-----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, EGOXC9mUcwdiE8/t90SqmV5tqKVRHCMlHXT1XtAr+6fNlGIL2xZ6JhBaR0TVGDSt jYQ1blnPFYwIkZNDh4jmEQ== 0001019687-09-001895.txt : 20090522 0001019687-09-001895.hdr.sgml : 20090522 20090520172447 ACCESSION NUMBER: 0001019687-09-001895 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20090331 FILED AS OF DATE: 20090520 DATE AS OF CHANGE: 20090520 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEXON TECHNOLOGIES INC CENTRAL INDEX KEY: 0001065189 STANDARD INDUSTRIAL CLASSIFICATION: ABRASIVE ASBESTOS & MISC NONMETALLIC MINERAL PRODUCTS [3290] IRS NUMBER: 870502701 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-24721 FILM NUMBER: 09843502 BUSINESS ADDRESS: STREET 1: 8 CORPORATE PARK, SUITE 300 CITY: IRVINE STATE: CA ZIP: 92606 BUSINESS PHONE: 949-752-7700 MAIL ADDRESS: STREET 1: 8 CORPORATE PARK, SUITE 300 CITY: IRVINE STATE: CA ZIP: 92606 FORMER COMPANY: FORMER CONFORMED NAME: REXFORD INC DATE OF NAME CHANGE: 19980630 10-Q 1 lexon_10q-033109.htm LEXON TECHNOLOGIES, INC. lexon_10q-033109.htm
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended: March 31, 2009

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________


Commission File Number: 0-24721
LEXON TECHNOLOGIES, INC.
(Exact name of registrant as specified in charter)
   
Delaware
87-0502701
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer I.D. No.)
   
   
8 Corporate Park, Suite 300, Irvine, California
92606
(Address of principal executive offices)
(Zip Code)

Issuer's telephone number, including area code: (949)752-7700

Securities registered pursuant to section 12(b) of the Act:
   
Title of each class
Name of each exchange on which registered
None
N/A

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

Common Stock, par value $0.001 per share
(Title of class)

Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)   Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o                                                                  Accelerated filer o
Non-accelerated filer o                                                                  Smaller reporting company ý
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ý No o
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of May 20, 2009, Lexon had 34,183,778 shares of its common stock, par value $.001 outstanding.


TABLE OF CONTENTS
 
 
PART I- FINANCIAL INFORMATION 
F-1
 
 
ITEM 1. FINANCIAL STATEMENTS 
F-1
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
3
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 
4
ITEM 4. CONTROLS AND PROCEDURES 
5
ITEM 4T. CONTROLS AND PROCEDURES 
5
 
5
PART II- OTHER INFORMATION 
 
 
5
ITEM 1. LEGAL PROCEEDINGS 
 
ITEM 1A. RISK FACTORS 
5
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 
5
ITEM 3. DEFAULT UPON SENIOR SECURITIES 
5
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 
5
ITEM 5. OTHER INFORMATION 
5
ITEM 6. EXHIBITS 
5
 
 
SIGNATURES 
6
 
 
 
 
2
 

ITEM 1. FINANCIAL STATEMENTS
 
 
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
 
   
Page
     
Consolidated Financial Statements (unaudited):
    
Consolidated Balance Sheets
  
F-2
Consolidated Statements of Operations
  
F-3
Consolidated Statement of Shareholders’ Deficiency and Comprehensive Income (Loss)
  
F-4
Consolidated Statements of Cash Flows
  
F-7
Notes to Consolidated Financial Statements
  
F-9

 

F-1
 
LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Balance Sheets

   
   
March 31,
    
December 31,
  
   
2009
    
2008
  
   
(Unaudited)
        
             
 ASSETS
                
                 
Current Assets
                
                 
Cash and cash equivalents
  
$
-
    
$
3,727
  
                 
Property and equipment, net
    
971
      
1,012
  
                 
Total assets
  
$
971
    
$
4,739
  
 
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
  
             
Current liabilities:
            
Accounts payable
  
$
27,408
    
$ 
26,847
  
Due to related parties
    
1,306,994
      
1,320,481
  
Accrued expenses
    
52,556
      
49,276
  
Notes payable
    
169,982
      
169,982
  
Liabilities related to discontinued operations
    
355,260
      
390,776
  
Total current liabilities
    
1,912,200
      
1,957,362
  
                 
Contingent liabilities
    
274,610
      
274,610
  
                 
Stockholders’ deficiency:
                
Common stock, $0.001 par value;
                
100,000,000 shares authorized;
                
