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, 2000

()   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)


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



(Registrant's telephone number, including area code):  (303) 798-6882
                                                       ---------------

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 $821,564

The  aggregate  market  value of the  2,272,315  shares of voting  stock held by
non-affiliates  of the Company  outstanding at December 31, 2000,  calculated by
taking the average of the bid and the asked prices of the Company's common stock
($0.96 as quoted on  January  23,  2001) was  $2,181,422.  The  number of shares
outstanding of the issuer's common equity as of December 31, 2000 was 8,534,835.

                       Document incorporated by reference:

     The Proxy  Statement for the Annual Meeting of  Shareholders  to be held in
April 2001 is  incorporated  by reference  herein into Part III, Items 9 through
12.

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

This report consists of 50 pages,  including one page  constituting  the cover
page.

<PAGE>

                                TABLE OF CONTENTS


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


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

   ITEM 2.  DESCRIPTION OF PROPERTY......................................    12

   ITEM 3.  LEGAL PROCEEDINGS............................................    13

   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..........    13


PART II..................................................................    14


   ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.....    14

   ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS....................................    15

   ITEM 7.  FINANCIAL STATEMENTS.........................................    20

   ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS................    20


PART III.................................................................    20


   ITEM 9.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.........    20

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

   ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
              AND MANAGEMENT.20

   ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............    21


PART IV..................................................................    21


   ITEM 13.       EXHIBITS AND REPORTS ON FORM 8-K.......................    21


SIGNATURES...............................................................    24


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  VITROCELL(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.

B.   Description of Products and Product Candidates
---------------------------------------------------

     VITROPINtm 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.

     VITROJECTtm is a novel delivery device for administration of VITROPINtm 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 VITROPINtm and  VITROJECTtm  are  sufficiently  advanced to
approach  regulatory  authorities  such as the Food and Drug  Administration  to
determine the most  appropriate  methods to receive FDA  approval.  Such contact
with the FDA regarding  VITROPINtm 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.

     VITROCELL(TM)  is envisioned to be the only product on the market identical
to native FSH. The Company  plans to produce  this  product  through use of cell
immortalization technology that is described in greater detail below. Management
believes that it may come to dominate the premium-priced  fertility marketplace,
which currently  depends upon artificially  derived  recombinant  products.  The
Company has been  awarded an SBIR Phase I grant from the  National  Institute of
Health to develop immortalized human gonadotrope cells, which will be the source
of cell-derived FSH.  VITOPIN-Ctm and VITROCELLtm 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 Office 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."

     VITROJECTtm 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.  VITROCELLtm is likewise
protected through patent  applications that are pending in the United States and
select foreign countries. There is no assurance that patents will be issued from
these  pending  applications.  VITROPIN-Ctm  is not yet subject to any  specific
patent  protection  other than that  afforded by the  aforementioned  issued and
pending patents.

D.   Competition

     Ares-Serono  Group,  SA controls  approximately  70% of the  worldwide  FSH
market. The Organon division of Akzo-Nobel, SA has the majority of the remaining
market,  with a 20% market share.  Ferring GmbH has the  remaining  share of the
market,  about 10%.  Both  Serono and Organon  have  diversified  product  lines
including impure LH/FSH combination drugs and 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 also 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.

                                        3
<PAGE>

E.   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.

     The Company has recently  made a submission of its plan for the approval to
the  FDA  regarding  VITROPIN(TM),   which  if  approved,  will  allow  scale-up
production  of  VITROPIN(TM)  for testing in humans.  The Company  anticipates a
relatively  short  clinical  program,  culminating  in a  rapid  approval  since
VITROPIN(TM)  will be  directly  compared  with  Fertinex(TM),  which  has  been
previously  approved by the FDA. The Company will carefully evaluate its current
dialogue with the FDA to determine  the final  version of its  submission to the
FDA seeking  formal  approval for the sale of VITROPINtm  in the United  States.
Approval  of  VITROPINtm  for  sales in other  countries  will be also  pursued.
VITROJECTtm,  VITOPIN-Ctm  and  VITROCELLtm  have not yet been  submitted to any
regulatory authority for consideration of approval.

F.   Commercialization and Development Plan
-------------------------------------------

     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
will also 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 recently  executed an agreement to attempt the establishment of
such  relationships.  An  agreement  was  executed  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.

