-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FAsNgMM7pJB3uGwItnDP1k49ImOrTgbvaWR7m28EJLZxBPYgkg1K3r3MeerKIh3k 1r7f/gMeCd1tn9SPfnckcA== 0000811779-97-000010.txt : 19971017 0000811779-97-000010.hdr.sgml : 19971017 ACCESSION NUMBER: 0000811779-97-000010 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970831 FILED AS OF DATE: 19971016 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXTEN INDUSTRIES INC CENTRAL INDEX KEY: 0000811779 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 521412493 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 001-10221 FILM NUMBER: 97696800 BUSINESS ADDRESS: STREET 1: 9625 BLACK MOUNTAIN RD STE 218 CITY: SAN DIEGO STATE: CA ZIP: 92126 BUSINESS PHONE: 6195789784 MAIL ADDRESS: STREET 1: 9625 BLACK MOUNTAIN RD STE 218 CITY: SAN DIEGO STATE: CA ZIP: 92126 FORMER COMPANY: FORMER CONFORMED NAME: EXTEN VENTURES INC DATE OF NAME CHANGE: 19910923 10QSB 1 U. S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended August 31, 1997 [ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the transition period from ___________ to __________ Commission File Number: 0-16354 EXTEN INDUSTRIES, INC. (Exact name of small business issuer as specified in its charter) Delaware 52-1412493 (State or other jurisdiction (IRS Employer of incorporation or organization) identification No.) 9625 Black Mountain Road, Suite 218, San Diego, California, 92126 (Address of principal executive offices) (619) 578-9784 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]No [ ] State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 33,986,457 as of August 31, 1997 Common Stock, $0.01 Par Value 1 Exten Industries, Inc. Form 10-QSB Table of Contents Part I: Financial Information Page Item 1: Condensed Consolidated Balance Sheets as of August 31, 1997 unaudited) and November 30, 1996 3 Condensed Consolidated Statements of Operations (unaudited) for the Nine and Three Months Ended August 31, 1997 and August 31, 1996 4 Condensed Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended August 31, 1997 and August 31, 1996 5 Notes to Condensed Consolidated Financial Statements (unaudited) 6 Item 1a: Factors Which May Affect Future Results 10 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations Overview 14 Results of Operations 16 Liquidity and Capital Resources 18 Part II: Other Information Item 1: Legal Proceedings 19 Item 2: Changes in Securities 19 Item 3: Defaults Upon Senior Securities 19 Item 4: Submission of Matters to a Vote of Security Holders 19 Item 5:Other Information 19 Item 6(a):Exhibits 19 Item 6(b): Reports on Form 8-K 19 SIGNATURES 2 EXTEN INDUSTRIES, INC. PART I - FINANCIAL INFORMATION CONDENSED CONSOLIDATED BALANCE SHEETS AS OF AUGUST 31, 1997 AND NOVEMBER 30, 1996 August 31,1997 November 30, 1996 (unaudited) ASSETS CURRENT ASSETS Cash $ 322 $ 579 Prepaid Expenses 33,217 25,000 ------ ------ TOTAL CURRENT ASSETS 33,539 25,579 PROPERTY AND EQUIPMENT, net - - OTHER ASSETS Real Estate Held For Sale 47,200 47,200 Deferred Offering Costs 5,000 - Patent Costs 36,726 - Intangibles, net 5,003 5,214 ------ ------ TOTAL OTHER ASSETS 89,426 82,414 ------ ------ $ 122,965 $ 107,993 ======= ======= LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIENCY) CURRENT LIABILITIES Accounts Payable $ 126,590 $ 171,016 Accrued Expenses 46,245 176,861 Due to Officer 23,487 - Notes Payable, Current 325,984 646,484 ------ ------ TOTAL CURRENT LIABILITIES 522,306 994,361 ------ ------ NOTE PAYABLE (net of current portion) 145,000 - ------ ------ TOTAL LIABILITIES 667,306 994,361 ------ ------ STOCKHOLDERS DEFICIT Common Stock, $0.01 par value; 50,000,000 shares authorized; 35,953,192 & 29,762,432 issued & outstanding, respectively 359,532 297,624 Additional Paid-in Capital 9,095,749 8,799,993 Preferred Stock, $0.01 par, 1,000,000 shares authorized, Series C, 143 shares issued & outstanding, respectively Accumulated Deficit (9,999,623) (9,983,986) ------ ------ TOTAL STOCKHOLDERS' DEFICIENCY (544,341) (886,368) ------ ------ $ 122,965 $ 107,993 ======= =======
The accompanying notes are integral part of these financial statements [FN] 3 EXTEN INDUSTRIES, INC. PART I - FINANCIAL INFORMATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS AND THREE MONTHS ENDED AUGUST 31, 1997 AND AUGUST 31, 1996 Nine Months Ended Three Months Ended August August August August 31, 31, 31, 31, 1997 1996 1997 1996 REVENUE Sales - - - - Royalties - - - - ------- ------- ------- ------- Total Revenue - - - - ------- ------- ------- ------- OPERATING EXPENSES General & Administrative 245,103 235,165 90,049 47,326 Consulting Fee Expense 45,350 363,030 32,850 110,717 Depreciation and Amortization 35,214 146 11,736 - Interest, net 14,312 281 5,793 - ------- -------- ------- ------- Total Operating Expenses 339,979 598,622 140,428 158,043 ------- -------- ------- ------- Net Operating Loss Before Extraordinary Item (339,979) (598,622) (140,428) (158,043) Extraordinary Item- Gain Loss) On Extinguishment Of Debt 325,142 (264,000) 42,142 - ------- -------- ------- ------- Net Operating Income Loss) Before Income Taxes (14,837) (862,622) (98,286) (158,043) ------- -------- ------- ------- Provision for Income Taxes 800 800 - - ------- -------- ------- ------- Net Income (Loss) (15,637) (863,422) (98,286) (158,043) ------- -------- ------- ------- Net Operating Loss Before Extraordinary Item per Average Common Share (0.01) (0.03) (0.01) (0.01) Extraordinary Item 0.01 (0.02) 0.01 (0.02) ------- ------- ------- ------- Net Income (Loss) per Average Common Share 0.00 (0.05) 0.00 (0.03) ------- ------- ------- ------- Weighted Average Common Share Outstanding 30,912,032 15,618,164 31,620,192 15,539,275
The accompanying notes are integral part of these financial statements [FN] 4 EXTEN INDUSTRIES, INC. PART I - FINANCIAL INFORMATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED AUGUST 31, 1997 AND AUGUST 31, 1996 Nine months Ended August 31, August 31, 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES Net Loss $(15,637) $(863,422) Adjustments to Reconcile Net Income (Loss) to Net Cash Provided By Used In)Operating Activities Depreciation and Amortization 35,214 146 Issuance of Common Stock for Services 357,664 225,386 Other Non-Cash Items - - Extinguishment of Debt (325,142) 264,000 (Increase) Decrease in: Accounts Receivable - (78) Prepaid Expense (8,217) 25,321 Other Assets (42,226) 112,175 Increase (Decrease) in: Accounts Payable (44,426) 67,195 Accrued Expenses (125,974) (42,173) ------- ------- NET CASH USED IN OPERATING ACTIVITIES (168,744) (211,450) ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES Advances from Officer 23,487 - Receipt of Note Receivable - 40,000 ------- ------- NET CASH FROM INVESTMENT ACTIVITIES 23,487 40,000 ------- ------- CASH FLOW FROM FINANCING ACTIVITIES Issuance of Common Stock - 162,435 Increase in Long Term Debt 145,000 1,650 ------- ------- NET CASH PROVIDED BY FINANCING ACTIVITIES 145,000 164,085 ------- ------- NET INCREASE (DECREASE) IN CASH (257) (7,365) CASH AT BEGINNING OF PERIOD 579 8,233 ------- ------- CASH AT END OF PERIOD $ 322 $ 868 ------- -------
