U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                  FORM 10-KSB/A

(X)   Annual Report under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended November 30, 2001.


                         Commission File Number 0-16354

                             EXTEN INDUSTRIES, INC.
                 (Name of small business issuer in its charter)

                  DELAWARE                                52-1412493
        ------------------------------                ------------------
       (State or other jurisdiction of                  (IRS Employer
        incorporation or organization)                Identification No.)

                          425 W. 5th Avenue, Suite 201
                           Escondido, California 92025
                                 (760) 781-3916
                   ------------------------------------------
          (Address and telephone number of principal executive offices)

         Securities registered under Section 12(b) of the Exchange Act:
                                      None

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

                                                 Name of each exchange on
             Title of each class                     which registered
    Common Stock, $0.01 par value per share         OTC Bulletin Board
    ---------------------------------------         ------------------


         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X    No ___

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained,  to the best of  registrant's  knowledge,  in definitive  proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB [X]

         State issuer's revenues for its most recent fiscal year: $ 0 .
                                                                  -----

         State the aggregate  market value of the voting and  non-voting  common
equity held by  non-affiliates  computed by  reference to the price at which the
common equity was sold, or the average bid and asked price of such common equity
as of a specified  date within the past 60 days  (based upon  73,654,316  shares
held by  non-affiliates  and the closing  price of $.12 per share for the common
stock on the over-the counter market as of January 25, 2002): $ 8,838,518.

         State the number of shares  outstanding of each of the issuer's classes
of common  equity,  as of the latest  practicable  date:  119,410,726  shares of
common stock as of February 11, 2002.


                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None.

Transitional Small Business Disclosure Format (check one):  Yes ____  No __X_


<PAGE>

<TABLE>
<CAPTION>


                             EXTEN INDUSTRIES, INC.
                                   FORM 10-KSB

                                      INDEX
 PART I                                                                               PAGE
 ------                                                                               ----
<S>                                                                             <C>
Item 1.  DESCRIPTION OF BUSINESS                                                        1
Item 2.  DESCRIPTION OF PROPERTY                                                        4
Item 3.  LEGAL PROCEEDINGS                                                              4
Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                            4

 PART II
 -------
Item 5.  MARKET FOR COMMON EQUITY
           AND RELATED STOCKHOLDER MATTERS                                              5
Item 6.  PLAN OF OPERATIONS                                                             5
Item 7.  FINANCIAL STATEMENTS                                                           8
Item 8.  CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
           AND FINANCIAL DISCLOSURE                                                     8

 PART III
 --------
Item 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
           COMPLIANCE WITH SECTION 16(9) OF THE EXCHANGE ACT                            8
Item 10. EXECUTIVE COMPENSATION                                                        10
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                10
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                11
Item 13. EXHIBITS AND REPORTS ON FORM 8-K                                              12

SIGNATURES                                                                             12

 PART IV
 -------
CONSOLIDATED FINANCIAL STATEMENTS                                                F1 - F22

</TABLE>


<PAGE>

                                     PART I

                         Item 1. DESCRIPTION OF BUSINESS

About Exten Industries, Inc.

         Exten  Industries,  Inc. was incorporated in Delaware on April 28, 1970
under  the name of  "Exten  Ventures,  Inc".  Today,  we have two  independently
operating subsidiaries. Our Xenogenics Corp. subsidiary is a developmental stage
enterprise that has not yet completed production of any marketable products. Our
key product,  the Sybiol(R)  Bio-synthetic liver device,  remains in development
and will not be ready to be  marketed  before the end of the year  2005,  at the
earliest. Our MultiCell Technologies Inc. subsidiary is also a development stage
enterprise.  We believe  that we will have  commercial  products  ready for sale
during 2002. We have  operated and continue to operate at a deficit,  which on a
cumulative basis through November 30, 2001, equals  $13,666,266 in a competitive
industry with high barriers to entry. Our ability to continue as a going concern
is not assured.  Our principal executive and business offices are located at 425
W. Fifth Avenue,  Escondido,  California  92025;  our telephone  number is (760)
781-3916.


About Our Business

         Exten  Industries,  Inc. is a holding  company  that is focusing on the
development  of  medical  products  and  associated   research  and  development
activities.   Our  primary  focus,   prior  to  the   acquisition  of  MultiCell
Technologies,  had been the  development of a bio-synthetic  liver device.  This
technology  will  take  approximately   three  to  five  years  to  develop  and
commercialize.  To our knowledge, no mass-produced liver device of the type that
we are developing is currently available. Our strategic plan is to acquire other
technologies  in order to generate  sufficient  cash flow to support our general
operations,  while the liver  technology  referenced  above proceeds through the
final  research  and  development  stages  and  government  regulatory  approval
processes.  We intend to  pursue  business  opportunities  with  companies  that
ideally have  products  that are health care  related and have already  received
government regulatory approval.

         MultiCell   Technologies,   Inc.   (MultiCell),    formerly   MultiCell
Associates,  Inc., our  wholly-owned  subsidiary which was acquired in September
2001, for $2.2 million in cash and stock,  develops and intends to commercialize
hepatic or liver  cells,  cell  lines,  and  associated  products  to be used in
diagnostic and  therapeutic  applications.  MultiCell has developed the "HepLiu"
cell line with cells that are designed to function as hepatocytes or liver cells
in Liver Assist Devices ("LADs") and other liver-related  processes.  Xenogenics
has a Research and Development Agreement and a Supplier Agreement with MultiCell
pursuant  to which  MultiCell  will supply  engineered  pig or porcine and human
liver cell lines and optimize  the  interface  between  these cell lines and the
Sybiol  Bio-synthetic  liver  device.  An  engineered  cell line is  expected to
eliminate  variability in patient treatment and limit the viral risks associated
with primary porcine hepatocytes.

         Xenogenics  Corporation,  our majority-owned  (54.6%) subsidiary,  is a
developmental  stage  enterprise  that owns all of the  rights to the  Sybiol(R)
Bio-synthetic  liver  device  for which a patent  is  pending  in 15  countries,
including the United States.  The  underlying  concept of the device is that the
artificial  liver can act as a substitute liver for a patient whose own liver is
healing from injury or disease.  In addition,  the device is intended for use as
an artificial liver "bridge" for transplant patients awaiting a donor organ. The
device may also be used to assist and improve  the quality of life for  patients
with chronic liver disease or episodic liver trauma. We are currently working on
a new design for this device and a compatible  engineered cell line to work with
it. We anticipate  completing the system redesign and the preclinical work so as
to be able  to  initiate  Phase  I human  trials  before  the end of  2003.  The
regulatory  approval  process is expected to last from two to five years,  which
means that the Sybiol  device will not be ready for the market before the end of
2005, at the earliest.

         We estimate  that we will need  approximately  $3 million to finish the
development process for the Sybiol(R) Bio-synthetic liver device,  including the
cellular  component,  and to begin  Phase I clinical  trials.  Assuming  that we
secure sufficient financing, we will use approximately $2 million of this amount
in 2002 with the balance of this amount being used,  starting in 2003,  to begin
human  clinical  trials.  Our goal is to introduce the Sybiol device for general
distribution  in 2005 and the  HepLiu  cell  line for  non-human  uses for which
regulatory approval is not required, in 2002.

                                      1
<PAGE>


About Our Revenues

         We have not generated any significant revenues to date. The main source
of revenue for our MultiCell  subsidiary was a grant from the National Institute
of Standards and Technology,  which expired on December 31, 2000. On November 1,
2001,  MultiCell  entered into a collaborative  research  agreement with Pfizer,
Inc.  pursuant  to which  Pfizer  has agreed to pay  $724,500  to  validate  the
efficacy  of   MultiCell's   immortalized   hepatic  cells  in  four   different
experimental  models.  These  cells,  if  effective,  could  replace the current
hepatocytes used by Pfizer.


Patents and Proprietary Technology

         Any  proprietary  protection  that our Company can obtain and  maintain
will be important to our business.  A patent application is presently pending on
the process  utilized by the Sybiol  artificial  liver  device  under the Patent
Cooperative  Treaty  Protection  in  15  countries.   The  Sybiol  trademark  is
registered in the United States Patent and Trademark Office, number 2,048,080.

         MultiCell  has an exclusive,  long-term  license  agreement  with Rhode
Island Hospital for use of the following  patents owned by the Hospital  related
to liver cell lines and LADs:

         US Patent  #6,017,760,  Isolation  and Culture of Porcine  Hepatocytes,
         expires October 9, 2015;
         US Patent  #6,107,043,  Immortalized  Hepatocytes,  expires February 8,
         2019;
         US Patent #5,043,260,  Perfusion Device for Hepatocytes, expires August
         27, 2008; and
         US  Patent  #4,795,459,  Implantable  Prosthetic  Device  (Endothelial)
         expires January 3, 2006.

         This  agreement  remains in effect as long as MultiCell pays the annual
license maintenance fees as follows:

                      Date                           Amount
                  ------------                      -------
                  July 1, 2002                      $50,000
                  July 1, 2003                      $50,000
                  July 1, 2004                      $75,000

         Each of the  license  maintenance  fees  specified  above,  may, at the
option of MultiCell,  be reduced to $10,000 if during the calendar year prior to
the date of any such  payment,  MultiCell  satisfies  the specific due diligence
requirements  specified for a twelve month  period.  MultiCell has satisfied the
due diligence requirements for the twelve month period ended July 1, 2001.


Need for Government Approval

         Some of our products will be subject to regulation in the United States
by the Food and Drug Administration and by comparable regulatory  authorities in
foreign jurisdictions.  The Sybiol Bio-synthetic liver device will be classified
as a "biologic" regulated under the Public Health Service Act and the Food, Drug
and  Cosmetic  Act. The use of HepLiu  cells for this  application  will also be
regulated by the FDA.  Development  of a therapeutic  product for human use is a
multi-step  process.  First,  animal and in vitro  testing  must  establish  the
potential safety and efficacy of the  experimental  product for a given disease.
Once the product is found to be reasonably safe and  potentially  efficacious in
animals,  suggesting that human testing would be appropriate, an Investigational
New Drug ("IND") application is submitted to the FDA. FDA approval, which may in
some circumstances  involve  substantial  delays, is necessary before commencing
clinical investigations.

         Clinical  investigations  typically  involve three  phases.  Phase I is
conducted to evaluate the safety of the experimental  product in humans,  and if
possible  to obtain  early  evidence  of  effectiveness.  Phase I  studies  also
evaluate various routes,  dosages and schedules of product  administration.  The
demonstration of therapeutic  benefit is not required in order to complete Phase
I  successfully.  If acceptable  product  safety is  demonstrated,  the Phase II
studies  are  initiated.  The Phase II  trials  are  designed  to  evaluate  the
effectiveness  of the product in the treatment of a given disease and typically,
are well controlled and closely  monitored  studies in a relatively small number
of patients.  The optimal routes and schedules of administration  are determined
in these studies.

                                      -2-
<PAGE>

         As Phase II trials are successfully  completed,  Phase III studies will
commence.  Phase III studies are expanded  controlled  and  uncontrolled  trials
which are intended to gather additional information about safety and efficacy in
order to evaluate  the overall  risk/benefit  relationship  of the  experimental
product and provide an adequate basis for physician labeling. These studies also
may compare the safety and efficacy of the  experimental  device with  currently
available products. While it is not possible to estimate the amount of time that
will be required to complete  Phase I, II and III studies,  this  process  often
lasts several years.

         Following the successful  completion of these clinical  investigations,
the preclinical and clinical  evidence that has been accumulated is submitted to
the FDA as part of a product license application ("PLA"). Approval of the PLA or
IND is necessary  before a company may market the product.  The approval process
can be very lengthy and depends  upon the time it takes to review the  submitted
data and the FDA's comments on the application, and the time required to provide
satisfactory answers or additional clinical data when requested.

         In addition to the regulatory  framework for product approvals,  we are
subject to  regulation  under  state and  federal  law,  including  requirements
regarding  occupational  safety,  laboratory  practices,  the use,  handling and
disposition of  radioactive  materials,  environmental  protection and hazardous
substance  control,  and may be subject to other  present  and  possible  future
local, state, federal and foreign regulation, including future regulation of the
biotechnology field.