 34,183,778 shares issued and outstanding
    
34,184
      
34,184
  
Additional paid-in capital
    
3,066,839
      
3,066,839
  
Accumulated other comprehensive loss
    
(101,216
)
    
(151,800
)
Deficit accumulated during the development stage
    
(5,027,642
)
    
(5,012,932
)
Total Lexon Technologies, Inc. stockholders’ deficiency
    
(2,027,835
)
    
(2,063,709
)
Noncontrolling interest
    
(158,004
)
    
(163,524
)
Total stockholders' deficiency
    
(2,185,839
)
    
(2,227,233
)
                 
Total liabilities and stockholders' deficiency
  
$
971
    
$
4,739
  
 

See accompanying notes to unaudited consolidated financial statements.
F-2

LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)

               
From July 18, 2001
  
               
(Inception)
  
   
For the Three Months Ended
    
through
  
   
March 31,
    
March 31,
  
   
2009
    
2008
    
2009
  
                   
Revenue
  
$
-
    
$
-
    
$
22,031
  
                         
Operating expenses:
                        
Research and development
    
-
      
-
      
-
  
Selling, general and administrative
    
11,429
      
22,570
      
3,820,144
  
Total operating expenses
    
11,429
      
22,570
      
3,820,144
  
Loss from operations
    
(11,429
)
    
(22,570
)
    
(3,798,113
)
                         
Other income (expenses):
                        
Interest income
    
-
      
-
      
39,817
  
Other income
    
-
      
-
      
6,000
  
(Loss) on sale of assets
    
-
      
-
      
(1,134
) 
Gain on debt cancellation
    
-
      
-
      
907,872
  
Interest expense
    
(3,281
)
    
(2,094
)
    
(799,610
)
Loss from investment
    
-
      
-
      
(11,667
)
Net other income (expenses)
    
(3,281
) 
    
(2,094
)
    
141,278
  
                         
Loss before income taxes and noncontrolling interest
    
(14,710
)
    
(24,664
)
    
(3,656,835
))
Income taxes
    
-
      
-
      
6,326
  
Loss from continuing operations, net of tax
    
(14,710
)
    
(24,664
)
    
(3,663,161
)
Loss from discontinued operations, net of income tax
    
-
      
-
      
(1,513,399
)
Net loss before noncontrolling interest
    
(14,710
)
    
(24,664
)
    
(5,176,560
)
Less: Net loss attributable to the noncontrolling interest
    
-
      
-
      
(148,918
)
Net loss attributable to Lexon Technologies, Inc.
  
$
(14,710
)
  
$
(24,664
)
  
$
(5,027,642
)
                         
Basic earnings per share attributable to Lexon Technologies, Inc.
                        
Continued operations
  
$
(0.00
)
  
$
(0.00
)
        
Discontinued operations
    
(0.00
)
    
(0.00
)
        
Basic income per common share
  
$
(0.00
)
  
$
(0.00
)
        
                         
Diluted earnings per share attributable to Lexon Technologies, Inc.
                        
Continued operations
  
$
(0.00
)
  
$
(0.00
)
        
Discontinued operations
    
(0.00
)
    
(0.00
)
        
Diluted income per common share
  
$
(0.00
)
  
$
(0.00
)
        
                         
Weighted-average shares outstanding:
                        
Basic
    
34,183,778
      
34,183,778
          
Diluted
    
34,183,778
      
34,183,778
          
                         
Amounts attributable to Lexon Technologies, Inc.
                        
Loss from continuing operations, net of tax
  
$
(14,710
)
  
$
(24,664
)
  
$
(3,663,161
)
Loss from discontinued operations, net of tax
    
-
      
-
      
(1,364,481
)
Net loss attributable to Lexon Technologies, Inc.
  
$
(14,710
)
  
$
(24,664
)
  
$
(5,027,642
)
                         
 
See accompanying notes to unaudited consolidated financial statements.
F-3

LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statement of Stockholders' Deficiency and Comprehensive Income (Loss)
(Unaudited)

                                       
Deficit
              
                                 
Accumulated
    
Accumulated
              
                   
Additional
          
Other
    
During the
          
Total
  
   
Common Stock
    
Paid-in
    
Subscription
    
Comprehensive
    
Development
    
Noncontrolling
    
Shareholders’
  
   
Shares
    
Amount
    
Capital
    
Receivable
    
Income (loss)
    
Stage
    
Interest
    
Equity
  
                                                       
Balance, Jul 18, 2001
    
-
    
$
-
    
 $
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                 
Jul 2001 - stock issued for services at $0.001 per share
    
