UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB

(X)  Annual report under section 13 or 15(d) of the Securities Exchange Act of
     1934 For the fiscal year ended October 31, 2004

( )  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. Employer
 incorporation or organization)                              Identification No.)

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

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

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

       None                                                None
-------------------                    -----------------------------------------
Title of each class                    Name of each exchange on which registered

       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 had no revenue for its most recent fiscal year.

The aggregate market value of the 4,581,666 shares of voting stock held by
non-affiliates of the Company at December 31, 2004, calculated by taking the
last sales price of the Company's common stock ($.34 as quoted on December 31,
2004) was $1,557,766. The number of shares outstanding of the issuer's common
equity as of January 31, 2005 was 10,620,555.

                       DOCUMENT INCORPORATED BY REFERENCE:

         None.

Transitional Small Business Disclosure Format:       [  ] Yes  [ X ] No
<PAGE>


                                TABLE OF CONTENTS


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


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

   ITEM 2.  DESCRIPTION OF PROPERTY..........................................10

   ITEM 3.  LEGAL PROCEEDINGS................................................11

   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..............11


PART II......................................................................11


   ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.........11

   ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS........................................12

   ITEM 7.  FINANCIAL STATEMENTS.............................................19

   ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS....................19

   ITEM 8A. CONTROLS AND PROCEDURES..........................................19


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


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

   ITEM 10. EXECUTIVE COMPENSATION...........................................21

   ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT.......................................................24

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


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


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

   ITEM 15. PRINCIPAL ACCOUNTANT FEES AND SERVICES...........................28


SIGNATURES....................................................................0



PART F/S......................................................................3

                                       ii

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                Special Note Regarding Forward Looking Statements

     Except for the historical information contained herein, this document
contains forward-looking statements relating to future financial results or
business expectations. These statements are identified by words such as
"expects," "anticipates" or "hopes." Investors should be aware that business
plans might change, as circumstances require. Actual results could differ
materially as a result of risk-related factors. Such factors include, but are
not limited to, those discussed in "Business" and "Management's Discussion and
Analysis or Plan of Operation." 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 content of any agreements
or other documents are qualified in their entirety by reference to those
documents, copies of which are filed with, or incorporated by reference into,
this Report.

<PAGE>


                                     PART I

ITEM 1.  BUSINESS

History
-------

     Vitro Diagnostics, Inc. ("we" or the "Company") was incorporated under the
laws of the State of Nevada on February 3, 1986. From November of 1990 to July
31, 2000, the Company was engaged in the development, manufacture and
distribution of purified human antigens and the development of therapeutic
products and related technologies. In August 2000, the Company sold the assets
used in the manufacture and sale of purified antigens for diagnostic
applications. Our common stock is currently traded over the counter and quoted
on the OTC Bulletin Board under the ticker symbol VODG. The activities described
herein refer to those that occurred during fiscal year 2004 unless otherwise
noted.

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

     Since the sale of the diagnostic operations, we have focused on
commercializing products with potential applications in research, manufacturing
and therapeutics, predominantly in the field of endocrinology. The technologies
underlying our recent efforts include those originally developed for diagnostic
applications and others developed since then. Our current strategy is to
develop, manufacture and market products for use in research and manufacturing
that do not require FDA approval prior to market introduction to establish
revenue while engaging in longer-term development of select therapeutic
products. Our products include the VITROCELL(TM) Product Line consisting of
human cell lines and related products. We have also developed products and
product candidates for treatment of infertility. We have recently begun sales of
our VITROCELL(TM) products and we have also entered into a supply contract with
a distributor that potentially affords the Company greater product sales in
medical research markets.

Human Cell Lines and Related Products and Technology
----------------------------------------------------

     1. Description of Technology

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

     Cell immortalization is a process to prolong the life of cells grown
outside of the body. Normally, these cells die relatively quickly. The Company's
technology extends cell lifetime for prolonged periods of time, resulting in
immortalization. Furthermore, the immortalized cells continue to maintain
properties of cells of the body, which is a primary basis for the perceived
competitive advantage of products derived from the Company's technology.

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     During the past year, the Company has applied its immortalization
technology to stem cells that are undifferentiated precursor cells that produce
other fully differentiated cells, which in turn perform essential functions in
the adult organism. Stem cells exist within embryonic, fetal and adult tissue
and serve as sources for fully functional cells of the body. Stem cells are
known to be important in development and also serve to replenish cells that are
destroyed through disease or injury. There is considerable ongoing interest and
research activity regarding the use of stem cell technology in the treatment of
human diseases that involve the destruction of specific types of cells such as
Type I diabetes, Alzheimer's and Parkinson's disease. Also, stem cell technology
has potential to replace cells that are destroyed as a consequence of
cardiovascular disease or stroke. Embryonic stem cell research is also ethically
controversial, since certain procedures involve the destruction of human
embryos. The Company's research efforts have focused on the immortalization of
stem cells that give rise to human beta islets, which are structures of the
pancreas gland responsible for the production and secretion of insulin and
glucagon that in turn regulate carbohydrate metabolism. Such research may have
application to the development of new therapies for diabetes. The Company
utilizes cell lines that it has previously developed as a source of stem cells
and is not presently involved in embryonic stem cell research. During the past
two years, the Company spent $209,132 for research and development.

     2. VITROCELL(TM) Product Line

     The Company launched its initial series of products that were derived from
its cell immortalization technology at the end of fiscal year 2003. The
VITROCELL(TM) product line consists of 35 different items based on three human
cell lines developed by the Company. The cell lines were derived from either the
pituitary or pancreas gland and provide medical researchers with novel cell
lines for various uses including basic research in diabetes, pancreatic cancer
and endocrinology of the pituitary or pancreas gland. Also, these cell lines may
be used in the production of biotherapeutic products including proteins derived
through recombinant DNA methods and vaccines. The Company's product sales
totaled $929 during 2004, which did not include any sales through the Company's
distribution contact (See: Item 6. Managements Discussion and Analysis or Plan
of Operation, for additional information.)

     Description of Products

     LT1 Immortalized Human Pituitary Cell Line: This line was derived from
cells of the pituitary gland that are involved in the production of pituitary
protein hormones including FSH and LH. These cells may contain stem cells that
can be differentiated into hormone producing cells when exposed to certain
environmental conditions.

     LT2 Immortalized Human Pancreatic Fibroblast Cell Line: This line was
derived from fibroblast cells of the pancreas that provide support to the
insulin-producing beta cells and glucagon-producing alpha cells.

                                       2

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     VIT1 Human Pancreatic Fibroblast Cell Line: This line was derived from
primary cultures of fibroblast cells of the pancreas gland. This cell line has
characteristics of stem cells.

     Optimized Cell Culture Media: We provide cell culture media optimized to
support growth of either the LT1 or LT2/VIT1 cell lines, VitroPlus I and
VitroPlus II, respectively. The Company provides all components necessary for
customers to prepare, store and use VitroPlus I & II.

     Other Products: The VITROCELL(TM) product line includes various forms of
the LT1, LT2 and VIT1 cell lines including cryopreserved cells and proliferating
cells in specialized cell culture containers. Cryopreservation media and starter
kits containing all products necessary to establish and maintain cell line
cultures are provided together with various derivatives of the LT1, LT2 & VIT1
cell lines.

     Target Markets & Competitive Advantage

     The present markets being pursued are select non-therapeutic applications
in research and manufacturing. VITROCELL(TM) products have various research
applications. Many researchers use in-vitro cell lines as model systems for
biological research and often these cells are derived from animals. Results
obtained from an in-vitro animal cell culture must then be extrapolated to human
tissues to demonstrate medical relevance. Our human derived pituitary and
pancreatic cells allow initial use of human cells providing the advantage of
direct interpretation of the application to human tissue. Alternatively,
cultured human cell lines may be used to extend research that was initially
performed on animal cells. The VITROCELL(TM) lines have utility in studies of
the basic molecular and cellular biology, drug discovery, toxicology and studies
of the mechanisms involved in pancreatic and pituitary cancer. Also, our
VITROCELL(TM) products have application in basic stem cell research. One of our
cell lines, VIT1, has many technical characteristics of stem cells.

     Therapeutic products produced by recombinant DNA technology require a host
cell line for production and these are generally animal derived. Animal cell
line hosts create problems in the production of sugar-containing proteins, known
as glycoproteins. Glycoproteins contain protein coupled together with complex
sugar polymers that are in many cases critical to function of the glycoprotein.
Animal cells lack enzymes necessary to properly construct the carbohydrate
structures necessary for complete glycoprotein function. Hence, one of the
target manufacturing markets for the VITROCELL(TM) product line is the
production of glycoproteins including humanized antibodies, which is a rapidly
expanding market. We have used gene expression profiling of our VIT1 cell line
during 2004 to show that this cell line expresses the genes of critical enzymes
known to contribute to the formation of glycoproteins, providing experimental
verification of the potential use of VITROCELL(TM) lines in the production of
glycoproteins. Humanized antibodies are now being used in targeted therapies of
certain types of cancer such as Herceptin(R) for breast cancer and Rituxin(R)
for certain cancers of the blood. There are also several other medical
applications of humanized antibodies.

                                       3

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     The production of several vaccines utilizes human cell lines for the
propagation of viruses that are subsequently inactivated and purified by various
procedures to generate vaccinations to Hepatitis A and B, chicken pox, small pox
and rabies. VITROCELL(TM) lines including the LT2 and VIT1 cell lines derived
from human fibroblast cells may have application in the production of vaccines.
The perceived primary competitive advantage of VITROCELL(TM) lines in vaccine
production is that the cells are immortal and therefore have prolonged growth
capabilities while existing cell lines are mortal with definite life spans.

     3. Marketing and Sales of the VITROCELL(TM) Product Line

     The Company has begun marketing and distribution of the VITROCELL(TM)
product line to research markets. We have sold directly to a few biotechnology
researchers who gained awareness of our products from the Company's web site and
through ads for these products. Furthermore, we have recently signed a contract
for the distribution of select VITROCELL(TM) products through Chemicon
International, Inc., located in Temecula, CA. Chemicon, a wholly-owned
subsidiary of Serologicals, Inc. (Nasdaq, SERO), has existing global
distribution channels for such products, a direct sales force, exhibits
extensively at various scientific trade shows, and provides diversified lines of
medical research products that are sold primarily to research scientists in
academia and pharmaceutical or biotechnology firms. The agreement stipulates the
terms and conditions of a five-year, non-exclusive supply to Chemicon for its
own use or distribution. The agreement stipulates that the Company will provide
Chemicon with its LT2 & VIT1 cell lines together with optimized growth medium
and cryopreservation medium at a discounted price. However, there are no
guaranteed minimum sales. Chemicon personnel have inspected the Company's
manufacturing operation and we anticipate an initial order in the near future.
All materials are sold under a non-exclusive research use only license and
material transfer agreement, while the Company retains all intellectual property
rights to its cell lines.

