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, 2001

()   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. [ ]

The issuer's revenues for its most recent fiscal year were $100,000.

The  aggregate  market  value of the  2,666,125  shares of voting  stock held by
non-affiliates  of the Company  outstanding at December 31, 2001,  calculated by
taking the average of the bid and the asked prices of the Company's common stock
($.155 as quoted on  February  6,  2002) was  $413,249.37.  The number of shares
outstanding of the issuer's common equity as of December 31, 2001 was 8,811,607.

                       Document incorporated by reference:

                                      None.

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

This report  consists of 52 pages,  including  one page  constituting  the cover
page.


<PAGE>


                                TABLE OF CONTENTS



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

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

   ITEM 2.  DESCRIPTION OF PROPERTY.........................................7

   ITEM 3.  LEGAL PROCEEDINGS...............................................7

   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............7


PART II.....................................................................7

   ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
            MATTERS.........................................................7

   ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS.......................................8

   ITEM 7.  FINANCIAL STATEMENTS...........................................16

   ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS..................16


PART III...................................................................16

   ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.............16

   ITEM 10. EXECUTIVE COMPENSATION.........................................20

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

   ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................25


PART IV....................................................................26


   ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K...............................26


SIGNATURES.................................................................30



PART F/S...................................................................F-1

                                       ii
<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  may  change  as  circumstances  warrant.   Actual  results  could  differ
materially  as a result of  risk-related  factors  over which the Company has no
control.  Such  factors  include,  but are not limited to,  those  discussed  in
"Business,"  "Risk  Factors"  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 this Report or  otherwise  filed with
the Securities and Exchange Commission.

                                       iii
<PAGE>

                                     PART I

ITEM 1. BUSINESS

History
-------

     Vitro Diagnostics,  Inc. (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  marketing  of
purified human antigens and the development of therapeutic products.

     Effective July 31, 2000, the Company was  significantly  restructured.  The
prior operation  consisting of the manufacture and sale of purified antigens for
diagnostic  applications  was sold and a new  management  team was  established,
including a new Board of Directors.  The Company received approximately $700,000
cash and the elimination of substantially  all of its debt in consideration  for
the sale of the  diagnostic  operation.  The Company  retained  ownership of its
intellectual  property  related to FSH and  cellular  immortalization.  With the
assets  remaining from the sale, the Company  currently  engages in research and
development  of products  and  technology  for use in the  manufacture  of human
therapeutic products targeted to the treatment of specific diseases.

Products and Product Candidates
-------------------------------

     The Company's previous  involvement with the purification,  manufacture and
sale  of  diagnostic  antigens  led  to  development  of  products  and  product
candidates  with  potential  therapeutic  applications  directed  to  markets of
greater  value.  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.

     A. Product Pipeline

     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.  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.
However, as of the date of this Report, none of the products or technologies has
generated any revenue for the Company.

     The Company's  present  products  envisioned 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

                                        1
<PAGE>


reproducible,  cost-efficient  production.  Other  products  designed  to  treat
infertility are  VITROPIN-C(TM)  (custom FSH) and  VITROPIN-V(TM)  (cell-derived
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.

     B. 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 provides 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  of that  dose  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 been  established  and is described in greater  detail
below.

     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-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  (VITROCELL(TM)) 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  will  be  the  source  of  cell-derived  FSH.  VITOPIN-C(TM)  and
VITROPIN-V(TM)  are  still in early  development  stages  and are  projected  to
require a substantial  and presently  unknown amount of time and other resources
to develop.

                                        2
<PAGE>


     C. 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.

     Also, the Company has another  patent  application  pending  concerning its
method to purify FSH. In the United States,  this application is a "Continuation
in Part"  application that seeks expanded  protection of its previously  granted
patent,  number  5,990,288.  This  application  has also been  filed in  Canada,
Australia,  New Zealand,  United Kingdom and the European  Patent Office.  Given
successful  prosecution of this application,  the Company would then own patents
in various European  countries,  Canada,  Australia,  New Zealand and the United
Kingdom.  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 - "Risk Factors."

     VITROJECT(TM) is subject to patent protection through pending  applications
filed by the Company in the United States and with various foreign  countries of
the "Patent  Cooperation  Treaty." This application may result in issued patents
within the United States and select foreign countries. VITROCELL(TM) is likewise
protected through patent  applications that are pending in the United States and
select  foreign  countries.  VITROPIN-C(TM)  is now protected  through a pending
patent  application  submitted to the USPTO in March 2001. There is no assurance
that patents will be issued from these pending applications.

     D. 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.   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),  VITOPIN-C(TM)  and  VITROPIN-V(TM)
have not yet been submitted to any  regulatory  authority for  consideration  of
approval.

                                        3
<PAGE>


     E. Commercialization and Development Plan

     Subject to the  availability  of  adequate  working  capital,  the  Company
intends  to  maintain  its focus on the  research  and  development  of  certain
technologies  and the  establishment  of a series of patents  both in the United
States and other  countries  that derive  from its  research.  The Company  also
intends to pursue  commercialization  of its products and  technology on its own
and through strategic alliances and other  inter-corporate  relationships.  Such
relationships  could provide the Company with an additional avenue to market its
technology  and obtain  financial  support  for  continuing  development  of its
products and technology.

     The Company  executed an  agreement  to attempt the  establishment  of such
relationships on November 3, 2000 with Pharma-Links,  Inc., a consulting company
focusing on strategic alliances and other collaborative relationships within the
pharmaceutical industry. Pharma-Links is owned and operated by Dr. Ronald Goode,
a director of the Company.

     Management  believes  that the  agreement  with  Pharma-Links  provides the
Company with substantially  increased access to the establishment of significant
inter-corporate  partnerships.  The  agreement  allows  Pharma-Links,   Inc.  to
investigate and negotiate, if appropriate,  strategic alliances, joint ventures,
partnerships,  equity investments,  licenses,  mergers, sales of assets or other
business  relationships  to develop the Company's  products and  technology.  It
contemplates  that  Pharma-Links may make  introductions to potential  partners,
provide counsel to the Company in negotiating or structuring  the  relationship,
make  presentations and negotiate on the Company's behalf.  Management  believes
that the  agreement  will be  instrumental  in  helping  the  Company  reach its
development goals.

     During  fiscal  2001,  management  of the  Company,  through the efforts of
Pharma-Links,  contacted  and conducted  negotiations  with a number of entities
that  expressed  some  interest in the Company's  technology.  The goal of these
discussions  was 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. Although management
exerted great effort to conclude one or more of these  relationships,  none were
successfully completed.  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.  However,  there is no  assurance  that such
efforts will be successful.

     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  distribute  product  and such
arrangements do not presently exist.

                                        4
<PAGE>


Cellular Immortalization
------------------------

     A. Origin of research

     Based on a desire to provide an internal source of human pituitary hormones
for therapeutic uses, the Company has developed  proprietary  technology for the
immortalization of human cells. This is considered a platform technology because
it  has  potentially  wide  application  in  the  development  of a  variety  of
therapeutic  products including cell products such as FSH, cell lines for use in
the  treatment  of  degenerative  diseases  and drug  discovery.  The  Company's
immortalization technology represents an alternative to current technologies for
replacing  degenerated tissue.  Commercialization of products to be derived from
immortalization research is a longer-term objective of the Company.

     B. Applications of Cellular Immortalization Technology

     The potential  applications of the Company's  technology include: a) use of
immortalized  cells  for  research  and drug  development,  b) the  products  of
immortalized  cells, and c) the establishment of immortalized cell lines for use
in cellular  transplantation  to treat diseases such as  Alzheimer's  and type I
diabetes that result from death of specific cells of the body.

     The  Company  will  focus  initially  on the  use of  cell  immortalization
technology to generate  pituitary  hormone-producing  cells. The hormones of the
pituitary gland control several bodily functions including growth,  reproduction
and  metabolism.  Immortalized  pituitary  cell  lines  will be used  for  basic
research  and  drug  development  studies.  Also,  these  cell  lines  allow  an
alternative  method for the production of these hormones.  Immediate targets are
cells that produce FSH and LH. The Company has recently made significant strides
in the  development  of this  technology.  New cell lines have been derived from
human  pituitary cells using  VITROCELL(TM)  technology and are being tested for
use in the production of FSH and LH. Also,  improved methods have been developed
to  immortalize  human  cells and these are being  applied to  pituitary  cells.
Research is also being  conducted to induce FSH and LH production  and secretion
from an  immortalized  human  pituitary  cell line  previously  developed by the
Company.

