CONFORMED COPY

                                    FORM 10-K SB

                                    UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549      

(X)  15, ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 31, 1998

                                         OR

( )  15, TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) 
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number:  0-17378


                               VITRO DIAGNOSTIC, INC.
             ______________________________________________________
               (Exact name of registrant as specified in its charter)

           Nevada                                  84-1012042          
______________________________        _________________________________
(State or other jurisdiction of      (I.R.S. Employer Identification No.)
incorporation or organization)

     8100 Southpark Way, Bldg B-1 , Littleton, Colorado       80120
_________________________________________________________________________
 (Address of principal executive offices)                     (Zip  Code)

                               (303) 794-2000                            
      ________________________________________________________________
            (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:      None

Securities registered pursuant to Section 12(g) of the Act:      None

      Indicate by check mark whether the registrant (1) has filed all 
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or such shorter
period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for at least the past 90
days.

Yes  X         No 
    ---           ---

      Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K SB or any amendment to this form 10-K SB.

Yes  X       No
    ---         ---

     The issuer's revenues for its most recent fiscal year were $1,232,244.

     The aggregate market value of the voting stock held by non-affiliates 
(1,550,087) computed by taking the average of the bid and the ask ($0.64 as
quoted on February 3, 1999) was $992,056.

     The number of shares outstanding of each of the issuer's classes of 
common equity as of February 9, 1999 was 6,413,702.

      Document incorporated by reference : None
     
      This report consists of 26 pages, including one page constituting the 
cover page.

<PAGE>                                                                    2

                                    PART I 
ITEM 1.  DESCRIPTION OF BUSINESS 

  a). Business.  The Company was incorporated under the name Imperial 
      Management, Inc. ("Imperial") on March 31, 1986 under the laws of the 
      State of Nevada.  On December  8, 1986, the Corporation merged with 
      Labtek, Inc., a Colorado corporation, and the name of the 
      corporation was changed to Vitro Diagnostics,  Inc.  Until July 1989, 
      the Company operated as a clinical reference lab and repackaged   
      immunodiagnostic kits.

      In July of 1989, management of the Company was replaced by a new 
      management team which assumed control over all Company operations.  
      The new management team has endeavored since said date to implement a 
      strategic plan designed to transform Vitro Diagnostics, Inc. into a 
      biotechnology company with a diverse product line.  The Company   
      manufactures specialty diagnostic reagents, viz. purified human 
      antigens. The Company sells its purified human antigens primarily to 
      manufacturers of immunodiagnostic test kits.  The short-term 
      objectives are to develop, produce, and market additional related 
      products to complement and expand its original line of diagnostic 
      antigens.
        
   b) Business of Issuer.  The Company's revenues and operating profits or 
      losses and identifiable assets have been attributable to manufacture 
      of purified human antigens. 

      Description of Company's Products and Services

      PURIFIED DIAGNOSTIC ANTIGENS 
                 
      Purified human antigens for diagnostic applications were selected
      as the initial business to be pursued by the Company.  Manufacture of 
      these products required expertise in the purification of clinically 
      significant proteins, which expertise was available to the Company 
      through its scientific      staff and recent technological advances.  The
      Company is presently only one of a      few manufacturers in the world
      that specialize in the purification of human pituitary hormones.

      The Company chose pituitary hormones and tumor marker as its initial 
      products for development.  The pituitary hormones include Growth 
      Hormone, Prolactin, LH, LH beta, LH alpha,  FSH, FSH beta, FSH alpha,
      TSH, TSH alpha, and TSH beta.  The tumor marker antigens include CEA, 
      rCEA, AFP, PSA, CA 19-9, CA 125, hCG, beta hCG and alpha hCG. These
      hormones and tumor markers are sold to diagnostic kit manufacturers,
      immunochemical distributors, brokers and to university  researchers.
      Company personnel have over twenty years experience in the extraction
      and purification of these antigens. 

      Human tissues are used as the raw materials for the purified antigens.
      Pituitary hormones are obtained from human pituitary glands, human 
      chorionic gonadotropin originates from urine collected during pregnancy
      and CEA is derived from human liver tissue containing adenomas secondary
      to primary colon cancer.  The Company has an adequate supply of most 
      raw materials.  Liver tissue is presently in short supply, therefore most
      of the CEA sales are derived from the Company's recombinant CEA
      inventory. Pregnancy urine is readily available commercially.  Human
      pituitary glands are more difficult to obtain, but several sources are
      available to the Company. The tissues are extracted with specialized
      chemicals and the extracts are subject to purification by modern liquid
      chromatography.  Sequential purification steps are usually required to
      produce highly purified materials.  The Company presently protects its
      purification technology as proprietary and trade secret information. 

      Purified human antigens are subject to minimal FDA regulations as 
      such products are considered Class I diagnostic devices.  The Class I 
      classification is usually given to components of finished diagnostic 
      devices.  The FDA requirements for sale of Class I devices are that the
      Company register with the FDA and list all of the Class I devices that 
      it markets.  The Company is in full compliance with these FDA 
      requirements.  The actual manufacturer of the diagnostic device 
      receives more rigorous FDA regulation since the device itself is more
      integrally related to potential health problems.  While the Company is
      not required to do so, it presently operates according to FDA guidelines
      for manufacture of diagnostic devices.  Such practices are helpful to the
      Company's customers and allows for vendor audits of the production 
      operation as needed.  All proposed new diagnostic antigens are Class I 
      devices with the exception of PSA (See "New Product Development"),
      which is a Class II device.  FDA approval of PSA would require filing of
      Form 510K with the U.S. Government. 

      A brief description of some of these products follows: 

      Growth Hormone - Growth hormone is produced in the pituitary gland and
      regulates growth of most human tissues. 
                                 
      Prolactin - This compound is a hormone produced by the pituitary gland 
      and stimulates lactation.  Prolactin levels in blood are measured 
      during treatment for infertility and for monitoring the effectiveness of
      chemotherapy for brain tumors.

      LH - Luteinizing hormone is produced in the pituitary gland and causes 
      the female sex organs to produce the hormones progesterone and estrogen.
      Abnormal values of LH will result in abnormal progesterone and estrogen 
      levels.  LH levels are measured to aid in diagnosing the source of 
      certain infertility problems and to ascertain the existence of a
      pituitary tumor.

      FSH - Follicle stimulating hormone is also a pituitary compound which 
      stimulates the growth of ovarian eggs in the beginning of the menstrual 
      cycle.  Urine or blood levels of FSH are measured to determine the cause
      of infertility. 

      Urofollitropin - This is FSH derived from the urine of postmenopausal 
      women.  This FSH is substantially similar to FSH purified from human
      pituitary glands although there are minor chemical differences.
      Urofollitropin is used in research to develop fertility drugs and in
      basic endocrinology research.

      TSH - Thyroid stimulating hormone is measured as part of assessing 
      overall thyroid function and metabolism.  It is also becoming 
      increasingly important in diagnosing the underlying cause of certain 
      infertility problems. 

      CA 125 - This product is a tumor marker, as is CEA.  However, 
      CA 125 is relatively specific to ovarian cancers, whereas CEA is known
      to be produced by tumors of the colon, liver, breast and other
      tissues.  The CA 125 diagnostic test has received FDA approval.  FDA 
      approval opens the United States diagnostic market for the product.

      CA 19-9 - This is another tumor marker structurally similar to CA 125 
      and CA 15-3, but selective for pancreatic and other gastrointestinal 
      tumors.  It, like CA 15-3, is not yet FDA approved, but has a history of
      use and acceptance, at least in foreign markets.