     Also, since research and manufacturing markets consist of predominantly
scientists, technical information regarding these products is an important
component of market acceptance. We have added more detailed technical
characterization of our cell lines during 2004 including gene expression
profiling through collaboration with Harvard Medical School scientists. Such
information is an important component of market acceptance and we plan to expand
characterization of VITROCELL(TM) products through collaborations with other
scientists.

     We intend to target other firms engaged in the development, testing and
commercialization of human biotherapeutic glycoproteins and vaccines in the
distribution of VITROCELL(TM) products to manufacturing markets. While we have
shown the potential of the use of our cells in the production of glycoproteins
by demonstrating the expression of key glycoprotein synthetic enzymes within our
cells, additional development work is necessary to demonstrate the utility and
commercial viability of our cell lines as hosts for the production of
therapeutic glycoproteins. We intend to engage in such development work in-house
depending on available resources or to jointly determine key manufacturing
properties through an agreement with potential customers. Likewise, the
applicability of our cell lines to vaccine manufacture requires additional proof
of principle demonstrations. The Company plans to directly market VITROCELL(TM)
products for manufacturing applications and to pursue application-specific
licenses with select customers.

                                       4

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     Current sales of VITROCELL(TM) products are limited by market awareness and
given the availability of sufficient resources, the Company intends to expand
its advertising program and to attend select trade shows. This would permit
greater awareness of our products and potentially lead to contact with key
strategic partners in targeted manufacturing market segments.

     4. Expansion of the VITROCELL(TM) Product Line

     A current product development objective is the launch of human pancreatic
beta islets for research applications. We have developed methods for the
continuous generation of human beta islets from stem cells and recently filed a
new US patent application concerning this technology and certain compositions.
We are presently expanding our beta islet production capacity to support the
initial product launch. We are also building inventory necessary to support the
initial launch. This will provide opportunities to sell our products to
researchers working on various approaches to cell therapy for diabetes including
use of stem cells and other applications. We hope to add the human beta islet
products to our present VITROCELL(TM) product offering and also add these
products to our existing supply agreement with Chemicon International, Inc.
Chemicon has expressed interest in the distribution of these products.

     Following launch of human beta islets and related products for research
applications, we hope to engage in further collaborative development of our
technology to determine feasibility of its use in the generation of human beta
islets for transplantation therapy of Type I diabetics. This work would involve
development of FDA-specified methods to extend the proliferation of beta islet
stem cells allowing generation of large quantities of human beta islets suitable
for clinical trials of their transplantation into diabetic patients. This is a
longer-term objective of the Company and would require significantly more
resources than are presently available to the Company. Our immediate objectives
are to establish the basic technology to generate human beta islets from stem
cells, patent the underlying intellectual property as broadly as possible and
conclusively demonstrate proof of principle.

     5. Relevant Patents and Other Intellectual Property Protection

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

     The Company also has additional applications pending with the United States
Patent and Trademark Office (USPTO) and the European Patent Office, potentially
allowing broad patent protection and issued patents in several European
countries. The Company also has pending patent applications for its cell
immortalization technology in Israel, Australia and Canada. The examination of

                                       5

<PAGE>


these applications could require several years for completion. The Company's
technology related to the production of cell culture media is protected as trade
secret.

     During 2004, the Company also filed a new patent application with the USPTO
concerning its technology related to the generation of beta islets from stem
cells. The Company developed a novel in-vitro model system of human stem cells
that can be induced to form beta islets under the appropriate environmental
conditions. The Company has successfully produced significant numbers of islets
that contain and secrete insulin in response to elevated glucose stimulation and
these islets have been maintained and expanded for several months in cell
culture, a method for the growth of cells outside of the body. Further
development of this new method may yield sufficient material to expand the
availability of transplantable materials for treatment of Type I diabetics.
Also, the Company's technology allows study of factors affecting beta islet
growth and differentiation from stem cells and such results may yield new drugs
that selectively stimulate beta cell regeneration without the need for
transplantation. Drugs inducing beta cell regeneration may then be combined with
therapies to block immune rejection of the newly formed cells, thereby restoring
normal function to the pancreas gland. The Company intends to follow this new
patent filing with appropriate additional filings in an attempt to obtain broad
patent protection in the US and select foreign countries for its technology
related to generation of beta islets from stem cells. There can be no assurance
that the Company will succeed in obtaining such patent protection or that these
patents would withstand legal challenges.

Fertility Drugs
---------------

     The Company's previous operations of manufacture and sale of purified
antigens for diagnostic purposes resulted in the discovery of several products
and technologies with potential application for therapeutic purposes. An initial
target was the pituitary hormone FSH and related products, since FSH has been
used as a drug to treat infertility for the past 30 years. The worldwide market
for FSH and related products is approximately $1.2 billion per year. Since the
sale of the diagnostic operation in 2000, management has continued efforts to
develop these discoveries into commercially valuable assets. However, in the
recent past the Company has utilized its limited resources to develop and
commercialize the VITROCELL(TM) product line in an effort to establish revenue
from product sales in the near term. There was no new development of the
Company's technology related to fertility drugs in 2004 while there were
strategic advances in commercialization plans as described below.

     The Company's present product candidates targeted to treat infertility
include purified FSH derived from human urine and FSH derived from an
immortalized cell line generated by the Company. The Company has also developed
another specialized product for the administration of fertility drugs by
injection. The U.S. Food and Drug Administration ("FDA") has not yet approved
any of these products.

                                       6

<PAGE>


     1. Description of Products and Product Candidates

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

     VITROPIN-V(TM) is envisioned to be the only product on the market identical
to native FSH. The Company plans to produce this product through use of its cell
immortalization technology. VITROPIN-V(TM) is still in an early development
stage and is projected to require substantial funding and approximately three to
four years' additional development to be marketable.

     VITROJECT(TM) is a novel delivery device for administration of
VITROPIN(TM), VITROPIN-V(TM) and other substances that provide an entire
treatment regime within a single device that is easy and economical to use. FSH
currently must be given by either intramuscular or subcutaneous injection at the
same time in the evening, for 7 to 15 consecutive days. Many of the existing
products are administered by reconstitution of a single dose, loading into a
syringe and injection, with repetition of these steps in subsequent days.
VITROJECT(TM) may allow patients to self-inject fertility drugs by subcutaneous
administration at home with fewer drug manipulations and lower cost compared to
existing methods.

     2. Relevant Patents

     The USPTO issued the Company's first patent on November 23, 1999 (US Patent
No. 5,990,288). This invention was entitled "Methods for Purifying FSH" and
details methods to manufacture highly purified FSH from various sources,
including human urine, recombinant FSH sources, human gonadotrope cells (cells
of the human pituitary gland that elaborate FSH & LH) and animal extracts of
pituitary glands. Management believes this invention represents a significant
advance in the methods previously used to purify FSH and to produce therapeutic
FSH.

     During 2002, two other patents were issued to the Company regarding its
technology to produce FSH. The USPTO granted patent number 6,414,123 B1 and the
New Zealand Patent Office granted patent number 501,212 to the Company for a
patent entitled "Method for Purifying FSH". These patents provide additional
protection for the Company's previously patented FSH purification method.
Various other pending patent applications were abandoned during 2004 since the
Company lacked sufficient resources to pursue these patents.

     3. Regulatory Approval

     Drugs used to treat human infertility require registration with, and
approval from, appropriate government authorities prior to sale. In the United
States, the FDA oversees approval of such products. This process can be very
time consuming and require millions of dollars in capital expenditures. Due to
the cost and time required to complete tests for possible FDA approval, we do

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not anticipate submitting any drugs for consideration in the immediate future,
absent the assistance of an industry partner, research collaboration or other
source of capital funding. Additional discussion regarding funding of fertility
drug development is described below.

     4. Commercialization and Development Plan

     Further development of the Company's fertility drugs requires substantial
capital that is presently not available to the Company. Management has been and
continues to be engaged in confidential discussion with pharmaceutical firms
that have expressed interest in commercializing select fertility drugs owned by
the Company. In general, these firms presently produce, sell or distribute
fertility drugs in various territories of the world. The goal of these
discussions is to establish an arrangement whereby the Company would receive
funding for the sale or license of its technology to further the
commercialization of its technology and fertility drug candidates. Also, the
Company may exchange rights to certain market territories for developmental
products, e.g., VITROPIN-V(TM), for rights to distribute a partner's presently
marketed products in other territories thus providing the Company with more
rapid access to product revenue from fertility drugs. Management intends to
continue and accelerate these efforts. However, some previous efforts to
establish partnerships have been unsuccessful and there is no assurance that
future efforts will be successful.

     Another alternative to obtaining additional capital necessary to pursue
commercialization of the Company's fertility drug-related products is through
equity funding provided by sales of the Company's securities. As described
below, the Company now has a consulting contract with a firm to provide the
Company with assistance in fund raising, investment and public relations.
Management believes that this agreement will provide additional investment
capital to the Company and possibly sufficient levels of capital to pursue the
establishment of manufacturing and distribution of select fertility drugs. Such
funding may be provided through private placements, a secondary offering of
securities or possibly through a joint venture.

     An outside member of the Company's Board of Directors, Dr. James Posillico,
heads up the Company's current initiative to commercialize its fertility drugs.
Dr. Posillico, formerly Chief Scientific Officer of Cooper Surgical, Inc. (NYSE,
COO), has extensive experience in the development and commercialization of
women's health care products. He founded SAGE Biopharma in 1997 and developed an
innovative line of products including devices and supplies to support assisted
reproductive technologies. SAGE grew to over $4 million in sales in 2002, when
it was sold to Cooper Surgical, Inc. Prior to that, Dr. Posillico spent 10 years
with Serono, SA, the leading supplier of fertility drugs, where he held various
positions related to management, regulatory approvals and sales of a broad line
of fertility drugs and related products. Dr. Posillico is well connected with
the network of pharmaceutical firms involved in fertility drug development.
Under Dr. Posillico's guidance, we are now engaged in discussions with various
firms that develop and commercialize fertility drugs regarding collaboration to
commercialize the Company's technology related to treatment of infertility.

                                       8

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Other Recent Developments
-------------------------

     The Company's recent operations and development of its business plan have
been limited due to lack of sufficient capital resources. While the Company did
receive funding through the sale of its diagnostic operating unit in 2000, these
funds were essentially depleted in mid-2002. Since then, the Company's president
and CEO has provided or guaranteed debt financing through which the Company was
able to maintain a curtailed operation focused primarily on the development and
commercialization of the VITROCELL(TM) line of products. This source of funding
of the Company is now depleted. While the Company does anticipate revenues from
product sales in 2005, additional capital is needed to support the continued
expansion of the VITROCELL(TM) product line, especially the commercialization of
the human beta islets and related products as well the development of its
fertility drugs, which require significant capital with regard to regulatory
approvals from agencies including the FDA.

