---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

OR

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

For the transition period from ________________to _______________

Commission file Number: 000-51698

Xeno Transplants
Corporation(Exact name of small business issuer as specified
in its charter)

|Nevada                          | 98-0335119                       
|------------------------------- | ---------------------------------
|(State or other jurisdiction of | (IRS Employer Identification No.)
|incorporation or organization)  |                                  

1066 West Hastings Street, Suite 2610, Vancouver, BC,
Canada V6E 3X2(Address of principal executive offices)

(604) 684-4691(Issuers telephone number)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the issuer 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 issuer is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of November 12, 2007, 40,363,822 shares of common stock of
the Issuer were issued and outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [
] No [X]

1

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XENO TRANSPLANTS CORP.

FORM 10-QSB

For the Quarterly Period Ended September 30, 2007

INDEX

|PART I  | Financial Information                                             | 3 
|------- | ----------------------------------------------------------------- | --
|Item 1. | Financial Statements                                              | 3 
|Item 2. | Managements Discussion
      and Analysis or Plan of Operation   | 15
|Item 3. | Controls and
      Procedures                                     | 22
|        |                                                                   |   
|PART II | Other Information                                                 | 23
|Item 1. | Legal Proceedings                                                 | 23
|Item 2. | Unregistered
      Sales of Equity Securities and Use of Proceeds | 23
|Item 3. | Defaults Upon Senior Securities                                   | 23
|Item 4. | Submission of
      Matters to a Vote of Security Holders         | 23
|Item 5. | Other Information                                                 | 23
|Item 6. | Exhibits                                                          | 24







2

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PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

XENO TRANSPLANTS CORPORATION

Index to Consolidated Financial Statements

|Consolidated Balance Sheets                 | Page 4
|------------------------------------------- | ------
|Consolidated Statements of Operations       | Page 5
|Consolidated Statements of
      Cash Flows | Page 6
|Notes to Consolidated Financial Statements  | Page 7

3

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|XENO TRANSPLANTS CORPORATION     
|---------------------------------
|(formerly Icon Development, Inc.)
|(A DEVELOPMENT STAGE COMPANY)    
|CONSOLIDATED BALANCE SHEETS      
|(unaudited)                      

|                                                                                   |   | September 30, |   |   | June 30,  |  
|---------------------------------------------------------------------------------- | - | ------------- | - | - | --------- | -
|                                                                                   |   | 2007          |   |   | 2007      |  
|                                                                                   |   | (unaudited)   |   |   | (audited) |  
|                                                                                   |   |               |   |   |           |  
|ASSETS                                                                             |   |               |   |   |           |  
|                                                                                   |   |               |   |   |           |  
|Current assets                                                                     |   |               |   |   |           |  
|Cash                                                                               | $ | 3,600         |   | $ | 32,096    |  
|Loans Receivable                                                                   |   | 25,000        |   |   | -         |  
|Prepaid expenses                                                                   |   | 460           |   |   | 5,731     |  
|                                                                                   |   |               |   |   |           |  
|Total current assets                                                               |   | 29,060        |   |   | 37,827    |  
|                                                                                   |   |               |   |   |           |  
|Equipment (Note 4)                                                                 |   | 1,679         |   |   | -         |  
|Intellectual Property (Note 5)                                                     |   | 751,540       |   |   | 603,582   |  
|                                                                                   |   |               |   |   |           |  
|TOTAL ASSETS                                                                       | $ | 782,279       |   | $ | 641,409   |  
|                                                                                   |   |               |   |   |           |  
|                                                                                   |   |               |   |   |           |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                               |   |               |   |   |           |  
|                                                                                   |   |               |   |   |           |  
|Current liabilities                                                                |   |               |   |   |           |  
|Accounts payable
      and accrued liabilities                                     | $ | 342,521       |   | $ | 233,812   |  
|Loans Payable                                                                      |   | 105,000       |   |   | -         |  
|Amounts due to
      related parties (Note 8)                                      |   | 21,557        |   |   | 21,557    |  
|                                                                                   |   |               |   |   |           |  
|Total current liabilities                                                          |   | 469,078       |   |   | 255,369   |  
|                                                                                   |   |               |   |   |           |  
|                                                                                   |   |               |   |   |           |  
|TOTAL LIABILITIES                                                                  |   | 469,078       |   |   | 255,369   |  
|                                                                                   |   |               |   |   |           |  
|                                                                                   |   |               |   |   |           |  
|Stockholders' equity (Note 6)                                                      |   |               |   |   |           |  
|Preferred stock                                                                    |   |               |   |   |           |  
|25,000,000 preferred shares authorized at $0.001 par value;                        |   |               |   |   |           |  
|no shares issued
      and outstanding                                             |   |               |   |   |           |  
|Common stock                                                                       |   |               |   |   |           |  
|125,000,000 common
      shares authorized at $0.001 par value;                    |   |               |   |   |           |  
|40,363,822 common shares issued and outstanding (June 30, 2007 -
      40,295,820) |   | 40,364        |   |   | 40,296    |  
|Subscriptions                                                                      |   | 625,000       |   |   | 625,000   |  
|Additional
      paid-in capital                                                   |   | 67,932        |   |   | -         |  
|Accumulated deficit                                                                |   | (420,095      | ) |   | (279,256  | )
|                                                                                   |   |               |   |   |           |  
|Total stockholders' equity                                                         |   | 313,201       |   |   | 386,040   |  
|                                                                                   |   |               |   |   |           |  
|TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY                                   | $ | 782,279       |   | $ | 641,409   |  

History and organization of the Company (Note 1) Subsequent
event (Note 11)

The accompanying notes are an integral part of these
consolidated financial statements.

4

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|XENO TRANSPLANTS CORPORATION               
|-------------------------------------------
|(formerly Icon Development, Inc.)          
|(A DEVELOPMENT STAGE COMPANY)              
|CONSOLIDATED
      STATEMENTS OF OPERATIONS

|                                                           |   |               |  |   | Cumulative          | 
|---------------------------------------------------------- | - | ------------- |  | - | ------------------- | 
|                                                           |   | Three months  |  |   | amounts from        | 
|                                                           |   | ended         |  |   | inception on        | 
|                                                           |   | September 30, |  |   | February 8, 2006 to | 
|                                                           |   | 2007          |  |   | September 30, 2007  | 
|                                                           |   | (unaudited)   |  |   | (unaudited)         | 
|Sales                                                      | $ | -             |  | $ | -                   | 
|Operating expenses                                         |   |               |  |   |                     | 
|General and administrative                                 |   | 140,838       |  |   | 315,374             | 
|                                                           |   |               |  |   |                     | 
|Net loss before income taxes                               |   | 140,838       |  |   | 315,374             | 
|Provision for income taxes                                 |   | -             |  |   | -                   | 
|Net loss                                                   | $ | 140,838       |  | $ | 315,374             | 
|                                                           |   |               |  |   |                     | 
|Loss per share - basic and diluted                         | $ | 0.00          |  |   |                     | 
|                                                           |   |               |  |   |                     | 
|Weighted average number of common shares
      outstanding |   | 40,325,386    |  |   |                     | 

The accompanying notes are an integral part of these
consolidated financial statements.