     The  Company  hopes to extend  immortalization  to other  types of cells as
well.  If the  Company  were  able to  engage in  further  cell  immortalization
research,  additional  objectives  would be to extend  immortalization  to nerve
cells  and to beta  cells of the  pancreas  gland  that  produce  insulin.  Such
research  may aid in the  development  of new  therapies  to  treat  Parkinson's
disease,  ALS,  type I diabetes  and spinal cord  injury.  Cell  immortalization
technology  may eventually be applied to the  development  of artificial  organs
that are based on human cells engineered to prevent rejection by recipients.

                                        5
<PAGE>


     C. Relevant Patents

     The Company  previously filed a patent  application with the USPTO and with
the Patent Cooperation Treaty as well,  designating several countries within the
PCT. On July 27,  2000,  the PCT  application  was  published  as  international
publication number WO 00/43500, entitled "Immortalized Cell Lines and Methods of
Making  the  Same."  The PCT  application  has been  formally  submitted  to the
European Patent Office,  allowing  possible  issued patents in several  European
countries.  The Company  also filed this  application  in Israel,  New  Zealand,
Australia  and Canada.  The  examination  of these  applications  is expected to
require some time for completion, up to several years.

     The Company has received its first Office Action from the USPTO, which is a
formal  report of the  examination  of this  patent  application.  Based on this
action,  management  believes  that some of the claims are  allowable and that a
further  course of action is available to the Company to gain broader claims for
this technology.  There is no assurance that either of these  applications  will
result in issued patents, nor that if patents are issued, that these will not be
subject to legal challenge resulting in limitation of the patent protection. SEE
- "Risk Factors."

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 the
Company's products to the market.

TRADEMARKS

     The Company has established trademark claims to its products, VITROPIN(TM),
VITROJECT(TM),  VITROPIN-C(TM),   VITROPIN-V(TM),  VITROCELL(TM)  and  the  term
"Naturally Pure  Therapeutics(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 search of various  information  sources listing
registered  and common  law marks to  determine  if there is a prior  claim 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.

                                        6
<PAGE>


EMPLOYEES

     The Company presently has two full time employees,  including James Musick,
the Company's  President and Erik Van Horn,  the Company's Vice  President.  Mr.
Musick is responsible for all day-to-day  operations of the Company,  as well as
assistance in strategic direction,  research and other management functions. Mr.
Van Horn heads the Company's research and development programs.

     The Company  also  utilizes  the services of  consultants  and  independent
contractors  to supplement  the  resources of its  employees  from time to time.
These consultants include scientific and laboratory  personnel,  accountants and
attorneys.  Some of these  consulting  positions  may be  converted to full time
employment if and when the Company's needs require and its 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,  2002 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

     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

                                        7
<PAGE>


     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 has been obtained by the Company from the Pink Sheets,  a
publication  which  tracks  stock prices for the  broker-dealer  community.  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
        --------------------     ------        ------
        2000

        January 31               $ 3.69        $ 1.56
        April 30                   4.56          2.13
        July 31                    2.91          1.25
        October 31                 2.67          0.88

        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

     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, 2001, the Company had approximately  1,978  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.

                                        8
<PAGE>


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

Background

     Pursuant to an agreement  dated August 7, 2000, the Company sold all of the
assets of its diagnostic operation to a private company controlled by its former
president and principal shareholder, Roger Hurst. That transaction was effective
for  accounting  purposes on July 31, 2000.  In exchange for these  assets,  the
purchaser paid the Company  $700,000,  $250,000 in cash and a promissory note in
the principal amount of $450,000.  That note was paid in full in September 2000.
Also as part of the transaction, the purchaser assumed all debts and liabilities
of  the  Company  originally  associated  with  the  diagnostic  operation.  The
liabilities  assumed by the purchaser  totaled  $67,319 for financial  statement
purposes,  together with debt of $202,578.  The purchaser  also assumed  certain
off-balance sheet liabilities,  including  equipment and facilities leases. As a
result of this transaction, the Company discontinued the diagnostic operation.

     Prior to sale of its diagnostic operation, the Company's operations focused
on the purification and sale of human antigens.  These antigens were used as raw
materials for the diagnostic  testing industry.  The antigens were purchased for
use in  diagnostics  kits,  standards  and  controls,  antibody  production  and
research.  Prior to the sale,  the Company sold to  approximately  150 customers
through its employees, independent brokers and distributors.

     The assets included in the sale were all of the assets formerly used by the
Company in its diagnostic operation. These assets included equipment, furniture,
fixtures,   inventory,  accounts  receivables,  cash  and  certain  intangibles.
However,  the Company retained patents and other  intellectual  property that it
uses in connection with its therapeutic operation.

     The value assigned to the assets in this transaction was based on a variety
of  factors.  Those  factors  included  negotiations  between the  parties,  the
historical cash flow of the assets during  preceding fiscal years, the estimated
replacement  cost of certain  assets and  estimates  of value  provided by third
parties.  The Company did not find it suitable to assign relative weights to the
individual factors considered in reaching a conclusion as to the estimated value
of the assets.  However,  each factor was considered material to a determination
of the sale price.

     Also as part of this transaction,  the Company  restructured its facilities
requirements.  The Company assigned its lease for approximately 5800 square feet
of office space to the purchaser of the  diagnostic  operation.  The Company now
leases space at another location in the Denver  metropolitan  area, as described
above.
                                        9
<PAGE>


Liquidity and Capital Resources

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

     At fiscal  year end October 31,  2001,  the Company had working  capital of
$158,985,  representing  a decrease of $415,617 from fiscal year end October 31,
2000.  This working  capital has been further  reduced  subsequent  to year-end.
Management  attributes  the  decrease  in  working  capital  to  cash  spent  on
operations during fiscal 2001. Assets that existed at year-end 2000 were used to
fund operations,  primarily research and development, general and administrative
expenses during fiscal year 2001.  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 second quarter of
the current  fiscal year.  After that time,  and failing  receipt of  additional
capital, the Company will be forced to curtail operations.

     Management  believes  that  the  Company  remains  dependent  on  receiving
additional  cash to  implement  its business  plan and  generate  revenue in the
future.  The report of the  independent  accountant  which audited the Company's
financial statements for the year ended October 31, 2001 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.

     Continued development of Vitropin(TM) requires substantially more financial
resources  than are  presently  available  to the  Company.  Management  is thus
pursuing  licensing  of its  technology  to produce  VITROPIN(TM)  as a means to
commercialize  this  product and generate  revenue for the  Company.  Continuing
research and development of other products will also require  additional working
capital.  Management hopes to fund the capital  requirements through one or more
of the following:  (i) private equity financing;  (ii) strategic  alliances with
other  companies,  possibly  including  joint  ventures,  partnerships,   equity
investments or sale of one or more assets; or (iii) research grants.  Management
is also reducing 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.
Management  does not  believe  that the Company is a viable  candidate  for debt
financing, due to its limited assets and lack of revenue.

     As of the date of filing  this  Report,  no  agreements  for funding are in
place, although the Company is constantly investigating such opportunities.  The
Company has executed an agreement with  Pharma-Links,  Inc. to  investigate  and
negotiate, if appropriate,  strategic alliances,  joint ventures,  partnerships,
equity  investments,  licenses,  mergers,  sales of  assets  or  other  business
relationships to develop the Company's products and technology. Pharma-Links may
also make introductions to potential partners, provide counsel to the Company in
negotiating or structuring the relationship, make presentations and negotiate on
the Company's behalf.  However, there is no assurance that the necessary funding
will be received.

                                       10
<PAGE>


     During the year ended October 30, 2000, the Company received approval for a
research  grant in the amount of $100,000 from the National  Institute of Health
relating to its cell immortalization  technology.  Proceeds from that grant were
used for that purpose during fiscal 2001, although the grant was extinguished in
December.  However, the receipt of that grant allows the Company to apply for an
additional grant of up to at least $750,000 to further that research. Management
intends to take all reasonable and appropriate steps to pursue that funding.

     During the fiscal year ended  October 31, 2001,  the  Company's  operations
used $348,454 of cash. The Company funded its cash requirements during that time
through cash provided by the sale of the  diagnostic  antigen  operation and the
research  grant  discussed  above.  Due to the projected  lack of revenue during
fiscal 2002,  management  expects that the Company will continue to require more
cash  during the current  fiscal  year.  Since  management  does not  anticipate
borrowing  will be  available,  other  avenues of  financing  will be pursued as
described above.

