<PAGE>
=========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended: DECEMBER 31, 1996
------------------
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File No. 0-19241
INVITRO INTERNATIONAL
--------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
California 33-0149560
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16632 Millikan Avenue, Irvine, California 92606
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(714) 851-8356
(Not applicable)
--------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past
12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements
for the past 90 days. YES [X] NO [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: Common Stock, without
par value, outstanding as of February 4, 1997: 14,028,300 shares.
Transitional Small Business Disclosure Format (check one):
YES [ ] NO [X]
=========================================================================
<PAGE>
INVITRO INTERNATIONAL
INDEX
<TABLE>
<CAPTION>
<S> <C> <C>
Page
Number
------
Part I FINANCIAL INFORMATION:
Item 1. Financial Statements:
Balance Sheets at December 31, 1996
and September 30, 1996 ................................. 1
Statements of Operations for the Three Months
ended December 31, 1996 and 1995 ....................... 2
Statement of Changes in Shareholders' Equity
for the Three Months ended December 31, 1996 ........... 3
Statements of Cash Flows for the Three Months
ended December 31, 1996 and 1995 ....................... 4
Notes to Unaudited Financial Statements
at December 31, 1996 ................................... 5
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION:
Management's Discussion and Analysis of
Financial Condition and Results of Operations .......... 7
PART II OTHER INFORMATION:
Item 4. Submission of Matters to a Vote
of Security Holders ........................... 9
Item 6. Exhibits and Reports on Form 8-K ................. 10
SIGNATURES .......................................................... 10
</TABLE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Report under the caption "Management's
Discussion and Analysis or Plan of Operation" and elsewhere constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may cause
the actual results or performance of the Company to be materially different
from future results or performance expressed or implied by such
forward-looking statements. Such factors, include, among others: market
acceptance of new products, economic, competitive, governmental and
technological factors affecting the Company's operations, markets, services
and prices, and other factors described in this Report and in prior filings
with the Securities and Exchange Commission. The Company's actual results
could differ materially from those suggested or implied by any
forward-looking statements as a result of such risks.
CAUTIONARY STATEMENTS
In connection with the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995, the Company has filed cautionary
statements identifying important factors that could cause the Company's
actual results to differ materially from those projected in forward-looking
statements made by, or on behalf of, the Company. Reference is made to
Exhibit 99.1 filed with the Company's Annual Report on Form 10-KSB for the
fiscal year ended September 30, 1996.
- i -
<PAGE>
PART I. FINANCIAL INFORMATION
INVITRO INTERNATIONAL
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, September 30,
1996 1996
------------ ------------
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents .................... $ 859,000 $ 1,209,000
Accounts receivable - net of allowance for
doubtful accounts of $10,000 at
December 31, 1996 and $10,000 at
September 30, 1996 ......................... 188,000 146,000
Stock subscription receivable ................ -- 250,000
Inventories .................................. 510,000 366,000
Prepaid expenses ............................. 37,000 57,000
------------ ------------
Total current assets ..................... 1,594,000 2,028,000
Furniture, equipment and leasehold
improvements, net ........................... 203,000 221,000
Deposits and other assets ..................... 157,000 166,000
------------ ------------
Total Assets .................................. $ 1,954,000 $ 2,415,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable ............................ $ 257,000 $ 174,000
Accrued payroll and employee benefits ....... 76,000 82,000
Accrued restructuring costs ................. 51,000 51,000
Accrued private placement costs ............. -- 25,000
Other accrued liabilities ................... 15,000 19,000
------------ ------------
Total current liabilities ............... 399,000 351,000
------------ ------------
Commitments and Contingencies
Shareholders' Equity:
Preferred stock, no par value;
1,000,000 shares authorized;
no shares issued or outstanding ........... -- --
Common stock, no par value;
40,000,000 shares authorized;
Issued and outstanding, 14,028,300 shares
at Dec 31, 1996 and 13,228,365 shares
at Sept 30, 1996 ........................ 25,036,000 24,811,000
Subscribed but not paid for and not issued,
799,935 shares at Sept 30, 1996 ......... -- 225,000
Accumulated deficit ......................... (23,534,000) (23,028,000)
Currency translation adjustment ............. 53,000 56,000
------------ ------------
Total shareholders' equity .............. 1,555,000 2,064,000
------------ ------------
Total Liabilities and Shareholders' Equity .... $ 1,954,000 $ 2,415,000
============ ============
</TABLE>
See accompanying notes to financial statements.