     Hence, management of the Company has been engaged in locating additional
sources of outside funding for the Company. We have recently entered into a
consulting agreement with Sussex Avenue Partners, located in Carlsbad, CA, to
provide the Company with assistance in locating appropriate funding on a "best
efforts" basis to support its operational and development needs, together with
an investor and public relations program designed to increase investor awareness
of the Company, its technology, products and future prospects. Management
believes that the agreement with Sussex Avenue Partners, which will be effective
on February 1, 2005, will improve shareholder value through increased liquidity
of the Company's stock and provide the Company with additional opportunities for
outside funding.

Competition
-----------

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

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

     Human cell lines are also produced and marketed by other companies with
substantially greater resources than the Company. Present suppliers of human
cells and related products include Crucell N.V., Cambrex Corporation and the
American Type Culture Collection. All of these firms have long-standing

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histories and significant financial resources. The Company believes its products
have competitive advantages as noted elsewhere, see: Human Cell Lines and
Related Products and Technology, but there is significant competition in the
markets that the Company has chosen to pursue.

TRADEMARKS

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

EMPLOYEES

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

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

ITEM 2.  DESCRIPTION OF PROPERTY

     The Company owns no real property. The Company leases its office and
laboratory space, consisting of 720 square feet, at 12635 East Montview
Boulevard, Suite 218, Aurora, CO 80010. The lease is a full service lease
allowing Company personnel access to common areas, conference rooms and use of
certain laboratory equipment. The lease for this space was renewed through
December 31, 2005. The Company may vacate the premises by giving 60 days' notice
to the landlord. Management believes that this space is adequate for the needs
of the Company for the foreseeable future.

                                       10

<PAGE>


ITEM 3.  LEGAL PROCEEDINGS

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

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

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

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     a) Market Information

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

     2003

     January 31                  $0.05             $0.03
     April 30                     0.04              0.04
     July 31                      0.045             0.03
     October 31                   0.2               0.03


     2004

     January 31                  $0.18             $0.06
     April 30                     0.13              0.07
     July 31                      0.07              0.05
     October 31                   0.21              0.03

                                       11

<PAGE>


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

     b) Holders

     As of December 31, 2004, the Company had approximately 1,956
shareholders of record, not including persons who hold their shares in "street
name".

     c) Dividends

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

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

     The following discussion and analysis covers our financial condition at
year end October 31, 2004, a comparison of our financial condition at that time
to year end 2003, our results of operation for the year ended October 31, 2004
and a comparison of those results to the year ended October 31, 2003. This
discussion and analysis should be read in conjunction with our financial
statements and notes appearing elsewhere in this report. The discussion should
also be read with the cautionary statements and risk factors appearing at the
end of this section.

Liquidity and Capital Resources

October 31, 2004
----------------

     The Company continues to have a shortage of working capital and liquidity
and reported a negative net worth at October 31, 2004. At fiscal year end
October 31, 2004, the Company had a working capital deficit of $287,189,
representing a decrease of $108,035 from fiscal year end October 31, 2003.
Current assets increased $10,027 from year-end 2003 to 2004 while total assets
decreased $27,847 during that time, the former from increased cash while the
latter was predominantly due to the write-down of impaired assets. Current
liabilities increased $118,062 from year-end 2003 to 2004 while total
liabilities increased $116,685, each predominantly from accrued debt and
deferred salary to the Company's president. This working capital has been
further reduced subsequent to year-end.

     During the fiscal year ended October 31, 2004, the Company's activities
provided $7,188 in cash, while during fiscal 2003, the Company used $7,503 in
cash. The general decrease in cash usage in the past two years reflects the
minimal cash available to the Company. Operating expenses have been minimized by
curtailing operations, deferral of salary and reduction of operating expenses to
fund only essential needs. The Company's present operations require

                                       12

<PAGE>


approximately $5,000/month in cash. Nearly all of our cash requirements during
2004 were funded or guaranteed by our president, and there is no assurance that
source of funding will continue. The Company anticipates needing approximately
equivalent capital to fund operations at the present minimal levels during
fiscal 2005. Expansion of operations beyond current levels would require
additional capital and additional personnel.

     The Company had lines of credit totaling $85,300 with $16,455 in available
credit at fiscal year end 2004. Credit balances have increased since then. The
Company must continue to service debt and the President personally guarantees
most of the Company debt. The Company did receive an additional $20,000 in cash
subsequent to the end of fiscal year 2004 through purchase of stock. Given the
current financial conditions, management believes that there is sufficient
capital to maintain operations through approximately the end of second quarter
2005. After that, and failing receipt of additional capital, the Company will be
forced to suspend operations.

     The Company remains dependent on receipt of additional cash to implement
its business plan and generate revenue in the future. The report of the
independent accountant that audited the Company's financial statements for the
year ended October 31, 2004 includes a qualification that the Company may not
continue as a going concern. In that event, the Company might be liquidated and
its assets sold to satisfy any claims of creditors. See note A to the financial
statements attached to this report for a more complete description of this
contingency.

     The Company continues to seek funding to maintain and expand its
operations. While a primary focus at the present time remains the sale of
VITROCELL(TM) products, the Company has also hired a firm to assist it in
raising capital. The VITROCELL(TM) products have now been launched and the
Company has entered into a distribution contract with a firm that specializes in
sales of biological products to research markets, Chemicon International, Inc.
Also, during 2004 the Company developed patent-pending technology related to the
generation of human beta islets from stem cells and the Company hopes to develop
this technology into marketable products targeting research markets during 2005.
These developments together with the Company's technology, products and product
candidates related to treatment of infertility, provide potential revenue
generation both in the near term and through a pipeline of products. Also, the
Company's technology related to the generation of beta islets from stem cells
may eventually be developed into a new cell therapy for diabetes, which is a
global health care problem and one of the most costly chronic diseases. (See
Item I, "Business" for a more detailed discussion of the Company's technology,
products and marketing and distribution plan.)

     Management believes that the current status of the Company and its future
prospects provide value to its shareholders and prospective investors.
Management has therefore recently hired Sussex Avenue Partners to assist in
increasing investor awareness through an accelerated public relations program.
Also, the agreement with Sussex provides the Company assistance in locating
capital for the Company, predominantly as private placements of Company stock,
which would be used to maintain and expand operations directed towards increased
product development and sales. Continued development of products requiring FDA
approval prior to marketing such as VITROPIN-V(TM) requires substantially more
financial resources than are presently available to the Company. The Company is

                                       13

<PAGE>


presently engaged in discussions with pharmaceutical companies that have
expressed interest in the commercialization of the Company's fertility drugs.
Management is pursuing these and other opportunities with the objective of
establishing strategic alliances to fund further development and
commercialization of its therapeutic products.

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

October 31, 2003
----------------

     At fiscal year end October 31, 2003, the Company had working capital
deficit of $179,154, consisting of current assets of $15,041 and current
liabilities of $184,195. This represents a decrease in working capital of
$122,061 from October 31, 2002. The decrease in working capital resulted from
accrued debt and salary.

     During fiscal 2003, the Company relied on funds from the sale of its
securities and debt financing to meet it working capital requirements.

     Total assets decreased from year-end 2002 to year-end 2003, primarily as a
result of the write-down of impaired assets. Total assets decreased by $125,281
from $224,370 at October 31, 2002 to $99,089 at October 31, 2003. Shareholders'
equity decreased by a similar amount during this period.

Results of Operations

Year Ended October 31, 2004
---------------------------

     During the year ended October 31, 2004, the Company realized a net loss of
$186,858, or $.02 per share, with $929 in product revenue. The net loss in 2004
was $75,420 less than the net loss of $262,278 in 2003. Coupled with the
decreased loss, the greater number of shares outstanding during fiscal 2004
reduced the loss per share from $.03 in 2003 to $.02 in 2004. However, this
difference is largely due to the difference in write-down due to impairment of
intangible assets, with approximately equivalent net losses in 2003 and 2004
without the write-down of assets, $149,907 in 2004 and $151,174 in 2003. In
2003, the Company determined that expenses related to FSH purification patents
that were previously capitalized (less depreciation) or deferred were unlikely
to be recovered in subsequent operations because of diminished marketability of
VITROPIN(TM), the Company's purified urinary FSH product. In 2004, the Company
abandoned its patent applications related to the multi-dose syringe driver since
it lacked the financial resources to pursue this patent and chose to utilize its
limited resources to proceed with the examination of its cell immortalization
patent in Europe.

                                       14

<PAGE>


     The loss from operations has been minimized during 2003 and 2004 while the
Company sustained an R&D program resulting in the launch and commercialization
of the VITROCELL(TM) product line. The continual reduction in operating losses
is attributable to management's efforts to increase operational efficiency in
light of reduced available capital.

     Management does not anticipate revenue from its fertility drugs in the
immediate future. Commercialization of these products depends on significant
funding, further product development including clinical trials, FDA approval,
and other conditions prior to commercial sale of any product. Establishment of a
strategic alliance could provide capital to accelerate product develop and may
include saleable products through cross licensing. (See item I, "Business" for
additional detail.)

     Management does anticipate revenues from the sale of VITROCELL(TM) products
in 2005. It is clear that there is a current and growing market for human cell
lines for various medical applications as noted elsewhere in this report. There
is apparent interest in the VITROCELL(TM) product line as judged by the
Company's ability to enter into a distribution agreement with a global firm
dedicated to sales of biological products to medical researchers. It is apparent
that there will be an initial period of market acceptance of the VITROCELL(TM)
product line, since these products are "new to the world". However, management
believes that the addition of human beta islets and related products will be an
important component to increased sales of the VITROCELL(TM) product line.

     Total operating expenses decreased from fiscal 2003 to fiscal 2004, from
$265,879 to $174,681. Without the write-off of patent expenses, operating
expenses decreased $17,025 in 2004 compared to 2003. Selling, general and
administrative expenses decreased $8,518 indicating some further reduction in
minimal operating expenses. Research and development expenses were also
decreased by $8,527.

     Other income decreased from fiscal 2003 to 2004, since interest expenses
increased as the Company increased its debt and there were no consulting fees
received in 2004 as there were in 2003.

Year Ended October 31, 2003.
----------------------------

     During the year ended October 31, 2003, the Company realized a net loss of
$262,278, or $.03 per share, on no revenue.

