U.S. SECURITIES AND EXCHANGE COMMISSION



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, 2002.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                            
|Commission File Number 1-10221                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                            
|EXTEN INDUSTRIES, INC. 
(Name of small business issuer in its charter)                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                            
|DELAWARE(State or other jurisdiction of 
incorporation or organization)                                                                                                                                                                                                                                                                                                                                                                                                | 52-1412493(IRS Employer Identification No.)                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                            
|55 Access Rd, Suite 700
Warwick, RI 02886(401)384-1000
(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:                                                                                                                                                                                                                                                                                                                                                                                                           
|Title of each class
Common Stock, $0.01 par value per share                                                                                                                                                                                                                                                                                                                                                                                                            | Name of each exchange on which registered
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 XNo ___                                                                                                                                        
|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: $ 804,538.                                                                                                                                                                                                                                                                                                                                                                                                   
|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 61,956,753 shares held by non-affiliates and the closing price of $.08 per share for the common stock on the over-the counter market as of  March 4, 2003):  $4,956,540
|State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 101,024,904 shares of common stock as of February 11, 2003.                                                                                                                                                                                                                                                                               
|DOCUMENTS INCORPORATED BY REFERENCE
None.                                                                                                                                                                                                                                                                                                                                                                                                                             
|Transitional Small Business Disclosure Format (check one):  Yes ____  No __X_                                                                                                                                                                                                                                                                                                                                                                                         



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EXTEN INDUSTRIES, INC.
FORM 10-K



INDEX





|PART I                            |                                                                                                                 | PAGE
|--------------------------------- | --------------------------------------------------------------------------------------------------------------- | ----
|                                  |                                                                                                                 |     
|Item 1.                           | DESCRIPTION OF BUSINESS                                                                                         | 3   
|Item 2.                           | DESCRIPTION OF PROPERTY                                                                                         | 6   
|Item 3.                           | LEGAL PROCEEDINGS                                                                                               | 6   
|Item 4.                           | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                             | 6   
|                                  |                                                                                                                 |     
|PART II                           |                                                                                                                 |     
|                                  |                                                                                                                 |     
|Item 5.                           | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                                                        | 7   
|Item 6.                           | MANAGEMENT'S DISCUSSION AND ANALYSIS                                                                            | 8   
|Item 7.                           | FINANCIAL STATEMENTS                                                                                            | 11  
|Item 8.                           | CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                               | 11  
|                                  |                                                                                                                 |     
|PART III                          |                                                                                                                 |     
|                                  |                                                                                                                 |     
|Item 9.                           | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT | 12  
|Item 10.                          | EXECUTIVE COMPENSATION                                                                                          | 13  
|Item 11.                          | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                                  | 14  
|Item 12.                          | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                                  | 16  
|Item 13                           | CONTROLS AND PROCEDURES                                                                                         | 16  
|Item 14.                          | EXHIBITS AND REPORTS ON FORM 8-K                                                                                | 17  
|                                  |                                                                                                                 |     
|SIGNATURES                        | 17                                                                                                             
|                                  |                                                                                                                 |     
|PART IV                           |                                                                                                                 |     
|                                  |                                                                                                                 |     
|CONSOLIDATED FINANCIAL STATEMENTS | F1 - F24                                                                                                       



- 2 -
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PART I
Item 1. DESCRIPTION OF BUSINESS



About Exten Industries, Inc.



About Our Business











- 3 -
---------------------------------------------------------------------------------------------------------------------

About Our Revenues





Patents and Proprietary Technology





| | 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.  





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



Need for Government Approval











- 4 -
---------------------------------------------------------------------------------------------------------------------









Research and Development





Competition



| | Amphioxis is focused on the sale of immortalized hepatocytes. The cells they are promoting are based on a cell line developed from a hepatoma (cancerous Liver tumor) therefore the efficacy and functionality of the cells are suspect.                                                                       
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                
| | 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 charcoal 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.                                                                                                                       



Employees





- 5 -
---------------------------------------------------------------------------------------------------------------------

Item 2. DESCRIPTION OF PROPERTY

Exten





MultiCell Technologies and Xenogenics





Item 3. LEGAL PROCEEDINGS





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





- 6 -
---------------------------------------------------------------------------------------------------------------------

PART II

Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS







|Fiscal Year Ended November 30, 2002
|-----------------------------------
|                                   
|First quarter                      
|Second quarter                     
|Third quarter                      
|Fourth quarter                     





|Fiscal Year Ended November 30, 2001
|-----------------------------------
|                                   
|First quarter                      
|Second quarter                     
|Third quarter                      
|Fourth quarter                     





Recent Sales of Unregistered Securities



|1. | During FY 2002 we issued an aggregate of 5,170,000 options to employees, officers, directors and consultants.  The options expire on various dates through 2010 and have exercise prices of $.08 per share.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | During FY 2002, we issued 33 convertible notes in the aggregate principal amount of $547,500.  The notes are convertible into shares of our common stock at the following conversion rates:                
|   | (1)                                                                                                                                                                                                        
|   | (2)                                                                                                                                                                                                        
|   | (3)                                                                                                                                                                                                        









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ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS



Overview













|Exten Industries, Inc.        | 56.4%
|----------------------------- | -----
|Kestrel Equity Partners, Ltd. | 21.7%
|Jack Schaps                   | 12.5%
|W. Gerald Newmin              | 8.0% 
|Others                        | 1.4% 







- 8 -
---------------------------------------------------------------------------------------------------------------------











The Application of Critical Accounting Policies









New Accounting Pronouncements







- 9 -
---------------------------------------------------------------------------------------------------------------------





Results of Operations.



Year Ended November 30, 2002, Compared to Year Ended November 30, 2001











Liquidity and Capital Resources







- 10 -
---------------------------------------------------------------------------------------------------------------------



Research Agreements





Notes Payable









Item 7.  FINANCIAL STATEMENTS





Item 8.