      CEA - Carcinoembryonic antigen is produced by cancerous tumors 
      especially of the colon or liver.  Measurement of blood CEA levels is 
      valuable in the management of cancer.  CEA is elaborated by certain 
      tumor cells and was one of the first so-called tumor markers, although 
      it is not specific for a particular type of cancer. 

      Recombinant CEA - This is CEA that is produced by use of recombinant
      DNA techniques.  The  product is apparently identical to natural CEA, 
      but its production is not subject to the limitations of raw material 
      availability as is natural CEA.

      hCG - Human chorionic gonadotropin is produced by particular cells of 
      the placenta.  Elevated levels are used to determine pregnancy.  It has 
      biological action on the ovaries and can cause ovulation.

      Beta hCG - The beta subunit of hCG is one of two dissimilar protein 
      chains that together compose hCG. It is similar to CEA in that it is a 
      tumor marker.  However, it is usually secreted by tumors arising from
      certain cells in the placenta.  These types of cancer can occur 
      following a miscarriage. 

      Beta hLH- The beta subunit of luteinizing hormone is one of two 
      dissimilar protein chains that together compose hLH.  The beta subunit
      of LH contains the  biochemical specificity of LH.  The beta subunit  of
      LH is used in antibody production to minimize contamination of antibodies
      to closely related hormones. 

      Beta hTSH- The beta subunit of thyroid-stimulating hormone is one of 
      two dissimilar protein chains that together compose hTSH.  The beta
      subunit of TSH contains the  biochemical specificity of TSH.  The beta
      subunit  of TSH is used in antibody production to minimize contamination
      of antibodies to closely related hormones. 

      Beta hFSH- The beta subunit of follicle-stimulating hormone is one of 
      two dissimilar protein chains that together compose hFSH.  The beta 
      subunit of FSH contains the  biochemical specificity of FSH.  The beta
      subunit of FSH is used in antibody production to minimize contamination
      of antibodies to closely related hormones. 

      Alpha hCG - The alpha subunit of hCG is a relative of beta hCG (above). 
      together with the beta subunit they comprise hCG. It is considered a 
      tumor marker, although it is less strongly documented clinically than
      is beta-hCG. 

      Alpha hLH - The alpha subunit of hLH is a relative of beta hLH (above). 
      together with the beta subunit they comprise hLH.  The alpha chain of 
      hLH is nearly identical to the alpha chain of hCG. 

      Alpha hTSH - The alpha subunit of hTSH is a relative of beta hTSH 
      (above) together with the beta subunit they comprise hTSH. The alpha
      chain of hTSH is nearly identical to the alpha chain of hCG. 

      Alpha hFSH - The alpha subunit of hFSH is a relative of beta hFSH 

      (above). ogether with the beta subunit they comprise hFSH.  The alpha
      chain of hFSH is nearly identical to the alpha chain of hCG. 

      AFP - Alpha-fetoprotein is a protein produced by the fetal liver.  
      Expression of this protein is normally suppressed in adults.  It is 
      considered a marker for testicular cancer.  Maternal serum levels 
      are also elevated when neural tube deficit occurs. 

      PURITY GRADES
        
      The Company's products are provided to its customers at two grades of
      purity, which are used for different applications.  The least pure grade
      (50% purity) is standard or control grade which is usually used in the 
      manufacture of standards or controls for immunoassay.  These components
      are used in obtaining quantitative results in a clinical test and to 
      determine if the test is performing properly.  Affinity-pure materials
      are >99% purity and contain very low levels of contaminants.  This 
      grade of product is suitable for applications requiring most stringent
      purity such as antibody production and use in the purification of
      purified antibodies.
            
      The Company operates its present antigen purification operation in 
      accordance with all relevant regulations. 

      MARKETS AND DISTRIBUTION FOR PURIFIED ANTIGENS 

      The market for the pituitary hormones arose out of the field of 
      endocrinology and understanding of the physiological regulatory 
      function of the pituitary gland.  These functions include control of 
      body growth, reproduction and regulation of metabolism.  Physiological 
      hormones are transported to the target organ where the hormone binds to
      a receptor with high affinity and specificity for that hormone only.  
      For example, the hormone LH is secreted from the pituitary gland and
      binds to receptors on cells in the ovary.  This binding to the LH
      receptor initiates a complex series of biological events which lead to
      ovulation, a critical step in the reproductive process.  The fundamental
      discoveries of pituitary hormone structure and function were followed by
      the development of the radioimmunoassay ("RIA") in the late 1960s.  This 
      development was important to medicine because the RIA allowed 
      measurement of the blood levels of a variety of clinically important 
      substances.  The developers of  RIA were awarded the Nobel Prize in the
      early 1970s.

      The market for the purified tumor markers arose from fundamental medical
      research in cancer. Tumor markers are substances produced in tumor cells
      through expression of proteins not usually produced in non-malignant 
      cells.  These proteins are released into the blood stream where they 
      can be measured by immunodiagnostic tests.  As the cancerous process 
      affects the amount of a specific marker in the blood stream, tumor 
      marker diagnostic tests are very valuable tools in the diagnosis and
      prognosis of cancer.  For example, prostate-specific antigen ("PSA") is
      highly effective in the diagnosis of prostate cancer.  Periodic
      measurement of PSA allows the physician to determine if a patient is in
      relapse or remission. 

      The immunodiagnostic segment of diagnostic medicine was spawned by the 
      development of the RIA.  Immunodiagnostics are test procedures which are
      based on antigen-antibody interactions.  This includes a broad range of 
      tests for hormones, tumor markers, therapeutic drugs, infectious agents
      and blood-borne substances characteristic of autoimmune or coronary 
      artery disease.  The line of products presently manufactured by the 
      Company deals with the testing for hormones and tumor markers.  The 
      purified antigens are considered raw materials of the testing industry 
      and are used primarily by manufacturers of diagnostic tests. 
      The scope of the market available for purified human antigens includes 
      manufacturers of diagnostic kits, manufacturers of standards and 
      controls, antibody producers and researchers.  Market analysts,
      such as IMS America, track immunodiagnostic markets and those kit 
      manufacturers who share that market.  However, the dollar size of the 
      test kit market does not directly relate to the purified antigen 
      component of that market.  Based upon management's involvement with 
      this market for over 10 years, management estimates the international 
      market to be extensive.

                                                                      
      MARKETING AND SALES STRATEGY 

      The Company has had its purified antigens on the market since November, 
1990.  Earlier sales were derived from only a few of the present product 
line.  New products were slowly added to attain the present line of diagnostic 
antigens. The Company maintains an active program of new product development.

      The Company presently has 14 different protein products on the market. 
Together with different purity grades and subunits, 36 catalog items are 
included in the present product line. Total product sales were  $376,746,  
$790,335, $650,846 and $1,232,244 for fiscal years   1995, 1996,1997 and 1998 
respectively.  The Company now sells to 65 clients including several domestic 
diagnostic kit manufacturers. 

      A primary objective of the Company's present sales program is to 
increase product sales to key end-user accounts.  These are usually large 
domestic companies that manufacture diagnostic products and control a 
substantial portion of the   immuno-diagnostic market.  For example, this 
market is typically dominated by Abbott Labs and Chiron Diagnostics.  An 
additional six to eight  companies control the majority of the market.  In 
certain cases, the Company has chosen to pursue these accounts through 
brokers.  Others are approached using the following procedure, although there 
may be some variation depending on the company and its staff.  Initially, the 
proper contacts must be made and there are usually several contacts within 
each company.  The contact people are mailed a packet of sales literature and 
follow-up is made by phone.  If there is further interest, a visit is made by 
Company personnel to the customer's facility.  Subsequently, an audit of the
Company's facility may be necessary, since the customers are especially
interested in adherence to manufacturing guidelines established by the FDA.
Finally, the customer will request samples of material for evaluation.  This
product inspection usually takes at least six months. 
                             
