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INVITRO INTERNATIONAL REPORTS 1ST HALF 2000 OPERATING INCOME ON INCREASED SALES

U.S. Government Agency Approvals expected to brighten future
Invitro International
Contact: W. Richard Ulmer
17751 Sky Park East, Suite G
(800) 2-INVITRO
Irvine, CA 92614
http://www.invitrointl.com
Irvine, CA May 16, 2000 — InVitro International (IVRO) announced today that revenues for each of its first two fiscal quarters in 2000 advanced to slightly more than $168,000. The nearly $337,000 first half sales total represents an increase of about 3% over same period 1999 figures. Operating profits for the December quarter were $7,787, and for the March quarter $13,967. These two quarters’ results extend to six, the number of consecutive fiscal quarters that IVRO has posted operating income. Although net income in IVRO’s second quarter was $8,949, the company posted a first half 2000 net loss of $95,249 due to an extraordinary, non-recurring write-off of $115,000 for a single doubtful receivable.
In commenting on first half Y2K results, InVitro President, W. Richard Ulmer, said, “We were really quite pleased with overall financial progress in our core business. And we are particularly hopeful that the recent approvals and acceptances from several important U.S. Regulatory Agencies (EPA, FDA, Consumer Product Safety Commission & OSHA) will reinvigorate our now 15 year old non-animal testing business. Such approvals reflect exciting scientific support and validation that should help Corrositex more firmly establish itself as the only commercially available government approved alternative to animal testing for corrosion. We plan to extend such strong credibility to include our other core capability, the Irritection Assay System, for ocular and dermal irritation detection.”
This press release may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to: acceptance of the Company’s technology by customers or regulatory agencies, changes in market conditions and other competitive factors. Any such forward-looking statements are not guarantees of future performance.


CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS

 


Three months ended
March 31


Six months ended
March 31

 


2000


1999


2000


1999


Revenues


168,126


166,575


336,704


328,651


Costs and expenses


154,159


150,582


314,950


294,840


Income (loss) from operations


13,967


15,993


21,754


33,811


Other income (loss)


(5,018)


9,198


(117,003)


9,535


Net income (loss)


8,949


25,191


(95,249)


43,346


Income (loss) per common share


0.001


0.002


(0.007)


0.0003


Weighted average common
shares outstanding


14,453,300


14,023,300


14,453,300


14,023,300

 



CONDENSED CONSOLIDATED
BALANCE SHEET

 

 

 


March 31, 2000


September 30, 1999


Cash, cash equivalents and marketable securities


150,097


104,593


Other current assets

 

 


218,103


217,126


Total current assets

 

 


368,200


321,719


Noncurrent assets

 

 


69,579


202,249


Total assets

 

 


437,779


523,968


Current liabilities

 

 


44,172


34,930


Shareholders’ equity

 

 


393,607


489,038


Total liabilities and equity

 

 


437,779


523,968

INVITRO INTERNATIONAL POSTS 4TH CONSECUTIVE PROFITABLE QUARTER

Full year ’99 sales up 16%, net profit at 9.4%
Invitro International
Contact: W. Richard Ulmer
17751 Sky Park East, Suite G
(800) 2-INVITRO
Irvine, CA 92614
http://www.invitrointl.com
Irvine, CA January 27, 2000 — InVitro International (OTC IVRO) announced that its 4th quarter ended September 30, 1999 produced sales of $169,806 and net profits of $11,801. For full fiscal year ’99, IVRO saw its audited sales reach $648,517, up 16%; its annual profits of nearly $61,000 were the first since the company went public in 1991. President & CEO, W. Richard Ulmer, said “We were very pleased that the 4th quarter was our top sales quarter in the year; but perhaps just as rewarding were the increases in both cash and new customers throughout the year. These increases allowed us to meet or exceed each of our ’99 financial objectives. Now it is our challenge to make profit a yearly habit!”


CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS

 


Three months ended
September 30


Twelve months ended
September 30

 


1999


1998


1999


1998


Revenues


169,806


152,517


648,517


560,091


Costs and expenses


153,599


388,846


600,513


981,994


Income (loss) from operations


16,207


(236,329)


48,004


(421,903)


Other income (loss)


(4,406)


48,534


12,880


50,035


Net income (loss)


11,801


(187,795)


60,884


(371,868)


Income (loss) per common share


0.0008


(0.0133)


0.0042


(0.0262)


Weighted average common
shares outstanding


14,453,300


14,169,968


14,453,300


14,169,968

 



CONDENSED CONSOLIDATED
BALANCE SHEET

 

 

 


September 30, 1999


September 30, 1998


Cash, cash equivalents and marketable securities


104,593


59,960


Other current assets

 

 


217,126


268,571


Total current assets

 

 


321,719


328,531


Noncurrent assets

 

 


202,249


154,479


Total assets

 

 


523,968


483,010


Current liabilities

 

 


34,930


54,856


Shareholders’ equity

 

 


489,038


428,154


Total liabilities and equity

 

 


523,968


483,010

INVITRO INTERNATIONAL POSTS 3RD CONSECUTIVE PROFITABLE QUARTER

Company also receives Corrositex endorsement from government sponsored science panel
W. Richard Ulmer
(800) 2-INVITRO
INVITRO INTERNATIONAL
Irvine

Glenn Bertolini
(619) 525-0800
COMPASS POINT GROUP, INC.

Irvine, CA August 3, 1999 — Invitro International (OTC IVRO) announced that its third quarter ended June 30, 1999 produced sales revenues of $150,060 and net income of $5,700. Fiscal 1999 year to date sales of nearly $479,000 are 17½% ahead of 1998 with the income total of $49,083 comparing favorably to a loss of $184,073 in the prior year.

In other important company news, InVitro announced that it had received an endorsement for its product Corrositex from a federally appointed panel of scientists (National Institute of Environmental Health Sciences) for use in evaluating potential skin corrosivity and irritation from chemicals and chemical formulations. Corrositex is the first such non-animal test method product endorsed by a U.S. government body. The panel review suggests that Corrositex testing can fully replace the use of animals for testing corrosiveness and irritation in some cases, while in others a tiered testing approach may be employed, thus having the potential to reduce considerably the numbers of laboratory animals used. This approach also has the potential to lower industry testing costs. IVRO President & CEO, W. Richard Ulmer, said “We are delighted and proud that our Corrositex test method can lead the way to lowering chemical, cosmetic, and other industry costs, save these companies time in their new product development cycles, and offers a bit of a good feeling for everyone when fewer animals are used in testing overall. We know that over 2000 new chemicals are introduced each year, and of course there are even more new cosmetic and over the counter personal products; our task now is to use our added new credibility to inform these manufacturers of how InVitro’s several non-animal test methods can help them.”



CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS


  Three months ended
June 30

Nine months ended June 30

 

1999


1998


1999


1998

Revenues

150,060


138,557


478,711


407,574

Costs and expenses

152,074


230,170


446,914


593,148

Income (loss) from operations

(2014)


(36,000)


31,797


(185,574)

Other income (loss)

7,751


950


17,286


1,501

Net income (loss)

5,737


(90,663)


49,083


(184,073)

Income (loss) per common share

0.0004


(0.0100)


0.0034


(0.0131)

Weighted average common
shares outstanding

14,453,300


14,023,300


14,453,300


14,023,300

 



CONDENSED
CONSOLIDATED BALANCE SHEET

     

June 30, 1999


Sep 30, 1998

 

(UNAUDITED)