The accompanying notes are integral part of these financial statements [FN] 5 EXTEN INDUSTRIES, INC. PART I - FINANCIAL INFORMATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies Organization and Nature of Operations Exten Industries, Inc. (the "Company") was incorporated on December 1, 1970 in the state of Delaware. The Company's principal business is the research and development of the synthetic liver technology (SYBIOL) of its wholly owned subsidiaries, Xenogenex, Inc. (Xenogenex) and Xenogenics Corporation (Xenogenics). Xenogenex was incorporated on July 30, 1991 in the state of California for the purpose of funding this biotechnology research. In March 1993, Xenogenex received all rights to the SYBIOL technology developed for Xenogenex under contract with Cedars-Sinai Medical Center. During the year ending November 30, 1996 Xenogenex transferred the SYBIOL technology to its parent company, Exten. The Company during February 1997 formed a new company, Xenogenics Corporation (Xenogenics). Xenogenics, a wholly owned subsidiary was incorporated in the state of Nevada in February 1997 to engage in the business of managing the development, research and commercialization of the SYBIOL technology. In June 1997, the SYBIOL patents, trademarks, licenses and assets were transferred to Xenogenics in exchange for 1,500,000 shares of $0.001 par value common stock. Additionally, cash and assumption of debt were exchanged between the two companies. A patent application has been filed and approved for the process utilized by the SYBIOL device and the Company has applied for trademark protection for the SYBIOL tradename. The Company has filed patent applications under the Patent Cooperative Treaty in fifteen countries including the United States. Basis of Accounting The Company's policy is to use the accrual method of accounting and to prepare and present financial statements that conform to generally accepted accounting principles. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Basis of Consolidation The consolidated financial statements include the accounts of Exten Industries, Inc. and its wholly owned subsidiaries, Xenogenex, Inc. and Xenogenics, Corporation (collectively, the Company). All significant intercompany balances and transactions have been eliminated in consolidation. Basis of Presentation The accompanying unaudited condensed financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-QSB. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of a normal recurring nature and considered necessary for a fair presentation, have been included. It is suggested that these financial statements are read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-KSB for the year ended November 30, 1996. The results of operations for the nine months ended August 31, 1997 are not necessarily indicative of the operating results for the year ended November 30, 1997. For further 6 EXTEN INDUSTRIES, INC. PART I - FINANCIAL INFORMATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies (continued) information, refer to the financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the fiscal year November 30, 1996. Reclassifications Certain August 31, 1996 balances have been reclassified to conform to the August 31, 1997 condensed financial statement presentation. Property and Equipment Property and equipment is stated at cost, and depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to five years. Assets under capital leases are depreciated by the straight-line method over the shorter of the lease term or the useful lives of the assets. Maintenance, repairs and minor renewals are charged to operations as incurred. Major replacements or upgrades are capitalized. When properties are retired or otherwise disposed, the related cost and accumulated depreciation are eliminated from the respective accounts and any gain or loss on disposition is reflected as income or expense. Prepaid Expense Prepaid Expense consists primarily of consulting services that have been prepaid pursuant to contracts. 2. Property and Equipment Property and equipment at August 31, 1997 and at November 30, 1996 are summarized as follows: August 31, 1997 November 30, 1996 (unaudited) Machinery and equipment $ 9,368 $ 9,368 Furniture and fixtures 14,706 14,706 24,074 24,074 Less accumulated depreciation and ------ ------ amortization (24,074) (24,074) ------ ------ Property and equipment, net $ - $ - ====== ======
7 EXTEN INDUSTRIES, INC. PART I - FINANCIAL INFORMATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 3. Supplemental Cash Flow Information Supplemental disclosures of cash flow information for the six-month periods ended August 31, 1997 and 1996 are summarized as follows: Nine Months Nine months Ended Ended August 31, August 31, 1997 1996 (unaudited) (unaudited) Cash paid for interest and income taxes: Interest $ 7,698 $ 810 Income taxes $ 800 $ 800
4. Earnings Per Share Certain options granted and outstanding as of August 31, 1997 (unaudited) are antidilutive for the purposes of calculating primary and fully diluted earnings per share and therefore are not included in the earnings per share calculations. In February 1997, the Financial Accounting Standards Board issued "Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings per Share," which is required to be adopted on December 31, 1997. At that time, the Company will be required to change the method currently used to compute earnings per share and to restate all prior periods. Under the new requirements for calculating primary earnings per share, the dilutive effect of stock options will be excluded. The impact is not expected to result in any change in primary earnings per share for the nine months ended August 31, 1997. The impact of Statement 128 on the calculation of fully diluted earnings per share for these periods is also not expected to be material. 5. Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 6. Going Concern Matters The Company's accumulated deficit and stockholders' deficiency at August 31, 1997 were $9,999,623 and $544,341, respectively. In addition, at August 31, 1997, the Company's current liabilities exceeded its current assets by $488,767. Additionally, even though the Company has been able to satisfy certain operating expenses by issuing shares of the Company's common stock, operating activities have still resulted in negative cash flows for the nine months ended August 31, 1997. Furthermore, judgments and claims against the Company relating to loan guarantees, claims of a former president of the Company, and amounts owed current and former suppliers continue to accumulate. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. In order to continue as a going concern, management's plans include (1) raising additional capital through sales of common stock, the proceeds of which would be used to perfect the Company's patent position in its SYBIOL 8 EXTEN INDUSTRIES, INC. PART I - FINANCIAL INFORMATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 6. Going Concern Matters (continued) technology and satisfy immediate operating needs; (2) continue to use common stock to pay for consulting and professional services; (3) negotiate reduced settlements of existing liabilities; and (4) sell non-productive assets. In addition, management is continually seeking other potential joint venture partners or merger candidates that would allow for the immediate recognition of the value of the SYBIOL technology for creditors and stockholders. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. 7. New Accounting Pronouncements In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS 128). SFAS 128 supersedes existing generally accepted accounting principles relative to the calculation of earnings per share, is effective for years ending after December 15, 1997 and requires restatement of all prior period earnings per share information upon adoption. Generally, SFAS 128 requires a calculation of basic earnings per share, which takes into consideration income (loss) available to common shareholders and the weighted average of common shares outstanding. SFAS 128 also requires the calculation of a diluted earnings per share, which takes into effect the impact of all additional common shares that would have been outstanding if all dilutive potential common shares relating to options, warrants, and convertible securities had been issued, as long as their effect is dilutive, with a related adjustment of income available for common shareholders, as appropriate. SFAS 128 requires dual presentation of basic and diluted earnings per share on the face of the statement of operations and requires a reconciliation of the numerator and denominator of the basic earnings per share computation. The Company does not expect the effect of its adoption of SFAS 128 to be material. In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130). Generally, SFAS 130 establishes standards for reporting and display of comprehensive income in financial statements. All components of comprehensive income shall be reported in the financial statements in the period in which they are recognized. A total amount for comprehensive income shall be displayed in the financial statement where the components of other comprehensive income are reported. The statement divides comprehensive income into net income and other comprehensive income. Items included in other comprehensive income shall be classified separately based on their nature and include foreign currency items, minimum pension liability adjustments, and unrealized gains and losses in certain investments in debt and equity securities. The total of other comprehensive income for a period shall be transferred to a component of equity that is accumulated and displayed separately from retained earnings and additional paid-in capital in the equity section of the balance sheet. SFAS 130 is effective for periods beginning after December 15, 1997, and will require reclassification of all prior periods presented in the financial statements. The Company does not expect the adoption of SFAS 130 to materially effect the financial statement presentation. 9 PART IA. FACTORS AFFECTING FUTURE OPERATING RESULTS An investment in the Common Stock of the Company involves a high degree of risk. In addition to the other information contained in this Form 10-QSB, prospective investors should carefully consider the following risk factors: 1. SIGNIFICANT AND REPEATED LOSSES. During the most recent fiscal year ended November 30, 1996, the Company's losses were significant. The Company has a history of losses dating back to 1992 and beyond. The Company faces all the risks inherent in a new business. The Company's Xenogenex subsidiary is without any record of earnings and sales. There can be no assurance that any of the Company's business activities will result in any operating revenues or profits. Investors should be aware that they may lose all or substantially all of their investment. 2. QUALIFIED OPINION. The Company's independent public accountants issued qualified opinions for the Company's financial statements for the years ended November 30, 1996, 1995 and 1994 with respect to uncertainties concerning the Company's ability to continue as a going concern. 3. LACK OF REVENUES. The Company's only active business is the research and development activities from which the Company generates no stream of revenues and there can be no assurance that the Company will ever generate any revenues in the near future. As a result, the Company may continue to incur losses and any investor who purchases or acquires any shares of the Company's common stock will likely incur further substantial dilution and loss in the value of their investment. 4. SIGNIFICANT AND INCREASING CURRENT LIABILITIES AND DEFAULT. As of August 31, 1997, the Company had current debts and other obligations that are due and payable on or before November 30, 1997. Included in these obligations is approximately $10,000 in notes payable currently in default. Furthermore, as of August 31, 1997, the Company had over 16 times as many current liabilities as current assets. In the event that the Company is not able to generate sufficient cash resources to pay these and other current liabilities on or before their due dates, the Company will likely incur substantial additional costs and expenses and otherwise risk whatever claims creditors may assert against the Company in connection with any default thereby. This may result in an investor losing all or substantially all of their investment. 5. NEED FOR ADDITIONAL FINANCING & LACK OF UNDERWRITING COMMITMENT. The Company's management recognizes that the Company needs to obtain additional external financing from the sale of the Company's debt, common stock, or preferred stock in order to support the Company and otherwise meet the Company's growing financial obligations. While the Company may attempt to obtain a commitment from an underwriter for a private placement or public offering of the Company's securities, there can be no guarantee that the Company will be successful. If the Company is not successful, the Company may suffer additional and continuing financial difficulties with consequent loss to any investor acquiring the Company's common stock. 6. NEGATIVE WORKING CAPITAL AND NEGATIVE CASH FLOW. While the Company's management seeks additional financing for the Company to complete its business plan, there can be no assurance that the Company will obtain any additional financing or, if it is obtained, that it can be obtained on terms reasonable in view of the Company's current circumstances. In addition, the Company has experienced negative cash flow from the 1992, 1993, 1994 and 1996 fiscal years. 