10-Q

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

FORM 10-Q

[ X ]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2014

OR

[   ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT

For the transition period from          to         

Commission file number 1-17378

VITRO DIAGNOSTICS, INC.

(Exact Name of Small Business Issuer as Specified in its Charter)

Nevada	84-1012042
(State or other jurisdiction	I.R.S. Employer
of incorporation or organization)	Identification number

4621 Technology Drive, Golden, CO  80403
(Address of Principal Executive Offices)

Issuer's telephone number:     (303) 999-2130

Former name, former address, and former fiscal year, if changed since last report

Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the last 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  

Yes  [ X ]    No [    ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,  a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):  

Large accelerated filer [    ] Accelerated filer [    ]   Non-accelerated filer [    ]

Smaller Reporting Company [  X  ]  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [   ]  No  [ X ].

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [  ] No [  ]

As of March 17, 2014, the Registrant had 19,803,403shares of its Common Stock outstanding.

PART 1.  FINANCIAL INFORMATION

Item 1.

   Financial Statements

The financial statements included herein have been prepared by Vitro Diagnostics, Inc. (the Company), pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such SEC rules and regulations.  In the opinion of management of the Company the accompanying statements contain all adjustments necessary to present fairly the financial position of the Company as of January 31, 2014 and October 31, 2013, and its results of operations for the three month periods ended January 31, 2014 and 2013, its statement of changes of shareholders’ deficit for the period November 1, 2012 through January 31, 2014, and its cash flows for the three month periods ended January 31, 2014 and 2013.  The results for these interim periods are not necessarily indicative of the results for the entire year.  The accompanying financial statements should be read in conjunction with the financial statements and the notes thereto filed as a part of the Company's annual report on Form 10-K.    

VITRO DIAGNOSTICS, INC. Balance Sheets
		January 31, 2014	October 31, 2013
		(unaudited)
Assets
Current assets:
	Cash	$                5,804	$                2,197
	Accounts receivable	3,631	4,733
	Accounts receivable – related parties (Note B)	20,602	700
	Inventory, at cost	25,782	25,224
	Prepaid and other current assets	-	302
	Total current assets	55,819	33,156
Equipment, net of accumulated depreciation of $110,865 and $107,092		51,508	10,764
Patents, net of accumulated amortization of $14,178 and $13,999 (Note A)		17,177	17,976
Deferred costs (Note A)		12,829	12,829
Other assets		1,449	1,449
	Total assets	$            138,782	$              76,174
Liabilities and Shareholders' Deficit
Current liabilities:
	Current maturities on capital lease obligation	$              21,488	$                     -
	Lines of credit (Note D)	36,557	37,292
	Accounts payable	22,553	28,238
	Accounts payable - related parties (Note B)	40,829	30,391
	Other accrued liabilities	6,196	-
	Advances and accrued interest payable to officer (Note B)	776,183	710,924
	Accrued payroll expenses (Note B)	1,205,958	1,202,808
	Total current liabilities	2,109,764	2,009,653
Capital lease obligation		17,405	-
	Total liabilities	2,127,169	2,009,653
Commitments and contingencies (Notes A, B, C, D, E, F, G, H, I and J)
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;     19,803,403 shares issued and outstanding
		19,803	19,803
	Additional paid-in capital	5,413,015	5,413,015
	Services prepaid with common stock	-	-
	Accumulated deficit	(7,421,205)	(7,366,297)
	Total shareholders' deficit	(1,988,387)	(1,933,479)
	Total liabilities and shareholders' deficit	$            138,782	$              76,174

See accompanying notes to these unaudited financial statements

1

		VITRO DIAGNOSTICS, INC. Statements of Operations (unaudited)
			For the Three Months Ended
			January 31,
			2014	2013
Product sales			$            7,031	$          14,778
	Cost of goods sold		(1,670)	(3,818)
		Gross profit	5,361	10,960
Professional services income			19,307	-
Net revenue			24,668	10,960
Operating costs and expenses:
	Research and development		35,861	27,143
	Selling, general and administrative		26,065	8,712
		Total operating costs and expenses	61,926	35,855
		Loss from operations	(37,258)	(24,895)
Other income (expense):
	Interest expense		(17,650)	(13,815)
		Income (loss) before income taxes	(54,908)	(38,710)
Provision for income taxes (Note C)			-	-
		Net income (loss)	$         (54,908)	$         (38,710)
Net loss per common share, basic and diluted			$            (0.00)	$            (0.00)
Shares used in computing net loss per common share:
	Basic and diluted		19,803,403	19,308,912

See accompanying notes to these unaudited financial statements

2

VITRO DIAGNOSTICS, INC.
Statement of Changes in Shareholders' Deficit
						Services
					Additional	Prepaid with
	Preferred Stock		Common Stock		Paid-in	Common	Accumulated
	Shares	Amount	Shares	Par Value	Capital	Stock	Deficit	Total
Balance, October 31, 2012	-	-	19,308,912	$   19,309	$     5,382,509	$     (1,458)	$     (7,155,093)	$     (1,754,733)
Prepaid services earned (Note E)	-	-	-	-	-	11,458	-	11,458
Common stock issued to director for future services (Note E)	-	-	169,491	169	9,831	(10,000)	-	-
Common stock issued for consulting services (Note E)	-	-	75,000	75	5,925	-	-	6,000
Conversion of accounts payable (Note E)	-	-	250,000	250	14,750	-	-	15,000
Net loss for the year October 31, 2013	-	-	-	-	-	-	(211,204)	(211,204)
Balance, October 31, 2013	-	-	19,803,403	$   19,803	$     5,413,015	$            -	$     (7,366,297)	$     (1,933,479)
Net loss for the three months ended January 31, 2014	-	-	-	-	-	-	(54,908)	(54,908)
Balance, January 31, 2014 (unaudited)	-	-	19,803,403	$   19,803	$     5,413,015	$            -	$     (7,421,205)	$     (1,988,387)

See accompanying notes to these unaudited financial statements

3

VITRO DIAGNOSTICS, INC.
Statements of Cash Flows
(unaudited)
		For The Three Months Ended
		January 31,
		2014	2013
Cash Flows from operating activities:
	Net loss	$       (54,908)	$       (38,710)
	Adjustments to reconcile net loss to net cash used in   operating activities:
	Depreciation and amortization	4,572	4,423
	Stock-based compensation	-	625
	Changes in current assets and current liabilities:
	Decrease (increase) in accounts receivable, inventories,    prepaid expenses and deposits
		(19,056)	55
	Increase in accounts payable and accrued expenses	29,358	(15,050)
Net cash used in operating activities		(40,034)	(48,657)
Cash flows from investing activities:
	Purchases of equipment	(217)	(5,839)
	Payments for patents and deferred costs	-	(592)
Net cash used in investing activities		(217)	(6,431)
Cash flows from financing activities:
	Proceeds from advances from officer	50,000	52,032
	Draws (payments) on lines of credit, net	(735)	(318)
	Principal payments on capital lease	(5,407)	-
Net cash provided by financing activities		43,858	51,714
	Net change in cash	3,607	(3,374)
Cash, beginning of year		2,197	5,286
	Cash, end of year	$          5,804	$          1,912
Supplemental disclosure of cash flow information:
	Cash paid during the year for:
	Interest	$          2,391	$          1,774
	Income taxes	$                  -	$                  -
	Non-cash investing and financing activities:
	Purchase of equipment under capital lease	$        44,300	$               -

See accompanying notes to these unaudited financial statements

4

VITRO DIAGNOSTICS, INC.

NOTES TO UNAUDITED 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 February 3, 1986.  From November of 1990 through July 31, 2000, the Company was engaged in the development, manufacturing and distribution of purified human antigens (“Diagnostics”) that were derived primarily from human tissues.  The Company also developed cell technology including immortalization of certain cells that allowed entry into other markets besides diagnostics.  However, during the 1990’s, the Company’s sales were solely attributable to the sales of purified human antigens for diagnostic applications.   

Following the sale of its Diagnostics operations in August of 2000, the Company began devoting all efforts to its cellular generation technology which evolved from a focus on induction of cellular immortalization to technology related to stem cells.  Stem cell technology has potentially broad application to many medical areas, including drug discovery and development together with numerous therapeutic applications to diseases involving cellular degeneration, injury or to the treatment of cancer.  The Company launched a series of products targeting basic research in stem cell technology in 2009.  These “Tools for Stem Cell and Drug Discovery™” offer researchers basic tools needed to advance stem cell technology including stem cells and their derivatives, media for growth and differentiation of stem cells and advanced tools for measurement of stem cell quality, potency and response to toxic agents.  The Company has been granted patents for its proprietary technology related to the immortalization of human cells and subsequently expanded this technology to include patented and patent-pending technology involving generation of stem cells with potential application to a variety of commercial opportunities including the treatment of degenerative diseases and drug discovery.

The Company also owns patented technology related to treatment of human infertility.  The Company has been granted a US patent for its process to manufacture VITROPIN™.  VITROPIN™ is a highly purified urinary follicle-stimulating hormone (“FSH”) preparation produced according to the Company’s patented purification process.

The Company also owns patented technology that provides protection to a specific cell line derived from human pancreatic tissues that gives rise to structures comparable to the Islets of Langerhans (beta islets).  These islets also synthesize and secrete insulin in response to elevated glucose levels, as do beta islets contained within pancreatic tissue.  Vitro has also developed a process for the commercial production its cell line-derived islets.  Furthermore, the Company previously obtained regulatory approval for an animal protocol to determine reversal of Type I diabetes, a critical step in the demonstration of efficacy.  This patent affords an exclusive proprietary position to the Company for a new cellular therapy to treat Type I diabetes.

5

The Company is currently focused on revenue generation from its stem cell-based research products and to expanded opportunities for revenue generation in drug discovery and development together with select opportunities in regenerative medicine.

Basis of Presentation – Going Concern

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has suffered significant losses since inception and has working capital and shareholders’ deficits of $(2,053,945) and $(1,988,387), respectively, at January 31, 2014, which raise substantial doubt about its ability to continue as a going concern. In view of these matters, realization of certain of the assets in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financial requirements, raise additional capital, and generate revenues and profits from operations.

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 has financed its operations primarily through cash advances from the Company’s president, as well as through various private placements of equity securities.  During the year ended October 31, 2012, the President advanced the Company a total of $114,032 for working capital on an “as needed” basis, as well as $50,000 during the quarter ended January 31, 2013.  There is no assurance that these advances will continue in the future.