 
13,720,000
      
13,720
      
-
      
-
      
-
      
-
      
-
      
13,720
  
                                                                 
Aug 2001 - stock issued for cash at $0.25 per share
    
 
2,280,000
      
2,280
      
567,720
      
(220,000
)
    
-
      
-
      
-
      
350,000
  
                                                                 
Oct 2001 - stock issued for technology at $0.25 per share
    
 
1,500,000
      
1,500
      
373,500
      
-
      
-
      
-
      
-
      
375,000
  
                                                                 
Net loss for the year ended Dec 31, 2001
    
 
-
      
-
      
-
      
-
      
-
      
(522,180
) 
    
-
      
(522,180
)
                                                                 
Balance, Dec 31, 2001
    
17,500,000
      
17,500
      
941,220
      
(220,000
) 
    
-
      
(522,180
)
    
-
      
216,540
  
                                                                 
Receipt of subscription receivable
    
 
-
      
-
      
-
      
220,000
      
-
      
-
      
-
      
220,000
  
                                                                 
Apr 2002 - stock issued to acquire Phacon Corp (Note 1)
    
 
1,648,778
      
1,649
      
(641,346
)
    
-
      
-
      
-
      
-
      
(639,697
) 
                                                                 
Sep 2002 - stock issued for cash at $0.25 per share
    
 
280,000
      
280
      
69,720
      
-
      
-
      
-
      
-
      
70,000
  
                                                                 
Dec 2002 - stock issued for cash at $0.83 per share
    
 
120,000
      
120
      
99,880
      
-
      
-
      
-
      
-
      
100,000
  
                                                                 
Net loss for the year ended Dec 31, 2002
    
 
-
      
-
      
-
      
-
      
-
      
(473,510
) 
    
-
      
(473,510
)
                                                                 
Balance, Dec 31, 2002
    
19,548,778
      
19,549
      
469,474
      
-
      
-
      
(995,690
) 
    
-
      
(506,667
)
                                                                 
Jan 2003 - stock issued for cash at $0.83 per share
    
 
240,000
      
240
      
199,760
      
-
      
-
      
-
      
-
      
200,000
  
                                                                 
Mar 2003 – stock issued for cash at $0.25 per share
    
 
840,000
      
840
      
209,160
      
-
      
-
      
-
      
-
      
210,000
  
                                                                 
Dec 2003 - stock issued for cash at $0.25 per share
    
 
60,000
      
60
      
14,940
      
-
      
-
      
-
      
-
      
15,000
  
                                                                 
Comprehensive income
                                                                
                                                                 
Net loss for the year ended Dec 31, 2003
    
 
-
      
-
      
-
      
-
      
-
      
(611,808
) 
    
-
      
(611,808
)
                                                                 
Foreign currency translation
    
-
      
-
      
-
      
-
      
4,729
      
-
      
-
      
4,729
  
                                                                 
Total comprehensive (loss) income
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(607,079
)
                                                                 
Balance, Dec 31, 2003
    
20,688,778
    
$
20,689
    
 $
893,334
    
$
-
    
$
4,729
    
$
(1,607,498
) 
    
-
      
(688,746
)
 


See accompanying notes to unaudited consolidated financial statements.
F-4

LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statement of Stockholders' Deficiency (Continued)
(Unaudited)

                                       
Deficit
              
                                 
Accumulated
    
Accumulated
              
                   
Additional
          
Other
    
During the
          
Total
  
   
Common Stock
    
Paid-in
    
Subscription
    
Comprehensive
    
Development
    
Noncontrolling
    
Shareholders’
  
   
Shares
    
Amount
    
Capital
    
Receivable
    
Income (loss)
    
Stage
    
Interest
    
Equity
  
                                                       
Balance, Dec 31, 2003
    
20,688,778
    
$
20,689
    
$
893,334
    
$
-
    
$
4,729
    
$
(1,607,498
) 
  
$
-
    
$
(688,746
)
                                                                 
Oct 2004 - stock issued for cash at $0.25 per share
    
4,000,000
      
4,000
      
996,000
      
-
      
-
      
-
      
-
      
1,000,000
  
                                                                 
Dec 2004 - stock issued for cash at $0.11 per share
    
6,125,000
      
6,125
      
693,875
      
-
      
-
      
-
      
-
      
700,000
  
                                                                 
Dec 2004 - stock issued for services at $0.25 per share
    
1,000,000
      
1,000
      
249,000
      
-
      
-
      
-
      
-
      
250,000
  
                                                                 
Dec 2004 - stock issued in lieu of outstanding debt at $0.10 per share
    
2,370,000
      
2,370
      
234,630
      
-
      
-
      
-
      
-
      
237,000
  
                                                                 
Comprehensive income
                                                                
                                                                 
Net loss for the year ended Dec 31, 2004
    
-
      
-
      
-
      
-
      
-
      
(895,710
) 
    