         We  have  not  yet  begun   human   clinical   trials  for  the  Sybiol
Bio-synthetic  liver  device.  We intend to begin such trials by the end of 2003
upon  completion  of the redesign  and  validation  of the device.  Before human
studies  may  begin,  the cells  provided  for the system by  MultiCell  will be
subjected  to the same  scrutiny as the Sybiol  device.  MultiCell  will need to
demonstrate  sufficient  process controls to meet strict standards for a complex
medical system.  This means the cell  production  facility will need to meet the
same standards as those pertaining to a pharmaceutical company, for example.


Research and Development

         In fiscal  2001,  our  Company's  research and  development  costs were
$297,424.  Research and development  costs during fiscal 2000 were $184,672.  We
intend to  continue  our  research  and  development  during  fiscal  2002.  Our
Xenogenics subsidiary will focus its development efforts on the Sybiol Synthetic
Bio-Artificial  Liver device.  Our goal is to develop  compelling data utilizing
the device with large animals.  This data will generate  interest from potential
partners who will fund future development costs.

         Our MultiCell  subsidiary will have three major research projects.  The
first will be continued  efforts  towards  improving  the  functionality  of our
immortalized  hepatocytes.  Improvements in function will open even more markets
for cell  usage.  Secondly,  we will move  forward  on our  therapeutic  protein
development  program,  taking a laboratory process and validating its commercial
application.  Finally,  we will begin a research  program focused on adult liver
stem cells.


Competition

         We are  engaged  in  businesses  characterized  by  extensive  research
efforts,  rapid technological  change, and intense  competition.  Competitors in
various stages of development of liver-related products or technologies include:

         Circe  Biomedical  (previously a wholly owned W.R.  Grace  subsidiary).
Circe had a device using porcine  primary  cells in Phase III clinical  studies.
These studies have been halted as results  proved  statistically  insignificant.
The future of the company is not known at this time.

         HemoTherapies,  Inc.  (formerly  Hemocleanse),  has a filtration device
that has been granted FDA approval for liver dialysis.  The company has recently
declared bankruptcy and has not yet emerged with a reorganization plan.

         VitaGen  (formerly  Hepatix) is currently  running  Phase I/II clinical
trials with its ELAD device,  which uses cloned human liver cells. The yet to be
proven  functionality of these cells, along with their potential tumor producing
tendencies, is expected to obstruct the commercialization of their device.

         In Europe,  Braun Inc.  has  demonstrated  interest in  supporting  the
development of a complicated and  sophisticated  hollow fiber device,  which has
already been used to treat two patients.

                                      -3-
<PAGE>

         To  our  knowledge,  there  is no  approved  affordable  mass  produced
live-cell  artificial liver device currently available on the global market. Our
device is intended to closely  replicate  human liver  functions and not just to
function as a blood-cleaning  device.  We believe that the differences in design
between existing products and the Sybiol device will result in the Sybiol device
achieving commercial success that will ultimately benefit our stockholders.


Employees

         As of February 22, 2002,  Exten had three  full-time  employees and one
part-time employee;  Xenogenics had one full-time employee and MultiCell had ten
full-time employees and one part-time employee.


                         Item 2. DESCRIPTION OF PROPERTY

Exten

San Diego.  Exten leases  approximately  1,000 square feet of space at a rent of
 ---------
$2,700 per month in an office building  located at 425 W. Fifth Ave., Suite 201,
Escondido,  CA 92025.  Rent  expense  was $4,500 in fiscal  2000 and  $32,400 in
fiscal 2001. We believe the facilities are adequate for the near future.

Arizona. As of November 30, 2001, our Company owned 202 undeveloped lots in the
 -------
Grand Canyon Development in Valle, Arizona,  approximately 70 miles south of the
Grand Canyon which were acquired by prior  management as a tangible  asset.  Our
Company  currently  has no policy of  acquisition  of land for  capital  gain or
income.  We are  currently in arrears on back taxes and  interest.  Tax sale for
back  taxes is pending  and as  management  has been  unable to obtain a current
appraisal  of the fair  market  value of the  land,  they  have not yet  decided
whether to pay the back taxes.


Xenogenics

         During the fiscal year ended November 30, 2001, Xenogenics was provided
office  space  and  clerical  services  by Exten and did not  maintain  separate
offices.


MultiCell Technologies

         MultiCell  maintains  both a Warwick,  Rhode  Island  facility  that is
dedicated to  controlled  development  and  manufacture  of human cells and cell
lines and a Providence, Rhode Island facility to maintain its animal cell lines.
The lease for MultiCell's main office and research  facility in Warwick requires
aggregate  monthly  payments  of  $2,797  and  expires  on  December  31,  2001.
Thereafter, the lease continues on a month to month basis. MultiCell has a lease
agreement  with Rhode  Island  Hospital  for use of  laboratory  facilities  and
equipment  located in Providence,  requiring  monthly payments of $4,200,  which
expired on  December  31,  2001 and  continues  on a month to month  basis until
written  notice is given.  We are currently  considering  potential new sites to
consolidate  our  operations  and allow for our planned growth over the next few
years.


                           Item 3. LEGAL PROCEEDINGS

         Jack Schaps, trustee of A. Jack Schaps Estate Trust, filed suit against
the Company and its legal counsel on February 13, 2001, in the Superior Court of
California.   Schaps,  a  stockholder  of  Exten,  alleged  that  the  defendant
negligently  lost,  and  failed  to  replace  in  a  timely  manner,  his  stock
certificate  for 625,000  shares of common  stock that he had  forwarded  to the
Company to be delivered to the Company's  former transfer agent. On February 25,
2002,  the Company  settled the lawsuit  with  Schaps.  This  settlement  has no
material impact on the financial position of the Company.

         In March 2002,  the  Company was served with a lawsuit  filed by George
Colin  alleging that the Company had  defaulted in its interest  payments to Mr.
Colin due pursuant to a $50,000  convertible  loan entered into in October 2001.
The  lawsuit was filed in the  Superior  Court of  California,  in the County of
Orange.  The lawsuit  alleges that the Company's  defaults  result in the loan's
conversion  rate being  reduced to from  $0.07 to $0.01 per share.  The  lawsuit
seeks  specific  performance  of Mr.  Colin's  election  to convert the loan and
unspecified damages. The Company is currently  investigating the allegations and
believes that it has a meritorious defense to the claims. The Company intends to
vigorously defend the lawsuit.


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

None.

                                      -4-
<PAGE>


                                     PART II

        Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         From June 14,  1994 to the  present,  our  Company's  Common  Stock has
traded on the OTC  Bulletin  Board.  The table below gives the range of high and
low bid prices for Exten Common  Stock for the fiscal  years ended  November 30,
2001 and November 30, 2000.

                       Fiscal Year Ended November 30, 2001

                                              High           Low
                                              ----          ----
               First quarter                  $.18          $.09
               Second quarter                 $.16          $.08
               Third quarter                  $.17          $.07
               Fourth quarter                 $.23          $.08

                       Fiscal Year Ended November 30, 2000

               First quarter                 $1.26          $.03
               Second quarter                 $.94          $.19
               Third quarter                  $.34          $.14
               Fourth quarter                 $.24          $.12

         The quotations  reflect  inter-dealer  prices without retail  mark-ups,
mark-down or commission and may not represent  actual  transactions  or a liquid
trading market.

         No cash dividends have been paid on Exten Common Stock for the 2001 and
2000  fiscal  years and no change of this policy is under  consideration  by the
Board of Directors.

         The payment of cash  dividends in the future will be  determined by the
Board of Directors in light of conditions then existing, including our Company's
earnings,  financial  requirements,   opportunities  for  reinvesting  earnings,
business  conditions,  and other  factors.  The  number of  shareholders  of our
Company's Common Stock on January 25, 2001 was  approximately  6,500.  There are
otherwise no restrictions on the payment of dividends.

 Recent Sales of Unregistered Securities
 ---------------------------------------

         1.   On July 11, 2001 we issued an aggregate  of  1,400,000  options to
              four of our officers and directors. The options expire on July 11,
              2005 and have an exercise price of $.115 per share.

         2.   During fiscal 2001 we issued an aggregate of 372,318 shares of our
              common  stock to a  director  and  consultant  of our  Company  in
              consideration for services rendered to us.

         3.   In August  2001,  we  issued  convertible  notes in the  aggregate
              principal  amount of  $500,000.  The notes  are  convertible  into
              shares of our common stock at the following conversion rates:

              (1)  $.10, if converted  during the first twelve (12) months after
                   the date of the Agreement;
              (2)  $.15, if converted  after the twelfth  (12th) and through the
                   twenty-fourth (24th) month of the Agreement; and
              (3)  $.20, if converted after the  twenty-fourth  (24th) month and
                   prior to the maturity date.

         The  securities  were  issued  pursuant to the  exemption  set forth in
Section  4.(2) of the  Securities  Act on the basis that they were issued  under
circumstances not involving a public offering.


                            Item 6. PLAN OF OPERATION

Plan of Operation

         Exten  Industries,  through its  subsidiaries  Xenogenics and MultiCell
Technologies,  is dedicated to providing  solutions to the medical community for
some of its most pressing needs.  These  solutions  include  improved  treatment
options for chronic liver disease,  better research tools for the pharmaceutical
industry,  naturally  derived complex  proteins for chronic and acute therapies,
and stem  cells  for  cellular  transplantation.  We  believe  our  patents  and
proprietary  technologies  strongly  position  us for market  success.  However,
improving  the quality of life of patients and  participating  in their  therapy
ultimately drives us to succeed.

                                      -5-
<PAGE>

         We acquired MultiCell  Associates,  Inc. of Warwick,  RI,  subsequently
renamed  MultiCell  Technologies,  Inc. in September 2001. They will continue to
operate as a subsidiary in Rhode Island.  MultiCell has been a research  company
existing on  government  and  private  grants.  Its main  source of  revenue,  a
National  Institute of Standards and Technology  grant,  expired on December 31,
2000. From that time until our  acquisition,  MultiCell  existed through private
contract revenues and was not pursuing  additional  government  contracts.  This
affected year to year revenues. Now that the acquisition has been concluded,  we
will begin  pursuing  new  government  grants to continue  many of our  research
efforts,  however  the  focus of our  company  is to  commercialize  some of our
products as quickly as possible.

         MultiCell has developed a unique immortalized human liver cell line and
has  redesigned  the  Xenogenics  Sybiol  liver  assist  device to optimize  the
interface  between this cell line and the  proprietary  device.  This cell line,
when used in the Sybiol device, is expected to eliminate  variability in patient
treatment and limit the risks  associated  with primary or porcine  hepatocytes.
The proper  combination  of cells and device have been lacking in prior attempts
to address  this market.  We believe  that the control of both the  immortalized
cell line and the liver assist device offer the best  opportunity for successful
introduction of a product.

         These  immortalized  cells  also  offer  pharmaceutical  companies  the
potential  for a  consistent  source of human  liver  cells for drug  discovery,
toxicology testing and pharmacokinetic studies. Today, these companies must rely
on an inconsistent supply of human liver cells obtained from donated organs that
cannot  be  transplanted  or  rat  liver  cells.   These  options  place  severe
limitations  on  research.  On  November  1,  2001,  MultiCell  entered  into  a
collaborative research agreement with Pfizer, Inc., pursuant to which Pfizer has
agreed to pay  $724,500 to validate  the  efficacy of  MultiCell's  immortalized
liver cells in four different  experimental  models.  These cells, if effective,
could  replace  the  current  hepatocytes  used  by  Pfizer  as  well  as  other
pharmaceutical  companies. We will focus on introducing these immortalized cells
to domestic and  international  pharmaceutical  companies  with the objective of
becoming an industry  standard  for  research.  It is  important to realize that
since these cells will only be used within the lab for research, no FDA approval
is necessary for commercialization.

         Additionally,  MultiCell has begun research  projects  related to adult
liver stem cells and  naturally  occurring  liver cell derived  proteins.  These
areas, while longer range research projects, offer extraordinary  opportunities.
Potentially,  therapeutic products, requiring FDA approvals, could be developed.
Due to their  ability  to  replicate,  stem  cells  offer  great  promise in the
treatment  of genetic and  acquired  chronic  liver  diseases.  We are  focusing
exclusively on adult stem cells which  naturally exist in everyone and avoid the
issues associated with fetal and embryonic stem cells.  Hepatocytes are the most
biochemically  active cells in the body. They naturally create simple as well as
complex proteins that are essential to everyone's  health and function.  Certain
complex  proteins,  if acquired  from natural  sources such as cells in culture,
would be very desirable. We plan to continue our research into culturing certain
complex proteins for therapeutic uses. We plan to develop data for both of these
areas so as to be able to pursue partnerships with pharmaceutical  companies for
the final development and the sales and distribution of the products.