The Company has recently entered into a non-binding Letter of Intent with Neuromics, Inc. to acquire this company through an exchange of its securities and cash (See Note I, Subsequent Events).  Completion of this merger would substantially increase the revenue generation of the combined entities and improve the Company’s financial condition.  Also, the Company and Neuromics, Inc. now operate in close association including distribution of Vitro products by Neuromics as well as joint development of new business opportunities in drug discovery and regenerative medicine.

There is no assurance that these initiatives will yield sufficient capital to maintain the Company’s operations. In such an event, management intends to pursue various strategic alternatives.

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.

6

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.

Accounts receivable

Accounts receivable consists of amounts due from customers.  The Company considers accounts more than 30 days old to be past due. The Company uses the allowance method for recognizing bad debts. When an account is deemed uncollectible, it is written off against the allowance. The Company generally does not require collateral for its accounts receivable.  At January 31, 2014 and October 31, 2013, no allowances were recorded and all amounts due from customers were considered collectible.

Inventory

Inventories, consisting of raw materials and finished goods, are stated at the lower of cost (using the specific identification method) or market.  Finished goods inventories include certain allocations of labor and overhead.  At January 31, 2014 and October 31, 2013, finished goods included approximately $9,000 and $9,800, respectively, of labor and overhead allocations.  Inventories consisted of the following:

	January 31, 2014	October 31, 2013
Raw materials	$    11,196	$       9,735
Finished goods	14,586	15,489
	$  25,782	$     25,224

Shipping and freight costs

All freight costs associated with the receiving of goods and materials are expensed during the period in which it is received.  For the three months ended January 31, 2014 and 2013, $995 and $648 are included in research and development costs in the accompanying statements of operations.  Shipping costs for products shipped to customers is generally charged to the customer at invoicing and are considered a component of the sale transaction.  For the three months ended January 31, 2014 and 2013, $177 and $331, respectively, are included in product sales in the accompanying statements of operations.

7

Research and development

The Company’s operations are predominantly in research and development (“R&D”).  These costs are expensed as incurred and are primarily comprised of costs for: salaries, overhead and occupancy, contract services and other outside costs, quality assurance and analytical testing. As the Company’s operations include manufacturing and R&D, we report cost of goods sold, including estimates of labor, materials and overhead allocations to the production of specific products. 

Property, equipment and depreciation

Property and equipment, generally consisting of laboratory equipment and office equipment and furniture, are stated at cost and are depreciated over the assets’ estimated useful lives ranging from three to seven years using the straight-line method.  Depreciation expense totaled $3,773 and $3,638 for the three months ended January 31, 2014 and 2013, 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 patents over a period of ten years.  Amortization expense totaled $799 and $785 for the three months ended January 31, 2014 and 2013, respectively.  Estimated future amortization expense for each of the next five fiscal years is as follows:

Year ended October 31,
2014	$	2,399
2015		3,198
2016		3,198
2017		3,198
2018		3,198
Thereafter		1,986
	$	17,177

8

At January 31, 2014 the Company had one patent as follows:

Generation and differentiation of adult stem cell lines	$	31,975
(This patent is for a proprietary stem cell line with potential application to treatment of diabetes in both animals and humans.)
Less accumulated amortization		(14,798)
	$	17,177

The Company has incurred costs relating to the filing of a new United States patent application entitled “POU5-F1 Expression in Human Mesenchymal Stem Cells” and the development of new technology related to generation of human induced pluripotent stem cells (iPS).  These costs totaled $10,459 at both January 31, 2014 and October 31, 2013 and 2012, and are included as deferred patent costs in the accompanying balance sheets.

The Company has also incurred costs relating to the filing of a new United States patent application entitled “Methods to Culture Mesenchymal Stem Cells and Related Materials” and the development of new technology related to this patent application.  These costs totaled $2,370 at both January 31, 2014 and October 31, 2013, and are included as deferred patent costs in the accompanying balance sheets.

Impairment and Disposal of Long-Lived Assets

The Company evaluates its long-lived assets for impairment when events or changes in circumstances indicate, in management's judgment, that the carrying value of such assets may not be recoverable.  If such assets are considered impaired, the impairment to be recognized is determined as the amount by which the carrying value exceeds the fair value of the assets.

The Company periodically reviews the carrying amount of it long-lived assets for possible impairment.  The Company recorded no asset impairment charges during either of the three months ended January 31, 2014 or 2013.  A contingency exists with respect to these matters, the ultimate resolution of which cannot presently be determined.

Income taxes

The Company uses the liability method of accounting for income taxes.  Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.

9

Revenue recognition and concentration of revenues

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred (or service has been performed), the sales price is fixed and determinable, and collectability is reasonably assured.

The Company derives a portion of its revenue from data and analysis services, and is included in Professional services income in the accompanying statement of operations.  Any costs associated with this revenue are included in the Company’s operating costs and expenses.

For the three months ended January 31, 2014, 76% of the Company’s product sales were made to customers of a company controlled by a director who was elected to the Company’s Board of Directors on February 20, 2013.  Of the remaining 24%, no significant concentrations existed.  For the three months ended January 31, 2013, 94% of the Company’s sales were made to the Company’s top two customers.

Advertising Costs

The Company expenses all advertising costs as they are incurred.  Advertising costs were $180 and $632 for the three months ended January 31, 2014 and 2013, respectively.

Consulting Expenses

From time-to-time the Company engages consultants to perform various professional and administrative functions including public relations and corporate marketing.  Expenses for consulting services are generally recognized when services are performed and billable by the consultant.  In the event an agreement requires payments in which the timing of the payments is not consistent with the performance of services, expense is recognized as either service events occur, or recognized evenly over the period of the consulting agreement where specific services performed under the agreement are not readily identifiable.  Consulting agreements in which compensation is contingent upon the successful occurrence of one or more events are only expensed when the contingency has been, or is reasonably assured, to be met.

Fair value of financial instruments

The carrying amounts of cash, accounts receivable, accounts payable and other accrued liabilities approximate fair value due to the short-term maturity of the instruments. Based on the borrowing rates currently available to the Company for loans with similar terms and average maturities, the fair value of long-term obligations consisting of various capital lease obligations approximates its carrying value.

10

Concentrations of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and cash equivalents, and trade accounts receivable.  As of January 31, 2014 and October 31, 2013, the Company had no amounts of cash or cash equivalents in financial institutions in excess of amounts insured by agencies of the U.S. Government.

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.  For each of the three months ended January 31, 2014 and 2013, common stock equivalents of 300,000 representing fully vested outstanding stock options, were not included in the diluted per share calculation as all potentially dilutive securities were anti-dilutive due to the net loss in the period.

Stock-based compensation

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “ASC”) Topic 718, “Stock Compensation,” establishes fair value as the measurement objective in accounting for share based payment arrangements, and requires all entities to apply a fair value based measurement method in accounting for share based payment transactions with employees.  Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the period during which the holder is required to provide services in exchange for the award, i.e., the vesting period.

Recent accounting standards

There were various accounting standards and interpretations issued during 2013 and 2014, none of which are expected to have a material impact on the Company’s consolidated financial position, operations, or cash flows.

NOTE B: RELATED PARTY TRANSACTIONS

Advances and accrued interest payable to officer

Through January 31, 2014, the Company’s President had advanced the Company a total of $627,014 used for working capital including $50,000 during the three months ended January 31, 2014.  The advances are uncollateralized, due on demand and accrue interest on the unpaid principal at a rate of 10% per annum.  Accrued interest payable on the advances totaled $149,169 and $133,910 at January 31, 2014 and October 31, 2013, respectively.  The total advances plus accrued interest totaling $776,183 and $710,924 at January 31, 2014 and October 31, 2013, respectively, are included as “Advances and accrued interest payable to officer” in the accompanying financial statements.

11

Employment agreements and accrued compensation

Effective May 1, 2008, the Company entered into an Executive Employment Agreement with its President.  The Agreement established annual base salaries of $80,000, $85,000, and $90,000 over the three years of the Agreement, which was to expire on April 30, 2011.  On April 27, 2011, the Company’s board of directors ratified a modification to the original agreement establishing an annual base salary of $12,000 per year, effective February 1, 2011 and continuing for three years, expiring February 2, 2014.  As of the date of this report, the agreement has expired and the Company is contemplating its options regarding the compensation of the President.  The Agreement also provided for incentive compensation based on the achievement of minimum annual product sales and an option to purchase one million shares of the Company’s common stock that includes contingent vesting requirements. The employment agreement includes changes in control accelerating vesting for exercise of underlying stock options and also includes severance provisions.  As of January 31, 2014, 100,000 of these common stock options were vested, and are exercisable at $0.19 per share and expire in July 2018.  These options are further discussed in Note E under the “Stock options granted to officer” caption.

The Company has accrued the salaries of its President due to a lack of working capital.  Total accrued salaries and payroll taxes were $1,205,958 and $1,202,808 and January 31, 2014 and October 31, 2013, respectively.  The President’s accrued salaries totaled $1,158,422 and $1,155,422 as of January 31, 2014 and October 31, 2013, respectively.  His salary is allocated as follows: 70% to research and development and 30% to administration.

In addition, accrued salaries totaling $833 are due a former executive officer from a previous employment agreement.

Total accrued payroll taxes on the above salaries totaled $46,703 and $46,553 at January 31, 2014 and October 31, 2013, respectively.

Office lease

On July 1, 2008, the Company entered into a five-year non-cancelable operating lease for a facility located in Golden, Colorado, which expired in June 2013.  The facility has been leased from a company that is owned by the President’s wife.  Upon expiration of the lease, the Company has agreed to continue leasing the facility under the same terms on a month-to-month basis.

The total rental expense was $6,633 and $6,222 and for the three months ended January 31, 2014 and 2013, respectively.  At January 31, 2014 and October 31, 2013, $37,198 and $26,750 were unpaid and are included in accounts payable - related parties in the accompanying balance sheets.

12

Sales and Accounts receivable

The Company derives a portion of its revenue from data and analysis services, and is included in Professional services income in the accompanying statement of operations.  For the three months ended January 31, 2014, this revenue totaled $19,307, and all the service income billings were made to customers of a company controlled by a director who was elected to the Company’s Board of Directors on February 20, 2013.  For the three months ended January 31, 2013 no such income was earned.  At January 31, 2014 and October 31, 2013, $20,602 and $700, respectively, of these sales had not been collected and are included in Accounts receivable, related parties.