 
Cash, cash equivalents
and marketable securities

75,050


59,960

Other current assets    

223,302


268,571

Total current assets    

298.352


328,531

Noncurrent assets    

203,641


154,479

Total assets    

501,993


483.010

Current liabilities    

21,678


54,856

Shareholders’ equity    

480,315


428,154

Total liabilities and equity
   

501,993


483,010

INVITRO INTERNATIONAL REPORTS SECOND QUARTER PROFIT

Sales & Cash Increase 6th Consecutive Quarter
W. Richard Ulmer
(800) 2-INVITRO
INVITRO INTERNATIONAL
Irvine
Irvine, CA May 11, 1999 — Invitro International (Bulletin Board Symbol “INVI”) announced revenues of $166,000 for its second fiscal quarter ended March 31, 1999; these sales represent a 22% increase over the comparable period in 1998 and continue a six quarter upward trend in both sales and cash. The company also posted profits of $25,200, its second successive profitable quarter after several years of losses. InVitro president, W. Richard Ulmer, commented, “It is interesting to note that our second quarter 1999 sales were higher than same quarter results in 1997 as well as 1998, and were bolstered by non-U.S. purchases of our core business products. We are very pleased that India/Asia, as well as Europe, contributed significantly to top and bottom line results.” Six months sales of $329,000 are up 22% vs. first half 1998 and profits total $43,000 vs. 1998 losses of $94,000.

In other company news, InVitro reported that it has redoubled its efforts to find a suitable partner, either within the U.S. or overseas, with whom to market its products and services.



CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS


  Three months ended
March 31

Six months ended March 31

 

1999


1998


1999


1998

Revenues

166,575


136,000


328,651


269,000

Costs and expenses

150,582


172,000


294,840


363,000

Income (loss) from operations

15,933


(36,000)


33,811


(94,000)

Other income (loss)

9,198


– 


9,535


– 

Net income (loss)

25,191


(36,000)


43,346


(94,000)

Income (loss) per common share

0.002


(0.003)


0.003


(0.01)

Weighted average common
shares outstanding

14,023,300


14,023,300


14,023,300


14,023,300

 



CONDENSED
CONSOLIDATED BALANCE SHEET

     

Mar 31, 1999


Sep 30, 1998

 

(UNAUDITED)

 
Cash, cash equivalents
and marketable securities

65,205


56,000

Other current assets    

262,930


566,000

Total current assets    

328,135


622,000

Noncurrent assets    

206,221


204,000

Total assets    

534,356


826,000

Current liabilities    

59,278


199,000

Shareholders’ equity    

475,078


627,000

Total liabilities and equity
   

534,356


826,000

INVITRO INTERNATIONAL REPORTS FIRST QUARTER PROFITABLE

Sales & Cash Increase 5th Consecutive Quarter
Irvine, CA February 9, 1999 — Invitro International (Bulletin Board Symbol “INVI”) announced revenues of $162,000 in its first fiscal quarter ended December 31, 1998; this is a 22% increase in sales over the comparable quarter last year. The Company also reported a profit of $18,000 in its first quarter 1999, or $.001 per share, which continues the recent INVI trend in positive results after many years of consistent losses. The second consecutive quarter of profit, although small in absolute dollars, combined with a fifth quarter consecutively of increased sales and cash, prompted INVI President, W. Richard Ulmer to say, “We are a determined team at INVI which has made steady progress toward profitability in our core business. Now, in addition to our internal efforts, we intend to increase our presence globally through a partnering or external strategy. We plan to continue profitable and growing so that we can more suitably structure opportunities in such areas as marketing and sales alliances, merger (as mentioned in prior releases), and even co-licensing our existing technologies”.

In other Company news INVI reported that after nearly three and one half years of U.S. Government process, the Inter-agency Committee for the Validation of Alternative Methods (rather that testing with animals) held a one day review January 21, 1999 to consider extending the Company’s Corrositex applications and acceptances beyond current DOT and EPA regulated areas. Results will be announced later in 1999. InVitro management remains hopeful that the “tiered testing” approach which mandates the use of animals under conditions frequently encountered in industry, and which has surfaced in several government sponsored work groups both in Europe and in the United States, will not appear in final committee reports. InVitro International asks each of its website and regular-form press release readers, as well as its shareholders, to be alert to developments in this area of corrosive testing regulations. Various animal welfare groups are prepared to help if necessary.



CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS


           
Three months ended December 30
 

 


 


1998


1997

Revenues

 


 


162,076


133,272

Costs and expenses

 


 


144,278


190,486

Income (loss) from operations

 


 


17,817


(57,215)

Other income (loss)

 


 


337


(207)

Net income (loss)

 


 


18,155


(57,421)

Income (loss) per common share

 


 


0.001


(0.004)

Weighted average common
shares outstanding

 


 


14,169,968


14,023,300

 



CONDENSED
CONSOLIDATED BALANCE SHEET

     

Dec 30, 1998


Dec 30, 1997

 

(UNAUDITED)

 
Cash, cash equivalents
and marketable securities

63,086


59,960

Other current assets    

316,562


268,571

Total current assets    

379,648


328,531

Noncurrent assets    

133,119


154,479

Total assets    

512,767


483,010

Current liabilities    

63,005


54,856

Shareholders’ equity    

449,761


428,154

Total liabilities and equity
   

512,766


483,010

INVITRO INTERNATIONAL REPORTS FOURTH QUARTER PROFITABLE, BEFORE INVENTORY WRITE OFF

Sales & Cash Increase 4th Consecutive Quarter
Irvine, CA January 25, 1999 — Invitro International (Bulletin Board Symbol “INVI”) announced revenues of $153,000 for its fourth fiscal quarter ended September 30, 1998; this is a 30% increase over the comparable quarter in the prior fiscal year. Also during INVI’s 1998 final quarter, the Company recorded an operating profit of $22,000 before a charge to write off excess Guardian DNA inventory of $258,000. The $22,000 operating profit is the first such quarterly result after more than five (5) years of losses and follows previously unannounced third quarter 1998 operating losses of just $11,000. The small third quarter operating loss was also before an extraordinary charge of $76,500 for stock compensation to McKenna, Delaney & Sullivan, Invitro International’s newly hired Advertising & Public Relations partner. President and Chief Executive Officer, W. Richard Ulmer, said “It has been a challenge to get INVI to a fiscally responsible place, and we know that our job is far from finished. In recent months we have seen an increase in our core business of non-animal testing, perhaps as a result of increased U.S. Department of Transportation regulatory enforcement; the sales increase may also be related to the 1999 change in United Kingdom regulations where no more permits will be issued for testing new cosmetic products using animals. In addition, we continue to be pleased with the performances of our new agents and partner laboratories in Asia, Europe and the United States.”

For full year 1998, INVI’s sales revenues totaled $560,000, off 22% vs. 1997; losses were $375,804 for the latest year, $(0.03) per share vs. $(0.08) in 1997 and $(0.15) in 1996. It is noteworthy that in the full year 1998, only $41,200 of the INVI losses were from operations before the aforementioned non-recurring charges. When viewed in this manner, 1998 losses were 92% lower than 1997 levels with none in the fourth quarter. In addition, the Company’s cash levels increased slightly in each of the four fiscal quarters.

With regard to previously announced INVI intentions to merge with Miragen, financing plans continue to move forward. The focus of these plans is on the development of an automated piece of equipment for Miragen’s patented antibody profiling identification technology. Of note, is that memoranda of understanding are pending for the purchase and use of several such machines in centers of influence throughout the world. The INVI merger plans, however, remain subject to various conditions such as obtaining additional financing in sufficient amounts to sustain future operation of both companies from sources willing to approve the proposed merger, INVI stockholder approval, etal.



CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS


  Three months ended
September 30
       
Twelve months ended September 30
 

1998


1997


1998


1997

Revenues

152,518


115,903


560,091


720,017

Costs and expenses

388,885


317,840


981,994


1,941,588

Loss from operations

(236,367)


(201,937)


(421,903)


(1,221,571)

Other income (loss)

41,429


683


46,099


32,801

Net loss

(194,938)


(201,254)


(375,804)


(1,188,770)

Loss per common share

(0.01)


(0.01)


(0.03)


(0.08)

Weighted average common
shares outstanding

14,169,968


14,023,300


14,169,968


14,023,300

 



CONDENSED
CONSOLIDATED BALANCE SHEET

     

Sept 30, 1998


Sept 30, 1997

 

(AUDITED)