-1-
<PAGE>
INVITRO INTERNATIONAL
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months ended
December 31,
---------------------------
1996 1995
------------ ------------
<S> <C> <C>
Revenues ...................................... $ 259,000 $ 225,000
------------ ------------
Costs and expenses:
Cost of revenues ........................... 184,000 166,000
Selling, general and
administrative expenses .................. 586,000 544,000
Research and development ................... 9,000 70,000
------------ ------------
Total costs and expenses .............. 779,000 780,000
------------ ------------
Operating loss ................................ (520,000) (555,000)
Interest income ............................... 14,000 33,000
------------ ------------
Net loss ...................................... $ (506,000) $ (522,000)
============ ============
Net loss per common share ..................... $ (.04) $ (.04)
============ ============
Weighted average
common shares outstanding ................... 14,028,300 11,969,682
============ ============
</TABLE>
See accompanying notes to financial statements.
-2-
<PAGE>
INVITRO INTERNATIONAL
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Common Stock Common Stock Subscriptions Currency Total
------------------------ -------------------------- Accumulated translation Shareholders'
Shares Amount Shares Amount deficit adjustments Equity
---------- ------------ ----------- ------------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at
September 30,
1996 ........... 13,228,365 $ 24,811,000 799,935 $ 225,000 $ (23,028,000) $ 56,000 $ 2,064,000
Payment of
of common
stock
subscription.... 799,935 225,000 (799,935) (225,000) -- -- --
Net loss for
the three
months ended
Dec 31, 1996.... -- -- -- -- (506,000) -- (506,000)
Currency
translation
adjustments .... -- -- -- -- -- (3,000) (3,000)
---------- ------------ ----------- ------------- ------------- ----------- ------------
Balances at
December 31,
1996 ........... 14,028,300 $ 25,036,000 -0- $ -0- $ (23,534,000) $ 53,000 $ 1,555,000
========== ============ =========== ============= ============= =========== ============
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
INVITRO INTERNATIONAL
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months ended
December 31,
---------------------------
1996 1995
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss ....................................... $ (506,000) $ (522,000)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization .............. 28,000 34,000
Changes in operating assets and liabilities:
Accounts receivable ...................... (42,000) 27,000
Inventories .............................. (144,000) 23,000
Prepaid expenses and other assets ........ 23,000 19,000
Accounts payable and accrued expenses .... 73,000 (41,000)
------------ ------------
Net Cash Provided By (Used In)
Operating Activities ......................... (568,000) (460,000)
------------ ------------
INVESTING ACTIVITIES:
Proceeds from sale of equipment ................ -- 40,000
Capital expenditures ........................... (3,000) (16,000)
Additions to capitalized patent costs .......... (2,000) (8,000)
------------ ------------
Net Cash Provided By (Used In)
Investing Activities ......................... (5,000) 16,000
------------ ------------
FINANCING ACTIVITIES:
Net cash provided by sale of common stock ...... 225,000 --
------------ ------------
Effect of exchange rate changes on cash ........ (2,000) (3,000)
------------ ------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS ......................... (350,000) (447,000)
Cash and cash equivalents at beginning of year . 1,209,000 1,165,000
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..... $ 859,000 $ 718,000
============ ============
Supplemental disclosures
of cash flow information:
Cash paid during the period for:
Income taxes ............................. $ -- $ 1,000
============ ============
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE>
INVITRO INTERNATIONAL
NOTES TO UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE 1 -- INTERIM FINANCIAL INFORMATION.
The accompanying unaudited financial statements of InVitro International, a
California corporation (the "Company") at December 31, 1996 and for the
three month periods ended December 31, 1996 and 1995 have been prepared by
the Company pursuant to the rules of the Securities and Exchange Commission
and, in the opinion of the Company's management, include all adjustments
necessary for a fair presentation of financial position, results of
operations and cash flows for the interim periods covered by such
statements. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the
Commission's rules. Reference is made to Note 1 of the Notes to
Consolidated Financial Statements contained in the Company's Annual Report
on Form 10-KSB for the fiscal year ended September 30, 1996 for a summary
of significant accounting policies utilized by the Company. It is
suggested that the financial statements at December 31, 1996 be read in
conjunction with the audited consolidated financial statements and notes
thereto included in the Company's latest Annual Report on Form 10-KSB.
Results of operations for the three months ended December 31, 1996 and 1995
may not necessarily be indicative of results for the full fiscal year.
NOTE 2 -- CASH EQUIVALENTS. For financial reporting purposes, cash
equivalents consist of money market fund accounts and all other highly
liquid investments with a maturity of three months or less when purchased.
At December 31, 1996, the Company had approximately $809,000 on deposit in
a money-market mutual fund.