Other

The President has personally guaranteed all debt instruments of the Company including all credit card debt.

NOTE C: INCOME TAXES

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

		October 31,  2013	October 31, 2012
Benefit related to U.S. federal statutory graduated rate		-30.16%	-21.80%
Benefit related to State income tax rate, net of federal benefit		-3.23%	-3.62%
Accrued officer salaries		1.99%	1.41%
Net operating loss for which no tax benefit is currently available		31.40%	24.01%
	Effective rate	0.00%	0.00%

The primary components of temporary differences that give rise to the Company’s net deferred tax assets are as follows:

	October 31, 2013		October 31,  2012
Tax credits for net operating loss carry forwards	$	1,623,138	$	1,578,251
Accrued officer salaries		445,761		441,091
Deferred tax asset (before valuation allowance)	$	2,068,899	$	2,019,342

13

At October 31, 2013, deferred taxes consisted of a net tax asset of $2,068,899, due to operating loss carry forwards and other temporary differences of $8,507,658, which was fully allowed for in the valuation allowance of $2,068,899.  The valuation allowance offsets the net deferred tax asset for which there is no assurance of recovery.  The changes in the valuation allowance for the years ended October 31, 2013 and 2012 totaled $49,556 and $53,038, respectively.  Net operating loss carry forwards will expire in various years through 2033.

The Company is delinquent on filing its federal and state tax returns and may be subject to penalties and interest.  A contingency exists with respect to this matter, the ultimate resolution of which may not be presently determined.

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 carry forwards generated prior to the ownership change will be subject to an annual limitation, which could reduce or defer the utilization of these losses.

NOTE D: LINES OF CREDIT

The Company has a $12,500 line of credit of which $512 was unused at January 31, 2014.  The interest rate on the credit line was 21.90% at January 31, 2014.  The credit line is collateralized by the Company’s checking account.  Principal and interest payments are due monthly.

At January 31, 2014 the Company also had three credit cards with a combined credit limit of $26,700, of which $2,131 was unused.  The interest rates on the credit cards range from 10.24% to 29.4%, with a weighted average rate of 15.24% at January 31, 2014.  All other credit cards previously used by the Company have been paid off and closed.

NOTE E: CAPITAL LEASE OBLIGATION

In November 2013, the Company entered into a capital lease agreement to acquire certain laboratory equipment.  The Company is obligated to make 24 monthly payments of $2,006 plus applicable sales and use taxes through October 2015.

14

Future maturities of the Company’s capital lease obligations are as follows:

Fiscal year ended October 31,
2014	$18,053
2015	24,071
	42,124
Less imputed interest	(3,231)
Present value of minimum lease payments	$38,893

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

NOTE F: SHAREHOLDERS’ DEFICIT

Preferred Stock

The Company has authorized 5,000,000 shares of $.001 par value preferred stock, of which none were issued and outstanding at January 31, 2014.  These shares may be issued in series with such rights and preferences as may be determined by the Board of Directors.

Stock options granted to officer

On May 1, 2008, the Company granted a non-qualified stock option to its President to purchase 1,000,000 shares of the Company’s common stock at an exercise price of $0.19 per share, and expire in 2018.  On the grant date, the traded market value of the stock was $0.19 per share.  The options vest upon the achievement of certain contingencies.  As a result of the patent license agreements in March 2011, a contingency was met resulting in the vesting of 100,000 of these options.  None of the other contingencies have been met as of January 31, 2014, and as of that date $170,100 of unamortized stock compensation expense remains for the unvested portion of these options. The weighted average exercise price and weighted average fair value of these options on the grant date were $0.19 and $0.19, respectively.  

The fair value of the options was determined to be $189,000, and was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

Risk-free interest rate	3.68%
Dividend yield	0.00%
Volatility factor	228.72%
Weighted average expected life	6.5 years

Common Stock Issued for Services

The Company has issued shares of its common stock to certain Directors and members of the Company’s advisory boards.  The value of the services is determined by the fair value of the common stock at the time the shares are considered issued.  The amounts are capitalized to equity as

15

“services prepaid with common stock” on the Company’s balance sheets until the services are considered earned, at which time they are expensed as stock-based compensation and removed from equity.

On February 21, 2013, the Company’s Board of Directors ratified the issuance of 169,491 shares of the Company’s common stock to Mr. Pete Shuster, Director, as compensation for services for fiscal year ending October 31, 2013.  The transaction was valued at $10,000 or $0.059 per share, which was the weighted average closing price of the Company’s common stock for the last twenty days preceding the date of the transaction.

In addition, $625 of stock compensation expense was charged to operations for the three months ended January 31, 2013, respectively, representing services provided by a member of the Company’s Scientific Advisory Board.  No such expense was recorded for the three months ended January 31, 2014.

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 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 an 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.

16

At January 31, 2014 a total of 543,500 options had been issued under the Plan, of which 43,500 have expired.  The 200,000 options outstanding and vested under the Plan have a weighted average exercise price of $0.08 per share, and a weighted average remaining contractual life of 2.03 years at January 31, 2014.  Three hundred thousand (300,000) outstanding options not yet vested have an exercise price of $0.17 per share, and expire in April 2015.  For either the three months ended January 31, 2014 and 2013, no compensation expense was recognized for options under the Plan. No additional options may be issued under the Plan.

The following schedule summarizes the changes in the Company’s stock options including non-qualified options and options issued under the 2000 Plan:

		Number of Shares	Exercise Price Per Share	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price Per Share
Balance at October 31, 2012		1,500,000	$0.08 to $0.19	4.75 years	$0.17
	Options granted	-
	Options exercised	-
	Options expired	-
Balance at October 31, 2013		1,500,000	$0.08 to $0.19	4.75 years	$0.17
	Options granted	-
	Options exercised	-
	Options expired	-
Balance at January 31, 2014		1,500,000	$0.08 to $0.19	3.50 years	$0.17
Exercisable at October 31, 2013		300,000	$0.08 to $0.19	3.10 years	$0.12
Exercisable at January 31, 2014		300,000	$0.08 to $0.19	2.85 years	$0.12

NOTE G: CONSULTING AGREEMENTS

On November 1, 2013, the Company signed a consulting agreement with a financial advisory firm to provide consulting services regarding corporate development and evaluation of strategic financing options that may be available to the Company.  In consideration for these services, the consultant received $5,000 upon execution of the agreement, and is entitled to an additional $2,500 per month until termination of the agreement.  In addition, the consultant shall be entitled to compensation for certain completed strategic transactions dependent upon the terms of the completed transaction.  The initial term of the agreement is two months from execution of the agreement, after which the agreement will automatically renew unless terminated by written notice by either party.  The agreement has not been terminated and remains in full effect.  For the three months ended January 31, 2014 a total of $12,500 has been paid the consultant and is included in selling, general and administrative expenses in the accompanying statement of operations.

17

NOTE H: JOINT PRODUCT DEVELOPMENT, MANUFACTURE AND DISTRIBUTION AGREEMENTS

On April 27, 2010 the Company executed an Agreement for Joint Product Development, Manufacture and Distribution (“Agreement”) with HemoGenix, Inc., a privately held biotechnology firm located in Colorado Springs, Colorado.  The Agreement provides for the joint manufacture and distribution of stem cell analysis tools.  The agreement provides for the expansion of assay platforms from HemoGenix, in particular, LUMENESC for mesenchymal stem cells (MSC).  Also, this original agreement between the Company and HemoGenix® was expanded during the latter portions of 2010 to include joint development of cell-specific toxicity assays including those targeting liver cells, heart, kidney and neuronal cells.  Furthermore, the strategic partners intend to jointly develop additional stem cell media products and align their respective quality programs to ensure consistency.  This agreement is currently inactive.

NOTE I: PATENT LICENSE AGREEMENT

Effective March 30, 2011, the Company entered into a Technology License, License Option and Technical Assistance Agreement with a former officer of the Company, granting him an exclusive license covering two of the Company’s patents: United States Patent Number 5,990,288, Method for Purifying FSH and United States Patent Number 6,458,593 B1, Immortalized Cell Lines and Methods of Making The Same.  The patents are related to treatment of infertility and know-how relating to the commercial production and cellular generation of the hormone, follicle-stimulating hormone and related gonadotropin hormones for use in the treatment of infertility in both humans and animals.  In addition, the License grants the exclusive option to license a pending patent application for the commercial production of clinical grade gonadotropin hormones and, in addition, the Company’s intellectual property related to generation of crude materials containing gonadotropin hormones from certain cellular sources. The License has an initial term of five years and shall be automatically renewed for additional two year periods until terminated by either party; however, the license can be terminated after two and one-half years if there have been no sales of licensed products.  Since there continues to be opportunities for commercialization, the Company has elected not to terminate this agreement at the present time.

The licensee was previously an executive officer of the Company, and the Company had carried a $200,833 liability for unpaid compensation.  The terms of the license agreement required payment of a non-refundable license fee of $10,000, which was paid by a reduction of the unpaid compensation liability.  In addition, the license agreement also required the licensee to forgive an additional $190,000 of the unpaid compensation liability.  In addition to the license fee and the forgiveness of the unpaid compensation liability, there shall be royalty payments of 3% and 4% of the gross sales of all licensed products sold by or on behalf of Licensee during the first and second years, respectively.  Such royalty payment shall be 4.5% of the gross sales of all licensed products during the third year of product sales and shall remain at that level throughout the remaining term of the agreement.  As of January 31, 2014, no sales have been made under this agreement.

The parties to this patent license have developed additional business collaborative opportunities involving the Company’s stem cell products, know-how and IP especially related to regenerative medicine applications of modern stem cell technology.

18

NOTE J: NON-BINDING LETTER OF INTENT

On October 10, 2013, the Company signed a non-binding letter of intent to acquire and merge with Neuromics, Inc, (“Neuromics”) a privately held life-science firm located in Minneapolis, MN. The Merger would be structured as a reverse triangular merger, with Neuromics becoming a wholly-owned subsidiary of Vitro.  Completion of the merger is subject to several material conditions, including, without limitation, the execution of a definitive agreement and plan of reorganization ("Merger Agreement"), completion of audited financial statements of Neuromics, requisite corporate and third party approvals, and other conditions customary in transactions of this nature.

