CONFORMED COPY

                                    FORM 10-K SB

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

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

For the fiscal year ended October 31, 1997

                                         OR

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

Commission file number:  0-17378


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

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

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

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

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

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

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

Yes  X         No 
    ---           ---

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

Yes  X       No
    ---         ---

     The issuer's revenues for its most recent fiscal year were $650,846.

     The aggregate market value of the voting stock held by non-affiliates 
(1,550,087) computed by taking the average of the bid and the ask ($0.235 as
quoted on October 6, 1998) was $364,270.

     The number of shares outstanding of each of the issuer's classes of 
common equity as of October 6, 1998, was 6,413,702.

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

<PAGE>                                                                    2

                                    PART I 
ITEM 1.  DESCRIPTION OF BUSINESS 

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

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

      Description of Company's Products and Services

      PURIFIED ANTIGENS 
                 
      In connection with management's objectives to transform the Company into
      a diversified biotechnology company, purified human antigens were selected
      as the initial business to be pursued by the Company.  Manufacture of 
      these products required that the Company develop expertise in 
      purification of clinically significant proteins, which expertise was 
      available to the Company through its scientific staff and recent 
      technological advances.  The Company is presently only one of a few
      manufacturers in the world that specialize in the purification of human
      pituitary hormones.

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

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

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

      A brief description of some of these products follows: 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

      MARKETS AND DISTRIBUTION FOR PURIFIED ANTIGENS 

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

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

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

                                                                      
      MARKETING AND SALES STRATEGY 

      The Company has had its purified antigens on the market since 
      November, 1990.  During the first year, the Company undertook 
      considerable product research and development.  Sales from November 
      1990 to August 1991 were largely derived from prolactin, growth hormone 
      and hCG.  By August 1991, the Company was able to provide at least 
      limited quantities of TSH, LH, FSH and CEA, in addition to prolactin, 
      growth hormone and hCG. Since then, the production procedures, used to 
      purify products, have undergone refinement and quality control procedures
      have been improved.  The Company has also added hCG-beta, hCG-alpha, and
      AFP to its product line. 

      The Company presently has 36 products on the market, which include 
      various purity grades of 11 individual purified antigens.
      Total product sales were   $311,041, $553,748, $376,746,  $790,335 and 
      $650,846 for fiscal years  1993, 1994, 1995, 1996 and 1997
      respectively.   Product sales for fiscal year 1997 were $650,846.  The 
      Company now sells  to 150 clients including several domestic diagnostic
      kit manufacturers. 

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

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

      EXPANSION OF PRODUCTION 

      In order to increase the market share of the Company's existing line of 
      purified antigens maintenance of adequate product inventory is essential.
      Most of the Company's production methods have been refined into highly
      efficient methods.  The basic method to increase the Company's 
      inventories of pituitary hormones is to increase the number of glands 
      processed in a given production run.  The amount of product produced is 
      dependent on the hormone content of the raw materials and the overall 
      efficiency of the purification process.  Since the present overall yield
      is similar for all products, variations in final product levels reflect 
      variation in hormone levels within pituitary glands. 

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

      At the present time, management is exploring various options to produce 
      cell lines which are known to produce and secrete human CEA, FSH, LH,
      TSH, growth hormone and prolactin.  Once a viable cell line is located,
      the Company will then engage in methods of development of the cell culture
      process and purification procedures.  Management believes that the market 
      is ready to accept cell line-derived products, but market resistance to a
      new cell line-derived product does exist.  There is no assurance that the
      Company can produce any cell line-derived product that is marketable.
        
      New Product Development 
                             
      Therapeutic Products - The Company is presently focused on protein 
      purification technology which is used to produce antigens from extracts
      of human tissues.  The technological expansion of the Company includes
      plans to add facilities and expertise in the areas of cell culture and
      recombinant DNA.  Cell culture methods are used to grow large
      quantities of a particular cell type and to allow for collection of
      products of the culture for use as raw materials in the production of
      purified proteins.  Recombinant DNA is a modern method of
      biotechnology whereby, genetic information directing the synthesis
      of specific proteins can be inserted into cells grown in culture.
      A cell culture facility has been been added to the Company's 
      operation.  Recombinant DNA technology is also available to 
      the Company. 

