UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

(X)  Annual report under section 13 or 15(d) of the  Securities  Exchange Act of
     1934.

     For the fiscal year ended October 31, 2002

( )  Transition  report  pursuant  to  section  13 or  15(d)  of the  Securities
     Exchange Act of 1934.

Commission file number:  0-17378
                         -------

                             VITRO DIAGNOSTICS, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


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


12635 E. Montview Blvd., Aurora, Colorado                               80010
-----------------------------------------                             ----------
(Address of principal executive offices)                              (Zip Code)


Registrant's telephone number, including area code:  (720) 859-4120
                                                     --------------

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

Securities registered pursuant to Section 12(g) of the Exchange Act:

                          Common Stock, $.001 par value
                          -----------------------------
                                (Title of Class)

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
                              ---     ---

Check if there is no  disclosure of  delinquent  filers  pursuant to Item 405 of
Regulation S-B 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-KSB or any  amendment to
this form 10-KSB. [ ]

<PAGE>

The issuer had no revenue for its most recent fiscal year.

The  aggregate  market  value of the  4,633,288  shares of voting  stock held by
non-affiliates  of the Company  outstanding at December 31, 2002,  calculated by
taking the last sales  price of the  Company's  common  stock ($.03 as quoted on
December  30,  2002) was  $140,000.  The  number of  shares  outstanding  of the
issuer's common equity as of December 31, 2002 was 9,238,750.

                       Document incorporated by reference:

     None.

Transitional Small Business Disclosure Format:  [] Yes  [ X ] No

This report  consists of 47 pages,  including  one page  constituting  the cover
page.


<PAGE>

                                TABLE OF CONTENTS



PART I.........................................................................1


   ITEM 1.   BUSINESS..........................................................1

   ITEM 2.   DESCRIPTION OF PROPERTY...........................................9

   ITEM 3.   LEGAL PROCEEDINGS.................................................9

   ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..............10


PART II.......................................................................10


   ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.........10

   ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
             CONDITION AND RESULTS OF OPERATIONS..............................11

   ITEM 7.   FINANCIAL STATEMENTS.............................................18

   ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS....................18


PART III......................................................................18


   ITEM 9.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT...............18

   ITEM 10.  EXECUTIVE COMPENSATION...........................................19

   ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
             AND MANAGEMENT...................................................22

   ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................23


PART IV.......................................................................24


   ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.................................24


SIGNATURES....................................................................27



PART F/S......................................................................29


                                        i



<PAGE>

                Special Note Regarding Forward Looking Statements

     Except for the  historical  information  contained  herein,  this  document
contains  forward-looking  statements  relating to future  financial  results or
business  expectations.  These  statements  are  identified  by  words  such  as
"expects,"  "anticipates"  or "hopes."  Investors  should be aware that business
plans  might  change as  circumstances  dictate.  Actual  results  could  differ
materially as a result of risk-related  factors.  Such factors include,  but are
not limited to, those discussed in "Business" and  "Management's  Discussion and
Analysis of Financial Condition and Results of Operations." Investors should not
put undue  reliance on these  forward-looking  statements.  Except as  otherwise
required  by  rules of the  Securities  and  Exchange  Commission,  the  Company
disclaims  any intent or  obligation to update  publicly  these  forward-looking
statements, whether as a result of new information, future events or otherwise.

                          Reference to Other Documents

     The  descriptions in this Report relating to the contents of any agreements
or other  documents  are  qualified  in their  entirety  by  reference  to those
documents,  copies of which are filed with, or  incorporated  by reference into,
this Report or otherwise filed with the Securities and Exchange Commission.

                                       ii
<PAGE>


                                     PART I

ITEM 1.  BUSINESS

History
-------

     Vitro Diagnostics,  Inc. ("we" or the "Company") was incorporated under the
laws of the State of Nevada on March 31, 1986. From November of 1990 to July 31,
2000, the Company was engaged in the  development,  manufacture and distribution
of purified human  antigens and the  development  of  therapeutic  products.  In
August  2000,  the Company sold the assets used in the  manufacture  and sale of
purified antigens for diagnostic applications.

     Our common stock is currently traded over the counter and quoted on the OTC
Bulletin  Board.  Like all  publicly  traded  companies,  we are  subject to the
provisions  of the  Sarbanes-Oxley  Act that was  adopted by the  United  States
Congress and signed into law by President Bush effective in July 2002.  That law
imposes a number of new  requirements  on public  companies to address  concerns
raised by the financial problems of such companies as Enron and WorldCom.  It is
anticipated  that  Sarbanes-Oxley  will have a  profound  effect  on how  public
companies are governed in the future,  especially  small public  companies  like
ours.  Many  implications  of the law have only recently  been  addressed by the
United States  Securities and Exchange  Commission  ("SEC"),  the federal agency
charged with  implementing  most of Sarbanes Oxley.  Some of the provisions have
already been  implemented,  others await  further  action.  Accordingly,  we are
unable at this time to accurately predict the extent of the Act on our operation
as a public company. We do expect that the effect of Sarbanes-Oxley will be felt
beginning  in fiscal  2003,  although  we are not  entirely  sure what all those
effects will be. Investors in our company should be aware of these effects.

     Also last  year,  the  National  Association  of  Securities  Dealers,  the
association that oversees the market on which our stock is quoted,  proposed new
rules to  ultimately  abolish the Bulletin  Board where quotes for our stock are
made and which to a large extent enables our trading market. If the SEC approves
these rules, the Bulletin Board would be replaced by a new stock exchange called
the  Bulletin  Board  Exchange,  or "BBX." The  proposed  requirements  for this
exchange  might  further  change the way we govern our  affairs  and the way our
stock trades. It would also require significant  additional  expenditures on our
part. If we are unable to obtain listing of our stock on that  exchange,  it may
negatively   affect  the  trading   market  for  those  shares.   See,  Item  6,
"Management's  Discussion and Analysis or Plan of Operation-Risk  Factors" for a
more complete description of the terms of these regulations.

Narrative Description of Business
---------------------------------

     The Company  currently  engages in research and development of products and
technologies for use in the production of human therapeutic products targeted to
the  treatment  of  specific  conditions  and  diseases.  Also,  the  Company is
developing products for use in research and manufacture of other  biotherapeutic
products. Since the sale of our diagnostic division in 2000, we have received no
revenue from operations.  However, with the development of product candidates in
fiscal  2002,  we hope to begin  marketing  a product in 2003 that will  provide
revenue and cash flow, albeit in limited amounts.

                                        1
<PAGE>

A.   Fertility Drugs
--------------------

     The Company's  previous  operation of the  manufacture and sale of purified
antigens for diagnostic  purposes  resulted in the discovery of several products
and technologies with potential application for therapeutic purposes. An initial
target was the pituitary  hormone FSH and related  products,  since FSH has been
used as a drug to treat  infertility for the past 30 years. The worldwide market
for FSH and related  products is  approximately  $1 billion per year.  Since the
sale of the diagnostic operation, management has concentrated on the development
of  these  discoveries  into  commercially  valuable  assets.  Efforts  are also
underway  to convert  some of the basic  technology  into a pipeline of products
with potentially wide-ranging applications in the treatment of human diseases.

     The Company's  present  product  candidates  targeted to treat  infertility
include purified urofollitropin ("VITROPIN(TM)") for injection.  VITROPIN(TM) is
a highly purified  urinary FSH preparation  produced  according to the Company's
patented  purification  process.  Management  believes  that  this  product  has
competitive  advantages over products currently on the market,  including higher
purity and reproducible,  cost-efficient production.  Other products designed to
treat  infertility  are  VITROPIN-V(TM)  (cell-derived  FSH) and  VITROPIN-C(TM)
(custom  FSH).  VITROJECT(TM)  is a novel drug  delivery  device with  perceived
competitive  advantages  over the current  methods used to administer  fertility
drugs.  None of these  products  has  been  approved  by the U.S.  Food and Drug
Administration ("FDA") for sale.

     1. Description of Products and Product Candidates

     VITROPIN(TM)   is  highly   purified   FSH   derived   from  the  urine  of
post-menopausal  women. It is produced through the Company's patented technology
that  management  believes  represents a significant  improvement  over previous
methods used to produce this  product.  FSH has been used for over 30 years as a
drug to treat infertility by inducing follicle development in the ovary.

     VITROJECT(TM) is a novel delivery device for administration of VITROPIN(TM)
and other  substances  that provide an entire  treatment  regime within a single
device that is easy and economical to use. FSH currently must be given by either
intramuscular or subcutaneous  injection at the same time in the evening,  for 7
to  15  consecutive   days.   Most  existing   products  are   administered   by
reconstitution  of a single  dose,  loading into a syringe and  injection,  with
repetition of these steps in subsequent days.  VITROJECT(TM)  may allow patients
to self-inject fertility drugs by subcutaneous administration at home with fewer
drug manipulations and lower cost compared to existing methods.  The development
of  VITROPIN(TM)  and  VITROJECT(TM)  are  sufficiently   advanced  to  approach
regulatory authorities such as the FDA to determine the most appropriate methods
to receive  approval.  Such  contact  with the FDA  regarding  VITROPIN(TM)  has
already occurred and is described in greater detail below.

                                        2
<PAGE>

     VITROPIN-V(TM) is envisioned to be the only product on the market identical
to native FSH. The Company  plans to produce  this  product  through use of cell
immortalization technology that is described in greater detail below. Management
believes that it may come to dominate the premium-priced  fertility marketplace,
which currently  depends upon artificially  derived  recombinant  products.  The
Company has been  awarded an SBIR Phase I grant from the  National  Institute of
Health to develop  immortalized  human gonadotrope  cells, which is the intended
source of  cell-derived  FSH.  VITROPIN-V(TM)  is still in an early  development
stage and is projected to require  substantial  funding and  approximately  four
years additional development to be marketable.

     VITROPIN-C(TM)  is produced  using the  Company's  proprietary  technology.
Management  hopes  that this  product  candidate  will allow the  production  of
specific  forms of FSH that  control the  clinical  pharmacology  and reduce the
likelihood of side effects of currently  available  products.  VITROPIN-C(TM) is
planned as a longer-term development activity of the Company.

     2. Relevant Patents

     The Company  believes  that  successful  commercialization  of  therapeutic
products requires patent  protection,  including process patents and composition
of matter  patents.  The Company has thus  endeavored to establish a proprietary
technological  position  with respect to the above  products.  The United States
Patent and  Trademark  Office  ("USPTO")  issued the  Company's  first patent on
November  23,  1999 (US Patent  No.  5,990,288).  This  invention  was  entitled
"Methods for Purifying FSH" and details  methods to manufacture  highly purified
FSH from various sources,  including human urine, recombinant FSH sources, human
gonadotrope  cells (cells of the human  pituitary gland that elaborate FSH & LH)
and animal  extracts of pituitary  glands.  Management  believes this  invention
represents a significant  advance in the methods  previously  used to purify FSH
and to produce therapeutic FSH.

     During 2002,  two other  patents were issued to the Company  regarding  its
technology to produce FSH. The United States Patent and Trademark Office (USPTO)
granted  patent number  6,414,123 B1 and the New Zealand  Patent Office  granted
patent number 501,212 to the Company for a patent entitled "Method for Purifying
FSH". The new patents  provide  additional  patent  protection for the Company's
previously  patented  FSH  purification  method and  additional  protection  for
production  of human  FSH from  different  sources  including:  urinary-derived,
recombinant,  cell-derived and genetically modified.  The new patents also cover
purified FSH derived from several different animal species.

     The Company  has  additional  pending  applications  in the United  States,
Canada,  Australia,  New Zealand, United Kingdom and the European Patent Office.
Issuance  of  these  pending   applications  would  broaden  and  extend  patent
protection  to include  other  countries.  There is presently no assurance  that
these additional patents will be issued. Also, once issued, an individual patent
may be subject to litigation  that may result in  invalidation of all or part of
the patent. There is no assurance that any patent issued to the Company will not
be invalidated through legal challenge. See Item 6. - "Risk Factors."

                                        3
<PAGE>

     VITROJECT(TM) is subject to patent protection through pending  applications
filed  by  the  Company  in  the  United  States  and  foreign  countries.  This
application  may result in issued  patents  within the United  States and select
foreign   countries.   The   Company's   patent   protection   related  to  cell
immortalization is described in greater detail below.

     3. Regulatory Approval

     Drugs  used to treat  human  infertility  require  registration  with,  and
approval from,  appropriate  government authorities prior to sale. In the United
States, the FDA oversees approval of such products.

     During fiscal year 2001,  the Company  submitted a plan for the approval of
VITROPIN(TM)  to the FDA. Based on the FDA's  evaluation,  the Company  believes
that the FDA,  following  substantial  additional  work, will accept a marketing
application  for  VITROPIN(TM).  These  applications  typically rely on previous
studies of similar  products and require clinical studies of safety and efficacy
to be provided by the Company or its partners.  The Company hopes to license its
purification  technology to a third party rather than attempt to directly market
this product due to the  substantial  costs involved in the process.  Presently,
the Company has no agreement to license its  purification  technology to a third
party,  although  there are ongoing  discussions  concerning  this  possibility.
VITROJECT(TM),  VITROPIN-C(TM) and VITROPIN-V(TM) have not yet been submitted to
any regulatory authority for consideration of approval.