As currently contemplated, and based upon the current financial conditions of both parties to the merger, the consideration for the merger would consist of Vitro issuing 4.0 million shares of common stock and paying an additional $250,000 on terms yet to be determined. The Letter of Intent also contemplates the conversion of accrued debt to Vitro's President into 1.0 million shares of common stock and other balance sheet restructuring.

Neuromics’ Chief Executive Officer is Mr. Pete Shuster, who has also been a director of Vitro Diagnostics since February 2013, and during the three months ended January 31, 2014 approximately 94% of Vitro’s total revenues were derived from customers of Neuromics. There can be no assurance as to if and when the Merger can be completed, or that the merger will be completed under the terms as currently contemplated.

NOTE K: SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date that the financial statements were available to be issued.

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ITEM 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Introduction

This section discusses the financial condition of Vitro Diagnostics, Inc. (the “Company”) at January 31, 2014 and compares it to the Company’s financial condition at October 31, 2013.  It also discusses the Company’s results of operations for the three-month period ending January 31, 2014 and compares those results to the results of the three months ended January 31, 2013.  This information should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2013, including the audited financial statements and notes contained therein.

Certain statements contained herein and subsequent oral statements made by or on behalf of the Company may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements include, without limitation, statements regarding the Company’s plan of business operations, potential contractual arrangements, and receipt of working capital, anticipated revenues and related expenditures.  Factors that could cause actual results to differ materially include, among others, acceptability of the Company’s products in the market place, general economic conditions, receipt of additional working capital, the overall state of the biotechnology industry and other factors set forth in the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended October 31, 2013 under the caption, “Risk Factors.”  Most of these factors are outside the control of the Company.  Investors are cautioned not to put undue reliance on forward-looking statements.  Except as otherwise required by applicable securities statutes or regulations, 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.

Liquidity and Capital Resources

At January 31, 2014, the Company had a working capital deficit of $2,053,945 consisting of current assets of $55,819 and current liabilities of $2,109,764.  This represents a decrease in working capital of $77,448 from fiscal year end October 31, 2013.  The decrease in working capital was mainly due to $75,443 in increased current liabilities due to operating expenses in excess of revenue from product sales.

Current assets increased by $22,663 and current liabilities increased by $100,111 during the quarter ended January 31, 2014.  The increase in current assets was primarily due to increased accounts receivable related to the Company’s product and services revenue efforts, while the increase in liabilities was primarily due to additional advances to the Company from its President, as well as the result of acquiring certain lab equipment under a capital lease arrangement.  The Company reported a $1,988,387 deficit in shareholders’ equity at January 31, 2014, which was $54,908 more than the deficit reported at October 31, 2013 due to the current quarter loss.  The majority of the working

20

capital deficit is primarily due to accrued salaries, interest due on advances the president and CEO, as well as previous operating losses.

During the three months ended January 31, 2014 the Company’s financing activities provided $43,858 in cash to support our operating activities.  During that time, the Company’s operations used $40,034 in cash compared to $48,657 of cash used by operations during the three months ended January 31, 2013.  The Company reported an overall increase in cash for the first three months of 2013 of $3,607 that was $6,981 more than the decrease in cash for the first three months of 2013. Cash raised from financing activities was derived through loans from the Company’s president and CEO.   Cash usage reflects a minimum cash requirement of about $18,300 per month for operations. Cash requirements for operations have been cut to a minimum level by previous cost reduction measures and are unlikely to be further reduced without additional curtailment or suspension of operations.  

The Company had total lines of credit and credit cards totaling $39,200 with $1,226 available in credit at January 31, 2014.  The Company must continue to service debt and the Chairman personally guarantees most of the Company debt.  Management is actively pursuing measures to reduce corporate debt while at the same time implementing various measures to increase revenues.

The Company continues to pursue various activities to obtain additional capitalization, as described in the Company’s Annual Report on Form 10-K for the fiscal year ended 2013. Total revenues increased from $14,778 in the first quarter of 2013 to $26,338 in the first quarter of 2014.  We anticipate maintained higher revenue growth in 2014 as revenues from our drug discovery and regenerative medicine initiatives begin to materialize.  Our analytical services offerings are providing early revenue growth in 2014 and we anticipate further growth in our service revenue as our initial cell-based assays for drug discovery are brought to the market.  We also plan to expand our research products offerings including specialized stem cells, media, and other products.  We are presently developing an equine MSC cell line together with optimized cell culture media and plan to introduce this product during 2014.  We are also investigating additional business development opportunities for the Company within veterinary markets.  

The Company is also pursuing other approaches to increase its capital resources such as investment, further out-licensing of its intellectual property, sale of assets or other transactions that may be appropriate.  

Results of Operations

During the three months ended January 31, 2014, the Company realized a net loss of $54,908 or $0.00 per share on $26,338 in total net revenue.  The net loss was $16,198 more than the net loss for the first quarter ended January 31, 2013.  The increased net loss in the first quarter of 2014 compared to the same quarter in 2013 was primarily due to $26,071 increased operating costs and expenses that were partially offset by $13,708 in increased total net revenues.  Research and development expenses (“R&D”), increased by $8,718, while selling, general and administrative expenses increased by $17,353.  The increase in our selling, general and administrative expenses was predominantly due to a financial service contract that began in the first quarter of 2014.   This contract is for fund raising and location of appropriate strategic partners to promote growth of the Company.

21

While the R&D necessary for launch of our initial products was completed previously, the Company continues to develop new products and services.  We are currently developing equine MSCs for veterinary applications and cell-based assays for drug discovery and development with a current primary focus on systems for use in treatment of skeletal-muscular disorders, including osteoporosis.

During the first quarter of 2014, we added bioanalytical services to our revenue generation capabilities.  These services include select and customized biomarker panel analysis providing customers quantitative levels of multiple biological molecules within various biological samples.  The new business involves analysis of human serum samples collected from patients within a network of clinical treatment centers throughout central Europe.  The results obtained provide information regarding current status and responses to various therapies.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures:

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures. Our management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management's control objectives.

Our management, with the participation of our CEO, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon this evaluation, our CEO concluded that our disclosure controls and procedures were not effective as of such date as a result of a material weakness in our internal control over financial reporting due to lack of segregation of duties and a limited corporate governance structure as discussed in Item 9A of our Form 10-K for the fiscal year ended October 31, 2013.

While we strive to segregate duties as much as practicable, there is an insufficient volume of transactions at this point in time to justify additional full time staff. We believe that this is typical in many R&D companies. We may not be able to fully remediate the material weakness until we generate more revenues at which time we would expect to hire more staff. We will continue to monitor and assess the costs and benefits of additional staffing.

22

Changes in Internal Control over Financial Reporting:

There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

None, except as previously disclosed.

Item 1A.

Risk Factors

None, except as previously disclosed.

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

None, except as previously disclosed.

Item 3.

Defaults Upon Senior Securities

None, except as previously disclosed.

Item 4.

 [Removed and Reserved]

Item 5.

Other Information

None, except as previously disclosed.

Item 6.

Exhibits

Certification*

Certification pursuant to 18 U.S.C. Section 1350*

101.INS	XBRL Instance**
101.SCH	XBRL Taxonomy Extension Schema**
101.CAL	XBRL Taxonomy Extension Calculation**
101.DEF	XBRL Taxonomy Extension Definition**
101.LAB	XBRL Taxonomy Extension Labels**
101.PRE	XBRL Taxonomy Extension Presentation**

*

filed herewith

**

provided herewith

23

SIGNATURES

       Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	VITRO DIAGNOSTIC, INC.
Date: March 17, 2014	By  _/s/ James R. Musick
	James R. Musick       President, Chief Executive Officer and Chief       Financial Officer

24

EX-31

Exhibit 31.1

CERTIFICATION

I, James R. Musick, President, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Vitro Diagnostics, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 17, 2014.

___/s/ James R. Musick

James R. Musick, President, Chief Executive Officer and Principal Financial Officer

EX-32

Exhibit 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PUSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q for the period ended January 31, 2014 fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report fairly presents in all material respect the financial condition and results of operations of Vitro Diagnostics, Inc.

Date:  March 17, 2014.

By: /s/ James R. Musick

Name:  James R. Musick

Title: President, Chairman, Chief Executive Officer and Principal Financial Officer

Vitro Diagnostics, Inc.

XML

NOTE F: SHAREHOLDERS' DEFICIT (Details) - The fair value of the options was determined to be $189,000, and was estimated at the date of grant	6 Months Ended
	Apr. 30, 2013
The fair value of the options was determined to be $189,000, and was estimated at the date of grant [Abstract]
Risk-free interest rate	3.68%
Dividend yield	0.00%
Volatility factor	228.72%

XML

NOTE B: RELATED PARTY TRANSACTIONS (Details) (USD $)	3 Months Ended		12 Months Ended			15 Months Ended	36 Months Ended	39 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Apr. 30, 2011	Apr. 30, 2010	Apr. 30, 2009	Jan. 31, 2014	Feb. 02, 2014	Jan. 31, 2014	Oct. 31, 2013	Oct. 31, 2012	Mar. 30, 2011	May 01, 2008
NOTE B: RELATED PARTY TRANSACTIONS (Details) [Line Items]
Related Party Transaction, Expenses from Transactions with Related Party	$ 50,000							$ 627,014
RelatedPartyTransactionInterestRateForLoan						10.00%
Interest Payable, Current	149,169					149,169		149,169	133,910
Advances to Affiliate	776,183					776,183		776,183	710,924
Officers' Compensation			90,000	85,000	80,000		12,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number (in Shares)	100,000					100,000		100,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price (in Dollars per share)	$ 0.19					$ 0.19		$ 0.19	$ 0.12			$ 0.19
Deferred Compensation Liability, Current	1,205,958					1,205,958		1,205,958	1,202,808		200,833
AccruedSalary	1,158,422					1,158,422		1,158,422	1,155,422
SalaryAllocationPercentageToResearchAndDevelopment									70.00%
SalaryAllocationPercentageToAdministration									30.00%
Accrued Payroll Taxes	46,703					46,703		46,703	46,553
Operating Leases, Rent Expense	6,633	6,222
AccruedRentExpense									37,198	26,750
Related Party Transaction, Amounts of Transaction	19,307
Due to Related Parties	20,602					20,602		20,602	700
FormerExecutiveOfficer
NOTE B: RELATED PARTY TRANSACTIONS (Details) [Line Items]
AccruedSalary									$ 833

XML

NOTE C: INCOME TAXES

3 Months Ended

Jan. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE C: INCOME TAXES

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

		October 31,  2013	October 31, 2012
Benefit related to U.S. federal statutory graduated rate		-30.16%	-21.80%
Benefit related to State income tax rate, net of federal benefit		-3.23%	-3.62%
Accrued officer salaries		1.99%	1.41%
Net operating loss for which no tax benefit is currently available		31.40%	24.01%
	Effective rate	0.00%	0.00%

The primary components of temporary differences that give rise to the Company’s net deferred tax assets are as follows:

	October 31, 2013		October 31,  2012
Tax credits for net operating loss carry forwards	$	1,623,138	$	1,578,251
Accrued officer salaries		445,761		441,091
Deferred tax asset (before valuation allowance)	$	2,068,899	$	2,019,342

At October 31, 2013, deferred taxes consisted of a net tax asset of $2,068,899, due to operating loss carry forwards and other temporary differences of $8,507,658, which was fully allowed for in the valuation allowance of $2,068,899.  The valuation allowance offsets the net deferred tax asset for which there is no assurance of recovery.  The changes in the valuation allowance for the years ended October 31, 2013 and 2012 totaled $49,556 and $53,038, respectively.  Net operating loss carry forwards will expire in various years through 2033.