      The Company intends to develop cell lines which produce some of the
      present products that are least abundant in the presently utilized raw 
      materials.  Subsequently, the Company intends to develop therapeutic 
      products using cell culture and recombinant DNA technologies. 

      The basic strategy in developing such products is initial research and 
      development to create genetically engineered cell lines which produce 
      viable products as determined by laboratory test procedures.  Once a 
      satisfactory product can be demonstrated by laboratory testing, the  
      Company will file for US and foreign patent protection designed to ensure 
      maximum protection of the Company's  technology.  Testing of the new drug
      would then follow with detailed studies of effectiveness, formulation and
      safety. Given successful results, the Company would then commercialize
      these products. At present the Company is targeting products for use in
      treatment of infertility and aging in humans.  Fertility drugs for animals
      area also of interest.  The addition of all new products will depend on 
      availability of capital.  There is no guarantee that any of these products
      will be developed or marketed. 

      Competition 

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

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

      Based on reports from its customers, management believes that its 
      purified antigens are equivalent or superior in quality to the same
      products provided by its competitors.  At the same time, the cost of
      the Company's products is significantly less than that of other
      suppliers.  One reason the company's product is less expensive is
      efficiency of production.  While the basis for the competitor's
      prices is unknown to management, the Company has continually improved
      its manufacturing efficiency.  The resulting decrease in costs of
      production have been passed on to the Company's customers in the form
      of lower prices.

      MAJOR CUSTOMERS 

      During the most recent fiscal year ended October 31, 1997, sales made to
      any one customer in an aggregate amount equal to 10% or more of the
      Company's consolidated revenues included Abbott Laboratories (16%)
      Bio Rad Laboratories (15%) and National Institutes of Health (11%).

      PATENTS AND TRADEMARK 

      The Company presently does not hold any patents or trademarks, 
      however,  the Company now has one patent application pending with the
      United States Patent and Trade Office concerning a method for the 
      purification of FSH.

      EMPLOYEES 

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

      FACILITIES 

      The Company presently occupies 5700 square feet at 8100 Southpark 
      Way, Littleton, CO 80120.  Such facilities house the Company's 
      administrative headquarters, research and development laboratories and  
      manufacturing facilities.  The lease on the premises terminates on 
      December 31, 1998. Management's future plans for expansion of the Company 
      will require relocation to a larger facility.

      MISCELLANEOUS 

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

      Research and development expenditures amounted to $113,373 for the 
      year ended October 31, 1995, $65,077 for the year ended October 31, 1996 
      and $81,579 for the year ended October 31, 1997.  These research and 
      development activities relate to the development of purified antigen 
      products.

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


                      
ITEM 2.  DESCRIPTION OF PROPERTY 

      The Company's administrative headquarters, research and development 
laboratories and manufacturing facilities are in a 5,700 square foot, one-
story brick building located at 8100 Southpark Way, Building B-1, 
Littleton, CO 80120.  The facilities  lease expires on  December 31, 1997.
The Company has outgrown its present facility and is actively looking for a
building to expand into.


ITEM 3.  LEGAL PROCEEDINGS 

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

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

      During the fiscal year ended October 31, 1997, there were no matters 
submitted to a vote of security holders. 


       
                                    PART II 

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

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


                                    Price Ranges (closing bid) 

                                                     Bid

       Quarter Ended                        High                       Low

     January 31, 1996                      $.25                        $.18
     April 30, 1996                        $.25                        $.12
     July 31, 1996                         $.30                        $.06
     October 31, 1996                      $.14                        $.06
     January 31, 1997                      $.14                        $.06
     April 30, 1997                        $.07                        $.04
     July 31, 1997                         $.07                        $.04
     October 31, 1997                      $.07                        $.04

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

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

           (b) Holders 
        
       As of October 31, 1997 the Company had approximately 2,000 
shareholders of record, not including approximately 1,800 persons who 
hold their shares in "street name". 
        