     4. Commercialization and Development Plan

     Further development of the Company's  fertility drugs requires  substantial
capital that is presently not available to the Company. Management is engaged in
confidential  discussions with pharmaceutical firms that have expressed interest
in  commercializing  select  fertility  drugs owned by the Company.  In general,
these firms presently produce and sell FDA-approved products targeted to women's
health  care  markets.  The  goal  of  these  discussions  is  to  establish  an
arrangement whereby the Company would receive funding for the sale or license of
its   technology   or   research   collaboration   designed   to   further   the
commercialization  of its  technology.  Management  has and  intends to continue
these efforts in the future, as it believes such relationships would provide the
most likely  source of funding for the Company to develop its  fertility  drugs.
However, there is no assurance that such efforts will be successful.

     The  Company  also  intends  to  pursue  grant   support  for  the  further
development of VITROPIN-V(TM). The Company was previously awarded a Phase I SBIR
grant in the amount of $100,000  during 2001. The  successful  completion of the
Phase I research  allows the Company to apply for Phase II support that could be
as much as $1.2 million  over two years.  The Company  anticipates  submitting a
Phase II application during 2003 with funding to begin about seven months later,
if the grant is  funded.  The  commitment  of a  commercial  partner  to further
support VITROPIN-V(TM)  commercialization  beyond Phase II research is important
to the  success  of the grant and the  Company  is  seeking  this  support  from
potential partners.

                                        4
<PAGE>

     Commercialization  of VITROPIN(TM)  requires  regulatory  approval as noted
above.  The Company  anticipates that obtaining such approval from the FDA would
require at least two years.  This  approval is dependent  upon several  factors,
including  funding of the  clinical  trials and other events that are beyond the
control of the  Company.  There can be no assurance  that the required  approval
would be  obtained  within the next two years.  Sales of product  would  further
require an arrangement  with a third party to market and distribute  product and
such arrangements do not presently exist.

B.   Cellular Immortalization
-----------------------------

     1. Background

     The Company has developed a novel  technology  for the  immortalization  of
cells that our management believes has broad application to commercialization of
a series of products providing  competitive  advantages over existing products &
technologies.   Cell  immortalization  represents  a  platform  technology  with
potential  application  to: a) production of cell products that are identical to
those of the human body,  b)  production of  biotherapeutic  products  including
antibodies and vaccines,  c) cell therapies for diseases such as Type I diabetes
and  Alzheimer's  and d)  other  applications  in  research,  manufacturing  and
veterinary medicine.

     A team of five  Company  scientists  developed a  proprietary  and patented
process that uses controlled  expression of specific genes to result in cellular
immortalization.  Cell immortalization is a process to prolong the life of cells
grown outside of the body.  Normally,  these cells die relatively  quickly.  The
Company's  technology  extends  cell  lifetime  for  prolonged  periods of time,
resulting in immortalization.  Furthermore,  cells immortalized by the Company's
method  continue to divide for prolonged  periods in cell culture while avoiding
malignant transformation. These cells thus maintain cellular properties of cells
of the body, which is a primary basis for the competitive  advantage of products
derived from cell immortalization

     Through its research program, the Company has immortalized various cells of
animal and human  origin thus  providing  proof of  principle of its approach to
cell immortalization.  This was an essential component of the issued and pending
patent  applications owned by the Company (described below) and provides a basis
for commercialization of cell immortalization.  Earlier research resulted in the
immortalization  of animal and human pituitary cells that synthesize and release
various hormones of medical value, e.g., growth hormone and FSH. The hormones of
the  pituitary  gland  control  several  bodily  functions   including   growth,
reproduction and metabolism.

     These results have  recently  been extended to cells of the human  pancreas
gland and an  immortalized  cell line of  pancreatic  fibroblast  cells has been
established.  Fibroblasts  are common to most tissues and primarily  function to
support and bind tissues into organs.  The Company has also  immortalized  other
cells of the human  pancreas  gland,  including  the type of cells that  produce
insulin.

                                        5
<PAGE>


     2. Plan to commercialize cell immortalization technology.

     The  commercial  opportunities  available  to the Company  through its cell
immortalization  technology are numerous  because of the platform  nature of the
technology,  e.g.,  cell  therapy  alone  is  applicable  to  Type  I  diabetes,
neurodegenerative  diseases including Alzheimer's,  Parkinson's,  ALS and spinal
cord  injury,   liver  failure  and  heart  failure.   In  general,   commercial
opportunities  fall into two classes:  those  requiring  FDA  approval  prior to
product marketing and those  applications  that do not require FDA approval.  At
the present time, the Company's  development efforts are focused on applications
that do not require FDA approval since such products may be marketed  relatively
quickly and provide  revenues to support the  Company's  operations  in the near
term. The products  presently under  development and those planned for near-term
development are described in the next section.

     The Company also hopes to develop  products  from its cell  immortalization
technology that require  FDA-approval,  e.g.,  VITROPIN-V(TM),  a fertility drug
derived  from  immortalized  pituitary  cells that  produce FSH and LH. As noted
above,  such development  depends in large part on funding that is not presently
available to the Company. In the absence of such funding, further development of
VITROPIN-V(TM)  will  not  proceed.  Likewise,  development  of  other  products
requiring FDA approval is highly dependent on available  funding,  e.g., through
partnerships with pharmaceutical or biotechnology firms.

     Products and product candidates

     Using its immortalized  human pancreatic  fibroblast cell line, the Company
developed a serum-free, defined cell culture medium called PRIMAID-I(TM).  (Cell
culture is a process for the  proliferation  of cells grown  outside of the body
and this process depends critically upon cell culture media, the liquid solution
in which the cells are grown.)  Serum-free,  chemically  defined medium that the
Company developed lacks components of human or animal origin.  Such media are of
value in the generation or research of pharmaceutical products derived from cell
culture  by  reducing  potential  contamination  of cell  lines or  cell-derived
products through  minimization of exposure to potential  contaminants thought to
underlie  bovine  spongioform  encephalitis  or "mad  cow"  disease.  Regulatory
authorities  now  require  use  of  media  devoid  of  animal  or  human-derived
components in order to obtain  registration of  pharmaceutical  products derived
through cell culture.

     The Company hopes to launch PRIMAID-I(TM) during 2003. Through an empirical
process of component  deletion and  titration,  cell growth rate was  optimized.
This  medium is entirely  free of  components  of animal or human  origin and is
cost-effective.  Prior to  launch,  the  Company  and  third  parties  that have
expressed  interest  in  possible  distribution  will test it  extensively.  The
Company plans to sell this product directly and use various  distributors in the
US and abroad to assist in broader product distribution.

     Additional  products may be added to  PRIMAID-I(TM)  that are  optimized to
other cell lines, given that the Company has adequate resources to develop these
products.  Such  development  will be  targeted  to  cells  that are used in the
manufacture of vaccines including Hepatitis A, Hepatitis B, combined Hepatitis A
and B, varicella zoster virus (chicken pox), smallpox,  and rabies.  Development
of this medium will require immortalization of cells used in vaccine manufacture

                                        6
<PAGE>


and the Company will determine if there is interest in license or acquisition of
these cells, given successful generation and development of the cell line. There
is potential application of the Company's cell immortalization technology to use
in the manufacture of vaccines to combat  bioterrorism such as the virus causing
smallpox and other infectious diseases.  Given available resources,  the Company
hopes to pursue this commercial  opportunity and may seek research grant funding
to support its research.

     It is becoming  increasingly clear that human cells are uniquely capable of
producing sugar-containing proteins known as glycoproteins. As the biotechnology
industry develops glycoprotein  therapeutic products,  there is a need for human
cells to produce products identical to those of the human body to ensure product
efficacy and safety. Antibodies are glycoprotein immune molecules that recognize
specific  molecular  sites.  Herceptin(R)  is an  example  of an  antibody-based
biotherapeutic  drug that is used to treat certain types of breast  cancer.  The
market for therapeutic  antibodies is projected to expand nearly ten-fold during
the next ten years from $2.5 billion presently to over $20 billion.  The Company
hopes to further  develop  its cell  immortalization  technology  for use in the
production of biotherapeutic products including antibodies.

4.   Relevant Patents

     On October 1, 2002 the Company  was granted  United  States  patent  number
6,458,593  B1 for a patent  entitled  "IMMORTALIZED  CELL  LINES AND  METHODS OF
MAKING  SAME."  The newly  issued  patent  provides  the  Company a  proprietary
position with respect to use of specific  immortalization methods and cell lines
derived from the pituitary  gland, an organ located just below the brain that is
responsible for regulation of reproduction,  growth, thyroid function and stress
responses.

     The Company also has additional applications pending with the USPTO and the
European Patent Office,  potentially allowing broadened patent protection in the
US and issued  patents in  several  European  countries.  The  Company  also has
pending patent applications for its cell  immortalization  technology in Israel,
New Zealand,  Australia and Canada.  The examination of these applications could
require several years for completion.  The Company's  technology  related to the
production  of defined,  serum-free  cell  culture  media is  protected as trade
secret.

     C. Other Recent Developments
     ----------------------------

     During fiscal year 2002, three new patents were granted to the Company, two
regarding  fertility  drugs  and  one  for the  Company's  cell  immortalization
technology. In addition,  current product development activities were focused on
products not requiring FDA registration prior to marketing. PRIMAID-I(TM) is one
such product in advanced stages of development,  nearing commercial distribution
and other similar products may be added relatively  quickly with nominal capital
resources. Such developments will hopefully generate revenues for the Company in
the  short-term.  Also,  during  2002 there  were  significant  advances  in the
establishment of strategic alliances with other firms for  commercialization  of
the Company's fertility drugs and for commercialization of products derived from
the Company's cell immortalization technology.

                                        7
<PAGE>

     Screening of viable candidates  initially identified potential partners for
fertility drug  commercialization.  Considerable advances have been made in this
process  recently  with the  identification  of viable  potential  partners  who
require  anonymity.  These  pharmaceutical  firms have  FDA-approved  drugs that
target  women's  health care  markets.  Management  believes  that the Company's
fertility drug product  candidates  complement  products  presently  marketed by
potential  partners,  thus  expanding the potential  partner's  total  available
market.  Further alliance development  generally requires detailed evaluation of
the Company's  technology on the basis of its technical and scientific merit and
analysis  of  the  competitive   market  advantages  of  the  Company's  product
candidates.  In certain cases,  the Company's  technology has received  strongly
positive   evaluations.   Subsequently,   negotiations  were  pursued  regarding
establishment   of  a  mutually   agreeable   business   relationship  and  such
negotiations  are ongoing.  However,  no specific  agreement or alliance has yet
been reached.

     With the issuance of the Company's first cell immortalization patent, there
are additional  opportunities  to commercialize  products through  collaborative
alliances  with  other   pharmaceutical  and  biotechnology   firms,   including
licensing,  collaborative research and possible distribution of products such as
PRIMAID-I(TM).  In general,  discussions regarding collaboration related to cell
immortalization  are at earlier  stages  than  discussions  regarding  fertility
drugs.  Our  Company's  management  intends to pursue all  available  avenues to
establishing   inter-corporate   alliances   to   assist   in  the   accelerated
commercialization of the Company's cell immortalization technology.

COMPETITION
-----------

     The Company  faces  competition  from a number of larger,  well-established
entities in the area of fertility  treatment and research for other  therapeutic
products.  Ares-Serono Group, SA controls approximately 50% of the worldwide FSH
market. The Organon division of Akzo-Nobel, SA has the majority of the remaining
market, with a 30% market share. Ferring Pharmaceuticals has the remaining share
of the market,  about 20%. Serono,  Organon and Ferring have diversified product
lines  including  impure  LH/FSH   combination   drugs  and  purified  human  or
recombinant FSH.

     The existing market participants  represent substantial  competition to any
entity  hoping  to  introduce  new  products  into the human  fertility  market,
including  the  Company.  All  of  these  entities  have  substantially  greater
financial and personnel  resources  than the Company.  Also,  Serono is known to
vigorously  protect  its  market  position  through  various  means,   including
litigation.  Organon and Ferring, while not known to engage in aggressive market
protection tactics,  may well present substantial  obstacles to the entry of any
of the Company's products to the market.

     Cell culture  media is presently  produced and marketed by other  companies
with substantially greater resources that the Company, e.g., Invitrogen, Inc. As
noted above,  management  believes  that it's  PRIMAID(TM)  product  possess the
competitive  advantage of being optimized to specific human cells. Other markets
targeted  by the  Company  are  competitive  as well,  e.g.,  vaccine & antibody
production  have been  ongoing for several  years.  The Company  will attempt to
build its patent  portfolio to provide  proprietary  protection for its intended
applications of cell immortalization technology.

TRADEMARKS

     The Company has established trademark claims to its products, VITROPIN(TM),
VITROJECT(TM),  VITROPIN-C(TM),  VITROPIN-V(TM), and PRIMAID-I(TM) informally by
publication.  These  trademarks are thus common law marks that may be challenged
through similar,  established and registered marks that existed prior to initial
publication  by the Company.  The Company may elect to formally  protect some or
all of these  marks  through  registration  with the  United  States  Patent and
Trademark Office.  Registration of a trademark involves an initial investigation
to determine if there are prior claims to a particular  mark.  If no conflict is
found, the registration  process includes an application to the Trademark office
and payment of filing fees.  Within about one year of the filing,  a decision is
issued as to whether or not registration is allowed.  There is no assurance that
the Company will be able to successfully  obtain any registered  trademark.  The
Company has registered the trademark Vitro Biopharma with the State of Colorado.
This is used as a  "doing-business-as"  name when  approaching  new contacts for
potential  strategic  alliance  with the Company  since the Company is no longer
involved in the manufacture of diagnostic products.