(11,490
)
    
(907,200
)
                                                                 
Foreign currency translation
    
-
      
-
      
-
      
-
      
1,433
      
-
      
156
      
1,589
  
                                                                 
Total comprehensive (loss) income
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(905,611
)
                                                                 
Balance, Dec 31, 2004
    
34,183,778
      
34,184
      
3,066,839
      
-
      
6,162
      
(2,503,208
) 
    
(11,334
)
    
592,643
  
                                                                 
Comprehensive income
                                                                
                                                                 
Net loss for the year ended Dec 31, 2005
    
-
      
-
      
-
      
-
      
-
      
(459,251
) 
    
10,980
      
(448,271
)
                                                                 
Foreign currency translation
    
-
      
-
      
-
      
-
      
(74,542
) 
    
-
      
(8,136
)
    
(82,678
)
                                                                 
Total comprehensive (loss) income
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(530,949
)
                                                                 
Balance, Dec 31, 2005
    
34,183,778
      
34,184
      
3,066,839
      
-
      
(68,380
) 
    
(2,962,459
) 
    
(8,490
)
    
61,694
  
                                                                 
Comprehensive income
                                                                
                                                                 
Net loss for the year ended Dec 31, 2006
    
-
      
-
      
-
      
-
      
-
      
(2,797,639
) 
    
(163,962
)
    
(2,961,601
)
                                                                 
Foreign currency translation
    
-
      
-
      
-
      
-
      
(18,729
) 
    
-
      
(2,044
)
    
(20,773
)
                                                                 
Investment loss
    
-
      
-
      
-
      
-
      
(22,704
) 
    
-
      
-
      
(22,704
)
                                                                 
Total comprehensive (loss) income
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(3,005,078
)
                                                                 
Balance, Dec 31, 2006
    
34,183,778
      
34,184
      
3,066,839
      
-
      
(109,813
) 
    
(5,760,098
) 
    
(174,496
)
    
(2,943,384
)
                                                                 
Comprehensive income
                                                                
                                                                 
Net income for the year ended Dec 31, 2007
    
-
      
-
      
-
      
-
      
-
      
749,430
      
(91
)
    
749,339
  
                                                                 
Foreign currency translation
    
-
      
-
      
-
      
-
      
4,083
      
-
      
446
      
4,529
  
                                                                 
Total comprehensive (loss) income
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
753,868
  
                                                                 
Balance, Dec 31, 2007
    
34,183,778
      
34,184
      
3,066,839
      
-
      
(105,730
)
    
(5,010,668
) 
    
(174,141
)
    
(2,189,516
)
                                                                 
Comprehensive income
                                                                
                                                                 
Net income for the year ended Dec 31, 2008
    
-
      
-
      
-
      
-
      
-
      
(2,264
) 
    
15,645
      
13,381
  
                                                                 
Foreign currency translation
    
-
      
-
      
-
      
-
      
(46,070
) 
    
-
      
(5,028
)
    
(51,098
)
                                                                 
Total comprehensive (loss) income
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(37,717
)
                                                                 
Balance, Dec 31, 2008
    
34,183,778
    
$
34,184
    
$
3,066,839
    
$
-
    
$
(151,800
)
  
$
(5,012,932
)
  
$
(163,524
)
  
$
(2,227,233
)
  
See accompanying notes to unaudited consolidated financial statements.
F-5

LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statement of Stockholders' Deficiency (Continued)
(Unaudited)

                                       
Deficit
              
                                 
Accumulated
    
Accumulated
              
                   
Additional
          
Other
    
During the
          
Total
  
   
Common Stock
    
Paid-in
    
Subscription
    
Comprehensive
    
Development
    
Noncontrolling
    
Shareholders’
  
   
Shares
    
Amount
    
Capital
    
Receivable
    
Income (loss)
    
Stage
    
Interest
    
Equity
  
                                                       
Balance, Dec 31, 2008
    
34,183,778
    
$
34,184
    
$
3,066,839
    
$
-
    
$
(151,800
) 
  
$
(5,012,932
) 
  
$
(163,524
)
  
$
(2,227,233
)
                                                                 
Comprehensive income
                                                                
                                                                 
Net income for the three months ended Mar 31, 2009
    
-
      
-
      
-
      
-
      
-
      
(14,710
)
    