10 7. POTENTIAL DILUTION. Funding of the Company's proposed business plan will result in substantial and on-going dilution of the Company's existing stockholders. During the nine months ended August 31, 1997 and for the year ended November 30, 1996, the Company issued 6,190,760 and 6,300,227 additional shares of its common stock, respectively, in connection with its operations while incurring continuing and ever-increasing financial losses. While there can be no guarantee that the Company will be successful in raising additional capital, if the Company is successful in obtaining any additional capital, existing stockholders may incur substantial dilution. 8. DEFAULT ON INDEBTEDNESS. The Company was in default on its repayment of a certain loan totaling $343,072 (as of November 30, 1996) (the "Loan") with Union Bank and a former officer of the Company, Robert H. Goldsmith, asserts that the Company has defaulted on approximately $388,000 in promissory notes. The Company has settled this default on repayment with the former officer by negotiation of debt for settlement of the previous obligation and an issuance of restricted stock. While Union Bank has sued the Company and has aggressively sought repayment of the Loan, together with interest and fees due, the result, Union Bank has obtained a judgment against the Company. The Company's management has settled this debt for payment of $50,000. In addition, the Company has over $520,000 in liabilities all due and payable on or before November 30, 1997. In the event that the Company is not able to generate additional cash from the sale of the Company's securities or otherwise obtain funds on some other basis, the Company will remain in default on its obligations and likely default on obligations to other creditors with the result that any investor in the Company's common stock will lose all or substantially all of their investment. 9. GOVERNMENT REGULATION AND PRODUCT APPROVALS. The Company's research, testing, preclinical development, clinical trials, manufacturing, and marketing of its proposed therapeutic products is subject to extensive and ever-changing regulation by numerous governmental authorities in the United States and other countries. Clinical trials, manufacturing, and marketing of products in the U.S. will be subject to the rigorous testing and approval processes of the U.S. Food and Drug Administration (the "FDA") and by comparable regulatory authorities in foreign countries. The testing and regulatory approval process will likely take several years and require the expenditure of substantial resources. Any testing of the Company's proposed products may not support the safety and efficacy of the Company's products. There can be no assurance that the Company will gain any regulatory approvals for the Company's proposed products or, if such approvals are obtained that such approvals may be limited and far narrower than those sought by the Company. To the extent that the above information describes statutory or regulatory provisions, it is qualified in its entirety by reference to the particular statutory and regulatory provisions currently in effect. Any change in applicable law or regulation may have a material effect on the business and prospect of the Company. 10. LACK OF INDEPENDENT EVALUATION OF TECHNOLOGY AND COMMERCIAL VIABILITY. The Company's current management does not possess any studies performed by an independent third party, which demonstrate that the synthetic bio-liver technology has ever been rigorously evaluated. There can be no assurance that this technology offers safe, efficacious, and cost-effective therapeutic attributes relative to those provided by competing technologies or, if it does that the technology is commercially viable. 11. COSTS OF LITIGATION. The Company is likely to incur significant costs for litigation in connection with a dispute with a law firm that previously represented the Company. While the Company seeks to resolve this dispute on terms favorable to the Company, there can be no assurance that the Company will be successful or that the costs incurred will not exceed any benefits that the Company may derive from this litigation. 11 12. LIMITED MANAGEMENT. The Company currently has only one full time officer and one full-time employee. The Company's limited cash flow and financial resources do not allow the Company to increase or add to the Company's full time management and there can be no guarantee that the Company's cash flow and financial resources will increase in the near future. As a result, the Company continues to rely upon consultants and others for a large part of its operations and the research and development work. 13. LACK OF DIVIDENDS. The Company has never paid any cash dividends on its common stock. The Company's board of directors intends to retain profits, if any, to finance the Company's business. 14. LIMITED MARKET FOR COMMON STOCK. The Company's Common Stock, traded on the Electronic Bulletin Board (OTC), has experienced significant price fluctuations and will likely remain highly volatile in the future. There can be no assurance that a meaningful trading market for the Company's Common Stock will be established, or, if established that it can be maintained for any significant period. 15. VALUATIONS & PRIOR ASSET ACQUISITIONS. The Company's current management has determined that the values accorded certain assets acquired in prior years be revalued to reflect lower carrying values in light of current market circumstances. While management believes that current carrying values for these assets more accurately reflect likely recovery values, there can be no assurance that the Company will not later revalue the Company's assets further. 16. POSSIBLE RULE 144 STOCK SALES. As of November 30, 1996, the Company had a substantial amount of shares of the Company's outstanding Common Stock as "restricted securities" which may be sold only in compliance with Rule 144 adopted under the Securities Act of 1933 or other applicable exemptions from registration. Rule 144 provides that a person holding restricted securities for a period of one year may thereafter sell in brokerage transactions, an amount not exceeding in any six month period the greater of either (i) 1% of the Company's outstanding Common Stock, or (ii) the average weekly trading volume during a period of four calendar weeks immediately preceding any sale. Persons who are not affiliated with the Company and who have held their restricted securities for at least six years are not subject to the volume limitation. Possible or actual sales of the Company's Common Stock by present shareholders under Rule 144 may have a depressive effect on the price of the Company's Common Stock if any liquid trading market develops. 