EMPLOYEES

     The  Company  presently  has one full  time  employee,  James  Musick,  the
Company's President & CEO. Erik Van Horn, the Company's Vice President, provides
the  Company  with  periodic  consultation  related  to the  achievement  of its
business objectives.  Mr. Musick is responsible for all day-to-day operations of
the Company, business development and other management functions.

     The Company  also  utilizes  the services of  consultants  and  independent
contractors to supplement the resources of its employee from time to time. These
consultants include scientific and laboratory personnel, accountants,  attorneys
and an individual who has previous CFO experience in the biotechnology industry.
Some of these  consulting  positions may be converted to full time employment if
and when the Company's needs and resources permit.


ITEM 2. DESCRIPTION OF PROPERTY

     The  Company  owns no real  property.  The  Company  leases  its office and
laboratory  space,  consisting  of 720  square  feet,  at  12635  East  Montview
Boulevard,  Suite  218,  Aurora,  CO 80010.  The lease is a full  service  lease
allowing Company  personnel access to common areas,  conference rooms and use of
certain  laboratory  equipment.  This lease  expires on May 31,  2003 and may be
extended  thereafter.  Management  believes  that this space is adequate for the
needs of the Company for the foreseeable future.


ITEM 3. LEGAL PROCEEDINGS

                                        9
<PAGE>


     There are currently no legal matters or other regulatory procedures pending
or  threatened  that involve the Company or its property or any of the principal
shareholders or officers or directors in their capacities as such.

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

     There were no matters  submitted to a vote of security  holders  during the
fourth quarter of the fiscal year covered by this Report.

                                     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.  The
Company's common stock is traded  over-the-counter  and quoted on the electronic
Bulletin Board maintained by the National Association of Securities Dealers. The
following  information  for 2001 has been  obtained by the Company from the Pink
Sheets, a publication which tracks stock prices for the broker-dealer community.
The  information  for 2002 was obtained from NASDAQ Data Source.  The prices set
forth below do not include retail mark-ups,  mark-downs or commissions,  and may
not represent prices at which actual transactions occurred.

         Fiscal Quarter Ended                High             Low
         --------------------                ----             ---

         2001
         ----

         January 31                         $1.25           $0.80
         April 30                            0.88            0.59
         July 31                             0.60            0.30
         October 31                          0.42            0.30

         2002
         ----

         January 31                          0.32            0.11
         April 30                            0.22            0.11
         July 31                             0.18            0.06
         October 31                          0.10            0.05

                                       10
<PAGE>


     The  Company's  securities  are presently  classified as "Penny  Stocks" as
defined by existing  securities  laws. This  classification  places  significant
restrictions upon broker-dealers desiring to make a market in such securities.

     b) Holders

     As of December 31, 2002, the Company had approximately  1,940  shareholders
of record, not including persons who hold their shares in "street name".

     c) Dividends

     The Company has paid no dividends since inception and it is not anticipated
that any will be paid in the foreseeable future. The payment of dividends in the
future is dependent on the generation of revenue and profit,  and the discretion
of the Board of Directors based upon such matters as the Company's capital needs
and costs of obtaining capital from outside sources.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Liquidity and Capital Resources

October 31, 2002
----------------

     The Company  continues to have a shortage of working capital and liquidity.
At fiscal year end October 31, 2002, the Company had a working  capital  deficit
of $57,093, representing a decrease of $216,078 from fiscal year end October 31,
2001.  Current assets decreased  $179,207 from year-end 2001 to 2002 while total
assets  decreased  $173,996  during that time, each primarily as a result of the
cash spent on operations.  Current  liabilities  increased $36,871 from year-end
2001 to 2002 while total liabilities  increased $34,217, each predominantly from
accrued  debt and  deferred  salary to the  Company's  president.  This  working
capital has been further reduced subsequent to year-end.

     Assets  that  existed  at  year-end  2001  were  used to  fund  operations,
primarily research and development,  general and administrative  expenses during
fiscal year 2002. Based upon its experience to date and capital requirements for
the  foreseeable  future,  and assuming no  unexpected  expenses  are  incurred,
management anticipates that the Company currently has sufficient working capital
to last approximately through the end of the first quarter of the current fiscal
year. After that, and failing receipt of additional capital, the Company will be
forced to suspend operations.

     Operations  during  the  latter  part of  fiscal  2002 were  funded  almost
entirely by the Company's  President.  He purchased  $36,000 of our common stock
for a price of $.18 per share in mid-year and subsequently loaned the Company an
additional  $20,000 to sustain  operation.  The loan is payable in August  2003,
bears  interest  at the rate of eight per cent per year and is secured by a lien
on a portion of the  Company's  technology.  The  President  has also deferred a
portion of his salary during this time to assist in reducing negative cash flow.
However,  there is no  assurance  that this  individual  will  continue  to fund
operations.

                                       11
<PAGE>

     In an additional effort to conserve  valuable working capital,  the Company
has  negotiated for payment of consultants  through  issuance of equity.  Toward
that end, the Company  issued 27,143  shares of its common stock and  additional
stock options to scientific  and other  consultants  who agreed to serve without
cash compensation for those services.

     The Company  remains  dependent on receipt of additional  cash to implement
its  business  plan and  generate  revenue  in the  future.  The  report  of the
independent  accountant that audited the Company's financial  statements for the
year ended  October 31, 2002  include a  qualification  that the Company may not
continue as a going concern.  In that event, the Company might be liquidated and
its assets sold to satisfy any claims of creditors.  See note A to the financial
statements  attached  to this  report for a more  complete  description  of this
contingency.

     The Company  continues to seek interim  funding to maintain its  operations
through debt and equity financing.  Continued  development of products requiring
FDA approval prior to marketing such as Vitropin(TM) and VITROPIN-V(TM) requires
substantially  more  financial  resources  than are  presently  available to the
Company.  Clinical trials of VITROPIN(TM)  are expected to require at least $1.5
to $2 million or more,  depending on the exact clinical  trials  required by the
FDA.  The  Company is  presently  engaged  in  discussions  with  pharmaceutical
companies that have expressed interest in the commercialization of the Company's
fertility drugs.  Management is pursuing these and other  opportunities with the
objective of  establishing  strategic  alliances to fund further  fertility drug
development  and  commercialization.  Grant  support  could  provide  additional
capital to support the  development of  VITROPIN-V(TM)  and management  hopes to
submit a Phase II SBIR grant  application  during 2003 that could  provide up to
$1.2 million support for  VITROPIN-V(TM)  development over two years, given that
the grant application is approved by the NIH.

     Given the long-term  nature and  substantial  capital  requirements  of the
development of products  requiring FDA registration  prior to commencing  sales,
the  Company's  management  has  re-focused  its immediate  product  development
activities towards products that may be marketed relatively quickly, without FDA
approval,  and with nominal capital expenditure.  The Company anticipates launch
of its first defined,  cell culture medium product,  PRIMAID-I(TM),  during 2003
(See  Part I for a more  complete  description).  Management  intends  to pursue
revenue  generation from this product and development of other related  products
to the fullest extent possible given its resources.

     With the  issuance of its first cell  immortalization  patent  during 2002,
additional   opportunities   have   become   available   to  the   Company   for
commercialization of its cell immortalization technology.  Various biotechnology
and  pharmaceutical  firms have expressed  interest in licensing,  collaborative
research  and   distribution  of  the  Company's  cell   immortalization-related
products,   such  as   PRIMAID-I(TM).   Management   intends  to  pursue   these
opportunities  in an  effort  to  provide  necessary  capital  to  continue  the
development and commercialization of its cell immortalization technology.

                                       12
<PAGE>


     Management   has  also  reduced   current   spending   levels  by  reducing
administrative  expenses and expenditures  related to research  activities while
maintaining  essential  operational  activities.  The Company may consider other
alternatives   to   increase   its  capital   resources   such  as  merger  with
revenue-generating private entities or sale of assets.

     During the fiscal year ended  October 31, 2002,  the  Company's  operations
used $211,768 of cash. The Company funded its cash requirements during that time
through cash provided by the sale of the diagnostic antigen operation,  debt and
equity  financing.  Due to the  projected  minimal  revenue  during fiscal 2003,
management  expects that the Company  will  continue to require more cash during
the current fiscal year. The avenues  described above will be pursued to provide
the needed capital resources to continue operations during 2003.

October 31, 2001
----------------

     At fiscal  year end October 31,  2001,  the Company had working  capital of
$158,985,  consisting of current  assets of $190,453 and current  liabilities of
$31,468.  This represents a decrease in working capital of $415,617 from October
31,  2000.  The  decrease  in  working  capital  resulted  from  cash  spent  on
operations.

     During  fiscal 2001,  the Company  relied on revenues from an NIH grant and
funds from the sale of assets, to meet it working capital requirements.

     Total assets decreased from year-end 2000 to year-end 2001,  primarily as a
result of the cash spent on operations.  Total assets decreased by $364,778 from
$763,144 at October 31,  2000 to  $398,366  at October 31,  2001.  Shareholders'
equity decreased by a similar amount during this period.

Results of Operations

Year Ended October 31, 2002
---------------------------

     During the year ended October 31, 2002, the Company  realized a net loss of
$252,397, or $.03 per share, with no revenue. Revenue for the year ended October
31, 2002 fell $100,000  from the prior fiscal year,  since the Company no longer
received  research grant funds.  None-the-less,  the Company has reduced its net
loss each of the last three years.

     Management  does not anticipate that the Company should expect revenue from
its  fertility  drugs  in the  foreseeable  future.  Commercialization  of these
products depends on significant funding,  further product development  including
clinical trials, FDA approval,  and other conditions prior to commercial sale of
any product.

     Given  that  the  Company  is  able to  successfully  launch  its  defined,
serum-free  culture medium  products  during 2003,  some revenue is anticipated.
Management  projects only modest  revenues  initially that may accelerate if its
new products are competitive and accepted by the target market.  The Company has

                                       13
<PAGE>


not conducted  any formal  market  studies to access the market for this product
due to its limited revenue.  However, with the presently curtailed operation and
minimal  expenditures,  such revenue may diminish the Company's  requirement for
operating  capital and help sustain  development  and  manufacturing  activities
related to the PRIMAID(TM) line of products.

     Operating expenses decreased from fiscal 2001 to fiscal 2002, from $470,689
to $278,879, due to curtailment of operations because of limited availability of
working capital. Selling, general and administrative expenses decreased $23,504,
primarily  as a result  of  downsizing  and the  reduction  of  other  expenses.
Research and development expenses also decreased by $155,136.

     Other income  increased from fiscal 2001 to 2002,  primarily as a result of
settlement of a lawsuit  regarding a deposit  previously  provided to a contract
manufacturing organization that was written off in 2001. The Company was able to
recover its deposit, plus interest and some costs of collection, during the 2002
fiscal year.

Year Ended October 31, 2001.
----------------------------

     During the year ended October 31, 2001, the Company  realized a net loss of
$382,107, or $.04 per share, on total revenue of $100,000.  Revenue for the year
ended  October 31, 2001 fell by $721,564  from the prior fiscal year,  since the
Company sold its diagnostic operation in 2000.

     Operating  expenses dropped  substantially from fiscal 2000 to fiscal 2001,
from  $878,092 to $470,689,  as a result of the sale of the  diagnostic  antigen
operation.  Selling,  general  and  administrative  expenses  decreased  also by
$348,256,  primarily  due to  downsizing  associated  with the  transition  from
manufacturing to predominantly research and development activities. Research and
development expenses also decreased by $82,355 also as a result of downsizing.

     Other expenses increased from fiscal 2000 to 2001, primarily as a result of
writing  off a deposit of $24,000  previously  paid to a contract  manufacturing
organization.  The  Company  also  had  interest  and  miscellaneous  income  of
approximately $13,741 in fiscal 2001, offsetting other expenses.

Recent Sales of Unregistered Securities

     In addition to other transactions  previously disclosed in our SEC reports,
we issued a total of 217,143  shares of our  common  stock and  173,833  options
during the year ended October 31, 2002, which sales were not registered pursuant
to the Securities  Act of 1933. We issued 200,000 shares to an officer  pursuant
to the exercise of  outstanding  stock  options and 17,143 to a  consultant  for
scientific consulting services.  The options were issued to our President,  some
former directors and to an attorney for services rendered.

                                       14
<PAGE>


     The  Company  issued  these  shares  and  options  directly,  and  paid  no
commissions in connection with the issuance. The Company relied on the exemption
from  registration  provided by Section 4(2) of the 1933 Act, as each individual
was  afforded  access to the type of  information  that would be  contained in a
registration  statement.   Each  individual  was  aware  of  the  risks  of  the
transaction,   and  the  Company  had  a  preexisting   relationship  with  each
individual.

RISK FACTORS

     This 10-KSB report,  including Management's Discussion and Analysis or Plan
of  Operation,  contains  forward-looking  statements  that  may  be  materially
affected by several risk factors including those discussed below.