Another important component of the Company's sales strategy is to maintain and 
increase product distribution through brokers and distributors.  The Company 
presently intends to continue sales through brokers, and especially through a 
group of key brokers.  This group is perceived as having potential to increase 
product sales and/or to approach certain accounts which may be difficult to 
sell to directly.  In certain cases in this industry, which is relatively 
small, consumers prefer to deal with brokerage firms with whom they have had a 
long standing relation.  Most firms specializing in brokerage have a full time 
sales staff available.  Such direct sales efforts can assist the Company while 
it focuses its present resources on production and new product development.  
Brokers are also advantageous as a distribution route to 
foreign markets.   
                                    
Foreign accounts are of interest to the Company, although this is not the 
primary focus of its present sales efforts.  Foreign antigen buying is focused 
in Canada, Europe and Japan.  The Company also has contacts with French, 
English and German firms.  The approach to foreign accounts will include use 
of brokers and distributors, as well as direct sales efforts.

The Company currently has a list of active and prospective customers that 
includes approximately 366 individual companies in the United States and 207 
abroad. 

      NEW PRODUCT DEVELOPMENT

The existing line of diagnostic antigens is supported by large-scale and 
efficient production methods.  The Company has developed cell lines to provide 
raw materials for production.  This reduces dependence on supply of human 
tissues as a raw material for production. The methods used to purify tissue 
antigens may then be applied to materials derived from cell lines that are 
maintained in a viable state by cell     culture technology.  In this process, 
cells which are genetically identical, are grown to high densities in culture 
media.  Culture media is a complex solution specifically designed to support 
cell growth. Subsequently, the cell culture enters a production phase whereby 
specific products of the cell can be collected in large amounts in the culture 
media at relatively high purity.  All of the products presently 
manufactured      by the Company from human tissues may also be derived from 
cell cultures. One of several advantages of cell culture derived products is 
cost effectiveness.  This arises from the reduced cost of the starting 
materials.  After a cell line is established, it can be maintained frozen, 
essentially indefinitely.  Furthermore, the purity of the products derived 
from cell culture is typically 10 to 90%, whereas the pituitary hormones 
present in pituitary extracts is usually less than 0.1% pure.  Cell culture 
derived products can be sufficiently purified with fewer process steps than 
can the hormones present in a pituitary extract.  Fewer processing steps 
translates to faster output, greater    overall product yields and hence, 
lower production costs.

      At the present time, the Company sells recombinant CEA that is derived 
from cell culture methods as described above.  This product was introduced to 
diagnostic markets in late 1996 and while sales were slow initially, this 
product currently is well-received and recombinant CEA sales showed 
substantial growth in 1998.  Recombinant CEA sales were $2385 in fiscal year 
1997 and were $41,672 in fiscal year 1998.  The Company now has active 
development projects oriented towards the production of recombinant PSA and 
cell-derived human pituitary hormones, including, FSH, LH, TSH, growth hormone 
and prolactin. Cell lines that elaborate animal pituitary hormones such as 
bovine growth hormone are also under development.

Management believes that the market is ready to accept cell line-derived 
products, but market resistance to a new cell line-derived product does 
exist.  There is no assurance that the Company can produce any other cell 
line-derived product that is marketable.

Another advantage of cell culture-derived products is that these may be used 
in therapeutic applications.  Some of the present diagnostic antigens that the 
Company manufactures are also used to treat infertility, growth hormone 
deficiency and may hold promise as cancer therapeutic agents.  The Company 
plans on exploration of the potential therapeutic applications of its 
products.  These efforts are focussed on FSH, LH, growth hormone, CEA and 
PSA.  In addition to cell culture technologies, the Company has recruited 
staff members with expertise in molecular biology to support its new product 
development objectives.  Hence, the Company now has in-house expertise in 
modern genetic engineering methods that will be used in the development of new 
cell lines that elaborate products of diagnostic and therapeutic value. 
                          
The basic strategy in developing such products is initial research and 
development to create genetically engineered cell lines which produce viable 
products as determined by laboratory test procedures.  Once a satisfactory 
product can be demonstrated by laboratory testing, the  Company will file for 
US and foreign patent protection designed to ensure maximum protection of the 
Company's  technology.  Testing of the new drug would then follow with detailed
studies of effectiveness, formulation and safety. Given successful results, the
Company would then commercialize these products. At present the Company is
targeting products for use in treatment of infertility and growth hormone
deficiency in humans.  Fertility drugs for animals area also of interest.  The
addition of all new products will depend on availability of capital.  There is
no guarantee that any of these products will be developed or marketed. 


      Competition 

      The market need for purified pituitary hormones for diagnostic 
applications has been primarily filled by Dr. Albert Parlow, a professor at 
UCLA, and an authority in pituitary hormone endocrinology.  Dr. Parlow has 
been the main supplier to the United States and foreign market for past 20 
years.  Dr. Parlow has had access to the entire domestic supply of human 
pituitary glands through 5-year contracts administered by the U.S.  Department 
of Health and Human Services.  The contracts are set up to provide researchers 
at the National Institutes of Health (NIH) with purified pituitary hormones 
for research purposes.  Animal hormones are also purified by this government 
contract. Dr. Parlow has also supplied the NIH with Antisera to both human and 
animal pituitary hormones.  Dr. Parlow sells his material to brokers and 
directly to end-users.  He does not operate a business per se, but is known as 
a reliable supplier of high quality pituitary hormones. 

The only other known major domestic competitor is Genzyme Diagnostics of 
Cambridge, Massachusetts.  Genzyme is a large biotechnology company, with 
strong expertise in the manufacture of recombinant protein products.  Genzyme 
has had recombinant TSH on the market for about five years.  Genzyme acquired 
Integrated Genetics of Framingham, Massachusetts.  Integrated Genetics holds 
several patents for recombinant proteins of clinical significance, including 
human LH, FSH and hCG. Management believes that Genzyme intends to pursue 
production of recombinant LH, FSH and prolactin.  Together with recombinant 
TSH, the major pituitary hormones will be available in their recombinant 
form.  Genzyme has several other major product lines, including a variety of 
enzymes, biotherapeutic drugs and a line of diagnostic kits for measurement of 
cytokines.  Other competitors are known in Europe, including UCB Bioproducts 
located in Belgium.  UCB produces high quality materials, with prices somewhat 
higher than products produced in the United States.  Finally, there are a few 
researchers who occasionally produce small amounts of material; however, the 
Company does not consider these producers serious competition. 



Based on reports from its customers, management believes that its purified 
antigens are equivalent or superior in quality to the same products provided 
by its competitors. 



      MAJOR CUSTOMERS 

During the most recent fiscal year ended October 31, 1998, sales made to any 
one customer in an aggregate amount equal to 10% or more of the Company's 
consolidated revenues included Eli Lilly and Company (35%), Jerome Diagnostics 
(16%) and BioRad Laboratories (15%).

      PATENTS AND TRADEMARK 

      The Company presently does not hold any patents.  The Company has one 
patent application pending with the United States Patent and Trademark Office 
concerning a method for the purification of FSH.  This same application is 
pending in various foreign countries through a PCT filing.  The Company holds 
a trademark on its logo and the phrase "Naturally Pure Antigens."