         Research continues in our Xenogenics subsidiary on the Sybiol Synthetic
Bioartificial  Liver  Device.  We are at a point where data must be developed to
validate the efficacy of the redesigned system in conjunction with the MultiCell
liver  cells.  Our plan is to  conclude  this study as quickly as  possible  and
present the data to large  pharmaceutical  and medical device companies with the
intention to collaborate  with an enterprise for future product  development.  A
plan to move the product  through human clinical trials will be presented to the
FDA for approval at that time.

         We believe that we have a very strong  Scientific  Advisory Board.  Dr.
John Brems,  Chairman of the Advisory Board,  oversees Loyola University's liver
transplant  program  and  has  been  intimately   involved  with  our  Company's
technology.  He has  recruited  a team  of many of the  world's  foremost  liver
doctors and  scientists.  Scientific  Advisory  Board members  include  Sangeeta
Bhatia,  MD,  PhD.,  Assistant  Professor of  Bioengineering  at  University  of
California  San Diego in La Jolla,  CA;  Dr.  Donald  Cramer,  BS,  DVM,  Ph.D.,
Director of Transplantation  Research at Children's Hospital in Los Angeles; Dr.
David Van Thiel, MD, Director of Liver  Transplantation at Loyola; Amy Friedman,
MD, Chief,  Liver  Transplantation,  Yale-New  Haven  Hospital,  Dr.  Alessandra
Colantoni,  Research Associate, Liver Transplant Service, Loyola University also
serves on the Scientific Advisory Board.

                                      -6-
<PAGE>

         We anticipate  that over the next two years we will need  approximately
$3 million to complete  development  of certain  products from  MultiCell and to
begin clinical trials on other products,  and $1 million for working capital and
general  corporate  purposes.  Some  portion  of this  funding  could  come from
successful  commercialization  of the MultiCell  products.  We will increase our
administrative  resources  to support the hiring of an  estimated  6  additional
employees  that will enable us to expand our  research  and product  development
capacity.  We  intend to expand  our  product  offering  by  completing  ongoing
development  projects  and  by  opportunistically   acquiring  or  merging  with
companies  that generate  revenues and using such profits to cover our operating
needs,  selling  shares of our common stock to investors,  and continuing to use
our common stock to pay for consulting and professional services.

         We also  anticipate the need for additional  financing in the future in
order to fund continued  research and development,  proceed with clinical trials
and to respond  to  competitive  pressures.  We  believe  that our  future  cash
requirements  may be fulfilled by product sales,  the sale of additional  equity
securities,  debt financing  and/or the sale or licensing of our technology.  We
cannot guarantee, however, that any future funds required will be generated from
operations or from the aforementioned or other potential sources. We do not have
any binding  commitment with regard to future  financing.  If adequate funds are
not  available or not available on  acceptable  terms,  we may be unable to fund
expansion,  develop or enhance  products and services or respond to  competitive
pressures,  any of which could have a material  adverse  effect on our business,
results of operations and financial condition.

         We  had  signed  a  Letters  of  Intent  to  acquire   Lexicor  Medical
Technologies Inc. of Boulder CO. and MediQuip International and Sterling Medical
Technologies,  Inc.  of  Dallas,  Texas  during  the  2001  fiscal  year.  After
performing  extensive  due  diligence,   we  concluded  that  neither  of  these
transactions   could  be  completed   under  the  originally   proposed   terms.
Consequently, both of these transactions have been terminated by us.

         During Fiscal 2000 and 2001, our Company continued to control costs. We
continue  to  effect   transactions   that  reduce  our   liabilities  and  cash
requirements  while we continue to raise  capital.  We continue to pay directors
fees, consulting fees, and in some cases, legal fees through the issuance of our
Company's Common Stock with the subsequent  registration of the shares so issued
on Form S-8.  Our Company has been forced to take these steps to conserve  cash.
We expanded the depth and quality of our management  team with the addition of a
Vice President of Operations for the corporation.  This is an important addition
as our corporate  president also acts as the president of Xenogenics and the CEO
of MultiCell.


Research Agreements

         Loyola University Medical Center.  Preclinical research on the efficacy
of the Sybiol device was being  conducted at Loyola  University  Medical Center,
Chicago,  IL but  was  halted  pending  work  on a new  generation  device  with
MultiCell  and  other  entities.  The team of  bioartificial  liver  researchers
including  John Brems,  MD, FACS,  Chairman of Xenogenics'  Scientific  Advisory
Board,  James Filkins,  Ph.D.,  and Professor  David Van Thiel,  MD, FACP,  also
Xenogenics  Scientific Advisory Board members and noted hepatological experts at
Loyola will again be chosen to conduct  research when the device  improvement is
completed.

         Pfizer,   Inc.  On  November  1,  2001,   MultiCell   entered   into  a
collaborative research agreement with Pfizer, Inc., pursuant to which Pfizer has
agreed to pay  $724,500 to validate  the  efficacy of  MultiCell's  immortalized
hepatic cells in four different  experimental models. These cells, if effective,
could replace the current hepatocytes used by Pfizer.


Notes Receivable

         As of  November  30,  2000,  in  connection  with a letter of intent to
purchase the outstanding common stock of Lexicor Medical  Technology  (Lexicor),
the Company  advanced a total of $600,000 for a note  receivable  to Lexicor and
received  83,333 common stock  warrants.  The Company  allocated  $17,500 to the
warrants  resulting in a discount on the note. The warrants  entitle the Company
to purchase up to 83,333 shares of Lexicor's common stock. The note has a stated
interest  rate of 10% per annum.  Principle  and interest was due and payable on
May 31,  2001;  however,  according  to its  terms  the note  was  automatically
extended  with  principle  and interest due January 2, 2005.  As of November 30,
2001,  the Company  discounted  this  long-term  note  receivable and provided a
valuation allowance to reduce the note for a total of $400,000.  In the event of
default,  Lexicor must issue common shares to the Company equal to 51 percent of
the issued and  outstanding  shares of  Lexicor.  Unpaid  principal  and accrued
interest on this note  receivable  may be converted  at any time until  maturity
into Lexicor common stock at a share price of $6.00.

                                      -7-
<PAGE>

         As of April 17, 2001, in connection with a letter of intent to purchase
Armstrong Industries,  Inc., the Company advanced $15,000 to Armstrong. The note
is due May 1, 2002. Interest is due from June 1, 2001 on the unpaid principal at
the rate of 12% per annum.


                          Item 7. FINANCIAL STATEMENTS

         The  full  text  of  the  Company's  audited   consolidated   financial
statements  for the fiscal years ended November 30, 2001 and 2000 begins on page
F-1 of this Report and is incorporated herein by reference.


               Item 8. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS
                     ON ACCOUNTING AND FINANCIAL DISCLOSURE

         Effective May 1, 2001,  our board of directors  approved the engagement
of Swenson  Advisors,  LLP, as our independent  certified public  accountants to
audit our  financial  statements  for the fiscal year ended  November  30, 2001.
Hutchinson  and  Bloodgood,  LLP  (formerly  Logan,  Throop & Co.,  LLP) was the
independent  certifying  accountant  previously  engaged to audit our  financial
statements  for the fiscal years ended  November 30, 2000 and 1999. On April 27,
2001, we notified  Hutchinson and Bloodgood,  LLP of their dismissal.  The audit
reports  provided by Hutchinson  and  Bloodgood,  LLP do not contain any adverse
opinions or  disclaimers  of opinion nor were they modified as to audit scope or
accounting  principles;  however,  the audit reports for such periods do contain
going concern  qualifications.  There have been no disagreements  between us and
Hutchinson  and  Bloodgood,  LLP on  any  matter  of  accounting  principles  or
practices,  financial  statement  disclosures  or auditing  scope or procedures.
There  were no  "reportable  events"  (as such  term is  defined  in Item 304 of
Regulation S-B) that occurred within our two most recent fiscal years.



                                    PART III


      Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The Directors and Executive Officers of the Company as of November 30, 2001
were:

<TABLE>
<CAPTION>

 Name                  Age      Position                                      Date elected
 ----                  ---      --------                                      ------------
<S>                   <C>      <C>                                           <C>
W. Gerald Newmin       63       Chairman, CEO, Secretary & Director           May 17, 2000

Jerry G. Simek         57       Director                                      May 17, 2000

Ed Sigmund             42       Director                                      May 17, 2000

Gregory Szabo          48       President & Director                          June 6, 2001

</TABLE>

         W.  Gerald  "Jerry"  Newmin  began  as a  consultant  to the  Board  of
Directors of Exten in June 1995. On December 1, 1995, he was elected Chairman of
the Board of Directors,  Chief  Executive  Officer,  and President of Exten.  He
currently  serves as our Chairman,  Chief Executive  Officer and Secretary.  Mr.
Newmin is the Secretary and a director of Xenogenics and a director of MultiCell
Technologies.  Mr.  Newmin  serves on the Board of SYS and is Chairman and Chief
Executive  Officer of SYS, a defense systems  company in San Diego,  California,
which is publicly traded on the OTC Bulletin Board.  Mr. Newmin is past Chairman
of the Board of the Corporate Directors Forum, a non-profit organization of over
200 California Board members, which promotes excellence in corporate governance.
He co-founded and serves on the board of the Corporate  Governance  Institute at
San Diego State  University.  From 1987 to 1995 Mr.  Newmin  owned a  management
consulting firm that provided  consulting  expertise to small private companies.
From 1984 to 1987, Mr. Newmin was President of HealthAmerica  Corporation,  then
the nation's largest publicly held HMO management company. From 1977 to 1984, he
was President of  International  Silver  Company,  a diversified  multi-national
manufacturing  company that he  restructured.  From 1973 to 1977, Mr. Newmin was
Vice President and Western Regional  Director for American  Medicorp,  Inc., and
managed 23 acute care hospitals in the Western United States. From 1962 to 1973,
at Whittaker Corporation, Mr. Newmin held senior executive positions,  including
Chief  Executive  Officer  of  Production  Steel  Company,   Whittaker  Textiles
Corporation,  Bertram Yacht Corp.,  Narmco Materials Corp., and Anson Automotive
Corp.,  and was  instrumental  in  Whittaker's  entry into the United States and
international  health  care  markets.  Mr.  Newmin  has a  Bachelor's  degree in
Accounting from Michigan State University.


                                      -8-
<PAGE>


         Ed Sigmond was elected to the Board of Directors  of Exten in 1999.  He
has been in sales, marketing and operations management for the past 18 years. He
is President of Kestrel  Development and has been an entrepreneur,  investor and
real estate  developer in the Dallas,  Texas area since 1994. From 1992 to 1996,
Mr.  Sigmond was  President  of American  Machine and Bearing of Dallas,  Texas.
Prior  positions  included  Assistant to President  of Alpha  Aviation,  Dallas,
Texas, 1990-1992;  Founder and President of Specialty Food Products,  Arlington,
Texas, 1987-1990;  and Vice  President/Regional  Manager of Geodata Corporation,
Houston,  Texas  1981-1987.   He  has  varied  negotiation,   sales,  marketing,
managerial  and  operational  skills with  existing and startup  operations.  He
studied Marketing and Chemistry at Duquesne University.

         Jerry Simek was elected to the Board of Directors of Exten on March 20,
1998.  From June 16,  1998 to April 19,  2001,  he served as Exten's  President,
Chief  Operating  Officer and  Treasurer.  Mr.  Simek has been  President of JGS
Management  Group since 1984,  specializing  in  strategic  planning,  financial
management,  business/corporate  development and international  business. He has
successfully  directed  and  implemented  company  reorganizations,  refinancing
programs and company turnarounds, as well as market development, acquisition and
divestiture programs. Mr. Simek was past President of a San Diego public medical
electronics  manufacturing  company and  facilitated its turnaround and funding.
Mr.  Simek  has  over  thirty  years  of   management   experience   with  major
multinational  companies  in the  medical,  energy,  electronics  and  aerospace
industries.  He has worked for such  medical  companies  as Baxter and Johnson &
Johnson.  He has  facilitated  raising  capital in public,  private and start-up
ventures;   has  identified   and   established   joint  venture   transatlantic
manufacturing, trading company and joint licensing programs, and has established
and  implemented   multimillion  dollar  project  management  and  manufacturing
expansion programs.  Mr. Simek has been a Director and/or Management Advisor for
other public and private  companies in the United States and the United Kingdom.
He has a B.S. from Illinois  Institute of Technology and an MBA from  Pepperdine
University.