-
      
(14,710
)
                                                                 
Foreign currency translation
    
-
      
-
      
-
      
-
      
50,584
      
-
      
5,520
      
56,104
  
                                                                 
Total comprehensive (loss) income
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
41,394
  
                                                                 
Balance, March 31, 2009
    
34,183,778
    
$
34,184
    
$
3,066,839
    
$
-
    
$
(101,216
)
  
$
(5,027,642
)
  
$
(158,004
)
    
(2,185,839
)
                                                                 



See accompanying notes to unaudited consolidated financial statements.
F-6

LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)

               
From July 18, 2001
  
   
For the Three Months Ended
    
(Inception)
  
   
March 31,
    
through
  
   
2009
    
2008
    
March 31, 2009
  
Cash Flows From Operating Activities:
                  
Net loss
  
$
(14,710
) 
  
$
(24,664
)
  
$
(5,176,560
)
Adjustments to reconcile net loss to net cash
                        
used in operating activities
                        
Depreciation and amortization
    
41
      
266
      
13,766
  
Stock for services
    
-
      
-
      
263,720
  
Stock for technology
    
-
      
-
      
375,000
  
Gain on forgiveness of debt
    
-
      
-
      
(907,872
)
Loss on sale of assets
    
-
      
-
      
1,134
  
Change in assets and liabilities:
                        
(Decrease) increase in accounts payable
    
561
      
-
      
27,408
  
(Decrease) increase in due to related parties
    
7,100
      
-
      
845,114
  
(Decrease) increase in accrued expenses
    
3,281
      
2,094
      
52,556
  
Increase in contingent liabilities
    
-
      
-
      
274,610
  
Operating cash generated by (used in) discontinued operations
    
-
      
(38,493
)
    
390,776
  
Net Cash Used in Operating Activities
    
(3,727
)
    
(60,797
)
    
(3,840,348
)
                         
Cash Flows From Investing Activities:
                        
Acquisition of property and equipment
    
-
      
-
      
(16,114
)
Proceeds received on sale of fixed assets
    
-
      
-
      
243
  
Net Cash Used in Investing Activities
    
-
      
-
      
(15,871
)
                         
Cash Flows From Financing Activities:
                        
Proceeds from related party notes
            
15,720
      
482,468
  
Proceeds from notes payable
    
-
              
1,356,469
  
Payments made on notes payable
    
-
              
(41,615
)
Proceeds from issuance of common stock
    
-
              
2,225,303
  
Net Cash Provided by Financing Activities
    
-
      
15,720
      
4,022,625
  
                         
Net increase (decrease) in cash and cash equivalents
    
(3,727
)
    
(45,077
)
    
166,406
  
                         
Effect of currency exchange rate changes
                        
On cash and cash equivalents
    
-
      
44,593
      
(166,406
)
                         
Cash and cash equivalent at beginning of period
    
3,727
      
5,255
      
-
  
                         
Cash and cash equivalent at end of period
  
$
-
    
$
4,771
    
$
-
  
 

See accompanying notes to unaudited consolidated financial statements.
F-7

LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)

               
From July 18, 2001
  
   
For the Three Months Ended
    
(Inception)
  
   
March 31,
    
through
  
   
2009
    
2008
    
March 31, 2009
  
Supplemental Cash Flow Information:
                  
                   
Cash Payments For
                  
Interest
  
$
-
    
$
-
    
$
717,548
  
                         
Non-Cash Investing and Financing Activities
                        
Stock issued for technology
  
$
-
    
$
-
    
$
375,000
  
Stock issued for services
  
$
-
    
$
-
    
$
263,720
  
Stock issued for in lieu of debt
  
$
-
    
$
-
    
$
237,000
  


See accompanying notes to unaudited consolidated financial statements.
F-8
 
LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited)

1. Nature of Business and Going Concern

Nature of Business

Lexon Technologies, Inc. ("the Company" or "Lexon") was incorporated in April 1989 under the laws of state of Delaware, and owns 90.16% of Lexon Semiconductor Corporation ("Lexon Semi" or  formerly known as Techone Co., Ltd ("Techone")) which develops and manufactures Low Temperature Cofired Ceramic (LTCC) components, including LTCC wafer probe cards, LTCC circuit boards, LTCC Light Emitting Diode (LED) displays and related products for the semiconductor testing and measurement, custom Printed Circuit Board (PCB), and cellular phone industries.  The Company currently has no other business activities.

Initially registered as California Cola Distributing Company, Inc, the Company changed its name twice; first to Rexford, Inc. in October 1992, and to the current name in July 1999.