17. POSSIBLE STOCK SALES - REGULATION S AND FORM S-8 REGISTRATION STATEMENT. The Company has periodically issued shares to non-U.S. citizens under Regulation S. In addition, the Company has utilized the services of consultants and, in this connection, and the Company has issued shares of the Company's Common Stock and registered these shares for sale on Form S-8. The shares issued under Regulation S become freely tradable 41 days after issuance. The shares registered on Form S-8 are immediately freely tradable. As a result, the Company's issuance of shares pursuant to Regulation S and Form S-8 likely depresses the market price of the Company's Common Stock. While the Company's management intends to carefully evaluate the need to issue shares of the Company's Common Stock on this basis, the Company's meager financial resources will likely prevent the Company from limiting its use of Regulation S and Form S-8, with the result that the market price of Company's Common Stock will likely be depressed by the registration and sale of shares on an on-going basis. 12 18. RISKS OF LOW PRICED STOCKS. Trading in the Company's Common Stock is limited. Consequently, a shareholder may find it more difficult to dispose of, or to obtain accurate quotations as to the price of, the Company's securities. In the absence of a security being quoted on NASDAQ, or the Company having $2,000,000 in net tangible assets, trading in the Common Stock is covered by Rule 3a51-1 promulgated under the Securities Exchange Act of 1934 for non-NASDAQ and non-exchange listed securities. Under such rules, broker/dealers who recommend such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or an annual income exceeding $200,000 or $300,000 jointly with their spouse) must make a special written suitability determination for the purchaser and receive the purchaser's written agreement to a transaction prior to sale. Securities are also exempt from this rule if the market price is at least $5.00 per share, or for warrants, if the warrants have an exercise price of at least $5.00 per share. The Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosure related to the market for penny stocks and for trades in any stock defined as a penny stock. The Commission has recently adopted regulations under such Act which define a penny stock to be any NASDAQ or non-NASDAQ equity security that has a market price or exercise price of less than $5.00 per share and allow for the enforcement against violators of the proposed rules. In addition, unless exempt, the rules require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule prepared by the Commission explaining important concepts involving a penny stock market, the nature of such market, terms used in such market, the broker/dealer's duties to the customer, a toll-free telephone number for inquiries about the broker/dealer's disciplinary history, and the customer's rights and remedies in case of fraud or abuse in the sale. Disclosure also must be made about commissions payable to both the broker/dealer and the registered representative, current quotations for the securities, and, if the broker/dealer is the sole market maker, the broker/dealer must disclose this fact and its control over the market. Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. While many NASDAQ stocks are covered by the proposed definition of penny stock, transactions in NASDAQ stock are exempt from all but the sole market-maker provision for (i) issuers who have $2,000,000 in tangible assets ($5,000,000 if the issuer has not been in continuous operation for three years), (ii) transactions in which the customer is an institutional accredited investor and (iii) transactions that are not recommended by the broker/dealer. In addition, transactions in a NASDAQ security directly with the NASDAQ market maker for such securities, are subject only to the sole market-maker disclosure, and the disclosure with regard to commissions to be paid to the broker/dealer and the registered representatives. Finally, all NASDAQ securities are exempt if NASDAQ raised its requirements for continued listing so that any issuer with less than $2,000,000 in net tangible assets or stockholder's equity would be subject to delisting. These criteria are more stringent than the proposed increase in NASDAQ's maintenance requirements. The Company's securities are subject to the above rules on penny stocks and the market liquidity for the Company's securities could be severely affected by limiting the ability of broker/dealers to sell the Company's securities. 13 Item 2. Management's' Discussion and Analysis of Financial Condition and Results of Operations. This Quarterly Report on Form 10-QSB contains forward-looking statements that involve risks and uncertainties. The Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in the section entitled "Factors Affecting Future Operating Results." Forward-Looking Information -General The following information contains certain forward-looking statements that anticipate future trends or events. These statements are based on certain assumptions that may prove to be erroneous and are subject to certain risks including, but not limited to, the Company's ability to complete and fund it research and development. Accordingly, actual results may differ, possibly materially, from the predictions contained herein. Although the Company cannot accurately anticipate the effects of inflation, the Company does not believe inflation has had or is likely to have a material effect on its results of operations or liquidity. The Company's quarterly operating results vary significantly depending on the occurrence of funding and the involvement of Company personnel in these endeavors. The results of operations for any quarter are not necessarily indicative of the results to be expected for any future period. Overview The Company's only active business is the proposed research and development activities of its SYBIOL technology. Between 1985 and 1990 the Company provided merchant banking services for small businesses. As compensation for these services the Company received both cash and common stock in the companies. The Company distributed shares of stock in some of these companies to its shareholders as dividends in kind. In October of 1990 the Company's Board of Directors decided on a major change in the Company's business. Due to the difficulty of raising capital for its small business merchant banking clients, the Company decided to change its business emphasis to that of becoming a diversified company. The merchant banking would be combined on a smaller scale with more substantial companies. The Company's merchant banking experience would be primarily directed to the acquisition of varied business for the Company. In September of 1991 the Company acquired all of the outstanding stock of Xenogenex, formerly known as Ascot Close Research Institute, Ltd. At that time Xenogenex was funding research on xenogeneic transplants with a major West Coast medical center. Xenogenex had the rights to the commercial development of the research work. Xenogenex, Inc. ("Xenogenex") was incorporated in California on July 30, 1991 for the purpose of funding biotech research. On September 11, 1991 the Company signed a research contract with Cedars-Sinai Medical Center in Los Angeles, California. The research contract was for the genetic manipulation of human to pig target antigens and xenogeneic transplants. Xenogeneic transplants involve the use of donor organs from species other than humans. The major objective of the research was to discover a way to transplant organs (heart, liver, lung and kidney) from a pig into a human. 