- 11 -
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PART III

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





|Name                        | Age          | Position                                                | Date elected         
|--------------------------- | ------------ | ------------------------------------------------------- | ---------------------
|--------------------------- | ------------ | ------------------------------------------------------- | ---------------------
|W. Gerald Newmin            | 65           | Chairman, CEO, Secretary and Director                   | May 17, 2000         
|Jerry G. Simek              | 59           | Director                                                | May 17, 2000         
|Ed Sigmund                  | 44           | Director                                                | May 17, 2000         
|Gregory Szabo               | 49           | President and Director                                  | June 6, 2001         
|Ann Randolph                | 56           | Director                                                | June 21, 2002        









- 12 -
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Item 10.  EXECUTIVE COMPENSATION

Summary Compensation Table





|                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Annual Compensation                               | Long Term Compensation
Awards                
|------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------- | ---------------------------------------------
|                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                 | ------------------------------------------------- | ---------------------------------------------
|Name and principal position                                                                 | Year                                                                                                                                                                                                                                                                                                                                                                                                                                            | Salary
($)                                        | Bonus
($)                                    
|-----------------------------                                                               | --------                                                                                                                                                                                                                                                                                                                                                                                                                                        | ------------                                      | -------                                      
|W. Gerald Newmin, 
Chairman of the Board, 
Chief Executive Officer, 
Secretary and Director | 2002
2001
2000                                                                                                                                                                                                                                                                                                                                                                                                                                  | -0-
-0-
-0-                                       | -0-
-0-
-0-                                  
|Gregory F. Szabo
President, Treasurer, 
Director                                            | 2002
2001
2000                                                                                                                                                                                                                                                                                                                                                                                                                                  | $66,169
$145,000
$60,000                          | -0-
-0-
-0-                                  
|                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                   |                                              
|(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.  A total of 458,656, 311,147 and 1,614,133 shares were issued to Mr. Newmin in fiscal 2002, 2001, and 2000, respectively, and a total of 474,951, 248,918 and 62,664 shares were issued to Mr. Szabo in fiscal 2002, 2001, and 2000, respectively.



- 13 -
---------------------------------------------------------------------------------------------------------------------

Stock Option Grants in Fiscal Year 2002

The following table sets forth information concerning stock options granted in the fiscal year ended November 30, 2002 to the Named Executive Officers.



|Name             | Number of 
Securities 
Underlying 
Options/SARs 
Granted (#) | Percent of Total
Options/SARs 
Granted to 
Employees in
Fiscal Year | Exercise or Base
Price ($/Sh) | Expiration Date
|---------------- | ------------------------------------------------------------ | ------------------------------------------------------------------- | ----------------------------- | ---------------
|W. Gerald Newmin | 0                                                            | 0%                                                                  | $0.0                          | N/A            
|Gregory F. Szabo | 2,000,000                                                    | 37.7%                                                               | $0.8                          | 06/21/2006     

Stock Option Exercises and Fiscal Year-end Values

The following table presents information for the Named Executive Officers with respect to stock options exercised during fiscal year 2002 and unexercised options held as of the end of the fiscal year.

Aggregated Option Exercises In Fiscal Year 2002 And Fiscal Year End Option Values



|Name             | Shares Acquired On Exercise (#) | Value Realized ($) | Number of Securities Underlying Unexercised Options at Fiscal Year End 11/30/02 Exercisable/Unexercisable | Value of Unexercised In-the-Money Options at Fiscal Year End ($) Exercisable/Unexercisable
|---------------- | ------------------------------- | ------------------ | --------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------
|W. Gerald Newmin | None                            | 0                  | 701,389/1,075,000                                                                                         | 0/0                                                                                       
|Gregory F. Szabo | None                            | 0                  | 1,299,000/1,084,267                                                                                       | 0/0                                                                                       

Compensation of Directors









Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT





|Name and Address of 
Beneficial Owner (1)                      | Number of Shares 
Beneficially Owned (2) | Percentage of Class 
Beneficially Owned
|-------------------------------------------------------------- | ---------------------------------------- | ---------------------------------------
|-------------------------------                                | -------------------------------          | ------------------------               
|W. Gerald Newmin (3)                                           | 31,116,683                               | 24.5%                                  
|Jerry G. Simek (4)                                             | 2,855,617                                | 2.7%                                   
|Gregory F. Szabo (5)                                           | 4,724,728                                | 4.5%                                   
|Ed Sigmond (6)                                                 | 8,957,896                                | 8.8%                                   
|Kestrel Equity Partners Ltd.(7)                                | 8,000,000                                | 7.9%                                   
|Clifton L. Cooke, Jr. (8)                                      | 5,719,432                                | 5.4%                                   
|The Estate of Hugo O. Jauregui (9)                             | 8,725,000                                | 7.9%                                   
|Ann Randolph (10)                                              | 278,571                                  | 0.3%                                   
|All executive officers and directors as a group (four persons) | 44,518,719                               | 36.1%                                  



- 14 -
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|(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)  | Includes 3,414,776 shares of our common stock owned by Mr. Newmin's spouse, over which Mr. Newmin disclaims beneficial ownership.  Includes 638,889 shares issuable under options which are exercisable on or within 60 days of December 31, 2002 and 13,920,000 shares in the form of convertible notes and warrants.                                                                                                                                                                                                                                                                              
|(4)  | Includes 309,444 shares issuable under options which are exercisable on or within 60 days of December 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(5)  | Includes 2,052,730 shares issuable under options which are exercisable on or within 60 days of December 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(6)  | Includes 309,444 shares issuable under options which are exercisable on or within 60 days of December 31, 2002.  Includes 8,000,000shares of our common stock owned by Kestrel Equity Partners Ltd., for which Mr. Sigmond serves as Managing Partner.                                                                                                                                                                                                                                                                                                                                              
|(7)  | 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.                                                                                                                                                                                                                                                                                                                                                                                                             
|(8)  | Includes 5,000,000 shares of the Cooke Family Trust for which Clifton Cooke is a Trustee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(9)  | The trustees of the Estate are Candice L. Dyer, M.D. and Timothy Van Johnson.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(10) | Includes 34,722 shares issuable under options which are exercisable on or within 60 days of December 31, 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       



- 15 -
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---









Item 13. CONTROLS AND PROCEDURES





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Item 14. EXHIBITS LIST AND REPORTS ON FORM 8-K