                                        4
<PAGE>


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

Cellular Immortilization
------------------------

     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.   Description of Technology

     The Company has developed a proprietary and patent pending  technology that
uses the  controlled  over-expression  of  specific  genes to  produce  cellular
immortalization.  Most  cells of the body will live for a short  time when taken
out of the body.  However,  these  cells will  eventually  die.  The Company has
developed  methods  involving the  controlled  expression of specific genes that
prevent the death of cells grown in  culture.  These genes are also  involved in
the control of cell  proliferation.  Cells  immortalized by the Company's method
continue to divide indefinitely in cell culture.

     Cancer results in uncontrolled  cell division of specific cells that become
malignant.  These  cancerous cells are immortal and also  transformed.  Cellular
transformation leads to development of tumors and metastatic disease that can be
fatal. While the Company's technology involves regulated expression of oncogenes
that are often active in cancerous cells, its method prevents the transformation
of  these  cells.  Immortalized  and  non-transformed  cells  maintain  the same
cellular properties of fully  differentiated cells that are present in the body.
These cells can  therefore  be used for  several  potentially  valuable  medical
applications.

                                        5
<PAGE>



     C.   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  presently  has a federal  research
grant to fund its research concerning the development of immortalized cells that
produce FSH and LH.

     The  Company  hopes to extend  immortalization  to other  types of cells as
well. If the Company is 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.

     D.   Relevant Patents

     The Company has filed a patent  application  with the United  States Patent
Office  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."  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."

     E.   Status of Research

     Research  concerning  cellular   immortalization  began  in  1996  and  was
initially oriented to the immortalization of bovine pituitary cells. Since 1997,
this work has been  extended  to human  pituitary  cells  where the  Company has
demonstrated  immortalization through oncogene over-expression.  The Company has
established   cell   culture   conditions   that   promote   proliferation   and
differentiation of primary pituitary cultures. The Company is also investigating
various  different methods of  immortalization  and control of the expression of
the immortalizing  oncogenes to result in cells that maintain continuous hormone
secretion.

                                        6
<PAGE>



     A Phase I Small  Business  Innovation  Research Grant (SBIR) awarded to the
Company by the National  Institutes of Health (NIH) on June 5, 2000 supports the
Company's research into the  immortalization of human pituitary cells. The grant
provides $100,000 in funding for a research project entitled "Immortalization of
Human  Gonadotropes." Given successful  completion of the Phase I research,  the
Company also has the opportunity to apply for a Phase II SBIR grant, which could
provide  up  to  $750,000  in  additional  funding.  See  ITEM  6.  "MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."

     F.   Development Plan

     The Company  intends to continue its research into the  immortalization  of
human  gonadotropes  through  its  Phase  I SBIR  research  grant.  The  primary
objectives  are to  successfully  complete the phase I research  objectives  and
submit a Phase II SBIR  grant  application.  If the  Phase II grant  support  is
obtained, additional research would be conducted to further develop immortalized
human  gonadotropes  for  commercialization  of the FSH secreted by these cells.
However,  without  additional  funding  beyond that provided by the Phase I SBIR
grant, the Company may not be able to engage in additional cell  immortalization
research and may discontinue this research.  Other sources of funding to support
the Company's research are additional research grant support through federal and
private  granting  agencies  and  research  support  that may be  obtained  from
inter-corporate  relationships  that  are  being  pursued  for  support  of  the
development   and   commercialization   of  the  Company's   products  to  treat
infertility, as described previously.

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. In addition, the
SBIR grant described  above provides for part-time  employment of two additional
persons to achieve the objectives of this research.

     The  Company   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.

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  consultation

                                        7
<PAGE>


capacity  thus far.  In the  future,  the  Company  intends to hold  semi-annual
meetings of its entire SAB to review and advise management  regarding  strategic
technical and relevant business issues.

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.

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.

                                        8
<PAGE>



     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.

RISK FACTORS

     This  10-KSB  report  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,  VITROPINtm  and  VITROJECTtm,  have  not yet been
subject to  clinical  trials or to approval by any  regulatory  authority.  Such
approvals  are  prerequisites  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

                                        9
<PAGE>

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 VITROCELL(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 2001 fiscal year,  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  VITROPINtm  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  VITROPINtm.  VITROJECTtm  may be
commercialized  independently  of VITROPINtm  through  funding by a third party.
However,  the  Company  has no  pending  or  contemplated  agreements  regarding
independent commercialization of VITROJECTtm. Hence, if VITROPINtm does not move
forward toward  commercialization due to lack of funding, it is also likely that
VITROJECTtm  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
does 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.

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.

                                       10
<PAGE>


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 and to its Scientific Advisory Board, 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.  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.