5

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|XENO TRANSPLANTS CORPORATION               
|-------------------------------------------
|(formerly Icon Development, Inc.)          
|(A DEVELOPMENT STAGE COMPANY)              
|CONSOLIDATED
      STATEMENTS OF CASH FLOWS

|                                                                        |   |               |   |   | Cumulative          |  
|----------------------------------------------------------------------- | - | ------------- | - | - | ------------------- | -
|                                                                        |   | Three months  |   |   | amounts from        |  
|                                                                        |   | ended         |   |   | inception on        |  
|                                                                        |   | September 30, |   |   | February 8, 2006 to |  
|                                                                        |   | 2007          |   |   | September 30, 2007  |  
|                                                                        |   | (unaudited)   |   |   | (unaudited)         |  
|                                                                        |   |               |   |   |                     |  
|Cash flows from operating activities                                    |   |               |   |   |                     |  
|Net loss                                                                | $ | (140,838      | ) | $ | (315,374            | )
|                                                                        |   |               |   |   |                     |  
|Adjustments to reconcile net
      loss to net cash used in operations: |   |               |   |   |                     |  
|Amortization                                                            |   | 48            |   |   | 48                  |  
|Write-off of
      capital assets                                       |   | -             |   |   | 348                 |  
|Changes in:                                                             |   |               |   |   |                     |  
|Prepaid expenses                                                        |   | 5,270         |   |   | (461                | )
|Accounts payable and accrued liabilities                                |   | 108,709       |   |   | 153,587             |  
|                                                                        |   |               |   |   |                     |  
|Net cash used in
      operating activities                             |   | (26,811       | ) |   | (161,852            | )
|                                                                        |   |               |   |   |                     |  
|                                                                        |   |               |   |   |                     |  
|Cash flows from investing activities                                    |   |               |   |   |                     |  
|Acquisition of
      intellectual property                              |   | (79,958       | ) |   | (569,017            | )
|Loans receivable                                                        |   | (25,000       | ) |   | (25,000             | )
|Purchase of
      equipment                                             |   | (1,727        | ) |   | (1,727              | )
|Cash acquired on acquisition                                            |   | -             |   |   | 252,385             |  
|                                                                        |   |               |   |   |                     |  
|Net cash used in investing
      activities                             |   | (106,685      | ) |   | (343,359            | )
|                                                                        |   |               |   |   |                     |  
|                                                                        |   |               |   |   |                     |  
|Cash flows from financing activities                                    |   |               |   |   |                     |  
|Issuance of capital stock                                               |   | -             |   |   | 41,500              |  
|Proceeds from
      share subscriptions                                 |   | -             |   |   | 18,250              |  
|Shareholder advances
      (repayments), net                            |   | -             |   |   | 16,561              |  
|Loans payable                                                           |   | 105,000       |   |   | 432,500             |  
|                                                                        |   |               |   |   |                     |  
|Net cash
      provided by financing activities                         |   | 105,000       |   |   | 508,811             |  
|                                                                        |   |               |   |   |                     |  
|                                                                        |   |               |   |   |                     |  
|Increase (decrease) in cash and cash equivalents                        |   | (28,496       | ) |   | 3,600               |  
|                                                                        |   |               |   |   |                     |  
|Cash and cash equivalents, beginning of period                          |   | 32,096        |   |   | -                   |  
|                                                                        |   |               |   |   |                     |  
|Cash and cash
      equivalents, end of period                          | $ | 3,600         |   | $ | 3,600               |  

Supplemental disclosure with respect to cash flows (Note 9)

The accompanying notes are an integral part of these
consolidated financial statements.

6

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|XENO TRANSPLANTS CORPORATION                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|September 30, 2007                            
|Unaudited                                     

|1. | HISTORY AND ORGANIZATION OF THE COMPANY
      Xeno Transplants Corporation (the Company)
        was incorporated under the laws of the State of Nevada on October 5, 2004.
        The Company was a software development company and its plan was to commercialize
        an enterprise information portal and related software applications. It
        was in the early marketing stages of its software application and infrastructure
        build out, and had not yet generated any revenue. Through the merger of
        its wholly-owned subsidiary, Icon Acquisition Corporation (Merger
        Sub), with and into American Xeno Inc. (AXI) described
        below, the Company has undertaken a new strategic and business direction.
        The Company is now a bio-technology research and development company that
        holds an exclusive commercial license from Massachusetts General Hospital
        (MGH) derived from over 15 years of development in the field
        of xenotransplantation by Novartis Pharmaceuticals (Novartis)
        and its associated research entities. Xenotransplantation is defined as
        the transplantation of organs, cells and tissues from one species to another.
        At this time, the Company has no employees and no material business operations
        and to date has not generated any revenue. AXI is a bio-technology research
        and development company incorporated in Nevada on February 8, 2006 and
        a wholly-owned subsidiary of the Company.
      On May 3, 2007, an agreement and plan of merger (the Agreement)
        was executed with AXI, Merger Sub, and the stockholders of AXI and on
        May 8, 2007 Merger Sub was merged with and into AXI and each two issued
        and outstanding shares of common stock of AXI were converted into one
        share of common stock of the Company (the Merger) resulting
        in an aggregate of 29,875,000 shares of common stock being issued. The
        Company also cancelled 12,500,000 shares of common stock previously held
        by a founding shareholder. As a result of the Merger, AXI became a wholly-owned
        subsidiary of the Company and a change of control of the Company occurred
        as the AXI stockholders acquired approximately 74% of the issued and outstanding
        shares of common stock following the closing of the Merger.
      As a condition to the Merger and as set forth in the Agreement,
        the Company intended to complete a private placement (the Private
        Placement) of up to 1,500,000 units (Units) of the Company
        at a price of $1.00 per Unit to certain eligible investors by September
        30, 2007. Each Unit was to consist of one share of common stock and one-half
        of one common stock purchase warrant of the Company. Each whole purchase
        warrant would have entitled the holder for 18 months from the date of
        issuance of the Units to acquire one additional share of common stock
        of the Company at an exercise price of $2.00. On September 24, 2007 the
        Company altered the terms of the warrants attached to the Units whereby
        each Unit when issued will now include one full warrant to purchase one
        share of common stock at a price of $1.00, exercisable for two years from
        the date of closing the Private Placement and extended the closing date
        of the Private Placement to on or before December 31, 2007.
      For accounting purposes, this Merger was treated as a reverse
        merger with AXI being the accounting acquirer and the go-forward financial
        statements reflect AXIs history from its inception on February 8,
        2006. The fiscal year-end of AXI was changed to June 30 from December
        31.
      On August 13, 2007 the Company changed its name from Icon
        Development, Inc. to Xeno Transplants Corporation.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7