         Gregory F. Szabo was appointed Exten's President and Treasurer on April
19, 2001, and was appointed MultiCell  Technologies' Chief Executive Officer and
Secretary on September 15, 2001. From June 2000 to the present, he has served as
President of Xenogenics Corporation,  our majority-owned  subsidiary.  He has 20
years of  experience  in the  medical  device  industry,  including  FDA product
submission  and insurance  reimbursement  experience  plus sales,  marketing and
management responsibilities. From January 2000 to June 2000, Mr. Szabo worked as
an independent  management  consultant for several  companies,  including Exten.
Prior to  joining  Exten  and  Xenogenics,  Mr.  Szabo was  President  and Chief
Executive  Officer of Titan Scan where he managed the medical  sterilization and
food  pasteurization  business from June 1998 until  January 2000.  From January
1997 until June 1998 he was  President  and Chief  Executive  Officer of Goulter
Medical Inc. He has also held senior management positions at Comfort Clinic, Bio
Clinic,  Zimmer,  and Becton  Dickinson.  He holds a Masters in Management  from
Drucker Graduate School,  Claremont  University,  Claremont,  CA and a Bachelors
degree from the University of Toledo.


                                      -9-
<PAGE>


                         Item 10. EXECUTIVE COMPENSATION

                           Summary Compensation Table

         The following table sets forth information  concerning the compensation
received  for the fiscal  years ended  November  30,  2001,  2000,  and 1999 for
services  rendered  to the  Company in all  capacities  by the  Company's  Chief
Executive  Officer  and any officer or Director  with salary over  $100,000  per
year.

<TABLE>
<CAPTION>


                                                                                Long Term Compensation
                                                                          ---------------------------------
                                                                                        Awards
                                              Annual Compensation         ---------------------------------
                                     ------------------------------------   Restricted
                                                          Other annual        stock           Securities
Name and principal                   Salary      Bonus    compensation       award(s)          Options/
position                  Year       ($)         ($)         ($)(1)            ($)             SARs (#)
------------------------- ---------- ----------- ------- ---------------- ------------ --------------------
<S>                       <C>          <C>       <C>        <C>              <C>             <C>
W. Gerald Newmin,         2001          -0-       -0-        $67,841          -0-              500,000
Chairman of the Board,
Chief Executive           2000          -0-       -0-        $48,424          -0-              825,000
Officer, Secretary and
Director                  1999          -0-       -0-        $94,285          -0-                -0-

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

Gregory F. Szabo          2001       $145,000     -0-        $30,000          -0-              400,000
President, Treasurer,
Director                  2000        $60,000     -0-        $15,000          -0-              250,000

</TABLE>

(1)  Represents the fair market value of shares of our common stock paid in lieu
of cash based on the  closing  market  price of our common  stock on the date of
approval by our board of directors.


Other Non-Cash Compensation

         Our bylaws  authorize our board of directors to fix the compensation of
directors for services related to their membership in board committees and allow
the  reimbursement of expenses of directors for their attendance at each meeting
of our board of  directors.  Beginning  January 1, 1994, we paid all directors a
fee of 10,000 shares of our common stock per calendar  year. On August 17, 1995,
the board of directors  adjusted the fee to 12,000 shares per month. On February
15, 2000,  the board of directors  resolved that each board member would receive
the  equivalent  of $2,000 in our common  stock for each board  meeting in which
such  director  participates.  Additionally,  during  fiscal year 2000,  Gregory
Szabo,  Ed Sigmond and Jerry Simek were each granted  stock  options for 250,000
shares  exercisable  at $0.21 per  share;  these  options  vest over 3 years and
expire on May 17, 2004. During fiscal year 2001, Ed Sigmond and Jerry Simek were
each granted stock options for 250,000 shares,  exercisable at $0.115 per share;
these  options vest over 3 years and expire on July 11, 2005.  The option grants
were in addition to the meeting compensation.

         Jerry Simek, a director,  works for Exten under a Contractor/Management
Consulting  Agreement  with JGS  Management  Group,  Inc., of which Mr. Simek is
President.  The  agreement  provides  that Mr. Simek will be paid at the rate of
$50.00 per hour,  which will be  converted  into our common  stock at the end of
each month using the common stock price on the last day of the month.  Mr. Simek
received  372,318 and  1,688,140  shares in fiscal years 2001 and 2000 under the
terms of that agreement.


     Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The  following  table sets forth,  as of  February  22,  2002,  certain
information  as to shares of our common  stock owned by (i) each person known to
beneficially own more than 5% of the outstanding  common stock, (ii) each of our
directors, and named executive officers, and (iii) all of our executive officers
and directors as a group. Unless otherwise indicated,  the address of each named
beneficial owner is the same as that of our principal  executive offices located
at 425 W. 5th Avenue, Suite 201, Escondido, California 92025.



                                      -10-
<PAGE>


                                                                    Percentage
                                             Number of Shares        of Class
Name and Address of                            Beneficially        Beneficially
Beneficial Owner (1)                             Owned (2)            Owned
--------------------                         ----------------      ------------
W. Gerald Newmin(3)                              21,423,251            20.1%

Jerry G. Simek                                    2,163,015             2.2%

Gregory F. Szabo                                  1,485,942             1.5%

Ed Sigmond(4)                                       307,499               *

Kestrel Equity Partners Ltd.(5)                   8,000,000             8.2%

Clifton L. Cooke, Jr. (6)                         8,000,000             8.1%

The Estate of Hugo O. Jauregui (7)                8,725,000             9.0%

All executive officers and directors
  as a group                                     25,379,707            23.7%
(four persons)

(1)      Beneficial  ownership has been determined in accordance with Rule 13d-3
         under the Exchange Act. Pursuant to the rules of the Commission, shares
         of common  stock  that  each  named  person  and group has the right to
         acquire within 60 days pursuant to options,  warrants, or other rights,
         are deemed  outstanding for purposes of computing  shares  beneficially
         owned by and the  percentage  ownership  of each such person and group.
         However,  such  shares  are not  deemed  outstanding  for  purposes  of
         computing the shares  beneficially owned by or percentage  ownership of
         any other person or group.
(2)      Unless  otherwise  noted, all shares listed are owned of record and the
         record owner has sole voting and investment power, subject to community
         property laws where applicable.
(3)      Does not  include  shares of our  common  stock  owned by Mr.  Newmin's
         spouse, over which Mr. Newmin disclaims beneficial ownership.
(4)      Includes  83,333 shares issuable under options which are exercisable on
         or within 60 days of December 31, 2001.  Does not include shares of our
         common  stock  owned by Kestrel  Equity  Partners  Ltd.,  for which Mr.
         Sigmond serves as Managing Partner.
(5)      Kestral Equity Partners, Ltd. is a limited partnership investment fund;
         Ed Sigmond, one of our directors,  is its Managing Partner. Its address
         is 2808 Cole Ave., Dallas, Texas 75204.
(6)      Includes  5,000,000  shares of the Cooke Family Trust for which Clifton
         Cooke is a Trustee.
(7)      The  trustees of the Estate are Candice L. Dyer,  M.D.  and Timothy Van
         Johnson.
* Less than 1%.


             Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         JGS Management  Group,  Inc. (JGS), of which Jerry G. Simek, a Director
of Exten, is the President, provides services to Exten pursuant to a finders fee
agreement  with  Exten.  The  agreement  provides  that JGS will be  compensated
pursuant  to an  established  formula  for the  introduction  of  investors  who
actually invest in Exten or lend Exten money. During fiscal year 2001, we issued
a total of 372,318  shares of our common  stock to Mr.  Simek  pursuant  to this
agreement.

         In August 2001 we  borrowed  an  aggregate  of  $1,085,000  in order to
finance the acquisition of MultiCell.  Of this amount, we borrowed $450,000 from
Mr.  Newmin,  our chairman  and Chief  Executive  Officer,  and $50,000 from Mr.
Szabo, our President, in connection with a note offering for purposes of raising
funds to consummate the acquisition of MultiCell. The notes bear interest at the
rate of 10% per annum,  with all principal and accrued  interest due and payable
in August 2004.

         Mr.  Newmin and Mr.  Szabo each may convert his loan into shares of our
common stock prior to the due date of the loan at the following conversion rates
(i) $.10,  if  converted  during the first  twelve (12) months after the date of
this Agreement; (ii) $.15, if converted after the twelfth (12th) and through the
twenty-fourth (24th) month of this Agreement; and (iii) $.20, if converted after
the twenty-fourth (24th) month and prior to the maturity date.



                                      -11-
<PAGE>


                 Item 13. EXHIBITS LIST AND REPORTS ON FORM 8-K


(a)      Exhibits
         --------

         Exhibit No.       Description

         23.1              Consent of Independent Accountants
         23.2              Consent of Independent Accountants

(b)      Reports on Form 8-K
         -------------------

         The  Registrant  filed a current report on Form 8-K with the Commission
on November 26, 2001.




                                   SIGNATURES

         Pursuant  to the  requirements  of Section 13 or 15D of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized,


                             EXTEN INDUSTRIES, INC.
                                  (Registrant)

                             By /s/ W. Gerald Newmin
                                --------------------
                                    W. Gerald Newmin
                                    Chairman & CEO

                             Dated  2/27/02


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.


 Signature                          Title                            Date
 ---------                          -----                            ----
/s/ W. Gerald Newmin       Chairman ,CEO and Secretary              2/27/02
    ----------------
    W. Gerald Newmin

/s/ Jerry G. Simek         Director                                 2/27/02
    --------------
    Jerry G. Simek

/s/ Gregory F. Szabo       President,  COO and Treasurer            2/27/02
    ----------------
    Gregory F. Szabo

/s/ Ed Sigmond             Director                                 2/27/02
    ----------
    Ed Sigmond

                                      -12-
<PAGE>




REPORT OF INDEPENDENT ACCOUNTANTS


Board of Directors and Stockholders
Exten Industries, Inc.


We have audited the accompanying consolidated balance sheet of Exten Industries,
Inc. (a Delaware corporation), and subsidiaries as of November 30, 2001, and the
related consolidated  statements of operations,  stockholders' equity (deficit),
and  cash  flows  for the year  ended  November  30,  2001.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of Exten Industries,
Inc. and its  subsidiaries  as of November  30,  2001,  and the results of their
operations  and their  cash  flows for the year  ended  November  30,  2001,  in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated  financial  statements,  the  Company has  significant  net losses,
negative  working  capital,  serious  liquidity  concerns  and is in  default on
certain notes payable. These matters raise substantial doubt about the Company's
ability to continue as a going  concern.  The Company may not be able to acquire
adequate  funding  for its  continued  operations.  The  consolidated  financial
statements  do  not  include  any  adjustments  as  to  the  recoverability  and
classification of assets and liabilities that might result should the Company be
unable to continue as a going concern.

The consolidated  financial statements of Exten Industries,  Inc. as of November
30, 2000,  were audited by other  auditors  whose report dated February 1, 2001,
and included in this Form 10-KSB,  on those  statements  included an explanatory
paragraph describing conditions that raise substantial doubt about the Company's
ability to continue as a going concern.


/s/SWENSON ADVISORS, LLP


San Diego, California
February 25, 2002, except for Note 14 which is as of March 20, 2002



                                      -F1-
<PAGE>


                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
Exten Industries, Inc.
San Diego, California

We have audited the accompanying consolidated balance sheet of Exten Industries,
Inc. and Subsidiary (a  development  stage company) as of November 30, 2000, and
the related consolidated statements of operations,  stockholders' deficiency and
cash  flows  for  the  year  then  ended.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Exten  Industries,  Inc. and
Subsidiary as of November 30, 2000,  and the results of its  operations and cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America..

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
consolidated  financial  statements,  the Company has sustained recurring losses
and  negative  cash  flows for  several  years and had a  stockholders'  capital
deficiency as of November 30, 2000.  These conditions  raise  substantial  doubt
about the Company's ability to continue as a going concern.  Management's  plans
in regard to these  matters  are also  described  in Note 2 to the  consolidated
financial statements.  The consolidated  financial statements do not include any
adjustments  relating to the recoverability and classification of reported asset
amounts and  classification of liabilities that might result from the outcome of
this uncertainty.