     Total  assets  decreased  $364,778  from  year-end  2000 to year-end  2001,
primarily as a result of the cash spent on  operations.  Total assets  decreased
from  $763,144 at October 31,  2000 to $398,366 at October 31,  2001.  The total
liabilities  of the Company were  substantially  unaltered from year-end 2000 to
year-end 2001, $38,822 verses $43,673.

October 31, 2000
----------------

     At fiscal  year end October 31,  2000,  the Company had working  capital of
$574,602,  consisting of current  assets of $613,424 and current  liabilities of
$38,822.  This represents a decrease in working capital of $103,427 from October
31, 1999. Management attributes the decrease in working capital to cash spent on
operations during fiscal 2000. Assets which existed at year end 1999,  including
accounts  receivable and inventory,  were sold in exchange for cash, leaving the
Company with approximately $590,000 in cash at fiscal year end 2000.

     During  fiscal 2000,  the Company  relied on revenues  from the sale of its
product  as  well  as  cash  from  financing  activities,  including  short-term
borrowing and the sale of assets  described  above,  to meet it working  capital
requirements. .

     Total assets decreased from year-end 1999 to year-end 2000,  primarily as a
result of the cash spent on operations.  Total long-term assets of approximately
$166,000  previously  owned at October  31,  1999 were sold with the  diagnostic
operation  in  August  2000  and a  portion  of  the  resulting  cash  spent  on
operations.  As a result,  total assets  decreased  from $936,393 at October 31,
1999 to $763,144 at October 31, 2000.  Shareholders'  equity remained  generally
constant from one period to the next.

                                       11
<PAGE>


Results of Operations

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 during the
year  consisted  entirely of the  proceeds of a research  grant  received by the
Company. As a result of sale of the diagnostic operation in fiscal year 2000 and
the Company's subsequent focus in developing  therapeutic  products,  management
does not anticipate  that the Company should expect revenue for the  foreseeable
future.  The Company remains  dependent on further  development of its products,
FDA  approval,  receipt  of  working  capital  and  other  conditions  prior  to
commercial sale of any product.

     Revenue for the year ended  October 31, 2001 fell  $721,564  from the prior
fiscal  year,  since the  Company  no  longer  manufactured  or sold  diagnostic
products.

     Operating expenses also decreased  substantially from fiscal 2000 to fiscal
2001, from $878,092 to $494,689 due to the  restructuring of the Company and its
operations  in the fourth  quarter of fiscal  year 2000.  Selling,  general  and
administrative expenses decreased $348,256,  primarily as a result of downsizing
and the reduction of other  expenses,  including  equipment and facility  leases
that occurred as a consequence of the sale of the diagnostic operation. Research
and development expenses also decreased by $82,355.

     Other expenses increased slightly from fiscal 2000 to 2001,  primarily as a
result of a deposit previously provided to a contract manufacturing organization
that was written off. The Company has filed suit and received a judgment against
this third party and is attempting to collect this judgment.

Year Ended October 31, 2000.
----------------------------

     During the year ended October 31, 2000, the Company  realized a net loss of
$407,563, or $.05 per share, on total revenue of $821,564.  Not reflected in the
results  of  operations  was a gain  on  sale  of the  diagnostic  operation  of
$355,000,  all of which  was  treated  as  contributed  capital  under  relevant
accounting  principles  since the assets were sold to a related  party.  If that
gain had been included in  calculation of the net loss, the Company's loss would
have been reduced to approximately $75,000 for the year.

     The Company's  decision to sell the assets of its diagnostic  operation was
based on several factors:  (i) the lack of substantial  growth in the market for
diagnostic  antigens;  (ii) the  Company's  desire to focus its resources on the
potentially  more profitable  therapeutic  market;  (iii) the  availability of a
buyer who was ready, willing and able to complete the proposed transaction;  and
(iv) the perceived  integration of the sale with  resolution of a dispute with a
principal  shareholder of the Company.  As a result of those factors, a decision
was made to sell the assets of the diagnostic  operation and  concentrate on the
therapeutic market.

                                       12
<PAGE>


     As a result of sale of the diagnostic operation and its focus in developing
therapeutic  products,  management  does not anticipate  that the Company should
expect revenue for the  foreseeable  future.  The Company  remains  dependent on
further  development of its products,  FDA approval,  receipt of working capital
and other conditions prior to commercial sale of any product.

     Revenue for the year ended October 31, 2000 fell approximately $14,000 from
the prior fiscal year,  or less than 2%,  despite the fact that the Company only
operated  the  diagnostic  segment  for nine  months.  Despite  the  decrease in
revenue,  costs of sales increased 20%, reducing the Company's gross profit from
approximately  $547,000 for the year ended  October 31, 1999 to $475,000 for the
year ended October 31, 2000. The increase in cost of goods sold is  attributable
to increased costs of raw materials inventory.

     Operating expenses also increased  substantially from fiscal 1999 to fiscal
2000, from $640,000 to $878,092.  Selling,  general and administrative  expenses
increased  $102,000,  primarily  as a result of legal  and other  administrative
costs associated with sale of the diagnostic operation,  resolution of a dispute
with a principal shareholder and preparation for the Company's annual meeting of
shareholders.  Research and  development  expenses also increased  approximately
$131,000.  This  increase  represents  expenses  associated  with the  Company's
efforts to capitalize on its cell  immortalization  technology,  preparation for
filing of patent applications on certain of its drug products and FDA submission
and data necessary to support its grant application.

     Other expenses decreased from fiscal 1999 to 2000, primarily as a result of
a decrease in interest expense.  During fiscal 1999, the Company had outstanding
high-interest,  short-term debt payable to related parties, due to its inability
to obtain financing from other sources. That debt was replaced with conventional
financing during fiscal 2000, thereby reducing associated interest.  The Company
also had interest and  miscellaneous  income of approximately  $16,000 in fiscal
2000, offsetting other expenses.

Recent Sales of Unregistered Securities
---------------------------------------

     During the year ended October 31, 2001, the Company issued a total of 1,684
shares of common stock to an Advisory Board member for services  rendered to the
Company, 275,088 shares to its employees pursuant to the exercise of outstanding
stock  options,  options for 110,500  shares to directors and options for 16,500
additional  shares  to  another  consultant,  which  sales  were not  registered
pursuant  to the  Securities  Act of  1933.  The  Company  issued  these  shares
directly,  and paid no  commissions  in  connection  with the  issuance of these
shares.  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.

                                       13
<PAGE>


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  of 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. Dependence on additional capital.
        ---------------------------------
     While the Company has sufficient  liquidity to maintain present  operations
until  approximately  the  conclusion of the second  quarter of fiscal 2002, the
successful   commercialization   of  any  of  the  Company's  products  requires
significant  additional  funding and there is no assurance that the Company will
be able to secure those funds.  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. Without the required funding,  these trials will not
proceed  and  the  Company  will  not be  able  to  commercialize  VITROPIN(TM).
VITROJECT(TM)  may  be  commercialized  independently  of  VITROPIN(TM)  through
funding by a third party.  However,  the Company has no pending or  contemplated
agreements regarding independent  commercialization of VITROJECT(TM).  Hence, if
VITROPIN(TM)  does  not move  forward  toward  commercialization  due to lack of
funding,  it is also  likely that  VITROJECT(TM)  will be blocked  from  further
development.  Other products in the Company's pipeline are still in research and
development and there is no assurance that the Company will be able to fund this
R & D. While the Company did have a small  research grant from the NIH, there is
no assurance that the Company will be able to secure  additional  research grant
support for its research or obtain  financial  support for its research from any
other source.

                                       14
<PAGE>


     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.

     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 either of its full-time  employees,  Dr. James
Musick  or Erik Van  Horn.  Neither  does the  Company  maintain  "key man" life
insurance  on the lives of either  individual.  Both of these  individuals  have
contributed   substantially   to  the  development  of  the  products  to  treat
infertility and cellular immortalization. Loss of either or both employees 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.

                                       15
<PAGE>


     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  to the fact that the
Company's  securities  are  traded  on the  OTC  bulletin  board  and  are  thus
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.

     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

     On October 9, 2000,  the  Company,  as approved by the Board of  Directors,
engaged Cordovano and Harvey,  P.C. as its principal  accountant and independent
auditors  for the fiscal  year  ending  October  31,  2000,  and  simultaneously
dismissed Larry O'Donnell, CPA, P.C. as its principal accountant and auditor.