     1. Dependence on successful product development.
     ------------------------------------------------
     The  realization  of revenue and profits  from  products  and  technologies
discussed herein is critically  dependent upon successful  product  development.
There is no assurance that the Company will be able to successfully  develop any
pharmaceutical  product for commercial  sales. The officers and employees of the
Company have no prior experience in the development of therapeutic products. The
leading product  candidates,  VITROPIN(TM) and VITROJECT(TM),  have not yet been
subject to  clinical  trials or to approval by any  regulatory  authority.  Such
approval  is a  prerequisite  to any  product  launch  and  sales.  There  is no
assurance that the Company will be able to successfully complete clinical trials
and  obtain  regulatory  approval.   Furthermore,   if  approved  by  regulatory
authorities such as the FDA, there is no assurance that an approved product will
be  successfully  commercialized.  In  addition,  the Company has several  other
products that are in the early stages of  development.  Further  development  of
such products, e.g., VITROPIN-C(TM) and VITROPIN-V(TM),  is critically dependent
on available financial,  human and technical resources and there is no assurance
that  development  of these  products  will be  successful.  It is  important to
recognize  that it is very  difficult  to  predict  the course of  research  and
development  of biological  products such as those being pursued by the Company.
While cellular  immortalization  holds  potential  promise for a wide variety of
applications  such as cell transplants for the treatment of Alzheimer's  disease
and type I diabetes,  there is no  assurance  that the  Company  will be able to
develop such products.

     2. New Regulations Affecting our Company and our Stock.
     -------------------------------------------------------
     New laws adopted by the Federal  government and  regulations  proposed by a
securities regulatory association would substantially affect how we are governed
and may negatively affect the trading market for our common stock. In July 2002,
the United States Government  adopted the  Sarbanes-Oxley Act in response to the
financial   problems   associated   with  companies  like  Enron  and  WorldCom.
Sarbanes-Oxley  is a  comprehensive  set of laws and  directives  affecting  all
public companies.  It affects,  among other things, the composition of our Board
of Directors, the responsibilities of our officers and directors and the conduct
and responsibilities of our public accountants.

     Immediate effects of Sarbanes-Oxley include a requirement that we establish
an audit committee of our Board of Directors and that such committee be composed
entirely  of  "independent"  directors.   Independent  directors  are  generally
individuals  other than our employees,  officers or their family members and who
do not have a significant  financial  relationship  with our Company.  If we are
able to locate  such  independent  individuals  to serve on our Board,  they may
require  that we  purchase  substantial  liability  insurance  to protect  their
economic interests. Such insurance will be costly and difficult to obtain. If we
are unable to obtain  such  insurance,  we may be unable to attract  independent
directors and may be faced with delisting of our common stock.

                                       15
<PAGE>


     Also in 2002,  the National  Association  of  Securities  Dealers  ("NASD")
proposed  new rules  designed to  ultimately  abolish the  Bulletin  Board where
quotes for our common  stock are made and which to a large  extent  enables  our
trading  market.  The NASD proposed to establish a new stock exchange called the
Bulletin  Board  Exchange or "BBX," to function  similar to existing  securities
exchanges  such as the New York or American  Stock  Exchange.  According  to the
NASD, these rules are designed to increase  transparency in trading and increase
investor  confidence in the securities of listed companies.  Creation of the BBX
has not yet  been  approved  by the SEC.  If it is,  the  requirements  for this
exchange  might  further  change the way we govern our affairs and could cost us
substantial additional funds. The proposed rules of the BBX could impose further
requirements  on our  corporate  governance  which  would  add to our  costs  of
operation.  It too would  require  that we obtain  independent  directors on our
Board.  If, as a result of this or other rules,  we are unable to obtain listing
of our common stock on the new exchange,  for financial or other reasons, it may
negatively affect the trading market for our stock.

     3. Dependence on intellectual property.
     ---------------------------------------
     Successful  commercialization  of therapeutic products requires significant
intellectual  property and the ability to maintain a  proprietary  position with
respect to  intellectual  property.  There can be no assurance  that the Company
will  achieve  or  maintain  the  necessary  intellectual  property.   There  is
uncertainty   with   respect  to  the  issuance  of  patents  from  the  pending
applications of the Company that were described above. Also, once issued,  there
is no assurance  that legal  challenge  will not result in the  narrowing of the
claims,  circumvention or invalidation of a patent.  Furthermore,  a third party
may engage in  infringement of patents issued to the Company and the Company may
not have the resources  necessary to prevail in defending  its patent  position.
Patent law concerning  biotechnology  inventions is subject to changes depending
upon  interpretation  of  present  law  and  new  statutes.  Biotechnology  is a
relatively new field and many ethical and legal issues have been raised that are
yet  to  be  resolved.   Such  developments  may  impact  the  Company  and  its
intellectual property position.

     4. Lack of operating experience.
     --------------------------------
     The  Company,  its  officers  and  employees,  have  no  experience  in the
operation  of a  biotherapeutic  operation.  While the Company has  attempted to
mitigate this  deficiency by adding  individuals  experienced in  pharmaceutical
operations  to its Board of  Directors,  its  Scientific  Advisory  Board and as
consultants to the Company,  there is no assurance that the Company will be able
to achieve the proficiency needed to: a) manufacture pharmaceutical products, b)
perform  necessary  clinical trials resulting in regulatory  approval by the FDA
and other  regulatory  authorities,  c) establish  strategic  alliances or other
inter-corporate  relationships  necessary to outsource  specific  aspects of the
development of a pharmaceutical  product, or d) engage in appropriate  marketing
strategies  to capture any share of the markets  targeted  by the  Company.  The
independent  members of our Board of Directors  resigned  their  positions  last
year, leaving us only two members.  While we will continue our efforts to obtain
additional  Board  representation  in an effort to supplement the experience and
expertise of our officers,  there is no assurance  that we will be successful in
that endeavor.

                                       16
<PAGE>


     5. Dependence on key personnel.
     -------------------------------
     Achievement of the objectives described herein also depends critically upon
key personnel  who have  contributed  substantially  to the  development  of the
products and technology  presently owned by the Company. At present, the Company
has no  employment  contracts  with its  full-time  employee,  Dr. James Musick.
Neither  does the Company  maintain  "key man" life  insurance.  Dr.  Musick has
contributed   substantially   to  the  development  of  the  products  to  treat
infertility and cellular  immortalization.  Loss of his services could adversely
impact the successful commercialization of the Company's products.

     6. Effects of potential litigation.
     -----------------------------------
     The Company is subject to  potential  litigation  as by class action of its
shareholders  regarding  reduction in the market value of the  Company's  stock,
hostile  takeover  efforts,  product  liability claims and other claims of legal
wrongdoing by the Company.  During 2000, a major shareholder  attempted to exert
control over the Company and threatened  litigation if its demands were not met.
The Company successfully  negotiated a compromise with the shareholder resulting
in the restructuring of the Company and satisfaction of the shareholder demands.
However,  there are other  potential  legal  challenges  that the Company may be
subjected to and such actions  could  divert  resources  from the pursuit of the
business objectives of the Company and compromise achievement of these goals.

     7. Dependence on third party manufacturers.
     -------------------------------------------
     The  Company  does not have the  resources  necessary  for  manufacture  of
therapeutic  products to required FDA guidelines.  As a result,  the Company has
decided to outsource  such  manufacturing,  called GMP  manufacturing,  to third
parties who serve as contract manufacturers.  Thus, the Company is at risk as to
the  quality of  manufacturing  by its  chosen  contractors.  While the  Company
engages  in careful  scrutiny  of its  potential  manufacturers  to ensure  high
quality and FDA  compliance,  there is no  assurance  that the  contractor  will
perform to FDA guidelines.  Also,  efficiency is a central issue  underlying the
Company's  profits and  manufacturing  efficiency will not be entirely under the
control  of  management  of the  Company  when  contractors  are  used  for  GMP
manufacture of the Company's products.

     8. Lack of liquidity in the Company's securities.
     -------------------------------------------------
     There is presently  limited liquidity in the public stock of the Company as
indicated by relatively  low price of the Company's  stock and a relatively  low
volume of trading.  This  limited  liquidity is related in part to the fact that
the Company's securities are traded on the OTC bulletin board and are considered
"penny stocks". Such limited liquidity of the Company's securities may limit the
funding abilities of the Company that are related to equity transactions.

     9. Dependence on regulatory approvals.
     --------------------------------------
     Prior to the  marketing  and  sale of the  Company's  products,  regulatory
approval is essential.  While the Company maintains  relationships with advisors
who provide counsel to the Company regarding its filings for registration by the
FDA and other regulatory authorities, there can be no assurance that the Company
will  receive the  requisite  approvals to market its  products.  The absence of
regulatory approval  essentially blocks the  commercialization  of the Company's
products.

                                       17
<PAGE>


     10. Some R&D  activities  of the Company  depend on fetal tissue  research.
Research using fetal tissue is controversial. The Company faces risks because of
fetal tissue research,  such as a potential federal ban of fetal tissue research
that would preclude  federal  funding of such  research.  The Company also faces
opposition to its research by anti-abortion groups.

ITEM 7. FINANCIAL STATEMENTS

     Reference is made to the Index of Financial Statements following Part IV of
this  Report  for a listing  of the  Company's  financial  statements  and notes
thereto.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

     There  have  been no  changes  in or  disagreements  with  our  independent
accountants during the last two fiscal years.


                                    PART III

Item 9. Directors and Executive Officers

     The following  individuals presently serve as officers and directors of the
Company:

   Name                       Age             Position
   ----                       ---             --------

   James R. Musick, Ph.D      56              President, Chief Executive Officer
                                              and Director

   Erik D. Van Horn           34              Vice President and Director

--------------------------------------------------------------------------------

     Directors  of  the  Company   serve  until  the  next  annual   meeting  of
shareholders and until their successors are elected and qualify.  Officers serve
at the will of the Board of Directors.  As shown above,  all of our officers are
also presently directors of the Company.

     The  Company  currently  has no audit or other  committee  of the  Board of
Directors and no financial  experts on its Board.  The entire Board of Directors
performs the functions typically performed by an audit committee. As required by
the Sarbanes-Oxley  Act, members of the existing Board will endeavor to nominate
or appoint  additional,  independent  directors to comprise an audit  committee.
However, there is no assurance that such efforts will be successful.

     The officers of the Company confirm their  responsibility  for establishing
and maintaining adequate controls and procedures for financial  reporting.  This
means that management is responsible for implementing and maintaining systems to
provide  reasonable  assurance that (i) the company's  transactions are properly
authorized;  (ii) the company's assets are safeguarded  against  unauthorized or
improper use; and (iii) the  company's  transactions  are properly  recorded and
reported. Management of the Company believes that these systems are in place and
that they are  effective.  It will  continue to evaluate  these  systems,  as it
believes circumstances warrant.

                                       18
<PAGE>


     The following  represents a summary of the business  history of each of the
foregoing individuals for the last five years:

     JAMES R. MUSICK,  Ph.D.
     -----------------------
     was  appointed  President  and Chief  Executive  Officer of the  Company on
     August 7, 2000.  From  September 1, 1989 until August 7, 2000,  Dr.  Musick
     served as Vice  President,  Secretary  and Chief  Operating  Officer of the
     Company. He has also served as a director of the Company since September 1,
     1989. Dr. Musick received a Bachelor of Arts in Biological Sciences in 1968
     and a doctorate in Biological Sciences in 1975 from Northwestern University
     in Evanston, Illinois.

     ERIK D. VAN HORN
     ----------------
     was appointed  Vice President of the Company on August 7, 2000. He has also
     been Production  Manager and a director of the Company since March of 1993.
     He  received  his  Bachelor  of Science in  Chemical  Engineering  from the
     University of Colorado in 1990. Mr. Van Horn is presently employed by Amgen
     as Supervisor of Manufacturing.

     The  Company  has not  established  a code  of  ethics  for  its  principal
executive officers due to the cost of such procedure,  but may consider adopting
such code in the future as its resources permit.

Compliance with Section 16(a) of the Securities and Exchange Act of 1934
------------------------------------------------------------------------

     The following table sets forth each director,  officer or beneficial  owner
of more  than ten  percent  of any  class of equity  securities  of the  Company
registered  pursuant to Section 12 of the Securities  Exchange Act of 1934 that,
based  solely on reports  received  by the  Company,  failed to file on a timely
basis,  Forms 3, 4 or 5 as  required  by Section  16(a)  during the most  recent
fiscal year or prior years.

     The numbers of late Form 3, Form 4 and Form 5 reports,  and the late Form 4
transactions reported are as follows:

Name of Reporting Person    Late Form 3  Late Form 4  Late Form 5   Transactions
------------------------    -----------  -----------  -----------   ------------

         James Musick                         1            1            1

         Eric Van Horn                                     1


Item 10. Executive Compensation

                                       19
<PAGE>


     The  following  table  summarizes  the  total  compensation  of  the  chief
executive  officer;  any person who served as the chief executive officer during
the last fiscal year, and any other executive  officers whose  compensation from
the Company exceeded $100,000 during that period (the "Named Officers"):
<TABLE>
<CAPTION>

                              SUMMARY COMPENSATION

                                                                                Long Term Compensation
                                                                                      Securities
                                    Year Ended       Annual Compensation              Underlying
Name                                October 31,           Salary                       Options
----                                -----------           ------                       -------

<S>                                 <C>              <C>                        <C>
James R. Musick, President             2002               $57,708(1)                      0
and Chief Executive Officer            2001               $57,708                         0
                                       2000               $57,708                         0
</TABLE>


(1)  Excludes  options to purchase  133,333 shares of the Company's common stock
     issued in  connection  with a loan made by such  individual to the Company.
     See, "Option Grants" below.