     Operating expenses were about equivalent from fiscal 2002 to fiscal 2003,
but without the loss due to impairment of intangible assets in 2003, operating
expenses were diminished by $124,104 as a result of the downsizing of
operations. Selling, general and administrative expenses were also decreased by
$47,837. Research and development expenses were also decreased by $60,979 as
operations were curtailed due to diminished working capital.

     Other income decreased from fiscal 2002 to 2003, primarily due to lack of
gain due to a settlement of lawsuit in 2002.

                                       15

<PAGE>


Recent Accounting Pronouncements

          In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - an
amendment of ARB No. 43, Chapter 4." This Statement clarifies the accounting for
abnormal amounts of idle facility expense, freight, handling costs, and wasted
materials. This Statement is effective for inventory costs incurred during
fiscal years beginning after June 15, 2005. The initial application of SFAS No.
151 is not expected to have a material impact on the Company's financial
statements.

     In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
Assets - an amendment of APB Opinion No. 29." This Statement eliminates the
exception for nonmonetary exchanges of similar productive assets and replaces it
with a general exception for exchanges of nonmonetary assets that do not have
commercial substance. A nonmonetary exchange has commercial substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange. This Statement is effective for nonmonetary asset exchanges
occurring in fiscal periods beginning after June 15, 2005. The Company does not
expect application of SFAS No. 153 to have a material affect on its financial
statements.

     In December 2004, the FASB issued a revision to SFAS No. 123, "Share-Based
Payment." This Statement supercedes APB Opinion No. 25, "Accounting for Stock
Issued to Employees" and its related implementation guidance. It establishes
standards for the accounting for transactions in which an entity exchanges its
equity instruments for goods or services. It also addresses transactions in
which an entity incurs liabilities in exchange for goods or services that are
based on the fair value of the entity's equity instruments or that may be
settled by the issuance of those equity instruments. This Statement does not
change the accounting guidance for share-based payment transactions with parties
other than employees provided in Statement No. 123 as originally issued and EITF
Issue No. 96-18. This Statement is effective for public entities that file as
small business issuers as of the beginning of the first fiscal period that
begins after December 15, 2005. The Company has not yet determined the impact of
SFAS No. 123 (revised) on its financial statements.

Critical Accounting Policies and Estimates

     The Company has identified the accounting policies described below as
critical to its business operations and the understanding of the Company's
results of operations. The impact and any associated risks related to these
policies on the Company's business operations is discussed throughout this
section where such policies affect the Company's reported and expected financial
results. The preparation of this Annual Report requires the Company to make
estimates and assumptions that affect the reported amount of assets and
liabilities of the Company, revenues and expenses of the Company during the
reporting period and contingent assets and liabilities as of the date of the
Company's financial statements. There can be no assurance that the actual
results will not differ from those estimates.

                                       16

<PAGE>


     Patents, Deferred Costs and Amortization

     Patents consist of costs incurred to acquire issued patents. Amortization
commences once a patent is granted. Costs incurred to acquire patents that have
not been issued are reported as deferred costs. If a patent application is
denied or expires, the costs incurred are charged to operations in the year the
application is denied or expires. The Company amortizes its patents over a
period of ten years. Amortization expense totaled $2,932 and $9,337 for the
years ended October 31, 2004 and 2003, respectively.

     Impairment and Disposal of Long-lived Assets

     The Company evaluates the carrying value of its long-lived assets under the
provisions of the Statement of Financial Accounting Standards ("SFAS") No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets". Statement No.
144 requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted future
cash flows estimated to be generated by those assets are less than the assets'
carrying amount. If such assets are impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the
fair value of the assets. Assets to be disposed of are reported at the lower of
the carrying value or fair value, less cost to sell.

     During the year ended October 31, 2004 and 2003, the Company completed a
balance sheet review that identified assets whose carrying amounts are not
recoverable. As a result of this review, the Company recorded asset impairment
charges of $36,951 and $111,104 during the year ended October 31, 2004 and 2003,
respectively, for the write-off of patents and deferred intellectual property
costs.

     Stock-Based Compensation

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

Recent Sales of Unregistered Securities

     During February 2004, the Company granted options to an outside director,
Dr. Posillico, for 31,765 shares of common stock of the Company at $0.17 per
share as compensation for serving on the Board of Directors. During May 2004,
the President exercised options and purchased 250,000 shares of the Company's
common stock for $10,000, or $.04 per share, which equaled the market value of
the common stock on the date of the stock option grant.

                                       17

<PAGE>


     The Company issued these shares or options directly, and paid no commission
in connection with the issuance. The Company relied on the exemptions from
registration provided by Section 4(2) of the 1933 Act, as the individuals were
afforded access to the type of information that would be contained in a
registration statement. The individuals with whom the Company transacted were
aware of the risks of the transaction, and the Company had a pre-existing
relationship with these individuals.

RISK FACTORS

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

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

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

     3. 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.

                                       18

<PAGE>


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

     5. Dependence on regulatory approvals. Prior to the marketing and sale of
the Company's fertility drug 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.

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

ITEM 7.  FINANCIAL STATEMENTS

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

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

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

Item 8A.  Controls and Procedures

     We maintain a system of controls and procedures designed to provide
reasonable assurance as to the reliability of the financial statements and other
disclosures included in this report. As of October 31, 2004, under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer, management has evaluated the effectiveness of the design and
operation of our disclosure controls and procedures. Based on that evaluation,
the Chief Executive Officer and the Chief Financial Officer concluded that our
disclosure controls and procedures were effective in timely alerting them to
required information to be included in our periodic filings with the Securities
and Exchange Commission. No significant changes were made to internal controls
or other factors that could significantly affect those controls subsequent to
the date of their evaluation.

                                       19

<PAGE>


                                    PART III

Item 9.  Directors and Executive Officers

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

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

     James R. Musick, Ph.D      58      President, Chief Executive Officer and
                                        Director

     Erik D. Van Horn           36      Vice President and Secretary

     James T. Posillico, Ph.D.  59      Director

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

     Directors of the Company serve until the next annual meeting of
shareholders and until their successors are elected and qualify. Officers serve
at the will of the Board of Directors.

     The Company currently has no audit or other committee of the Board of
Directors and no financial experts on its Board. The entire Board of Directors
performs the functions typically performed by an audit committee. There is no
"audit committee financial expert" on the Board, as defined by SEC rule.

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

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

     ERIK D. VAN HORN was appointed Vice President of the Company on August 7,
2000. He was also the Production Manager from 1993 to 2000 and a director of the
Company from 1993 to 2004. From 2002 to the present, he has been Supervisor of
Manufacturing at Amgen Boulder Inc. He received his Bachelor of Science in
Chemical Engineering from the University of Colorado in 1990.

     JAMES T. POSILLICO, Ph.D. was appointed to the Board of Directors on
November 3, 2003. Dr. Posillico has over 20 years experience in the
commercialization of women's health care products including devices and drugs
for treatment of infertility. Dr. Posillico received his Ph.D. in endocrinology
from Duke University Medical Center in 1982 and performed post-doctoral training
at Harvard Medical School, where he also served as Assistant Professor in the

                                       20

<PAGE>
<TABLE>
<CAPTION>


Departments of Medicine and Biochemistry from 1986 to 1991. Dr. Posillico was
formerly the Chief Scientific Officer for Cooper Surgical, Inc., listed on the
New York Stock Exchange; a provider of medical devices and products located in
Trumbull, Connecticut, a position he occupied from 2002 to January 2005. From
1997 to 2002, Dr. Posillico founded and managed a medical product and device
firm, SAGE Biopharma that specialized in providing support to assisted
reproductive technologies including in-vitro fertilization.

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

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

     Based solely on a review of Forms 3, 4 and 5 furnished to the Company under
relevant SEC rules, one officer and director, James Musick, Ph.D., failed to
file reports required under the Section 16(a) of the Securities Exchange Act of
1934, as amended. Dr. Musick failed to file two reports covering a total of
three transactions in securities of the Company.

Item 10.    Executive Compensation

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

                                    SUMMARY COMPENSATION TABLE

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

<S>                                <C>                 <C>                       <C>
James R. Musick, President         2004                $57,708                   0
and Chief Executive Officer        2003                $57,708                   01
                                   2002                $57,708                   0

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

1    Excludes options to purchase 383,333 shares of the Company's common stock
     issued in connection with loans made by this individual to the Company.
     See, Item 12 below.

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

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

     During 2004, the outside Directors including Erik Van Horn and James
Posillico, were each compensated $5,000 payable in stock, stock options or debt
reduction according the prerogative of the director. Mr. Van Horn reduced his
debt to the Company by $5,000 and Dr. Posillico received a stock option valued

                                       21
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


at $5,000 at the date of the grant of the option. There was no compensation to
Dr. Musick for serving on the Board of Directors. The Board may reevaluate this
compensation in the future, especially as it relates to actions taken by the
Company's Board of Directors during fiscal year 2005. Each director is also
entitled to reimbursement for reasonable and necessary expenses incurred on
behalf of the Company.

Option Grants For 2004
----------------------

     On February 13, 2004, the Company granted to Dr. Posillico options to
purchase 31,765 shares of the Company's common stock with an exercise price
equal to the common stock market value on the date of grant, or $0.17 per share.
The option is exercisable until February 13, 2014 and was issued as compensation
for serving on the Board of Directors of the Company. The option was granted
pursuant to the Equity Incentive Plan of 2000.

Year End Option Values

     The following table sets forth the value of unexercised options held by the
Named Officers at October 31, 2004. The last sales price of the Company's common
stock prior to October 31, 2004 was $.22 per share.

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

<S>                        <C>              <C>               <C>                       <C>
James R. Musick            0                0                 31,848                    $01

===================================================================================================================

1    Based upon the difference between the exercise price of $.625 and the last
     reported sale price of the Company's common stock of $.22 per share prior
     to October 31, 2004.

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

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

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

     The Plan authorizes total stock awards of up to 1,000,000 shares of the
Company's common stock plus an annual increase equal to the lesser of (i) four
per cent of the amount of stock outstanding on the date of the stockholders'
meeting for that year or (ii) the amount determined by the Board of Directors.
Based on annual increases, the total amount currently available for issuance
under the Plan (including options and grants already made) is 1,341,393. Awards
may take the form of incentive stock options, non-qualified stock options,
restricted stock awards, stock bonuses and other stock grants. If a stock award

                                       22
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


made under the New Plan expires, terminates, is canceled or settled in cash
without the issuance of all shares of common stock covered by the award, those
shares will be available for future awards under the Plan. Awards may not be
transferred except by will or the laws of descent and distribution. No awards
may be granted under the Proposed Plan after September 30, 2010.