      EMPLOYEES 

The Company presently has nine full time employees. Full time employees 
include Roger D. Hurst, the Company's President, and James R. Musick, Ph. D.,
Secretary.

      FACILITIES 

The Company presently occupies 5700 square feet at 8100 Southpark Way, 
Littleton, CO 80120.  Such facilities house the Company's administrative 
headquarters, research and development laboratories and  manufacturing 
facilities.  The lease on the premises has been extended through  December 31, 
2001. Management's future plans for expansion of the Company will require 
relocation to a larger facility.

RISK FACTORS

The product development activities outlined herein depend on available capital 
for completion.  This capital is presently being provided by operating profits 
and there can be no assurance that profitability will be maintained.  The 
Company has applied for research grant funding to support its product 
development activities.  No grant funds have yet been awarded and there is no 
assurance of the awarding of any grant money. Once developed there is no 
assurance of market acceptance of the products the Company develops.   The 
success of the Company's operation depends on key personnel and there is no 
assurance that these personnel will continue to provide their services to the 
Company.  The Company has no employment contracts with key personnel. The 
Company is open to competitive forces in the market place since it has no 
presently issued patents protecting its technology (See Patents and 
Trademarks).  Because of the highly competitive nature of the Company's 
business, there can be no assurance of continued sales of the Company's 
products.  The Company has a continuing need for Research and Development 
activities in order to remain competitive in the market.  Requirements for 
existing product updates and development of new products are strategic 
requirements of every biotechnology firm.  Inability to continue R&D 
activities due to shortage of capital could adversely impact the success of 
the Company.

Y2K ISSUES

The Company has a plan in place to assess the risk of "Y2K" problems in the 
operation of its business.  This includes an examination of all 
computer-controlled processing and analytical equipment, the power supply to 
the facility, telephone, banking services and water supply to the facility. 
The present operating plan calls for completion of the Y2K assessment by June, 
1999.  Should problem areas be noted, corrective action will be taken to 
minimize the disruption of the Company's operation.


      MISCELLANEOUS 

The Company's business is not subject to re-negotiation of profits or 
termination of contracts or subcontracts at the election of the federal 
government. 


Research and development expenditures amounted to $65,077 for the year ended 
October 31, 1996, $81,579 for the year ended October 31, 1997 and $52,209 for 
the year ended October 31, 1998.  These research and development activities 
relate to the development of purified antigen products.

The nature of Company's business does not subject it to compliance with 
federal, state and local provisions which have been enacted or adopted 
regulating the discharge of materials into the environment, or otherwise 
relating to the protection of the environment, which would have a material 
effect upon the capital expenditures, earnings or competitive position of the 
Company.


                      
ITEM 2.  DESCRIPTION OF PROPERTY 

      The Company's administrative headquarters, research and development 
laboratories and manufacturing facilities are in a 5,700 square foot, 
one-story brick building located at 8100 Southpark Way, Building B-1, 
Littleton, CO 80120.  The facilities  lease expires on  December 31, 2001.The 
Company has outgrown its present facility and is actively looking for a 
building to expand into.


ITEM 3.  LEGAL PROCEEDINGS 

      There are currently no legal matters or other regulatory procedures 
pending which involve the Company. 
       

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 

      During the fiscal year ended October 31, 1998, there were no matters 
submitted to a vote of security holders. 



                                    PART II 

ITEM  5.   MARKET  FOR  COMMON  EQUITY  AND  RELATED STOCKHOLDER  MATTERS. 
                         
           (a) Market Information 

       The following information sets forth the high and low bid price for the
Company's common stock for each quarter within the last two fiscal years
(as adjusted for a one forward stock split in March, 1988 and a one for one 
forward stock split in April, 1989 and a one for two hundred reverse split in 
April, 1991).  The Company's common stock is traded over the counter and 
quoted on the OTC Bulletin Board.  The following information has been 
obtained by the Company with reference to such source.


                                    Price Ranges (closing bid) 

                                                     Bid

       Quarter Ended                       High                 Low
     ----------------                      ----                 ----
     January 31, 1997                      $.14                 $.06
     April 30, 1997                        $.07                 $.04
     July 31, 1997                         $.07                 $.04
     October 31, 1997                      $.07                 $.04
     January 31, 1998                      $.07                 $.04
     April 30, 1998                        $.07                 $.04
     July 31, 1998                         $.52                 $.07
     October 31, 1998                      $.35                 $.14

Because of recent changes in the rules and regulations governing the trading 
of small issuers securities, the Company's securities are presently classified 
as "Penny Stocks", which classification places significant restrictions upon 
broker-dealers desiring to make a market in such securities.  It has been 
difficult for management to interest any broker - dealers in the Company's 
securities and it is anticipated that these difficulties will continue until 
the Company is able to obtain a listing on NASDAQ at which time market makers 
may trade the Company's securities without complying with such stringent 
requirements.  The existence of market quotations should not be considered 
evidence of the "established public trading market".  The public trading 
market is presently extremely limited as to number of market markers in the 
Company's stock and the number of states within which the Company's stock is 
permitted to be traded.

       The over-the-counter market quotations above reflect inter- dealer 
prices, without retail mark - up, mark-down or commission and may not 
necessarily represent actual transactions.  The Company's C Warrants, expired 
on December 31, 1994. 

           (b) Holders 
        
       As of October 31, 1998 the Company had approximately 2,000 shareholders 
of record, not including approximately 1,800 persons who hold their shares in 
"street name". 
        
           (c) Dividends 
  
       On March 20, 1989, the Company's Board of Directors approved the 
issuance of a total of 550,528 (after adjustment for the 1 for 200 reverse 
split) warrants to the Company's shareholders as of April 15, 1989, as a stock 
dividend.  This class C Warrant expired on December 31, 1994.


       ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL  CONDITION AND RESULTS OF OPERATIONS 
                        

       The Company's Operating Expenses for fiscal 1998 were $362,135, the 
Cost of Sales was $462,819 and Interest Expense was $24,280.  These 
expenses total $849,234 or $70,770 per month.  Gross Revenues for 1998 
were $1,232,244 or $102,687 per month.  This equates to a $31,917 gain per 
month.  On October 31, 1998 the Company had $0 in Cash and 
$128,365 in Accounts Receivable - Trade for a total of $128,365.  

       Capital is required for the new product development described in 
"Description of Business (Item 1).  This capital will come from operating 
profits or outside investment.  Assets will not be sold to finance 
expansion.  

New Product development will be limited by the availability of capital for 
expansion. 

                                
       Comparison of 12 Month Periods October 1998 to October 1997 

       The Company's net revenue increased from 1997.  The net gain for 1998 
of $374,487 is an increase of $518,932 from 1997.  This gain in 1998 was 
due to increased product sales, especially urofollitropin. Working capital at 
October 31, 1998 amounted to $352,549 which was a $340,604 increase from the 
$11,945 in working capital at October 31, 1997.  An increase in inventories and
a decrease in Accounts Payable were responsible for the change in working
capital.  These changes to working capital were a direct result of increased
product sales.

       The Company's revenues from product sales (purified antigens) for the 
year ended October 31, 1998 were $1,232,244 or 89% more than the $650,846 
in product sales for the year ended October 31, 1997. Total milligram 
quantities of all products sold in 1998 equaled 5,700 compared to 1,730 
milligrams in 1997.  This equates to a 329% increase from 1997. 
                                                   
       There are general expenses for any company that remain fairly constant,
no matter what the revenues, i.e.  rent, utilities, administrative staff.
Management believes that  the current administrative staff is sufficient to
handle revenues up to $5 million per year.
                                