            (c) Dividends 
  
       On March 20, 1989, the Company's Board of Directors approved the 
issuance of a total of 550,528 (after adjustment for the 1 for 200 reverse 
split) warrants to the Company's shareholders as of April 15, 1989, as a 
stock dividend.  This class C Warrant expired on December 31, 1994.


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

       The Company's Operating Expenses for fiscal 1997 were $514,638, the 
Cost of Sales was $259,336 and Interest Expense was $21,317.  These 
expenses total $795,291 or $66,274 per month.  Gross Revenues for 1997 
were $650,846 or $54,237 per month.  This equates to a $12,037 loss per 
month.  On October 31, 1997 the Company had $0 in Cash and 
$105,675 in Accounts Receivable - Trade for a total of $105,675.  

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

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

                                
       Comparison of 12 Month Periods October 1997 to October 1996 

       The Company's net revenue decreased from 1996.  The net loss for 1997 
of $144,445 is a decrease of $139,489 from 1996.  This loss in 1997 was 
due to two major customers slowing down their production.  One for 
relocation, the other for reorganization.  Working capital at October 31, 1997 
amounted to $11,945 which was a $123,973 decrease from the ($135,918) in 
working capital at October 31, 1996.  A decrease in Cash and an increase in
Accounts Payable were responsible for the change in working capital.  These 
changes to working capital were a direct result of decreased product sales. 

       The Company's revenues from product sales (purified antigens) for the 
year ended October 31, 1997 were $650,846 or 18% less than the $790,335 
in product sales for the year ended October 31, 1996. Total milligram 
quantities of all products sold in 1997 equaled 1,730 as compared to 2,704 
milligrams in 1996.  This equates to a 36% decrease from 1996. 
                                                   
       There are general expenses for any company that remain fairly constant,
no matter what the revenues, i.e.  rent, utilities, administrative staff.
Management believes that  the current administrative staff is sufficient to
handle revenues up to $2 million per 
year.                                                       
                                
       The Company is presently seeking financial assistance.  If no or 
minimal capital is raised, the Company will continue operations at its 
current levels.  Without added capital, the Company will have difficulty in 
expanding its operations.  The Company anticipates greater profits in the
near future through increased sales and decreased production costs.

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

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


       ITEM 7.  FINANCIAL STATEMENTS 

       See "Index to Financial Statements and Financial Statement Schedules"

       ITEM 8.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

       None.

                                   PART III 

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

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

    Directors and Executive Officers

    The following table sets forth certain information regarding the officers 
and directors of the Company as of  January 20, 1997.

                            
           Name               Age                Position

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

       James R. Musick        51               Secretary/Treasurer
                                                  Chief Operating Officer
                                                  Director

       Erik D. Van Horn       32               Director

                                  

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

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

       Roger D. Hurst has been President and Director of the Company since 
February 15, 198.  On June 26, 1989 he assumed the Chief Executive 
Officer, Chief Financial Officer and the Chief Accounting Officer 
responsibilities for the Company.  Mr. Hurst received a Bachelors Degree in 
Education from Nebraska Wesleyan University in 1972.  Mr. Hurst devotes 
100% of his time to the affairs of the Company. 

       James R. Musick, Ph.D. was appointed as Secretary, Chief Operating 
Officer and Director of the Company on September 1, 1989.  From 
December, 1987 to the present Dr. Musick has been President of Health 
Sciences Consultants, a medical consulting firm located in Denver, 
Colorado.  Dr. Musick is a member of the Society of the Sigma Xi and he is 
referenced in American Men and Women in Science and Who's Who in the 
West.  Dr. Musick has written and had numerous scientific papers 
published.  Dr. Musick received a Bachelor of Arts in Biological Sciences 
degree in 1968 and a doctorate in Biological Sciences in 1975 from 
Northwestern University, Evanston, Illinois.  Dr. Musick devotes his full 
time to managing all technical areas of the Company. Erik D. Van Horn has 
been a Director of the Company since March 1993 and presently serves as 
Production Manager.  He received his Bachelor of Science in Chemical 
Engineering from the University of Colorado in 1990 and had developed a 
significant expertise in protein separation and engineering of production 
processes and in the cell culture of various plant and animal cell lines.  