(a)



| | Exhibit No.      | Description                                                                                                          | Page       
| | ---------------- | -------------------------------------------------------------------------------------------------------------------- | -----------
| | ---------------- | ----------------------------------------------------------------------------------                                   | -----------
| | 10.3             | NIH Grant.                                                                                                           | 22         
| | 10.4             | Loan and  Security  Agreement dated  August, 2001 among Exten Industries, Inc. and the lenders named therein.        | 23         
| | 10.5             | Form of Warrant issued to each of the lenders a party to the Loan and Security Agreement.                            | 24         
| | 10.6             | Loan Agreement dated October 13, 2001 between Exten Industries, Inc. and George Colin.                               | 25         
| | 10.7             | Collaborative Research Agreement dated as of November 1, 2001, between Pfizer, Inc. and MultiCell Technologies, Inc. | 26         
| | 23.1             | Consent of Independent Public Accountants-J.H. Cohn, LLP                                                             | F24        
| | 23.2             | Consent of Independent Public Accountants- Swenson Advisors, LLP                                                     | F24        
| | 31.1             | Certifications of the Chief Executive Officer and the Treasurer under Section 302 of the Sarbannes-Oxley Act of 2002 | 18         
| | 31.2             | Certifications of the Chief Executive Officer and the Treasurer under Section 302 of the Sarbannes-Oxley Act of 2002 | 19         
| | 32.1             | Certifications of the Chief Executive Officer under Section 906 of the Sarbannes-Oxley Act of 2002                   | 20         
| | 32.2             | Certifications of the Treasurer under Section 906 of the Sarbannes-Oxley Act of 2002                                 | 21         

(b)



| | None. | 
| | ----- | 







SIGNATURES







|EXTEN INDUSTRIES, INC.
(Registrant)                                             
|--------------------------------------------------------------------------------
|                                                                                
|                                                                                
|By /s/ W. Gerald NewminW. Gerald Newmin 
Chairman & CEO
Dated: November 17, 2003











|Signature                              | Title                                      | Date                 
|-------------------------------------- | ------------------------------------------ | ---------------------
|-------------------------------------  | ------------------------------------------ | ---------------------
|/s/ W. Gerald Newmin 
W. Gerald Newmin | Chairman ,CEO and Secretary                | November 17, 2003    
|                                       |                                            |                      
|/s/Jerry G. SimekJerry G. Simek        | Director                                   | November 17, 2003    
|                                       |                                            |                      
|/s/ Gregory F. SzaboGregory F. Szabo   | President,  COO and Treasurer              | November 17, 2003    
|                                       |                                            |                      
|/s/ Ed SigmondEd Sigmond               | Director                                   | November 17, 2003    
|                                       |                                            |                      
|/s/ Ann RandolphAnn Randolph           | Director                                   | November 17, 2003    





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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



Board of Directors and Stockholder
Exten Industries, Inc. and Subsidiaries



We have audited the accompanying consolidated balance sheet of EXTEN INDUSTRIES, INC. AND SUBSIDIARIES  as of November 30, 2002, and the related consolidated statements of operations,  stockholders' equity 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 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 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 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 Subsidiaries as of November 30, 2002, and their results of operations and cash flows for the year then ended,  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.



J. H. Cohn LLP





San Diego, California



March 4, 2003



- F 1 -
---------------------------------------------------------------------------------------------------------------------



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.





SWENSON ADVISORS, LLP
An Accountancy Firm

San Diego, California
February 25, 2002



- F 2 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
November 30, 2002 and 2001





|ASSETS                     
|---------------------------
|                           
|                           
|Current assets:            
|                           
|                           
|                           
|                           
|                           
|Total current assets       
|                           
|Property and equipment, net
|                           
|Other assets:              
|                           
|                           
|                           
|                           
|Total other assets         
|                           
|Total assets               
|                           



See accompanying notes on consolidated financial statements.



- F 3 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
November 30, 2002 and 2001





|LIABILITIES AND STOCKHOLDERS' EQUITY      
|------------------------------------------
|                                          
|                                          
|Current liabilities:                      
|                                          
|                                          
|                                          
|                                          
|                                          
|Total current liabilities                 
|                                          
|Other liabilities:                        
|                                          
|                                          
|                                          
|Total other liabilities                   
|                                          
|Total liabilities                         
|                                          
|Minority interest                         
|                                          
|Commitments and contingencies             
|                                          
|Stockholders' equity:                     
|                                          
|                                          
|                                          
|                                          
|                                          
|                                          
|Total stockholders' equity                
|                                          
|                                          
|Total Liabilities and Stockholders' Equity
|                                          



See accompanying notes on consolidated financial statements.



- F 4 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Consolidated Statements of Operations
For Years ended November 30, 2002 and 2001





|                                              |                                         |                   |           |  | 2002              | 2001             
|--------------------------------------------- | --------------------------------------- | ----------------- | --------- |  | ----------------- | -----------------
|                                              |                                         |                   |           |  | ----------------- | -----------------
|Revenue                                       | $804,538                                | $113,327         
|                                              |                                         |                   |           |  | ----------------- | -----------------
|Operating expenses:                           |                                         |                  
|                                              | General and administrative              | 1,525,126         | 1,425,628
|                                              | Research and development                | 548,840           | 297,424  
|                                              | Depreciation and amortization           | 167,344           | 33,005   
|                                              |                                         |                   |           |  | ----------------- | -----------------
|Total operating expenses                      | 2,241,310                               | 1,756,057        
|                                              |                                         |                   |           |  | ----------------- | -----------------
|Operating loss                                | (1,436,772)                             | (1,642,730)      
|                                              |                                         |                   |           |  | ----------------- | -----------------
|Other income (expense):                       |                                         |                  
|                                              | Interest expense                        | (124,464)         | (93,588) 
|                                              | Discount on notes payable               | (132,142)         | (25,163) 
|                                              | Interest income                         | 74,731            | 79,262   
|                                              | Discount on note receivable             | 30,000            | (95,000) 
|                                              | Minority interest in loss of subsidiary | 12,334            | 169,686  
|                                              |                                         |                   |           |  | ----------------- | -----------------
|Total other income (expense)                  | (139,541)                               | 35,197           
|                                              |                                         |                   |           |  | ----------------- | -----------------
|Loss before income tax provision              | (1,576,313)                             | (1,607,533)      
|                                              |                                         |                   |           |  |                   |                  
|Income tax provision                          | 350                                     | 1,850            
|                                              | -----------------                       | -----------------
|Net loss                                      | $(1,576,663)                            | $(1,609,383)     
|                                              | =================                       | =================
|Loss per share                                | $(0.02)                                 | $(0.02)          
|Weighted average number of shares outstanding | 99,458,556                              | 81,208,211       



See accompanying notes on consolidated financial statements.