Hutchinson and Bloodgood, LLP
San Diego, California
February 1, 2001





                                      -F2-
<PAGE>



                     Exten Industries, Inc. and Subsidiary
                         (A Development Stage Company)
                           Consolidated Balance Sheets
                           November 30, 2001 and 2000

<TABLE>
<CAPTION>
                                                    2001             2000
                                                ------------     ------------
<S>                                             <C>              <C>
                      ASSETS
Current assets:
     Cash and cash equivalents                  $    367,864     $    539,103
     Accounts receivable                              40,000             -
     Current portion of notes receivable              15,000          132,500
     Other current assets                             83,528           50,000
                                                ------------     ------------
Total current assets                                 506,392          721,603
                                                ------------     ------------

Property and equipment, net                          174,659            1,222

Other assets:
     License agreement                             2,406,593             -
     Notes receivable, net                           200,000             -
     Other assets                                     88,540           93,805
                                                ------------     ------------
Total other assets                                 2,695,133           93,805
                                                ------------     ------------

Total Assets                                    $  3,376,184     $    816,630
                                                ============     ============

              See accompanying notes to the financial statements
</TABLE>


                                     - F3 -

<PAGE>

                     Exten Industries, Inc. and Subsidiary
                         (A Development Stage Company)
                          Consolidated Balance Sheets
                          November 30, 2001 and 2000

<TABLE>
<CAPTION>
                                                    2001             2000
                                                ------------     ------------
<S>                                             <C>              <C>
 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
     Accounts payable and accrued expenses      $    353,007     $    157,627
     Current portion of notes payable                 79,500          509,460
     Deferred income                                 417,125             -
     Other current liabilities                        11,552             -
                                                ------------     ------------
Total current liabilities                            861,184          667,087
                                                ------------     ------------

Other liabilities:
     Notes payable, net                              832,713             -
     Other liabilites                                 36,349             -
                                                ------------     ------------
Total other liabilities                              869,062             -
                                                ------------     ------------

Total liabilities                                  1,730,246          667,087

Minority interest                                    159,591          158,581

Commitments and contingent liabilities

Stockholders' equity (deficit):
     Common stock, $.01 par value: 200,000,000
          shares authorized, 97,629,444 and
          73,586,502 shares issued and
          outstanding at November 30, 2001
          and 2000, respectively                     976,294          735,865
     Additional paid-in capital                   14,269,569       11,409,980
     Stock subscriptions receivable                  (85,000)         (81,500)
     Deferred compensation costs                      (8,250)         (16,500)
     Deficit accumulated prior to the
          development stage                      (10,084,284)     (10,084,284)
     Deficit accumulated during the
          development stage                       (3,581,982)      (1,972,599)
                                                ------------     ------------
Total stockholders' equity (deficit)               1,486,347           (9,038)
                                                ------------     ------------

Total Liabilities and Stockholders'
     Equity (Deficit)                           $  3,376,184     $    816,630
                                                ============     ============

              See accompanying notes to the financial statements
</TABLE>

                                     - F4 -

<PAGE>

                     Exten Industries, Inc. and Subsidiary
                         (A Development Stage Company)
                     Consolidated Statements of Operations
                 For the Years Ended November 30, 2001 and 2000

<TABLE>
<CAPTION>
                                                                        February 28, 1997
                                                                          (Inception) to
                                                                           November 30,
                                                 2001           2000           2001
                                             ------------   ------------   ------------
<S>                                          <C>            <C>            <C>
Revenue                                      $    113,327   $       -      $    113,327
                                             ------------   ------------   ------------
Operating expenses:
     General and administrative                 1,425,628        559,796      3,332,399
     Research and development                     297,424        184,672        654,345
     Depreciation and amortization expense         33,005            389         57,419
                                             ------------   ------------   ------------

Total operating expenses                        1,756,057        744,857      4,044,163
                                             ------------   ------------   ------------

Operating loss                                 (1,642,730)      (744,857)    (3,930,836)

Other income (expense):
     Interest expense                             (93,588)       (21,258)      (213,354)
     Discount on note receivable                  (95,000)          -           (95,000)
     Interest income                               79,262         12,327         91,589
     Discount on note payable                     (25,163)          -           (25,163)
     Minority interest in loss of subsidiary      169,686        113,110        291,398
                                             ------------   ------------   ------------

Other income                                       35,197        104,179         49,470

Net loss before extraordinary item             (1,607,533)      (640,678)    (3,881,366)
                                             ------------   ------------   ------------

Net gain on extinguishment of debt                   -              -           302,380

Net loss before income tax provision           (1,607,533)      (640,678)    (3,578,986)

Income tax provision                                1,850           -             1,850
                                             ------------   ------------   ------------

Net loss                                     $ (1,609,383)  $   (640,678)  $ (3,580,836)
                                             ============   ============   ============

Loss per share                               $     (0.02)   $     (0.01)
Average number of shares outstanding           81,208,211     61,125,011


              See accompanying notes to the financial statements
</TABLE>


                                     - F5 -

<PAGE>

                     Exten Industries, Inc. and Subsidiary
                         (A Development Stage Company)
            Consolidated Statements of Stockholders' Equity (Deficit)
             From February 28, 1997 (Inception) to November 30, 2001

<TABLE>
<CAPTION>
                                                 Series H
                                     Common     Convertible               Common                          Total        Stockholders'
                                     Stock       Preferred                 Stock         Deferred      Accumulated        Equity
                                     Shares       Shares       Amount    Subscribed    Compensation      Deficit         (Deficit)
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>          <C>         <C>          <C>          <C>              <C>            <C>
Balance at February 28, 1997
  inception of development stage   29,968,382        -      $9,207,400   $     -      $         -      $(10,084,284)  $   (876,884)

Issuance of stock for cash            120,000        -           6,000         -                -              -             6,000
Issuance of stock for services      3,798,038        -          93,949         -                -              -            93,949
Issuance of stock for settlement
  of accounts payable                 750,000        -          30,000         -                -              -            30,000
Issuance of stock to officer
  unpaid at end of year             2,500,222        -         140,040     (140,040)            -              -              -
Net loss                                 -           -            -            -                -            (4,535)        (4,535)
                                   ----------   ---------   ----------   ----------   --------------   ------------   ------------

Balance at November 30, 1997       37,136,642        -       9,477,389     (140,040)            -       (10,088,819)      (751,470)
                                   ----------   ---------   ----------   ----------   --------------   ------------   ------------

Issuance of stock for cash            625,000        -          25,000         -                -              -            25,000
Issuance of stock for services     10,040,027        -         511,177         -                -              -           511,177
Issuance of stock for settlement
  of accounts payable                  48,000        -           2,880         -                -              -             2,880
Issuance of stock for settlement
  of notes payable                    500,000        -          30,000         -                -              -            30,000
Effect of issuance of stock by
  subisidiary in excess of book
  value                                  -           -          49,137         -                -              -            49,137
Services provided by officer to
  extinguish receivable from sale
  of stock                               -           -            -         140,040             -              -           140,040

</TABLE>


                                      -F6-
<PAGE>

                      Exten Industries, Inc. and Subsidiary
                          (A Development Stage Company)
            Consolidated Statements of Stockholders' Equity (Deficit)
             From February 28, 1997 (Inception) to November 30, 2001
                                  (continued)

<TABLE>
<CAPTION>

                                                 Series H
                                     Common     Convertible               Common                          Total        Stockholders'
                                     Stock       Preferred                 Stock         Deferred      Accumulated        Equity
                                     Shares       Shares       Amount    Subscribed    Compensation      Deficit         (Deficit)
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>          <C>         <C>          <C>          <C>              <C>            <C>
Stock subscribed                         -           -          37,125       16,502             -              -            53,627
Net loss                                 -           -            -            -                -          (811,677)      (811,677)
                                   ----------   ---------   ----------   ----------   --------------   ------------   ------------

Balance at November 30, 1998       48,349,669        -      10,132,708       16,502             -       (10,900,496)      (751,286)
                                   ----------   ---------   ----------   ----------   --------------   ------------   ------------

Issuance of stock for legal
  settlement                             -         22,622      176,000         -                -              -           176,000
Issuance of stock subscribed        1,151,350        -          11,513      (11,513)            -              -              -
Effect of issuance of stock by
  subsidiary in excess of book
  value                                  -           -          91,095         -                -              -            91,095
Dividend paid to preferred
  minority shareholders                  -           -            -            -                -            (1,145)        (1,145)
Net loss                                 -           -            -            -                -          (514,564)      (514,564)
                                   ----------   ---------   ----------   ----------   --------------   ------------   ------------

Balance at November 30, 1999       49,501,019      22,622   10,411,316        4,989             -       (11,416,205)      (999,900)
                                   ----------   ---------   ----------   ----------   --------------   ------------   ------------

Issuance of stock subscribed             -           -           4,989       (4,989)            -              -              -
Exercise of stock options unpaid
  at year end                         837,500        -          81,500      (81,500)            -              -              -
Issuance of stock for cash          5,000,000        -          50,000         -                -              -            50,000
Exercise of stock options             800,000        -          48,000         -                -              -            48,000
Issuance of stock for services      1,994,079        -         269,639         -                -              -           269,639
Issuance of stock options to
  scientific advisory board              -           -          16,500         -             (16,500)          -              -


</TABLE>

                                      -F7-
<PAGE>

                      Exten Industries, Inc. and Subsidiary
                          (A Development Stage Company)
            Consolidated Statements of Stockholders' Equity (Deficit)
             From February 28, 1997 (Inception) to November 30, 2001
                                  (continued)
<TABLE>
<CAPTION>
                                                 Series H
                                     Common     Convertible               Common                          Total        Stockholders'
                                     Stock       Preferred                 Stock         Deferred      Accumulated        Equity
                                     Shares       Shares       Amount    Subscribed    Compensation      Deficit         (Deficit)
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>          <C>         <C>          <C>          <C>              <C>            <C>
Issuance of stock warrants               -           -           2,112         -                -              -             2,112
Issuance of stock
  settlement of accounts payable
  and accrued expenses             10,361,435        -         491,214         -                -              -           491,214
Issuance of stock for settlement
  of officer advances               2,718,469        -          81,554         -                -              -            81,554
Issuance of stock for settlement
  of notes payable                    112,000        -           3,000         -                -              -             3,000
Effect of issuance of stock by
  subsidiary in excess of book
  value                                  -           -         686,021         -                -              -           686,021
Conversion of preferred shares
  to common                         2,262,000     (22,622)        -            -                -              -              -
Net loss                                 -           -            -            -                -          (640,678)      (640,678)
                                   ----------   ---------   ----------   ----------   --------------   ------------   ------------

Balance at November 30, 2000       73,586,502        -      12,145,845      (81,500)         (16,500)   (12,056,883)        (9,038)
                                   ----------   ---------   ----------   ----------   --------------   ------------   ------------

Issuance of stock for services      4,035,546        -         445,496         -               8,250           -           453,746
Issuance of stock for note payable  5,000,000        -         500,000         -                -              -           500,000
Acquisition of Multicell
      Associates                   12,083,334        -       1,450,000         -                -              -         1,450,000
Issuance of stock for cash
  and other                         2,824,062        -          94,000       11,500             -              -           105,500
Effect of issuance of stock by
  subsidiary  in excess of book
  value                                  -           -         298,572         -                -              -           298,572
Exercise of stock options             100,000        -          10,000         -                -              -            10,000
Common stock warrants issued in
  connection with borrowings             -           -         301,950         -                -              -           301,950
Note receivable from stockholder         -           -            -         (15,000)            -              -           (15,000)
Net loss                                 -           -            -            -                -        (1,609,383)    (1,609,383)
                                   ----------   ---------   ----------   ----------   --------------   ------------   ------------

Balance at November 30, 2001       97,629,444        -     $15,245,863   $  (85,000)  $       (8,250)  $(13,666,266)    $1,486,347
                                   ==========   =========   ==========   ==========   ==============   ============   ============
</TABLE>



                                     - F8 -

<PAGE>

                     Exten Industries, Inc. and Subsidiary
                         (A Development Stage Company)
                     Consolidated Statements of Cash Flows
                 For the Years Ended November 30, 2001 and 2000