       The Company is presently seeking financial assistance.  If no or 
minimal capital is raised, the Company will continue operations at its 
current levels.  Without added capital, the Company will have difficulty in 
expanding its operations.  The Company anticipates greater profits in the
near future through increased sales and decreased production costs.

       The effects of inflation have not had a material impact on the 
Company's operation, nor is it expected to in the immediate future. 

       Although the Company is unaware of any major seasonal aspect that 
would have a material effect on the financial condition or results of 
operation, the first quarter of each fiscal year is always a financial 
concern.  It is not uncommon for companies to shut down their operation or 
operate on a skeletal crew during the Christmas/New Year holiday.  Therefore 
in effect, the first quarter really has only two months for generating revenue.


       ITEM 7.  FINANCIAL STATEMENTS 

       See "Index to Financial Statements and Financial Statement Schedules"

       ITEM 8.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

       None.
                                   PART III 

       ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS 
                AND CONTROL PERSONS; 
       Compliance with Section 1 of the Exchange Act 

    a)  Identification of Directors and Executive Officers.  The name, 
position with Company and age of each director and the period 
during which each current director has served are as follows:

    Directors and Executive Officers

    The following table sets forth certain information regarding the officers 
and directors of the Company as of February 10, 1999.

                            
           Name               Age                Position

       Roger D. Hurst         48               President
                                                  Chief Executive Officer
                                                  Chief Financial Officer
                                                  Chief Accounting Officer
                                                  Director

       James R. Musick        52               Secretary/Treasurer
                                                  Chief Operating Officer
                                                  Director

       Erik D. Van Horn       33               Director

                                  

       Each member of the Board of Directors has been elected to serve until 
the next annual meeting of shareholders and until his successor has been 
duly elected and qualified, or until his resignation or removal.  Officers 
are appointed to serve at the discretion of the Board of Directors.  There is 
no family relationship between any member of the Board of Directors. 

       The executive officers of Company are elected annually at the first 
meeting of the Company's Board of Directors held after each annual 
meeting of shareholders.  Each executive officer of the Company will hold 
office until his or her successor is duly elected and qualified or until his 
or her death or resignation or until he or she shall be removed in the manner
provided by the Company's Bylaws.  There was no arrangement or 
understanding between any executive officer and any other person pursuant 
to which any executive officer was selected as such.

       Roger D. Hurst has been President and Director of the Company since 
February 15, 1988.  On June 26, 1989 he assumed the Chief Executive 
Officer, Chief Financial Officer and the Chief Accounting Officer 
responsibilities for the Company.  Mr. Hurst received a Bachelors Degree in 
Education from Nebraska Wesleyan University in 1972.  Mr. Hurst devotes 
100% of his time to the affairs of the Company. 

       James R. Musick, Ph.D. was appointed as Secretary, Chief Operating 
Officer and Director of the Company on September 1, 1989.  From 
December, 1987 to the present Dr. Musick has been President of Health 
Sciences Consultants, a medical consulting firm located in Denver, 
Colorado.  Dr. Musick is a member of the Society of the Sigma Xi and he is 
referenced in American Men and Women in Science and Who's Who in the 
West.  Dr. Musick has written and had numerous scientific papers 
published.  Dr. Musick received a Bachelor of Arts in Biological Sciences 
degree in 1968 and a doctorate in Biological Sciences in 1975 from 
Northwestern University, Evanston, Illinois.  Dr. Musick devotes his full 
time to managing all technical areas of the Company. 

Erik D. Van Horn has been a Director of the Company since March 1993 and 
presently serves as Production Manager.  He received his Bachelor of Science 
in Chemical Engineering from the University of Colorado in 1990 and had
developed a significant expertise in protein separation and engineering of
production processes and in the cell culture of various plant and animal cell
lines.

Remuneration and Employment Agreements 

       The Company's two executive officers were paid a total of $107,840
during fiscal year ending October 31, 1998 and  $43,200 during the fiscal 
year 1997.  Such payments are pursuant to resolution of the Board of Directors.
The Company has not entered into employment contracts with either Mr. Hurst or
Dr. Musick as of the date of this document. 

       On May 15, 1992,  May 7, 1996, April 8, 1997 and May 1, 1998 stock
options were approved for issuance by the Board of Directors in favor of
Mr. Roger Hurst and Dr. James Musick and Mr. Erik Van Horn.  Mr. Hurst
has been granted the right to purchase 600,000 shares, Dr. James Musick 
800,000 shares and  Mr. Van Horn 500,000 shares of the Company's Common Stock 
at an exercise price equal to the market value at the time the options were 
granted.

       No officer of the Company is entitled to receive any additional 
compensation for his services to the Company, including his services as a 
director.  The Company may compensate non - employee Directors in the 
future. 

       Cash or Deferred Arrangement Simplified Employee Pension
       (CODA-SEP) 

   Effective March 9, 1994, the Company adopted a Paine Webber 
(currently Prudential) CODA - SEP Plan.  The CODA-SEP is the 401(k) 
alternative for smaller businesses.  Employee contributions are made to 
each employee's IRA.  Employees can elect to contribute pre-tax dollars 
amounting to 15% of their annual salary up to $9,000 (this amount is 
indexed annually for inflation).  The Company may also contribute to the 
plan on behalf of each employee.  Combined Company and employee 
contributions cannot exceed 15% of salary up to $30,000 per employee.  No 
contributions by the Company have been made to this plan.

       Stock Option Plan 

       Effective December 2, 1992, the Company adopted the Vitro 
Diagnostics, Inc. 1992 Stock Option Plan (the "Plan") for the benefit of 
officers, directors and other personnel providing substantial assistance to 
the Company.  An aggregate of 3,000,000 Common Shares has been 
reserved for issuance under the Plan.  To date, options to purchase an 
aggregate of 2,620,000 shares have been issued and exercised under the Plan. 

       The Plan is administered by a Compensation Committee as designated 
by the Board of Directors of the Company.  The Compensation Committee 
presently consists of Mr. Hurst and Dr. Musick.  The Plan provides for the 
issuance of stock options for the benefit of employees, non-employee 
directors, consultants of the Company and others who render significant 
service.  In determining the services rendered by consultants and other non-
employee and non-directors of the Company, the plan provides that the 
Compensation Committee shall consider the value of services rendered by 
such individuals, the value of comparable services in the community and 
the value of the benefits received by the Company.

       According to the 1992 Stock Option Plan, the determination of those 
eligible to receive Stock Options, and the amount, price, type and timing of 
each Stock Option and the terms and conditions of the respective Stock 
Option agreements shall rest in the sole discretion of the committee, subject 
to the provisions of the Plan.  Also, all Stock Options granted under the 
plan must be granted within ten years from the date the plan was adopted 
and no option granted will be exercisable after the expiration of the plan.  
The Committee can provide than an option be exercisable during the ten 
year period or during a shorter time period.  The Board may also suspend or 
terminate the plan as a whole or in part or amend it at any time in such 
respects as the Board may deem appropriate and in the best interest of the 
Company.


 ITEM 10.  EXECUTIVE COMPENSATION 

  (a) Cash Compensation. 

The following table shows all cash compensation paid by Company 
during the fiscal year ended October 31, 1998, to each of the five most 
highly compensated executive  officers whose total cash compensation 
exceeded $60,000 (there were no such persons).