- F 5 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Consolidated Statement of Stockholders' Equity
For Years ended November 30, 2002 and 2001





|                                                                  | Common Stock             |              |                              |                                  |                               |                     
|----------------------------------------------------------------- | ------------------------ | ------------ | ---------------------------- | -------------------------------- | ----------------------------- | --------------------
|                                                                  | ------------------------ |              |                              |                                  |                               |                     
|                                                                  | Shares                   | Amount       | Additional 
Paid-in 
Capital | Stock 
Subscriptions 
Receivable | Deferred 
Compensation 
Costs | Accumulated 
Deficit
|                                                                  | ------------             | ------------ | ------------                 | ------------                     | ------------                  | ------------        
|Balance, November 30, 2000                                        | 73,586,502               | $  735,865   | $11,409,980                  | $(81,500)                        | $(16,500)                     | $(12,056,883)       
|                                                                  |                          |              |                              |                                  |                               |                     
|Issuance of stock for services                                    | 4,035,546                | 40,355       | 405,141                      | -                                | 8,250                         | -                   
|                                                                  |                          |              |                              |                                  |                               |                     
|Issuance of stock for note payable                                | 5,000,000                | 50,000       | 450,000                      | -                                | -                             | -                   
|                                                                  |                          |              |                              |                                  |                               |                     
|Acquisition of MultiCell Associates                               | 12,083,334               | 120,833      | 1,329,167                    | -                                | -                             | -                   
|                                                                  |                          |              |                              |                                  |                               |                     
|Issuance of stock for cash and other                              | 2,824,062                | 28,241       | 65,759                       | 11,500                           | -                             | -                   
|                                                                  |                          |              |                              |                                  |                               |                     
|Effect of issuance of stock by subsidiary in excess of book value | -                        | -            | 298,572                      | -                                | -                             | -                   
|                                                                  |                          |              |                              |                                  |                               |                     
|Exercise of stock options                                         | 100,000                  | 1,000        | 9,000                        | -                                | -                             | -                   
|                                                                  |                          |              |                              |                                  |                               |                     
|Common stock warrants issued in connection with borrowings        | -                        | -            | 301,950                      | -                                | -                             | -                   
|                                                                  |                          |              |                              |                                  |                               |                     
|Note receivable from stockholder                                  | -                        | -            | -                            | (15,000)                         | -                             | -                   
|                                                                  |                          |              |                              |                                  |                               |                     
|Net loss                                                          | -                        | -            | -                            | -                                | -                             | (1,609,383)         
|                                                                  | ------------             | ------------ | ------------                 | ------------                     | ------------                  | ------------        
|Balance, November 30, 2001                                        | 97,629,444               | 976,294      | 14,269,569                   | (85,000)                         | (8,250)                       | (13,666,266)        
|                                                                  |                          |              |                              |                                  |                               |                     
|Issuance of stock for services                                    | 3,395,460                | 33,955       | 287,364                      | -                                | (16,666)                      | -                   
|                                                                  |                          |              |                              |                                  |                               |                     
|Partial extinguishment of receivable                              | -                        | -            | -                            | 15,000                           | -                             | -                   
|                                                                  |                          |              |                              |                                  |                               |                     
|Common stock warrants issued in connection with borrowings        | -                        | -            | 167,074                      | -                                | -                             | -                   
|                                                                  |                          |              |                              |                                  |                               |                     
|Net loss                                                          | -                        | -            | -                            | -                                | -                             | (1,576,663)         
|                                                                  | ------------             | ------------ | ------------                 | ------------                     | ------------                  | ------------        
|Balance, November 30, 2002                                        | 101,024,904              | $1,010,249   | $14,724,007                  | $(70,000)                        | $(24,916)                     | $(15,242,929)       
|                                                                  | ============             | ============ | ============                 | ============                     | ============                  | ============        



See accompanying notes on consolidated financial statements.



- F 6 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For Years ended November 30, 2002 and 2001





|                                      |                                                                             |                                         |              |           |  |  | 2002 | 2001
|------------------------------------- | --------------------------------------------------------------------------- | --------------------------------------- | ------------ | --------- |  |  | ---- | ----
|                                      | --------------                                                              | ------------                           
|Cash flows from operating activities: |                                                                             |                                        
|                                      | Net loss                                                                    | $(1,576,663)                            | $(1,609,383)
|                                      | Adjustments to reconcile net loss to net cash used in operating activities: |                                         |             
|                                      |                                                                             | Depreciation and amortization           | 167,344      | 33,005   
|                                      |                                                                             | Discount on note receivable             | (30,000)     | 95,000   
|                                      |                                                                             | Discount on notes payable               | 132,142      | 25,163   
|                                      |                                                                             | Valuation allowance on note receivable  |              | 305,000  
|                                      |                                                                             | Common stock issued for services        | 304,653      | 445,496  
|                                      |                                                                             | Minority interest in loss of subsidiary | (12,334)     | (169,686)
|                                      |                                                                             | Vesting of deferred compensation costs  |              | 8,250    
|                                      |                                                                             |                                         |              |          
|                                      | Changes in operating assets and liabilities:                                |                                         |             
|                                      |                                                                             | Accounts receivable                     | 4,819        | (40,000) 
|                                      |                                                                             | Other current assets                    | 57,502       | (48,258) 
|                                      |                                                                             |                                         |              |          
|                                      |                                                                             | Other assets                            | (23,295)     | 5,215    
|                                      |                                                                             | Accounts payable and accrued expenses   | 382,644      | (35,871) 
|                                      |                                                                             | Deferred income                         | (387,025)    | 417,125  
|                                      |                                                                             | Other liabilities                       | 106,261      | 36,349   
|                                      | --------------                                                              | ------------                           
|Net cash used in operating activities | (873,952)                                                                   | (532,595)                              
|                                      | --------------                                                              | ------------                           



See accompanying notes on consolidated financial statements.