<TABLE>
<CAPTION>
                                                                           February 28, 1997
                                                                             (Inception) to
                                                                              November 30,
                                                    2001           2000           2001
                                                ------------   ------------   ------------
<S>                                             <C>            <C>            <C>
Cash flows from operating activities:
   Net loss                                     $ (1,609,383)  $   (640,678)  $ (3,580,837)
   Adjustments to reconcile net income (loss)
      to net cash provided (used) by
      operating activities:
      Depreciation and amortization                   33,005            389         57,419
      Discount of note receivable                     95,000           -            95,000
      Discount of notes payable                       25,163           -            25,163
      Valuation allowance on note receivable         305,000           -           305,000
      Common stock issued for services               445,496        269,639      1,430,044
      Note issued for compensation                      -              -            15,133
      Minority stock issued for interest                -            12,493         12,493
      Minority interest in loss from subsidiary     (169,686)      (113,110)      (291,399)
      Vesting of deferred compensation costs           8,250           -             8,250
      Gain on extinguishments of debt                   -              -          (302,380)
   Changes in assets and liabilities:
      Accounts receivable                            (40,000)          -           (40,000)
      Other current assets                           (48,258)        31,863        (81,591)
      License agreement                           (2,433,393)          -        (2,433,393)
      Other assets                                     5,265         (5,868)       (41,340)
      Accounts payable and accrued expenses          197,472         25,998        782,939
      Deferred income                                417,125           -           417,125
      Other liabilities                               36,349           -            36,349
                                                ------------   ------------   ------------
Net cash used by operating activities             (2,732,595)      (419,274)    (3,586,025)
                                                ------------   ------------   ------------

Cash flows from investing activities:
   Advances for notes receivable                    (482,500)      (150,000)      (632,500)
   Purchase of equipment                             (95,644)          (327)       (97,804)
                                                ------------   ------------   ------------
Net cash used by investing activities:              (578,144)      (150,327)      (730,304)
                                                ------------   ------------   ------------
</TABLE>

                                      -F9-
<PAGE>


                     Exten Industries, Inc. and Subsidiary
                         (A Development Stage Company)
                     Consolidated Statements of Cash Flows
                 For the Years Ended November 30, 2001 and 2000
                                  (continued)
<TABLE>
<CAPTION>
                                                                           February 28, 1997
                                                                             (Inception) to
                                                                              November 30,
                                                    2001           2000           2001
                                                ------------   ------------   ------------
<S>                                             <C>            <C>            <C>



Cash flows from financing activities:
   Proceeds from notes payable                     1,164,000        500,000      1,904,500
   Payments of notes payable                            -            (5,000)       (55,000)
   Proceeds from sale of stock                        94,000         50,000        175,000
   Proceeds from exercised options                    10,000         48,000         58,000
   Proceeds from subscribed stock                     11,500           -            11,500
   Proceeds from sale of stock by subsidiary         410,000        500,000      1,042,395
   Purchase of Multicell Associates, Inc.          1,450,000           -         1,450,000
   Advances from officers                               -            15,476         81,554
   Dividends paid-subsidiary preferred stock            -              -            (1,145)
   Proceeds from subscriptions for purchase of
      common stock of subsidiary                        -              -            17,601
                                                ------------   ------------   ------------
Net cash provided by financing activities          3,139,500      1,108,476      4,684,405
                                                ------------   ------------   ------------

Net increase (decrease) in cash and
   cash equivalents                                 (171,239)       538,875        368,076
Cash and cash equivalents,
   beginning of year                                 539,103            228           (212)
                                                ------------   ------------   ------------
Cash and cash equivalents, end of year          $    367,864   $    539,103   $    367,864
                                                ============   ============   ============

Supplemental disclosures:
   Interest paid                                $     45,219   $     30,031   $     61,216
   Income taxes                                 $      1,600   $       -      $      1,600

Noncash transactions:
   Issuance of stock for legal settlement       $       -      $       -      $    176,000
   Issuance of common stock warrants in
      connection with borrowings                $    301,950   $       -      $    301,950
   Issuance of stock for debt                   $    500,000   $      3,000   $    673,040
   Issuance of minority stock for debt          $       -      $    444,063   $    444,063
   Settlement of officer advances for stock     $       -      $     81,554   $     81,554
   Settlement of accounts payable and
      accrued expenses for stock                $       -      $    491,214   $    524,094
   Note payable issued for accrued liabilities  $       -      $       -      $     20,000
   Note payable increased by accrued interest   $       -      $       -      $     30,518
   Stock subscribed for accrued expenses to
      be satisfied by the issuance of stock     $       -      $       -      $     18,916
   Issuance of stock warrants                   $       -      $      2,112   $      2,112
   Receipt of Lexicor stock warrants            $       -      $     17,500   $     17,500
</TABLE>

                                     - F10 -


<PAGE>


                     Exten Industries, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended November 30, 2001 and 2000



Note 1 - Summary of Organization and Significant Accounting Policies

         Organization - Exten Industries,  Inc. is a holding company for its two
         ------------
         subsidiaries,  Xenogenics  Corporation and MultiCell  Associates,  Inc.
         (together the "Company").  Xenogenics was incorporated in February 1997
         to focus on the research and development of SYBIOL(R)technology. At the
         time of  Xenogenics  incorporation,  the  Company  reentered  into  the
         development  stage. In September 2001, the Company purchased  MultiCell
         Technologies,  Inc.  (MultiCell),  which was previously named MultiCell
         Associates,  Inc.  (See Note 6).  MultiCell  is in the  business of the
         development and future  commercialization  of hepatic cells, cell lines
         and  associated  products  to be used  in  diagnostic  and  therapeutic
         applications.

         Basis of Consolidation - The consolidated  financial statements include
         ----------------------
         the   accounts  of  Exten  and  its   subsidiaries.   All   significant
         intercompany   balances  and  transactions   have  been  eliminated  in
         consolidation.

         Cash and Cash  Equivalents  - The Company  considers  all  unrestricted
         --------------------------
         highly liquid investments  purchased with a maturity of three months or
         less to be cash  equivalents.  The carrying  value of cash  equivalents
         approximates fair value.

         Fair Value of Financial  Instruments - The carrying amounts of cash and
         ------------------------------------
         cash  equivalents,  accounts  receivable,  accounts payable and accrued
         expenses approximate fair market value because of the short maturity of
         those instruments. Notes payable approximate fair value.

         Credit  Risk  -  It  is  the  Company's  practice  to  place  its  cash
         ------------
         equivalents  in high  quality  money market  securities  with one major
         banking institution.  Periodically, the Company maintains cash balances
         at  this  institution   that  exceed  the  Federal  Deposit   Insurance
         Corporation insurance limit of $100,000 per bank. The Company considers
         its  credit  risk  associated  with  cash  and cash  equivalents  to be
         minimal.

         Revenue Recognition -The Company recognizes revenue at the time service
         -------------------
         is performed on commercial contracts.

         Accounts Receivable - Accounts receivable consists primarily of amounts
         -------------------
         due under contractual  agreements.  All accounts  receivable related to
         contractual  agreements  are  collectible;   accordingly,  the  Company
         recorded no allowance for doubtful accounts as of November 30, 2001.

         Property  and  Equipment - Property  and  equipment  is valued at cost.
         -----------------------
         Improvements  to leased  properties are amortized over their  estimated
         useful lives or lease  period,  whichever is shorter.  Leased  property
         meeting  certain  criteria is capitalized  and the present value of the
         related  lease  payments is recorded as a  liability.  Amortization  of
         capitalized leased assets is computed over the term of the lease.

         Depreciation  -  Depreciation  for  equipment and furniture is provided
         ------------
         using the  straight-line  method over the estimated useful lives of the
         assets,  generally  three to five  years.  Leasehold  improvements  are
         depreciated using the  straight-line  method over the remaining life of
         the lease.

                                     -F11-
<PAGE>

                     Exten Industries, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended November 30, 2001 and 2000


Note 1 - Summary of Organization and Significant Accounting Policies, continued

         Research and  Development  costs - Research and  development  costs are
         --------------------------------
         expensed as incurred.

         Income Taxes - Deferred income taxes are provided for the estimated tax
         ------------
         effects of timing  differences  between  income  for tax and  financial
         reporting.  A valuation  allowance  is provided  against  deferred  tax
         assets, where realization is uncertain. The income tax provision is the
         tax payable  for the period plus or minus the change  during the period
         in deferred tax assets and liabilities.

         Loss Per Share - The Company  computed  primary  and  diluted  loss per
         --------------
         share  amounts for November 30, 2001 and 2000 pursuant to the Statement
         of Financial  Accounting Standard (SFAS) No. 128, "Earnings Per Share".
         The Company has incurred  losses  applicable to common stock during the
         years  ended 2001 and 2000.  The  assumed  effects of the  exercise  of
         outstanding  stock  options,  warrants,  and  conversion  of notes were
         anti-dilutive  and,  accordingly,  dilutive per share  amounts have not
         been  presented  in  the   accompanying   consolidated   statements  of
         operations.

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

         Risks  and  Uncertainties  - The  Company  is  dependent  on  continued
         -------------------------
         financing from  investors and obtaining new research  grants to sustain
         the development and other  activities  necessary to  commercialize  new
         products.  Management is seeking additional  financing in order to fund
         its  future  activities.  There is no  assurance,  however,  that  such
         financing will be available, if and when needed, or if available,  such
         financing will be completed on commercially  favorable  terms, nor that
         such  development  and other  activities in connection with its planned
         products will be successful.

         Environmental  Remediation - Environmental  expenditures that relate to
         --------------------------
         current   operations  are  expensed  or  capitalized  as   appropriate.
         Expenditures  that  relate  to an  existing  condition  caused  by past
         operations,  and which do not  contribute to current or future  revenue
         generation,  are expensed.  Liabilities are recorded when environmental
         assessments and/or remedial efforts are probable,  and the costs can be
         reasonably estimated. Generally, the timing of these accruals coincides
         with the Company's commitment to a formal plan of action.

         Recent  Authoritative  Pronouncements  - In June  2001,  the  Financial
         -------------------------------------
         Accounting   Standards  Board  (FASB)  issued  Statement  of  Financial
         Accounting  Standard  (SFAS)  No.  141  "Business  Combinations".  This
         statement requires business combinations initiated after June 30, 2001,
         to be accounted for using the purchase  method of  accounting.  It also
         specifies the types of acquired  intangible assets that are required to
         be recognized and reported  separately  from goodwill.  The Company has
         applied this statement in connection  with its acquisition of MultiCell
         (See Note 6).

         In June  2001,  the  FASB  issued  SFAS No.  142  "Goodwill  and  Other
         Intangible Assets". This statement addresses how intangible assets that
         are acquired  individually  or with a group of other  assets  should be
         accounted for upon their acquisition. This statement also addresses how
         goodwill and other intangible assets should be accounted for after they
         have been initially recognized in the financial statements. The Company
         will adopt SFAS No. 142, in the fiscal year ending  November  30, 2002.
         Management is assessing the impact of this statement.

                                     -F12-
<PAGE>

                     Exten Industries, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended November 30, 2001 and 2000


Note 1 - Summary of Organization and Significant Accounting Policies, continued

         In August  2001,  the FASB  issued  SFAS No.  144  "Accounting  for the
         Impairment  or  Disposal  of   Long-Lived   Assets".   This   statement
         establishes the accounting  model for long-lived  assets to be disposed
         of by sale and applies to all long-lived assets, including discontinued
         operations.  This statement  requires that those  long-lived  assets be
         measured  at the lower of  carrying  amount or fair  value less cost to
         sell,  whether  reported  in  continuing   operations  or  discontinued
         operations.  Therefore,  discontinued  operations  will  no  longer  be
         measured  at net  realizable  value or include  amounts  for  operating
         losses that have not yet occurred.  The Company plans to adopt SFAS No.
         144,  in the fiscal  year  ending  November  30,  2002.  Management  is
         assessing the impact of this statement.

         Reclassifications  - Certain prior year balances have been reclassified
         -----------------
         to conform to the current year presentation.


Note 2 - Going Concern

         These financial statements have been prepared assuming that the Company
         will  continue  as a going  concern.  The  Company  has  operating  and
         liquidity concerns,  has incurred an accumulated deficit of $13,666,266
         through the year ended November 30, 2001, current liabilities  exceeded
         current assets by $354,792 and as of that date is in default on certain
         notes  payable (See Note 9). These  factors,  among  others,  create an
         uncertainty about the Company's ability to continue as a going concern.
         There can be no assurance that the Company will be able to successfully
         acquire the  necessary  capital to  continue  their  on-going  research
         efforts and bring it to the commercial  market.  Management's  plans to
         acquire  future  funding  include  sales  of  its  proprietary   media,
         immortalized  cells, and primary cells to the pharmaceutical  industry.
         Additionally,  the  Company  continues  to  pursue  research  projects,
         government grants and capital investment.


