-----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, J3IEk2fFLlM1PwY2AQiAUKtvpFMqTQU3iS4aFPc2SUuTmFQ9QbwPdnlU969kS08V UNvajZHN3zrQvk5GnfieAQ== 0001086380-01-500024.txt : 20010417 0001086380-01-500024.hdr.sgml : 20010417 ACCESSION NUMBER: 0001086380-01-500024 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010228 FILED AS OF DATE: 20010416 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: 1602660 BUSINESS ADDRESS: STREET 1: 9620 CHESAPEAKE DRIVE STREET 2: SUITE 201 CITY: SAN DIEGO STATE: CA ZIP: 92123 BUSINESS PHONE: 858/496-0173 MAIL ADDRESS: STREET 1: 9620 CHESAPEAKE DRIVE STREET 2: SUITE 201 CITY: SAN DIEGO STATE: CA ZIP: 92123 FORMER COMPANY: FORMER CONFORMED NAME: EXTEN VENTURES INC DATE OF NAME CHANGE: 19910923 10QSB 1 extq0201.txt PREPARED BY: MHUEBOTTER@HOTMAIL.COM 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 quarter ended February 28, 2001. ( ) Transition 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 registrant as specified in its charter) DELAWARE 52-1412493 -------- ---------- (State or other jurisdiction of (IRS Employer ID No.) incorporation or organization) 9620 Chesapeake Drive, Suite 201 SAN DIEGO, CALIFORNIA 92123-1324 -------------------------------- (Address of principal executive offices) (858) 496-0173 -------------- (Issuer's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act None ---- Securities registered pursuant to Section 12(g) of the Act: Title of each class Name of exchange on which registered Common Stock $0.01 per share OTC BB ---------------------------- ---------------------------- 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 such shorter period that the registrant was required to be 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: 73,686,502 as March 5, 2001 Common Stock, .01 par value. =============================================================================== TABLE OF CONTENTS
PAGE ---- PART I FINANCIAL INFORMATION Item 1: Financial Statements (Unaudited) Condensed Consolidated Balance Sheets as of February 28, 2001 and November 30, 2000 2 Condensed Consolidated Statement of Operations for the Three Months Ended February 28, 2001 and February 29, 2000 3 Condensed Consolidated Statement of Cash Flows for the Three Months Ended February 28, 2001 and February 29, 2000 4 Notes to Condensed Consolidated Financial Statements 5 Item 1a. Management's Plan of Operation 8 Part II: OTHER INFORMATION 9 Item 1: Legal Proceedings 9 Item 2: Changes in Securities 9 Item 3: Defaults Upon Senior Securities 9 Item 4: Submission of Matters to a Vote of Security Holders 9 Item 5: Other Information 9 Item 6(a): Exhibits 9 Item 6(b): Reports on Form 8-K 9 SIGNATURES 9
- 2 - =============================================================================== EXTEN INDUSTRIES, INC. PART I - FINANCIAL INFORMATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) as of February 28, 2001 and November 30, 2000
February 28, 2001 November 30, 2000 ------------ ------------ ASSETS CURRENT ASSETS Cash $ 75,566 $ 539,103 Notes Receivable 491,250 132,500 Interest Receivable 12,500 0 Prepaid Expenses 33,000 50,000 ------------ ------------ TOTAL CURRENT ASSETS 612,316 721,603 PROPERTY AND EQUIPMENT, net 1,109 1,222 Real Estate Held For Sale 47,200 47,200 Patent Costs and other intangibles 46,605 46,605 ------------ ------------ TOTAL OTHER ASSETS 93,805 93,805 ------------ ------------ TOTAL ASSETS $ 707,230 $ 816,630 ============ ============ LIABILITIES AND STOCKHOLDERS' DEFICIENCY CURRENT LIABILITIES Accounts Payable $ 68,499 $ 13,411 Accrued Expenses 205,669 144,216 Advances from Stockholder 0 0 Notes Payable 519,266 509,460 ------------ ------------ TOTAL CURRENT LIABILITIES 793,434 667,087 MINORITY INTEREST 116,668 158,581 STOCKHOLDERS EQUITY (DEFICIENCY) Preferred Stock, $0.01 par value; 5,000,000 shares authorized, 0 issued & outstanding 0 0 Common Stock, $0.01 par value; 200,000,000 shares authorized; 73,686,502 issued & outstanding 736,865 735,865 Stock subscription receivable (70,000) (81,500) Deferred Compensation Costs (12,375) (16,500) Additional Paid-in Capital 11,418,980 11,409,980 Accumulated Deficit prior to development stage (10,084,284) (10,084,284) Accumulated Deficit during development stage (2,192,058) (1,972,599) ------------ ------------ TOTAL STOCKHOLDERS' DEFICIENCY (202,872) (9,038) ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 707,230 $ 816,630 ============ ============ The accompanying notes are an integral part of these financial statements
- 3 - =============================================================================== EXTEN INDUSTRIES, INC. PART I - FINANCIAL INFORMATION CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) For the three months ended February 28, 2001 and February 29, 2000
Three Months Ended February 28, 2001 February 29, 2000 ------------ ------------ REVENUE Sales $ - $ - Royalties - - ------------ ------------ Total Revenue - - OPERATING EXPENSES General and Administrative 164,967 72,588 Consulting Fee Expense 63,234 294,842 Research and Development 20,484 1,453 Depreciation and Amortization 113 92 ------------ ------------ Total Operating Expenses 248,798 368,975 Other Income (Expense) Interest, net 12,441 11,109 Minority Interest in Loss of Subsidiary (41,913) - ------------ ------------ Total Other Income (Expense) (29,472) 11,109 ------------ ------------ Net Operating Loss Before Income Taxes (219,326) (380,084) Provision for Income Taxes 133 1,600 ------------ ------------ Net Loss $ (219,459) $ (381,684) ============ ============ Net Loss per Average Common Share $ (0.01) $ (0.01) ============ ============ Weighted Average Common Shares Outstanding 73,686,502 49,501,019 ============ ============ The accompanying notes are an integral part of these financial statements