- F 7 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For Years ended November 30, 2002 and 2001





|                                             |                                                               |              |            |  |  |  | 2002           | 2001        
|-------------------------------------------- | ------------------------------------------------------------- | ------------ | ---------- |  |  |  | -------------- | ------------
|                                             | --------------                                                | ------------
|Cash flows from investing activities:        |                                                               |             
|                                             | Advances for notes receivable                                 |              | (482,500) 
|                                             | Purchase of equipment                                         | (13,758)     | (95,644)  
|                                             | Principal payments on notes receivable                        | 1,238        | -         
|                                             | Purchase of license agreement                                 |              | (750,000) 
|                                             | --------------                                                | ------------
|Net cash used in investing activities:       | (12,520)                                                      | (1,328,144) 
|                                             |                                                               |              |            |  |  |  | -------------- | ------------
|                                             |                                                               |             
|Cash flows from financing activities:        |                                                               |             
|                                             | Proceeds from notes payable                                   | 547,500      | 1,164,000 
|                                             | Payments of notes payable                                     |              | -         
|                                             | Proceeds from sale of stock                                   |              | 94,000    
|                                             | Proceeds from exercised options                               | -            | 10,000    
|                                             | Proceeds from subscribed stock                                | 15,000       | 11,500    
|                                             | Proceeds from sale of stock by subsidiary                     |              | 410,000   
|                                             |                                                               |              |           
|                                             | --------------                                                | ------------
|Net cash provided by financing activities    | 562,500                                                       | 1,689,500   
|                                             |                                                               |              |            |  |  |  | -------------- | ------------
|                                             |                                                               |             
|Net decrease in cash and cash equivalents    | (323,972)                                                     | (171,239)   
|Cash and cash equivalents, beginning of year | 367,864                                                       | 539,103     
|                                             |                                                               |              |            |  |  |  | -------------- | ------------
|Cash and cash equivalents, end of year       | $43,892                                                       | $367,864    
|                                             |                                                               |              |            |  |  |  | ============== | ============
|                                             |                                                               |              |            |  |  |  |                |             
|Supplemental disclosures:                    |                                                               |             
|                                             | Interest paid                                                 | $18,203      | $45,219   
|                                             | Income taxes                                                  | $350         | $1,600    
|                                             |                                                               |              |            |  |  |  |                |             
|Non-cash transactions:                       |                                                               |             
|                                             | Issuance of  stock warrants in connection with borrowings     | $167,074     | $301,950  
|                                             | Issuance of stock for debt                                    | $-           | $500,000  
|                                             | Issuance of stock for purchase of license agreement           |              | $1,450,000
|                                             | Settlement of accounts payable and accrued expenses for stock | $33,392      | $-        



See accompanying notes on consolidated financial statements.



- F 8 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001



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 technology.  At the time of Xenogenic's incorporation, the Company reentered  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 commercialization of hepatic cells, cell lines and associated products to be used in diagnostic and therapeutic applications. Management considers the Company's activities to be in one segment related to liver-cell bio-technology.

On November 1, 2001, MultiCell entered into a collaborative research agreement with Pfizer, Inc. ("Pfizer") pursuant to which Pfizer began the process of validating the efficacy of MultiCell's immortalized hepatic cells in four different experimental models (see Note 10). During the fiscal year ended November 30, 2002, Pfizer demonstrated the efficacy of these cell lines to the scientific community in October 2002 and MultiCell began to receive revenues from licensing fees and product sales that management expects will be part of a continuous revenue stream. Accordingly, the Company is no longer a development stage company for accounting purposes.

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.

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. The Company does not require collateral from its customers. The Company closely monitors the extension of credit to its customers while maintaining an allowance for potential credit losses. On a periodic basis, management evaluates its accounts receivable and, if warranted, establishes an allowance based on current credit considerations. However, accounts receivable at November 30, 2002 and 2001 consist 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.

Revenue Recognition - To date, the Company's revenues have been generated primarily from contractual research activities and the sale of cells. Management believes such sources of revenue will be part of the Company's ongoing operations. The Company applies the guidance provided by Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements," ("SAB 101"). Under the provision of SAB 101, the Company recognizes revenue from commercial and government research agreements as services are performed, provided a contractual arrangement exists, the contract price is fixed or determinable and the collection of the contracted amounts is probable. In situations where the Company receives payment in advance of the performance of services, such amounts are deferred and recognized as revenue as the related services are performed.



- F 9 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001



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

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.   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. Amortization of capitalized leased assets is computed over the term of the lease. Leasehold improvements are depreciated using the straight-line method over the remaining life of the lease.

License Agreements - Costs incurred to obtain license agreements, principally legal fees, are capitalized. The Company amortizes these costs on a straight-line basis over the term of the respective license agreement. Amortization totaled $132,432 and $26,800 for the years ended November 30, 2002 and 2001, respectively.

Impairment of long-lived assets - The impairment of long-lived assets that do not have definite lives, such as property and equipment and trademarks, is recognized when events or changes in circumstances indicate that the undiscounted cash flows estimated to be generated by such assets are less than their carrying value and, accordingly, all or a portion of such carrying value may not be recoverable. Impairment losses are then measured by comparing the fair value of assets to their carrying amounts. The Company did not record any charges for the impairment of long-lived assets in 2002 or 2001.

Stock-Based Compensation - Statement of Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation", provides for the use of a fair value based method of accounting for stock-based compensation. However, SFAS 123 allows an entity to continue to measure compensation cost related to stock and stock options issued to employees using the intrinsic value method of accounting prescribed by Accounting Principles Board Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to Employees". Entities electing to continue to use the intrinsic value method must make pro forma disclosures of net income or loss and earnings or loss per share as if a fair value method of accounting had been applied. The Company has elected to continue to account for its stock-based compensation to employees under APB 25.