Compensation of Directors
-------------------------

     During 2002,  each member of the Board of Directors  who is not an employee
of the Company  was  entitled to receive  options to purchase  10,000  shares of
common stock upon appointment to the Board and an additional 10,000 options upon
reelection for each additional term.  Additionally,  non-employee  Board members
were  entitled  to  receive  options  for 2000  shares of common  stock for each
meeting  attended  in person  and 500  shares of common  stock for each  meeting
attended by telephone. The Board may reevaluate this compensation in the future.

     The former Chairman of the Board received  options to purchase 5,000 shares
upon his  appointment  and  chairmen  of each  standing  committee  of the Board
received  options for 2,000  shares  upon their  appointment.  Upon  election or
reelection  as Chairman of the Board or  chairman of a standing  committee,  the
member was entitled to receive  options for an additional  5,000 shares or 2,000
shares, respectively.  All of these options were exercisable at a price equal to
the closing bid price of the Company's common stock on the date of grant and for
a period of ten years thereafter. During the last fiscal year, a total of 13,500
options were granted to Directors in their capacities as such.

     Each  director  is  also  entitled  to be  reimbursed  for  reasonable  and
necessary expenses incurred on behalf of the Company.

Option Grants For 2002
----------------------

                                       20
<PAGE>


     On August 23, 2002, the Company  granted its President  options to purchase
133,333 shares of the Company's common stock with an exercise price equal to the
common stock market 1value on the date of grant, or $0.075 per share. The option
is exercisable until August 2012 and was issued as part  consideration for loans
made to the Company by the President.

Year End Option Values
----------------------

     The following table sets forth the value of unexercised options held by the
Named Officers at October 31, 2002.  The price of the Company's  common stock on
October 31, 2002 was $.05 per share.
<TABLE>
<CAPTION>

                  Shares                        Number of                     Value of unexercised
                  Acquired       Value          Unexercised                   in-the-money options
Name              on Exercise    Realized($)    Options at fiscal year end    at fiscal year end
--------------------------------------------------------------------------------------------------


<S>               <C>            <C>            <C>                           <C>
James R. Musick   0              0              165,181                       $ 0(1)
</TABLE>

(1)  Based upon the difference  between the average exercise price of $.1815 and
     the last  reported  sale price of the  Company's  common  stock of $.05 per
     share on October 31, 2002.

Stock Option Plan
-----------------

     The  Company  adopted a new Equity  Incentive  Plan on October 9, 2000 (the
"Plan")  for the  benefit  of key  personnel  and others  providing  significant
services to the Company.  The Plan replaces the 1992 Equity  Incentive Plan (the
"1992 Plan"). The 1992 Plan will remain effective only so long as options remain
outstanding  under the 1992 Plan.  No new options will be granted under the 1992
Plan,  and the only  shares  that will be  issued  under the 1992 Plan are those
shares underlying currently outstanding options.

     The Plan  authorizes  total stock awards of up to  1,000,000  shares of the
Company's  common stock.  Awards may take the form of incentive  stock  options,
non-qualified  stock options,  restricted stock awards,  stock bonuses and other
stock grants. If a stock award made under the New Plan expires,  terminates,  is
canceled or settled in cash  without the  issuance of all shares of common stock
covered by the award, those shares will be available for future awards under the
Plan.  Awards may not be  transferred  except by will or the laws of descent and
distribution.  No awards may be granted under the Proposed Plan after  September
30, 2010.

     The Plan is  administered  by the Company's  Board of Directors,  which may
delegate its  authority to a committee of the Board of  Directors.  The Board of
Directors  has the  authority  to  select  individuals  to  receive  awards,  to
determine  the time and type of  awards,  the  number of shares  covered  by the
awards, and the terms and conditions of such awards in accordance with the terms
of the Plan. In making such determinations, the Board of Directors may take into
account  the  recipient's  current  and  potential  contributions  and any other
factors the Board of Directors considers relevant. The recipient of an award has
no  choice  regarding  the form of a stock  award.  The  Board of  Directors  is
authorized to establish rules and regulations and make all other  determinations
that may be necessary or advisable for the administration of the Plan.

                                       21
<PAGE>

     All options  granted  pursuant to the Plan shall be  exercisable at a price
not less than the fair  market  value of the common  stock on the date of grant.
Unless otherwise specified, the options expire ten years from the date of grant.

     During the year ended October 31, 2002,  options to purchase 173,833 shares
of our common stock were issued under the Plan. At the fiscal year end,  704,197
options  remained  outstanding  under the Plan and the 1992 Plan,  with exercise
prices  ranging from $.075 to $1.50 per share,  or an average  exercise price of
$.37 per share.


Item 11. Security Ownership of Certain Beneficial Owners and Management

Beneficial Ownership
--------------------

     The following  table sets forth  information,  based solely on  information
available to the Company,  with respect to the ownership of the Company's common
stock by all officers and directors individually,  all officers and directors as
a group,  and all beneficial  owners known to the Company to hold more than five
percent (5%) of the Company's common stock.

     The  following  shareholders  have sole  voting and  investment  power with
respect to the shares, unless it is indicated otherwise.

Name and Address of Beneficial Owner             Number of Shares          %
------------------------------------             ----------------       ------
Officers and Directors
---------------------
James R. Musick (1, 2)                             1,653,161            17.58%
12635 E. Montview Blvd.,
Aurora, Colorado 80010

Erik Van Horn (3)                                    530,516             5.54%
12635 E. Montview Blvd.,
Aurora, Colorado 80010

Officers and Directors as a group (1, 2, 3)        2,183,677            22.43%
 (2 individuals)

Five Percent Shareholders
-------------------------
Roger D. Hurst (4)                                 1,135,482            12.29%
8100 Southpark Way
Unit B-1
Littleton, CO 80120

                                       22
<PAGE>


The James R. Musick Trust                          1,032,839            11.18%
12635 E. Montview Blvd
Aurora, Colorado 80010

Lloyd Hansen                                       1,040,000            11.26%
2646 S.W. Mapp Rd
STE #304
Palm City, FL 34990

Kilyn Roth (5)
P.O. Box 8
Westcliffe, CO 81252                                 742,000             8.03%

Kristine Brubaker                                    564,002             6.1%

(1)  Includes 31,848 shares of common stock underlying an option  exercisable at
     $.625 until June 6, 2009 and 133,333  shares of common stock  underlying an
     option exercisable at $0.075 until August 23, 2012.

(2)  Includes  1,032,839  shares held by The James R. Musick Trust, of which Mr.
     Musick is a trustee and beneficiary.

(3)  Includes 330,516 shares of common stock underlying  options  exercisable at
     prices ranging from $.08 to $.625 and expiring through 2009.

(4)  Includes  10,386  shares  owned by  Compion  and  3,000  owned  by  Compion
     Management  Services,  Inc.,  companies  in  which  Mr.  Hurst  is the sole
     shareholder.

(5)  Includes  453,000  shares  owned by World Wide Capital  Investors,  LLC, of
     which the reporting person served as Manager.

Changes in Control
------------------

     The Company knows of no arrangement,  including the pledge by anyone of any
securities of the Company, that may result in a change in control.


Item 12.   Certain Relationships and Related Transactions

     In May 2002, the Company  loaned its vice president  $14,000 to enable such
individual to exercise outstanding stock options. The loan bears interest at the
rate of five per cent per year and is payable  in full in May 2004.  The loan is
secured by a pledge of a portion of the common stock owned by this individual. A
total of $2,400 was repaid on the loan in 2002 through services  rendered to the
Company.

     During the period from August 1, 2000 through  January 31, 2001,  AspenBio,
Inc., a private company owned by a shareholder of more than five per cent of our
common  stock,  contributed  the use of its office space and  facilities  to the
Company.  The use of the office  space and  facilities  was valued at $1,750 per

                                       23
<PAGE>


month  based on the market rate in the local  area.  On  February  1, 2001,  the
Company began paying this entity for the use of the office space and facilities.
The Company paid a total of $15,980 for the use of the office space,  facilities
and contract services for the period from February 1, 2001 through May 31, 2001.

                                     PART IV

Item 13. Exhibits and Reports on Form 8-K

(a)  Exhibits

     The following is a list of exhibits filed or incorporated by reference into
this Report:

No.      Description

1         Not applicable.

2.1(1)    Purchase Agreement between Vitro Diagnostics, Inc., AspenBio, Inc. and
          others dated August 7, 2000, without Exhibits.

3.1.1(2)  Articles of  Incorporation of the Company as filed March 31, 1986 with
          the Nevada Secretary of State.

3.1.2(3)  Certificate of Merger of Domestic  and Foreign  Corporations  as filed
          December 17, 1986 with the Nevada Secretary of State.

3.1.3(4)  Certificate  of  Amendment of  Articles  of  Incorporation  as  filed
          February 6, 1987 with the Nevada Secretary of State.

3.1.4(3)  Certificate of Amendment of Articles of Incorporation as filed May 18,
          1988 with the Nevada Secretary of State.

3.1.5(5)  Amended and Restated  Articles of  Incorporation of Vitro Diagnostics,
          Inc., as filed July 20, 2001 with the Nevada Secretary of State

3.2(4)    Bylaws of the Company.

4.1(4)    Specimen certificate for Common Shares, $.001 par value per share.

9         Not applicable.

10.1(1)   Settlement Agreement and Release dated August 7, 2000

10.2(6)   Equity Incentive Plan dated October 9, 2000

10.3(*)   Promissory note issued by Erik Van Horn to the Company dated
          May 7, 2002.

                                       24
<PAGE>


10.4(*)   Promissory note issued by the Company to James R. Musick dated
          August 23, 2002.

10.5(*)   Agreement for  Liquidation of  Shares between the Co. and World  Wide
          Capital Investors dated June 17, 2002.

11        Not applicable.

13        Not applicable.

16        Not applicable.

18        Not applicable.

21        Not applicable.

22        Not applicable

23        Not applicable.

24        Not applicable.

27        Not applicable.

99        Not applicable.
___________________
*  Filed herewith.

(1)  Filed as an  Exhibit  to Form 8-K dated  August  7,  2000 and  incorporated
     herein by reference.

(2)  Filed as an Exhibit to Form 10-KSB dated October 31, 2000.

(3)  Filed as an Exhibit to Form 10-KSB/A dated July 31, 2000.

(4)  Filed as an Exhibit to  Registration  Statement on Form SB-2,  SEC File No.
     33-59230 and incorporated herein by reference.

(5)  Filed as an Exhibit to Form 10-KSB for the year ended October 31, 2001.

(6)  Filed as an Exhibit to the definitive  Proxy  Statement on Schedule 14/A as
     filed with the  Commission on October 30, 2000 and  incorporated  herein by
     reference.

                                       25
<PAGE>


(b)  Reports on Form 8-K.

         The Company  filed no Reports on Form 8-K during the fourth  quarter of
the fiscal year covered by this Report.

                                       26
<PAGE>


                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934, the Registrant has caused this Report to be signed on its behalf by
the undersigned thereunto duly authorized in Aurora, Colorado on the 29th day of
January 2003.

                                        VITRO DIAGNOSTICS, INC.


                                        By:  /s/ James R. Musick
                                             ----------------------------
                                             James R. Musick, President,
                                             Chief Executive Officer

Pursuant to the  requirements of the Security  Exchange Act of 1934, as amended,
this Report has been signed by the following  persons in the  capacities  and on
the dates indicated.

Signatures                 Title                                    Date
----------                 -----                                    ----


/s/ James R. Musick        President, Chief Executive        January 29, 2003.
--------------------       Officer and Director              -----------------
James R. Musick



/s/ Erik D. Van Horn       Vice President and Director       January 29, 2003.
--------------------                                         -----------------
Erik D. Van Horn


                                       27
<PAGE>

                                  CERTIFICATION


     Pursuant to the requirements of Rule 13a-14 of the Securities  Exchange Act
of 1934, as amended, James R. Musick provides the following certification.

     I, James R. Musick,  President,  Chief  Executive and  Principal  Financial
Officer of Vitro Diagnostics, Inc. ("Company"), certify that:

     1. I have reviewed this annual report on Form 10-KSB of the Company;

     2. Based on my  knowledge,  this annual  report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information included in this report, fairly present in all material respects the
financial condition,  results of operations and cash flows of the Company as of,
and for, the periods presented in this report;

     4. I am responsible for  establishing and maintaining  disclosure  controls
and  procedures  (as  defined in Exchange  Act Rules  13a-14 and 15d-14) for the
registrant and have designed such  disclosure  controls and procedures to ensure
that material information relating to the Company is made known to me by others,
particularly during the period in which this report is being prepared;

     5. I have disclosed,  based on my most recent evaluation,  to the Company's
auditors  and  the  audit  committee  of our  board  of  directors  (or  persons
performing the equivalent functions):

          a. All significant deficiencies in the design or operation of internal
     controls  which could  adversely  affect the  Company's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     Company's auditors any material weaknesses in internal controls, and

          b. Any fraud,  whether or not material,  that  involves  management or
     other  employees  who have a  significant  role in the  Company's  internal
     controls; and

     6. I have  indicated in this report  whether or not there were  significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of my most recent evaluation, including
any  corrective  actions with regard to  significant  deficiencies  and material
weaknesses.