 
Cash, cash equivalents
and marketable securities

59,960


54,000

Other current assets    

268,571


584,000

Total current assets    

328,531


638,000

Noncurrent assets    

154,479


255,000

Total assets    

483,010


893,000

Current liabilities    

54,856


169,000

Shareholders’ equity    

428,154


724,000

Total liabilities and equity
   

483,010


893,000

INVITRO SALES, CASH INCREASE AGAIN; MERGER PLANS UPDATE

W. Richard Ulmer
(800) 2-INVITRO
INVITRO INTERNATIONAL
Irvine

Bob Sullivan
760-931-2500
MAKENNA DELANEY & SULLIVAN
Carlsbad
IRVINE – July 7, 1998 – InVitro International, (OTC: INVI) announced that its quarter ended June 30, 1998, produced revenues of $138,600. This is the Company’s third consecutive quarter in which revenues and cash have grown. President and CEO, W. Richard Ulmer, stated “INVI’s unaudited cash and revenues in the most recent quarter once again met budget and showed a small increase. Profit and loss results are not yet available, however, exclusive of non-cash charges, our fiscal quarter should be near break even. These results reinforce management’s view that the Company has made good progress toward being able to stand alone and make us an even more attractive merger prospect.”

Regarding possible merger, Ulmer revealed that INVI’s target company, Miragen, has continued steps toward commercializing its patented Antibody Profiling identification technology. Recently, Miragen signed a licensing agreement with Ag Research of New Zealand, a combined private and government organization, to commit in excess of half a million dollars over the next twelve months to gather data in support of the antibody profile technology. The objective of this investment is to establish traceability of New Zealand sheep and cattle.

Currently, Miragen’s head of science, Dr. Thomas Unger, is in Calgary, Canada as an invited speaker to the Beef Improvement Federation. He is addressing the potential application of the antibody profile technology for use in identifying and tracing beef sold in North America. Despite these encouraging signs, any finalization of merger between Miragen and InVitro must await completion of either company’s planned financing.

InVitro International is engaged in the development, manufacture, and sale of proprietary, non-animal toxicity testing products and services that ensure the safekeeping of humans and the environment, and that minimize animal testing in commercial and academic enterprise.

Certain information in this document includes “forward-looking statements” within the meaning of applicable securities laws. In addition, from time to time the Company or its executive officers have made or may make forward-looking statements, orally or in writing, that involve substantial risks and uncertainties. Actual results could differ materially from those projected or suggested by forward-looking statements as a result of a variety of factors and conditions including, but not limited to, the ability of the Company to continue as a going concern, market acceptance of new products and technologies, economic, competitive, governmental, and technological factors affecting the Company’s operations, markets, services, and prices, Year 2000 issues, litigation costs, unanticipated events and various other factors. The reader is specifically referred to disclosures contained in this document and in prior documents publicly disseminated by the Company.

INVITRO INTERNATIONAL SIGNS INVESTOR RELATIONS FIRM

Makenna Delaney & Sullivan, Inc. to assist the firm.
W. Richard Ulmer
(800) 2-INVITRO
INVITRO INTERNATIONAL
Irvine

Bob Sullivan
760-931-2500
MAKENNA DELANEY & SULLIVAN
Carlsbad

IRVINE — June 8, 1998 – InVitro International, (OTC Bulletin Board: INVI) announced today that it has signed Makenna Delaney & Sullivan, Inc. to assist the firm with investor relations, capital formation, and related materials. InVitro has publically announced its intention to merge with entities in related technology fields, and has specifically targeted Miragen, Inc. Miragen, Inc. has developed a cost-effective, patented, biologically based identification system for use in several markets, including human clinical laboratories, animal, forensic, educational, and environmental applications.

For more than nine years, Makenna Delaney & Sullivan has specialized in investor relations, venture packaging, equity financing, strategic marketing, financial documentation, and corporate identity services. MDS is a nationally recognized leader in business document production and investor relations with a successful track record of assisting clients in their quest for capital.

InVitro International is engaged in the development, manufacture and sale of quality, proprietary preventive products and services to ensure the safekeeping of humans and the environment, and to minimize animal testing in commercial and academic enterprise.