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|XENO TRANSPLANTS CORPORATION                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|September 30, 2007                            
|Unaudited                                     

|2. | GOING CONCERN
      The accompanying consolidated financial statements have
        been prepared assuming the Company will continue as a going concern, which
        assumes the realization of assets and settlement of liabilities in the
        normal course of business. The Company has not earned any revenues since
        inception and has had a history of negative cash flows from operating
        activities. In addition, the Company has an accumulated deficit of $420,095
        as of September 30, 2007. These considerations raise substantial doubt
        about the Company's ability to continue as a going concern. Accordingly,
        the Company will require continued financial support from its shareholders
        and creditors until it is able to generate sufficient cash flow from operations
        on a sustained basis. There is substantial doubt that the Company will
        be successful at achieving these results. Failure to obtain the ongoing
        support of its stockholders and creditors may make the going concern basis
        of accounting inappropriate, in which case the Companys assets and
        liabilities would need to be recognized at their liquidation values. These
        financial statements do not include any adjustments relating to the recoverability
        and classification of recorded asset amounts and classification of liabilities
        that might arise from this uncertainty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|3. | SIGNIFICANT ACCOUNTING POLICIES
      Basis of presentation
      The accompanying financial statements have been prepared
        in accordance with accounting principles generally accepted in the United
        States (US GAAP) and are expressed in US dollars. The financial
        statements have been prepared under the guidelines of Statement of Financial
        Accounting Standard (SFAS) No. 7, Accounting and Reporting
        by Development Stage Enterprises. A development stage enterprise
        is one in which planned principal operations have not commenced or if
        its operations have commenced, there have been no significant revenues
        therefrom. As of September 30, 2007, the Company has not commenced its
        planned principal operations. The accompanying consolidated interim financial
        statements have been prepared in accordance with accounting principles
        generally accepted in the United States for interim financial information
        with the instructions to Form 10-QSB and Regulation S-B. Accordingly,
        they do not include all of the information and footnotes required by US
        GAAP for complete financial statements. Although they are unaudited, in
        the opinion of management, they include all adjustments, consisting only
        of normal recurring items, necessary for a fair presentation. Results
        are not necessarily indicative of results which may be achieved in the
        future. The consolidated financial statements and notes appearing in this
        report should be read in conjunction with the Company's consolidated audited
        financial statements and related notes thereto, together with Management's
        Discussion and Analysis of Financial Condition and Results of Operations,
        contained in the Company's Annual Report on Form 10-KSB for the fiscal
        year ended June 30, 2007, as filed with the Securities and Exchange Commission
        (the SEC) on September 27, 2007 (file no. 000-51698).

8

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|XENO TRANSPLANTS CORPORATION                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|September 30, 2007                            
|Unaudited                                     

|3. | SIGNIFICANT ACCOUNTING POLICIES(contd)
      Basis of consolidation
      The consolidated financial statements include the accounts
        of the Company and its wholly-owned subsidiary, AXI, since the date of
        its acquisition on May 3, 2007. All material inter-company accounts and
        transactions have been eliminated.
      Use of estimates
      The preparation of financial statements in accordance with
        US GAAP requires management to make estimates and assumptions that affect
        the reported amounts of assets and liabilities and the disclosure of contingent
        assets and liabilities at the date of the financial statements, and the
        reported amounts of revenue and expenses during the reporting period.
        Actual results could differ from those estimates.
      Cash and cash equivalents
      The Company considers all highly liquid instruments with
        a stated maturity of three months or less to be cash and cash equivalents.
        As of September 30, 2007, cash consists of balances held with financial
        institutions. Cash is deposited in institutions that are generally federally
        insured in limited amounts.
      Fair value of financial instruments
      The carrying values of financial instruments such as cash,
        loans receivable, accounts payable and accrued liabilities, loans payable,
        and amounts due to related parties approximate their fair values due to
        the short settlement period for these instruments.
      Intellectual property
      Intellectual property such as patents and licences applications
        is recorded at cost. Capitalized amounts relate to the acquisition of
        patents and licences, which include legal and advisory costs incurred
        in registration of the patents. Depreciation is calculated using the straight-line
        method over the useful lives of the patents. No depreciation is provided
        for as the patents have not yet been awarded and/or begun to generate
        revenues.
      Equipment
      Equipment is stated at cost less accumulated depreciation
        and is depreciated on a straight line basis, commencing when the assets
        are put into use over the estimated useful life of three years.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9

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|XENO TRANSPLANTS CORPORATION                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|September 30, 2007                            
|Unaudited                                     

|3. | SIGNIFICANT ACCOUNTING POLICIES(contd)
      Impairment of long-lived assets
      Long-lived assets are accounted for in accordance with
        SFAS No.144, Accounting for the Impairment or Disposal of Long-Lived
        Assets and for Long-Lived Assets to be Disposed of, which requires
        that companies consider whether events or changes in facts and circumstances,
        both internally and externally, may indicate that an impairment of long-lived
        assets held for use are present. Management periodically evaluates the
        carrying value of long-lived assets and has determined that there was
        no impairment as of September 30, 2007. Should there be impairment in
        the future, the Company would recognize the amount of the impairment based
        on the expected future cash flows from the impaired assets. The cash flow
        estimates would be based on managements best estimates, using appropriate
        and customary assumptions and projections at the time.
      Advertising costs
      There were no advertising costs incurred during the period
        presented.
      Research and development costs
      Research and development costs are charged to expense as
        incurred.
      Income taxes
      The Company accounts for income taxes under Statements
        of Financial Accounting Standards No. 109, Accounting for Income
        Taxes (SFAS 109). Under SFAS 109, deferred tax assets
        and liabilities are recognized for the future tax consequences attributable
        to differences between the financial statement 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. Under SFAS No. 109, the effect on
        deferred tax assets and liabilities of a change in tax rates is recognized
        in income in the period that includes the enactment date.
      Loss per share
      Basic loss per share of common stock is computed using
        the weighted average number of shares of common stock outstanding during
        the period. To calculate diluted loss per share, the Company uses the
        treasury stock method as defined in SFAS No. 128, Earnings Per Share.
        As at September 30, 2007, the Company had 34,000 of potentially dilutive
        instruments that were excluded from the determination of diluted loss
        per share as they would be anti-dilutive.
      Concentration of credit risk
      The financial instrument which potentially subjects the
        Company to concentration of credit risk is cash. The Company maintains
        cash in bank accounts that, at times, may exceed federally insured limits.
        As of September 30, 2007, the Company has not exceeded the federally insured
        limit. The Company has not experienced any losses in such accounts and
        believes it is not exposed to any significant risks on its cash in bank
        accounts.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10

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|XENO TRANSPLANTS CORPORATION                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|September 30, 2007                            
|Unaudited                                     

|3. | SIGNIFICANT ACCOUNTING POLICIES(contd)
      Comparative figures
      For accounting purposes, the Merger was treated as a reverse
        merger with AXI being the accounting acquirer. Prior to the Merger, AXI
        did not prepare quarterly financial statements and its fiscal year-end
        was December 31. The comparative financial statement figures for the results
        of operations and cash flows for the three-months ended September 30,
        2006 have not been presented as they were not prepared and are not considered
        to be material.
      Recent accounting pronouncements
      In February, 2007, the FASB issued SFAS No. 159 The
        Fair Value Option for Financial Assets and Financial Liabilities.
        SFAS No. 159 permits entities to choose to measure many financial assets
        and financial liabilities at fair value. Unrealized gains and losses on
        items for which the fair value option has been elected are reported in
        earnings. SFAS No. 159 is effective for fiscal years beginning after November
        15, 2007. The Company is currently assessing the impact of SFAS No. 159
        on our financial position and results of operations, but does not anticipate
        a material impact.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4. | EQUIPMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| | September 30, 2007 |   |       |  |   |              |  |   |       | 
| | ------------------ | - | ----- |  | - | ------------ |  | - | ----- | 
| |                    |   |       |  |   | Accumulated  |  |   | Net   | 
| |                    |   | Cost  |  |   | Amortization |  |   | Book  | 
| |                    |   |       |  |   |              |  |   | Value | 
| |                    |   |       |  |   |              |  |   |       | 
| | Equipment          | $ | 1,727 |  | $ | 48           |  | $ | 1,679 | 