NOTE 3 -- INVENTORIES. Inventories consist of the following at December
31, 1996 and September 30, 1996:
<TABLE>
<CAPTION>
December 31, September 30,
1996 1996
------------ ------------
<S> <C> <C>
Raw materials and work-in-process .. $ 60,000 $ 59,000
Finished goods ..................... 450,000 307,000
------------ ------------
$ 510,000 $ 366,000
============ ============
</TABLE>
Inventories are stated at the lower of cost (first-in, first-out method) or
market. Management has recorded reserves that they believe are appropriate
for obsolete inventory. However, the Company has purchased inventories of
Guardian DNA in anticipation of future sales and adjustments to the
inventory reserve would be required if such sales are not generated.
-5-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 4 -- FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS. Furniture,
equipment and leasehold improvements consist of the following at December
31, 1996 and September 30, 1996:
<TABLE>
<CAPTION>
December 31, September 30,
1996 1996
------------ ------------
<S> <C> <C>
Furniture and equipment ............ $ 843,000 $ 840,000
Leasehold improvements ............. 206,000 206,000
------------ ------------
1,049,000 1,046,000
Less accumulated depreciation ...... (846,000) (825,000)
------------ ------------
$ 203,000 $ 221,000
============ ============
</TABLE>
In December 1995, the Company sold a large capacity freeze dryer for
$40,000 which had been used by the Company to manufacture reagent powder
for certain of its test kits. The Company has subcontracted with the
purchaser of the this equipment to supply the Company's future requirements
for reagent materials. The Company recorded a provision of $145,000 in
September 1995 to write this equipment down to its net realizable value and
to reserve for the estimated disposal costs.
NOTE 5 -- EARNINGS PER SHARE. Earnings per share were computed by
dividing net loss for the period by the weighted average number of shares
of common stock and dilutive common stock equivalents. All common stock
equivalents (stock options and warrants) have been excluded from earnings
per share for the periods ended December 31, 1996 and 1995, as the effect
of these common stock equivalents is antidilutive.
NOTE 6 -- COMMITMENTS AND CONTINGENCIES.
The Company leases its facility in Irvine, California for $6,400 per month
under a two year lease which expires on February 28, 1998.
The Company has entered into equipment leases which are accounted for as
operating leases. Future commitments under all of the Company's
noncancelable equipment lease agreements are as follows:
<TABLE>
<S> <C>
Fiscal 1997 .......................... $ 85,000
Fiscal 1998 .......................... 35,000
-----------
$ 121,000
===========
</TABLE>
The Company is a defendant in a wrongful termination lawsuit which arose
when the Company determined to liquidate its European subsidiary.
Management, based in part on consultation with legal counsel, believes this
suit is without substantial merit and should not result in a judgment which
in the aggregate would have a material adverse effect on the Company s
financial statements.
A restructuring reserve was established when the Company liquidated its
European subsidiary. Management has elected to keep this accrual until all
matters related to the liquidation have been settled.
-6-
<PAGE>
INVITRO INTERNATIONAL
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
Consolidated Financial Statements and notes thereto appearing elsewhere in
this Report.
RESULTS OF OPERATIONS:
REVENUES: For the quarter ended December 31, 1996 (the "1996
Period") revenues were $259,000, an increase of 15% from revenues of
$225,000 in the comparable quarter of the prior fiscal year ended December
31, 1995 (the "1995 Period"). The increase was primarily attributable to
$31,000 in revenues from the initial introduction of Guardian DNA products;
revenues from laboratory and other services increased by $34,000, offset in
part by a $31,000 decline in kit sales of the Company's safety testing
products.
For the reasons discussed in more detail below, the Company's
management believes sales declines in prior periods were stabilized in the
last half of the fiscal year ended September 30, 1996 and that revenues
should increase in future periods. The Company recognized that sales of
EYTEX and SKINTEX ocular and dermal irritation test kits experienced
declines in 1994 and 1995. The Company reformatted these tests into a
newly configured IRRITECTION Assay System, which included an automated
plate reader system. Availability of the Company's internal testing
services have been emphasized for smaller accounts, isolated testing
requirements and as a first step in evaluation for prospective new
accounts. Sales of CORROSITEX test kits to determine Packing Group
classification of corrosive substances declined during 1995 and 1996
because of a continuing high level of industry noncompliance with DOT
Packing Group classification regulations. The Company anticipates that
sales of CORROSITEX may benefit in the future by a proposed addition to the
U.S. Environmental Protection Agency ("EPA") manual of solid waste test
methods, which lists CORROSITEX as a method of characterizing dermal
corrosivity (EPA Publication SW-846, Method 1120).