Remuneration and Employment Agreements 

       The Company's two executive officers were paid a total of $43,200 
during fiscal year ending October 31, 1997 and  $81,600 during the fiscal year 
1996.  Such payments are pursuant to resolution of the Board of Directors.  The
Company has not entered into employment contracts with either Mr. Hurst or
Dr. Musick as of the date of this document. 

       Effective May 15, 1992, the Company entered into agreements not to 
compete with Messrs. Hurst and Musick, respectively, pursuant to which 
each has agreed that during his employment with the Company and for a 
period of two years thereafter, that he will not directly or indirectly, (i) 
consult with or assist any competitor in competing with the Company in 
any of the Company's then businesses; (ii) own an interest greater than 5% 
in any competitor, (iii) take any action intended to divert business from the 
Company to any competitor, or (iv) serve as an officer, director or 
employee of any competitor.  Further, under the terms of such agreements 
not to compete, the Company has used its best efforts to enter into an 
employment agreement with Messrs Hurst and Musick.  As of October 5, 1998 
these  agreements have yet to be negotiated. 

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

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

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

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

       Stock Option Plan 

       Effective December 2, 1992, the Company adopted the Vitro 
Diagnostics, Inc. 1992 Stock Option Plan (the "Plan") for the benefit of 
officers, directors and other personnel providing substantial assistance to 
the Company.  An aggregate of 3,000,000 Common Shares has been 
reserved for issuance under the Plan.  To date, options to purchase an 
aggregate of 2,350,000 shares have been issued and exercised under the Plan. 

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

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


 ITEM 10.  EXECUTIVE COMPENSATION 

  (a) Cash Compensation. 

  The  following table  shows  all cash  compensation paid  by Company 
during the fiscal year ended October 31, 1997, to each of the five most 
highly compensated executive  officers whose total cash compensation 
exceeded $60,000 (there were no such persons).

<TABLE>
<S>                         <C>     <C>        <C>       <C>             <C>
                                                         Other           Restricted
 Name and Principal                                      Annual          Stock
 Position                   Year    Salary     Bonus     Compensation    Awards
 
 Roger Hurst                1997    $21,600    $0        $0              $0
   CEO, CFO                 1996    $40,800    $0        $0              $0
   President                1995    $48,000    $0        $0              $0

 Jim Musick, Ph.D.          1997    $21,600    $0        $0              $0
   Secretary, COO           1996    $40,800    $0        $0              $0
                            1995    $48,000    $0        $0              $0
</TABLE>

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

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

  As set forth in the following table, no options were exercised by any 
executive officer of the Company during the fiscal year ended October 31, 
1997 or 1996.  The value of unexercised options held by these persons is as 
follows:

<TABLE>
<S>                <C>          <C>       <C>          <C>            <C>          <C>
                                          Number of                   Value of     
                                          Unexercised  Options        Unexercised Options
                   Shares       Values    at October 31, 1997         at October 31, 1997
 NAME              Acquired     Realized  Exercisable  Unexercisable  Exercisable  Unexercisable

  Roger Hurst      0            0         600,000      0              $ 94,000     0
  Jim Musick       0            0         700,000      0              $118,000     0
  Erik VanHorn     0            0         500,000      0              $ 34,200     0

</TABLE>

  Employment Agreements

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

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


       ITEM  11.  SECURITY  OWNERSHIP OF  CERTAIN BENEFICIAL  
OWNERS AND  MANAGEMENT 

   (a) (b) Security Ownership of Certain Beneficial Owners. 
        
        The following table sets forth information with respect to the 
ownership of the Company's Common Stock, $.001 par value, of all 
Officers and Directors, individually, all Officers and Directors as a group, 
and all beneficial owners of more than five percent (5%) of the Company's 
Common Stock.  The following shareholders have sole voting and 
investment power with respect to shares, unless it is indicated otherwise.  
Based upon 6,413,702 outstanding shares as of October 31, 1997.