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.

                                       11
<PAGE>

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.

TRADEMARKS

     The Company has established  trademark claims to its products,  VITROPINtm,
VITROJECTtm,   VITROPIN-Ctm,   VITROCELLtm   and  the   term   "Naturally   Pure
Therapeuticstm" 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.

MISCELLANEOUS

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

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

ITEM 2. DESCRIPTION OF PROPERTY

     The Company owns no real property.  The Company shares office space located
at 8100  Southpark  Way,  Building  B-1,  Littleton,  CO  80120.  This  space is
presently occupied by AspenBio, Inc, which is owned  by  the former president of

                                       12
<PAGE>


the Company who is also a significant  shareholder  of the Company.  The Company
has an informal  arrangement  with AspenBio,  Inc.  whereby the Company  obtains
office space and related services and access to scientific  equipment for use in
its research and development  activities.  Also,  during calendar year 2001, the
Company has retained  part-time  services of two employees of AspenBio,  Inc. to
assist the Company in achieving the  objectives of its SBIR research  grant that
was  described  above.  The Company will pay AspenBio  approximately  $21,000 in
indirect costs for the use of space and equipment during 2001. The lease of this
space expires on December 31, 2001.  The Company  presently has no  arrangements
made regarding another facility for its operations after December 31, 2001.

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.

                                       13
<PAGE>


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     a) Market Information

     The  following  information  sets  forth the high and low bid price for the
Company's  common stock for each quarter  within the last two fiscal years.  The
Company's common stock is traded  over-the-counter  and quoted on the electronic
Bulletin Board maintained by the National Association of Securities Dealers. The
following  information 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
--------------------       -------             --------

1999

January 31                $  0.65               $ 0.62
April 30                     0.75                 0.75
July 31                      2.13                 1.88
October 31                   2.31                 2.00

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

     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, 2000, 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.

                                       14
<PAGE>

ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 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 and proposes to use in connection with its therapeutic operation.

     The value of the assets  transferred  in the sale 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
subleases a small portion of that space from the purchaser on a rent-free basis.
The value of office space and  facilities  contributed  by the related party was
valued at $1,750 per month based on the  prevailing  market  rate,  the value of
which was  treated as capital  contributed  by the  related  party.  The Company
believes this arrangement is suitable for the foreseeable future.

                                       15
<PAGE>


Liquidity and Capital Resources

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

     At fiscal year end October 31, 2000,  and as a result of the sale discussed
above,  the  Company  had  converted  substantially  all of its  assets to cash.
Working  capital at fiscal  year end was  $574,602,  representing  a decrease of
$103,727  from  fiscal  year end 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. Proceeds from that sale
will be used to fund operations, primarily research and development, general and
administrative   expenses  during  the  current  fiscal  year.  Based  upon  its
experience  to  date,  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 through the end of the
current fiscal year.

     Management  believes  that  the  Company  remains  dependent  on  receiving
additional  cash to  implement  its business  plan and  generate  revenue in the
future.  The Company  has  submitted  a plan for the  approval  of its  proposed
fertility drug, VitropinTM, with the FDA and expects to commence clinical trials
during the current fiscal year. Conduct of those clinical trials,  together with
additional  obligations  in relation to this FDA filing,  will  require $1 to $2
million in additional funds.  Continuing  research and development on additional
products will also require 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 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 and no specific discussions toward that end are in progress.  However, the
Company has  executed an  agreement  with a related  party to  investigate  such
funding arrangements. 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.  However,  there is no
assurance that the necessary funding will be received.

     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 will
be used for that purpose  during the current  fiscal  year.  The receipt of that
grant also allows the Company to apply for an additional grant of up to $750,000
to  further  that  research.  Management  intends  to take  all  reasonable  and
appropriate steps to pursue that funding.

                                       16
<PAGE>


     During the fiscal year ended  October 31, 2000,  the  Company's  operations
used  approximately  $142,000 of cash. The Company funded its cash  requirements
during fiscal 2000 through a combination of short-term borrowing and the sale of
assets  described  above.  Due  to the  lack  of  revenue  during  fiscal  2001,
management  expects  the  Company  will use  substantially  more cash during the
current fiscal year.  Since  management  does not  anticipate  borrowing will be
available, other avenues of financing will be pursued.

     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 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.