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 temporary 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 basic and diluted loss per share amounts for 2002 and 2001 pursuant to  Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share".  The Company has incurred losses applicable to common stock during the years ended 2002 and 2001.  The assumed effects of the exercise of outstanding stock options, warrants, and conversion of notes were anti-dilutive and, accordingly, diluted per share amounts have not been presented in the accompanying consolidated statements of operations. Accordingly, diluted loss per share equals basic loss per share. The total number of potential common shares excluded from the calculation of diluted loss per share for the years ended November 30, 2002 and 2001 was 25,001,556 and 14,676,556, respectively.



- F 10 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001



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

Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of 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. As of November 30, 2002, no amounts have been accrued for environmental liabilities.

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



- F 11 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001



Note 2 - Going Concern

These consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As of November 30, 2002, the Company has operating and liquidity concerns, has incurred an accumulated deficit of $15, 242,929 as a result of recurring losses, has current liabilities that exceed current assets by $794,806 and  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 its 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. The accompanying consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue its operations as a going concern.



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 from Lexicor and  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.  Principal and interest was due and payable on May 31, 2001; however, according to its terms the note was automatically extended with principal and interest due January 2, 2005.  As of November 30, 2002, the Company discounted this long-term note receivable and provided a valuation allowance thereby reducing the carrying amount of the note to $230,000. In the event of default, Lexicor must issue common shares to the Company equal to 51% 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 per share price of $6.00. All interest payments are current through November 30, 2002

As of April 17, 2001, in connection with a letter of intent to purchase Armstrong Industries, Inc., ("Armstrong") the Company advanced $15,000 to Armstrong for a note receivable that was due May 1, 2002.  On June 27, 2001, the Company informed Armstrong that it no longer had any intention of acquiring them. Interest is due from June 1, 2001 on the unpaid principal at the rate of 12% per annum.  Armstrong was unable to repay the note in full.  The Company agreed to a monthly payment schedule to repay the debt.  Beginning June 15, 2002, Armstrong agreed to pay $558.67 per month for 33 months. The payments are current through November 30, 2002.



- F 12 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001





Note 3 - Notes Receivable, continued

Notes receivable  at November 30, 2002 and 2001 are as follows:



|                                     | 2002           | 2001          
|------------------------------------ | -------------- | --------------
|                                     | -------------- | --------------
|Notes receivable                     | $ 613,762      | $ 615,000     
|Less: discounts to net present value | (65,000)       | (95,000)      
|Less: valuation allowance            | (305,000)      | (305,000)     
|                                     | -------------- | --------------
|Net notes receivable                 | 243,762        | 215,000       
|Less: current portion                | (5,813)        | (15,000)      
|                                     | -------------- | --------------
|                                     | $ 237,949      | $ 200,000     
|                                     | ========       | ========      



Note 4- Property and Equipment

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



|                                                | 2002           | 2001          
|----------------------------------------------- | -------------- | --------------
|                                                | -------------- | --------------
|Lab equipment                                   | $192,590       | $189,118      
|Furniture and fixtures                          | 30,585         | 29,330        
|Equipment                                       | 5,490          | 4,459         
|Leasehold improvements                          | 48,995         | 40,995        
|                                                | -------------- | --------------
|                                                | 277,660        | 263,902       
|Less: Accumulated depreciation and amortization | 123,365        | 89,243        
|                                                | -------------- | --------------
|Property and equipment, net                     | $154,295       | $ 174,659     
|                                                | ========       | ========      

Depreciation and amortization expense totaled $34,122 in 2002 and $6,205 in 2001.



- F 13 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001



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, the Company acquired all of the capital stock of MultiCell 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 common stock valued at $.12 per share, totaling $1,450,000.  The stock was valued at the per share market trading price at the close of the market on the date the Board of Directors authorized the acquisition price. 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".

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



|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 as of November 30, 2002. The license agreement is being amortized over an estimated useful life of approximately 18 years.  Amortization expense totaled $133,222 in 2002 and $26,800 in 2001.

The License Agreement acquired during the purchase includes the ownership of four patents of which the primary patent for immortalized hepatocytes is being utilized. As required by Statement of Financial Accounting Standard No. 141, the Company determined that the excess of purchase price over the fair value of the tangible assets acquired is attributable to the licensing agreement.  The Company recorded the value of license agreement at $2,200,000, the purchase price, plus the assumption of additional accounts payable and other accrued liabilities of $233,343 for a total price of $2,433,343. The License Agreement is being amortized over the estimated useful life of this patent of approximately 18 years.



- F 14 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001



The unaudited condensed pro forma consolidated statement of operations of the Company for the year ended November 30, 2001, assuming the acquisition of MultiCell occurred as of December 1, 2000 follows:



|                                 | 2001          
|-------------------------------- | --------------
|                                 | --------------
|Revenue                          | $340,421      
|                                 | --------------
|                                 |               
|Research and development         | 633,306       
|General and administrative       | 1,650,978     
|Depreciation and amortization    | 160,416       
|                                 | --------------
|Total expenses                   | 2,444,700     
|                                 | --------------
|                                 |               
|Operating loss                   | (2,104,279)   
|                                 |               
|Other income                     | 80,782        
|                                 | --------------
|                                 |               
|Loss before income tax provision | (2,023,497)   
|                                 |               
|Income tax provision             | 1,850         
|                                 | --------------
|                                 |               
|Net loss                         | $(2,025,347)  
|                                 | =========     
|                                 |               
|Loss per share                   | $(.03)        
|                                 | =========     



- F 15 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001



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 of temporary differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

A reconciliation of the expected income tax benefit at the U.S. Federal income tax rate to the provisions for state income taxes for the years ended November 30, 2002 and 2001 are set forth below:



|                                         | 2002           | 2001          
|---------------------------------------- | -------------- | --------------
|                                         | -------------- | --------------
|Income tax benefit                       | $(536,065)     | $(546,561)    
|State income benefit, net of federal tax | (92,235)       | (93,879)      
|Valuation allowance                      | 628,650        | 638,550       
|Other, net                               | -              | 3,740         
|                                         | -------------- | --------------
|Income tax expense                       | $350           | $1,850        
|                                         | ========       | ========      