     The  reports  of  Larry  O'Donnell,  CPA,  P.C.  for the two  fiscal  years
preceding its  dismissal  did not contain an adverse  opinion or a disclaimer of
opinion and were not  qualified  or modified as to  uncertainty,  audit scope or
accounting principles.

                                       16
<PAGE>


     During  the two  preceding  fiscal  years and the  interim  period  through
October 9, 2000, there were no disagreements with Larry O'Donnell,  CPA, P.C. on
any  matter  of  accounting   principles  or  practices,   financial   statement
disclosure,  or  auditing  scope and  procedure  which,  if not  resolved to the
satisfaction of Larry  O'Donnell,  CPA, P.C., would have caused Larry O'Donnell,
CPA, P.C. to make reference to the matter in its report.  Further, there were no
reportable events requiring disclosure in this Report.

     During  the two  preceding  fiscal  years and the  interim  period  through
October 9, 2000,  the  Company had not  consulted  Cordovano  and  Harvey,  P.C.
regarding any matter requiring disclosure in this Report.


                                    PART III

Item 9. Directors and Executive Officers of the Registrant

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

                Name                   Age                 Position
       ------------------------        ---         ---------------------------
       Ronald L. Goode, Ph.D(1)        58          Chairman of the Board of
                                                   Directors

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

       Erik D. Van Horn                34          Vice President and Director

       Henry C. Schmerler(1)           61          Treasurer, Chief Financial
                                                   Officer and Director

       William J. Schmuhl, Jr.(1)      58          Secretary and Director
------------------------

(1) Members of the Audit and Compensation Committees.

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

     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.

                                       17
<PAGE>


     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.

     RONALD L.  GOODE,  Ph.D.,  has served as a director  of the  Company  since
August 7, 2000 and was elected  Chairman of the Board on September 14, 2000. Mr.
Goode  is  the  president  and  CEO  of  Exegenics,   Inc.,  a   publicly-traded
biotechnology company focusing on the development of new pharmaceutical products
for the treatment and prevention of cancer and infectious diseases.  He has held
that position since March of 2001. He is also president and sole  shareholder of
Pharma-Links,  Inc., a consulting  business focusing on strategic  alliances and
other collaborative relationships within the pharmaceutical industry, a position
he has held since 1999. Dr.  Goode's Ph.D.  was earned in microbial  genetics at
the University of Georgia.  From 1997 to 1999, Dr. Goode was president and chief
executive  officer  of  Unimed  Pharmaceuticals,  a  Delaware  corporation  with
securities traded on the Nasdaq National Market System. Prior to that, Dr. Goode
held a variety of executive positions with two major  pharmaceutical firms (G.D.
Searle and Company and Pfizer Pharmaceuticals),  including senior vice president
of  licensing  and  business  development  of G.D.  Searle from 1995 to 1997 and
president of Searle International from 1991 to 1995.

     HENRY C.  SCHMERLER has served as a director of the Company since August 7,
2000 and was  elected  Treasurer  on  September  14,  2000.  He also  served  as
Secretary from  September 14, 2000 to December 1, 2000. Mr.  Schmerler has acted
as a financial  consultant  since 1994.  Prior to that, he was an executive with
Dun and Bradstreet Corporation,  where he held various positions over the course
of thirty years including Vice President of Business  Development (1991 - 1994),
Vice  President  of Customer  Relations  (1989 - 1991),  President of the Credit
Clearing House (1986 - 1989) and President of the National Credit Office (1983 -
1986).  Mr.  Schmerler  received a Bachelor's  degree in  Economics  from Hobart
College, Geneva, New York in 1962.

     WILLIAM J.  SCHMUHL,  JR. has served as a  director  and  Secretary  of the
Company  since  December 1, 2000.  He serves as president  of Heywood  Williams,
Inc., a $500 million  multi-division  manufacturer  and  distributor of building
products.  He has held that  position  since  1996.  He has been  employed  with
Heywood Williams or one of its predecessors  since 1978, and served as president
and chief executive officer of Bristol  Corporation,  a $160 million  subsidiary
between 1990 and 1996. Prior to 1978, Mr. Schmuhl acted as a business consultant
with Cromwell Management Corporation. He also taught accounting and business law
and acted as department chair of the Department of Business  Administration  and
Economics at Saint  Mary's  College,  Notre Dame,  Indiana.  Prior to that,  Mr.
Schmuhl  practiced  as  an  accountant  and  as an  attorney.  He  received  his
Bachelor's degree in Business Administration in 1965 and Juris Doctorate in 1967
from the  University of Notre Dame, and an MBA from the University of Chicago in
1972.

                                       18
<PAGE>


SCIENTIFIC ADVISORY BOARD

         The  Company has  recruited  individuals  outside of the  Company  with
relevant  scientific and business experience to serve on its Scientific Advisory
Board  (SAB)  to  facilitate  the  achievement  of  the  Company's   development
objectives.  The SAB has  primarily  assisted  the Company as  individuals  in a
consulting capacity thus far.

The following  individuals  presently comprise the Company's Scientific Advisory
Board:

     1. Patrick  Sluss,  Ph.D.
        ----------------------
     Dr. Sluss is presently Director of the Assay Laboratory of the Reproductive
Endocrine Unit of Massachusetts  General Hospital,  Boston, MA. The Reproductive
Endocrine  Unit is one of two National  Centers for  Infertility  Research.  Dr.
Sluss also holds a joint  appointment  with Harvard  Medical School as assistant
professor of medicine.

     Dr. Sluss has authored numerous scientific  research articles.  His present
research interests are: 1) The structure and function of the  gonodotropins,  2)
the physiology and  pathophysiology  of gonadal function,  3) the physiology and
biochemistry  of  activin  and  inhibin,   4)  the  structure  and  function  of
follistatin, 5) the regulation of gonadotropin action by autocrine and paracrine
systems, and 6) control of normal and abnormal prostate growth. He is considered
a leading  authority in the emerging field of regulation of  reproduction by the
hormones  activin,  inhibin and  follistatin.  His research is  presently  being
supported by 3 grants from the National Institutes of Health. Dr. Sluss provides
the Company with technical advice concerning  cellular  immortalization  and the
development  of its  fertility  drugs.  Dr.  Sluss  also  assists  Vitro  in the
preparation of its research grant applications.

     2. Michael E. Hanson.
        ------------------
     Mr. Hanson is presently retired from a 24-year career in the pharmaceutical
industry  with Eli Lilly  and  Company  in  Indianapolis,  Indiana  where he was
President of the Internal  Medicine Business Unit. In his first eleven years, he
held various  sales  positions  and was  involved  with the  introduction  of an
injectable  antibiotic  product line. In 1985, Mr. Hanson became Director of New
Product Planning and Licensing,  where he was responsible for the acquisition of
external  products and  technologies  and for the global  commercialization  and
launch of all new  products.  Notable  product  launches  were Prozac,  Axid and
Humatrope.  In 1988, Mr. Hanson became the Executive  Director of Japan Business
Planning and was  responsible  for the "Japan 2000" strategic plan for Eli Lilly
Japan K.K. In 1992,  Mr. Hanson was Vice  President of New Product  Planning and
Licensing and in 1993,  Vice President of Lilly Research  Laboratories  where he
was responsible for Global Clinical Pharmacology, Global Medical, Regulatory and
Health  Economic  Organizations.  In 1994,  Mr.  Hanson  became a member  of the
Operations  Committee  of Eli  Lilly  and  President  of the  Internal  Medicine
Business Unit, concentrating in cardiovascular and oncology businesses.

     Mr. Hanson also serves as a member of the Board of Directors of MGI Pharma,
Inc. and on several philanthropic and educational boards. Mr. Hanson assists the
Company in the  strategic  planning of its  therapeutic  products and in general
business matters.

                                       19
<PAGE>


     3. Kenneth Faber, M.D.
        -------------------
     Dr.  Faber  is  presently   Chief  of  the   Department   of   Reproductive
Endocrinology at Colorado  Permanente  Medical Group and assistant  professor in
the   Department  of  Obstetrics   and   Gynecology   Section  of   Reproductive
Endocrinology, University of Colorado Health Sciences Center, Denver, CO.

     Dr. Faber received his M.D. in 1985 from the University of Michigan Medical
School,  was certified  with the American  Board of Obstetrics and Gynecology in
1993 and in 1995 with the American Board of Obstetrics and  Gynecology:  Section
on  Reproductive  Endocrinology.  Dr.  Faber  provides  scientific  consultation
relevant to the business objectives of the Company,  with concentration on human
infertility.