     The Plan is administered by the Company's Board of Directors, which may
delegate its authority to a committee of the Board of Directors. The Board of
Directors has the authority to select individuals to receive awards, to
determine the time and type of awards, the number of shares covered by the
awards, and the terms and conditions of such awards in accordance with the terms
of the Plan. In making such determinations, the Board of Directors may take into
account the recipient's current and potential contributions and any other
factors the Board of Directors considers relevant. The Board of Directors is
authorized to establish rules and regulations and make all other determinations
that may be necessary or advisable for the administration of the Plan.

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

     During the year ended October 31, 2004, options to purchase 31,765 shares
of our common stock were issued under the Plan. At the fiscal year end, 437,629
options remained outstanding under the Plan and the 1992 Plan, with exercise
prices ranging from $.08 to $.81 per share, or a weighted average exercise price
of $.21 per share.

                                         Equity Compensation Plan Information

                                  The following table summarizes certain information about
                              options, warrants and rights of the Company at October 31, 2004

--------------------------------------------- ------------------------- ----------------------- ----------------------
                Plan Category                  Number of securities to     Weighted-average      Number of securities
                                               be issued upon exercise     exercise price of     remaining available
                                               of outstanding options,   outstanding options,    for future issuance
                                                 warrants and rights      warrants and rights        under equity
                                                                                                 compensation plans
                                                                                                (excluding securities
                                                                                                 reflected in column
                                                                                                         (a))

                                                                                                         (c)
                                                         (a)                      (b)
--------------------------------------------- ------------------------- ----------------------- ----------------------
<S>                                                    <C>                      <C>                   <C>
Equity compensation plans approved by                  437,629                  $.21                  882,795
security holders
--------------------------------------------- ------------------------- ----------------------- ----------------------
Equity  compensation  plans not  approved                0                       $0                       0
by security holders
--------------------------------------------- ------------------------- ----------------------- ----------------------
TOTAL                                                  437,629                                        882,795
--------------------------------------------- ------------------------- ----------------------- ----------------------

                                                          23
</TABLE>

<PAGE>


Item 11.   Security Ownership of Certain Beneficial Owners and Management

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

     The following table sets forth information as of January 31, 2005, based
solely on information available to the Company, with respect to the ownership of
the Company's common stock by all officers and directors individually, all
officers and directors as a group, and all beneficial owners known to the
Company to hold more than five percent (5%) of the Company's common stock. The
percentages in the table assume that any options owned by the beneficial owner
have been exercised, but that no other outstanding options have been exercised.

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

     Name and Address of Beneficial Owner        Number of Shares           %
     ------------------------------------        ----------------         ------

     Officers and Directors
     James R. Musick 1, 2                           2,227,753             22.16%
     12635 E. Montview Blvd.
     Aurora, Colorado 80010

     Erik Van Horn 3                                  534,016              5.16%
     12635 E. Montview Blvd.
     Aurora, Colorado 80010

     James T. Posillico 4
     5 Topping Way
     Chester, New Jersey 07930                         31,765              0.32%

     Officers and Directors as a group1,2,3,4       2,793,534             26.82%
     (3 individuals)

     Other Beneficial Owners
     Roger D. Hurst 5                               1,135,482             11.33%
     8100 Southpark Way
     Unit B-1
     Littleton, CO 80120

     The James R. Musick Trust                      1,740,764             17.37%
     12635 E. Montview Blvd.
     Aurora, Colorado 80010

     Lloyd Hansen                                   1,140,000             11.38%
     2646 S.W. Mapp Rd
     Ste. #304
     Palm City, FL 34990

     Kristine Brubaker                                764,002              7.62%

                                       24

<PAGE>


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

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

2    Includes 1,740,764 shares held by The James R. Musick Trust, of which Mr.
     Musick is a trustee and beneficiary.

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

4    Includes 31,765 shares of common stock underlying options exercisable at a
     price of $.0.17 per share until 2014.

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

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

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

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

Item 12.   Certain Relationships and Related Transactions

     During September 2003, the president loaned the Company $10,000 for working
capital. The note matures in August 2005 and carries a 10 percent interest rate.
Accrued interest payable on the loan totaled $167 at October 31, 2003 and $1,167
at October 31, 2004. In addition, in accordance with the terms of the note, the
Company granted the president options to purchase 125,000 shares of the
Company's common stock with an exercise price equal to the common stock market
value on the date of grant, or $.04 per share.

     During May 2003, the president loaned the Company $10,000 for working
capital. The note matures in May 2005 and carries a 10 percent interest rate.
Accrued interest payable on the loan totaled $458 at October 31, 2003 and $1,458
at October 31, 2004. In addition, in accordance with the terms of the note, the
Company granted the president options to purchase 125,000 shares of the
Company's common stock with an exercise price equal to the common stock market
value on the date of grant, or $.04 per share.

     During February 2003, the Company sold 222,222 shares of its common stock
to the president of the Company for $20,000, or $.09 per share, which equaled
the market value of the common stock on the transaction date.

     During May 2002, the Company began accruing its president's salary due to a
lack of working capital. The president's unpaid salary totaled $144,270 as of
October 31, 2004 and is included in the accompanying condensed financial
statements as "accrued salaries".

                                       25

<PAGE>


     During May 2002, the Company's Board of Directors approved a $14,000 loan
to the vice president of the Company. The loan was used to exercise options to
purchase 200,000 shares of the Company's common stock. The loan carries a five
percent interest rate and matured on May 8, 2004. The Company is holding stock
certificates in the name of the officer, totaling 116,700 shares of common
stock, as collateral for the loan, and the Company and the officer have made
arrangements for satisfaction of the loan in the future. During the period from
May 1, 2002 through October 31, 2003, the vice president earned $6,100 in
compensation, which was allocated against the balance due on the loan. At
October 31, 2003, the principal and related accrued interest owed on the loan
totaled $7,900 and $751, respectively.

                                     PART IV

Item 13. Exhibits and Reports on Form 8-K

(a)       Exhibits

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

No.       Description
---       -----------

1         Not applicable.

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

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

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

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

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

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

3.2(4)    Bylaws of the Company.

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

                                       26

<PAGE>


9         Not applicable.

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

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

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

10.4(7)   Promissory note issued by the Company to James R. Musick dated August
          23, 2002.

10.5(7)   Agreement for Liquidation of Shares between the Co. and World Wide
          Capital Investors dated June 17, 2002.

10.6(8)   Consulting Agreement between Sussex Avenue Partners, LLC and Vitro
          Diagnostics, Inc. dated February 1, 2005.

11        Not applicable.

13        Not applicable.

16        Not applicable.

18        Not applicable.

21        Not applicable.

22        Not applicable

23        Not applicable.

24        Not applicable.

27        Not applicable.

31        Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the
          Securities Exchange Act of 1934, as amended.

32        Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002.

99        Not applicable.

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

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

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

                                       27

<PAGE>


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

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

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

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

(7)  Filed as an Exhibit to Form 10-KSB for the year ended October 31, 2002.

(8)  Filed with this report.
--------------------------------------------------------------------------------

(b) Reports on Form 8-K.

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

Item 15.   Principal Accountant Fees and Services

     The Company currently has no audit committee of the Board of Directors, and
is not required to maintain such a committee since its stock is not quoted on
Nasdaq or traded on any national securities exchange. Accordingly, all material
decisions affecting the Company's audited financial statements, periodic
disclosure with the SEC and its relationship with its auditors are addressed by
the entire Board. The Board currently has no policies and procedures relating to
the pre-approval of audit and audit related services.

Audit Fees

     The Company paid or will pay Cordovano & Honeck, P.C. an aggregate of
$4,500 in fees for an audit of its 2004 financial statements and the review of
its financial statements contained in its quarterly reports filed during fiscal
2004.

All Other Fees

     The Company paid or will pay Cordovano & Honeck, P.C. an aggregate of
approximately $700 in fees in connection with the filing of corporate income tax
returns for 2004.

                                       28

<PAGE>


                                   SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has caused this Report to be signed on its
behalf by the undersigned thereunto duly authorized in Aurora, Colorado on the
4th day of February 2005.

                                          VITRO DIAGNOSTICS, INC.

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

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


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

/s/  James R. Musick              President, Chief Executive    February 4, 2005
-----------------------------     Officer, Principal Financial  ----------------
     James R. Musick              and Accounting Officer and
                                  Director



/s/  James T. Posillico           Director                      February 4, 2005
-----------------------------                                   ----------------
     James T. Posillico

                                       29

<PAGE>


                                 EXHIBIT INDEX

No.       Description
---       -----------

1         Not applicable.

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

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

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

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

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

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

3.2(4)    Bylaws of the Company.

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

9         Not applicable.

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

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

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

10.4(7)   Promissory note issued by the Company to James R. Musick dated August
          23, 2002.

10.5(7)   Agreement for Liquidation of Shares between the Co. and World Wide
          Capital Investors dated June 17, 2002.

10.6(8)   Consulting Agreement between Sussex Avenue Partners, LLC and Vitro
          Diagnostics, Inc. dated February 1, 2005.

11        Not applicable.

13        Not applicable.

16        Not applicable.

18        Not applicable.

21        Not applicable.

22        Not applicable

23        Not applicable.

24        Not applicable.

27        Not applicable.

31        Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the
          Securities Exchange Act of 1934, as amended.

32        Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002.

99        Not applicable.

                                       30

<PAGE>


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

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

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

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

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

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

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

(7)  Filed as an Exhibit to Form 10-KSB for the year ended October 31, 2002.

(8)  Filed with this report.

                                       31

<PAGE>


                             VITRO DIAGNOSTICS, INC.

                          Index to Financial Statements

                                                                           Page
                                                                           ----

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

Balance sheet at October 31, 2004........................................  F-3

Statements of operations for the years ended
     October 31, 2004 and 2003...........................................  F-4

Statement of changes in shareholders' deficit for
     the year ended October 31, 2004 and 2003............................  F-5

Statements of cash flows for the years ended
     October 31, 2004 and 2003...........................................  F-6

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

                                      F-1

<PAGE>


                          INDEPENDENT AUDITORS' REPORT


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


We have audited the balance sheet of Vitro Diagnostics, Inc. as of October 31,
2004, and the related statements of operations, changes in shareholders'
deficit, and cash flows, for each of the years in the two-year period ended
October 31, 2004. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Vitro Diagnostics, Inc. as of
October 31, 2004, and the results of its operations and its cash flows for each
of the two years in the period ended October 31, 2004 in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note A to the financial
statements, the Company has suffered significant operating losses since
inception and has a working capital deficit at October 31, 2004, which raises a
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note A. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

As discussed in the Summary of Significant Accounting Policies, the Company
capitalized deferred costs totaling $30,400 for patent applications as of
October 31, 2004. Recovery of the deferred costs is dependent on the issuance of
those patents and the subsequent realization of income therefrom. The ultimate
outcome of this uncertainty cannot presently be determined. Accordingly, the
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.