|   | At June 30, 2007 the Company did not have any equipment.                                                                                                                                                                                                                                                                                                                                           
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                    
|5. | INTELLECTUAL PROPERTY
      On May 16, 2006 (the Effective Date), AXI signed
        an exclusive licence agreement with MGH to have the exclusive right to
        commercially develop, manufacture, distribute and use products and processes
        for public use with regard to xenotransplantation.
      In order to maintain its licence in good standing, AXI
        must pay to MGH:

| |                                                                                                   | 1. | $25,000 within 30 days of the Effective Date (paid).                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------- | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                   | 2. | $175,000 within 18 months of the Effective Date or when
        the Company secures $5,000,000 in financings, whichever is earlier.                                                                                                                
| |                                                                                                   | 3. | Reimbursement for any costs associated with the preparation,
        filing, prosecution and maintenance of all patent rights.                                                                                                                     
| |                                                                                                   | 4. | An annual licence fee of $5,000 for the first four years,
        and $20,000 for every year thereafter (this fee can be waived if the Company
        spends a minimum of $100,000 per year for other hospital supported patent
        projects).
| |                                                                                                   | 5. | $1,125,000 per product that is successfully brought
        to commercial production. Payments that add up to the $1,125,000 will
        be due upon each successful stage to obtain commercial production.                                       
| |                                                                                                   | 6. | A royalty of 6% of net sales as defined in the agreement.                                                                                                                                                                                          
| |                                                                                                   |    |                                                                                                                                                                                                                                                    
| | The Company is obligated to perform the following from the
      Effective Date of the agreement:
| |                                                                                                   |    |                                                                                                                                                                                                                                                    
| |                                                                                                   | 1. | Raise $500,000 by March 31, 2007 (completed).                                                                                                                                                                                                      
| |                                                                                                   | 2. | Raise an additional $5,000,000 within 18 months.                                                                                                                                                                                                   

11

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|XENO TRANSPLANTS CORPORATION                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|September 30, 2007                            
|Unaudited                                     

|5. | INTELLECTUAL PROPERTY(contd)
|-- | ------------------------------
|   |                               
|   |                               
|   |                               

|   | The term of the agreement is in effect until such time
        that all obligations have been met by the Company.
      The Company also had an agreement with Minitube of America,
        Inc. (Minitube) whereby Minitube assisted the Company in developing
        its intellectual property. The term of the agreement was for six months,
        ending July 2007, and the Company paid a total of $166,000 for setting
        up costs and consulting fees related to the agreement, and reimbursed
        Minitube for any additional expenses they incurred, including sampling
        fees. Minitube has accepted 68,000 units in the capital of the Company,
        consisting of one share of common stock of the Company and one-half of
        one warrant to purchase one share of common stock at a price of $2.00,
        exercisable until February 21, 2009, at a price of $1.00 per unit in payment
        of $68,000 of the $166,000 (Note 6).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|6. | CAPITAL STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company has authorized capital stock of 125 million
        shares of $.001 par value common stock and 25 million shares of $.001
        par value preferred stock.
      The holders of common stock are entitled to one vote per
        share on matters submitted to shareholders. The common stock in entitled
        to dividends as declared by the Board. As of September 30, 2007 the Company
        has not declared any dividends to the holders of the common stock. The
        rights and preferences associated with the preferred stock shall be designated
        by the Company's Board of Directors.
      Reverse Merger
      On May 3, 2007, the Company acquired all the issued and
        outstanding stock of AXI, which was accounted for as a recapitalization
        of the Company, in exchange for 29,875,000 shares of common stock and
        the cancellation of 12,500,000 shares of common stock (see Note 1). The
        issued number of shares of common stock is that of the Company with adjustments
        made for differences in par value between the Company and AXI.
      Stock Issuances
      Pursuant to the terms of the Minitube agreement described
        in Note 5, the Company issued 68,000 units, consisting of one share of
        common stock of the Company and one-half of one warrant to purchase one
        share of common stock at a price of $2.00 exercisable until February 21,
        2009.
      Stock options
      The Company has no stock options outstanding as of September
        30, 2007, and June 30, 2007. To date, the Company has not adopted an incentive
        stock option plan.
      Warrants
      During the period ended September 30, 2007 the Company
        granted 34,000 warrants to purchase one share of common stock at a price
        of $2.00 exercisable until February 21, 2009. There are no other warrants
        outstanding as at September 30, 2007 or June 30, 2007.

12

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|XENO TRANSPLANTS CORPORATION                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|September 30, 2007                            
|Unaudited                                     

|6. | CAPITAL STOCK(contd)
      Share subscriptions
      Share subscriptions of $625,000 as at September 30, 2007
        consist of $675,000 in subscriptions for the Companys Units less
        finders fees of $50,000. The subscriptions have been received as
        part of the intended Private Placement of up to 1,500,000 Units of the
        Company at a price of $1.00 per Unit to certain eligible investors. Each
        Unit will consist of one share of common stock and one common stock purchase
        warrant of the Company. Each whole purchase warrant will entitle the holder
        for 2 years from the date of issuance of the Units to acquire one additional
        share of common stock of the Company at an exercise price of $1.00.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|7. | ACQUISITION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On September 20, 2007 the Company entered into a Letter
        of Intent (the LOI) to acquire CrossCart, Inc. (CrossCart),
        a privately held California corporation.
      The terms of the LOI include:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| |  | - | all of the stock of CrossCart, including common stock,
        preferred stock, and stock issuable on conversion of debt, shall be exchanged
        for 22 million shares of common stock of the Company. CrossCart will become
        a wholly-owned subsidiary of the Company;                                                                                                                                                       
| |  | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | - | the CrossCart stockholders will have the right to
        nominate two directors to the Board of the Company;                                                                                                                                                                                                                                                                                                                            
| |  | - | the Company shall advance $250,000 to CrossCart for
        operating capital, on or before October 30, 2007, in the form of a non-refundable
        deposit ($25,000 advanced as at September 30, 2007). In the event that
        the acquisition does not close, the $250,000 will be converted to an investment
        in CrossCart by the Company on the same terms as the next financing obtained
        by CrossCart (Note 11);
| |  | - | a further contribution of $2.25 million in operating
        capital will be provided by the Company to Crosscart on or before the
        closing date of the acquisition; and                                                                                                                                                                                                                                                          
| |  | - | closing is set to occur on or before November 30,
        2007.                                                                                                                                                                                                                                                                                                                                                                          

|   | In conjunction with the acquisition, the Company
        intends to complete a private placement of units in the capital of the
        Company of a minimum of 2.5 million units and up to a maximum of 15 million
        units of the Company at a price of $1.00 per unit to certain eligible
        investors. Each unit will consist of one share of common stock and one
        common stock purchase warrant. Each whole purchase warrant will entitle
        the holder for 2 years from the date of issuance of the units to acquire
        one additional share of common stock at an exercise price of $1.00.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|8. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | During the period ended September 30, 2007, the Company
        did not receive any loans from related parties and did not make any loan
        repayments. The balance due to two significant shareholders remained $21,557
        (June 30, 2007: $21,557). These loans are unsecured, bear no interest
        and are due on demand.                                                                                                                                                                                                                                                                                   