      Name and Address of Beneficial  
                   Owner                Number of shares            %


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

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

       Lloyd Fields                         3,650,000             56.9
       425 Castle Place
       Beverly Hills, CA 90210

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

   (1) Officer and Director 

         Does not include 1,300,000 shares of common stock issuable upon 
         exercise of an option by  Messrs Hurst and Musick.  

(c)  Change in Control.  Company knows of no arrangement which may 
         at a subsequent date result in a change in control of the Company.  
          However, on May 15, 1992, the Company entered into an  
          Agreement with Mr. Lloyd Fields, a principal shareholder, regarding 
          proxy solicitation to amend the Company's Articles of Incorporation. 

       In connection with Mr. Fields' forgiveness of rent owed the Company 
on its leased offices in exchange for the issuance of Common Shares, and 
his further investment if $150,000 in the Company for additional Common 
Shares, Mr. Fields and the Company agreed that management would cause 
the Company to solicit proxies from shareholders on or before December 
31, 1992, to amend the Company's Articles of Incorporation.  As of October 
31, 1994, this proxy solicitation has not been finalized.

       The Agreement provides, and Messrs.  Hurst and Musick have agreed, 
that management will vote its shares with Mr. Fields to amend the 
Company's Articles of Incorporation to require the consent of  the holders 
of at least 70% of the outstanding shares of common stock to the issuance 
of Securities (as defined below) of Vitro except with respect to the 
following transactions:

    i) The issuance of Securities involving less than 0.1% of the outstanding 
common shares of Vitro outstanding at the close of the previous 
fiscal year in any single transaction or involving less than twice such 
number in the aggregate in any fiscal year;

  ii) Issuance of Securities to creditors in exchange for debt or rent 
forgiveness at a rate approved by the Board of Directors; 

 iii) Issuance of Securities of Vitro in exchange for a reduction of 
obligations owed to trade creditors at a rate approved by; 

  iv) Issuance of Securities pursuant to a public offering of securities; 

   v) Issuance of Securities pursuant to a private placement for which a 
registered broker - dealer is engaged to act as placement agent; 

  vi) Issuance of Securities in exchange for the securities or assets of any 
unaffiliated entity;

 vii)  Issuance of Securities when the delay in securing stockholder 
approval would seriously jeopardize the financial viability or prospects of 
Vitro; and 

viii) A qualified employee stock option plan in which officers and directors 
of the Company are not eligible to participate. 

       Further, the Agreement provides that the Company will not issue any 
securities in contravention to the above exceptions prior to undertaking a 
proxy solicitation for the above described purposes.

       Upon consultation with counsel to the Company, management has been 
advised that the subject proxy solicitation agreement may not be 
enforceable under Colorado law.  Accordingly, no action has been
taken by the Company to solicit proxies for such purposes.  
Management intends to refrain from any actions with respect to the 
Agreement until a determination can be made under Colorado statutory and 
case law as to various legal issues.

       ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 

            (a) Transactions With Management and Others. 
                                                
      In March, 1991, January, 1992, May, 1992, August, 1993, May, 1994, 
April, 1995,  May, 1996 and April, 1997 the Company issued 266,500, 107,500,
113,500, 119,143, 49,096, 132,000, 250,000 and 125,000 Common Shares,
respectively, to Mr. Lloyd Fields, a principal shareholder of the Company to 
pay rent
and project operating costs of the Company for its office space during the 
period October 1,
1990 through December 31, 1997. Such Common  Shares have been valued in
the aggregate at $347,053.  In April, 1992, October, 1992, March, 1993, 
August,
1993 and May, 1994, Mr. Fields purchased 1,000,000, 667,000, 33,000, 50,857,
and 300,000 Common Shares of  the Company for aggregate consideration 
$351,297 (See "Principal and Selling Shareholders" and Business - 
Facilities.") 

       The Company maintained a lessor/lessee relationship with Mr. Lloyd 
Fields under a lease agreement which terminated December, 1997.  
Management believes that the terms of this arrangement were fair, 
reasonable and no less favorable than could be obtained from unaffiliated 
third parties.  (See "Business - Facilities.") 