Date: January 29, 2003               /s/ James R. Musick
      ----------------               -------------------------------------------
                                     James R. Musick, President, Chief Executive
                                     and Principal Financial Officer

                                       28
<PAGE>


                             VITRO DIAGNOSTICS, INC.

                          Index to Financial Statements

                                                                            Page
                                                                            ----

Independent auditors' report .............................................   F-2

Balance sheet at October 31, 2002 ........................................   F-3

Statements of operations for the years ended
     October 31, 2002 and 2001 ...........................................   F-4

Statement of changes in shareholders' equity for
     the two years ended October 31, 2002 and 2001 .......................   F-5

Statements of cash flows for the years ended
     October 31, 2002 and 2001 ...........................................   F-6

Notes to financial statements ............................................   F-7

                                       F-1
<PAGE>


                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
Vitro Diagnostics, Inc.:


We have audited the balance sheet of Vitro  Diagnostics,  Inc. as of October 31,
2002, and the related statements of operations, changes in shareholders' equity,
and cash flows,  for each of the years in the two-year  period ended October 31,
2002.  These  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audits 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 the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Vitro Diagnostics,  Inc. as of
October 31, 2002,  and the results of its operations and its cash flows for each
of the two  years in the  period  ended  October  31,  2002 in  conformity  with
accounting principles generally accepted in the United States of America.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in Note A to the  financial
statements,   the  Company  has  suffered  significant  operating  losses  since
inception and has a working capital deficit at October 31, 2002,  which raises a
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these  matters are also  described  in Note A. The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

As  discussed in the Summary of  Significant  Accounting  Policies,  the Company
capitalized  deferred  costs  totaling  $66,569  for patent  applications  as of
October 31, 2002. Recovery of the deferred costs is dependent on the issuance of
those patents and the subsequent  realization of income therefrom.  The ultimate
outcome of this  uncertainty  cannot presently be determined.  Accordingly,  the
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.



/s/ Cordovano and Harvey, P.C.
------------------------------
Cordovano and Harvey, P.C.
Denver, Colorado
January 7, 2003

                                       F-2
<PAGE>

<TABLE>
                             VITRO DIAGNOSTICS, INC.
                                  Balance Sheet
                                October 31, 2002
<CAPTION>

<S>                                                                                                <C>
Assets
Current assets:
    Cash .......................................................................................   $     7,503
    Prepaid expenses ...........................................................................         3,744
                                                                                                   -----------
                                                                            Total current assets        11,247

Equipment, net of accumulated depreciation of $1,242 ...........................................         4,274
Equipment under capital lease, net of accumulated depreciation of $7,195 .......................         8,041
Patents, net of accumulated amortization of $23,167 (Note A) ...................................       134,239
Deferred costs (Note A) ........................................................................        66,569
                                                                                                   -----------

                                                                                                   $   224,370
                                                                                                   ===========

Liabilities and Shareholders' Equity
Current liabilities:
    Current maturities on capital lease obligation (Note E) ....................................   $     2,656
    Accounts payable ...........................................................................         7,963
    Indebtedness to officer (Note B) ...........................................................         1,323
    Note payable to officer (Note B) ...........................................................        20,000
    Accrued interest payable to officer (Note B) ...............................................           300
    Accrued salaries ...........................................................................        28,854
    Line of credit (Note D) ....................................................................         1,244
    Other accrued expenses .....................................................................         6,000
                                                                                                   -----------
                                                                       Total current liabilities        68,340

Capital lease obligation, less current maturities (Note E) .....................................         9,549
                                                                                                   -----------
                                                                               Total liabilities        77,889
                                                                                                   -----------

Commitments and contingency (Note H) ...........................................................          --

Shareholders' equity (Note F):
    Preferred stock, $.001 par value; 5,000,000 shares authorized;
       -0- shares issued and outstanding .......................................................          --
    Common stock, $.001 par value; 50,000,000 shares authorized;
       9,238,750 shares issued and outstanding .................................................         9,239
    Additional paid-in capital .................................................................     4,352,360
    Officer loan to exercise options, including $290 of accrued interest (Note B) ..............       (11,890)
    Stock options - 704,197 outstanding ........................................................         8,003
    Accumulated deficit ........................................................................    (4,211,231)
                                                                                                   -----------
                                                                      Total shareholders' equity       146,481
                                                                                                   -----------

                                                                                                   $   224,370
                                                                                                   ===========
</TABLE>
               See accompanying summary of significant accounting
                   policies and notes to financial statements.

                                       F-3
<PAGE>

<TABLE>
                               VITRO DIAGNOSTICS, INC.
                              Statements of Operations
<CAPTION>
                                                                                           For the Years Ended
                                                                                               October 31,
                                                                                       --------------------------
                                                                                           2002           2001
                                                                                       -----------    -----------
Revenue:
<S>                                                                                    <C>            <C>
     NIH grant (Note G) ............................................................   $      --      $   100,000
                                                                                       -----------    -----------
                                                                       Total revenue          --          100,000
                                                                                       -----------    -----------

Operating costs and expenses:
     Research and development ......................................................       169,804        324,940
     Selling, general and administrative ...........................................        93,787        117,291
     Rent and facility fees paid to related party (Note B) .........................          --           15,980
     Contributed rent and facility fees, related party (Note B) ....................          --            5,250
     Stock-based compensation (Note F):
        Stock-based compensation: legal fees .......................................         2,775          5,228
        Stock-based compensation: SAB director services ............................         2,100           --
        Stock-based compensation: consulting services ..............................         1,200          2,000
     Loss on write-off of deferred patent costs (Note A) ...........................         9,213           --
                                                                                       -----------    -----------
                                                  Total operating costs and expenses       278,879        470,689
                                                                                       -----------    -----------
                                                                Loss from operations      (278,879)      (370,689)

Other income (expense):
     Gain on settlement of Goodwin deposit (Note H) ................................        28,000           --
     Loss on write-off of Goodwin deposit (Note H) .................................          --          (24,000)
     Interest income, officer loan (Note B) ........................................           290           --
     Interest income ...............................................................           930         13,229
     Miscellaneous income ..........................................................          --              512
     Interest expense ..............................................................        (2,738)        (1,159)
                                                                                       -----------    -----------
                                                            Loss before income taxes      (252,397)      (382,107)

Provision for income taxes (Note C) ................................................          --             --
                                                                                       -----------    -----------

                                                                            Net loss   $  (252,397)   $  (382,107)
                                                                                       ===========    ===========

Basic and diluted net loss per common share ........................................   $     (0.03)   $     (0.04)
                                                                                       ===========    ===========
Shares used in computing basic and diluted net loss per common share ...............     8,989,519      8,788,122
                                                                                       ===========    ===========
</TABLE>

               See accompanying summary of significant accounting
                   policies and notes to financial statements.

                                       F-4
<PAGE>

<TABLE>
                             VITRO DIAGNOSTICS, INC.
                  Statement of Changes in Shareholders' Equity

                  For the Years ended October 31, 2002 and 2001
<CAPTION>

                                                                                                                   Loan to
                                                                                                                   Officer
                                                     Preferred Stock         Common Stock         Additional     to Exercise
                                                     ---------------     ---------------------     Paid-in          Stock
                                                     Shares   Amount      Shares     Par Value     Capital         Options
                                                     ------   ------     ---------   ---------   -----------       --------
<S>                                                  <C>      <C>        <C>         <C>         <C>               <C>
                         Balance, October 31, 2000    --      $--        8,534,835      $8,535   $ 4,292,514       $   --

Common stock issued upon exercise of
   stock options (Note F) ........................    --       --          275,088         275          (275)          --
Common stock options granted in exchange
   for services (Note F) .........................    --       --             --          --            --             --
Office and facility use contributed by an
   affiliate company (Note B) ....................    --       --             --          --           5,250           --
Common stock issued to a director for
   Scientific Advisory Board services (Note F) ...    --       --            1,684           2         1,998           --
Net loss for the year ended October 31, 2001 .....    --       --             --          --            --             --
                                                     ------   ------     ---------      ------   -----------       --------
                         Balance, October 31, 2001    --       --        8,811,607       8,812     4,299,487           --

Common stock issued to a consultant for
   Security Advisory Board service (Note F) ......    --       --           10,000          10         2,090           --
Common stock options granted in exchange
   for services (Note F) .........................    --       --             --          --            --             --
Common stock sold to an officer at
   $.18 per share (Note B) .......................    --       --          200,000         200        35,800           --
Common stock options exercised by an
   officer and paid for with a loan from the
   Company (Note F) ..............................    --       --          200,000         200        13,800        (14,000)
Common stock issued to a consultant for
   market research services (Note F) .............    --       --           17,143          17         1,183           --
Officer compensation charged against the
   loan to officer (Note B) ......................    --       --             --          --            --            2,400
Interest accrued on officer's equity loan (Note B)    --       --             --          --            --             (290)
Net loss for the year ended October 31, 2002 .....    --       --             --          --            --             --
                                                     ------   ------     ---------   ---------   -----------       --------
                         Balance, October 31, 2002    --      $--        9,238,750      $9,239   $ 4,352,360       $(11,890)
                                                     ======   ======     =========   =========   ===========       ========
</TABLE>


<TABLE>
                             VITRO DIAGNOSTICS, INC.
                  Statement of Changes in Shareholders' Equity

                  For the Years ended October 31, 2002 and 2001

                            (CONTINUED - SPLIT TABLE)

<CAPTION>



                                                     Stock       Accumulated
                                                    Options        Deficit           Total
                                                     ------      -----------       ---------
<S>                                                  <C>         <C>               <C>
                         Balance, October 31, 2000   $ --        $(3,576,727)      $ 724,322

Common stock issued upon exercise of
   stock options (Note F) ........................     --               --              --
Common stock options granted in exchange
   for services (Note F) .........................    5,228             --             5,228
Office and facility use contributed by an
   affiliate company (Note B) ....................     --               --             5,250
Common stock issued to a director for
   Scientific Advisory Board services (Note F) ...     --               --             2,000
Net loss for the year ended October 31, 2001 .....     --           (382,107)       (382,107)
                                                     ------      -----------       ---------
                         Balance, October 31, 2001    5,228       (3,958,834)        354,693

Common stock issued to a consultant for
   Security Advisory Board service (Note F) ......     --               --             2,100
Common stock options granted in exchange
   for services (Note F) .........................    2,775             --             2,775
Common stock sold to an officer at
   $.18 per share (Note B) .......................     --               --            36,000
Common stock options exercised by an
   officer and paid for with a loan from the
   Company (Note F) ..............................     --               --              --
Common stock issued to a consultant for
   market research services (Note F) .............     --               --             1,200
Officer compensation charged against the
   loan to officer (Note B) ......................     --               --             2,400
Interest accrued on officer's equity loan (Note B)     --               --              (290)
Net loss for the year ended October 31, 2002 .....     --           (252,397)       (252,397)
                                                     ------      -----------       ---------
                         Balance, October 31, 2002   $8,003      $(4,211,231)      $ 146,481
                                                     ======      ===========       =========
</TABLE>


               See accompanying summary of significant accounting
                   policies and notes to financial statements.

                                       F-5
<PAGE>

<TABLE>
                             VITRO DIAGNOSTICS, INC.
                            Statements of Cash Flows
<CAPTION>
                                                                                      For the Years Ended
                                                                                          October 31,
                                                                                    ----------------------
                                                                                      2002          2001
                                                                                    ---------    ---------
<S>                                                                                 <C>          <C>
Cash flows from operating activities
     Net loss ...................................................................   $(252,397)   $(382,107)
     Adjustments to reconcile net loss to net cash used in
       operating activities:
        Depreciation and amortization ...........................................      16,587       11,158
        Office and facility use contributed by affiliate (Note B) ...............        --          5,250
        Stock-based compensation for common stock issued and
           stock options granted in exchange for services (Note F) ..............       6,075        7,228
        Loss on write-off of Goodwin receivable (Note H) ........................        --         24,000
        Interest income recognized on Officer's equity loan (Note B) ............        (290)        --
        Services charged against Officer's equity loan (Note B) .................       2,400         --
     Changes in current assets and current liabilities:
        (Increase) decrease in accounts receivable, inventories,
           prepaid expenses and deposits ........................................         667       (4,411)
        Increase (decrease) in accounts payable, accrued expenses
           and payroll taxes payable ............................................      15,190       (9,572)
                                                                                    ---------    ---------
Net cash used in operating activities ...........................................    (211,768)    (348,454)
                                                                                    ---------    ---------

Cash flows from investing activities:
     Purchases of property and equipment ........................................      (2,706)      (2,810)
     Payments for patents .......................................................     (19,092)     (51,304)
                                                                                    ---------    ---------
Net cash used in investing activities ...........................................     (21,798)     (54,114)
                                                                                    ---------    ---------

Cash flows from financing activities:
     Proceeds from issuance of notes payable (Note B) ...........................      20,000         --
     Proceeds from line of credit ...............................................       1,400         --
     Principal payments on line of credit .......................................        (156)        --
     Principal payments on capital lease ........................................      (2,218)        (813)
     Sale of common stock .......................................................      36,000         --
                                                                                    ---------    ---------
Net cash provided by (used in) financing activities .............................      55,026         (813)
                                                                                    ---------    ---------

                                                               Net change in cash    (178,540)    (403,381)
Cash, beginning of year .........................................................     186,043      589,424
                                                                                    ---------    ---------
                                                                Cash, end of year   $   7,503    $ 186,043
                                                                                    =========    =========

Supplemental disclosure of cash flow information:
        Cash paid during the year for:
        Interest ................................................................   $   2,738    $   1,159
                                                                                    =========    =========
        Income taxes ............................................................   $    --      $    --
                                                                                    =========    =========

     Non-cash investing and financing transactions:
        Equipment acquired under capital lease (Note E) .........................   $    --      $  15,236
                                                                                    =========    =========
        Officer loan to exercise stock options (Note B) .........................   $  14,000    $    --
                                                                                    =========    =========
</TABLE>

               See accompanying summary of significant accounting
                   policies and notes to financial statements.