13

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|XENO TRANSPLANTS CORPORATION                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|September 30, 2007                            
|Unaudited                                     

|8. | RELATED PARTY TRANSACTIONS(contd)
      Included in accounts payable and accrued liabilities is
        $21,072 (June 30, 2007: $8,404) of expense reimbursements owing to two
        directors of the Company.    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                       
|9. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
      Included in accounts payable and accrued liabilities is
        $165,369 (June 30, 2007: $114,523) of expenditures included in intellectual
        property.

| |                                                   |   |                 |  |   |                     | 
| | ------------------------------------------------- | - | --------------- |  | - | ------------------- | 
| |                                                   |   | Three months    |  |   | Cumulative amounts  | 
| |                                                   |   | ended September |  |   | from inception on   | 
| |                                                   |   | 30, 2007        |  |   | February 8, 2006 to | 
| |                                                   |   |                 |  |   | September 30, 2007  | 
| |                                                   |   | (unaudited)     |  |   | (unaudited)         | 
| | Cash paid during the period for:                  |   |                 |  |   |                     | 
| | Interest                                          | $ | -               |  | $ | -                   | 
| | Income taxes                                      | $ | -               |  | $ | -                   | 
| | Non-cash investing and financing transactions not |   |                 |  |   |                     | 
| | included in cash flows:                           |   |                 |  |   |                     | 
| | Elimination of debt due to
      recapitalization | $ | -               |  | $ | 327,500             | 
| | Issuance of stock for
      services              | $ | 68,000          |  | $ | 68,000              | 

|    | There were no other significant non-cash transactions for the period ended
      September 30, 2007.                                                                                                                                                                                      
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                           
|10. | SEGMENTED INFORMATION
      The Company has one reportable segment, being the development
        of products to address the shortage of human donor cells and organs for
        transplantation into patients. All of the Companys activities are
        located in the United States.
|    |                                                                                                                                                                                                                                                                                           
|11. | SUBSEQUENT EVENT
      The Company advanced an additional $25,000 under the terms
        of the CrossCart LOI however has not advanced the balance of $200,000
        owing, the parties are in discussions to extend the payment date or modify
        the terms of the LOI.          

14

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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION

NOTE REGARDING FORWARD-LOOKING STATEMENTS

Xeno Transplants Corporation (the Company) cautions
readers that certain important factors (including without limitation those set
forth below) may affect the Companys actual results and could cause such
results to differ materially from any forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
Securities Act), and Section 21E of the Securities and Exchange Act of 1934,
as amended (the Exchange Act), made herein. The Company intends such
forward-looking statements to be covered by the safe-harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and is including this statement for purposes of complying with
those safe-harbor provisions. You should not rely on forward-looking statements
in this document. Forward-looking statements are based on current management
expectations that involve risks and uncertainties that may result in such
expectations not being realized. Without limiting the generality of the
foregoing, words such as may, expect, expects, believe, believes,
plan, plans, anticipate, anticipates, intend, intends, could,
estimate, estimates, continue, or continues and the negative of such
words and phrases are intended to identify forward-looking statements. These
statements are based on the Companys beliefs as well as assumptions the Company
has made using information currently available to it. Some, but not all, of the
factors that may cause these differences include those discussed in the Risk
Factors section of the Companys Annual Report on Form 10-KSB for the year ended
June 30, 2007.

In particular, this document contains forward-looking statements
  pertaining to the following:

| | - | the Companys intended business objectives and
        the implementation of those objectives going forward;                                                                                                                                                                                                                     
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | the inability of the Companys pig herd cells
        to infect humans with PERV (as defined herein);                                                                                                                                                                                                                            
| | - | the Companys position in the field of tolerance
        and rejection with respect to transplantation methods and materials;                                                                                                                                                                                                    
| | - | the timing, scope and success of the Companys
        desired clinical trials;                                                                                                                                                                                                                                                  
| | - | the closing of the proposed private placements and
        the need for additional financing in the future;                                                                                                                                                                                                                      
| | - | the possibility that xenotransplantation will become
        a treatment alternative to limited human donor sources;                                                                                                                                                                                                             
| | - | the desirability of the Companys inbred miniature
        swine for xenotransplantation;                                                                                                                                                                                                                                        
| | - | the ability of the Company to identify miniature
        swine donor pigs that may be incapable of infecting human cells;                                                                                                                                                                                                        
| | - | the Companys intended focus on the field of
        end stage liver and renal disease, specifically the transplantation of
        porcine livers and kidneys; diabetes, specifically the transplantation
        of porcine islet cells; and their impact upon the Companys other
        research and development activities;
| | - | the Companys research and development plans,
        including its plan to advance its miniature swine breeding program and
        the costs associated with such plans;                                                                                                                                                       
| | - | the Companys ability to obtain additional funding
        to expand its research and development program, satisfy the requirements
        of the MGH license and complete the acquisition of CrossCart;                                                                                                                        
| | - | the need to satisfy the conditions to closing of
        the private placements of units related to the acquisition of CrossCart;                                                                                                                                                                                                
| | - | the integration of the businesses of the Company
        and CrossCart;                                                                                                                                                                                                                                                          
| | - | the expectation that CrossCart will roll out its
        anterior cruciate ligament replacement device in Europe over the next
        one to two years;                                                                                                                                                                         
| | - | the potential for the Companys technology to
        provide the opportunity for xenotransplantation of multiple types of organs
        and cells;                                                                                                                                                                             
| | - | the potential applications of CrossCarts technology
        to a variety of medical devices;                                                                                                                                                                                                                                    
| | - | the potential of the acquisition of CrossCart to
        significantly improve the business opportunities of the Company and CrossCart;                                                                                                                                                                                          
| | - | the need to satisfy the regulatory and legal requirements
        with respect to the acquisition of CrossCart and private placement of
        units.                                                                                                                                                                           

The actual results could differ materially from those
anticipated in these forward-looking statements as a result of the risk factors
contained in the Risk Factors section of the Companys Annual Report on Form
10-KSB for the year ended June 30, 2007 and other risks and uncertainties
identified elsewhere in this document.

These forward-looking statements are made as of the date of
this document and the Company assumes no obligation to update such
forward-looking statements or to update the reasons why actual results could
differ materially from those anticipated in such forward-looking
statements.

15

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About Xeno Transplants Corporation

Xeno Transplants Corporation is a bio-technology research and
development company that holds an exclusive commercial license from
Massachusetts General Hospital of what the Company considers to be some of the
medical industrys most advanced research, intellectual property and associated
technologies, derived from over 15 years of development in the field of
xenotransplantation by Novartis Pharmaceuticals and its associated research
entities. Xenotransplantation is defined as the transplantation of organs, cells
and tissues from one species to another. At this time, the Company has no
employees and no material business operations.