In July 1999, Lexon acquired 100% of the outstanding common stock of Chicago Map Corporation (CMC) in exchange for 10,500,000 shares of the Company's common stock through a reverse acquisition accompanied by a recapitalization.  The surviving entity, Lexon, reflected the assets and liabilities of Lexon and CMC at their historical book values. Lexon dissolved CMC in 2002.

In April 2002, Lexon acquired 100% of the outstanding common stock of Phacon Corporation (Phacon) in exchange for 17,500,000 shares of Company's common stock through a reverse acquisition accompanied by a recapitalization.  As part of the agreement, the Company elected a 1 for 10 reverse stock split and the acquired shares of Phacon were entirely canceled leaving the Company as the surviving entity.

In March 2003, the Company incorporated Lexon Korea Corporation (“Lexon Korea”) as a wholly-owned subsidiary in Korea for the purpose of entering into potential business combinations with Korean operating entities. Lexon Korea was reorganized in August 2005, and as a result, the Company’s equity share in Lexon Korea was reduced to 10%.

In December 2004, the Company acquired 90.16% of the voting stock of Techone Company, Ltd, a company in Korea, by investing $1,588,000.  The Company recognized goodwill of $1,851,692 in the acquisition.  The Company acquired Techone to develop it as the Company’s core operating business in Korea for manufacturing and selling LTCC related products.  However, the development of the LTCC related products was not successful, and the operations of Techone became highly leveraged financially.  In August 2005, certain creditors filed an involuntary foreclosure and sold Techone’s assets through public auction to satisfy secured debts.  This disposal of assets resulted in a gain $1,315,469 for the year ended December 31, 2005.  In February 2006, Techone changed its name to Lexon Semiconductor Corporation and all of its operation has been suspended due to lack of operating working capital.    

Going Concern

The Company’s consolidated financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  The Company has experienced recurring losses which have resulted in an accumulated deficit of $5,027,642 and a working capital deficit of approximately $1,912,000 as of March 31, 2009.   The development of the LTCC related products by Lexon Semi, which had been pursued as the Company’s core business, was unsuccessful, and most of assets of Lexon Semi were foreclosed and sold by creditors in August 2005. Since then, the operations of Lexon Semi have been suspended.  These situations raise substantial doubt about the Company's ability to continue as a going concern.   The Company’s ability to continue as a going concern is contingent upon its ability to secure additional financing, initiate sales of its products and attain profitable operations.

As discussed earlier within this Note and Note 3, the development of planned products of Lexon Semi, the Company’s core business operation, was unsuccessful and most of assets of Lexon Semi were foreclosed and sold by creditors in August 2005.  Since then, the operations of Lexon Semi have been suspended.

The Company’s management is currently pursuing various sources of equity or debt financing, although there can be no assurance that the Company will be able to secure financing when needed or obtain on such terms that are satisfactory to the Company.

The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.  It is the intent of management to continue to raise additional funds to sustain operations and to pursue acquisitions of operating companies in order to generate future profits for the Company.

F-9

LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited, continued)

2. Significant Accounting Policies

The following summary of significant accounting polices of the Company is presented to assist in understanding the Company’s financial statements. These accounting policies conform to the accounting principles generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.

Principles of Consolidation. The consolidated financial statements include the accounts of Lexon Technologies, Inc., and its majority-owned subsidiary, Lexon Semiconductor Co., Ltd.  All material intercompany accounts and transactions have been eliminated in the consolidation. Minority interests are recorded to the extent of equity owned. Losses in excess of minority interest equity capital are charged against the majority interest and will be reversed when the losses reverse.

Use of Estimates. Preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and related notes to financial statements.  These estimates are based on management's best knowledge of current events and actions the Company may undertake in the future. Actual results may ultimately differ from estimates, although management does not believe such changes will materially affect the financial statements in any individual year.

Revenue Recognition.  Revenue is recognized, in accordance with Staff Accounting Bulletin No. 101 "Revenue Recognition in Financial Statements" ("SAB No. 101"), when delivery has occurred provided there is persuasive evidence of an agreement, the fee is fixed or determinable and collection of the related receivable is probable.   As such, the Company recognizes revenue for its products generally when the product is shipped and title passes to the buyer.  There are no multi-deliverables or product warranties requiring accounting recognition.