14 In 1993, the Company divested itself of its other business lines, leaving development of the synthetic bio-liver ("SYBIOL") through its subsidiary Xenogenex, Inc. as the Company's only business. In March of 1993 Xenogenex received all the rights to a synthetic bio-liver ("SYBIOL") developed for Xenogenex under contract with Cedars-Sinai Medical Center. A patent application is presently pending on the process utilized by the SYBIOL device and the Company has applied for trademark protection for the SYBIOL tradename. In July 1996, the Company acquired all of the assets of Xenogenex; and, as a result, as of August 31, 1997, the Company owned all assets of Xenogenex. On August 31, 1995, the Company entered into a license agreement (the "GMI License") with GroupMed International, Inc. ("GMI"). Under the terms of the GMI License, the Company granted GMI the exclusive right and license to manufacture, market, and sell the technology and patents held by Xenogenex in Mexico, Central America, and South America. Subsequently, the Company terminated the GMI License due to lack of consideration. Newly formed wholly owned subsidiary: Xenogenics Corporation, is a new company formed in February, 1997 to engage in the business of managing the research, development and commercialization of the SYBIOL artificial liver support technology. Sybiol is an external bio-liver support system designed to perform and maintain some of the essential liver functions for patients with chronic liver disease or liver trauma until a liver transplant can be arranged or the damaged liver heals and resumes it normal functions. The system functions in a manner similar to kidney dialysis treatment. Xenogenics Corporation is a wholly owned subsidiary of Exten, which has owned the SYBIOL technology since 1993. Exten conveyed all SYBIOL technology rights to Xenogenics Corporation in June 1997. Xenogenics Corporation is currently conducting a private offering of its shares. An investment in the shares of the company may be considered speculative, involve certain risks, and are suitable only for "accredited investors" as that term is defined in Rule 501(a) promulgated under the Securities Act of 1933, as amended (the Act). In addition to the other information contained in this Form 10-QSB, prospective investors should carefully consider the following risk factors: 1. PATENTS AND PROPRIETARY TECHNOLOGY. Any proprietary protection that the Company can obtain and maintain will be important to its proposed business. The Company has exchanged its U.S. patent application for a P.C.T. filing and has filed a patent application in China. The patent positions of bio-pharmaceutical and biotechnology firms, as well as academic and other research institutions, are uncertain and involve complex legal and factual questions. Accordingly, no firm predictions can be made regarding the bio-pharmaceutical and biotechnology patents or whether the Company will have the financial resources to aggressively protect its rights. 2. INTENSE COMPETITION. Competition from other biotechnology and pharmaceutical companies and from research and academic institutions is intense and is expected to increase. Competitors or potential competitors of the Company have filed applications for, or have been issued, certain patents, and may obtain additional patents and proprietary rights, relating to technologies competitive with those of the Company. Accordingly, there can be no assurance that the Company's patent applications will result in patents being issued or that, if issued, such patents will provide protection against competitive technology that circumvents such patents or will be held valid by a court of competent jurisdiction; nor can there be any assurance that others will not obtain patents that the Company would need to license or circumvent. Furthermore, there can be no assurance that licenses that might be required for the Company's processes or products would be available on reasonable terms, if at all. The Company also intends to rely upon non-patented trade secrets, know-how and continuing technological innovation to develop and maintain its competitive position. No assurance can be given that others will not independently develop substantially equivalent proprietary information and technology, or otherwise gain access to the Company's trade secrets or disclose such technology, or that the Company can meaningfully protect its rights to its non-patented trade secrets. 3. GOVERNMENT REGULATION. The Company's present and proposed activities are subject to regulation by numerous governmental authorities in the United States and other countries. To the extent that the following information describes statutory or regulatory provisions, it is qualified in its entirety by reference to the particular statutory and regulatory provisions currently in effect. Any change in applicable law or regulation may have a material effect on the business and prospects of the Company. 4. THERAPEUTIC PRODUCTS. The Company's products will be subject to regulation in the U.S. by the Food and Drug Administration ("FDA") and by comparable regulatory authorities in foreign jurisdictions. The products produced will be classified as "biologics" regulated under the Public Health Service Act and the Federal Food, Drug and Cosmetic Act. Development of a therapeutic product for human use is a multi-step process. First, animal or in vitro testing must establish the potential safety and efficacy of the experimental product in a given disease. Once the product has been found to be reasonably safe and potentially efficacious in animals, suggesting that human testing would be appropriate, an Investigational New Drug ("IND") application is submitted to the FDA. FDA approval is necessary before commencing clinical investigations. That approval may, in some circumstances, involve substantial delays. Clinical investigations typically involve three phases. Phase I is conducted to evaluate the safety of the experimental product in humans, and if possible, to gain early evidence of effectiveness. Phase I studies also evaluate various routes, dosages and schedules of product administration. The demonstration of therapeutic benefit is not required in order to complete Phase I successfully. If acceptable product safety is demonstrated, the Phase II studies are initiated. The Phase II trials are designed to evaluate the effectiveness of the product in the treatment of a given disease and, typically, are well controlled closely monitored studies in a relatively small number of patients. 