The Company is delinquent on filing its federal and state tax returns and may be subject to penalties and interest.  A contingency exists with respect to this matter, the ultimate resolution of which may not be presently determined.

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 carry forwards generated prior to the ownership change will be subject to an annual limitation, which could reduce or defer the utilization of these losses.

XML

NOTE D: LINES OF CREDIT (Details) (USD $)	Jan. 31, 2014
NOTE D: LINES OF CREDIT (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 12,500
Line of Credit Facility, Amount Outstanding	512
Line of Credit Facility, Interest Rate at Period End	21.90%
LineOfCreditInterestRateMinimum	10.24%
LineOfCreditInterestRateMaximum	29.40%
LineOfCreditInterestRateWeightedAverage	15.24%
CombinedCreditLimit
NOTE D: LINES OF CREDIT (Details) [Line Items]
Line of Credit Facility, Amount Outstanding	2,131
CombinedCreditLimit
NOTE D: LINES OF CREDIT (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 26,700

XML

NOTE C: INCOME TAXES (Details) - The primary components of temporary differences that give rise to the Company’s net deferred tax ass (USD $)	Oct. 31, 2013	Oct. 31, 2012
The primary components of temporary differences that give rise to the Company’s net deferred tax ass [Abstract]
Tax credits for net operating loss carry forwards	$ 1,623,138	$ 1,578,251
Accrued officer salaries	445,761	441,091
Deferred tax asset (before valuation allowance)	$ 2,068,899	$ 2,019,342

XML

NOTE E: CAPITAL LEASE OBLIGATION (Details) (USD $)	Nov. 30, 2013
Disclosure Text Block Supplement [Abstract]
Capital Lease Obligations	$ 2,006

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NOTE E: CAPITAL LEASE OBLIGATION (Details) - Future maturities of the Company’s capital lease obligations are as follows: (USD $)	Oct. 31, 2015	Jan. 31, 2014
Future maturities of the Company’s capital lease obligations are as follows: [Abstract]
2014	$ 18,053
2015	24,071
	42,124	21,488
Less imputed interest	(3,231)
Present value of minimum lease payments	$ 38,893

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NOTE B: RELATED PARTY TRANSACTIONS

3 Months Ended

Jan. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE B: RELATED PARTY TRANSACTIONS

Advances and accrued interest payable to officer

Through January 31, 2014, the Company’s President had advanced the Company a total of $627,014 used for working capital including $50,000 during the three months ended January 31, 2014.  The advances are uncollateralized, due on demand and accrue interest on the unpaid principal at a rate of 10% per annum.  Accrued interest payable on the advances totaled $149,169 and $133,910 at January 31, 2014 and October 31, 2013, respectively.  The total advances plus accrued interest totaling $776,183 and $710,924 at January 31, 2014 and October 31, 2013, respectively, are included as “Advances and accrued interest payable to officer” in the accompanying financial statements.

Employment agreements and accrued compensation

Effective May 1, 2008, the Company entered into an Executive Employment Agreement with its President.  The Agreement established annual base salaries of $80,000, $85,000, and $90,000 over the three years of the Agreement, which was to expire on April 30, 2011.  On April 27, 2011, the Company’s board of directors ratified a modification to the original agreement establishing an annual base salary of $12,000 per year, effective February 1, 2011 and continuing for three years, expiring February 2, 2014.  As of the date of this report, the agreement has expired and the Company is contemplating its options regarding the compensation of the President.  The Agreement also provided for incentive compensation based on the achievement of minimum annual product sales and an option to purchase one million shares of the Company’s common stock that includes contingent vesting requirements. The employment agreement includes changes in control accelerating vesting for exercise of underlying stock options and also includes severance provisions.  As of January 31, 2014, 100,000 of these common stock options were vested, and are exercisable at $0.19 per share and expire in July 2018.  These options are further discussed in Note E under the “Stock options granted to officer” caption.

The Company has accrued the salaries of its President due to a lack of working capital.  Total accrued salaries and payroll taxes were $1,205,958 and $1,202,808 and January 31, 2014 and October 31, 2013, respectively.  The President’s accrued salaries totaled $1,158,422 and $1,155,422 as of January 31, 2014 and October 31, 2013, respectively.  His salary is allocated as follows: 70% to research and development and 30% to administration.

In addition, accrued salaries totaling $833 are due a former executive officer from a previous employment agreement.

Total accrued payroll taxes on the above salaries totaled $46,703 and $46,553 at January 31, 2014 and October 31, 2013, respectively.

Office lease

On July 1, 2008, the Company entered into a five-year non-cancelable operating lease for a facility located in Golden, Colorado, which expired in June 2013.  The facility has been leased from a company that is owned by the President’s wife.  Upon expiration of the lease, the Company has agreed to continue leasing the facility under the same terms on a month-to-month basis.

The total rental expense was $6,633 and $6,222 and for the three months ended January 31, 2014 and 2013, respectively.  At January 31, 2014 and October 31, 2013, $37,198 and $26,750 were unpaid and are included in accounts payable - related parties in the accompanying balance sheets.

Sales and Accounts receivable

The Company derives a portion of its revenue from data and analysis services, and is included in Professional services income in the accompanying statement of operations.  For the three months ended January 31, 2014, this revenue totaled $19,307, and all the service income billings were made to customers of a company controlled by a director who was elected to the Company’s Board of Directors on February 20, 2013.  For the three months ended January 31, 2013 no such income was earned.  At January 31, 2014 and October 31, 2013, $20,602 and $700, respectively, of these sales had not been collected and are included in Accounts receivable, related parties.

Other

The President has personally guaranteed all debt instruments of the Company including all credit card debt.

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NOTE F: SHAREHOLDERS' DEFICIT (Details) (USD $)	0 Months Ended	3 Months Ended
	Feb. 21, 2013	Jan. 31, 2014	Oct. 31, 2013	Apr. 30, 2013	Jan. 31, 2013	Mar. 29, 2011	May 01, 2008	Jan. 31, 2014 Total	Jan. 31, 2013 FormerPresident	Mar. 29, 2011 FormerPresident	Sep. 30, 2010 Total
NOTE F: SHAREHOLDERS' DEFICIT (Details) [Line Items]
Preferred Stock, Shares Authorized				5,000,000
Preferred Stock, Par or Stated Value Per Share (in Dollars per share)				$ 1
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number		(300,000)					1,000,000	200,000			1,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price (in Dollars per share)		$ 0.19	$ 0.12				$ 0.19
Auction Market Preferred Securities, Stock Series, Par Value Per Share (in Dollars per share)							$ 0.19
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number		100,000								100,000
Unamortized Debt Issuance Expense (in Dollars)			$ 170,100
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in Dollars per share)		$ 0.17				$ 0.19		$ 0.08	$ 0.19
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in Dollars per share)		$ 0.17				$ 0.19		$ 0.08	$ 0.19
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest (in Dollars)					189,000
Stock Granted During Period, Shares, Share-based Compensation	169,491
Stock Issued During Period, Shares, Issued for Services	10,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share)	$ 0.059
Common stock issued to SAB member for future services, Value (in Dollars)		$ 625
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		543,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period		43,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in Dollars per share)		$ 0.17				$ 0.19		$ 0.08	$ 0.19
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term		2.03
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in Dollars per share)		$ 0.17				$ 0.19		$ 0.08	$ 0.19

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Vitro Diagnostics, Inc. - Balance Sheets (USD $)	Jan. 31, 2014	Oct. 31, 2013
Current assets:
Cash	$ 5,804	$ 2,197
Accounts receivable	3,631	4,733
Accounts receivable – related parties (Note B)	20,602	700
Inventory, at cost	25,782	25,224
Prepaid and other current assets		302
Total current assets	55,819	33,156
Equipment, net of accumulated depreciation of $110,865 and $107,092	51,508	10,764
Patents, net of accumulated amortization of $14,178 and $13,999 (Note A)	17,177	17,976
Deferred costs (Note A)	12,829	12,829
Other assets	1,449	1,449
Total assets	138,782	76,174
Current liabilities:
Current maturities on capital lease obligation	21,488
Lines of credit (Note D)	36,557	37,292
Accounts payable	22,553	28,238
Accounts payable - related parties (Note B)	40,829	30,391
Other accrued liabilities	6,196
Advances and accrued interest payable to officer (Note B)	776,183	710,924
Accrued payroll expenses (Note B)	1,205,958	1,202,808
Total current liabilities	2,109,764	2,009,653
Capital lease obligation	17,405
Total liabilities	2,127,169	2,009,653
Common stock, $.001 par value; 50,000,000 shares authorized; 19,803,403 shares issued and outstanding
19,803	19,803	19,803
Additional paid-in capital	5,413,015	5,413,015
Accumulated deficit	(7,421,205)	(7,366,297)
Total shareholders' deficit	(1,988,387)	(1,933,479)
Total liabilities and shareholders' deficit	$ 138,782	$ 76,174