       In May, 1992, the Board of Directors of the Company, including 
Messrs. Hurst and Musick, granted options to Mr. Hurst and Dr. Musick to 
acquire 400,000 Common Shares of the Company each at an exercise price 
of $.19 per share.  The Board of Directors also approved the issuance of an 
option to Mr. Erik Van Horn, a key employee and director of the Company, 
entitling him to purchase 200,000 Common Shares at an exercise price of 
$.19 per share.  (See "Management.")

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

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

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



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

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

       1. Financial Statements:
            Balance sheets, October 31, 1997 (Audited)
            Statements of Operations for the years ended October 31, 1997 
                  (Audited), and 1996 (Audited)
            Statement of Stockholder's Equity for the years October 31, 1997
                  (Audited) and 1996 (Audited)
            Statements of Cash Flows for the years ended October 31, 1997 
                  (Audited) and 1996 (Audited)
            Notes to Financial Statements for the years ended October 31, 1997 
                  (Audited) and 1996 (Audited)

   


                               FIANANCIAL STATEMENTS


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

     Board of Directors
     Vitro Diagnostics, Inc.
     Littleton, Colorado

                          Independent Auditor's Report

     I have audited the accompanying balance sheet of Vitro Diagnostics, 
Inc. as of October 31, 1997 and the related statements of operations, 
stockholder's equity and cash flows for the years ended October 31, 1997 
and 1996.  These financial statements are the responsibility of the Company's. 
My responsibility is to express an opinion on these financial statements based 
on my audit

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

     In my opinion, the financial statements referred to above present 
fairly, in all material respects, the financial position of Vitro Diagnostics, 
Inc. as of October 31, 1997 and the results of its operations and its cash 
flows for the years ended  October 31, 1997 and 1996 in conformity with
generally accepted accounting principles.

/s/Larry O'Donnell

September 9, 1998

<PAGE>


                                  VITRO DIAGNOSTICS, INC 
                        Balance Sheet October 31, 1997 (Audited) 

       Assets 

  Current Assets:

       Cash                                              $        0
       Accounts Receivable-Trade,                           105,677
       Inventories                                          202,019
       Prepaid Expenses                                      67,438
                                                          ---------
  Total Current Assets                                      375,134          


  Property, Plant and Equipment :

       Office Furniture and Equipment                        8,583
       Laboratory and EDP Equipment                        131,645
       Leasehold Improvements                               11,885
                                                         ---------
       Sub Total                                           152,113

       Less Accumulated Depreciation                      (124,123)
                                                         ---------
       Total Property, Plant and Equipment                  27,990

  Other Assets:
       Inventory  Non -Current                              87,144
       Deposits                                              6,402
                                                         ---------
Total Other Assets                                          93,546
                                                         ---------
  Total Assets                                          $  496,670
                                                         =========

<PAGE>

                    VITRO DIAGNOSTICS, INC 
             Balance Sheet October 31, 1997 (Audited) 

       Liabilities and Stockholders' Equity 

  Current Liabilities:

       Accounts Payable - Trade                         $  161,540
       Bank Overdraft                                        7,754
       Accounts Payable - Officer                            8,227
       Accrued Salaries and Wages                              500
       Payroll Taxes Payable                                35,648
       Accrued Expenses                                      2,447
       Short-Term Notes Payable                            147,073
                                                         --------- 
       Total Current Liabilities                           363,189

  Stockholders' Equity

       Common Stock; 500,000,000 Shares of
        $.001 Par Value Authorized;
        6,413,702 Issued and Outstanding                   281,001
        Paid-in Capital in Excess
         of Par Value                                    3,255,328
       Accumulated Deficit                              (3,402,848)
                                                         ---------
       Total Stockholders' Equity                          133,481
                                                         ---------
       Total Liabilities and
        Stockholders' Equity                            $  496,670
                                                         =========

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

                            VITRO DIAGNOSTICS, INC 
       Statement of Operations October 31, 1997 and 1996 (Audited)
 
                                                           
                                            1997              1996
  Revenue
       Product Sales                     $ 650,846         $ 790,335
       