Overview

The Companys Business

The Company intends to develop therapeutic applications of
organs and cells derived from genetically engineered pigs as a transplant
alternative to limited human donor sources. Xenotransplantation is intended to
address the problems arising from the limited supply of available human cells,
tissues and organs for transplantation by developing technologies to permit the
transplantation of cells, tissues and organs from other species, such as swine,
into humans. There is a critical shortage of sources for transplantation
worldwide.

Critical Issues Governing the Application of
Xenotransplantation

A need exists for the creation of pig organs that can match the
size needed for replacing human organs. In order to address this issue, a pig
herd has been created of inbred miniature swine that develop organs which are
human in size. It is thus possible to match the pig donor and human recipient
organ sizes, which is expected to be an important factor for success in
transplantation.

It is also desirable to create a pig herd with uniformity to
facilitate production, quality assurance and quality control of donor cells and
organs. The genetic profile of the planned breeding nucleus to be selected from
the current herd should ensure uniformity of the pigs in the herd, which could
become a production lot, rather than each animal being a unique production
lot. Uniformity also facilitates genetic engineering of the herd.

Safety concerns caused by Porcine Endogenous Retrovirus
(PERV) must be addressed. Xenotransplantation guidelines have been created by
the FDA and clinical trials have been opened and completed under these
guidelines. Beyond the existing guidelines, miniature swine have been identified
by the Company that are believed to be incapable of infecting human cells, based
on laboratory studies, with PERV. Their subtype of PERV has been shown not to
recombine with human endogenous retroviral gene segments.

Research demonstrating the efficacy of life supporting pig
organs and cells in primates is necessary before human clinical trials can be
conducted. Research evidence has been demonstrated for donor specific
immunological tolerance to organs from cloned miniature swine whose expression
of alpha galactose (the major target of rejection) has been knocked out. This
combination of technologies, tolerance and pig genetic engineering, has resulted
in survival of life supporting pig kidneys in primates for up to 83 days,
without evidence of rejection. In addition, tolerance is now being demonstrated
in patients receiving allogeneic organ transplants.

The Companys Intellectual Property

Massachusetts General Hospital

On May 16, 2006 AXI signed an exclusive license agreement with
MGH to have the exclusive right to commercially develop, manufacture, distribute
and use products and processes for public use with regard to
xenotransplantation. The MGH license includes 38 issued U.S. patents and 51
issued international patents, with multiple patent applications. Technologies
covered by AXIs exclusive commercial licensee from MGH include the following:

- Exclusive rights to the commercial
use of a herd of proprietary in-bred miniature swine for xenotransplantation.
The AXI pig herd has been in-bred over decades in a controlled scientific
environment in order to ensure greater animal uniformity, which facilitates
consistent transplant quality control. - AXIs exclusively licensed
patent rights include the methods and composition for targeting and eliminating
a major cause of rejection of xenotransplants.

16

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- The Company believes it will be
in a strong position in the field of tolerance whereby a patients immune system
can be re-educated to more closely recognize transplanted foreign cells, tissues
and organs as self, reducing the requirement for chronic systemic
immunosuppressive drugs.

Infigen, Inc. Patents

On January 31, 2007, AXI also acquired a patent assignment from
Infigen, Inc. consisting of two issued U.S. and seven issued international
patents and multiple patent applications relating to producing pigs by cloning,
including the methods used in producing the Companys genetically engineered
pigs. In these miniature swine a specific porcine gene, which is a major cause
of xenotransplantation rejection, has been knocked out. The genetic
engineering uses somatic cell nuclear transfer (SCNT), including oocyte
maturation, oocyte/donor cell fusion, oocyte activation and embryo transfer.
This is often referred to as pig cloning. SCNT is presently the only known
method for introducing complex and predictably regulated genetic modifications
into the pig genome. The Infigen patents cover key technologies with respect to
pig cloning and have been demonstrated to be enabling. The Company believes that
these patents represent one of the most efficient processes currently available
for performing genetic modifications in pigs.

Acquisition Letter of Intent

On September 20, 2007 the Company entered into a Letter of
Intent (the LOI) to acquire CrossCart, Inc. (CrossCart), a privately held
California corporation.

CrossCart has developed and patented a technology intended to
make animal tissues usable for human applications. The process has been tested
in primate models and human studies and a proposed pivotal clinical trial of
CrossCarts anterior cruciate ligament (ACL) replacement device has received
FDA approval to proceed.

CrossCart is expecting to commercialize the ACL device in
Europe over the next one to two years, and subsequently intends to complete the
U.S. pivotal trial and develop further applications such as soft tissue patches
and bone dowels and screws.

The Companys technology potentially provides the opportunity
for xenotransplantation of multiple types of organs and cells, including whole
organ liver and kidney transplants, and islet cell transplants, from the same
proprietary genetically modified donor animal, GalT-KO miniature pigs.
CrossCart's technology is potentially applicable to a variety of medical devices
including orthopedics, ligaments, cartilage and bone; cardiovascular materials,
including heart valves and vascular grafts; and cosmetics, including soft tissue
patches and injectable collagen.

Management of the Company believes that that the acquisition of
CrossCart has the potential to significantly improve the business opportunities
of both companies through the following key factors:

- the potential to significantly
accelerate the Companys product commercialization timetable; - the
possibility of expanding potential markets and diversifying revenue streams;
and- it could create strong synergies in research and development programs
and administrative cost savings.

There can be no assurance however, that the Company will close
the acquisition of CrossCart or that all of the terms and conditions to such
acquisition will be satisfied.

PLAN OF OPERATION

The Company intends to conduct its research and development
programs through its wholly-owned subsidiary AXI. Over the next year the Company
intends to advance its miniature swine breeding program and further develop its
research plan. During this period the Company will be seeking additional funding
to expand its research and development program. The Company expects to conduct
its research primarily through the use of sub-contractors that are experts in
the fields that the various research programs relate to. As such, the Company
does not expect to incur substantial increases in its number of employees or
overhead costs including rent or plant and equipment.

In order to fund its operations the Company believes that it
  will be required to raise funds through private placements of equity securities.
  The Company will seek to raise approximately $15 million over a two year period,
  in particular to satisfy the requirements of the MGH license and complete the
  acquisition of CrossCart. There can be no assurance that such financing will
  be available to the Company on terms acceptable to it, if at all. Failure to
  obtain adequate financing if necessary could result in significant delays in
  development of new products and a substantial curtailment of the Companys
  operations.

17

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The Company intends to prioritize development of its exclusive
xenotransplantation rights through the evaluation of its proprietary porcine
organs to treat end stage organ disease and of its proprietary porcine islet
cells to treat diabetes. After prioritization, each of these initial
applications will be directed through independent research and development
programs, but with common management. The Company believes that encouraging
clinical results with the initial product may make it possible to achieve more
rapid therapeutic deployment of additional transplantable organs, tissues and
cells.

Research and Development Focus

The research and development focus will be to evaluate porcine
transplant applications and determine their priorities. The Company expects to
focus a portion of its early research and development program on the application
of its intellectual property as it relates to the field of end stage liver
disease and end stage renal disease, specifically the transplantation of porcine
liver and kidneys. The Company believes that the focused development of
xenotransplantation of porcine livers and organs may also permit the resulting
technology platform to serve as a foundation and template for the rapid
development of other porcine organs through to approved therapy. The proposed
development plan is a continuation of the major research advances already in
place through the recent work of Dr. David Sachs at MGH where he successfully
demonstrated evidence of tolerance in pig to primate kidney transplants. The
transplantation of other organs will also be evaluated and prioritized for the
Companys initial research and development.