- 4 - =============================================================================== EXTEN INDUSTRIES, INC. PART I - FINANCIAL INFORMATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW (UNAUDITED) as of February 28, 2001 and February 29, 2000
Three Months Ended February 28, 2001 February 29, 2000 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net Loss $ (219,459) $ (381,684) Adjustments to Reconcile Net Loss to net Cash Provided (Used) By Operating Activities - - Minority Interest (41,913) - Depreciation and Amortization 113 92 Vesting of Deferred Compensation Costs 4,125 0 Amortization of discount on note payable 9,806 0 Amortization of discount on note receivable (8,750) 0 (Increase) Decrease in: Prepaid research 17,000 0 Interest Receivable (12,500) 0 Increase (Decrease) in: Accounts Payable 55,088 54,439 Accrued Expenses 61,453 313,084 ------------ ------------ NET CASH USED IN OPERATING ACTIVITIES (135,037) (14,069) CASH FLOWS FROM INVESTING ACTIVITIES Notes receivable (350,000) 0 ------------ ------------ NET CASH USED IN INVESTMENT ACTIVITIES (350,000) 0 CASH FLOW FROM FINANCING ACTIVITIES Issuance of Common Stock 0 0 Common stock options exercised 10,000 0 Advances from officer 0 13,225 Stock Subscriptions received 11,500 0 Increase in Long Term Debt, net 0 0 ------------ ------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 21,500 13,225 ------------ ------------ NET INCREASE (DECREASE) IN CASH (463,537) (844) CASH AT BEGINNING OF PERIOD 539,103 228 ------------ -------------- CASH AT END OF PERIOD $ 75,566 $ (616) ============ ============ The accompanying notes are an integral part of these financial statements
- 5 - =============================================================================== EXTEN INDUSTRIES, INC. PART I - FINANCIAL INFORMATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business: Exten Industries, Inc. ("Exten") is a technology holding company. Its subsidiary, Xenogenics Corporation ("Xenogenics"), is in the business of developing an artificial liver technology, the SYBIOL(R) synthetic bio-liver. In 1993, the Company acquired all of the rights to the SYBIOL technology developed under its contract with a major west coast medical center. The rights to the technology were transferred to Xenogenics when it was formed in 1997. A patent application is currently pending on the process utilized by the SYBIOL device and the Company has received trademark protection for the SYBIOL registered trade name. 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 considered necessary for a fair presentation have been included. It is suggested that these financial statements be 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, 2000. The results of operations for the three-month periods are not necessarily indicative of the operating results anticipated for the fiscal year ending November 30, 2001. 2. SUPPLEMENTAL CASH FLOW INFORMATION Supplemental disclosures of cash flow information for the three-month period ended February 28, 2001 (unaudited) and February 29, 2000 are summarized as follows:
Three Months Ended February 28, 2001 February 29, 2000 ------------ ------------ Cash paid for interest and income taxes: Interest $ 12,560 $ 11,109 Income taxes 0 1,600
3. GOING CONCERN MATTERS During fiscal years 2000 and 1999, the Company incurred net losses of ($640,678) and ($514,564), respectively. Management does not expect the Company to generate significant revenues in the near future. At February 28, 2001, the Company's accumulated deficit and stockholders' deficiency were $12,276,342 and $202,872 respectively, and its current liabilities exceeded its assets by $86,204. In order to continue as a going concern, develop and commercialize its technology and, ultimately, achieve a profitable level of operations, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) Sales of shares of the Company's common stock to and through Kestrel Equity Partners Ltd., which has resulted in their first $550,000 investment in the Company; and another $500,000 received on March 29, 2001, (2) raising additional capital through sales of preferred and common stock; (3) continuing to use common stock to pay for consulting and professional services.. In addition, management is continually seeking other potential joint venture partners or merger candidates that would provide financial, technical and/or marketing resources to enable the Company to realize the potential value of its technology. 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, 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. - 6 - =============================================================================== 4. REAL ESTATE HELD FOR SALE Real estate as of November 30, 2000 consisted of a parcel of undeveloped land, approximately 202 lots in the Grand Canyon subdivision in Valle Junction, AZ south of the Grand Canyon. The land was originally purchased in February 1992 for $1,654,000 and written down to an estimated fair market value of $47,200 in 1995. (The current property tax valuation is $351,611.) The Company is currently in arrears on back taxes in the amount of $39,571 and is evaluating the land's resale potential. 5. CONTINGENCIES A stockholder filed suit against the Company and its legal counsel on February 13, 2001 in the Superior Court of California. The stockholder alleges that the defendants negligently lost, and failed to replace in a timely manner, his stock certificate for 625,000 shares of common stock that he had delivered to the Company for redelivery to the transfer agent. The case is in the initial pleading stages and Management believes that there are meritorious defenses to the claim. The stockholder is seeking $600,000 in damages for the loss in potential profits on the stock during the period in question. 