  Cost of Sales                            259,336           269,972
                                           -------           -------
       Gross Profit                        391,510           520,363


  Operating Expenses

       Selling, General and Admin         417,814            283,442
       Research and Development            81,579             65,077
       Depreciation                        15,245             17,118
                                          -------            -------
       Total Operating Expenses           514,638            365,637
                                          -------            -------
       Income (Loss) From Operations     (123,128)           154,726

  Other Income (Expense)

       Interest Expense                   (24,517)           (26,900)
       Penalties Expense                   (1,220)                 0
       Miscellaneous Income                 4,420                900
                                          -------            -------
       Total Other Income (Expenses)      (21,317)            26,000
                                          -------            -------
       Net Income (Loss) For the Year  $ (144,445)         $ 128,726
                                          =======            =======
       Net Income (Loss) Per
        Share of Common Stock              ($0.02)             $0.02
                                          =======            =======
        Weighted Average Number 
        of Shares Outstanding 
        During the Year                 6,413,702          6,161,816
                                        =========          =========

<PAGE>
                         VITRO DIAGNOSTICS, INC 
                  Statement of Stockholders' Equity 
       For the Years Ended October 31, 1997 and 1996 (Audited) 

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

Balance 10/31/95    6,036,816      $ 280,618    $ 3,155,211  $ (3,387,129)  $ 48,700

5/96 for Cash
  and rent            250,000            250         49,750                   50,000

Net income for the
 year ended 10/31/96                                              128,726    128,726
                    ---------       --------     ----------   -----------    -------
Balance 10/31/96    6,286,816      $ 280,868    $ 3,204,961  $ (3,258,403)  $227,426

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

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

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

<PAGE>
         


                             VITRO DIAGNOSTICS, INC 
       Statement of Cash Flows For the Years Ended October 31, 1997
                         (Audited) and 1996 (Audited)  


                                                         
                                           1997                    1996
Cash Flows from 
   Operating Activities:
  Net Income (Loss)                      $ (144,445)             $  128,722
  Adjustments to Reconcile
   Net Income (Loss) to
   Net Cash Provided by
   Operating Activities:
     Depreciation                            15,245                  17,118
   Expenses Incurred for Stock               50,500                  49,389
  Changes in Assets and Liabilities:
     (Increase) Decrease in
      Accounts Receivable                       533                 (46,430)
      Inventories                           (54,366)               (114,100)
      Prepaid Expenses                       11,107                 (18,400)
      Deposits                                1,196                     292 

     Increase (Decrease) in
      Accounts Payable                       54,071                   1,656 
      Accrued Expenses                       (5,514)                  5,737
      Payroll Taxes Payable                  25,771                   1,434 
     (Increase) Decrease in
                                           --------                --------   
Net Cash Provided (Used) by        
  Operating Activities                      (46,079)                 25,418


 Cash Flows from 
    Investing Activities:
  Capital Expenditures                      (10,619)                (2,443)
  Receivable/Payable Officer                                          (150)
                                           --------               --------
    Net Cash Provided (Used)
     by Investing Activities                (10,619)                (2,593) 
                                         

Cash Flows from 
   Financing Activities:
      Payments on
        Notes Payable, Bank                 (14,130)               (15,870)
      Proceeds from Short
        Term Notes Payable                   40,728                  5,702 
     Proceeds from Issue of 
      Common Stock                                                     611
                                           --------               --------
Net Cash Provided (Used) by
      Financing Activities                   26,598                (9,557)
                                           --------              --------

    Net Increase (Decrease) in Cash         (30,100)               13,268 

    Cash at Beginning of Year                22,346                 9,078
                                          
    Cash (Bank Overdraft) 
         at End of Year                   $  (7,754)            $  22,346
                                      

       Supplemental disclosures of cash flow information 
    
                                                           
                                             1997                   1996
         Cash paid during the year for: 
            Interest                       $ 24,517               $ 26,900
            Income taxes                   $      -               $      -

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

<PAGE>

                           Vitro Diagnostics, Inc. 
                      Notes to the Financial Statements 
                          October 31, 1997 (Audited) 


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

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

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

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

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

                                            10-31-97
                                           ------------
     Finished Goods                         $ 115,153
     Goods in Process                          86,866
     Raw Materials                                  0
                                             --------
                                            $ 202,019
                                             ========
  
Goods in process inventory which is not expected to be completed and
sold in the next fiscal year is classified as non current.