InVitro International offers experience and consulting from what may be the world’s largest data base of NON-ANIMAL ocular and dermal test results; this offering is part of INVI’s Irritection Assay Systemr (IAS) and Corrositexr Assay methods. The IAS is a plate reader based computer driven upgrade from the former Eytex/Skintex methodology; it has been widely accepted over the past two years and has helped reduce industry costs when testing for safety and efficacy of ocular, skin care, personal care, and chemical products. InVitro International offers industry a series of services, including protocol development, customized contract testing services, and direct kit sales in support of product claims or workplace safety. The Irritection Assay System is well suited for choosing new formulations as well as testing final or competitive products. IAS helps cut time and costs out of new product development cycles.

Certain information in this document includes “forward-looking statements” within the meaning of applicable securities laws. In addition, from time to time the Company or its executive officers have made or may make forward-looking statements, orally or in writing, that involve substantial risks and uncertainties. Actual results could differ materially from those projected or suggested by any forward-looking statements as a result of a variety of factors and conditions including, but not limited to, the ability of the Company to continue as a going concern, market acceptance of new products and technologies, economic, competitive, governmental, and technological factors affecting the Company’s operations, markets, services, and prices, significant disruptions caused by third parties’ failure to address Year 2000 issues, litigation costs, changes in the Company’s operations, unanticipated events and various other factors. The reader is specifically referred to disclosures contained in this document and in prior documents publicly disseminated by the Company.

INVITRO INTERNATIONAL REPORTS SECOND QUARTER RESULTS AND COMMENTS ON ANNUAL MEETING

Company Looks Forward with Cautious Optimism
Irvine, CA, May 5, 1998 — InVitro International’s (Bulletin Board Symbol “INVI”) second fiscal quarter, ended March 31, 1998, resulted with revenues of $135,744, an increase of 2% over the revenues of $133,272 for quarter ended December 31, 1997; net loss for the second quarter was $36,069 or .003¢ per share, a decrease of $ 21,700 compared to first quarter losses and 91% less than second quarter 1997 losses of $395,000, or .02¢ per share. Management anticipates that the losses will continue to narrow if revenues increase only slightly above their current rate.

President and Chief Executive Officer, W. Richard Ulmer, stated “INVI’s unaudited second quarter financial for the period ending March 31, 1998, again showed an increase in cash with slightly higher sales than in the first quarter(ended December 31, 1997); profit and loss results were very near break-even for this second quarter.” Most of the quarter’s loss is attributable to fiscal year end audit, and shareholder/ broker printing and mailing expenses.

In reviewing current opportunities for INVI, Ulmer indicated that the recent increase in Department of Transportation enforcement personnel appears to have spurred more interest in Corrositex® testing in the United States; in addition, INVI’s agents and partner laboratories in both Asia and Europe have developed several new business opportunities for the Company’s Irritection Assay System® during the last year. Ulmer commented, “InVitro International has demonstrated a mental toughness and shown its ability to stay on course under difficult circumstances; we continue to believe that we are ahead of our time both with the non-animal testing core business as well as with the infant safety and identification product, Guardian DNA.” He continued by saying, “with the November 1997 United Kingdom legislation preventing future new finished cosmetics from being tested on animals, there is potential for more demand for non-animal test methodologies such as INVI’s Irritection Assay System in its Ocular and Dermal forms.”

Finally, Ulmer noted that as had been mentioned in the recent 1997 Letter to Shareholder, the Company’s current plan of operation includes a continuing effort to find a suitable merger partner. There is no new news on that activity at this time.

InVitro’s annual shareholder’ meeting was held on April 17, 1998, at which five incumbent directors were re-elected.

InVitro International is engaged in the development, manufacture and sale of proprietary, non-animal toxicity testing products and services that ensure the safekeeping of humans and the environment, and that minimize animal testing in commercial and academic enterprise.