To take advantage of its internal sales force and distribution
capabilities, the Company entered into an exclusive distributorship
agreement in March 1996 to market the Guardian-DNA child identification
system to and through hospitals, birthing and other institutional obstetric
markets. During October 1996, the Company entered into an agreement
providing for the distribution of Guardian DNA literature and discount
coupons in hospital gift packs to approximately 3.7 million new mothers
from January through December 1997. Management anticipates that the
Guardian DNA product line will increase the Company's revenues in future
periods although there can be no assurance of such revenue increases.
Initial indications of order response to the distribution of hospital gift
packs are not expected until February and March 1997.
COSTS OF GOODS SOLD: Cost of revenues for the 1996 Period were
$184,000, or approximately 71% of sales, compared to $166,000, or 74% of
sales, for the 1995 Period, resulting in gross profit margins of 29% for
the 1996 Period compared to 26% in the 1995 Period. The increase in gross
profit margins for the 1996 Period resulted primarily from increased sales
and improvement in gross profit on the CORROSITEX product line. Due to
fixed manufacturing costs, a portion of which are unabsorbed due to low
revenues, gross margins for the Company's proprietary in vitro products and
services are expected to remain at or near present levels until sales
growth necessary to absorb a higher percentage of fixed costs is attained,
as to which there can be no assurance. However, the Company anticipates
that gross margins in future periods will show continued improvement due to
the Company's introduction of the Guardian DNA product line, since the
Company's cost of revenues for Guardian DNA is limited to the purchase of
finished kits from a supplier and a limited amount of warehouse space to
store Guardian DNA inventories.
-7-
<PAGE>
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $586,000 in the 1996 Period, an increase of
approximately $42,000, or 8%, compared to $544,000 in selling, general and
administrative expenses for the 1995 Period. The increase is primarily due
to increased marketing expenses associated with the introduction of
Guardian DNA products.
RESEARCH AND DEVELOPMENT. Research and development expenses for
the 1996 Period were $9,000, a $61,000 decrease, or 87%, from $70,000 in
research and development expenses in the 1995 Period. To conserve capital
resources, the Company has elected to outsource as much of its research and
development requirements for the near term as is possible. Consistent with
this policy, the decline in research and development expenses is primarily
attributable to reductions in personnel and decreased expenditures for
research materials and supplies.
The Company has entered into strategic alliances with third parties
to promote joint development of industry product applications. Agreements
were entered into with Celsis International and Tanks Inc. in February
1996. The alliance with Celsis will assess the effectiveness of the
Company's IRRITECTION assay system in markets for animal testing, and the
Tanks Inc. alliance will assess the effectiveness of CORROSITEX in
conjunction with Tanks' Barrier products in petrochemical and other
corrosion removal markets. In cooperation with one of its contract
laboratories, Burlington Research, the Company has targeted major textile
manufacturers and installed the IRRITECTION assay system in two textile
manufacturing companies during the quarter ended December 31, 1996.
As discussed above, the Company also acquired exclusive distribution
rights to the Guardian DNA identification system through institutional
markets. Strategic alliances for product development and the Guardian DNA
marketing agreement collectively offer the potential of expanding the
Company's markets for new applications and products without adding expense
to the Company's internally funded research and development.
OTHER INCOME. Interest income was $14,000 in the 1996 Period, a
decline of $19,000 compared to the 1995 Period. The decrease in interest
income was attributable to a reduction in cash balances compared to the
1995 Period.
NET LOSS. The Company's net loss of $506,000 during the 1996
Period declined by approximately $16,000, a 3% decrease compared to the
$522,000 net loss for the 1995 Period. The Company's management
anticipates the Company will continue to incur losses, but at a lower rate
based on expectations of sales growth noted above, for the immediate near
term due to the Company's current level of fixed expenses for manufacturing
overhead and selling, general and administrative expenses. Losses are
expected to continue until such time as sales increase to a level necessary
to absorb fixed costs. No assurances can be given as to whether or when
sales increases may be achieved. Sales increases will be dependent in part
upon expanding use of the Company's products and services by customers and
in part upon sales and marketing of new products by the Company.
The Company's operating management anticipates that a successful
launch of the Guardian DNA product line, combined with gradual anticipated
growth in its core IRRITECTION and CORROSITEX assay systems and services,
will lead to a turn-around in financial performance and significant
progress toward management's goal of attaining a profitable level of
operations by the end of Fiscal 1997. However, there can be no assurance
of future growth in revenues or that the Company will achieve revenue
increases in an amount necessary to attain profitable operations.