15 The optimal routes and schedules of administration are determined in these studies. As Phase II trials are successfully completed, Phase III studies will be commenced. Phase III studies are expanded, controlled and uncontrolled trials which are intended to gather additional information about safety and efficacy in order to evaluate the overall risk/benefit relationship of the experimental product and provide an adequate basis for physician labeling. These studies also may compare the safety and efficacy of the experimental device with currently available products. It is not possible to estimate the time in which Phase I, II and III studies will be completed with respect to a given product, although the time period is often as long as several years. Following the successful completion of these clinical investigations, the preclinical and clinical evidence that has been accumulated is submitted to the FDA as part of a product license application ("PLA"). Approval of the PLA or IND is necessary before a company may market the product. The approval process can be very lengthy and depends upon the time it takes to review the submitted data and the FDA's comments on the application and the time required to provide satisfactory answers or additional clinical data when requested. In addition to the regulatory framework for product approvals, the Company is and may be subject to regulation under state and federal law, including requirements regarding occupational safety, laboratory practices, the use, handling and disposition of radioactive materials, environmental protection and hazardous substance control, and may be subject to other present and possible future local state, federal and foreign regulation, including future regulation of the biotechnology field. Results of Operations Nine months Ended August 31, 1997 Compared to Nine months Ended August 31, 1996 During the nine months ending August 31, 1997 and August 31, 1996 the Company recorded no revenues. During the nine months ended August 31, 1997, the Company incurred $45,350 in consulting fees compared to $363,030 for the nine months ended August 31, 1996. This decrease (88%) in consulting fees was due primarily to the Company's continued limited use of outside consultants and the increased reliance on the services of the Company's Chief Executive Officer and Directors to fill the roles previously filled by outside consultants. During the nine months ended August 31, 1997, the Company incurred $245,103 in general and administrative expenses. This increased slightly from the six-month period ended August 31, 1996. This increase was primarily due to increased officers salary (which has been accrued and not paid) offset by reduced administrative, payroll, legal and accounting functions and other ancillary expenses. During the nine months ended August 31, 1997 no research and development costs were incurred. The absence of research and development costs reflected the Company's substantially limited financial resources and the efforts expended in pursuing those financial resources. The Company believes that research and development efforts will commence within the next year if private placement funds become available. The Company however did incur expenses related to the patent for the SYBIOL technology, which it intends to defend vigorously. 16 During the nine months ended August 31, 1997, the Company incurred $35,214 in amortization expense. This amortization expense is resultant of the Goodwill recognized during the year ended November 30, 1996 pursuant to the redemption of the minority shareholders interest in the subsidiary Xenogenex. There will be no additional amortization expense related to this Goodwill. The $146 incurred for the six-month period ended August 31, 1996 was due to equipment that the Company held at the research facility. As a result, total operating expenses for the nine month period ended August 31, 1997 were $339,979 compared to $598,622 for the nine month period ended August 31, 1997. This resulted in the Company recording a loss from operations of $339,979 for the nine month period ended August 31, 1997 compared to a loss from operations of $598,622 for the comparable period in 1996, or a decrease of approximately 43%. During the nine months ended August 31, 1997 the Company entered into an agreement with Union Bank to settle a previous existing note payable and judgment with a balance due of $333,000. As of August 31, 1997 a payment of $50,000 was made for full settlement in connection with the note payable and judgment, the Company recorded a gain on extinguishment of debt of $283,000 during this period. For the nine months ended August 31, 1996 the Company recognized loss on dispositions totaling $264,000. Three Months Ended August 31, 1997 Compared to Three Months Ended August 31, 1996 During the three months ending August 31, 1997 and August 31, 1996 the Company recorded no revenues. During the three months ended August 31, 1997, the Company incurred consulting fee expense of $32,850 compared to $110,717 for the three months ended August 31, 1996. This decrease in consulting fees was due primarily to the Company's continued limited use of outside consultants and the increased reliance on the services of the Company's Chief Executive Officer and Directors to fill the roles previously filled by outside consultants. During the three months ended August 31, 1997, the Company incurred $90,049 in general and administrative expenses. This increased by nearly 100% from the three-month period ended August 31, 1996. This increase was primarily due to the executive officer positions being held by Mr. Newmin as an employee versus the status of a consultant, legal and accounting functions and other ancillary expenses. The Company will continue to hold these expenses to a minimum due to economic and financial reasons. During the three months ended August 31, 1997 no research and development costs were incurred. The absence of research and development costs reflected the Company's substantially limited financial resources and the efforts expended in pursuing those financial resources. The Company believes that research and development efforts will commence within the next year if funds become available. During the three months ended August 31, 1997, the Company incurred $11,736 in amortization expense. This amortization expense is resultant of the Goodwill recognized during the year ended November 30, 1996 pursuant to the redemption of the minority shareholders interest in the subsidiary Xenogenex. The Company incurred no expense for the three-month period ended August 31, 1996. 