Note 3 - Notes Receivable

         As of  November  30,  2000,  in  connection  with a letter of intent to
         purchase the  outstanding  common stock of Lexicor  Medical  Technology
         (Lexicor),  the  Company  advanced  a  total  of  $600,000  for a  note
         receivable to Lexicor and received  83,333 common stock  warrants.  The
         Company  allocated  $17,500 to the warrants  resulting in a discount on
         the note.  The  warrants  entitle  the Company to purchase up to 83,333
         shares of Lexicor's  common stock.  The note has a stated interest rate
         of 10% per annum. Principle and interest was due and payable on May 31,
         2001;  however,  according  to its  terms  the note  was  automatically
         extended  with  principle  and  interest  due  January 2,  2005.  As of
         November  30,  2001,  the  Company   discounted   this  long-term  note
         receivable and provided a valuation  allowance to reduce the note for a
         total of $400,000.  In the event of default,  Lexicor must issue common
         shares to the Company equal to 51 percent of the issued and outstanding
         shares of Lexicor.  Unpaid  principal and accrued interest on this note
         receivable  may be  converted at any time until  maturity  into Lexicor
         common stock at a share price of $6.00.

         On April 17, 2001,  in  connection  with a letter of intent to purchase
         the outstanding common stock of Armstrong Industries, Inc., the Company
         advanced $15,000 for a note receivable.  The note has a stated interest
         rate of 12% per annum  beginning  June 1, 2001.  Principle and interest
         are due and payable on May 1, 2002.

                                     -F13-
<PAGE>

                     Exten Industries, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended November 30, 2001 and 2000


         Notes receivable for November 30, 2001 and 2000 are as follows:

                                                 2001           2000
                                              ---------       ---------
   Notes receivable                           $ 615,000       $ 132,500
   Less: discounts to net present value         (95,000)             -
   Less: valuation allowance                   (305,000)             -
                                              ---------       ---------
      Net notes receivable                      215,000         132,500
   Less: current portion                        (15,000)       (132,500)
                                              ---------       ---------
                                              $ 200,000       $      -
                                              =========       =========


Note 4- Property and Equipment

         Property and equipment is valued at cost, less accumulated depreciation
is as follows:

                                                   2001          2000
                                                 --------      --------
      Lab equipment                              $189,118      $    -
      Furniture and fixtures                       29,330           -
      Equipment                                     4,459        2,161
      Leasehold improvements                       40,995           -
                                                 --------      --------
                                                  263,902        2,161
      Less: Accumulated depreciation               89,243          939
                                                 --------      --------
      Property and equipment, net                $174,659      $ 1,222
                                                 ========      ========

         Depreciation expense totaled $6,205 in 2001 and $389 in 2000.


Note 5 - Real Estate Held for Sale

         The Company owns a parcel of  undeveloped  land near the Grand  Canyon.
         The land was  originally  purchased  in February  1992 for  $1,654,000.
         During the fiscal year ended  November 30, 1995, the Company tested the
         land for  impairment  and  expensed all but the  remaining  fair market
         value of $47,200. The Company is currently in arrears on property taxes
         and interest in the amount of $47,200. A tax sale for property taxes is
         pending and as management has been unable to obtain an appraisal of the
         fair market value of the land,  no decision has been made as to whether
         to pay the taxes in  arrears.  Real estate held for sale is included in
         other  assets  and  unpaid  property  taxes  are  included  in  accrued
         expenses.


Note 6 - Acquisition of MultiCell Associates, Inc.

         On September 13, 2001, Exten Industries  acquired all the capital stock
         of  MultiCell  Associates,  Inc.,  which  was later  renamed  MultiCell
         Technologies,  Inc.,  in  September  2001,  for  $2,200,000,  of  which
         $750,000 was paid in cash and the remaining  $1,450,000 was paid by the
         issuance  of  12,083,334  shares  of  Exten  Industries  common  stock.
         MultiCell   is  in  the   business  of  the   development   and  future
         commercialization  of hepatic cells, cell lines and associated products
         to be used in  diagnostic  and  therapeutic  applications.  The Company
         accounted for the acquisition in accordance with SFAS No. 141 "Business
         Combinations".


                                     -F14-
<PAGE>

                     Exten Industries, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended November 30, 2001 and 2000


         The following table  summarizes the estimated fair values of the assets
and liabilities assumed at September 13, 2001:

Note 6 - Acquisition of MultiCell Associates, Inc., continued

         Current assets                      $   168,436
         Property and equipment                  176,186
         License agreement                     2,433,393
         Other assets                              5,940
                                             -----------
         Total assets acquired                 2,783,955
                                             -----------
         Current liabilities                    (446,629)
         Long-term debt                         (125,000)
         Other liabilities                       (12,326)
                                             -----------
         Total liabilities assumed              (583,955)
                                             -----------
         Net assets acquired                 $ 2,200,000
                                             ===========

         The  Company  has an  exclusive  license  agreement  with Rhode  Island
         Hospital for use of patents owned by the hospital related to liver cell
         lines and liver  assist  devices.  The  Company  pays an annual  fee of
         $10,000.  The license  agreement  also requires  royalty  payments upon
         completion  of  certain  milestones.  The  Company  has not  met  these
         milestones  during the fiscal year ended November 30, 2001. The license
         agreement  is  being  amortized  over  an  estimated   useful  life  of
         approximately 18 years.  Amortization expense for the fiscal year ended
         November 30, 2001 was $26,800.

         The  License  Agreement  acquired  during  the  purchase  includes  the
         ownership of six patents of which the primary  patent for  immortalized
         hepatocytes is being utilized. The License Agreement is being amortized
         over the  estimated  useful  life of this  patent of  approximately  18
         years.

         Unaudited condensed pro forma consolidated  statements of operations of
         the Company for the years ended  November  30, 2001 and 2000,  assuming
         the acquisition of MultiCell  Associates,  Inc. occurred as of December
         1,  1999 and  December  1,  2000 and for the  years  then  ended are as
         follows:

                                                      2001             2000
                                                  -----------      -----------
         Revenue                                  $   340,421      $   946,919
                                                  -----------      -----------

         Research and development                     633,306        1,278,139
         General and administrative                 1,650,978          381,721
         Depreciation and amortization                160,416          178,346
                                                  -----------      -----------
           Total expenses                           2,444,700        1,838,206
                                                  -----------      -----------

         Operating loss                            (2,104,279)        (891,287)

         Other income                                  80,782           94,896
                                                  -----------      -----------

         Loss before income tax provision          (2,023,497)        (796,391)

         Income tax provision                           1,850              250
                                                  -----------      -----------

         Net loss                                 $(2,025,347)     $  (796,641)
                                                  ===========      ===========

         Loss per share                                 $(.03)           $(.01)


                                     -F15-
<PAGE>

                     Exten Industries, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended November 30, 2001 and 2000


Note 7 - Income Taxes

         The Company  provides  for income  taxes  using an asset and  liability
         based approach. Deferred income tax assets and liabilities are recorded
         to  reflect  the  tax   consequences   on  future  years  of  temporary
         differences  of revenue and expense  items for  consolidated  financial
         statement  and income tax  purposes.  There is a deferred  tax asset of
         approximately  $2,877,000  relating primarily to the net operating loss
         carryforwards generated by the operations of the Company. For financial
         statement  purposes,  the deferred tax asset has been fully offset by a
         valuation  allowance  since it is uncertain  whether any future benefit
         will  be  realized.   The   valuation   allowance   has   increased  by
         approximately  $639,000 for the year ended  November 30, 2001.  Current
         income tax expense is $1,850.

         A reconciliation of the statutory U.S. federal rate and effective rates
         is as follows:

                                                     2001             2000
                                                 -----------      -----------
   Income tax benefit                             $(546,561)       $(256,288)
   State income benefit, net of federal tax         (93,879)         (43,946)
   Valuation allowance                              638,550          301,339
   Other, net                                         3,740              495
                                                 -----------      -----------
   Income tax expense                             $   1,850        $   1,600
                                                 ===========      ===========

         The Company has net operating loss carryforwards as follows:

                                    Balance of                Year of
     Year Loss Generated        Loss Carryforwards          Expiration
     -------------------        ------------------      -----------------
     Prior                          $5,264,158          2008 through 2019
     November 30, 2000               1,025,963                2020
     November 30, 2001               1,604,660                2021
                                   -----------
                                    $7,894,781

Note 8 - Commitments

         Leases - The  Company  has  entered  into  leases for the Rhode  Island
         office and  laboratory  facilities.  The leases  ended at December  31,
         2001,  and are currently on a  month-to-month  basis.  Rent expense for
         these  facilities  is $3,552 per month.  The Company  has entered  into
         leases  for the  California  office  space and  laboratory  and  office
         equipment.  Most  leases  contain  renewal  options at  varying  terms.
         Generally,  the Company is responsible for property taxes and insurance
         on its leased  property.  The future  minimum  lease  payments  for all
         leases are as follows:


                Year ending November 30,
                2002                             $ 45,808
                2003                               41,333
                2004                               37,540
                2005                                3,066
                2006                                1,749
                                                ---------
                                                 $129,496
                                                =========

         Rent expense was $11,218 and $4,500 for the fiscal years ended November
         30, 2001 and 2000, respectively.


                                     -F16-
<PAGE>

                     Exten Industries, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended November 30, 2001 and 2000


Note 9 - Notes Payable

         During  April  1998,  Xenogenics  entered  into a  promissory  note for
         $10,000 with an unrelated party. Interest is accruing at 10% per annum.
         The principle and unpaid accrued interest were due and payable on April
         17, 2001.  The note is  convertible  into common stock of Xenogenics at
         $1.875 per share. The Company is currently in default and is continuing
         to accrue interest on this note.

         During  November 1998,  Xenogenics  entered into a promissory  note for
         $15,000 with a stockholder.  Interest is accruing at 8% per annum.  The
         principle and unpaid accrued  interest were due and payable on November
         10, 2000.  The note is  convertible  into common stock of Xenogenics at
         $1.875 per share. The Company is currently in default and is continuing
         to accrue interest on this note.

         During  February  1999,  the Company was granted a promissory  note for
         $125,000 from the Rhode Island Center for Cellular  Medicine,  Inc. The
         note is payable on or before February 9, 2004.  Interest is accruing at
         a rate of  5.25%  per  annum  and is  payable  upon  maturity.  Accrued
         interest is included with other liabilities in the balance sheet.

         On November 17, 2000,  the Company  entered into a promissory  note for
         $500,000 from an investor.  The note was payable on May 31, 2001,  with
         accrued interest of 10% per annum. The Company  converted the principle
         balance of $500,000 into 5,000,000 shares of common stock.

         On October 16, 2001,  the Company  entered  into a promissory  note for
         $50,000 with an unrelated party. Interest is accruing at 12% per annum.
         The  principle and any unpaid  accrued  interest are due and payable on
         October 15, 2002. Additionally, the Company issued 715,000 common stock
         warrants  convertible  at $.10 per share.  The lender may  convert  the
         outstanding  principle  balance and any accrued unpaid interest at $.07
         per share however;  the lender must convert no less than $12,500 at any
         one time.  The warrants  have been valued at $.03 and the face value of
         the note has been discounted by $19,662. (See Note 14.)

         During  September  and October 2001,  the Company  entered into various
         promissory notes with related parties for a total of $935,000. Interest
         accrues at 10% per annum. The principle and unpaid accrued interest are
         due and  payable  on August 31,  2004.  The  lenders  may  convert  the
         principle balance and any unpaid interest due into the Company's common
         stock.  The  conversion  price  varies  from $.10 to $.20 at  maturity.
         Additionally,  the  Company  issued  9,350,000  common  stock  warrants
         convertible at $.10 per share.  These warrants have been valued at $.03
         and the face value of the notes have been discounted by $257,125.

         During  September  and October 2001,  the Company  entered into various
         promissory notes with related parties for a total of $104,000. Interest
         accrues at 10% per annum. The principle and unpaid accrued interest are
         due and payable on December 31, 2001. These notes have been extended to
         June 30, 2002.  During October 2001, the Company converted $50,000 to a
         long-term note due August 31, 2004.

         The Company's total interest expense was $93,588 in 2001 and $21,258 in
         2000.