Cordovano and Honeck, LLP
Denver, Colorado
January 12, 2005

                                      F-2

<PAGE>
<TABLE>
<CAPTION>

                                               VITRO DIAGNOSTICS, INC.
                                                    Balance Sheet
                                                   October 31, 2004

<S>                                                                                                  <C>
Assets
Current assets:
  Cash ..................................................................................            $     7,188
  Accounts receivable ...................................................................                    753
  Inventory, at cost ....................................................................                  3,383
  Prepaid expenses ......................................................................                  3,744
                                                                                                     -----------
                                                                     Total current assets                 15,068

Equipment, net of accumulated depreciation of $3,633 ....................................                  2,565
Equipment under capital lease, net of accumulated depreciation of $15,236 ...............                   --
Patents, net of accumulated amortization of $6,108 (Note A) .............................                 23,209
Deferred costs (Note A) .................................................................                 30,400
                                                                                                     -----------
                                                                                                     $    71,242
                                                                                                     ===========

Liabilities and Shareholders' Deficit
Current liabilities:
  Current maturities on note payable (Note E) ...........................................            $     5,520
  Current maturities on capital lease obligation (Note E) ...............................                  3,808
  Accounts payable ......................................................................                 16,252
  Due to officer (Note B) ...............................................................                  3,537
  Note payable to officer (Note B) ......................................................                 50,000
  Accrued interest payable to officer (Note B) ..........................................                  5,525
  Accrued salaries (Note B) .............................................................                144,270
  Lines of credit (Note D) ..............................................................                 68,845
  Other accrued expenses ................................................................                  4,500
                                                                                                     -----------
                                                                Total current liabilities                302,257

Long-term debt (Note E):
  Note payable, less current maturities .................................................                  3,515
  Capital lease obligation, less current maturities .....................................                  2,560
                                                                                                     -----------
                                                                        Total liabilities                308,332
                                                                                                     -----------

Shareholders' deficit (Note F):
   Preferred stock, $.001 par value; 5,000,000 shares authorized;
     -0- shares issued and outstanding ..................................................                   --
   Common stock, $.001 par value; 50,000,000 shares authorized;
     10,020,555 shares issued and outstanding ...........................................                 10,021
   Additional paid-in capital ...........................................................              4,407,678
   Officer loan to exercise options, including $885 of accrued interest (Note B) ........                 (2,425)
   Stock options - 437,629 outstanding ..................................................                  8,003
   Accumulated deficit ..................................................................             (4,660,367)
                                                                                                     -----------
                                                              Total shareholders' deficit               (237,090)
                                                                                                     -----------
                                                                                                     $    71,242
                                                                                                     ===========

                                       See accompanying notes to financial statements

                                                           F-3
 <PAGE>

                                                VITRO DIAGNOSTICS, INC.
                                               Statements of Operations

                                                                                           For the Years Ended
                                                                                               October 31,
                                                                                    ---------------------------------
                                                                                        2004                 2003
                                                                                    -----------           -----------
Product sales ............................................................          $       929           $      --
                                                                                    -----------           -----------

Operating costs and expenses:
     Research and development ............................................              100,307               108,825
     Selling, general and administrative .................................               37,423                45,950
     Impairment of intangible assets (Note A) ............................               36,951               111,104
                                                                                    -----------           -----------
                                        Total operating costs and expenses              174,681               265,879
                                                                                    -----------           -----------
                                                      Loss from operations             (173,752)             (265,879)

Other income (expense):
     Consulting fees .....................................................                 --                  10,000
     Interest income, officer loan (Note B) ..............................                  134                   461
     Interest expense ....................................................              (13,240)               (6,860)
                                                                                    -----------           -----------
                                                  Loss before income taxes             (186,858)             (262,278)

Provision for income taxes (Note C) ......................................                 --                    --
                                                                                    -----------           -----------
                                                                 Net loss           $  (186,858)          $  (262,278)
                                                                                    ===========           ===========

Basic and diluted net loss per common share ..............................          $     (0.02)          $     (0.03)
                                                                                    ===========           ===========
Shares used in computing basic and diluted net loss per common share .....            9,788,472             9,366,955
                                                                                    ===========           ===========

                                      See accompanying notes to financial statements

                                                          F-4
<PAGE>


                                                   VITRO DIAGNOSTICS, INC.
                                        Statement of Changes in Shareholders' Deficit


                                                                   Preferred Stock                     Common Stock
                                                               --------------------------     ---------------------------
                                                                 Shares          Amount          Shares         Par Value
                                                               ----------      ----------      ----------      ----------
                               Balance, October 31, 2002             --        $     --         9,238,750      $    9,239

Common stock sold to an officer at
   $.09 per share (Note B) ..............................            --              --           222,222             222
Officer compensation charged against the
   loan to officer (Note B) .............................            --              --              --              --
Interest accrued on officer's equity loan (Note B) ......            --              --              --              --
Net loss for the year ended October 31, 2003 ............            --              --              --              --
                                                               ----------      ----------      ----------      ----------
                               Balance, October 31, 2003             --              --         9,460,972           9,461

Common stock options exercised,
   $.075 per share (Note B) .............................            --              --           133,333             133
Common stock options exercised,
   $.04 per share (Note B) ..............................            --              --           250,000             250
Common stock sold to an officer at
   $.10 per share (Note B) ..............................            --              --           100,000             100
Common stock sold to an investor at
   $.08 per share (Note B) ..............................            --              --            76,250              77
Officer compensation charged against the
   loan to officer (Note B) .............................            --              --              --              --
Interest accrued on officer's equity loan (Note B) ......            --              --              --              --
Net loss for the year ended October 31, 2004 ............            --              --              --              --
                                                               ----------      ----------      ----------      ----------
                               Balance, October 31, 2004             --        $     --        10,020,555      $   10,021
                                                               ==========      ==========      ==========      ==========


<PAGE>


                                                        VITRO DIAGNOSTICS, INC.
                                        Statement of Changes in Shareholders' Deficit (Continued)


                                                                            Loan to
                                                                            Officer
                                                            Additional    to Exercise
                                                             Paid-in        Stock          Stock      Accumulated
                                                             Capital       Options        Options       Deficit          Total
                                                           -----------   -----------    -----------   -----------    -----------

                              Balance, October 31, 2002    $ 4,352,360   $   (11,890)   $     8,003   $(4,211,231)   $   146,481

Common stock sold to an officer at
   $.09 per share (Note B) .............................        19,778          --             --            --           20,000
Officer compensation charged against the
   loan to officer (Note B) ............................          --           3,700           --            --            3,700
Interest accrued on officer's equity loan (Note B) .....          --            (461)          --            --             (461)
Net loss for the year ended October 31, 2003 ...........          --            --             --        (262,278)      (262,278)
                                                           -----------   -----------    -----------   -----------    -----------
                               Balance, October 31, 2003     4,372,138        (8,651)         8,003    (4,473,509)       (92,558)

Common stock options exercised,
   $.075 per share (Note B) ............................         9,867          --             --            --           10,000
Common stock options exercised,
   $.04 per share (Note B) .............................         9,750          --             --            --           10,000
Common stock sold to an officer at
   $.10 per share (Note B) .............................         9,900          --             --            --           10,000
Common stock sold to an investor at
   $.08 per share (Note B) .............................         6,023          --             --            --            6,100
Officer compensation charged against the
   loan to officer (Note B) ............................          --           6,360           --            --            6,360
Interest accrued on officer's equity loan (Note B) .....          --            (134)          --            --             (134)
Net loss for the year ended October 31, 2004 ...........          --            --             --        (186,858)      (186,858)
                                                           -----------   -----------    -----------   -----------    -----------
                               Balance, October 31, 2004   $ 4,407,678   $    (2,425)   $     8,003   $(4,660,367)   $  (237,090)
                                                           ===========   ===========    ===========   ===========    ===========

                                           See accompanying notes to financial statements.

                                                               F-5
<PAGE>


                                               VITRO DIAGNOSTICS, INC.
                                              Statements of Cash Flows


                                                                                           For the Years Ended
                                                                                                October 31,
                                                                                        ---------------------------
                                                                                           2004             2003
                                                                                        ---------         ---------
Cash flows from operating activities:
  Net loss .....................................................................        $(186,858)        $(262,278)
  Adjustments to reconcile net loss to net cash used in
   operating activities:
    Depreciation and amortization ..............................................            7,245            15,456
    Impairment of intangible assets (Note A) ...................................           36,951           111,104
    Interest income recognized on Officer's equity loan (Note B) ...............             (134)             (461
    Services charged against Officer's equity loan (Note B) ....................            6,360             3,700
  Changes in current assets and current liabilities:
    (Increase) decrease in accounts receivable, inventories,
      prepaid expenses and deposits ............................................           (2,839)           (1,297)
    Increase (decrease) in accounts payable, accrued expenses
      and payroll taxes payable ................................................           67,709            93,177
                                                                                        ---------         ---------
Net cash used in operating activities ..........................................          (71,566)          (40,599)
                                                                                        ---------         ---------

Cash flows from investing activities:
   Purchases of property and equipment .........................................             (601)             (481)
   Payments for patents and deferred costs .....................................           (6,121)           (7,004)
                                                                                        ---------         ---------
Net cash used in investing activities ..........................................           (6,722)           (7,485)
                                                                                        ---------         ---------

Cash flows from financing activities:
   Proceeds from issuance of notes payable (Note B) ............................           18,446            20,000
   Principal payments on notes payable .........................................           (5,705)           (1,802)
   Proceeds from line of credit, net ...........................................           39,815             5,040
   Principal payments on capital lease .........................................           (3,180)           (2,657)
   Proceeds from common stock options exercised ................................           20,000              --
   Proceeds from sale of common stock ..........................................           16,100            20,000
                                                                                        ---------         ---------
Net cash provided by (used in) financing activities ............................           85,476            40,581
                                                                                        ---------         ---------

                                                              Net change in cash            7,188            (7,503)
Cash, beginning of year ........................................................                             -7,503
                                                                                        ---------         ---------
                                                               Cash, end of year        $   7,188         $    --
                                                                                        =========         =========

Supplemental disclosure of cash flow information:
 Cash paid during the year for:
    Interest ...................................................................        $   9,198         $   4,635
                                                                                        =========         =========
    Income taxes ...............................................................        $    --           $    --
                                                                                        =========         =========

  Non-cash investing and financing transactions:
    Promissory note issued in exchange for payables (Note E) ...................        $    --           $   8,096
                                                                                        =========         =========

                                       See accompanying notes to financial statements.