<TABLE>
<S>                         <C>     <C>        <C>       <C>             <C>
                                                         Other           
Restricted
 Name and Principal                                      Annual          Stock
 Position                   Year    Salary     Bonus     Compensation    
Awards
 
 Roger Hurst                1998    $53,920    $0        $0              $0
   CEO, CFO                 1997    $21,600    $0        $0              $0
   President                1996    $40,800    $0        $0              $0

 Jim Musick, Ph.D.          1998    $53,920    $0        $0              $0
   Secretary, COO           1997    $21,600    $0        $0              $0
                            1996    $40,800    $0        $0              $0
</TABLE>

On May 15, 1992,  May 7, 1996, April 8, 1997 and May 1, 1998 stock
options were approved for issuance by the Board of Directors in favor of
Mr. Roger Hurst and Dr. James Musick.  Mr. Hurst has been granted the
right to purchase 600,000 shares and Dr. James Musick 800,000 shares 
of the Company's Common Stock at an exercise price equal to the market
value at the time the options were granted

The Company pays health insurance premiums  for its full time   
employees,  of which Mr.  Hurst and Dr. Musick  are included.   There is  no 
deferred compensation payable any executive officer. 

As set forth in the following table, no options were exercised by any 
executive officer of the Company during the fiscal year ended October 31, 
1998 or 1997.  The value of unexercised options held by these persons is as 
follows:
<TABLE>
<S>           <C>         <C>       <C>          <C>            <C>
                                    Number of                   Value of
                                    Unexercised  Options        Unexercised Options
                                    at October 31, 1998         at October 31, 1998
              Shares      Values    --------------------------  -------------------------
NAME          Acquired    Realized  Exercisable  Unexercisable  Exercisable Unexercisable
-----------   --------    --------  -----------  -------------  ----------- -------------
Roger Hurst      0           0         600,000      0           $ 46,000        0
Jim Musick       0           0         800,000      0           $ 78,000        0
Erik VanHorn     0           0         500,000      0           $ 48,000        0

</TABLE>

  Employment Agreements

  Effective May 15, 1992, the Company entered into agreements not to 
compete with Messrs.  Hurst and Musick, respectively, pursuant to which 
each has agreed during his employment with the Company and for a period 
of two years thereafter, that he will not directly or indirectly; (I) consult 
with or assist any  competitor in competing with the Company in any of  the 
Company's  then businesses;  (ii) own an  interest greater  than 5% in any 
competitor; (iii) take any  action intended to divert business from  the 
Company to any competitor;  or (iv)  serve as  an  officer, director  or 
employee  of any competitor  Further, under the terms  of such agreements 
not to compete, the  Company has agreed to use its best efforts to enter in 
an employment agreement with Messrs.  Hurst and Musick, which 
agreements have yet to be negotiated.

  No officer of the Company is entitled to receive any additional 
compensation for his services to the Company, including his services as a 
director.  The Company may compensate non-employee Directors in the 
future.


       ITEM  11.  SECURITY  OWNERSHIP OF  CERTAIN BENEFICIAL OWNERS AND  
MANAGEMENT 

   (a) (b) Security Ownership of Certain Beneficial Owners. 
        
        The following table sets forth information with respect to the 
ownership of the Company's Common Stock, $.001 par value, of all 
Officers and Directors, individually, all Officers and Directors as a group, 
and all beneficial owners of more than five percent (5%) of the Company's 
Common Stock.  The following shareholders have sole voting and 
investment power with respect to shares, unless it is indicated otherwise.  
Based upon 6,413,702 outstanding shares as of October 31, 1998.

      Name and Address of Beneficial  
                   Owner                Number of shares            %


       Roger D. Hurst (1) (2)                 611,729              9.5
       8100 Southpark Way
       Bldg. B, Suite 1
       Littleton, CO 80120 

       James R. Musick (1) (2)                600,000              9.4
       8100 Southpark Way
       Bldg. B, Suite 1
       Littleton, CO  80120

       Officers and Directors               1,211,729             18.9
       as a Group (2 persons)

   (1) Officer and Director 

         Does not include 1,400,000 shares of common stock issuable upon 
         exercise of an option by  Messrs Hurst and Musick.  

(c) Change in Control. 

         On December 29, 1998, the Company was notified that World Wide 
Capital Company arranged for a group of investors to purchase the entire
position of the Company's major shareholder, Lloyd Fields.  The transaction
totaled 3.65 million shares of stock or 56.9% of the total outstanding shares.



       ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 

            (a) Transactions With Management and Others. 


       In May, 1992, the Board of Directors of the Company, including 
Messrs. Hurst and Musick, granted options to Mr. Hurst and Dr. Musick to 
acquire 400,000 Common Shares of the Company each at an exercise price 
of $.07 per share.  The Board of Directors also approved the issuance of an 
option to Mr. Erik Van Horn, a key employee and director of the Company, 
entitling him to purchase 200,000 Common Shares at an exercise price of 
$.07 per share.  (See "Management.")

      On May 7, 1996, stock options were approved for issuance by the 
Board of Directors in favor of Dr. James Musick and Mr. Erik Van Horn. 
Dr. Musick was granted the right to purchase 200,000 shares of the Company's
Common Stock and Mr. Van Horn 100,000 shares of the Company's Common
Stock at an exercise price equal to the market value at May 7, 1996.
                                                                    
       On January 12, 1993, the Company issued 240,000 "restricted "
Common Shares to Home Corp., an unaffiliated third party, in exchange for 
the forgiveness of indebtedness aggregating $92,000.

On April 8, 1997, stock options of 100,000 shares each were approved for 
issuance by the Board of Directors in favor of Dr. James Musick, Roger Hurst 
and Erik Van Horn.  

On May 1, 1998, stock options of 100,000 shares each were approved for 
issuance by the Board of Directors in favor of Dr. James Musick, Roger Hurst 
and Erik Van Horn.

       On  October 28, 1997, the Company issued 8,000 "restricted" common 
Shares to Dr. Patrick Sluss, an unaffiliated third party, in exchange for the
forgiveness of indebtedness aggregating $500.





       (b)  Certain Business Relationships.  There are no material business 
relationships between management or management's family and the 
Company. 
                                                  
       (c)  Indebtedness of Management.  None.





                               PART IV
Item 13. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

  (a) The following documents are filed as a part of this report:

       1. Financial Statements:
            Balance sheets, October 31, 1998 (Audited)
            Statements of Operations for the years ended October 31, 1998 
                  (Audited), and 1997 (Audited)
            Statement of Stockholder's Equity for the years October 31, 1998
                  (Audited) and 1997 (Audited)
            Statements of Cash Flows for the years ended October 31, 1998 
                  (Audited) and 1997 (Audited)
            Notes to Financial Statements for the years ended October 31, 1998
                  (Audited) and 1997 (Audited)




                               FINANCIAL STATEMENTS


                             Larry O'Donnell, CPA, P.C.
                              Telephone (303)745-4545
                          2280 South Xanadu Way, Suite 370
                                 Aurora, CO  80014

     Board of Directors
     Vitro Diagnostics, Inc.
     Littleton, Colorado

                          Independent Auditor's Report

     I have audited the accompanying balance sheet of Vitro Diagnostics, 
Inc. as of October 31, 1998 and the related statements of operations, 
stockholder's equity and cash flows for the years ended October 31, 1998 
and 1997.  These financial statements are the responsibility of the 
Company's.  My responsibility is to express an opinion on these financial
statements based on my audit

     I conducted my audit in accordance with generally accepted auditing 
standards.  Those standards require that I plan and perform the audit to 

obtain reasonable assurance about whether the financial statements are free 
of material misstatement.  An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial 
statements.  An audit also includes assessing their accounting principles 
used and significant estimates made by management, as well as evaluating 
the overall financial statement presentation.  I believe my audit provides a 
reasonable basis for my opinion.