                                                   2001            2000
                                               -----------      ----------
       Notes payable                           $ 1,189,000      $  509,460
       Less: Discount on warrants issued          (276,787)             -
       Less: long-term portion                    (832,713)             -
                                               -----------      ----------
       Current portion of notes payable        $    79,500      $  509,460
                                               ===========      ==========


                                     -F17-
<PAGE>

                     Exten Industries, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended November 30, 2001 and 2000


Note 10 - Research Contracts

         On November 1, 2001, the Company entered into a research  contract with
         Pfizer  Inc. to test their  library of  hepatocyte  cell lines,  in the
         amount of $724,500,  which is received  throughout the contract period,
         ending  October 31, 2002.  According to the provisions of the contract,
         the Company received $477,500 and recognized  revenue of $60,375 during
         the fiscal year ended November 30, 2001.

         Beginning in November 2001, the Company shipped hepatocytes and culture
         media to Pfizer Inc. as contracted in various service  agreements.  The
         total  contracted  amount was $77,500,  with final payment  received in
         December 2001.


Note 11 - Stock Compensation Plans

         Effective February 15, 2000, the Company adopted a 2000 Stock Incentive
         Plan and a 2000 Employee  Benefit Plan which authorizes the granting of
         stock and options to employees,  outside  directors,  consultants,  and
         vendors.  Under the Plans,  awards  are made in the form of  restricted
         shares or options,  which may  constitute  incentive  stock  options or
         nonstatutory stock options.  Only employees of the Company are eligible
         for the grant of incentive stock options.

         The total number of options and  restricted  shares that can be awarded
         under the 2000 Stock  Incentive Plan is 5,000,000.  As of the first day
         of each  calendar  year  commencing  January 1,  2001,  this total will
         automatically  increase by 2% of the total number of common shares then
         outstanding  or  500,000,  whichever  is less.  At  fiscal  year  ended
         November 30, 2001,  the Company had 4,400,000  options for common stock
         issued and outstanding. The option price, number of shares, grant date,
         and vesting  period are  determined at the  discretion of the Company's
         Board of  Directors.  The exercise  price of each ISO granted under the
         plan must equal 100% of the market price of the Company's  stock on the
         date of grant.  The  exercise  price of each NSO  grant  under the plan
         cannot be less than 85% of the market price of the  Company's  stock on
         the date of grant. An option's maximum term is 10 years.

         Under the 2000 Employee  Benefit Plan, one or more  Performance  Awards
         may be granted to any eligible person providing  services to or for the
         Company.  The value of such  awards may be linked to the market  value,
         book value or other  measure of the value of the common  stock or other
         specific  performance  criteria determined  appropriate by the Board of
         Directors  or the  Compensation  Committee  (Committee).  The  Board or
         Committee may approve stock  payments to eligible  persons who elect to
         receive  such  payments  in the manner  determined  by the Board or the
         Committee.  The total  number of shares  that can be awarded  under the
         2000 Employee  Benefit  Plans is  35,000,000.  Federal,  state or local
         taxes that are  subject to the  withholding  tax at the source  will be
         withheld by the Company as required by  applicable  law. The Company is
         entitled to the required  deduction from other  compensation  for these
         taxes or in the alternative may require the participant to advance such
         sums or if the participant elects the Company may withhold,  or require
         the return of,  shares  having the fair market  value equal to the sums
         required  to be  withheld.  This  election  is subject  to the  Board's
         approval.

         Prior to 2000,  the Company had a stock  option  plan  authorizing  the
         granting  of  stock  options  to  various  individuals,   officers  and
         directors of the Company in return for various services rendered to the
         Company.  Stock  options  issued  under the plan have terms of up to 10
         years. The exercise price of the options is $.10 per share.

                                     -F18-
<PAGE>

                     Exten Industries, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended November 30, 2001 and 2000


Note 11 - Stock Compensation Plans, continued

         Pro forma  information  regarding net loss is required by SFAS 123, and
         has been  determined  as if the Company had  accounted for its employee
         stock options under the fair value method of that  statement.  The fair
         value of each  option  grant is  estimated  on the grant date using the
         Black-Scholes  option-pricing  model. The weighted-average  assumptions
         used for  options  were:  risk  free  interest  rate of 2.9% and  6.5%,
         dividend  yield of 0% and 0%,  volatility  factors of 1.67 and 2.11 and
         expected  lives of 2.58 and 4 years for the fiscal years ended November
         30, 2001 and 2000, respectively.

         Pro forma  information  regarding net loss is required by SFAS 123, and
         has been  determined  as if the  Company had  accounted  for its common
         stock warrants under the fair value method of that statement.  The fair
         value  of each  warrant  is  estimated  on the  grant  date  using  the
         Black-Scholes  option-pricing  model. The weighted-average  assumptions
         used for warrants were: risk free interest rate of 2.9%, dividend yield
         of 0%,  volatility  factor of 1.67 and  expected  lives of 2.63 for the
         fiscal year ended November 30, 2001.
<TABLE>
<CAPTION>

                                                                 2001              2000
                                                              -----------       ---------
<S>                                                           <C>               <C>
         Net loss as reported                                 $(1,609,383)      $(640,678)
         Pro forma net loss under SFAS No. 123                $(2,058,333)      $(693,572)
         Basic loss per share as reported                           $(.02)          $(.01)
         Pro forma net loss per share under SFAS No. 123            $(.02)          $(.01)
</TABLE>



                                           2001                    2000
                                  ---------------------   ---------------------
                                               Weighted                Weighted
                                               average                 average
                                               exercise                exercise
                                    Shares      price       Shares      price
                                  ----------   --------   ----------   --------
Options outstanding at
   beginning of year               2,665,000    $ 0.17     2,277,500    $ 0.14
Granted                            2,205,000    $ 0.12     2,025,000    $ 0.21
Forfeited                           (370,000)   $ 0.17          -       $  -
Exercised                           (100,000)   $ 0.10    (1,637,500)   $ 0.08
                                  ----------   --------   ----------   --------
Options outstanding at
   end of year                     4,400,000    $ 0.15     2,665,000    $ 0.17

Options exercisable at
   end of year                     1,011,666                 600,000



                                    - F19 -

<PAGE>


                     Exten Industries, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended November 30, 2001 and 2000


NOTE 11 - STOCK COMPENSATION PLANS, CONTINUED

The following table summarizes information about stock options outstanding at
November 30, 2001 and 2000, all of which are at fixed prices:

                                Weighted
                  Number        Average        Weighted       Number
  Range of     Outstanding     Remaining       Average      Exercisable
  Exercise          at        Contractual      Exercise          at
   Prices       11/30/2001        Life          Price        11/30/2001
------------   ------------   ------------   ------------   ------------
$.10 -  $.50      2,195,000         2.32         $0.24         1,011,666
$.115 - $.12      2,205,000         3.46         $0.12              -
------------   ------------   ------------   ------------   ------------
                  4,400,000                                    1,011,666
============   ============   ============   ============   ============


                                Weighted
                  Number        Average        Weighted       Number
  Range of     Outstanding     Remaining       Average      Exercisable
  Exercise          at        Contractual      Exercise          at
   Prices       11/30/2000        Life          Price        11/30/2000
------------   ------------   ------------   ------------   ------------
$.10 -  $.50        640,000         1.80         $0.29           600,000
    $.21          2,025,000         3.60         $0.21              -
------------   ------------   ------------   ------------   ------------
                  2,665,000                                      600,000
============   ============   ============   ============   ============


Note 12 - Xenogenics Subsidiary and Minority Interest

         During 2001,  Xenogenics  issued  226,000  additional  shares of common
         stock in  exchange  for  $410,000  in cash.  The  proceeds  exceed  the
         Company's  proportionate interest in Xenogenics by $298,572,  which the
         Company recorded as an increase in additional paid-in capital,  and the
         balance of $111,428 was  recorded as an increase in minority  interest.
         As of the fiscal year ended  November 30,  2001,  Exten owned 56.41% of
         Xenogenics.

         During 2000,  Xenogenics  issued  913,000  additional  shares of common
         stock in  exchange  for  $956,560  of cash,  repayment  of  notes,  and
         conversion   of  preferred   shares.   The  proceeds   exceed   Exten's
         proportionate  interest in  Xenogenics  by $686,021,  which the Company
         recorded as an increase in additional paid-in capital,  and the balance
         of $270,539 was recorded as an increase in minority interest. Including
         the preferred shares,  Exten owned 61.65% of Xenogenics at November 30,
         2000.  During 2000, all 16,667 preferred  shares including  accumulated
         dividends of $6,448 were renegotiated and converted into 106,448 shares
         of common stock.


                                     -F20-
<PAGE>

                     Exten Industries, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended November 30, 2001 and 2000


Note 12 - Xenogenics Subsidiary and Minority Interest, continued

         During 1997 and 1999,  the Company's  subsidiary,  Xenogenics,  granted
         options to  acquire  494,063  shares of its  common  stock at $1.00 per
         share to various  individuals,  officers and directors of Xenogenics in
         connection  with the  issuance  of notes  and in  return  for  services
         rendered. A summary of the status of the Company's stock option plan as
         of November 30, 2001 and 2000,  and the changes  during the years ended
         November 30, 2001 and 2000 as presented below:

         The following summarizes information about stock options outstanding at
         November 30, 2001 and 2000, all of which are at fixed prices:

                                           2001                    2000
                                  ---------------------   ---------------------
                                               Weighted                Weighted
                                               average                 average
                                               exercise                exercise
                                    Shares      price       Shares      price
                                  ----------   --------   ----------   --------
Options outstanding at
   beginning of year                 211,556    $ 1.00       494,063    $ 1.00
Granted                                 -                     12,493    $ 1.00
Forfeited                               -                    (50,000)   $ 1.00
Exercised                               -                   (245,000)   $ 1.00
                                  ----------              ----------
Options outstanding at
   end of year                       211,556                 211,556

Options exercisable at
   end of year                       211,556                 211,556

The following table summarizes information about stock options outstanding at
November 30, 2001 and 2000, all of which are at fixed prices:

                                Weighted
                  Number        Average        Weighted       Number
  Range of     Outstanding     Remaining       Average      Exercisable
  Exercise          at        Contractual      Exercise          at
   Prices       11/30/2001        Life          Price        11/30/2001
------------   ------------   ------------   ------------   ------------
   $1.00            211,556         3.46         $1.00           211,556
------------   ------------   ------------   ------------   ------------
                    211,556                                      211,556
============   ============   ============   ============   ============


                                Weighted
                  Number        Average        Weighted       Number
  Range of     Outstanding     Remaining       Average      Exercisable
  Exercise          at        Contractual      Exercise          at
   Prices       11/30/2000        Life          Price        11/30/2000
------------   ------------   ------------   ------------   ------------
   $1.00            211,556        0.5          $1.00            211,556
------------   ------------   ------------   ------------   ------------
                    211,556                                      211,556
============   ============   ============   ============   ============


                                    - F21 -

<PAGE>


Note 13 - Contingencies and Subsequent Event

         Jack Schaps, trustee of A. Jack Schaps Estate Trust, filed suit against
         the Company and its legal counsel on February 13, 2001, in the Superior
         Court of California.  Schaps, a stockholder of Exten,  alleged that the
         defendant  negligently  lost, and failed to replace in a timely manner,
         his stock  certificate  for 625,000  shares of common stock that he had
         forwarded  to the  Company  to be  delivered  to the  Company's  former
         transfer  agent.  On February 25, 2002, the Company settled the lawsuit
         with Schaps.  This  settlement has no material  impact on the financial
         position of the Company.


Note 14 - Subsequent Event (Unaudited)

         In March 2002,  the  Company was served with a lawsuit  filed by George
         Colin alleging that the Company had defaulted in its interest  payments
         to Mr. Colin due pursuant to a $50,000 convertible loan entered into in
         October  2001.   The  lawsuit  was  filed  in  the  Superior  Court  of
         California,  in the  County of Orange.  The  lawsuit  alleges  that the
         Company's  defaults result in the loan's  conversion rate being reduced
         to  from  $0.07  to  $0.01  per  share.   The  lawsuit  seeks  specific
         performance of Mr. Colin's election to convert the loan and unspecified
         damages.  The Company is currently  investigating  the  allegations and
         believes that it has a meritorious  defense to the claims.  The Company
         intends to vigorously defend the lawsuit.



                                     -F22-
<PAGE>


         Table of Exhibits
         -----------------

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

         23.1              Consent of Independent Accountants
         23.2              Consent of Independent Accountants