October 31, 1999
----------------

     At fiscal  year end October 31,  1999,  the Company had working  capital of
$678,029,  consisting of current  assets of $738,525 and current  liabilities of
$60,496. This represents an increase in working capital of $310,479 from October
31, 1998. In addition to the working capital  available at October 31, 1999, the
Company had available a line of credit in the amount of $250,000 to help finance
operations and capital requirements,  all of which was then available.  However,
this loan was not  renewed  after the  purchaser  in the asset sale  assumed it.
During the fiscal year ended October 31, 1999,  the Company's  operations  used,
rather than  provided,  cash.  During that time, the Company's  operations  used
$241,760,  compared to cash generated by operations of $64,389 during the fiscal
year ended  October 31, 1998.  Management  believes the decrease in cash flow is
primarily  attributable  to two factors:  (i) a  substantial,  one-time  sale of
products to a single  purchaser  in fiscal 1998,  which was not repeated  during
fiscal  1999;  and (ii) a  substantial  increase  in  research  and  development
expenses during fiscal 1999.

     During  fiscal 1999,  the Company  relied on revenues  from the sale of its
product as well as cash from  financing  activities  to meet it working  capital
requirements.  The Company  borrowed  $150,000 from its primary lender in fiscal
1999 in the form of a term  loan,  which  loan was also  assumed  as part of the
asset sale. The Company also realized $376,000 from the sale of its common stock
in private  placements and from exercise of outstanding stock options. A portion
of the  proceeds  of  those  transactions  was used to  repay  short-term  notes
payable.  The short-term notes accrued interest at rates ranging from 14 to 25%;
the  Company's  ability to refinance  such notes with  proceeds of the term note
assisted in reducing interest expense for the past year.

     Also as a result  of the  financing  activities,  the  Company  was able to
reduce  current  liabilities  and increase cash.  Cash  increased  approximately
$45,000 from fiscal year end 1998 to October 31, 1999. Current  liabilities were
reduced  from  $256,702  at October  31,  1998 to $60,496 at October  31,  1999.
Accounts payable were reduced  approximately  $70,000.  A portion of the accrual
for short-term  notes payable at October 31, 1998 were refinanced into long-term
obligations.

                                       17
<PAGE>


Results of Operations

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.

     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

                                       18
<PAGE>


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.

Year Ended October 31, 1999
---------------------------

     During the year ended October 31, 1999, the Company  realized a net loss of
$140,803,  or $.02 per share,  on total  revenue of  $835,452.  The net loss for
fiscal  1999 is a decrease  of  $515,290  from the net income for the year ended
October 31,  1998.  Revenues  also  decreased  from  fiscal  1998 to 1999,  from
$1,232,244  to $835,452,  a decrease of $396,792 or 32%. The decrease in revenue
is attributable to a one-time sale  consummated in 1998,  which was not repeated
during 1999.  The net loss  experienced  during  fiscal 1999,  in the opinion of
management,  is  attributable  to the  decrease in  revenues  and an increase in
research and development expenses during fiscal 1999.

     In fiscal  1999,  the  Company  sold 3,297  milligrams  of  antigens to its
customers.  This compares to 5,700  milligrams  sold during 1998,  including the
one-time sale to a single  customer.  This accounts for the decrease in revenues
during  fiscal  1999.  Prices  for the  Company's  products  remained  generally
constant from 1998 to 1999.

     Gross profit from sale of the Company's  product increased from fiscal 1998
to 1999,  from 62% for the year  ended  October  31,  1998 to 65.5% for the year
ended October 31, 1999.  However,  operating  expenses  increased  substantially
during the same time.  Operating  expenses for 1999 were  $640,366,  compared to
$362,135 for the year ended October 31, 1998. The greatest increase in operating
expenses was research and development,  which increased from $52,209 for 1998 to
$276,484  in 1999.  This  increase  is  attributable  to  increased  emphasis on
development  of new  products  and  techniques,  part of which  resulted  in the
issuance of a patent to the Company and several patents pending.

     Management does not believe that inflation has had a material impact on the
Company's  operations  during the last two fiscal  years,  nor is it expected to
have such an impact in the immediate future.

Recent Sales of Unregistered Securities

     During the year ended  October  31,  2000,  the  Company  issued a total of
79,478 shares of common stock to its employees or former employees  pursuant the
exercise of outstanding stock options,  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.

                                       19
<PAGE>



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, Vitro Diagnostics, Inc. (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 past two fiscal years 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.

     During the Company's  two most recent  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 most  recent  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 information  required by this item is incorporated  herein by reference
from the Company's  proxy statement for the annual meeting of shareholders to be
held in April 2001.