Translation of Foreign Currency. The Company applies FASB No. 52, Foreign Currency Translation, for translating foreign currency into US dollars in our consolidation of the financial statements.  Upon consolidation of the Company’s foreign subsidiary into the Company’s consolidated financial statements, any balances with the subsidiary denominated in the foreign currency are translated at the exchange rate at year end. The financial statements of Lexon Semi have been translated based upon Korean Won as the functional currency.  Lexon Semi’s liabilities were translated using the exchange rate at period end and income and expense items were translated at the average exchange rate for the periods reported. The resulting translation adjustment was included in other comprehensive income (loss).

Cash and Cash Equivalents.  The Company considers all highly liquid investments with original maturity dates of three months or less when purchased to be cash equivalents.

Property and Equipment.  Property and equipment are stated at cost less accumulated depreciation and amortization. Additions and major renewals are capitalized. Repairs and maintenance are charged to expense as incurred. Upon disposal, the related cost and accumulated depreciation are removed from the accounts, with the resulting gain or loss included in operating income. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which range from three to forty years.

In accordance with Statement of Financial Accounting Standards No. 144, the Company records impairment of long-lived assets to be held and used or to be disposed of when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount.  

Investments. Investments in available-for-sale securities are being recorded in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities".  Equity securities that are not held principally for the purpose of selling in the near term are reported at fair market value with unrealized holding gains and losses excluded from earnings and reported as a separate component of stockholders' equity.  Investments in equities where the Company has the ability to exercise influence over the operations are accounted for using the equity method.
 
Intangible Assets.  Intangible assets such as cost of obtaining industrial rights and patents are stated at cost, net of amortization computed using the straight-line method over five to ten years.

Goodwill.  Beginning January 1, 2002, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets.  According to this statement, goodwill and other intangible assets are no longer subject to amortization, but instead must be reviewed annually for impairment by applying a fair value-based test.

Impairment of Long-lived Assets. The Company reviews long-lived assets to be held and used in operations for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may be impaired. An impairment loss is recognized when the estimated fair value of the assets is less than the carrying value of the assets.  The Company recognized no impairment during the three months ended March 31, 2009 and 2008.
 
F-10

LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited, continued)

Basic Earning (Loss) Per Share.  The computations of basic earning (loss) per share of common stock are based on the weighted average number of common shares outstanding during the each period of the consolidated financial statements.  Common stock equivalents, consisting of stock options and warrants, have not been included in the calculation as their effect is anti-dilutive for the periods presented.

Fair Value of Financial Instrument.  The estimated fair value of amounts reported in the consolidated financial statements have been determined using available market information and valuation methodologies, as applicable.  The carrying amount of cash and cash equivalents, accounts payable, and all other liabilities approximate their fair value because of their short term maturities at March 31, 2009 and December 31, 2008, unless otherwise stated.

Stock-Based Compensation. The Company accounts for share-based compensation in accordance with the fair value recognition provisions of SFAS No. 123(R), Share-based Payment , which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the consolidated financial statements based on their fair values. The fair value of stock options is calculated by using the Black-Scholes option pricing formula that requires estimates for expected volatility, expected dividends, the risk-free interest rate and the term of the option.  If any of the assumptions used in the Black-Scholes model change significantly, share-based compensation expense may differ materially in the future from that recorded in the current period.

Income Taxes. Income taxes are provided under the asset and liability method as required by SFAS No. 109, Accounting for Income Taxes . Under this method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. The effect of a tax rate change on deferred taxes is recognized in operations in the period that the change in the rate is enacted. Valuation allowances are established when necessary to reduce net deferred tax assets to the amount expected to be realized.
 
The Company adopted the provisions of Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (“FIN 48”) on January 1, 2007. At the adoption date and as of December 31, 2007, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. There was no expense related to interest and penalties for the three months ended March 31, 2009 and 2008.

Recent Accounting Pronouncements. In December 2007, the FASB issued SFAS No. 141R, “Business Combinations” (“SFAS 141R”). SFAS 141R amends the requirements for accounting for business combinations.  SFAS 141R will be effective after the beginning of the first annual reporting period beginning on or after December 15, 2008.  The Company is currently evaluating the potential impact of the adoption of SFAS 141R on the Company’s consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (“SFAS 160”). This statement establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. Minority interests will be recharacterized as noncontrolling interests and classified as a component of shareholders’ equity separate from the parent’s equity. In addition, SFAS 160 establishes reporting requirements that provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. This statement is effective prospectively, except for certain retrospective disclosure requirements, for fiscal years beginning after December 15, 2008. Accordingly, the Company has adopted SFAS 160 as of January 1, 2009.