     4. Pamela L. Mellon, Ph.D.
        -----------------------
     Dr.  Mellon  is  presently   Director  of  the  Center  for  the  Study  of
Reproductive  Biology and Disease and  Professor  of  Reproductive  Medicine and
Neurosciences at the Center for Molecular Genetics,  University of California at
San Diego.

     Dr. Mellon  received her Ph.D. in Molecular  Biology from the University of
California at Berkeley in 1979. Dr. Mellon has authored many scientific research
articles  throughout  her career  relating to the  molecular  and  developmental
biology of the pituitary  gland.  Her articles are published  widely and, she is
considered a leading  authority  concerning  targeted  oncogenesis  of pituitary
cells.  Dr. Mellon  provides  scientific  consultation  relevant to the business
objectives  of  the  Company,  with  concentration  on  the  immortalization  of
pituitary  cells.  She also  provides  assistance  in preparing  research  grant
applications.

     5. Gary E. Gamerman,  M.S., J.D.
     --------------------------------
     Mr.   Gamerman  has  extensive   experience  in  several   aspects  of  the
biotechnology industry,  including legal,  regulatory,  technical and commercial
development of biotherapeutic  products. His prior employment includes the FDA's
Center  for  Biologics,  Evaluation  and  Research  where he  reviewed  approval
requests  for new  biotechnology  therapies.  He received  his J.D.  from George
Washington  University  and B.A.  (Biochemistry  & Molecular  Biology)  and M.S.
(Applied  Molecular  Biology) degree from the University of Maryland  Baltimore.
Mr.  Gamerman  sits  on the  Board  of  Directors  of  GeneTox  Corporation  and
Pharmaceutical Outsourcing Managers Association. He also serves on the Editorial
Advisory Board of  Bio/Pharmaceutical  Outsourcing  Reports, The Journal of cGMP
Compliance and Validation  Times.  Mr. Gamerman will primarily focus his efforts
on regulatory  approvals of the  Company's  biotherapeutic  products,  including
VITROPIN(TM) and related products.

     6. Arthur Guiterrez-Hartmann, M.D.
     ----------------------------------
     Dr.  Gutierrez-Hartmann,  a Professor at the University of Colorado  Health
Sciences  Center  in  Denver,  CO,  has  extensive  research  experience  in the
molecular  endocrinology of the pituitary gland. His recent research has focused
on the molecular genetic events involved in the development of hormone-producing
cells of the pituitary  gland. He and his colleagues have recently  discovered a
new  genetic  pathway  critically  important  to  the  expression  of  pituitary
hormones. Dr. Gutierrez-Hartmann has authored numerous scientific papers, serves
on the  editorial  board of  several  prestigious  journals  and  reviews  grant
applications for the National  Institutes of Health, the American Cancer Society
and the Howard Hughes Medical Institute.  Dr.  Gutierrez-Hartmann teams with the
Company to assist in further developing its cell immortalization  technology now
focused on hormone-producing cells of the human pituitary gland.

                                       20
<PAGE>


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

     No director,  officer or  beneficial  owner of more than ten percent of any
class of equity securities of the registrant  registered  pursuant to Section 12
failed to file on a timely basis,  Form 3, 4, or 5 during the most recent fiscal
year or prior years


Item 10. Executive Compensation

     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"):

SUMMARY COMPENSATION
                                                                     Long Term
                                                                   Compensation
                                                 Annual             Securities
                               Year Ended      Compensation         Underlying
Name                           October 31,       Salary              Options
---------------------------    -----------     ------------        ------------
James R. Musick, President         2001          $57,708                0
and Chief Executive Officer        2000          $57,708                0
                                   1999          $55,876                0

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

     Each member of the Board of Directors who is not an employee of the Company
received  options to purchase 10,000 shares of common stock upon  appointment to
the  Board  and is  entitled  to  receive  an  additional  10,000  options  upon
reelection for each additional term.  Additionally,  non-employee  Board members
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 Chairman of the Board  received  options to purchase  5,000 shares upon
his  appointment  and chairmen of each  standing  committee of the Board receive
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 is
entitled to receive  options for an  additional  5,000  shares or 2,000  shares,
respectively.  All of these  options  are  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 110,500
options were granted to Directors.

                                       21
<PAGE>


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

Option Grants For 2001
----------------------

     No stock options were granted to any of the Named Officers  during the last
fiscal year.

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

     The following table sets forth the value of unexercised options held by the
Named Officers at October 31, 2001.  The price of the Company's  common stock on
October 31, 2001 was $.40 per share.

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


James R. Musick      0          0             31,848                $ 0(1)

-------------------
(1) Based upon the  difference  between the exercise price of $.625 and the last
reported sale price of the  Company's  common stock of $.40 per share on October
31, 2001.
-------------------

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.

                                       22
<PAGE>


     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.

     During the last fiscal year,  the Company  issued  275,088 shares of common
stock through the cashless  exercise of 357,480  options.  An  additional  1,684
shares were issued to a member of the SAB for services rendered, 110,500 options
were issued to directors and 16,500 options were granted to a consultant. At the
fiscal year end,  776,814 options  remained  outstanding  under the Plan and the
1992 Plan, with exercise prices ranging from $.07 to $1.50 per share.


Item 11. Security Ownership of Certain Beneficial Owners and Management

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

     The following table sets forth information 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. As of
January 31, 2002, a total of 8,811,607  shares of common  stock,  the  Company's
only class of voting stock, were issued and outstanding.

     The  following  shareholders  have sole  voting and  investment  power with
respect to the shares, unless it is indicated otherwise.
                                                           Number
            Name and Address of Beneficial Owner          of Shares         %
     --------------------------------------------------   ---------      -------
     Officers and Directors
     ----------------------
     James R. Musick(1, 2)                                1,321,848       14.95%
     12635 E. Montview Blvd.,
     Aurora, Colorado  80010


     Erik Van Horn(3)                                       530,516        5.68%
     12635 E. Montview Blvd.,
     Aurora, Colorado  80010

     Henry C. Schmerler(4)                                  205,500        2.31%
     5095 Joewood Drive
     Sanibel, Florida 33957

                                       23
<PAGE>


     Ronald L. Goode(5)                                     112,500        1.27%
     1051 Melody Road
     Lake Forest, Illinois 60045

     William J. Schmuhl, Jr.(6)                              66,800           *
     1421 Honan Drive
     Southbend, Indiana 46614

     Officers and Directors as a group(1, 2, 3, 4, 5,6)   2,237,164       23.49%
      (5 individuals)

     Five Percent Shareholders
     -------------------------
     Roger D. Hurst(7)                                    1,135,482       12.89%
     8100 Southpark Way
     Unit B-1
     Littleton, CO 80120

     The James R. Musick Trust                              834,859        9.47%
     12635 E. Montview Blvd.,
     Aurora, Colorado  80010

     Lloyd Hansen(8)                                      1,250,000       14.19%
     2646 S.W. Mapp Rd
     STE #304
     Palm City, FL 34990

     World Wide Capital Investors, LLC                    2,370,000       26.90%
     P.O. Box 8
     Westcliffe, CO 81252

     Kilyn Roth(9)                                        2,370,000       26.90%
     P.O. Box 8
    Westcliffe, CO 81252

-----------------------
* Less than 1%

(1) Includes 31,848 shares of common stock  underlying an option  exercisable at
$.625 until June 6, 2009.

(2)  Includes  834,859  shares held by The James R. Musick  Trust,  of which Mr.
Musick is a trustee and beneficiary.

(3) Includes  530,516 shares of common stock underlying  options  exercisable at
prices ranging from $.07 to $.625 and expiring through 2009.

                                       24
<PAGE>


(4) Includes  55,500 shares of common stock  underlying  options  exercisable at
prices  ranging  from $.30 to $1.50 and expiring  through  2011.  Also  includes
125,000 shares owned by a limited  liability company in which Mr. Schmerler is a
member,  representing the  individual's  pro-rata share of common stock owned by
that entity.

(5) Includes  62,500 shares of common stock  underlying  options  exercisable at
prices  ranging from $.30 to $1.50 and expiring  through 2011, and 50,000 shares
held by the  [Ronald  L.  Goode  Trust,  of which  Mr.  Goode is a  trustee  and
beneficiary.]

(6) Includes  33,500 shares of common stock  underlying  options  exercisable at
prices  ranging  from $.30 to $1.19 and expiring  through  2011.  Also  includes
33,300  shares owned by a limited  liability  company in which Mr.  Schmuhl is a
member,  representing the  individual's  pro-rata share of common stock owned by
that entity.

(7)  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.