ITEM 10. EXECUTIVE COMPENSATION

     The information  required by this item is incorporated  herein by reference
from the Company's  proxy statement for the annual meeting of shareholders to be
held in April 2001.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information  required by this item is incorporated  herein by reference
from the Company's  proxy statement for the annual meeting of shareholders to be
held in April 2001.

                                       20
<PAGE>




ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information  required by this item is incorporated  herein by reference
from the Company's  proxy  statement for the annul meeting of shareholders to be
held in April 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*  Articles of Incorporation of the Company as filed March 31, 1986 with
        the Nevada Secretary of State.

3.1.2(2)Certificate of Merger of Domestic and Foreign Corporations as filed
        December 17, 1986 with the Nevada Secretary of State.

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(2)Certificate of Amendment of Articles of Incorporation as filed May 18,
        1988 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*   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.

                                       21
<PAGE>


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.

99      Not applicable.

* Filed herewith.

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

(2)  To be filed by amendment to this Report.

(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.


(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.

     (i)  Form 8-K  dated  August  7,  2000 to  report  changes  in  control  of
          Registrant;

     (ii) Form 8-K  dated  October  9, 2000 to report  Changes  In  Registrant's
          Certifying Accountant; and

                                       22
<PAGE>

     (iii)Form 8-K/A  dated  October 9, 2000 to report  Changes In  Registrant's
          Certifying Accountant.

                                       23
<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 Littleton, Colorado on the 24th day
of January, 2001.

                                   VITRO DIAGNOSTICS, INC.

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

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

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


/s/ James R. Musick           President, Chief Executive       January 24, 2001
----------------------        Officer and Director             ----------------
    James R. Musick


/s/ Henry Schmerler           Chief Financial Officer,         January 26, 2001
----------------------        Treasurer and Director           ----------------
    Henry Schmerler


/s/ Erik D. Van Horn          Vice President and Director      January 24, 2001
----------------------                                         ----------------
    Erik D. Van Horn


/s/ Ronald L. Goode           Chairman of the Board            January 24, 2001
----------------------        and Director                     ----------------
    Ronald L. Goode


/s/ William J. Schmuhl        Secretary and Director           January 27, 2001
----------------------                                         ----------------
    William J. Schmuhl


                                       24
<PAGE>

                             VITRO DIAGNOSTICS, INC.

                          Index to Financial Statements


                                                           Page
                                                         --------

Independent auditors' reports ........................     F-2

Balance sheet, October 31, 2000 ......................     F-4

Statements of operations, for the years ended
    October 31, 2000 and 1999 ........................     F-5

Statement of shareholders' equity, for the years ended
    October 31, 2000 and 1999 ........................     F-6

Statements of cash flows, for the years ended
    October 31, 2000 and 1999 ........................     F-7

Summary of significant accounting policies ...........     F-8

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

                                     F-1

<PAGE>



                          INDEPENDENT AUDITORS' REPORT

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

We have audited the balance sheet of Vitro  Diagnostics,  Inc. as of October 31,
2000, and the related statements of operations,  shareholders'  equity, and cash
flows, for the year ended October 31, 2000.  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  audit.  The  financial
statements of Vitro Diagnostics,  Inc. for the year ended October 31, 1999, were
audited by other  auditors  whose  report dated  January 18, 2000,  expressed an
unqualified opinion on those statements.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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, 2000,  and the results of its  operations and its cash flows for the
year ended October 31, 2000, in conformity  with generally  accepted  accounting
principles.

/s/ Cordovano and Harvey, P.C.
------------------------------
Cordovano and Harvey, P.C.
Denver, Colorado
December 22, 2000

                                       F-2


<PAGE>

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



                          INDEPENDENT AUDITOR'S REPORT

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

I have audited the balance  sheet of Vitro  Diagnostics,  Inc. as of October 31,
1999 (not separately included herein), and the related statements of operations,
shareholders'  equity and cash flows for the year then  ended.  These  financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the  financial  position of Vitro  Diagnostics,  Inc. as of
October 31, 1999 and the results of its  operations and their cash flows for the
year then ended in conformity  with generally  accepted  accounting  principles.

/s/ Larry O'Donnell
--------------------------
Larry O'Donnell, CPA, P.C.
January 18, 2000

                                       F-3
<PAGE>

                             VITRO DIAGNOSTICS, INC.