                                       F-6
<PAGE>

                             VITRO DIAGNOSTICS, INC.
                          Notes to Financial Statements


NOTE A:  NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Nature of Organization

     The Company was  incorporated  under the laws of Nevada on March 31,  1986.
     From November of 1990 through July 31, 2000, the Company was engaged in the
     development,   manufacturing  and  marketing  of  purified  human  antigens
     ("Diagnostics")    and   the    development   of    therapeutic    products
     ("Therapeutics").  The  Company's  sales were  solely  attributable  to the
     manufacturing of the purified human antigens.

     Following the transfer of its Diagnostics operations in August of 2000, the
     Company began devoting all efforts to its therapeutic drug development. The
     Company's  target area for its  therapeutic  products is the  treatment  of
     human  infertility.  The Company  has been  granted  three  patents for its
     process to  manufacture  VITROPIN(TM).  VITROPIN(TM)  is a highly  purified
     urinary follicle-stimulating hormone ("FSH") preparation produced according
     to the Company's patented  purification  process. The Company is developing
     additional  FSH-related drugs including  VITROPIN-C(TM) and VITROPIN-V(TM),
     and a syringe for administration of fertility drugs called VITROJECT(TM).

     The Company has also been granted a patent for its  proprietary  technology
     related to the  immortalization  of human cells.  This technology is can be
     used in the treatment of degenerative diseases and drug discovery.

     The accompanying financial statements have been prepared on a going concern
     basis,  which  contemplates  the realization of assets and  satisfaction of
     liabilities in the normal course of business.  As shown in the accompanying
     financial  statements,  the Company has suffered  significant  losses since
     inception  and has a working  capital  deficit at October 31,  2002.  These
     factors,  among  others,  may  indicate  that the Company will be unable to
     continue as a going concern for a reasonable time.

     The  financial  statements do not include any  adjustments  relating to the
     recoverability  and  classification  of liabilities that might be necessary
     should the Company be unable to continue as a going concern.  The Company's
     continuation  as a going concern is dependent  upon its ability to generate
     sufficient  cash  flow  to meet  its  obligations  on a  timely  basis  and
     ultimately  to attain  profitability.  The  Company  plans to seek  interim
     funding to maintain its operations  through debt and equity financing.  The
     Company is presently engaged in discussions with  pharmaceutical  companies
     that have expressed interest in the commercialization of the Company's cell
     immortalization  technology and the Company's  fertility drugs.  Management
     will  pursue  these  and  other   opportunities   with  the   objective  of
     establishing strategic alliances to fund further fertility drug development
     and commercialization. The Company anticipates launch of its first defined,
     cell culture medium product,  PRIMAID-I(TM) within 2003. Management intends
     to pursue  revenue  generation  from this product and  development of other
     related products to the fullest extent possible given its resources.  There
     is no assurance that any of these initiatives will yield sufficient capital
     to maintain the Company's operations.  In such an event, management intends
     to pursue  various  alternatives  such as sale of its assets or merger with
     other entities that are engaged in similar business activities.


     Summary of Significant Accounting Policies

                                       F-7
<PAGE>


                             VITRO DIAGNOSTICS, INC.
                          Notes to Financial Statements


     Use of estimates

     The  preparation of the financial  statements in conformity with accounting
     principles  generally  accepted  in the United  States of America  requires
     management  to make  estimates  and  assumptions  that affect the  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.

     Cash equivalents

     For the purposes of the statement of cash flows, the Company  considers all
     highly liquid debt instruments purchased with an original maturity of three
     months or less to be cash equivalents.  The Company had no cash equivalents
     at October 31, 2002.

     Property, equipment and depreciation

     Property  and  equipment  are stated at cost and are  depreciated  over the
     assets' estimated useful lives using the straight-line method. Depreciation
     expense  totaled $6,102 and $2,335 for the years ended October 31, 2002 and
     2001, respectively.

     Upon  retirement  or  disposition  of equipment,  the cost and  accumulated
     depreciation  are removed from the accounts and any resulting  gain or loss
     is reflected in operations.  Repairs and maintenance are charged to expense
     as  incurred  and   expenditures   for  additions  and   improvements   are
     capitalized.

     Patents, deferred costs and amortization

     Patents consist of costs incurred to acquire issued  patents.  Amortization
     commences once a patent is issued.  Costs incurred to acquire  patents that
     have  not  been  issued  are  reported  as  deferred  costs.  If  a  patent
     application  is denied  or  expires,  the costs  incurred  are  charged  to
     operations in the year the  application  is denied or expires.  The Company
     amortizes  its  patents  over a period of ten years.  Amortization  expense
     totaled  $10,485 and $8,823 for the years ended  October 31, 2002 and 2001,
     respectively.  The Company's  patents and deferred  costs  consisted of the
     following at October 31, 2002:

Patent
Method for purifying "FSH" (3 patents).................................$128,089
      These patents detail methods to manufacture highly purified FSH
      from various sources including human cells and animal extracts
      of pituitary glands.
Immortalized cell lines and methods of making the same (1 patent)....... 29,317
      This patent is for proprietary technology related to the
      immortalization of human cells, which could be used in the
      treatment of degenerative diseases and drug discovery.
Less: accumulated amortization..........................................(23,167)
                                                                       ---------
                                                                       $134,239
                                                                       =========

                                       F-8
<PAGE>


                             VITRO DIAGNOSTICS, INC.
                          Notes to Financial Statements


Deferred costs
Method for purifying "FSH", continuation-
   in-part application..................................................$ 8,516
      This patent application is a continuation on the above patents
      previously obtained by the Company that seeks to expand
      protection of its issued patent.  The patent application was also
      filed in the United Kingdom, Canada, Australia, and in the
      European Patent office.
Immortalization of human cell lines (VITROPIN-V(TM)).................... 19,545
      This patent application is a continuation on the above patent
      previously obtained by the Company that seeks to expand
      protection of its issued patent.  The patent application was also
      filed in the United Kingdom, Canada, Australia, New Zealand
      and in the European Patent office.
Multi-dose syringe driver (VITROJECT(TM))............................... 38,508
      Patent application for a device designed to administer injections
      more easily and economically.
                                                                       ---------
                                                                       $ 66,569
                                                                       =========

     During  the year ended  October  31,  2002,  the  Company  allowed 2 patent
     applications to expire. The costs associated with those patent applications
     totaled $9,213 and were expensed in the accompanying  financial  statements
     as "loss on write-off of deferred patent costs".

     Income taxes

     Income taxes are provided for the tax effects of  transactions  reported in
     the financial  statements and consist of taxes  currently due plus deferred
     taxes related primarily to differences  between the recorded book basis and
     the tax basis of assets  and  liabilities  for  financial  and  income  tax
     reporting. The deferred tax assets and liabilities represent the future tax
     return  consequences of those differences,  which will either be taxable or
     deductible  when the assets  and  liabilities  are  recovered  or  settled.
     Deferred taxes are also recognized for operating  losses that are available
     to offset  future  taxable  income and tax credits  that are  available  to
     offset future federal income taxes.

     Revenue and cost recognition

     The Company  utilizes the accrual method of accounting  whereby  revenue is
     recognized when earned and expenses are recognized  when incurred.  Revenue
     from grants is recognized as the related costs are incurred.

     Fair value of financial instruments

     SFAS 107, "Disclosure About Fair Value of Financial  Instruments," requires
     certain disclosures regarding the fair value of financial instruments.  The
     carrying amounts of cash,  accounts  payable and other accrued  liabilities
     approximate fair value due to the short-term maturity of the instruments.

                                       F-9
<PAGE>

                             VITRO DIAGNOSTICS, INC.
                          Notes to Financial Statements


     Net loss per share

     The Company  reports net loss per share using a dual  presentation of basic
     and diluted loss per share. Basic net loss per share excludes the impact of
     common stock  equivalents.  Diluted net loss per share utilizes the average
     market  price  per  share  when  applying  the  treasury  stock  method  in
     determining common stock equivalents.  Common stock options  outstanding at
     October  31, 2002 were not  included  in the diluted  loss per share as all
     704,197 options were anti-dilutive. Therefore, basic and diluted losses per
     share at October 31, 2002 were equal.

     Stock-based compensation

     The Company accounts for stock-based employee compensation  arrangements in
     accordance with Accounting Principles Board ("APB") Opinion 25, "Accounting
     for Stock Issued to Employees" and complies with the disclosure  provisions
     of SFAS No. 123,  "Accounting for Stock-Based  Compensation." Under APB No.
     25, compensation expense is based on the difference, if any, on the date of
     grant,  between  the fair  value of the  Company's  stock and the  exercise
     price. The Company accounts for stock issued to non-employees in accordance
     with the provisions of SFAS No. 123. SFAS 123 requires the fair value based
     method of  accounting  for stock  issued to  non-employees  in exchange for
     services.

     Companies  that elect to use the method  provided in APB 25 are required to
     disclose pro forma net income and pro forma earnings per share  information
     that would have resulted  from the use of the fair value based method.  The
     Company  has  elected to continue  to  determine  the value of  stock-based
     compensation  arrangements  under  the  provisions  of APB  25.  Pro  forma
     disclosures have been included in Note D.

NOTE B:  RELATED PARTY TRANSACTIONS

     During the year ended October 31, 2002, the Company's president paid $1,323
     in expenses on behalf of the Company.  The expenses were not  reimbursed to
     the  president  at October  31, 2002 and are  included in the  accompanying
     financial statements as "indebtedness to officer".

     On August 23, 2002, the Company's  president loaned the Company $20,000 for
     working  capital in exchange  for a  promissory  note.  The note carries an
     eight  percent  interest  rate and  matures on August 23,  2003.  Principal
     unpaid as of August 23,  2003  accrues  interest  at ten  percent.  Accrued
     interest totaled $300 at October 31, 2002. The note is  collateralized by a
     first  lien  on the  Company's  patents  related  to FSH  purification.  In
     addition, in accordance with the terms of the note, the Company granted the
     president  options to purchase 133,333 shares of the Company's common stock
     with an exercise  price equal to the common  stock market value on the date
     of grant, or $.075 per share.

     During May 2002, the Company began accruing its president's salary due to a
     lack of working capital.  The president's  unpaid salary totaled $28,854 as
     of October 31, 2002 and is included in the accompanying condensed financial
     statements as "accrued salaries".

     During May 2002, the Company's  Board of Directors  approved a $14,000 loan
     to the vice president of the Company. The loan was used to exercise options
     to purchase  200,000 shares of the Company's common stock. The loan carries
     a five  percent  interest  rate and matures on May 8, 2004.  The Company is
     holding stock  certificates  in the name of the officer,  totaling  116,700
     shares of common stock, as collateral for the loan.  During the period from
     May 1, 2002 through  October 31, 2002, the vice president  earned $2,400 in
     compensation,  which was allocated  against the balance due on the loan. At
     October 31, 2002,  the principal and related  accrued  interest owed on the
     loan totaled $11,600 and $290, respectively.

                                      F-10
<PAGE>


                             VITRO DIAGNOSTICS, INC.
                          Notes to Financial Statements


     During  February  2002, the Company sold 200,000 shares of its common stock
     to the  president  of the Company  for  $36,000,  or $.18 per share,  which
     equaled the market value of the common stock on the transaction date.

     During the period from November 1, 2000 through January 31, 2001, AspenBio,
     Inc.  ("AspenBio"),  a private  affiliated  company  owned by a significant
     Company shareholder, contributed the use of its office space and facilities
     to the Company.  The use of the office space and facilities  were valued at
     $1,750 per month based on the market rate in the local area and is included
     in the accompanying financial statements as rent and facility fees, related
     party with a corresponding credit to contributed capital.

     On February 1, 2001,  the Company began paying  AspenBio for the use of the
     office space and facilities.  The Company paid AspenBio $15,980 for the use
     of office  space,  facilities  and  contract  services  for the period from
     February 1, 2001  through May 31,  2001.  The Company  signed an  operating
     lease for new office space and facilities  that commenced June 1, 2001 (see
     Note H).