(8) Includes  10,000 shares owned by Mr. Hansen's  immediate  family and 100,000
owned by the Barnabus Trust, of which Mr. Hansen is a trustee and beneficiary.

(9) Includes  2,370,000  shares owned by World Wide Capital  Investors,  LLC, of
which Ms. Roth is the sole manager of the company.
-----------------------

Changes in Control and Voting Agreement
---------------------------------------

     Pursuant to the terms of a  shareholders'  agreement  executed on August 7,
2000, World Wide Capital Investors,  LLC ("WWC"),  the owner of 2,370,000 shares
of the Company's common stock, Messrs.  Musick and Van Horn agreed to vote their
shares  for the  election  of Messrs.  Musick,  Schmerler,  Goode,  Van Horn and
William J. Schmuhl,  Jr. for a period of three years.  Also in conjunction  with
the  shareholders'  agreement,  Messrs.  Hurst and  Musick  granted a proxy with
regard to  1,400,000  shares  of their  common  stock to  Ronald  Goode or Henry
Schmerler to vote as  determined  by a majority  vote of the Board of Directors.
The shareholders'  agreement represented a compromise between the Company's then
management  and WWC with  regard to the  efforts  of WWC to  nominate  and elect
certain  individuals to the Company's Board of Directors and otherwise  exercise
control of the Company.


Item 12. Certain Relationships and Related Transactions

Sale of Assets
--------------

     Effective  August 7, 2000,  pursuant to the terms of a purchase  agreement,
the Company  sold all of the assets of its  diagnostic  operation  to  AspenBio,
Inc., a private Colorado corporation  ("purchaser") controlled by Mr. Hurst. Mr.
Hurst is the owner of more than 5% of the Company's securities. This transaction
was  effective  for  accounting  purposes on July 31, 2000.  In exchange for the
assets,  the purchaser  paid the Company  $700,000 and assumed a majority of its
debts and  liabilities.  The purchaser  assumed all of the  Company's  debts and
liabilities except for certain excluded liabilities associated with the business
and assets which the Company retained.  The debts and liabilities assumed by the
purchaser were valued at $269,897.

                                       25
<PAGE>


     The assets  included in this sale were all of the assets  formerly  used by
the  Company in its  diagnostic  operations.  These  assets  include  equipment,
furniture,  fixtures,  inventory,  accounts  receivable  and  intangible  assets
associated with that business. These assets were formerly used by the Company to
produce and distribute antigens primarily for diagnostic purposes. Following the
sale, the Company retained patents and other intellectual property which it uses
or proposes to use in connection with its therapeutic business.

     The value of the assets  transferred in this sale was based on a variety of
factors   considered  by  the  Board  of  Directors.   These  factors   included
negotiations between the parties,  historical cash flow of the assets during the
preceding  fiscal  years,  estimated  replacement  cost of  certain  assets  and
estimates  of the assets  provided by third  parties.  The Board did not find it
suitable  to and did not  assign  relative  weights  to the  individual  factors
considered  in reaching a conclusion  as to the  estimated  value of the assets.
However,  the  Board  believes  that each of those  factors  was  material  to a
determination  of the sale price.  The Board of Directors of the Company as then
constituted  considered  the terms of that  transaction  no less  favorable than
could have been obtained from an unaffiliated third party.

     In connection with the purchase agreement,  the Company agreed to indemnify
Mr. Hurst and Mr. Hurst has  indemnified  the Company as to certain  liabilities
related to the  transaction.  The  indemnification  includes  liabilities of the
Company which were assumed by the purchaser.

Consulting Agreement
--------------------

     The Company  executed an agreement  on November 3, 2000 with  Pharma-Links,
Inc. (the "Agreement"), a consulting company focusing on strategic alliances and
other  collaborative  relationships  within  the  pharmaceutical  industry.  The
agreement   allows   Pharma-Links,   Inc.  to  investigate  and  negotiate,   if
appropriate,   strategic  alliances,   joint  ventures,   partnerships,   equity
investments,  licenses, mergers, sales of assets or other business relationships
to  develop  the  Company's  products  and  technology.   It  contemplates  that
Pharma-Links may make  introductions to potential  partners,  provide counsel to
the Company in negotiating or structuring the relationship,  make  presentations
and negotiate on the Company's behalf. Pharma-Links is owned and operated by Dr.
Ronald Goode, a director of the Company.

     The Agreement provides for payment of a fee to Pharma-Links,  Inc. equal to
5% of the aggregate consideration received with respect to any agreement entered
into by the Company with a third-party  pursuant to the terms and  conditions of
the  Agreement,  and an  additional  1% for each $10  million of such  aggregate
consideration in excess of $30 million,  subject to a maximum fee of 10% for any
aggregate  consideration  in  excess  of $80  million.  The  Board of  Directors
considered  the terms and  conditions of this  agreement no less  favorable than
could have been obtained from an unaffiliated third party. No payments were made
during the past fiscal year.

                                       26
<PAGE>


Other Events
------------

     In connection  with the  compromise  with WWC and the sale of assets to the
purchaser,  the  Company  executed a  settlement  agreement  and mutual  release
relating  to claims  pending  between  the  parties.  Parties to the  settlement
include the Company, purchaser, Hurst individually, WWC, Kyln Roth, a manager of
WWC, Musick and Van Horn  individually.  This agreement  releases and discharges
each  party  from any and all  claims  pending  between  them  except for claims
arising  out  of  the  shareholders'  agreement,  purchase  agreement  or  other
documents referenced therein.

     In conjunction with the settlement agreement,  the Company and WWC executed
a  registration  rights  agreement  relating to common stock owned by WWC.  This
agreement  obligates  the  Company to  register  up to  2,370,000  shares of the
Company's  common stock with the  Securities  and Exchange  Commission  upon the
request of WWC and to keep that registration effective for a period of up to six
months. The Company agreed to pay all costs and expenses in connection with that
registration  except  commissions  payable  upon sale of the common stock by the
shareholder.

     During the period from August 1, 2000 through  January 31, 2001,  AspenBio,
Inc., 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  was valued at $1,750 per month based on the
market rate in the local area.  On February 1, 2001,  the Company  began  paying
AspenBio, Inc. for the use of the office space and facilities.  The Company paid
AspenBio,  Inc. $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(6)  Certificate  of Merger of Domestic  and Foreign  Corporations as filed
          December 17, 1986 with the Nevada Secretary of State.

                                       27
<PAGE>


3.1.3(3)  Certificate  of  Amendment  of  Articles  of  Incorporation  as  filed
          February 6, 1987 with the Nevada Secretary of State.

3.1.4(6)  Certificate of Amendment of Articles of Incorporation as filed May 18,
          1988 with the Nevada Secretary of State.

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

3.2(3)    Bylaws of the Company.

4.1(3)    Specimen certificate for Common Shares, $.001 par value per share.

9         Not applicable.

10.1(2)   Business Development Agreement between the Company and Pharma-Links,
          Inc., dated November 3, 2000.

10.2(1)   Registration  Rights Agreement between the Company and World Wide
          Capital Investors,  LLC, dated August 7, 2000.

10.3(1)   Shareholders' Agreement dated August 7, 2000.

10.4(1)   Settlement Agreement and Release dated August 7, 2000.

10.5(4)   Equity Incentive Plan dated October 9, 2000.

11        Not applicable.

13        Not applicable.

16(5)     Letter,  dated  October 27, 2000, from  former  certifying accountant,
          Larry O'Donnell, CPA, P.C.

18        Not applicable.

21        Not applicable.

22        Not applicable

23        Not applicable.

24        Not applicable.

27        Not applicable.

                                       28
<PAGE>


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  Registration  Statement  on Form SB-2,  SEC File No.
33-59230 and incorporated herein by reference.

(4) 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.

(5) Filed as an  Exhibit to Form 8-K/A  dated  October 9, 2000 and  incorporated
herein by reference.

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

(b) Reports on Form 8-K.

     The  Company  filed the  following  Reports  on Form 8-K  during the fourth
quarter of the fiscal year covered by this Report.

                                       29
<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 11th day of
February 2002.

                                        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      February  11, 2002
----------------------       Officer and Director            ------------------
James R. Musick


/s/ Henry Schmerler          Chief Financial Officer,        February  11, 2002
----------------------       Treasurer and Director          ------------------
Henry Schmerler


/s/ Erik D. Van Horn         Vice President and Director     February  11, 2002
----------------------                                       ------------------
Erik D. Van Horn


/s/ Ronald L. Goode          Chairman of the Board           February  11, 2002
----------------------       and Director                    ------------------
Ronald L. Goode


/s/ William J. Schmuhl       Secretary and Director          February  11, 2002
----------------------                                       ------------------
William J. Schmuhl

                                       30
<PAGE>


                             VITRO DIAGNOSTICS, INC.