                                                             F-6
</TABLE>

<PAGE>


                             VITRO DIAGNOSTICS, INC.
                          Notes to Financial Statements


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

     Nature of Organization

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

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

     The Company has also been granted a patent for its proprietary technology
     related to the immortalization of human cells. The Company believes this
     technology can be used in a variety of commercial applications including
     the treatment of degenerative diseases and drug discovery.

     The accompanying financial statements have been prepared on a going concern
     basis, which contemplates the realization of assets and satisfaction of
     liabilities in the normal course of business. As shown in the accompanying
     financial statements, the Company has suffered significant losses since
     inception and has a working capital deficit at October 31, 2004. These
     factors, among others, may indicate that the Company will be unable to
     continue as a going concern for a reasonable time.

     The financial statements do not include any adjustments relating to the
     recoverability of assets and classification of liabilities that might be
     necessary should the Company be unable to continue as a going concern. The
     Company's continuation as a going concern is dependent upon its ability to
     obtain capital from outside sources, generate sufficient cash flow to meet
     its obligations on a timely basis and ultimately to attain profitability.
     During the years ended October 31, 2004 and 2003, the president has loaned
     the Company funds for working capital on an "as needed" basis. There is no
     assurance that these loans will continue in the future. The Company plans
     to seek additional funding to maintain its operations through debt and
     equity financing. The Company is presently engaged in discussions with
     companies that have expressed interest in the commercialization of the
     Company's cell immortalization technology and the Company's fertility
     drugs. Management will pursue these and other opportunities with the
     objective of establishing strategic alliances to fund further fertility
     drug development and commercialization. Also, the Company recently launched
     a new product line, VITROCELL(TM), consisting of novel human cell lines for
     research and development. These products represent unique opportunities for
     researchers to utilize proliferating human cell lines for a variety of
     research applications including basic research in diabetes, pancreatic
     cancer and endocrinology of the pituitary gland. Management intends to
     pursue revenue generation from this product line and development of other
     related products to the fullest extent possible given its resources. There
     is no assurance that any of these initiatives will yield sufficient capital
     to maintain the Company's operations. In such an event, management intends
     to pursue various alternatives such as sale of its assets or merger with
     other entities.

                                      F-7

<PAGE>


                             VITRO DIAGNOSTICS, INC.
                          Notes to Financial Statements


     Summary of Significant Accounting Policies

     Use of estimates

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

     Cash equivalents

     For the purposes of the statement of cash flows, the Company considers all
     highly liquid debt instruments purchased with an original maturity of three
     months or less to be cash equivalents. The Company had no cash equivalents
     at October 31, 2004.

     Inventory

     Inventories, consisting of raw materials and VITROCELL(TM) product, are
     stated at the lower of cost (using the specific identification method) or
     market.

     Property, equipment and depreciation

     Property and equipment are stated at cost and are depreciated over the
     assets' estimated useful lives using the straight-line method. Depreciation
     expense totaled $4,313 and $6,119 for the years ended October 31, 2004 and
     2003, respectively.

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

     Patents, deferred costs and amortization

     Patents consist of costs incurred to acquire issued patents. Amortization
     commences once a patent is granted. Costs incurred to acquire patents that
     have not been issued are reported as deferred costs. If a patent
     application is denied or expires, the costs incurred are charged to
     operations in the year the application is denied or expires. The Company
     amortizes its patents over a period of ten years. Amortization expense
     totaled $2,932 and $9,337 for the years ended October 31, 2004 and 2003,
     respectively. Estimated aggregate amortization expense for each of the next
     five years is as follows:

                        Year ended October 31,
                        ----------------------

                                2005 ...............    $   2,932
                                2006 ...............        2,932
                                2007 ...............        2,932
                                2008 ...............        2,932
                                2009 ...............        2,932
                                                        ----------
                                                        $   14,660
                                                        ==========

                                      F-8

<PAGE>


                            VITRO DIAGNOSTICS, INC.
                          Notes to Financial Statements

<TABLE>
<CAPTION>

     The Company's patents and deferred costs consisted of the following at
     October 31, 2004:

<S>                                                                                 <C>
Patent
Method for purifying "FSH" (3 patents) .......................................       $   --
      These patents detail methods to manufacture highly purified FSH
      from various sources including human cells and animal extracts
      of pituitary glands. (See "impairment" below)
Immortalized cell lines and methods of making the same (1 patent) ............         29,317
      This patent is for proprietary technology related to the
      immortalization of human cells, which could be used in the
      treatment of degenerative diseases and drug discovery ..................
Less: accumulated amortization ...............................................         (6,108)
                                                                                     --------
                                                                                     $ 23,209
                                                                                     ========

Deferred costs
Method for purifying "FSH", continuation-
   in-part application .......................................................       $   --
      This patent application is a continuation on the above patents
      previously obtained by the Company that seeks to expand
      protection of its issued patent.  The patent application was also
      filed in the United Kingdom, Canada, Australia, and in the
      European Patent office. (See "impairment" below)
Immortalization of human cell lines (VITROPIN-V(TM)) .........................         30,400
      This patent application is a continuation on the above patent
      previously obtained by the Company that seeks to expand
      protection of its issued patent.  The patent application was also
      filed in the United Kingdom, Canada, Australia, New Zealand,
      Israel, and in the European Patent office ..............................
Multi-dose syringe driver (VITROJECT(TM)) ....................................           --
      Patent application for a device designed to administer injections
      more easily and economically. (See "impairment" below)
                                                                                     --------
                                                                                     $ 30,400
                                                                                     ========
</TABLE>

     Impairment and Disposal of Long-Lived Assets

     The Company evaluates the carrying value of its long-lived assets under the
     provisions of Statement of Financial Accounting Standard ("SFAS") No. 144,
     "Accounting for the Impairment or Disposal of Long-Lived Assets". Statement
     No. 144 requires impairment losses to be recorded on long-lived assets used
     in operations when indicators of impairment are present and the
     undiscounted future cash flows estimated to be generated by those assets
     are less than the assets' carrying amount. If such assets are impaired, the
     impairment to be recognized is measured by the amount by which the carrying
     amount of the assets exceeds the fair value of the assets. Assets to be
     disposed of are reported at the lower of the carrying value or fair value,
     less costs to sell.

     During the years ended October 31, 2004 and 2003, the Company completed
     balance sheet reviews that identified assets whose carrying amounts are not
     recoverable. As a result of this review, the Company recorded asset
     impairment charges of $36,951 and $111,104 during the years ended October
     31, 2004 and 2003, respectively, for the write-off of patents and deferred
     intellectual property costs as follows:

                                      F-9
<PAGE>


                           VITRO DIAGNOSTICS, INC.
                         Notes to Financial Statements


<TABLE>
<CAPTION>

October 31, 2004                                           Accumulated
                                                          Amortization       Book Value                    Book Value at
                                             Original        Through          Prior to         Asset        October 31,
               Description                    Cost       April 30, 2003      Impairment     Impairment         2004
------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>            <C>                <C>            <C>             <C>
Deferred Intellectual Property Costs:
Multi-dose syringe driver                   $  36,951       $    --          $  36,951       $ (36,951)       $  --
                                            =========       =========        =========       =========        =======


October 31, 2003                                           Accumulated
                                                          Amortization       Book Value                    Book Value at
                                             Original        Through          Prior to         Asset        October 31,
               Description                    Cost       April 30, 2003      Impairment     Impairment         2003
------------------------------------------------------------------------------------------------------------------------

Patents:
Method for purifying FSH (3 patents)        $ 128,089       $ (29,328)       $  98,761       $ (98,761)       $  --

Deferred Intellectual Property Costs:
Continuation-in-part application
   related to FSH patents                      10,339            --             10,339         (10,339)          --
Other patent application costs                  2,004            --              2,004          (2,004)          --
                                            ---------       ---------        ---------       ---------        -------
                                   Totals   $ 140,432       $ (29,328)       $ 111,104       $(111,104)       $  --
                                            =========       =========        =========       =========        =======
</TABLE>

     Income taxes

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

     Revenue and cost recognition

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

     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.

     Net loss per share

     The Company reports net loss per share using a dual presentation of basic
     and diluted loss per share. Basic net loss per share excludes the impact of
     common stock equivalents. Diluted net loss per share utilizes the average
     market price per share when applying the treasury stock method in
     determining common stock equivalents. Common stock options outstanding at
     October 31, 2004 were not included in the diluted loss per share as all

                                      F-10
<PAGE>


                            VITRO DIAGNOSTICS, INC.
                         Notes to Financial Statements


     437,629 options were anti-dilutive. Therefore, basic and diluted losses per
     share at October 31, 2004 were equal.

     Stock-based compensation

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

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

     Recent accounting standards

     In May 2003, the Financial Accounting Standards Board ("FASB") issued SFAS
     No. 150, "Accounting for Certain Financial Instruments with Characteristics
     of both Liabilities and Equity". This Statement establishes standards for
     classifying and measuring as liabilities certain financial instruments that
     embody obligations of the issuer and have characteristics of both
     liabilities and equity. SFAS No. 150 is effective at the beginning of the
     first interim period beginning after June 15, 2003; including all financial
     instruments created or modified after May 31, 2003. SFAS No. 150 currently
     has no impact on the Company.

     In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - an
     amendment of ARB No. 43, Chapter 4." This Statement clarifies the
     accounting for abnormal amounts of idle facility expense, freight, handling
     costs, and wasted materials. This Statement is effective for inventory
     costs incurred during fiscal years beginning after June 15, 2005. The
     initial application of SFAS No. 151 is not expected to have a material
     impact on the Company's financial statements.

     In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
     Assets - an amendment of APB Opinion No. 29." This Statement eliminates the
     exception for nonmonetary exchanges of similar productive assets and
     replaces it with a general exception for exchanges of nonmonetary assets
     that do not have commercial substance. A nonmonetary exchange has
     commercial substance if the future cash flows of the entity are expected to
     change significantly as a result of the exchange. This Statement is
     effective for nonmonetary asset exchanges occurring in fiscal periods
     beginning after June 15, 2005. The Company does not expect application of
     SFAS No. 153 to have a material affect on its financial statements.

     In December 2004, the FASB issued a revision to SFAS No. 123, "Share-Based
     Payment." This Statement supercedes APB Opinion No. 25, "Accounting for
     Stock Issued to Employees" and its related implementation guidance. It
     establishes standards for the accounting for transactions in which an
     entity exchanges its equity instruments for goods or services. It also
     addresses transactions in which an entity incurs liabilities in exchange
     for goods or services that are based on the fair value of the entity's
     equity instruments or that may be settled by the issuance of those equity
     instruments. This Statement does not change the accounting guidance for

                                      F-11

<PAGE>


                           VITRO DIAGNOSTICS, INC.
                         Notes to Financial Statements


     share-based payment transactions with parties other than employees provided
     in Statement No. 123 as originally issued and EITF Issue No. 96-18. This
     Statement is effective for public entities that file as small business
     issuers as of the beginning of the first fiscal period that begins after
     December 15, 2005. The Company has not yet determined the impact of SFAS
     No. 123 (revised) on its financial statements.