NOTE C:  INCOME TAXES

     A  reconciliation  of the U.S.  statutory  federal  income  tax rate to the
     effective rate is as follows:

                                                                 October 31,
                                                            --------------------
                                                              2002        2001
                                                            --------    --------
U.S. federal statutory graduated rate....................    32.04%      34.00%
State income tax rate, net of federal benefit............     3.15%       3.06%
Contributed office and facility use......................     0.00%      -0.52%
Net operating loss for which no tax benefit
   is currently available................................   -35.19%     -36.54%
                                                            --------    --------
                                        Effective rate...     0.00%       0.00%
                                                            ========    ========


     At  October  31,  2002,  deferred  taxes  consisted  of a net tax  asset of
     $1,044,348,  due to operating loss  carryforwards of $2,801,319,  which was
     fully allowed for in the valuation  allowance of $1,044,348.  The valuation
     allowance  offsets  the net  deferred  tax  asset  for  which  there  is no
     assurance of recovery.  The deferred tax assets for the years ended October
     31, 2002 and 2001 were $88,813 and  $137,845,  respectively.  The change in
     the valuation  allowance from October 31, 2001 through October 31, 2002 was
     $88,813. Net operating loss carryforwards will expire through 2022.

     The  valuation  allowance  will  be  evaluated  at the  end of  each  year,
     considering  positive and negative evidence about whether the asset will be
     realized.  At that time, the allowance will either be increased or reduced;
     reduction  could result in the  complete  elimination  of the  allowance if
     positive evidence  indicates that the value of the deferred tax asset is no
     longer impaired and the allowance is no longer required.

     Should the Company undergo an ownership change as defined in Section 382 of
     the  Internal   Revenue  Code,   the  Company's  tax  net  operating   loss
     carryforwards generated prior to the ownership change will be subject to an
     annual  limitation,  which could reduce or defer the  utilization  of these
     losses.

                                      F-11
<PAGE>


                             VITRO DIAGNOSTICS, INC.
                          Notes to Financial Statements


NOTE D:  LINE OF CREDIT

     The  Company  has a $10,000  line of credit of which  $8,756  was unused at
     October 31, 2002. The interest rate on the credit line was 13.75 percent at
     October 31, 2002. Principal and interest payments are due monthly.

NOTE E:  CAPITAL LEASE OBLIGATION

     On May 22,  2001,  the Company  entered into a capital  lease  agreement to
     acquire computer and laboratory equipment. The Company is obligated to make
     60  monthly  payments  of $388 under the lease.  Future  maturities  of the
     capital lease obligation are as follows:

   Year ended October 31,
------------------------------
        2003................................         $ 4,657
        2004................................           4,657
        2005 and thereafter.................           7,373
                                               --------------
                                                      16,687
Less: imputed interest......................          (4,482)
                                               --------------
Present value of net minimum
   lease payments...........................        $ 12,205
                                               ==============

     The  president  of  the  Company  has   personally   guaranteed  the  lease
     obligation.


NOTE F:  SHAREHOLDERS' EQUITY

     During  October 2002,  the Company issued 17,143 shares of its common stock
     to a consultant in exchange for market research  services.  The transaction
     was valued at the market price of the stock on the date of issuance,  which
     was $.07 per share.  As a result,  the  Company  recognized  a  stock-based
     compensation  expense totaling $1,200 based on the fair value of the common
     stock.

     During  December 2001, the Company issued 10,000 shares of its common stock
     to an  individual  in  exchange  for  services  provided  to the  Company's
     Scientific Advisory Board ("SAB"). The transaction was valued at the market
     price of the stock on the date of issuance,  which was $.21 per share. As a
     result, the Company recognized a stock-based  compensation expense totaling
     $2,100 based on the fair value of the common stock.

     During the year ended October 31, 2001,  the Company  issued 275,088 shares
     of its $.001 par value  common stock as a result of the exercise of 357,480
     common stock options.

     During the year ended October 31, 2001,  the Company issued 1,684 shares of
     its common  stock in  exchange  for  services  performed  on the  Company's
     Scientific  Advisory Board.  The transaction was valued at the market price
     of the stock on the date of  issuance,  or $1.1875 per share.  As a result,
     the Company recognized a stock-based  compensation  expense totaling $2,000
     based on the fair market value of the common stock.

                                      F-12
<PAGE>


                             VITRO DIAGNOSTICS, INC.
                          Notes to Financial Statements


     On February  11, 2001,  the Board of  Directors  approved a revision to the
     Amended  and  Restated  Articles of  Incorporation  to reduce the amount of
     authorized  common  stock  from  500,000,000  shares to  50,000,000  and to
     include a provision for the  authorization of 5,000,000 shares of $.001 par
     value preferred stock with such rights,  preferences and limitations as may
     be designated by the Board of Directors. As of October 31, 2002, there were
     no preferred shares issued and outstanding.

     Incentive plans

     Through  November  30,  2000,  all  stock  options  were  issued  under the
     Company's 1992 Stock Option Plan. Effective December 2, 2000, the Company's
     Board of Directors  adopted an Equity  Incentive  Plan (the "Plan"),  which
     replaced the Company's  1992 Stock Option Plan.  The purpose of the Plan is
     to attract and retain qualified personnel, to provide additional incentives
     to  employees,  officers,  consultants  and  directors,  and to promote the
     Company's  business.  The  Plan  authorizes  total  stock  awards  of up to
     1,000,000 shares of the Company's common stock. Awards may take the form of
     incentive  stock options,  non-qualified  stock options,  restricted  stock
     awards,  stock bonuses and other stock grants.  If a stock award made under
     the Plan  expires,  terminates,  is canceled or settled in cash without the
     issuance of all shares of common stock  covered by the award,  those shares
     will be  available  for  future  awards  under the Plan.  Awards may not be
     transferred  except by will or the laws of  descent  and  distribution.  No
     awards may be granted under the Plan after September 30, 2010.

     The Plan is  administered  by the Company's  Board of Directors,  which may
     delegate its authority to a committee of the Board of Directors.  The Board
     of Directors has the authority to select  individuals to receive awards, to
     determine the time and type of awards,  the number of shares covered by the
     awards,  and the terms and conditions of such awards in accordance with the
     terms of the Plan.  In making such  determinations,  the Board of Directors
     may take into account the recipient's  current and potential  contributions
     and any  other  factors  the Board of  Directors  considers  relevant.  The
     recipient  of an award has no choice  regarding  the form of a stock award.
     The Board of Directors is authorized to establish rules and regulations and
     make all other  determinations  that may be necessary or advisable  for the
     administration  of the Plan. All options granted pursuant to the Plan shall
     be exercisable at a price not less than the fair market value of the common
     stock on the date of grant. Unless otherwise specified,  the options expire
     ten years from the date of grant.  The following  schedule  summarizes  the
     changes in the Company's stock option plan:

                                    Options Outstanding
                                      and Exercisable
                                 ----------------------------   Weighted Average
                                 Number of     Exercise Price   Exercise Price
                                   Shares       Per Share       Per Share
                                 -----------   --------------   ----------------
Balance at October 31, 2000...   1,218,394      $.07.to.$1.50      $ 0.25
   Options granted............     127,000      $.30 to $1.19      $ 0.85
   Options exercised..........    (357,480)    $1.06 to $1.20      $ 1.13
   Options canceled...........    (187,550)     $.18 to $.33       $ 0.19
                                 ----------    --------------   ----------------

Balance at October 31, 2001...     800,364      $.07 to $1.50      $ 0.35
   Options granted............     173,833      $.075 to $.21      $ 0.09
   Options exercised..........    (200,000)        $0.07           $ 0.07
   Options expired............     (70,000)        $0.20           $ 0.20
                                 ----------                     ----------------

Balance at October 31, 2002...     704,197     $.075 to $1.50      $ 0.37
                                 ==========


                                      F-13
<PAGE>

                             VITRO DIAGNOSTICS, INC.
                          Notes to Financial Statements


     Stock options - employees

     During the year ended October 31, 2002, the Company granted 146,833 options
     to officers and directors  with  exercise  prices equal to the common stock
     market value on the date of grant.  The weighted average exercise price and
     weighted  average  fair value of these  options as of October 31, 2002 were
     $.08 and $.07,  respectively.  Directors'  options are considered  employee
     options and are accounted for under APB 25.

     During the year ended October 31, 2001, the Company granted 110,500 options
     to directors with exercise prices equal to the common stock market value on
     the date of grant. The weighted average exercise price and weighted average
     fair  value of these  options as of  October  31,  2001 were $.90 and $.37,
     respectively.  Directors'  options are considered  employee options and are
     accounted for under APB 25.

     Pro forma  information  regarding  net  income  and  earnings  per share is
     required by SFAS 123 as if the Company had  accounted for its granted stock
     options under the fair value method of that  Statement.  The fair value for
     these  options was  estimated at the date of grant using the  Black-Scholes
     option-pricing model with the following assumptions:

     Risk-free interest rate ....................................      5.00%
     Dividend yield .............................................      0.00%
     Volatility factor ..........................................    114.02%
     Weighted average expected life .............................    5 years

     The  Black-Scholes  options  valuation  model  was  developed  for  use  in
     estimating  the  fair  value  of  traded  options,  which  have no  vesting
     restrictions  and are fully  transferable.  In addition,  option  valuation
     models  require the input of highly  subjective  assumptions  including the
     expected stock price  volatility.  Because the Company's stock options have
     characteristics  significantly  different from those of traded options, and
     because changes in the subjective input  assumptions can materially  affect
     the fair value estimate,  in management's  opinion,  the existing models do
     not necessarily  provide a reliable single measure of the fair value of its
     stock  options.  However,  the Company has presented the pro forma net loss
     and pro forma basic and diluted loss per common share using the assumptions
     noted above.

                                                        For the Years Ended
                                                            October 31,
                                                    ---------------------------
                                                      2002             2001
                                                    ---------       -----------

Net loss, as reported ........................      $(252,397)      $  (382,107)
                                                    =========       ===========

Pro forma net loss ...........................      $(262,708)      $  (433,607)
                                                    =========       ===========

Basic and diluted net loss per common
   share, as reported ........................      $   (0.03)      $     (0.04)
                                                    =========       ===========

Pro forma basic and diluted net loss
   per common share ..........................      $   (0.03)      $     (0.05)
                                                    =========       ===========


     Stock options - non-employees

     During the year  ended  October  31,  2002,  the  Company  granted  its SEC
     attorney  options to purchase 27,000 shares of the Company's  common stock.
     The options'  exercise  prices  range from $.12 to $.21 and expire  between
     December 11, 2011 and May 7, 2012. The Company determined the fair value of
     the  options  in  accordance  with  SFAS 123 and has  recorded  stock-based
     compensation expense of $2,775 in the accompanying financial statements.

                                      F-14
<PAGE>


                             VITRO DIAGNOSTICS, INC.
                          Notes to Financial Statements


     During the year  ended  October  31,  2001,  the  Company  granted  its SEC
     attorney  options to purchase 16,500 shares of the Company's  common stock.
     The options'  exercise  prices  range from $.30 to $.81 and expire  between
     February 5, 2011 and  October 12,  2011.  The Company  determined  the fair
     value  of the  options  in  accordance  with  SFAS  123  and  has  recorded
     stock-based  compensation  expense of $5,228 in the accompanying  financial
     statements.

NOTE G:  NATIONAL INSTITUTE OF HEALTH GRANT

     During the year ended October 31, 2000,  the Company was awarded a $100,000
     grant from the National  Institute  of Health  ("NIH").  Proceeds  from the
     grant were  expended  during the fiscal  year ended  October  31,  2001 for
     research related to the Company's cell immortalization technology.

     NIH grant  proceeds  are  subject to audit and review by the United  States
     Department  of Health and Human  Services,  which may result in findings of
     unallowable  costs.  Findings  of  unallowable  costs  could  result in the
     repayment of grant funds.

NOTE H:  COMMITMENTS AND CONTINGENCY

     Goodwin deposit

     On June 18, 2001, the Company negotiated the repayment of a $24,000 deposit
     for   future   services   paid  to  Goodwin   Biotechnology,   Incorporated
     ("Goodwin").  Under the repayment  settlement,  Goodwin agreed to repay the
     Company $25,000.

     On October 22,  2001,  the Company  filed a complaint  in Arapahoe  County,
     Colorado District Court against Goodwin for breach of contract.  On January
     10,  2002,  the  Arapahoe  County  Court issued a judgment in the amount of
     $29,177  (including  interest and attorney fees). The judgment also carries
     an annual interest rate of 18 percent.  The amount expected to be collected
     under the judgement could not be estimated. The $24,000 deposit was written
     off as of  October  31,  2001  resulting  in a loss of  $24,000,  which  is
     included in the accompanying  financial statements as "loss on write-off of
     Goodwin deposit".

     During  February 2002, the Company  received  $28,000 toward the payment of
     the  judgment  filed on January 10,  2002  against  Goodwin  Biotechnology,
     Incorporated.  The  Satisfaction of Judgment was filed in Arapahoe  County,
     Colorado  District  Court on March 5, 2002.  The $28,000 is included in the
     accompanying  financial  statements  as  "gain  on  settlement  of  Goodwin
     deposit".

     Facilities lease

     The Company  entered  into an  operating  lease  agreement on May 15, 2001.
     Under the lease,  the Company  receives the use of a  laboratory  facility,
     equipment and furnishings within the facility,  common areas, and reception
     services.  The  original  term of the lease  ran from June 1, 2001  through
     August 31, 2001.  Following  August 31, 2001,  the lease was  automatically
     extended, under the terms of the lease, for an additional year. On June 25,
     2002,  the parties  signed an  amendment to the lease,  which  extended the
     lease  through May 31, 2003.  Rent payments of $1,872 are payable under the
     lease on or before the first of each month.  Future minimum  payments under
     the facilities lease totaled $13,104 at October 31, 2002.

                                      F-15