                                  Balance Sheet

                                October 31, 2000

Assets
Current assets:

     Cash and cash equivalents........................      $      589,424
     Deposit..........................................              24,000
                                                            --------------

                                  Total current assets             613,424

Patents, net of accumulated amortization of $3,859....             149,720
                                                            --------------

                                                            $      763,144
                                                            ==============

Liabilities and Shareholders' Equity
Current liabilities:

     Accounts payable.................................      $       29,822
     Accrued expenses.................................               9,000
                                                            --------------
                             Total current liabilities              38,822
                                                            --------------
Shareholders' equity (Note D):

     Common stock, $.001 par value; 500,000,000
     shares authorized;
        8,534,835 shares issued and outstanding.......               8,535
     Additional paid-in capital.......................           4,292,514
     Retained deficit.................................          (3,576,727)
                                                            --------------
                           Total shareholders' equity              724,322
                                                            --------------

                                                            $      763,144
                                                            ==============

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


                                       F-4
<PAGE>

<TABLE>
                             VITRO DIAGNOSTICS, INC.

                            Statements of Operations
<CAPTION>

                                                              For the Years Ended
                                                                  October 31,
                                                        ------------------------------
                                                             2000             1999
                                                        ----------        ------------
Revenue:
<S>                                                     <C>               <C>
     Product sales.................................     $ 821,564         $  835,452
     Cost of goods sold............................       346,604            288,565
                                                        ----------        -----------

                                       Gross profit       474,960            546,887

Operating expenses:
     Selling, general and administrative...........       465,547            363,882
     Rent and facility fees, related party (Note B)         5,250                  -
     Research and development......................       407,295            276,484
                                                        ----------        -----------

                           Total operating expenses       878,092            640,366
                                                        ----------        -----------

                               Loss from operations      (403,132)           (93,479)

Other income (expense):
     Interest income...............................         7,171                  -
     Interest expense..............................       (20,894)           (52,866)
     Miscellaneous income..........................         9,292              5,542
                                                        ----------        -----------
                           Loss before income taxes      (407,563)          (140,803)

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

                                           Net loss     $(407,563)        $ (140,803)
                                                        ==========        ===========


Basic and diluted loss per common share............     $   (0.05)        $    (0.02)
                                                        ==========        ===========
Basic and diluted weighted average common
  shares outstanding...............................     8,469,239          7,097,000
                                                        ==========        ===========
</TABLE>


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

                                       F-5
<PAGE>

<TABLE>
                             VITRO DIAGNOSTICS, INC.

                        Statement of Shareholders' Equity

                  For the Years ended October 31, 2000 and 1999
<CAPTION>



                                                                 Common Stock          Additional
                                                          --------------------------    Paid-in         Retained
                                                             Shares       Par Value     Capital          Deficit         Total
                                                          ------------   -----------   -----------    -------------   -----------

<S>                                                       <C>            <C>           <C>            <C>             <C>
                                Balance, October 31, 1998    6,419,816   $   6,420     $ 3,529,909    $ (3,028,361)   $  507,968

Common stock issued in exchange
   for services ......................................... $    149,842         150          27,150               -        27,300

Sale of common stock ....................................      485,429         485         251,515               -       252,000

Stock options exercised .................................    1,400,000       1,400         122,600               -       124,000

Net loss for the year ended October 31, 1999 ............            -           -               -        (140,803)     (140,803)
                                                          ------------   -----------   -----------    -------------   -----------
                                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

Stock options exercised (Note D) ........................       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
                                                          ============   ===========   ===========    =============   ===========

</TABLE>


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

                                       F-6
<PAGE>

<TABLE>

                         VITRO DIAGNOSTICS, INC.

                         Statements of Cash Flows
<CAPTION>

                                                                                        For the Years Ended
                                                                                            October 31,
                                                                                     -------------------------
                                                                                        2000           1999
                                                                                     ----------     ----------
Cash flows from operating activities:

<S>                                                                                  <C>            <C>
    Net loss ...................................................................     $(407,563)     $(140,803)
    Transactions not requiring cash:
       Depreciation and amortization ...........................................        14,346         13,763
       Office and facility use contributed by affiliate (Note B) ...............         5,250              -
       Stock issued in exchange for services ...................................             -         27,300
    Changes in current assets and current liabilities:
       (Increase) decrease in accounts receivable, inventories,
          prepaid expenses and deposits, net of sale to AspenBio ...............       172,791        (68,130)
       Increase (decrease) in accounts payable, accrued expenses
          and payroll taxes payable, net of sale to AspenBio ...................        71,831        (73,890)
                                                                                     ----------     ----------
Net cash used in operating activities ..........................................      (143,345)      (241,760)
                                                                                     ----------     ----------