17 As a result, the Company recorded a loss from operations of $140,428 for the three month period ended August 31, 1997 compared to a loss from operations of $158,043 for the three month period ended August 31, 1996, or a decrease of approximately 11%. The Company believes that expenses and losses will be significantly less than previous years due to cost cutting and outside services being held to a minimum. Liquidity and Capital Resources The Company's principal capital requirements are to fund operations and development of new products. The Company has historically satisfied its cash requirements through cash flows from private placements and short-term borrowings. The Company's current ratio (current assets over current liabilities) is .0642 to 1 as of August 31, 1997. During the first nine months of fiscal year 1997, the Company's cash requirements were met by short term borrowings from an officer of the Company and long term borrowings from an unrelated party. The Company issued in the amount of $357,664, common stock of the Company for services performed. Several steps have been taken by the Company to reduce its liabilities, reduce cash requirements, and raise capital. The Company has been negotiating with the bank and its vendor creditors to settle its liabilities. Exten is also negotiating with investment bankers for raising of additional capital. The Company is also considering mergers with other entities. No assurances can be given that any such activity will prove successful. The Company will require substantial working capital to continued synthetic bio-liver development of Xenogenex, Inc. and there can be no guarantee that the Company will be successful in obtaining any such needed financing. The Company has also continued to pay salaries, consulting fees, and in some cases, legal fees through the issuance of the Company's Common Stock with the subsequent registration of the shares so issued on Form S-8. The Company has been forced to take these steps to conserve the Company's cash and liquid resources. The Company is raising some funds intermittently through the use of long-term debt instruments and through the payment of services with stock. The Company is also currently conducting a private placement of common stock of its wholly owned subsidiary Xenogenics. The offering is a best efforts offering with a minimum and maximum amount to be placed. There can be no assurance that the Company will be successful with this offering. On March 7, 1997, the Company borrowed $125,000 from an unrelated party. On March 18, 1997, this note was increased to $145,000 by an additional borrowing of $20,000. The terms of the note require monthly interest payments of approximately $1,000 beginning April 7, 1997. Interest will be charged at the published prime rate, which was 8.25% at March 7, 1997. On March 18, 1997, the Company entered into an agreement with a bank to settle a note payable in the amount of $333,000. The Company is in default on the note and the bank has received a judgment for the full amount of the note plus fees of $35,000 associated with the collection of the note. As stipulated by the agreement, the Company made a cash payment in the amount of $50,000 in full settlement of the note and fees. 18 The Company entered into an agreement with a former president of the Company to settle a previously existing note in the amount of $388,000. As part of that settlement, the Company has agreed to a cash payment of $50,000, which was never made. On March 6, 1997, the Company settled that $50,000 obligation by issuing an additional 1,000,000 shares of stock with a market value of $.05 per share to the former president of the Company. This transaction was recorded within the year ending November 30, 1996 stock issuances. In connection with the formation and private placement of the Company's wholly owned subsidiary Xenogenics, the following transpired. Xenogenics assumed a promissory note in the amount of $162,500, plus accrued interest of $6,045 owing to an officer of the Company in connection with the transfer of the SYBIOL patents, trademarks, licenses and assets from Exten. This note matures within two years and is payable interest only at 7% per annum until maturity and is convertible into common stock of Xenogenics at $1.00 per share over its term. In addition, a grant of an option to purchase an additional 162,500 shares of common stock at $1.00 per share over a three year period. The note is secured by a security interest in the SYBIOL patents, trademarks, technology and assets. An unrelated party loaned Xenogenics (as stated above) $145,000 under a two year promissory note in June 1997, that is payable interest only and is convertible into common stock under a formula ranging from $2.00 to $3.00 per share. In addition, the unrelated party was granted an option to purchase 145,000 shares of common stock of Xenogenics at $1.00 per share over a three-year period. The note is also secured by a security interest. Additionally, two directors of Xenogenics were granted stock options in June 1997, to purchase 50,000 shares of common stock each at $1.00 per share over a five-year period. PART II. OTHER INFORMATION Item 1: Legal Proceedings As of October 13, 1997, there were no pending legal proceedings involving the Company which, in the opinion of management, after discussion with legal counsel, were of a material nature except the following: 1. Zampi & Associates Litigation (1)San Diego County Superior Court, State of California (2)October 16, 1996. (3)Zampi & Associates as plaintiff. Exten Industries, Inc. as a defendant. (4)Lawsuit to collect legal fees. (5)Relief Sought: Monetary payment. Item 2: Changes in Securities NONE Item 3: Defaults Upon Senior Securities NONE Item 4: Submission of Matters to a Vote of Security Holders NONE Item 5: Other Information NONE Item 6(a): Exhibits NONE Item 6(b): Reports on Form 8-K Form 8-K dated October 13, 1997 19 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report be signed on its behalf by the undersigned thereunto duly authorized. EXTEN INDUSTRIES, INC. (Registrant) Date: 10/13/97 By: /s/ W. Gerald Newmin W. Gerald Newmin Chairman, Chief Executive Officer Date: 10/13/97 By: /s/ William R. Hoelscher William R. Hoelscher Director, Vice-President and Principal Accounting Officer 20 [ARTICLE] 5 [S] [C] [C] [PERIOD-TYPE] 3-MOS 9-MOS [FISCAL-YEAR-END] NOV-30-1997 NOV-30-1997 [PERIOD-START] JUN-01-1997 DEC-01-1996 [PERIOD-END] AUG-31-1997 AUG-31-1997 [CASH] 0 322 [SECURITIES] 0 0 [RECEIVABLES] 0 0 [ALLOWANCES] 0 0 [INVENTORY] 0 0 [CURRENT-ASSETS] 0 33,539 [PP&E] 0 0 [DEPRECIATION] 0 0 [TOTAL-ASSETS] 0 122,965 [CURRENT-LIABILITIES] 0 552,306 [BONDS] 0 0 [PREFERRED-MANDATORY] 0 0 [PREFERRED] 0 1 [COMMON] 0 359,532 [OTHER-SE] 0 (544,341) [TOTAL-LIABILITY-AND-EQUITY] 0 122,965 [SALES] 0 0 [TOTAL-REVENUES] 0 0 [CGS] 0 0 [TOTAL-COSTS] 140,428 339,479 [OTHER-EXPENSES] 0 0 [LOSS-PROVISION] 0 0 [INTEREST-EXPENSE] 5,793 14,312 [INCOME-PRETAX] (98,286) (14,837) [INCOME-TAX] 0 800 [INCOME-CONTINUING] (98,286) (14,837) [DISCONTINUED] 0 0 [EXTRAORDINARY] 42142 325,142 [CHANGES] 0 0 [NET-INCOME] (98,286) (15,637) [EPS-PRIMARY] .00 .00 [EPS-DILUTED] .00 .00 -----END PRIVACY-ENHANCED MESSAGE-----