       Cash includes demand deposits at banks. 

       During the past two years the Company has not had employees who 
were compensated for absences.

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


       NOTE #2: Common Stock and Stock Transactions 

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

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

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



       Note #3: LEASE OBLIGATION 

       The Company's  lease at 8100 Southpark Way expires on December
31, 1998.  Monthly lease payments are $4,813.  At the present time extended
lease terms have not been negotiated.  Rent expense recorded under the lease
is $50,000 and $49,561 for the years ended October 31, 1997 and 1996 
respectively.

       The Company leases its office/warehouse space from a major 
shareholder of the Company.  The lease payments were made by issuing 
stock for the rents due. 


       NOTE #4: Schedule of Short Term Notes Payable 

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

                             Issue          Interest
                             Date           Rate                  Balance
                            ----------      ------------          -----------
 Unrelated Party:
                              1/10/90            20.00%            $ 14,597
                              6/12/90           14.453%              23,396
                              6/30/95            15.00%              27,970
  Related Party:
  Corporate COO               6/29/95            15.00%              14,692
  Corporate COO                8/4/95            25.00%               6,980
  Corporate COO                7/7/97            25.00%              13,478
  Corporate COO                7/7/97            25.00%               6,516
  Corporate CEO              10/31/95            21.00%              39,444

                                       Total                       $147,073
          
           Interest expense to related parties was $23,929 and  $10,928 for 
the years ended October 31, 1997 and 1996, respectively.

           At October 31, 1996, the Company had a note payable to a bank which 
allowed for a maximum borrowing of $30,000 at 2% plus the banks prime rate
(resulting in a rate of 10.25% at October 31, 1996).  The note was secured by
accounts receivable and was retired February 1, 1997.

NOTE #5: Income Taxes

Income Taxes  - Deferred income taxes arise from the temporary 
differences between financial   statement and income tax recognition of net 
operating losses.  A deferred tax asset arising from the net operating loss 
carryover of approximately $550,000 has been offset by a valuation 
allowance.

During the year ended October 31, 1996, the Company utilized a portion
of its net operating loss carryover recognizing a benefit of  approximately
$50,000 which reduced the entire amount of its income tax expense.
  
  At October 31, 1997, the Company has unused Federal net
  operating loss carry forwards which expire as follows:

       Carry Over     Expires      Original    Amount      Loss
       From F/Y       In F/Y       Loss        Utilized    Carryover
       -----------    ----------   ----------  ----------  ----------
          1988           2003      $  333,034  $  140,504  $  192,530
          1989           2004         783,474                 783,474
          1990           2005         480,296                 480,296
          1991           2006          21,321                  21,321
          1995           2010         386,846                 386,846
          1997           2012         144,445                 144,445
                                                            ---------
                                                           $2,008,912
                                                            =========


                                  SIGNATURES 
                                             
            Pursuant to the requirements of Section 13 or 15(d) of the 
Securities Exchange Act of 1934, the Company has duly caused this Report to be 
signed on its behalf by the undersigned, thereunto duly authorized, on 
October 26, 1998. 

                                     Vitro Diagnostics, Inc. 
                                          (Company) 


                                          By: /s/ Roger Hurst         
                                              Roger Hurst, President, 
                                              Chief Executive Officer 
                                              Chief Financial Officer
                                              Chief Accounting Officer
        
            Pursuant to the requirements of the Securities Exchange Act of 
1934, this report has been signed below by the following persons on behalf 
of the Company in the capacities indicated on October 26, 1998. 

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

       Directors:

       /s/ Roger Hurst 
       Roger Hurst

       /s/ James Musick 
       James Musick

       /s/ Erik VanHorn 
       Erik VanHorn