The Company's net operating loss carry-forwards expire as follows:



|Year Loss Generated                     | Balance of Loss Carry-forwards | Year of Expiration       
|--------------------------------------- | ------------------------------ | -------------------------
|--------------------------------------- | -------------------------      | -------------------------
|November 30, 1999 and prior             | $5,264,158                     | 2008 through 2019        
|November 30, 2000                       | 1,025,963                      | 2020                     
|November 30, 2001                       | 1,604,660                      | 2021                     
|November 30, 2002                       | 1,516,313                      | 2022                     
|                                        | -------------------------      |                          
|                                        | $9,411,094                     |                          
|                                        | ===============                |                          



- F 16 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001



Note 8 - Lease  commitments

Lease - The Company and its two subsidiaries lease a Warwick, Rhode Island facility that houses administration, research, development and manufacturing of human cells and cell lines.



|Year ending November30              | Amount         
|----------------------------------- | ---------------
|----------------------------------- | ---------------
|2003                                | $ 52,790       
|2004                                | 34,420         
|2005                                | 1,908          
|2006                                | 1,749          
|                                    | ---------------
|Total                               | $ 90,867       
|                                    | ===============

Rent expense was $128,329 and $11,218 for the fiscal years ended November 30, 2002 and 2001, respectively



- F 17 -
---------------------------------------------------------------------------------------------------------------------

Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001





Note 9 - Notes payable:

Notes payable at November 30, 2002 and 2001 consisted of the following:



|                                                                                                                                                 |                                                                                                                       | 2002                   | 2001                  
|------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------- | ---------------------- | ----------------------
|                                                                                                                                                 |                                                                                                                       | ---------------------- | ----------------------
|Xenogenics convertible promissory note payable with interest at 10%, due on April 17, 2001, in default at November 30, 2002                      | $                                                                                                                     | 10,000                 | $                     
|                                                                                                                                                 |                                                                                                                       |                        |                       
|Xenogenics convertible promissory note payable to a related party with interest at 8%, due on November 10, 2000, in default at November 30, 2002 |                                                                                                                       | 15,000                 |                       
|                                                                                                                                                 |                                                                                                                       |                        |                       
|MultiCell promissory note payable to Rhode Island Cellular Medicine, Inc. with interest at 5.25%, due on or before February 9, 2004              |                                                                                                                       | 125,000                |                       
|                                                                                                                                                 |                                                                                                                       |                        |                       
|Convertible promissory notes payable to related parties with interest at 10%, due on varying dates in 2004 and 2005                              |                                                                                                                       | 1,258,000              |                       
|                                                                                                                                                 |                                                                                                                       |                        |                       
|Convertible promissory note payable with interest at 12%, due on October 15, 2002                                                                |                                                                                                                       | 50,000                 |                       
|                                                                                                                                                 |                                                                                                                       |                        |                       
|Convertible promissory notes payable with interest at 10%, due in 2005                                                                           |                                                                                                                       | 224,500                |                       
|                                                                                                                                                 |                                                                                                                       |                        |                       
|Convertible promissory note payable to a related party with interest at 10%, due June 29, 2005                                                   |                                                                                                                       | 54,000                 |                       
|                                                                                                                                                 |                                                                                                                       |                        |                       
|Promissory note payable with interest at 10% in monthly installments of $4,000 for principal and interest until paid off                         |                                                                                                                       | 33,392                 |                       
|                                                                                                                                                 |                                                                                                                       | ---------------------- | ----------------------
|                                                                                                                                                 |                                                                                                                       |                        |                       
|                                                                                                                                                 | Totals                                                                                                                |                        | 1,769,892             
|                                                                                                                                                 |                                                                                                                       |                        |                       
|Less:                                                                                                                                            |                                                                                                                       |                        |                       
|                                                                                                                                                 | Unamortized discounts attributable to warrants and beneficial conversion features on certain promissory notes payable |                        | (311,719)             
|                                                                                                                                                 |                                                                                                                       |                        |                       
|Current portion of notes payable                                                                                                                 |                                                                                                                       | (34,892)               |                       
|                                                                                                                                                 |                                                                                                                       | ---------------------- | ----------------------
|                                                                                                                                                 |                                                                                                                       |                        |                       
|Notes payable - long-term portion                                                                                                                | $                                                                                                                     | 1,423,281              | $                     
|                                                                                                                                                 | ===============                                                                                                       | ===============       



- F 18 -
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Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001



Note 9 - Notes payable: continued

The Company continues to accrue interest on all notes in default.

The Xenogenics convertible notes payable are convertible into common stock of Xenogenics at $1.875 per share (see Note 12).

The 10% convertible promissory notes payable with a principal balance of $1,258,000 as of November 30, 2002, are convertible into common stock of the Company at conversion prices that vary from $.10 to $.20 per share. In addition, during the fiscal years ended November 30, 2002 and 2001, the Company issued a total of 5,170,000 and 9,350,000 warrants to purchase common stock exercisable at $.10 per share to the lenders on the respective dates of the issuances of the notes.

The 12% convertible note payable was issued in October 2001 and is convertible into common stock of the Company at a conversion price of $.07 per share.

During 2002, the note went into default and the lender and the Company reached an agreement whereby (i) the 715,000 warrants granted in 2001 were cancelled, (ii) the lender will be allowed to convert the note into 724,000 shares of common stock of the Company and (iii) upon conversion of the note, the lender will receive warrants to purchase 2,000,000 shares of common stock of the Company exercisable at $.10 per share through 2005 and 500,000 shares of common stock of the Company exercisable at $.12 per share through 2005. The lender has agreed to convert the note at such time as the Company is able to complete the registration of the shares under the Securities Act of 1933. If and when the note is converted the new warrants will become issuable and the Company will record a charge for the fair value of those warrants.