                          Index to Financial Statements

                                                                          Page
                                                                          ----

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

Balance sheet at October 31, 2001 .....................................   F-3

Statements of operations for each of the two years in the
   period ended October 31, 2001 ......................................   F-4

Statement of shareholders' equity for each of the two years in
   the period ended October 31, 2001 ..................................   F-5

Statements of cash flows for each of the two years in the period
   ended October 31, 2001 .............................................   F-6

Summary of significant accounting policies ............................   F-7

Notes to financial statements .........................................   F-10

<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,
2001, and the related statements of operations,  shareholders'  equity, and cash
flows,  for each of the two years in the period ended  October 31,  2001.  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.  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, 2001,  and the results of its operations and its cash flows for each
of the two  years in the  period  ended  October  31,  2001 in  conformity  with
accounting principles generally accepted in the United States.

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,  which raises a substantial  doubt about its ability to continue as a
going concern. Management's plans in regard to this matter 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  $116,652 for patent  applications  as of
October 31, 2001. 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 15, 2002

                                       F-2
<PAGE>

                             VITRO DIAGNOSTICS, INC.

                                  Balance Sheet

                                October 31, 2001

Assets
Current assets:
     Cash ......................................................... $   186,043
     Prepaid expenses .............................................       4,411
                                                                    -----------
                                               Total current assets     190,454

Equipment, net of accumulated depreciation of $219 ................       2,591
Equipment under capital lease, net of accumulated depreciation
    of $2,116 .....................................................      13,120
Patents, net of accumulated amortization of $12,682 ...............      75,549
Deferred costs ....................................................     116,652
                                                                    -----------

                                                                    $   398,366
                                                                    ===========

Liabilities and Shareholders' Equity
Current liabilities:
     Current maturities on capital lease obligation (Note D) ...... $     2,219
     Accounts payable .............................................      21,157
     Accrued expenses .............................................       8,093
                                                                    -----------
                                          Total current liabilities      31,469

Capital lease obligation, less current maturities (Note D) ........      12,204
                                                                    -----------
                                                  Total liabilities      43,673
                                                                    -----------

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

Shareholders' equity (Note E):
     Preferred stock, $.001 par value; 5,000,000 shares authorized;
        -0- shares issued and outstanding .........................        --
     Common stock, $.001 par value; 500,000,000 shares authorized;
        8,811,607 shares issued and outstanding ...................       8,812
     Additional paid-in capital ...................................   4,299,487
     Stock options - 776,814 outstanding ..........................       5,228
     Accumulated deficit ..........................................  (3,958,834)
                                                                    -----------
                                         Total shareholders' equity     354,693
                                                                    -----------

                                                                    $   398,366
                                                                    ===========

               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,
                                                                       --------------------------
                                                                          2001            2000
                                                                       -----------    -----------
Revenue:
<S>                                                                    <C>            <C>
     NIH grant (Note F) ............................................   $   100,000    $      --
     Product sales .................................................          --          821,564
                                                                       -----------    -----------
                                                       Total revenue       100,000        821,564
                                                                       -----------    -----------

Operating costs and expenses:
     Cost of goods sold ............................................          --          346,604
     Research and development ......................................       324,940        407,295
     Selling, general and administrative ...........................       117,291        465,547
     Rent and facility fees, related party (Note B) ................        15,980          5,250
     Contributed rent and facility fees, related party (Note B) ....         5,250           --
     Stock-based compensation: legal fees (Note E) .................         7,228           --
     Loss on write-off of Goodwin deposit (Note G) .................        24,000           --
                                                                       -----------    -----------
                                  Total operating costs and expenses       494,689      1,224,696
                                                                       -----------    -----------
                                                Loss from operations      (394,689)      (403,132)

Interest income ....................................................        13,229          7,171
Miscellaneous income ...............................................           512          9,292
Interest expense ...................................................        (1,159)       (20,894)
                                                                       -----------    -----------
                                            Loss before income taxes      (382,107)      (407,563)

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

                                                            Net loss   $  (382,107)   $  (407,563)
                                                                       ===========    ===========


Basic and diluted net loss per common share ........................   $     (0.04)   $     (0.05)
                                                                       ===========    ===========
Shares used in computing basic and diluted net loss per common share     8,788,122      8,469,239
                                                                       ===========    ===========
</TABLE>


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

                                       F-4
<PAGE>

<TABLE>
                VITRO DIAGNOSTICS, INC.

           Statement of Shareholders' Equity

     For the Years ended October 31, 2001 and 2000
<CAPTION>

                                          Preferred Stock      Common Stock       Additional
                                          ---------------  --------------------    Paid-in      Stock    Accumulated
                                          Shares   Amount    Shares   Par Value    Capital     Options     Deficit         Total
                                          ------   ------  ---------  ---------   ----------  --------   -----------    -----------
<S>                                       <C>      <C>     <C>        <C>         <C>         <C>        <C>            <C>
              Balance, October 31, 1999     --       --    8,455,087  $   8,455   $3,931,174  $   --     $(3,169,164)   $   770,465

Net contributed capital received
   in Purchase Agreement with
   related party (Note B) .............     --       --         --         --        354,770      --            --          354,770
Common stock issued upon exercise
   of stock options (Note E) ..........     --       --       79,748         80        1,320      --            --            1,400
Office and facility use contributed
   by an affiliate company (Note B) ...     --       --         --         --          5,250      --            --            5,250
Net loss for the year ended October
   31, 2000 ...........................     --       --         --         --           --        --        (407,563)      (407,563)
                                          ------   ------  ---------  ---------   ----------  --------   -----------    -----------
              Balance, October 31, 2000     --       --    8,534,835      8,535    4,292,514      --      (3,576,727)       724,322

Common stock issued upon exercise
   of stock options (Note E) ..........     --       --      275,088        275         (275)     --            --             --
Common stock options granted in
   exchange for services (Note E) .....     --       --         --         --           --       5,228          --            5,228
Office and facility use contributed
   by an affiliate company (Note B) ...     --       --         --         --          5,250      --            --            5,250
Common stock issued to a director for
   Scientific Advisory Board services
   (Note E) ...........................     --       --        1,684          2        1,998      --            --            2,000
Net loss for the year ended October
   31, 2001 ...........................     --       --         --         --           --        --        (382,107)      (382,107)
                                          ------   ------  ---------  ---------   ----------  --------   -----------    -----------
              Balance, October 31, 2001     --     $ --    8,811,607  $   8,812   $4,299,487  $  5,228   $(3,958,834)   $   354,693
                                          ======   ======  =========  =========   ==========  ========   ===========    ===========
</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,
                                                                          ----------------------
                                                                             2001         2000
                                                                          ---------    ---------
<S>                                                                       <C>          <C>
Cash flows from operating activities:
    Net loss ..........................................................   $(382,107)   $(407,563)
    Adjustments to reconcile net loss to net cash used in
      operating activities:
       Depreciation and amortization ..................................      11,158       14,346
       Office and facility use contributed by affiliate (Note B) ......       5,250        5,250
       Stock-based compensation for common stock issued and
          stock options granted in exchange for services (Note E) .....       7,228         --
       Loss on write-off of Goodwin receivable (Note G) ...............      24,000         --
    Changes in current assets and current liabilities:
       (Increase) decrease in accounts receivable, inventories,
          prepaid expenses and deposits, net of sale to AspenBio (2000)      (4,411)     172,791
       Increase (decrease) in accounts payable, accrued expenses
          and payroll taxes payable, net of sale to AspenBio (2000) ...      (9,572)      71,831
                                                                          ---------    ---------
Net cash used in operating activities .................................    (348,454)    (143,345)
                                                                          ---------    ---------

Cash flows from investing activities:
    Proceeds from Purchase Agreement (Note A) .........................        --        250,000
    Purchases of property and equipment ...............................      (2,810)     (29,683)
    Payments for patents ..............................................     (51,304)     (50,244)
    Proceeds from receipts on note receivable .........................        --          6,500
    Proceeds from AspenBio note receivable (Note A) ...................        --        450,000
                                                                          ---------    ---------
Net cash provided by (used) in investing activities ...................     (54,114)     626,573
                                                                          ---------    ---------