The Company also seeks to focus a portion of its research and
development program on evaluating the application of its intellectual property
as it relates to the field of diabetes, specifically the transplantation of
porcine islet cells. The Company is exploring technology options and potential
collaborations for developing the use of porcine pancreatic islet cells from its
GalT-KO miniature swine to treat brittle type 1 diabetics and diabetic
patients with renal failure. There are approximately 100,000 brittle type 1
diabetics in the US alone who do not respond adequately to insulin therapy.
These patients might be able to achieve an improved life expectancy if islet
cell transplants were not limited by the lack of donor cells. Islet cell
transplants have demonstrated the capability to remove short-term insulin
dependence in brittle diabetics, but with only approximately 500 pancreases
available each year in the US for islet cell extraction and transplantation, the
development of this potentially life-saving therapy is currently severely
limited to a very small minority of patients.

Competition

Source of porcine organs

The Company believes that its proprietary inbred miniature
swine will be desirable donors for xenotransplantation because of the ability to
match donor recipient organs and the potential to identify miniature swine donor
pigs which may be incapable of infecting human cells. We are unaware of any
other suppliers of inbred miniature swine.

Porcine cloning

The Company considers Revivicor and the Mayo Clinic group as
potential competitors in using nuclear cloning and genetic engineering of pigs
for xenotransplantation.

Geron and their joint venture, stART Licensing Inc., may hold
some relevant intellectual property (originally from the Roslin Institute) that
they have been nonexclusively licensing to interested parties. These patents
have broad generic claims to methods of nuclear transfer in which quiescent
cells are used as the nuclear transfer donor cell. Nuclear transfer cloning has
also been successfully accomplished by Revivicor and the Mayo clinic group. The
Company is leveraging the prior work done with Immerge, Infigen and University
of Missouri in this area. The major target for this work by all the above groups
was the production of pigs whose organs reduce rejection.

The other area of interest has been dominant transgenesis of
human complement inhibitor proteins in pigs. The Company has control of the
assets and intellectual property from Novartis and Imutran in this area The Mayo
group and Revivicor both have pigs with similar but not identical proteins
expressed.

18

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Tolerance

From the recent Nature Medicine publications, the Company
expects that creation of tolerance will be necessary to prevent immune responses
to further develop against swine organs in primate recipients. Through the
Companys license with MGH, it believes that it has a strong position in the
field of tolerance (the re-education of the patients immune system to more
closely recognize foreign cells, tissues and organs as self) to potentially
reduce the need for chronic systemic immunosuppressive drugs. We are unaware of
current competitors that are creating tolerance.

Critical Accounting Polices and Estimates

Critical accounting policies are those that management believes
are both most important to the portrayal of the Companys financial condition
and results, and that require difficult, subjective, or complex judgements,
often as a result of the need to make estimates about the effects of matters
that involve uncertainty.

The Company believes the critical accounting policies it uses
in the preparation of its financial statements are as follows:

Use of estimatesThe
preparation of financial statements in accordance with US GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements, and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.

Intellectual
propertyIntellectual property such as patents and licences applications
is recorded at cost. Capitalized amounts relate to the acquisition of patents
and licences, which include legal and advisory costs incurred in registration of
the patents. Depreciation is calculated using the straight-line method over the
useful lives of the patents. No depreciation is provided for as the patents have
not yet been awarded and/or begun to generate revenues.

Impairment of long-lived assetsLong-lived assets are accounted for in accordance with Statement of
Financial Accounting Standards (SFAS) No.144, Accounting for the Impairment
or Disposal of Long-Lived Assets and for Long-Lived Assets to be Disposed of,
which requires that companies consider whether events or changes in facts and
circumstances, both internally and externally, may indicate that an impairment
of long-lived assets held for use are present. Management periodically evaluates
the carrying value of long-lived assets and has determined that there was no
impairment as of June 30, 2007. Should there be impairment in the future, the
Company would recognize the amount of the impairment based on the expected
future cash flows from the impaired assets. The cash flow estimates would be
based on managements best estimates, using appropriate and customary
assumptions and projections at the time.

Research and Development

As the Company is in the early stages of its development it has
not incurred any research and development expenses to date. Its total
expenditures have related to administrative costs and costs associated with the
acquisition, maintenance and development of intellectual property.

Results of Operations for the three-month period ended
September 30, 2007

The Company is in the early stage of its development and just
beginning operations. As a result there is a very limited history of operations.
Due to the reverse merger accounting, change in fiscal year-end from December 31
to June 30, and the fact that AXI did not prepare quarterly financial statements
prior to the Merger the comparative results of operations for the three-month
period ended September 30, 2006 are not presented. The comparative results of
operations are not considered to be material in nature nor are they considered
to be reflective of the Companys current operations.

19

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Operating Expenses

Operating expenses totalled $140,838 for the three-month period
ended September 30, 2007. The operating expenses consisted of general and
administrative expenses, which primarily included legal and consulting fees.
Prior to 2007 the Company was privately held and quarterly financial statements
were not prepared.

Amortization

During the three month period ended September 30, 2007 there
was amortization of $48 on computer equipment, recorded in general and
administrative expenses.

Net Loss for the Period

Overall, the Company incurred a net loss for the three-month
period ended September 30, 2007 of $140,838.

Liquidity and Capital Resources

The Companys aggregated cash on hand at the beginning of the
three-month period ended September 30, 2007 was $32,096.

The impact on cash after adjustment for non-cash items and
changes to other working capital accounts in the period, resulted in a negative
cash flow from operations of $26,811. The Company spent $79,958 to increase its
intellectual property, and advanced $25,000 to CrossCart as part of its LOI to
acquire CrossCart. The Company purchased computer equipment at a cost of $1,727.
The Company received $105,000 in loans payable. The Companys cash position
decreased for the three-month period by $28,496 to $3,600 cash on hand at
September 30, 2007.

During the prior period ended June 30, 2007 the Company
received $675,000 in stock subscriptions with $50,000 in corresponding issuance
costs resulting in a net stock subscription amount of $625,000. The
subscriptions have been received as part of the intended private placement of up
to 1,500,000 Units of the Company at a price of $1.00 per Unit to certain
eligible investors. Each Unit will consist of one share of common stock and one
common stock purchase warrant of the Company. Each whole purchase warrant will
entitle the holder for two years from the date of issuance of the Units to
acquire one additional share of common stock of the Company at an exercise price
of $1.00. The Company intends to complete this Private Placement by December 31,
2007. There can be no assurance that the Company will be able to complete this
Private Placement by that date, or at all.

On September 20, 2007 the Company entered into a LOI to acquire
CrossCart, a privately held California corporation.