The 10% convertible promissory note payable with a principal balance of $54,000 as of November 30, 2002, is due and payable on June 29, 2005. The note may be converted at $.10 per share during year one, $.15 per share during year two, and $.20 per share during year three. Upon conversion, the lender is entitled to warrants to purchase 540,000 shares at $.10 per share.

The Company is obliged to register for resale all of the shares associated with conversion of notes for common stock and the warrant rights that come with a conversion of a note.



- F 19 -
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Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001



Note 9 - Notes payable: continued

During the fiscal year ended November 30, 2002, the Company converted $33,392 of accounts payable into the 10% promissory

During the fiscal year ended November 30, 2001, the Company converted a 10% promissory note with a principal balance of $500,000 into 5,000,000 shares of common stock.

Interest expense of $111,058 and $21,822 and amortization of debt discount of $124,170 and $22,081 were attributable to notes payable to related parties in the fiscal years ended November 30, 2002 and 2001, respectively.

The maturities of notes payable in years subsequent to November 30, 2002 are as follows:



|Year Ending November 30                 | Amount          
|--------------------------------------- | ----------------
|--------------------------------------- | ----------------
|2003                                    | $138,892        
|2004                                    | 1,194,000       
|2005                                    | 437,000         
|                                        | ----------------
|Total                                   | $1,769,892      
|                                        | ==========      



Note 10 - Research Contracts

On November 1, 2001, MultiCell entered into a research contract with Pfizer to test MultiCell's library of hepatocyte cell lines.



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.

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 November 30, 2002, the Company had 9,640,000 options for common stock issued and outstanding.



- F 20 -
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Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001



Note 11 - Stock Compensation Plans, continued

Prior to 2000, the Company had issued options with terms of up to 10 years and exercise prices of $.10 per share (the fair market value at the respective dates of grant) to various employees, officers and directors of the Company in return for various services rendered to the Company.

Changes during the years ended November 30, 2002 and 2001 in stock options outstanding for the Company were as follows:



|                                         |             |  |       | 2002                         |             | 2001                           
|---------------------------------------- | ----------- |  | ----- | ---------------------------- | ----------- | -------------------------------
|                                         |             |  |       | ---------------------------- |             | ----------------------------   
|                                         |             |  |       | Shares                       |             | Weighted average exercise price
|                                         |             |  |       | -----------                  |             | -----------                    
|Options outstanding at beginning of year | 4,400,000   |  | $0.15 |                              | 2,665,000   |                                
|Granted                                  | 5,300,000   |  | $0.08 |                              | 2,205,000   |                                
|Forfeited                                | (145,000)   |  | $0.15 |                              | (370,000)   |                                
|Exercised                                |             |  | -     |                              | (100,000)   |                                
|                                         | ----------- |  |       |                              | ----------- |                                
|Options outstanding at end of year       | 9,555,000   |  | $0.12 |                              | 4,400,000   |                                
|                                         |             |  |       | ===========                  |             | ===========                    
|                                         |             |  |       |                              |             |                                
|Options exercisable at end of year       | 6,518,889   |  |       |                              | 1,011,666   |                                
|                                         | =========== |  |       |                              | =========== |                                

The following table summarizes information about stock options outstanding at November 30, 2002, all of which are at fixed prices:



|Range of Exercise Prices    | Number Outstanding At 11/30/02 | Weighted Average Remaining Contractual Life | Weighted Average Exercise,Price | Number Exercisable At 11/30/02
|--------------------------- | ------------------------------ | ------------------------------------------- | ------------------------------- | ------------------------------
|--------------------------- | ---------------------------    | ---------------------------                 | ---------------------------     | ---------------------------   
|$.10 - $.50                 | 2,075,000                      | 1.32                                        | $.24                            | 1,779,167                     
|$.115 - $.12                | 2,180,000                      | 2.46                                        | $.12                            | 878,611                       
|$.08                        | 5,300,000                      | 3.00                                        | $.08                            | 3,861,111                     
|                            | ---------------------------    |                                             |                                 | ---------------------------   
|                            | 9,555,000                      |                                             |                                 | 6,518,889                     
|                            | ===============                |                                             |                                 | ===============               



- F 21 -
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Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001



Note 11 - Stock Compensation Plans, continued

SFAS 123 provides for the use of a fair value based method of accounting for stock-based compensation. However, SFAS 123 allows an entity to continue to measure compensation cost related to stock and stock options issued to employees using the intrinsic value method of accounting prescribed by APB 25. Entities electing to continue to use the intrinsic value method must make pro forma disclosures of net income or loss and earnings or loss per share as if a fair value method of accounting had been applied.

The Company and its subsidiary (see Note 12) have elected to continue to account for their stock-options issued to employees under APB 25. Since the exercise price of all of the options granted by the Company and its subsidiary to their employees has been equal to or greater than fair value, the Company has not recognized any earned or unearned compensation cost in its consolidated financial statements in connection with those options. The Company's historical net loss and basic net loss per share, and pro forma net loss and basic net loss per share, for the years ended November 30, 2002 and 2001 assuming compensation cost had been determined based on the fair value of all options at the respective dates of grant determined using a pricing model consistent with the provisions of SFAS 123 are set forth below.



|                                            | 2002         | 2001        
|------------------------------------------- | ------------ | ------------
|Net loss as reported                        | $(1,576,663) | $(1,609,383)
|Pro forma net loss under SFAS 123           | $(2,509,413) | $(2,058,333)
|Basic loss per share as reported            | $(.02)       | $(.02)      
|Pro forma net loss per share under SFAS 123 | $(.02)       | $(.02)      

The fair value of each option granted by the Company was estimated on the date of grant using the Black-Scholes option pricing model, as permitted by SFAS 123, with the following weighted-average assumptions used for the years ended November 30, 2002 and 2001:



- F 22 -
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Exten Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2002 and 2001



Note 12 - Xenogenics Subsidiary and Minority Interest

During 2001, Xenogenics, the Company's subsidiary, issued 226,000 additional shares of common stock in exchange for $410,000 in cash.

During 1997 and 1999, , Xenogenics granted options to acquire 494,063 shares of its common stock at $1.00 per share to various employees, officers and directors of Xenogenics in connection with the issuance of notes and in return for services rendered.



- F 23 -
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