-8-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES:
At December 31, 1996, the Company's cash resources totalled $859,000
and its working capital was $1,195,000. During the three months ended
December 31, 1996, the Company's cash and cash equivalents securities
decreased by $350,000, due primarily to cash outflows used by operating
activities of $568,000, partially offset by the collection of $225,000 in
net proceeds from the sale of common stock.
The Company's principal capital requirements include working capital
to finance sales and marketing activities, other general and administrative
expenses and product development. The Company has no significant pending
commitments for capital expenditures, and capital equipment additions are
not expected to be material in amount for the foreseeable future. During
the three months ended December 31, 1996, the Company's inventories
increased by $144,000 primarily as the result of increases in quantities of
Guardian DNA to support the market launch of that product line.
Management is actively pursuing strategies to increase the Company's
sales volume and reduce its negative cash flow. Based on currently planned
activities and assuming reasonable revenue increases projected by the
Company's strategic plan, management believes that its cash resources at
December 31, 1996 are sufficient to fund the Company's operations for at
least the next nine months. The Company also reserves the right to raise
additional capital through the sale of common equity. There can be no
assurance the Company would be successful in efforts to raise additional
capital.
PART II -- OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The 1997 annual meeting of the Company's stockholders was held on
January 31, 1997. Matters voted on at the annual meeting included (i) the
annual election of six directors to the Company's Board of Directors; and
(ii) a proposal to authorize an amendment to the Company's articles of
incorporation to effect a 1-for-10 reverse stock split as to the Company's
common stock. All of such matters were described in the Company's proxy
statement dated December 30, 1996, definitive copies of which were filed
with the Securities and Exchange Commission. The results of voting on
matters presented to the meeting were as follows:
(i) Incumbent directors Dennis E. Chenoweth, William M. Curtis, Irwin J.
Gruverman, David A. Reed, Jeffrey A. Safchik and W. Richard Ulmer
were re-elected as directors of the Company, each to serve for a term
of one year until the next annual meeting of shareholders in 1998 and
until their successors are elected and shall qualify.
(ii) The proposal to authorize an amendment of the Company's articles of
incorporation to effect a 1-for-10 reverse stock split as to the
Company's outstanding common stock and reduce the authorized common
stock to 4,000,000 shares was adopted and approved by a vote of
10,347,278 shares in favor, 1,130,456 shares against and 21,690
shares abstaining.
Although the 1-for-10 reverse stock split as to the Company's common stock
was authorized by the requisite vote of shareholders, the Company's Board
of Directors has determined to defer a decision on whether and when to
implement a reverse stock split until a subsequent meeting of the Board of
Directors. In evaluating this proposal, the Board intends to consider the
timing of proposed revisions to Nasdaq rules relating to the listing of
common stock in the Nasdaq SmallCap Market system and will also assess
initial results from the GiftPax program for distribution of Guardian DNA
sales materials by hospitals.
-9-
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS.
Exhibit
No. Description
------ ------------
27 Financial Data Schedule at December 31, 1996.
(b) REPORTS ON FORM 8-K. No reports on Form 8-K were filed during the
quarter ended December 31, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 of 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
Date: February 4, 1997
INVITRO INTERNATIONAL
(Registrant)
By: /s/ W. Richard Ulmer
-----------------------------
W. Richard Ulmer, President,
Chief Executive Officer and
Chief Financial Officer
By: /s/ Kristina A. Parker
-----------------------------
Kristina A. Parker,
Chief Accounting Officer
-10-
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information
extracted from the Statements of Operations and
Balance Sheets of InVitro International and is
qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000872610
<NAME> INVITRO INTERNATIONAL
<MULTIPLIER> 1000
<S> <C>
<FISCAL-YEAR-END> Sep-30-1997
<PERIOD-START> Oct-01-1996
<PERIOD-END> Dec-31-1996
<PERIOD-TYPE> 3-MOS
<CASH> 859
<SECURITIES> 0
<RECEIVABLES> 203
<ALLOWANCES> 15
<INVENTORY> 510
<CURRENT-ASSETS> 1,594
<PP&E> 1,049
<DEPRECIATION> 846
<TOTAL-ASSETS> 1,954
<CURRENT-LIABILITIES> 399
<BONDS> 0
0
0
<COMMON> 25,036
<OTHER-SE> (23,481)
<TOTAL-LIABILITY-AND-EQUITY> 1,954
<SALES> 259
<TOTAL-REVENUES> 259
<CGS> 184
<TOTAL-COSTS> 779
<OTHER-EXPENSES> (14)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (506)
<INCOME-TAX> 0
<INCOME-CONTINUING> (506)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (506)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