     In my opinion, the financial statements referred to above present 
fairly, in all material respects, the financial position of Vitro 
Diagnostics, Inc. as of October 31, 1998 and the results of its operations and
its cash flows for the years ended  October 31, 1998 and 1997 in conformity
with generally accepted accounting principles.

/s/Larry O'Donnell

February 4, 1999

<PAGE>


                                  VITRO DIAGNOSTICS, INC 
                        Balance Sheet October 31, 1998 (Audited) 

       Assets 

  Current Assets:

       Cash                                              $        0
       Accounts Receivable-Trade,                           128,366
       Inventories                                          417,343
       Prepaid Expenses                                      63,543
       Deposits                                              15,000
                                                          ---------
  Total Current Assets                                      624,252          


  Property, Plant and Equipment :

       Office Furniture and Equipment                       14,793
       Laboratory and EDP Equipment                        138,477
       Leasehold Improvements                               12,636
                                                         ---------
       Sub Total                                           165,906
       Less Accumulated Depreciation                      (139,020)
                                                         ---------
       Total Property, Plant and Equipment                  26,886

  Other Assets:
       Inventory  Non -Current                              51,471
       Patents                                              54,725 
       Deposits                                              7,336
                                                         ---------
Total Other Assets                                         113,532
                                                         ---------
  Total Assets                                          $  764,670
                                                         =========

<PAGE>

                    VITRO DIAGNOSTICS, INC 
             Balance Sheet October 31, 1998 (Audited) 

       Liabilities and Stockholders' Equity 

  Current Liabilities:

       Accounts Payable - Trade                         $   85,039
       Bank Overdraft                                        4,248
       Accrued Salaries and Wages                              950
       Payroll Taxes Payable                                 9,310
       Accrued Expenses                                      2,447
       Short-Term Notes Payable                            154,708
                                                         --------- 
       Total Current Liabilities                           256,702

  Stockholders' Equity

       Common Stock; 500,000,000 Shares of
        $.001 Par Value Authorized;
        6,413,702 Issued and Outstanding                   281,001
        Paid-in Capital in Excess
         of Par Value                                    3,255,328
       Accumulated Deficit                              (3,028,361)
                                                         ---------
       Total Stockholders' Equity                          507,968
                                                         ---------
       Total Liabilities and
        Stockholders' Equity                             $ 764,670
                                                         =========

    The accompanying notes are an integral part of these financial statements
<PAGE>

                            VITRO DIAGNOSTICS, INC
                            Statement of Operations 
               For The Years Ended October 31, 1998 and 1997 (Audited)
 
                                                           
                                            1998              1997
                                        ----------         ---------
  Revenue
       Product Sales                    $1,232,244         $ 650,846
       
  Cost of Sales                            462,819           259,336
                                           -------           -------
       Gross Profit                        769,425           391,510


  Operating Expenses

       Selling, General and Admin         295,029            417,814
       Research and Development            52,209             81,579
       Depreciation                        14,897             15,245
                                          -------            -------
       Total Operating Expenses           362,135            514,638
                                          -------            -------
       Income (Loss) From Operations      407,290           (123,128)

  Other Income (Expense)

       Interest Expense                   (24,280)           (24,517)
       Penalties Expense                   (9,147)            (1,220)
       Miscellaneous Income                   624              4,420
                                          -------            -------
       Total Other Income (Expenses)      (32,803)           (21,317)
                                          -------            -------
       Net Income (Loss) For the Year  $  374,487          $(144,445)
                                       ==========          =========
       Net Income (Loss) Per
        Share of Common Stock 
        Primary                        $     0.06          $  ($0.02)
                                       ==========          =========
        Fully diluted                  $     0.05             ($0.02)
                                       ==========          =========
        Weighted Average Number 
        of Shares Outstanding 
        During the Year
           Primary                      6,419,816          6,413,702
                                        =========          =========
           Fully Diluted                7,819,816          6,413,702 
                                        =========          ========= 

<PAGE>
                         VITRO DIAGNOSTICS, INC 
                  Statement of Stockholders' Equity 
       For the Years Ended October 31, 1998 and 1997 (Audited) 

<TABLE>
<S>                 <C>            <C>          <C>          <C>            <C>
                         Common Stock           Capital in  
                    Number                      Excess       Accumulated
                    of Shares      Par Value    of Par       Deficit        Total

Balance 10/31/96    6,286,816      $ 280,868    $ 3,204,961  $ (3,258,403)  $227,426

5/97 for services
  and rent            133,000            133         50,367                   50,500

Net loss for the
 year ended 10/31/97                                             (144,445)  (144,445)
                    ---------       --------     ----------   -----------   --------
Balance 10/31/97    6,419,816      $ 281,001    $ 3,255,328  $ (3,402,848)  $133,481

Net income for the
  year ended 10/31/98                                             374,487    374,487
                     ---------       --------     ----------   -----------   --------
Balance 10/31/98     6,419,816      $ 281,001    $ 3,225,328  $(3,028,301)  $507,968
                     =========       ========    ===========  ===========   ========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

<PAGE>
         


                             VITRO DIAGNOSTICS, INC 
                            Statements of Cash Flows
            For the Years Ended October 31, 1998 and 1997 (Audited)  


                                                         
                                           1998                    1997
Cash Flows from 
   Operating Activities:
  Net Income (Loss)                       $  374,487             $ (144,445)
  Adjustments to Reconcile
   Net Income (Loss) to
   Net Cash Provided by
   Operating Activities:
     Depreciation                             14,897                 15,245
   Expenses Incurred for Stock                                       50,500
  Changes in Assets and Liabilities:
     (Increase) Decrease in
      Accounts Receivable                    (22,689)                    533  
      Inventories                           (179,651)                (54,366)
      Prepaid Expenses                         3,895                  11,107 
      Deposits                               (15,934)                  1,196 

     Increase (Decrease) in
      Accounts Payable                       (84,728)                 54,071 
      Accrued Expenses                           450                  (5,514)
      Payroll Taxes Payable                  (26,338)                 25,771 
                                             --------                --------   
Net Cash Provided (Used) by        
  Operating Activities                        64,389                 (46,079)


 Cash Flows from 
    Investing Activities:
  Capital Expenditures                       (13,793)                (10,619)
  Patents                                    (54,725) 
                                            --------                  --------
    Net Cash Provided (Used)
     by Investing Activities                 (68,518)                (10,619) 
                                         

Cash Flows from 
   Financing Activities:
      Payments on
        Notes Payable, Bank                                          (14,130)
      Proceeds from Short
        Term Notes Payable                    7,635                   40,728 
                                            --------                 --------
Net Cash Provided (Used) by
      Financing Activities                    7,635                   26,598  
                                           --------                  --------

    Net Increase (Decrease) in Cash           3,506                  (30,100)

    Cash (Bank Overdraft)
         at Beginning of Year                (7,754)                  22,346
                                            --------                 --------
    Cash (Bank Overdraft) 
         at End of Year                     $(4,248)                $ (7,754)
                                            =======                 ========

       Supplemental disclosures of cash flow information 
    
                                                           
                                             1998                   1997
         Cash paid during the year for: 
            Interest                       $ 24,289               $ 24,517
            Income taxes                   $      -               $      -

The accompanying notes are an integral part of these financial statements.