The terms of the LOI are summarized as follows:

- the terms of the LOI are subject to negotiation and execution of a
  definitive acquisition agreement which shall be approved by the respective
  Board of Directors of each corporation and by the shareholders of CrossCart;
- all of the stock of CrossCart, including common stock, preferred stock,
  and stock issuable on conversion of debt, shall be exchanged for 22 million
  shares of common stock of the Company. CrossCart will become a wholly-owned
  subsidiary of the Company;
- certain current stockholders of the Company and CrossCart will negotiate
  the terms of a voting trust whereby all their combined shares will be voted
  together for any transaction or event involving a material acquisition or
  disposal of assets, a change in control, a change in the majority of
  directors, or a change in senior management;
- the CrossCart stockholders will have the right to nominate two directors
  to the Board of the Company;
- the Company shall advance $250,000 to CrossCart for operating capital, on
  or before October 30, 2007, in the form of a non-refundable deposit ($25,000
  advanced as at September 30, 2007). In the event that the acquisition does not
  close, the $250,000 will be converted to an investment in CrossCart by the
  Company on the same terms as the next financing obtained by CrossCart;
- a further contribution of $2.25 million in operating capital will be
  provided by the Company to Crosscart on or before the closing date of the
  acquisition; and
- closing is set to occur on or before November 30, 2007, but there can be
  no assurance that the acquisition will actually close.

20

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The Company has advanced an additional $25,000 under the terms
of the CrossCart LOI however has not advanced the balance of $200,000 owing, the
parties are in discussions to extend the payment date or modify the terms of the
LOI.

In conjunction with the acquisition, the Company intends to
complete a private placement of units to sell a minimum of 2.5 million units and
up to a maximum of 15 million units of the Company at a price of $1.00 per unit
to certain eligible investors. Each unit will consist of one share of common
stock and one common stock purchase warrant. Each whole purchase warrant will
entitle the holder for 2 years from the date of issuance of the units to acquire
one additional share of common stock at an exercise price of $1.00.

As the Company is just beginning its research and development
program, it does not yet have any products for sale and it has not generated any
revenues and does not anticipate generating any revenues for the next several
years. It will need to raise additional funds through private placements of its
securities or seek other forms of financing during the 2008 and future financial
years. Completion of the remaining $825,000 of the $1.5 million private
placement described above would provide the Company with sufficient capital to
fund its operations for approximately six months. The Company intends to seek a
minimum of $2.5 million and up to a maximum of $15 million in private placement
funding in order to be able to complete the planned acquisition of CrossCart and
complete anticipated preclinical studies programs in organ transplantation. The
costs of proceeding with the preclinical studies are estimated to be $3 million
per year for the next two years.

There can be no assurance that any such financing will be
available to the Company on terms acceptable to it, if at all. Failure to obtain
adequate financing could result in significant delays in development of new
products and a substantial curtailment of the Companys operations. If the
Companys operations are substantially curtailed, it may have difficulty
fulfilling its current and future contract obligations.

Recent Accounting Pronouncements

In February, 2007, the FASB issued SFAS No. 159 The Fair Value
Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits
entities to choose to measure many financial assets and financial liabilities at
fair value. Unrealized gains and losses on items for which the fair value option
has been elected are reported in earnings. SFAS No. 159 is effective for fiscal
years beginning after November 15, 2007. The Company is currently assessing the
impact of SFAS No. 159 on its financial position and results of operations, but
does not anticipate a material impact.

Off-Balance Sheet Arrangements

At September 30, 2007 the Company did not have any off-balance
sheet arrangements.

21

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Item 3. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, management
carried out an evaluation, under the supervision and with the participation of
the principal executive officer and principal financial officer, of the
effectiveness of the design and operation of the Companys disclosure controls
and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act). Based on this evaluation, the principal executive officer and principal
financial officer have concluded that the Companys disclosure controls and
procedures are, as of the date covered by this Quarterly Report, effective to
ensure that the information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC rules and
forms and accumulated and communicated to management, including the principal
executive officer and principal financial officer to allow timely decisions
regarding required disclosures.

Changes in Internal Control over Financial Reporting

Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining
adequate internal control over financial reporting to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP. In
connection with the evaluation of the Companys internal controls during its
last fiscal quarter, the principal executive officer and principal financial
officer have determined that there have been no changes to the Companys
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Companys internal control over
financial reporting.

Notwithstanding the foregoing, because of the inherent
limitations in all control systems, no evaluation of controls can provide
absolute assurance that the Companys disclosure controls and procedures will
detect or uncover every situation involving the failure of persons within the
Company and its subsidiaries to disclose material information otherwise required
to be set forth in the Companys periodic reports. The Companys disclosure
controls and procedures are designed to provide reasonable assurance of
achieving their objective of ensuring that information required to be disclosed
in the reports that the Company files or submits under the Exchange Act is
communicated to management, including the principal executive officer and
principal financial officer, to allow timely decisions regarding required
disclosure.

22

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PART II  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS

During the period the Company issued 68,000 units, each unit
consisting of one share of common stock of the Company and one-half of one
warrant to purchase one share of common stock at a price of $2.00 exercisable
for 18 months, at a deemed price of $1.00 per unit in payment of $68,000 of
services, pursuant to the exemption from registration provided in Section 4(2)
of the Securities Act..

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

None.







23

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Item 6. Exhibits

The following exhibits are filed (or incorporated by reference
  herein) as part of this Form 10-QSB:

|ExhibitNumber | Description                                                                                                                                                                                       
|------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1.4(1)      | Fourth Amendment dated July 30, 2007 to Agreement and
      Plan of Merger dated April 24, 2007 among Icon Development Group, Inc.,
      Icon Acquisition Corporation and American Xeno, Inc.    
|2.1.5(2)      | Fifth Amendment dated September 24, 2007 to Agreement and
      Plan of Merger dated April 24, 2007 among Icon Development Group, Inc.,
      Icon Acquisition Corporation and American Xeno, Inc.
|3.1(3)        | Articles of Incorporation dated September 28, 2004                                                                                                                                                
|3.1.2(4)      | Amended Articles of Incorporation dated August 22, 2006                                                                                                                                           
|3.1.3(5)      | Certificate of Amendment to Articles of Incorporation
      dated August 13, 2007                                                                                                                 
|3.1.3(6)      | Bylaws                                                                                                                                                                                            
|10.2(2)       | Letter of Intent dated September 19, 2007 among Xeno
      Transplants Corporation and CrossCart, Inc.                                                                                            
|31.1          | Certification of Chief Executive
        Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                       
|31.2          | Certification of Chief Financial
        Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                       
|32.1          | Certification of Chief Executive
        Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                       
|32.2          | Certification of Chief Financial
        Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                       

|(1) | Previously filed with Form 8-K filed August 3, 2007.    
|--- | --------------------------------------------------------
|(2) | Previously filed with Form 8-K filed September 26, 2007.
|(3) | Previously filed with Form SB-2 filed November 15, 2005.
|(4) | Previously filed with Form 8-K on August 22, 2006.      
|(5) | Previously filed with Schedule 14C filed July 24, 2007. 
|(6) | Previously filed with Form 8-K filed July 11, 2007.     

24

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SIGNATURES

In accordance with the requirements of the Exchange Act, the
  registrant has caused this report to be signed on its behalf by the undersigned,
  thereunto duly authorized.

|                        | XENO TRANSPLANTS CORPORATION                      
|----------------------- | --------------------------------------------------
|                        |                                                   
|                        |                                                   
|                        |                                                   
|Date: November 13, 2007 | By: /s/ Wayne Smith                               
|                        | Wayne
      Smith                                 
|                        | Chief
      Financial Officer and Treasurer       
|                        | (Principal
      Financial and Accounting Officer)

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