Cash flows from investing activities:

    Proceeds from Purchase Agreement (Note A) ..................................       250,000              -
    Property and equipment purchases ...........................................       (29,683)       (17,953)
    Payments for patents .......................................................       (50,244)       (48,612)
    Issuance of note receivable ................................................             -         (6,825)
    Proceeds from receipts on note receivable ..................................         6,500            325
    Proceeds from AspenBio note receivable (Note A) ............................       450,000              -
                                                                                     ----------     ----------

Net cash provided by (used) in investing activities ............................       626,573        (73,065)
                                                                                     ----------     ----------

Cash flows from financing activities:

    Proceeds from issuance of notes payable ....................................       195,000        150,000
    Principal payments of notes payable ........................................      (134,495)      (162,636)
    Sale of common stock .......................................................         1,400        376,000
                                                                                     ----------     ----------

Net cash provided by financing activities ......................................        61,905        363,364
                                                                                     ----------     ----------


                                         Net change in cash and cash equivalents       545,133         48,539
Cash and cash equivalents, beginning of year ...................................        44,291         (4,248)
                                                                                     ----------     ----------

                                          Cash and cash equivalents, end of year     $ 589,424      $  44,291
                                                                                     ==========     ==========

Supplemental disclosure of cash flow information: Cash paid during the year for:

       Interest ................................................................     $  20,894      $  51,854
                                                                                     ==========     ==========
       Income taxes ............................................................     $      -       $       -
                                                                                     ==========     ==========

    Non-cash investing and financing transactions:
       Net assets and debt sold to AspenBio in exchange for
          promissory note (Note A) .............................................     $ 450,000            $ -
                                                                                     ==========     ==========
       Cashless exercise of stock options (Note D) .............................     $      62            $ -
                                                                                     ==========     ==========
</TABLE>



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

                                       F-7

<PAGE>

                             VITRO DIAGNOSTICS, INC.

                   Summary of Significant Accounting Policies

Use of estimates

The  preparation  of the  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect  the  reported  amounts of  assets,  liabilities,  and
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.

Revenue and cost recognition

The  Company  utilizes  the  accrual  method of  accounting  whereby  revenue is
recognized when earned and expenses are recognized when incurred.

Inventory

Inventory is valued  utilizing  the lower of cost or market value  determined on
the  first-in  first-out  (FIFO)  valuation  method.  Physical  inventories  are
conducted  quarterly.  As of October 31, 2000, the Company had no inventory (See
note A).

Property, equipment and depreciation

Property and  equipment  are stated at cost.  Depreciation  is calculated on the
straight-line  method.  As of October 31, 2000,  the Company had no  depreciable
assets (See Note A).  Depreciation  expense  totaled  $10,487 for the year ended
October 31, 2000.

Patents and amortization

Patents  consist of costs incurred to acquire  patents.  Amortization  commences
once a patent is granted.  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 twenty years.  Amortization expense totaled $3,859 for the year
ended October 31, 2000.

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.

                                       F-8
<PAGE>

Earnings/(loss) per share

The  Company  reports  loss per  share  using a dual  presentation  of basic and
diluted loss per share. Basic loss per share excludes the impact of common stock
equivalents.  Diluted 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, 2000 were not included in the
diluted loss per share as all 1,162,344 options were  anti-dilutive.  Therefore,
basic and diluted losses per share at October 31, 2000 were equal.

Stock-based compensation

SFAS No. 123,  "Accounting for Stock-Based  Compensation"  was issued in October
1995 (SFAS  123).  This  accounting  standard  permits the use of either a "fair
value  based  method" or the  "intrinsic  value  method"  defined in  Accounting
Principles Board Opinion 25, "Accounting for Stock Issued to Employees" (APB 25)
to account for stock-based compensation arrangements.

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  have been  solely  attributable  to the  manufacturing  of the
purified human antigens.