<PAGE>

                           Vitro Diagnostics, Inc. 
                      Notes to the Financial Statements 
                          October 31, 1998 (Audited) 


       Note #1: Accounting Policies
    
       The Company is engaged in the development, manufacturing and 
marketing of purified antigens.  These products are sold domestically and 
internationally: the first product was introduced November, 1990. 

        Accounts Receivable - The Company considers accounts receivable to 
be fully collectible; accordingly, no allowance for doubtful accounts was 
established.  If accounts become uncollectible, they will be charged to 
operations when that determination is made. 

       Depreciation and Amortization - Equipment is stated at lower of cost 
or estimated market value and is being depreciated on the straight-line basis
over estimated useful lives of 3 to 10 years. 

       Inventories - They are valued at the lower of cost or market using the 
first-in first-out method.
          
       Inventories consist of: 

                                            10-31-98
                                           ------------
     Finished Goods                         $ 263,193
     Goods in Process                         115,432
     Raw Materials                             38,718
                                             --------
                                            $ 417,343
                                             ========
  
Goods in process inventory which is not expected to be completed and
sold in the next fiscal year is classified as non current.

       Cash equivalents - Cash includes demand deposits at banks. 

       Patents - Patents are recorded at the cost of acquiring the patent.  
Amortization will begin when the patents are granted.  If the patents are 
granted, the cost will be charged to operations in the year the patents are 
denied.

       Use of estimates - The preparation of financial statements in 
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those 
estimates.


       NOTE #2: Common Stock and Stock Transactions 

       The net earnings (loss) per share is based upon the weighted average
number of shares outstanding during the year.  Common stock warrants are not 
included in the calculation of earnings (loss) per share

       On May 15, 1992, the Board of Directors of the Company issued stock 
options, which are to be exercised at the market value on May 15, 1992, to 
Roger Hurst, Jim Musick and Erik Van Horn.  The options are for a period 
of 10 years.  Mr. Hurst and Dr. Musick were each granted the right to 
acquire 400,000 "restricted" common shares of the Company.  Mr. 
Van Horn was granted the right to acquire 200,000 "restricted" common 
shares of the Company.  No options have been exercised.

       On May 7, 1996, stock options were approved for issuance by the 
Board of Directors in favor of Dr. James Musick and Mr. Erik Van Horn. 
Dr. Musick was granted the right to purchase 200,000 shares of the Company's
Common Stock and Mr. Van Horn 100,000 shares of the Company's Common
Stock at an exercise price equal to the market value at May 7, 1996.


On April 8, 1997, stock options of 100,000 shares were approved for issuance 
by the Board of Directors in favor of Dr. James Musick, Roger Hurst and Erik 
Van Horn.  

On May 1, 1998, stock options of 100,000 shares were approved for issuance by 
the Board of Directors in favor of Dr. James Musick, Roger Hurst and Erik Van 
Horn.

       On  October 28, 1997, the Company issued 8,000 "restricted" common 
Shares to Dr. Patrick Sluss, an unaffiliated third party, in exchange for the
forgiveness of indebtedness aggregating $500.



       Note #3: LEASE OBLIGATION 

       The Company's  lease at 8100 Southpark Way expires on December 31, 
2001.  Monthly lease payments are $4,813.   Rent expense recorded under the 
lease is $49,238 and $50,000 for the years ended October 31, 1998 and 1997, 
respectively.

        The Company leases laboratory equipment under leases which are classifie
d as operating leases.  Rent expense recorded under the leases is $44,809 and 
$81,902 for the years ended October 31, 1998 and 1997, respectively. 
     
     Future minimum lease payments for each of the years ending October 31 are 
as follows: 1999 $112,000; 2000 $92,000; 2001 $75,000; 2002 $11,000.     

       NOTE #4: Schedule of Short Term Notes Payable 

        The Company has notes payable to individuals which are unsecured
 and due on demand as follows:

                             Issue          Interest
                             Date           Rate                  Balance
                            ----------      ------------          -----------
 Unrelated Party:
                              1/10/90            20.00%            $ 17,800
                              6/12/90           14.453%              27,010
                              6/30/95            15.00%              32,467
  Related Party:
  Corporate COO               6/29/95            15.00%              17,054
  Corporate COO                8/4/95            25.00%               8,939
  Corporate COO                7/7/97            25.00%              13,478
  Corporate COO                7/7/97            25.00%               8,345
  Corporate CEO              10/31/95            21.00%              29,615

                                       Total                       $154,708
          
           Interest expense to related parties was $15,968 and  $23,929 for 
the years ended October 31, 1998 and 1997, respectively.


NOTE #5: Income Taxes

Income Taxes  - Deferred income taxes arise from the temporary differences 
between financial   statement and income tax recognition of net operating 
losses.  A deferred tax asset arising from the net operating loss carryover of 
approximately $600,000 has been offset by a valuation allowance.

During the year ended October 31, 1998, the Company utilized a portion
of its net operating loss carryover recognizing a benefit of  approximately
$140,000 which reduced the entire amount of its income tax expense.
  
At October 31, 1998, the Company has unused Federal net   operating loss carry 
forwards which expire as follows:

       Carry Over     Expires      Original    Amount      Loss
       From F/Y       In F/Y       Loss        Utilized    Carryover
       -----------    ----------   ----------  ----------  ----------
          1988           2003      $  333,034  $  333,034  $  
          1989           2004         783,474     192,229     591,245
          1990           2005         480,296                 480,296
          1991           2006          21,321                  21,321
          1995           2010         386,846                 386,846
          1997           2012         156,514                 156,514
                                                            ---------
                                                           $1,636,222
                                                            =========

NOTE 6.  Earnings per share

                                                  1998           1997

     Weighted number of shares outstanding      6,419,816    6,419,816 

     Stock options                              1,400,000
                                               ----------    ---------

     Fully diluted number of shares 
         outstanding                            7,819,816    6,419,816
                                               ==========    =========

NOTE 7. Concentrations

        Major customers - The Company had three major customers in 1998.  They 
accounted for 35%, 16% and 15% of sales. The Company had three major customers 
in 1997.  They accounted for 16%, 15% and 11% of sales.

     Credit risk - The Company performs ongoing credit evaluations of its 
customers' financial condition and, generally, requires no collateral from its 
customers.

     Raw materials - The Company purchases substantially all of its raw 
materials from one supplier.



                                  SIGNATURES 
                                             
            Pursuant to the requirements of Section 13 or 15(d) of the 
Securities Exchange Act of 1934, the Company has duly caused this Report to 
be signed on its behalf by the undersigned, thereunto duly authorized, on
February 12, 1999. 

                                     Vitro Diagnostics, Inc. 
                                          (Company) 


                                          By: /s/ Roger Hurst         
                                              Roger Hurst, President, 
                                              Chief Executive Officer 
                                              Chief Financial Officer
                                              Chief Accounting Officer
        
            Pursuant to the requirements of the Securities Exchange Act of 
1934, this report has been signed below by the following persons on behalf 
of the Company in the capacities indicated on February 9, 1999. 

       Principal Executive, Financial and Accounting Officer  
       and Director: /s/ Roger Hurst                         
                     Roger Hurst 

       Directors:

       /s/ Roger Hurst 
       Roger Hurst

       /s/ James Musick 
       James Musick

       /s/ Erik Van Horn 
       Erik Van Horn