NOTE B: RELATED PARTY TRANSACTIONS

     Indebtedness to officer

     During the year ended October 31, 2004, the Company's president paid $3,537
     in expenses on behalf of the Company, which remained unpaid as of October
     31, 2004. The $3,537 is included in the accompanying condensed financial
     statements as "Due to officer".

     Notes payable

     During October 2004, the president loaned the Company $10,000 for working
     capital in exchange for a promissory note. The note matures in October 2006
     and carries a 10 percent interest rate. Accrued interest payable on the
     loan totaled $42 at October 31, 2004.

     During September 2003, the president loaned the Company $10,000 for working
     capital in exchange for a promissory note. The note matures in August 2005
     and carries a 10 percent interest rate. Accrued interest payable on the
     loan totaled $1,167 at October 31, 2004. In addition, in accordance with
     the terms of the note, the Company granted the president options to
     purchase 125,000 shares of the Company's common stock with an exercise
     price equal to the common stock market value on the date of grant, or $.04
     per share. The president exercised these options during May 2004 (see Note
     F).

     During May 2003, the president loaned the Company $10,000 for working
     capital in exchange for a promissory note. The note matures in May 2005 and
     carries a 10 percent interest rate. Accrued interest payable on the loan
     totaled $1,458 at October 31, 2004. In addition, in accordance with the
     terms of the note, the Company granted the president options to purchase
     125,000 shares of the Company's common stock with an exercise price equal
     to the common stock market value on the date of grant, or $.04 per share.
     The president exercised these options during April 2004 (see Note F).

     On August 23, 2002, the Company's president loaned the Company $20,000 for
     working capital in exchange for a promissory note. The note carries an
     eight percent interest rate and matured on August 23, 2003. The note is
     currently in default. Principal unpaid as of August 23, 2003 accrues
     interest at ten percent. Accrued interest totaled $3,900 at October 31,
     2004. The note is collateralized by a first lien on the Company's patents
     related to FSH purification. In addition, in accordance with the terms of
     the note, the Company granted the president options to purchase 133,333
     shares of the Company's common stock with an exercise price equal to the
     common stock market value on the date of grant, or $.075 per share. The
     president exercised these options during November 2003 (see Note F).

     Accrued salary

     During May 2002, the Company began accruing its president's salary due to a
     lack of working capital. The president's unpaid salary totaled $144,270 as
     of October 31, 2004 and is included in the accompanying condensed financial
     statements as "Accrued salaries".

                                      F-12

<PAGE>


                           VITRO DIAGNOSTICS, INC.
                         Notes to Financial Statements


     Officer loan

     During May 2002, the Company's Board of Directors approved a $14,000 loan
     to the vice president of the Company. The loan was used to exercise options
     to purchase 200,000 shares of the Company's common stock. The loan carries
     a five percent interest rate and matured on May 8, 2004. The Company is
     holding stock certificates in the name of the officer, totaling 116,700
     shares of common stock, as collateral for the loan. During the period from
     May 1, 2002 through October 31, 2004, the vice president earned $12,460 in
     compensation, which was allocated against the balance due on the loan. At
     October 31, 2004, the principal and related accrued interest owed on the
     loan totaled $1,540 and $885, respectively.

     Common stock sales

     During June 2004, the Company sold 100,000 shares of its common stock to
     the president of the Company for $10,000, or $.10 per share, which equaled
     the market value of the common stock on the transaction date.

     During February 2003, the Company sold 222,222 shares of its common stock
     to the president of the Company for $20,000, or $.09 per share, which
     equaled the market value of the common stock on the transaction date.

NOTE C: INCOME TAXES

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

                                                                October 31,
                                                             ------------------
                                                              2004        2003
                                                             ------      ------
     U.S. federal statutory graduated rate ..............     29.60%     32.30%
     State income tax rate, net of federal benefit ......      3.26%      3.14%
     Net operating loss for which no tax benefit
       is currently available ...........................    (32.86%)   (35.44%)
                                                             -------    ------
                                     Effective rate .....      0.00%      0.00%

     At October 31, 2004, deferred taxes consisted of a net tax asset of
     $1,198,696, due to operating loss carryforwards of $3,250,455, which was
     fully allowed for in the valuation allowance of $1,198,696. 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, 2004 and 2003 were $61,402 and $92,946, respectively. The changes in
     the valuation allowance for the yeas ended October 31, 2004 and 2003 also
     totaled $61,402 and $92,946, respectively. Net operating loss carryforwards
     will expire through 2024.

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

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

                                      F-13

<PAGE>


                           VITRO DIAGNOSTICS, INC.
                         Notes to Financial Statements


NOTE D: LINES OF CREDIT

     The Company has a $10,000 line of credit of which $644 was unused at
     October 31, 2004. The interest rate on the credit line was 13.75% at
     October 31, 2004. Principal and interest payments are due monthly.

     The Company also has six credit cards with a combined credit limit of
     $75,300, of which $15,811 was unused at October 31, 2004. The interest
     rates on the credit cards range from 9.74% to 20.83% as of October 31,
     2004.

NOTE E: LONG-TERM DEBT

     Note Payable

     During August 2003, the Company converted liabilities owed to its attorney
     into a promissory note, which had a balance of $6,294 at October 31, 2003.
     The note carries a 10 percent interest rate and is payable at the rate of
     $500 per month. During the year ended October 31, 2004, the Company
     incurred an additional $8,446 in legal fees and paid $5,705 against the
     principal balance. The Company also paid $335 and $198 toward interest
     expense for the years ended October 31, 2004 and 2003, respectively. As of
     October 31, 2004, the Company owed $9,035 on the note. Future maturities of
     the note are as follows:

                  Year ended October 31,
                  ----------------------
                        2005 ........................     $  5,520
                        2006 ........................        3,515
                                                          --------
                                                          $  9,035
                                                          ========

     Capital Lease Obligation

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

                  Year ended October 31,
                  ----------------------
                        2005 ........................     $  4,657
                        2006 ........................        2,716
                                                          --------
                                                             7,373
                  Less: imputed interest ............       (1,005)
                                                          --------
                  Present value of net minimum
                    lease payments ..................     $  6,368
                                                          ========

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

NOTE F: SHAREHOLDERS' EQUITY

     During June 2004, the Company sold 76,250 shares of its common stock to an
     unrelated third-party investor for $6,100, or $.08 per share.

                                      F-14

<PAGE>


                             VITRO DIAGNOSTICS, INC.
                          Notes to Financial Statements


     Incentive plans

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

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

                                                   Options Outstanding and Exercisable
                                                ---------------------------------------            Weighted Average
                                                 Number of               Exercise Price             Exercise Price
                                                   Shares                  Per Share                  Per Share
                                                 ---------               --------------             --------------
<S>                                              <C>                    <C>      <C>                 <C>
Balance at October 31, 2002 ...........           704,197                $.075 to $1.50               $   0.35
   Options granted ....................           250,000                $    0.04                    $   0.04
   Options exercised ..................              --                  $    0.00                    $   --
   Options expired ....................          (165,000)               $.14 to $1.50                $   0.96
                                                 --------                                             --------

Balance at October 31, 2003 ...........           789,197                $.04 to $.81                 $   0.14
   Options granted ....................            31,765                $    0.17                    $   0.17
   Options exercised ..................          (383,333)               $.04 to $.075                $   0.05
   Options expired ....................              --                  $    0.00                    $   --
                                                 --------                                             --------

Balance at October 31, 2004 ...........           437,629                $.08.to.$.81                 $   0.21
                                                 ========
</TABLE>


     Stock options - employees

     During February 2004, the Company granted 31,765 options to a director 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 the grant date were $.17 and $.135, respectively.

     Pro forma information regarding net income and earnings per share is
     required by SFAS 123 as if the Company had accounted for its granted stock
     options under the fair value method of that Statement. The fair value for
     the options granted during the year ended October 31, 2004 was estimated at
     the date of grant using the Black-Scholes option-pricing model with the
     following assumptions:

                                      F-15

<PAGE>


                            VITRO DIAGNOSTICS, INC.
                         Notes to Financial Statements


         Risk-free interest rate ...............................      3.00%
         Dividend yield ........................................      0.00%
         Volatility factor .....................................    109.79%
         Weighted average expected life ........................     5 years

     During the year ended October 31, 2003, the Company granted 250,000 options
     to its president with exercise prices equal to the common stock market
     value on the date of grant. The weighted average exercise price and
     weighted average fair value of these options as of October 31, 2002 were
     $.04 and $.04, respectively.

     Pro forma information regarding net income and earnings per share is
     required by SFAS 123 as if the Company had accounted for its granted stock
     options under the fair value method of that Statement. The fair value for
     the options granted during the fiscal year ended October 31, 2003 was
     estimated at the date of grant using the Black-Scholes option-pricing model
     with the following assumptions:

         Risk-free interest rate ...............................      2.00%
         Dividend yield ........................................      0.00%
         Volatility factor .....................................    785.38%
         Weighted average expected life ........................     5 years

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

                                                        For the Years Ended
                                                           October 31,
                                                    ---------------------------
                                                       2004             2003
                                                    ---------       -----------

Net loss, as reported ..........................    $(186,858)      $  (262,278)
                                                    =========       ===========

Pro forma net loss .............................    $(191,146)      $  (272,278)
                                                    =========       ===========

Basic and diluted net loss per common
   share, as reported ..........................    $   (0.02)      $     (0.03)
                                                    =========       ===========

Pro forma basic and diluted net loss
   per common share .............................   $   (0.02)      $     (0.03)
                                                    =========       ===========

NOTE G: COMMITMENT

     The Company entered into an operating lease agreement on November 8, 2004.
     Under the lease, the Company receives the use of a laboratory facility,

                                      F-16

<PAGE>


                            VITRO DIAGNOSTICS, INC.
                         Notes to Financial Statements


     equipment and furnishings within the facility, common areas, and reception
     services. The lease term commences January 1, 2005 and ends December 31,
     2005. Rent payments of $1,512 are payable under the lease on or before the
     first of each month. Future minimum payments under the facilities lease
     totaled $18,144 at October 31, 2004. Facilities rent expense for the years
     ended October 31, 2004 and 2003 totaled $24,025 and $23,950, respectively.

NOTE H: SUBSEQUENT EVENT

     During January 2005, the Company sold 100,000 shares of its common stock to
     the president of the Company for $20,000, or $.20 per share. Following the
     stock sale, the Company had 10,120,555 common shares issued and
     outstanding.

                                      F-17