On August 7, 2000, the Company sold its Diagnostics operations to AspenBio, Inc.
("AspenBio"),  a private  affiliated  company owned by the former  president and
director.  The  transaction  was effective for  accounting  purposes on July 31,
2000.  AspenBio  purchased  all of the assets and  liabilities  of the  Company,
excluding the patents,  in exchange for $250,000 and a $450,000 promissory note.
The  promissory  note was  paid in full as of  October  31,  2000.  Because  the
transaction occurred between related parties, the Company's gain on the sale was
recorded  to  equity as an  increase  to  additional  paid-in  capital.  The net
increase to additional paid-in capital of $354,770 was calculated as follows:

            Description                                 Amount       Totals
--------------------------------------------------------------------------------
Cash.............................................      $   6,517
Receivables......................................        208,142
Inventory........................................        335,198
Furniture and equipment, net.....................         54,212
Other assets.....................................         11,058
                                                       ----------
                                     Total Assets                      615,127

Payables and accruals............................        (67,319)
Debt.............................................       (202,578)
                                                       ----------
                              Total Liabilities *                     (269,897)
                                                                      ----------

Net assets sold to AspenBio......................                      345,230
                                                                      ----------

Cash.............................................        250,000
Promissory note..................................        450,000
                                                       ----------
Consideration received from AspenBio.............                      700,000
                                                                      ----------

Net contributed capital received from AspenBio...                     $354,770
                                                                      ==========

* Does not include $283,726 in off-balance sheet operating leases transferred to
AspenBio in the sale.

Following the sale of its Diagnostics operations, 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 product 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
VITROCELL(TM),  and a syringe  for  administration  of  fertility  drugs  called
VITROJECT(TM).

                                      F-10
<PAGE>

The Company  expects  continuing  losses over the next several years as research
and development  efforts continue.  Management plans to finance  operations with
funds  obtained  through the sale of the  Diagnostics  operations,  issuances of
equity or debt  securities,  and in the longer term,  research  and  development
contract revenue and revenue from product sales and royalties.

NOTE B:  RELATED PARTY TRANSACTIONS

During the  period  from  August 1, 2000  through  October  31,  2000,  AspenBio
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.

NOTE C:  INCOME TAXES

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

                                                     October 31,
                                                 -----------------
                                                   2000      1999
                                                 -------   -------
U.S. federal statutory graduated rate             34.00%    26.51%
State income tax rate, net of federal benefit      3.14%     3.49%
Contributed office and facility use               -0.46%     0.00%
Net operating loss for which no tax benefit
   is currently available                        -36.68%   -30.00%
                                                 -------   -------
                                                   0.00%     0.00%
                                                 =======   =======

At October 31, 2000,  deferred  taxes  consisted of a net tax asset of $817,690,
due to operating loss  carryforwards of $2,181,755,  which was fully allowed for
in the valuation allowance of $817,690.  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, 2000 and 1999 were $157,791 and $42,243,
respectively.  The change in the  valuation  allowance  from  October  31,  1999
through  October 31, 2000 was $157,791.  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:  SHAREHOLDERS' EQUITY

During the year ended October 31, 2000,  the Company issued 62,248 shares of its
$.001 par value  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
$.001 par value  common stock for $1,400  through the exercise of 17,500  common
stock options at $.08 per share.

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.

                                      F-11
<PAGE>

All stock options have been issued under the  Company's  1992 Stock Option Plan.
An aggregate of 3,000,000 common shares has been reserved for issuance under the
1992  Plan.  All stock  options  were  fully  vested  on the date of grant.  The
following schedule summarizes the changes in the Company's stock option plan:

                          Options Outstanding and Exercisable
                          -----------------------------------   Weighted Average
                             Number of    Exercise Price         Exercise Price
                              Shares        Per Share              Per Share
                           ------------   -------------         ----------------
Balance at October 31, 1998  2,440,000    $.07 to $.79            $   0.10
   Options granted ........    220,000    $.63 to $.79                0.64
   Options exercised ...... (1,400,000)   $.07 to $.19                0.09
   Options canceled .......         -              -                     -
                           ------------   -------------         ----------------
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
                           ============

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.................6.00%
Dividend yield..........................0.00%
Volatility factor......................50.00%
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-12
<PAGE>

                            VITRO DIAGNOSTICS, INC.

                          Notes to Financial Statements


                                               For the Years Ended
                                                   October 31,
                                            ----------------------------
                                               2000             1999
                                            -----------      -----------
Pro forma net loss                          $ (455,336)      $ (211,203)
                                            ===========      ===========
Pro forma basic and diluted net loss
   per common share                         $    (0.05)      $    (0.03)
                                            ===========      ===========

NOTE E:  SUBSEQUENT EVENT

On November  3, 2000,  the  Company  granted  4,000  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
on November 3, 2000 were $1.16 and $.59, respectively.

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.  One million shares of common stock are authorized to be awarded under the
Plan.  Awards may take the form of stock options,  non-qualified  stock options,
restricted stock awards, stock bonuses and other stock grants.

                                      F-13