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Vitro Diagnostics, Inc. - Statements of Cash Flows (USD $)	3 Months Ended	12 Months Ended
	Jan. 31, 2014	Oct. 31, 2013
Cash Flows from operating activities:
Net loss	$ (54,908)	$ (38,710)
Depreciation and amortization	4,572	4,423
Stock-based compensation		625
Decrease (increase) in accounts receivable, inventories, prepaid expenses and deposits
(19,056)	(19,056)	55
Increase in accounts payable and accrued expenses	29,358	(15,050)
Net cash used in operating activities	(40,034)	(48,657)
Cash flows from investing activities:
Purchases of equipment	(217)	(5,839)
Payments for patents and deferred costs		(592)
Net cash used in investing activities	(217)	(6,431)
Cash flows from financing activities:
Proceeds from advances from officer	50,000	52,032
Draws (payments) on lines of credit, net	(735)	(318)
Principal payments on capital lease	(5,407)
Net cash provided by financing activities	43,858	51,714
Net change in cash	3,607	(3,374)
Cash, beginning of year	2,197	5,286
Cash paid during the year for:
Interest	2,391	1,774
Income taxes	0	0
Non-cash investing and financing activities:
Purchase of equipment under capital lease	44,300
Cash, end of year	$ 5,804	$ 2,197

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NOTE G: CONSULTING AGREEMENTS (Details) (USD $)	0 Months Ended	1 Months Ended	3 Months Ended
	Nov. 02, 2013	Jan. 02, 2014	Jan. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
Other Cost and Expense, Operating	$ 5,000	$ 2,500	$ 12,500
Contractual Obligation, Due in Next Twelve Months			$ 250,000

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NOTE A: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Inventories, consisting of raw materials and finished goods (USD $)	Jan. 31, 2014	Oct. 31, 2013
Inventories, consisting of raw materials and finished goods [Abstract]
Raw materials	$ 11,196	$ 9,735
Finished goods	14,586	15,489
	$ 25,782	$ 25,224

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NOTE I: PATENT LICENSE AGREEMENT (Details) (USD $)	28 Months Ended
	Jul. 31, 2013	Jan. 31, 2014	Oct. 31, 2013	Mar. 30, 2011
NOTE I: PATENT LICENSE AGREEMENT (Details) [Line Items]
Deferred Compensation Liability, Current		$ 1,205,958	$ 1,202,808	$ 200,833
Direct Taxes and Licenses Costs	10,000
Debt Instrument, Decrease, Forgiveness	$ 190,000
RoyaltyPaymentPercentageMinimum	3.00%
RoyaltyPaymentPercentageMaximum	4.00%
RoyaltiesPercentagePaidInTheThirdYear
NOTE I: PATENT LICENSE AGREEMENT (Details) [Line Items]
RoyaltyPaymentPercentageMaximum	4.50%

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NOTE A: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - The Company’s patents consisted of the following at April 30, 2013: (USD $)	Jan. 31, 2014	Oct. 31, 2013
The Company’s patents consisted of the following at April 30, 2013: [Abstract]
Generation and differentiation of adult stem cell lines		$ 31,975
Less accumulated amortization	(14,178)	(13,999)
		$ 17,177

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

3 Months Ended

Jan. 31, 2014

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

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

Nature of Organization

The Company was incorporated under the laws of Nevada on February 3, 1986.  From November of 1990 through July 31, 2000, the Company was engaged in the development, manufacturing and distribution of purified human antigens (“Diagnostics”) that were derived primarily from human tissues.  The Company also developed cell technology including immortalization of certain cells that allowed entry into other markets besides diagnostics.  However, during the 1990’s, the Company’s sales were solely attributable to the sales of purified human antigens for diagnostic applications.   

Following the sale of its Diagnostics operations in August of 2000, the Company began devoting all efforts to its cellular generation technology which evolved from a focus on induction of cellular immortalization to technology related to stem cells.  Stem cell technology has potentially broad application to many medical areas, including drug discovery and development together with numerous therapeutic applications to diseases involving cellular degeneration, injury or to the treatment of cancer.  The Company launched a series of products targeting basic research in stem cell technology in 2009.  These “Tools for Stem Cell and Drug Discovery™” offer researchers basic tools needed to advance stem cell technology including stem cells and their derivatives, media for growth and differentiation of stem cells and advanced tools for measurement of stem cell quality, potency and response to toxic agents.  The Company has been granted patents for its proprietary technology related to the immortalization of human cells and subsequently expanded this technology to include patented and patent-pending technology involving generation of stem cells with potential application to a variety of commercial opportunities including the treatment of degenerative diseases and drug discovery.

The Company also owns patented technology related to treatment of human infertility.  The Company has been granted a US patent for its process to manufacture VITROPIN™.  VITROPIN™ is a highly purified urinary follicle-stimulating hormone (“FSH”) preparation produced according to the Company’s patented purification process.

The Company also owns patented technology that provides protection to a specific cell line derived from human pancreatic tissues that gives rise to structures comparable to the Islets of Langerhans (beta islets).  These islets also synthesize and secrete insulin in response to elevated glucose levels, as do beta islets contained within pancreatic tissue.  Vitro has also developed a process for the commercial production its cell line-derived islets.  Furthermore, the Company previously obtained regulatory approval for an animal protocol to determine reversal of Type I diabetes, a critical step in the demonstration of efficacy.  This patent affords an exclusive proprietary position to the Company for a new cellular therapy to treat Type I diabetes.

The Company is currently focused on revenue generation from its stem cell-based research products and to expanded opportunities for revenue generation in drug discovery and development together with select opportunities in regenerative medicine.

Basis of Presentation – Going Concern

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has suffered significant losses since inception and has working capital and shareholders’ deficits of $(2,053,945) and $(1,988,387), respectively, at January 31, 2014, which raise substantial doubt about its ability to continue as a going concern. In view of these matters, realization of certain of the assets in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financial requirements, raise additional capital, and generate revenues and profits from operations.

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 has financed its operations primarily through cash advances from the Company’s president, as well as through various private placements of equity securities.  During the year ended October 31, 2012, the President advanced the Company a total of $114,032 for working capital on an “as needed” basis, as well as $50,000 during the quarter ended January 31, 2013.  There is no assurance that these advances will continue in the future.

The Company has recently entered into a non-binding Letter of Intent with Neuromics, Inc. to acquire this company through an exchange of its securities and cash (See Note I, Subsequent Events).  Completion of this merger would substantially increase the revenue generation of the combined entities and improve the Company’s financial condition.  Also, the Company and Neuromics, Inc. now operate in close association including distribution of Vitro products by Neuromics as well as joint development of new business opportunities in drug discovery and regenerative medicine.

There is no assurance that these initiatives will yield sufficient capital to maintain the Company’s operations. In such an event, management intends to pursue various strategic alternatives.

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.

Accounts receivable

Accounts receivable consists of amounts due from customers.  The Company considers accounts more than 30 days old to be past due. The Company uses the allowance method for recognizing bad debts. When an account is deemed uncollectible, it is written off against the allowance. The Company generally does not require collateral for its accounts receivable.  At January 31, 2014 and October 31, 2013, no allowances were recorded and all amounts due from customers were considered collectible.

Inventory

Inventories, consisting of raw materials and finished goods, are stated at the lower of cost (using the specific identification method) or market.  Finished goods inventories include certain allocations of labor and overhead.  At January 31, 2014 and October 31, 2013, finished goods included approximately $9,000 and $9,800, respectively, of labor and overhead allocations.  Inventories consisted of the following:

	January 31, 2014	October 31, 2013
Raw materials	$    11,196	$       9,735
Finished goods	14,586	15,489
	$  25,782	$     25,224

Shipping and freight costs

All freight costs associated with the receiving of goods and materials are expensed during the period in which it is received.  For the three months ended January 31, 2014 and 2013, $995 and $648 are included in research and development costs in the accompanying statements of operations.  Shipping costs for products shipped to customers is generally charged to the customer at invoicing and are considered a component of the sale transaction.  For the three months ended January 31, 2014 and 2013, $177 and $331, respectively, are included in product sales in the accompanying statements of operations.

Research and development

The Company’s operations are predominantly in research and development (“R&D”).  These costs are expensed as incurred and are primarily comprised of costs for: salaries, overhead and occupancy, contract services and other outside costs, quality assurance and analytical testing. As the Company’s operations include manufacturing and R&D, we report cost of goods sold, including estimates of labor, materials and overhead allocations to the production of specific products. 

Property, equipment and depreciation

Property and equipment, generally consisting of laboratory equipment and office equipment and furniture, are stated at cost and are depreciated over the assets’ estimated useful lives ranging from three to seven years using the straight-line method.  Depreciation expense totaled $3,773 and $3,638 for the three months ended January 31, 2014 and 2013, 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 patents over a period of ten years.  Amortization expense totaled $799 and $785 for the three months ended January 31, 2014 and 2013, respectively.  Estimated future amortization expense for each of the next five fiscal years is as follows:

Year ended October 31,
2014	$	2,399
2015		3,198
2016		3,198
2017		3,198
2018		3,198
Thereafter		1,986
	$	17,177

At January 31, 2014 the Company had one patent as follows:

Generation and differentiation of adult stem cell lines	$	31,975
(This patent is for a proprietary stem cell line with potential application to treatment of diabetes in both animals and humans.)
Less accumulated amortization		(14,798)
	$	17,177

The Company has incurred costs relating to the filing of a new United States patent application entitled “POU5-F1 Expression in Human Mesenchymal Stem Cells” and the development of new technology related to generation of human induced pluripotent stem cells (iPS).  These costs totaled $10,459 at both January 31, 2014 and October 31, 2013 and 2012, and are included as deferred patent costs in the accompanying balance sheets.

The Company has also incurred costs relating to the filing of a new United States patent application entitled “Methods to Culture Mesenchymal Stem Cells and Related Materials” and the development of new technology related to this patent application.  These costs totaled $2,370 at both January 31, 2014 and October 31, 2013, and are included as deferred patent costs in the accompanying balance sheets.

Impairment and Disposal of Long-Lived Assets

The Company evaluates its long-lived assets for impairment when events or changes in circumstances indicate, in management's judgment, that the carrying value of such assets may not be recoverable.  If such assets are considered impaired, the impairment to be recognized is determined as the amount by which the carrying value exceeds the fair value of the assets.