6. STOCK OPTIONS During the three months ended February 28, 2001, no new stock options were granted. 100,000 options were exercised for $10,000. Item 2. Management's Plan of Operation. This Quarterly Report on Form 10-QSB contains forward-looking statements that involve risks and uncertainties. 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 its research and development. The Company's actual results may differ significantly from the results discussed in the forward-looking statements. PLAN OF OPERATION. The Company's only business in fiscal 2000 was the research and development of the proprietary Sybiol(R) liver support technology. Dr. John Brems, Chairman of the Company's Scientific Advisory Board, oversees Loyola University's liver transplant program and has established an artificial liver research program focusing on the Company's technology. He has recruited a team of many of the world's foremost liver doctors and scientists at Loyola. Scientific Advisory Board members include Dr. Donald Cramer, BS, DVM, and Ph.D., director of Transplantation Research at Children's Hospital in Los Angeles; Dr. David Van Thiel, MD Director of Liver Transplantation at Loyola; Amy Friedman, MD, Chief, Liver Transplantation, Yale-New Haven Hospital; Dr. Alessandra Colantoni, Research Associate, Liver Transplant Service, Loyola University also serves on the Scientific Advisory Board. The Company has a Research and Development Agreement and a Supplier Agreement with MultiCell Associates, Inc. (MultiCell) of Warwick, RI, under which MultiCell will supply a unique engineered porcine liver cell line and optimize the interface between this cell line and Xenogenics' proprietary Sybiol(R) liver failure treatment device. This cell line is expected to eliminate variability in patient treatment and limit the viral risks associated with primary hepatocytes. A grant from the National Institutes of Health was awarded in January 2001 to fund joint research by Xenogenics, MultiCell, and Compact Membranes Inc of Delaware. The Company continues to seek financing for its subsidiary, Xenogenics to fund ongoing R&D. It expects to have additional funding in place within the next 12 months. Funding received in fiscal 2000 was from Kestrel Equity Partners and individual investors. Cash on hand and an additional $500,000 commitment from Kestrel Equity Partners is expected to be sufficient for the current fiscal year's needs. In order to continue to fund operations, R&D and growth, the Company is exploring various opportunities such as: obtaining financing from multiple sources, mergers, acquisitions or other business combinations and alliances. The Company has signed a Letter of Intent to acquire Lexicor Medical Technologies Inc. of Boulder CO, which was terminated on 4/9/01. The Company has also signed a Letter of Intent to acquire MediQuip International and Sterling Medical Technologies, Inc. of Dallas, TX. There is no assurance that definitive agreements will be concluded with any of these companies. The Company has also identified several other business entities that present possibilities for alliance, acquisition or merger. The Company is currently in the preliminary discussion stage with several entities in this regard. There is no assurance that these discussions will result in the completion of a transaction. The Company is negotiating with an investment group to provide a $15 million equity credit line. The Company continues to seek additional financing through the offering and sale of the Company's securities, joint ventures, and other efforts. There can be no assurances that the Company will be successful in obtaining any additional financing, including the equity line, or in otherwise completing any joint venture, alliance, merger, or other transaction or, if the Company is successful in completing any such transaction, that it can be completed on terms that are reasonable in view of the Company's current circumstances. - 7 - =============================================================================== During Fiscal 1999 and 2000, the Company continued to control costs. The Company continues to effect transactions that reduce its liabilities and cash requirements while it continues to raise capital. The Company continues to pay directors fees, 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. PART II. OTHER INFORMATION Item 1: Legal Proceedings Jack Schaps, trustee of A. Jack Schaps Estate Trust, filed suit against the Company and its legal counsel on February 13, 2001 in the Superior Court of California. Schaps, a stockholder of the company, alleges that the defendants negligently lost, and failed to replace in a timely manner, his stock certificate for 625,000 shares of common stock that he had delivered to the Company for redelivery to the transfer agent. The case is in the initial pleading stages and Management believes that there are meritorious defenses to the claim. Schaps is seeking $600,000 in damages for the loss in potential profits on the stock during the period in question. 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 NONE 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: 4/12/01 By: /s/ W. Gerald Newmin W. Gerald Newmin Chairman, Chief Executive Officer Date: 4/12/01 By: /s/ Jerry Simek Jerry Simek Director, President and Chief Operating Officer - 8 - =============================================================================== -----END PRIVACY-ENHANCED MESSAGE-----