Certain information in this document includes “forward-looking statements” within the meaning of applicable securities laws. In addition, from time to time the Company or its executive officers have made or may make forward-looking statements, orally or in writing, that involve substantial risks and uncertainties. Actual results could differ materially from those projected or suggested by any forward-looking statements as a result of a wide variety of factors and conditions, including but not limited to, the ability of the Company to continue as a going concern, market acceptance of new products and technologies, economic, competitive, governmental and technological factors affecting the Company’s operations, markets, services and prices, significant disruptions caused by third parties failures to address the Year 2000 issues, litigation costs, changes in the Company’s operations, unanticipated events and various other factors. The reader is specifically referred to disclosures contained in this document and in prior documents publicly disseminated by the Company.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS



Three months ended March 31 Six months ended March 31
1998 1997 1998 1997
(unaudited) Revenues $136,000 $164,000 $269,000 $423,000

Costs and expenses 172,000 567,000 363,000 1,346,000

Loss from operations (36,000) (403,000) (94,000) (923,000)

Other income 0 8,000 0 22,000

Net loss $(36,000) $(395,000) $(94,000) $(901,000)

Loss per common share $(0.003) (0.02) $(0.01) (0.06)

Weighted average common
shares outstanding 14,028,300 14,023,300



Condensed Consolidated Balance Sheet
(unaudited) March 31, March 31, 1998 1997

Cash and cash equivalents $56,000 54,000

Other current assets 566,000 584,000

Total current assets 622,000 638,000

Noncurrent assets 204,000 255,000

Total assets $826,000 $893,000

Current liabilities $199,000 $169,000

Shareholders' equity 627,000 724,000

Total liabilities & equity $826,000 893,000








PRESIDENT’S LETTER

To Our Shareholders: InVitro International finished the 1997 fiscal year by recording its lowest quarterly loss since becoming a public company in 1991. The loss for the quarter ended September 30, 1997, was $232,000, or $0.01 per share, compared to a loss of $568,000, or $0.04 per share in the quarter ended September 30, 1996. Our loss for the full 1997 fiscal year was $1,331,000, or $0.09 per share, compared to a loss of $1,898,000, or $0.15 per share in fiscal 1996.

As our shareholders are aware from prior announcements, InVitro has experienced significant financial difficulties primarily as a result of low sales volume. Erosion in demand for our non-animal safety testing alternatives continued in fiscal 1997 as revenues declined to $720,000 from $1,063,000 in fiscal 1996. To maintain the Company’s survival, operations have been significantly downsized during the last three years by staff reductions and other decreases in operating expenses. The Company’s plan of operation is to seek a suitable merger partner in an effort to preserve and hopefully enhance shareholder value. InVitro is a clean public company, free of debt, with a diversified shareholder base that should be attractive to an appropriate merger candidate.

For the present, we have been able to maintain and preserve the Company’s core business while merger possibilities are pursued. To compensate in part for sales staff reductions, we have added agents and partner laboratories that have been appointed and trained in Europe, Asia and the Unites States. With these changes and my agreement to defer temporarily a portion of the President’s salary, the most recent quarter ended December 31, 1997, showed a small increase in the Company’s cash position from operations as compared to September 30, 1997. This is the first time InVitro has experienced positive cash flow from operations in a fiscal quarter. If the Company can successfully maintain this position or the immediate future, your management is committed to preserving INVI’s core business and seeking new customers while continuing the search for a suitable merger partner.

Our preferred merger partner, Miragen Inc., to date has been unable to complete a transaction due to delays in obtaining additional financing. At the request of Miragen’s Board, I have agreed to serve on a part-time basis as Miragen’s Acting President and Chief Executive Officer. I believe this affords an excellent opportunity to assess Miragen’s potential and progress while it continues to pursue financing necessary for Miragen to become a viable merger prospect.

Notwithstanding my current role in Miragen, my topmost priority is to preserve INVI’s core business and to take any steps possible for INVI to attain the goal of standing on its own financially. As we maintain InVitro’s technology and core capabilities, the Company is impatiently waiting for government and industry to move toward non-animal testing. There are new glimmers of hope from time to time as, for example, November 1997 legislation passed in the United Kingdom that prohibits animal testing for new cosmetic products marketed in the U.K.

Thank you for your continued support. We encourage shareholders and friends of the Company to put pressure through your purchasing decisions on industries such as cosmetics, industrial chemicals, textiles, personal care products and petrochemical in support of non-animal safety testing methods. As always, I can be reached at 1-800-2-INVITRO, extension 260, if I can be of help or service.