The Company periodically reviews the carrying amount of it long-lived assets for possible impairment.  The Company recorded no asset impairment charges during either of the three months ended January 31, 2014 or 2013.  A contingency exists with respect to these matters, the ultimate resolution of which cannot presently be determined.

Income taxes

The Company uses the liability method of accounting for income taxes.  Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.

Revenue recognition and concentration of revenues

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred (or service has been performed), the sales price is fixed and determinable, and collectability is reasonably assured.

The Company derives a portion of its revenue from data and analysis services, and is included in Professional services income in the accompanying statement of operations.  Any costs associated with this revenue are included in the Company’s operating costs and expenses.

For the three months ended January 31, 2014, 76% of the Company’s product sales were made to customers of a company controlled by a director who was elected to the Company’s Board of Directors on February 20, 2013.  Of the remaining 24%, no significant concentrations existed.  For the three months ended January 31, 2013, 94% of the Company’s sales were made to the Company’s top two customers.

Advertising Costs

The Company expenses all advertising costs as they are incurred.  Advertising costs were $180 and $632 for the three months ended January 31, 2014 and 2013, respectively.

Consulting Expenses

From time-to-time the Company engages consultants to perform various professional and administrative functions including public relations and corporate marketing.  Expenses for consulting services are generally recognized when services are performed and billable by the consultant.  In the event an agreement requires payments in which the timing of the payments is not consistent with the performance of services, expense is recognized as either service events occur, or recognized evenly over the period of the consulting agreement where specific services performed under the agreement are not readily identifiable.  Consulting agreements in which compensation is contingent upon the successful occurrence of one or more events are only expensed when the contingency has been, or is reasonably assured, to be met.

Fair value of financial instruments

The carrying amounts of cash, accounts receivable, accounts payable and other accrued liabilities approximate fair value due to the short-term maturity of the instruments. Based on the borrowing rates currently available to the Company for loans with similar terms and average maturities, the fair value of long-term obligations consisting of various capital lease obligations approximates its carrying value.

Concentrations of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and cash equivalents, and trade accounts receivable.  As of January 31, 2014 and October 31, 2013, the Company had no amounts of cash or cash equivalents in financial institutions in excess of amounts insured by agencies of the U.S. Government.

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.  For each of the three months ended January 31, 2014 and 2013, common stock equivalents of 300,000 representing fully vested outstanding stock options, were not included in the diluted per share calculation as all potentially dilutive securities were anti-dilutive due to the net loss in the period.

Stock-based compensation

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “ASC”) Topic 718, “Stock Compensation,” establishes fair value as the measurement objective in accounting for share based payment arrangements, and requires all entities to apply a fair value based measurement method in accounting for share based payment transactions with employees.  Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the period during which the holder is required to provide services in exchange for the award, i.e., the vesting period.

Recent accounting standards

There were various accounting standards and interpretations issued during 2013 and 2014, none of which are expected to have a material impact on the Company’s consolidated financial position, operations, or cash flows.

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Vitro Diagnostics, Inc. - Balance Sheets (Parentheticals) (USD $)	Jan. 31, 2014	Oct. 31, 2013
Equipment, net of accumulated depreciation	$ 110,865	$ 107,092
Patents, net of accumulated amortization	$ 14,178	$ 13,999

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NOTE A: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Jan. 31, 2014

Disclosure Text Block [Abstract]

Schedule of Inventory, Current [Table Text Block]

	January 31, 2014	October 31, 2013
Raw materials	$    11,196	$       9,735
Finished goods	14,586	15,489
	$  25,782	$     25,224

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Year ended October 31,
2014	$	2,399
2015		3,198
2016		3,198
2017		3,198
2018		3,198
Thereafter		1,986
	$	17,177

Schedule of Finite-Lived Intangible Assets by Major Class [Table Text Block] (Deprecated 2012-01-31)

Generation and differentiation of adult stem cell lines	$	31,975
(This patent is for a proprietary stem cell line with potential application to treatment of diabetes in both animals and humans.)
Less accumulated amortization		(14,798)
	$	17,177

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Document And Entity Information	3 Months Ended
	Jan. 31, 2014	Mar. 17, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	VITRO DIAGNOSTICS INC,
Document Type	10-Q
Current Fiscal Year End Date	--10-31
Entity Common Stock, Shares Outstanding		19,803,403
Amendment Flag	false
Entity Central Index Key	0000793171
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jan. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1

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NOTE C: INCOME TAXES (Tables)

3 Months Ended

Jan. 31, 2014

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

		October 31,  2013	October 31, 2012
Benefit related to U.S. federal statutory graduated rate		-30.16%	-21.80%
Benefit related to State income tax rate, net of federal benefit		-3.23%	-3.62%
Accrued officer salaries		1.99%	1.41%
Net operating loss for which no tax benefit is currently available		31.40%	24.01%
	Effective rate	0.00%	0.00%

Summary of Deferred Tax Liability Not Recognized [Table Text Block]

	October 31, 2013		October 31,  2012
Tax credits for net operating loss carry forwards	$	1,623,138	$	1,578,251
Accrued officer salaries		445,761		441,091
Deferred tax asset (before valuation allowance)	$	2,068,899	$	2,019,342

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Vitro Diagnostics, Inc. - Statements of Operations (USD $)	3 Months Ended	12 Months Ended
	Jan. 31, 2014	Oct. 31, 2013
Product sales	$ 7,031	$ 14,778
Cost of goods sold	(1,670)	(3,818)
Gross profit	5,361	10,960
Professional services income	19,307
Net revenue	24,668	10,960
Operating costs and expenses:
Research and development	35,861	27,143
Selling, general and administrative	26,065	8,712
Total operating costs and expenses	61,926	35,855
Loss from operations	(37,258)	(24,895)
Other income (expense):
Interest expense	(17,650)	(13,815)
Income (loss) before income taxes	(54,908)	(38,710)
Provision for income taxes (Note C)	0	0
Net income (loss)	$ (54,908)	$ (38,710)
Net loss per common share, basic and diluted (in Dollars per share)	$ 0.00	$ 0.00
Shares used in computing net loss per common share:
Basic and diluted (in Shares)	19,803,403	19,308,912

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NOTE F: SHAREHOLDERS' DEFICIT

3 Months Ended

Jan. 31, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE F: SHAREHOLDERS’ DEFICIT

Preferred Stock

The Company has authorized 5,000,000 shares of $.001 par value preferred stock, of which none were issued and outstanding at January 31, 2014.  These shares may be issued in series with such rights and preferences as may be determined by the Board of Directors.

Stock options granted to officer

On May 1, 2008, the Company granted a non-qualified stock option to its President to purchase 1,000,000 shares of the Company’s common stock at an exercise price of $0.19 per share, and expire in 2018.  On the grant date, the traded market value of the stock was $0.19 per share.  The options vest upon the achievement of certain contingencies.  As a result of the patent license agreements in March 2011, a contingency was met resulting in the vesting of 100,000 of these options.  None of the other contingencies have been met as of January 31, 2014, and as of that date $170,100 of unamortized stock compensation expense remains for the unvested portion of these options. The weighted average exercise price and weighted average fair value of these options on the grant date were $0.19 and $0.19, respectively.  

The fair value of the options was determined to be $189,000, and was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

Risk-free interest rate	3.68%
Dividend yield	0.00%
Volatility factor	228.72%
Weighted average expected life	6.5 years

Common Stock Issued for Services

The Company has issued shares of its common stock to certain Directors and members of the Company’s advisory boards.  The value of the services is determined by the fair value of the common stock at the time the shares are considered issued.  The amounts are capitalized to equity as

“services prepaid with common stock” on the Company’s balance sheets until the services are considered earned, at which time they are expensed as stock-based compensation and removed from equity.

On February 21, 2013, the Company’s Board of Directors ratified the issuance of 169,491 shares of the Company’s common stock to Mr. Pete Shuster, Director, as compensation for services for fiscal year ending October 31, 2013.  The transaction was valued at $10,000 or $0.059 per share, which was the weighted average closing price of the Company’s common stock for the last twenty days preceding the date of the transaction.

In addition, $625 of stock compensation expense was charged to operations for the three months ended January 31, 2013, respectively, representing services provided by a member of the Company’s Scientific Advisory Board.  No such expense was recorded for the three months ended January 31, 2014.

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 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 an 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.

At January 31, 2014 a total of 543,500 options had been issued under the Plan, of which 43,500 have expired.  The 200,000 options outstanding and vested under the Plan have a weighted average exercise price of $0.08 per share, and a weighted average remaining contractual life of 2.03 years at January 31, 2014.  Three hundred thousand (300,000) outstanding options not yet vested have an exercise price of $0.17 per share, and expire in April 2015.  For either the three months ended January 31, 2014 and 2013, no compensation expense was recognized for options under the Plan. No additional options may be issued under the Plan.

The following schedule summarizes the changes in the Company’s stock options including non-qualified options and options issued under the 2000 Plan:

		Number of Shares	Exercise Price Per Share	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price Per Share
Balance at October 31, 2012		1,500,000	$0.08 to $0.19	4.75 years	$0.17
	Options granted	-
	Options exercised	-
	Options expired	-
Balance at October 31, 2013		1,500,000	$0.08 to $0.19	4.75 years	$0.17
	Options granted	-
	Options exercised	-
	Options expired	-
Balance at January 31, 2014		1,500,000	$0.08 to $0.19	3.50 years	$0.17
Exercisable at October 31, 2013		300,000	$0.08 to $0.19	3.10 years	$0.12
Exercisable at January 31, 2014		300,000	$0.08 to $0.19	2.85 years	$0.12

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NOTE E: CAPITAL LEASE OBLIGATION

3 Months Ended

Jan. 31, 2014

Disclosure Text Block Supplement [Abstract]

Debt and Capital Leases Disclosures [Text Block]

NOTE E: CAPITAL LEASE OBLIGATION

In November 2013, the Company entered into a capital lease agreement to acquire certain laboratory equipment.  The Company is obligated to make 24 monthly payments of $2,006 plus applicable sales and use taxes through October 2015.