Cash flows from financing activities:
    Proceeds from issuance of notes payable ...........................        --        195,000
    Principal payments of notes payable ...............................        --       (134,495)
    Principal payments on capital lease ...............................        (813)        --
    Sale of common stock ..............................................        --          1,400
                                                                          ---------    ---------
Net cash provided by (used) in financing activities ...................        (813)      61,905
                                                                          ---------    ---------

                                                     Net change in cash    (403,381)     545,133
Cash, beginning of year ...............................................     589,424       44,291
                                                                          ---------    ---------
                                                      Cash, end of year   $ 186,043    $ 589,424
                                                                          =========    =========

Supplemental disclosure of cash flow information:
    Cash paid during the year for:
       Interest .......................................................   $   1,159    $  20,894
                                                                          =========    =========
       Income taxes ...................................................   $    --      $    --
                                                                          =========    =========

    Non-cash investing and financing transactions:
       Net assets and debt sold to AspenBio in
          exchange for promissory note (Note A) .......................   $    --      $ 450,000
                                                                          =========    =========
       Equipment acquired under capital lease (Note G) ................   $  15,236    $    --
                                                                          =========    =========
       Cashless exercise of stock options (Note E) ....................   $    --      $      62
                                                                          =========    =========
</TABLE>


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

                                       F-6

<PAGE>


                             VITRO DIAGNOSTICS, INC.

                   Summary of Significant Accounting Policies


Use of estimates

The  preparation  of the  financial  statements in  conformity  with  accounting
principles  generally accepted in the United States 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, 2001.

Property, equipment and depreciation

Property and  equipment  are stated at cost.  Depreciation  is calculated on the
straight-line  method.  Depreciation  expense totaled $2,335 and $10,487 for the
years ended October 31, 2001 and 2000, respectively.

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 is denied, the costs
incurred are charged to operations in the year the patent is denied. The Company
amortizes its patent over a period of ten years.  Amortization  expense  totaled
$8,823 and $3,859 for the years ended  October 31, 2001 and 2000,  respectively.
The Company's  patent and deferred  costs  consisted of the following at October
31, 2001:

Patent
Method for purifying "FSH" ........................................    $ 88,231
    This patent details methods to manufacture highly purified FSH
    from various sources including human cells and animal extracts
    of pituitary glands
Less: accumulated amortization ....................................     (12,682)
                                                                       ---------
                                                                       $ 75,549
                                                                       =========
                                       F-7
<PAGE>
                             VITRO DIAGNOSTICS, INC.

                   Summary of Significant Accounting Policies


Deferred costs
Method for purifying "FSH", continuation-
   in-part application ............................................... $ 37,775
       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
Immortalization of human cell lines (VITROPIN-V(TM)) .................   41,114
       Patent application for proprietary technology related to the
       immortalization of human cells, which could be used in the
       treatment of degenerative diseases and drug discovery
Multi-dose syringe driver (VITROJECT(TM)) ............................   28,550
       Patent application for a device designed to administer
       injections more easily and economically
Modified "FSH" molecules and uses (VITROPIN-C(TM)) ...................    8,962
       Patent application for methods of production and
       composition of VITROPIN-C(TM)
Defined medium for the culture of human cells .........................     251
       Patent application for cell culture medium for the culture of
       immortalized cells
                                                                       ---------
                                                                       $116,652
                                                                       =========

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.

                                       F-8
<PAGE>


                             VITRO DIAGNOSTICS, INC.

                   Summary of Significant Accounting Policies



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, 2001 were not
included  in  the  diluted   loss  per  share  as  all  776,814   options   were
anti-dilutive. Therefore, basic and diluted losses per share at October 31, 2001
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.

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


NOTE A: 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  was  granted a patent for its process to  manufacture
VITROPIN(TM) on November 23, 1999.  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  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.  This factor,  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's  management  intends to finance its  research and
development   operations  with  funds  obtained  through  the  transfer  of  the
Diagnostics  operations,  the acquisition of government  grants,  private equity
sales, and revenue from technology licensing contracts and royalties. Should the
Company  fail to  obtain  sufficient  working  capital  from  those  activities,
management will consider restructuring the Company's operations.

NOTE B: RELATED PARTY TRANSACTIONS

During the period from August 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 G).

                                      F-10
<PAGE>


                             VITRO DIAGNOSTICS, INC.

                          Notes to Financial Statements


NOTE C: INCOME TAXES

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

                                                       October 31,
                                               ------------------------
                                                 2001             2000
                                               ---------      ---------
U.S. federal statutory graduated rate .......    34.00%          34.00%
State income tax rate, net of federal benefit     3.06%           3.14%
Contributed office and facility use .........    -0.52%          -0.46%
Net operating loss for which no tax benefit
   is currently available ...................   -36.54%         -36.68%
                                               ---------      ---------
                                                  0.00%           0.00%
                                               =========      =========

At October 31, 2001,  deferred  taxes  consisted of a net tax asset of $955,535,
due to operating loss  carryforwards of $2,548,922,  which was fully allowed for
in the valuation allowance of $955,535.  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, 2001 and 2000 were $137,845 and $157,791,
respectively.  The change in the  valuation  allowance  from  October  31,  2000
through  October 31, 2001 was $137,845.  Net operating loss  carryforwards  will
expire through 2020.

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.

NOTE D: 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,
                   ----------------------
                      2002 ....................   $  4,657
                      2003 ....................      4,657
                      2004 ....................      4,657
                      2005 and thereafter .....      7,373
                                                  --------
                                                    21,344
                   Less: imputed interest .....     (6,921)
                                                  --------
                   Present value of net minimum
                      lease payments ..........   $ 14,423
                                                  ========

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

                                      F-11
<PAGE>


                             VITRO DIAGNOSTICS, INC.

                          Notes to Financial Statements


NOTE E: SHAREHOLDERS' EQUITY

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, 2001,  there were no preferred  shares  issued and
outstanding.

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.

During the year ended October 31, 2000,  the Company issued 62,248 shares of its
common stock  through the exercise of 82,656  common stock  options.  The option
holders surrendered 20,408 options as consideration for the stock received.

During the year ended  October 31, 2000,  the Company sold 17,500  shares of its
common stock for $1,400  through the exercise of 17,500  common stock options at
$.08 per share.

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:

                                      F-12
<PAGE>




                             VITRO DIAGNOSTICS, INC.

                          Notes to Financial Statements


<TABLE>
<CAPTION>
                                             Options Outstanding and Exercisable
                                           ---------------------------------------     Weighted Average
                                              Number of            Exercise Price       Exercise Price
                                               Shares                Per Share             Per Share
                                           ---------------        ----------------     -----------------
<S>                                        <C>                    <C>                  <C>
Balance at October 31, 1999..........           1,260,000           $.07 to $.79             $ 0.22
   Options granted...................              35,000          $1.19 to $1.50            $ 1.42
   Options exercised.................            (100,156)         $.08 to $1.00             $ 0.59
   Options canceled..................                   -                       -            $ -
                                           ---------------        ----------------     -----------------

Balance at October 31, 2000..........           1,194,844           $.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..........             776,814           $.07 to $1.50            $ 0.35
                                           ===============
</TABLE>


Stock options - employees

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.

During the year ended October 31, 2000,  the Company  granted  35,000 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, 2000 were $1.42 and $.72, respectively.

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 ....................      113.67%
          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.

                                      F-13
<PAGE>


                             VITRO DIAGNOSTICS, INC.

                          Notes to Financial Statements

                                                 For the Years Ended
                                                     October 31,
                                              -------------------------
                                                2001            2000
                                              ----------    -----------
       Pro forma net loss .................   $ (433,607)   $  (455,336)
                                              ==========    ===========

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

Stock options - non-employees

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 unaudited condensed financial statements.

NOTE F: 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.

The receipt of the NIH grant also allows the Company to apply for an  additional
grant of up to $750,000 to further its research.  Management intends to take all
reasonable and appropriate steps to pursue the additional funding.

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 G: COMMITMENTS AND CONTINGENCY

Loss on write-off of 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.

                                      F-14
<PAGE>

                             VITRO DIAGNOSTICS, INC.

                          Notes to Financial Statements


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 lease
commenced June 1, 2001 and expires  August 31, 2001. The lease is  automatically
extended  at the end of the  initial  term  for the same  period  of time as the
initial  term,  up to a maximum of one year,  unless  either party gives written
notice to the contrary at least 60 days prior to the end of the initial term, as
extended.  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 are as
follows:

                       October 31,
                       -----------
                       2002....................   $13,104

                                      F-15