Future maturities of the Company’s capital lease obligations are as follows:

Fiscal year ended October 31,
2014	$18,053
2015	24,071
	42,124
Less imputed interest	(3,231)
Present value of minimum lease payments	$38,893

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

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NOTE A: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - The Company amortizes its patents over a period of ten years. (USD $)	3 Months Ended		10 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016	Oct. 31, 2015	Oct. 31, 2014
The Company amortizes its patents over a period of ten years. [Abstract]
Year Ended October 31,				$ 1,986	$ 3,198	$ 3,198	$ 3,198	$ 3,198	$ 2,399
	$ 799	$ 785	$ 17,177

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NOTE E: CAPITAL LEASE OBLIGATION (Tables)

3 Months Ended

Jan. 31, 2014

Disclosure Text Block Supplement [Abstract]

Schedule of Capital Leased Assets [Table Text Block]

Fiscal year ended October 31,
2014	$18,053
2015	24,071
	42,124
Less imputed interest	(3,231)
Present value of minimum lease payments	$38,893

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NOTE I: PATENT LICENSE AGREEMENT

3 Months Ended

Jan. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE I: PATENT LICENSE AGREEMENT

Effective March 30, 2011, the Company entered into a Technology License, License Option and Technical Assistance Agreement with a former officer of the Company, granting him an exclusive license covering two of the Company’s patents: United States Patent Number 5,990,288, Method for Purifying FSH and United States Patent Number 6,458,593 B1, Immortalized Cell Lines and Methods of Making The Same.  The patents are related to treatment of infertility and know-how relating to the commercial production and cellular generation of the hormone, follicle-stimulating hormone and related gonadotropin hormones for use in the treatment of infertility in both humans and animals.  In addition, the License grants the exclusive option to license a pending patent application for the commercial production of clinical grade gonadotropin hormones and, in addition, the Company’s intellectual property related to generation of crude materials containing gonadotropin hormones from certain cellular sources. The License has an initial term of five years and shall be automatically renewed for additional two year periods until terminated by either party; however, the license can be terminated after two and one-half years if there have been no sales of licensed products.  Since there continues to be opportunities for commercialization, the Company has elected not to terminate this agreement at the present time.

The licensee was previously an executive officer of the Company, and the Company had carried a $200,833 liability for unpaid compensation.  The terms of the license agreement required payment of a non-refundable license fee of $10,000, which was paid by a reduction of the unpaid compensation liability.  In addition, the license agreement also required the licensee to forgive an additional $190,000 of the unpaid compensation liability.  In addition to the license fee and the forgiveness of the unpaid compensation liability, there shall be royalty payments of 3% and 4% of the gross sales of all licensed products sold by or on behalf of Licensee during the first and second years, respectively.  Such royalty payment shall be 4.5% of the gross sales of all licensed products during the third year of product sales and shall remain at that level throughout the remaining term of the agreement.  As of January 31, 2014, no sales have been made under this agreement.

The parties to this patent license have developed additional business collaborative opportunities involving the Company’s stem cell products, know-how and IP especially related to regenerative medicine applications of modern stem cell technology.

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NOTE G: CONSULTING AGREEMENTS

3 Months Ended

Jan. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE G: CONSULTING AGREEMENTS

On November 1, 2013, the Company signed a consulting agreement with a financial advisory firm to provide consulting services regarding corporate development and evaluation of strategic financing options that may be available to the Company.  In consideration for these services, the consultant received $5,000 upon execution of the agreement, and is entitled to an additional $2,500 per month until termination of the agreement.  In addition, the consultant shall be entitled to compensation for certain completed strategic transactions dependent upon the terms of the completed transaction.  The initial term of the agreement is two months from execution of the agreement, after which the agreement will automatically renew unless terminated by written notice by either party.  The agreement has not been terminated and remains in full effect.  For the three months ended January 31, 2014 a total of $12,500 has been paid the consultant and is included in selling, general and administrative expenses in the accompanying statement of operations.

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NOTE H: JOINT PRODUCT DEVELOPMENT, MANUFACTURE AND DISTRIBUTION AGREEMENTS

3 Months Ended

Jan. 31, 2014

Product Liability Contingency, Uncertainties from Joint and Several Liability [Abstract]

Product Liability Contingency, Uncertainties from Joint and Several Liability

NOTE H: JOINT PRODUCT DEVELOPMENT, MANUFACTURE AND DISTRIBUTION AGREEMENTS

On April 27, 2010 the Company executed an Agreement for Joint Product Development, Manufacture and Distribution (“Agreement”) with HemoGenix, Inc., a privately held biotechnology firm located in Colorado Springs, Colorado.  The Agreement provides for the joint manufacture and distribution of stem cell analysis tools.  The agreement provides for the expansion of assay platforms from HemoGenix, in particular, LUMENESC for mesenchymal stem cells (MSC).  Also, this original agreement between the Company and HemoGenix® was expanded during the latter portions of 2010 to include joint development of cell-specific toxicity assays including those targeting liver cells, heart, kidney and neuronal cells.  Furthermore, the strategic partners intend to jointly develop additional stem cell media products and align their respective quality programs to ensure consistency.  This agreement is currently inactive.

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NOTE K: SUBSEQUENT EVENTS

3 Months Ended

Jan. 31, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE K: SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date that the financial statements were available to be issued.

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NOTE F: SHAREHOLDERS' DEFICIT (Details) - The following schedule summarizes the changes in the Company’s stock options including non-qualified (USD $)	3 Months Ended	12 Months Ended
	Jan. 31, 2014	Oct. 31, 2013	Oct. 31, 2012	May 01, 2008
The following schedule summarizes the changes in the Company’s stock options including non-qualified [Abstract]
Balance at		1,500,000	1,500,000
Balance at (in Dollars per share)		$ 0.17	$ 0.17
Balance at January 31, 2014	1,500,000
Exercisable at	300,000	300,000
Exercisable at (in Dollars per share)	$ 0.19	$ 0.12		$ 0.19

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NOTE A: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	3 Months Ended		9 Months Ended	10 Months Ended	12 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Jul. 31, 2013	Oct. 31, 2020	Oct. 31, 2012	Oct. 31, 2013
Disclosure Text Block [Abstract]
WorkingCapitalDeficit						$ (2,053,945)
Stockholders' Equity Attributable to Noncontrolling Interest						(1,988,387)
Proceeds from Related Party Debt			114,032		50,000
Other Inventory, Gross	9,000					9,800
Shipping, Handling and Transportation Costs	995	648
Cost of Other Manufactured Products	177	331
Property, Plant and Equipment, Gross	3,773	3,638
Amortization	799	785		17,177
DeferredPatentCosts	10,459
PatentApplicationFees						2,370
Advertising Expense	$ 180	$ 632
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number (in Shares)	300,000

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NOTE C: INCOME TAXES (Details) (USD $)	12 Months Ended
	Oct. 31, 2013	Oct. 31, 2012
Income Tax Disclosure [Abstract]
Deferred Tax Assets, Net of Valuation Allowance	$ 2,068,899
Operating Loss Carryforwards	8,507,658
Valuation Allowance, Amount	2,068,899
Valuation Allowance, Deferred Tax Asset, Change in Amount	$ 49,556	$ 53,038

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Vitro Diagnostics, Inc. - Statement of Changes in Shareholders' Deficit (USD $)	Common Stock [Member]	Additional Paid-in Capital [Member]	Services Prepaid with Common Stock	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings, Appropriated [Member]	Total
Balance, at Oct. 31, 2012
Prepaid services earned (Note E)			$ 11,458		$ 11,458
Common stock issued to director for future services (Note E) (in Shares)	169,491	9,831	(10,000)
Common stock issued to director for future services (Note E)	169
Common stock issued for consulting services (Note E) (in Shares)	75,000	5,925			6,000
Common stock issued for consulting services (Note E)	75
Conversion of accounts payable (Note E)	250,000	14,750			15,000
Conversion of accounts payable (Note E) (in Shares)	250
Net Loss				(211,204)	(211,204)	(38,710)
Balance, at Oct. 31, 2013	19,803					19,803
Balance, at Oct. 31, 2013	$ 19,803,403	$ 5,413,015		$ (7,366,297)	$ (1,933,479)

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NOTE D: LINES OF CREDIT

3 Months Ended

Jan. 31, 2014

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

NOTE D: LINES OF CREDIT

The Company has a $12,500 line of credit of which $512 was unused at January 31, 2014.  The interest rate on the credit line was 21.90% at January 31, 2014.  The credit line is collateralized by the Company’s checking account.  Principal and interest payments are due monthly.

At January 31, 2014 the Company also had three credit cards with a combined credit limit of $26,700, of which $2,131 was unused.  The interest rates on the credit cards range from 10.24% to 29.4%, with a weighted average rate of 15.24% at January 31, 2014.  All other credit cards previously used by the Company have been paid off and closed.

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NOTE C: INCOME TAXES (Details) - A reconciliation of the U.S. statutory federal income tax rate to the effective rate is as follows f	12 Months Ended
	Oct. 31, 2013	Oct. 31, 2012
A reconciliation of the U.S. statutory federal income tax rate to the effective rate is as follows f [Abstract]
Benefit related to U.S. federal statutory graduated rate	(30.16%)	(21.80%)
Benefit related to State income tax rate, net of federal benefit	(3.23%)	(3.62%)
Accrued officer salaries	1.99%	1.41%
Net operating loss for which no tax benefit is currently available	31.40%	24.01%
Effective rate	0.00%	0.00%

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NOTE F: SHAREHOLDERS' DEFICIT (Tables)

3 Months Ended

Jan. 31, 2014

Stockholders' Equity Note [Abstract]

Fair Value, Measurement Inputs, Disclosure [Text Block]

Risk-free interest rate	3.68%
Dividend yield	0.00%
Volatility factor	228.72%
Weighted average expected life	6.5 years

Schedule of Share-based Compensation, Stock Options and Stock Appreciation Rights Award Activity [Table Text Block]

		Number of Shares	Exercise Price Per Share	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price Per Share
Balance at October 31, 2012		1,500,000	$0.08 to $0.19	4.75 years	$0.17
	Options granted	-
	Options exercised	-
	Options expired	-
Balance at October 31, 2013		1,500,000	$0.08 to $0.19	4.75 years	$0.17
	Options granted	-
	Options exercised	-
	Options expired	-
Balance at January 31, 2014		1,500,000	$0.08 to $0.19	3.50 years	$0.17
Exercisable at October 31, 2013		300,000	$0.08 to $0.19	3.10 years	$0.12
Exercisable at January 31, 2014		300,000	$0.08 to $0.19	2.85 years	$0.12