In May 2008, the FASB issued FASB Staff Position No. APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP APB 14-1”) which clarifies that convertible debt instruments that may be settled in cash or other assets upon conversion are not addressed by APB No. 14, “Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants.” Additionally, FSP APB 14-1 requires an entity to separately account for the liability and equity components of a convertible instrument to reflect an entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP APB 14-1 also expands the disclosure requirements regarding convertible debt instrument terms and how the instrument is reflected in an entity’s financial statements. FSP APB 14-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company is currently evaluating the potential impact of FSP APB14-1 on its consolidated financial statements.
 
F-11

LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited, continued)

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS 162”). SFAS 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles for nongovernmental entities. SFAS 162 will become effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.” The Company is currently evaluating the impact of SFAS 162.

In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments” (“FSP FAS 115-2/124-2”). FSP FAS 115-2/124-2 requires entities to separate any other-than-temporary impairment of a debt security into two components when there are credit related losses associated with the impaired debt security for which management asserts that it does not have the intent to sell the security, and it is more likely than not that it will not be required to sell the security before recovery of its cost basis. The amount of the other-than-temporary impairment related to a credit loss is recognized in earnings, and the amount of the other-than-temporary impairment related to other factors is recorded in other comprehensive loss. FSP FAS 115-2/124-2 is effective for periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. We expect the adoption of FSP FAS 115-2/124-2 will not have a material impact on our financial condition or results of operations.
 
On April 1, 2009, the FASB issued FSP No. FAS 141R-1, “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies” (“FSP FAS 141R-1”). Under FSP FAS 141R-1, assets and liabilities arising from contingencies in a business combination are to be recognized at fair value at the acquisition date if the acquisition-date fair value can be determined during the measurement period. In cases where acquisition-date fair values cannot be determined during the measurement period, an asset or liability shall be recognized at the acquisition date at amounts based on guidance in FASB Statement No. 5, “Accounting for Contingencies” and FASB Interpretation No. 14, “Reasonable Estimation of the Amount of a Loss” if certain other criteria are met. FSP FAS 141R-1 also expands the disclosure requirements of Statement 141R to provide additional information about business combination-related contingencies in footnotes describing business combinations. FSP FAS 141R-1 is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, which for us is our fiscal 2010. Thus, while adoption is not expected to materially impact our financial position, results of operations or cash flows directly when it becomes effective on July 4, 2009 (the beginning of our fiscal 2010), it may have a significant effect on the accounting for any acquisitions we make on, or subsequent to, that date.
 
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA and the SEC did not or are not believed by management to have a material impact on our company’s present or future consolidated financial statements.


As stated in Note 1, Lexon Semi, the Korean subsidiary, has ceased all operations in 2006.  Currently, the regulatory body in the Republic of Korea has disqualified the subsidiary from conducting further business.  Most of the assets of the subsidiary have been liquidated through a public auction to satisfy secured debt.

4. Property and Equipment

Property and equipment at March 31, 2009 and December 31, 2008 consists of the following:

     
(Unaudited)
          
     
March 31,
2009
    
December 31,
2008
    
                 
 
Computer and equipment
  
$
10,450
    
$
10,450
    
 
Furniture and fixture
    
4,287
      
4,287
    
       
14,737
      
14,737
    
 
Accumulated depreciation
    
(13,766
)
    
(13,725
)
  
                     
 
Net property and equipment
  
$
971
    
$
1,012
    

Depreciation expense for the three months ended March 31, 2009 and 2008 was $41 and $266, respectively.
 
F-12
 
LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited, continued)

5. Investment

In 2003, the Company’s subsidiary in Korea, Lexon Semi, invested $125,967 in a 10% voting stock of Mirae Sojae Company, a Korean entity.  The investment was recorded under the cost method.  The fair value of this investment as of December 31, 2007 was $104,189.  During 2008, Mirae Sojae Company ceased to operate as a viable company, and the investment was written off in 2008.

6. Due to Related Parties

The Company has not been able to pay compensation to its officers on time, and has accrued its past-due compensations.  During 2007, $888,000 was waived by the former officers. The Company recorded this waived amount as gain on debt cancellation for the year ended December 31, 2007.  As of March 31, 2009 and December 31, 2008, the balance of the past-due compensation was $847,014 and $838,014, respectively.

In addition, the Company has loans payable to officers, directors and shareholders of the Company and other related individuals.   These amounts are non-interest bearing and payable on demand.  As of March 31, 2009 and December 31, 2008, the balance of theses loans was $368,020 and $390,507, respectively.

Also, there are interest bearing notes payable to related parties at March 31, 2009 and December 31, 2008 consisting of the following:
 
     
(Unaudited)
          
     
March 31,
2009
    
December 31,
2008
    
                 
 
Unsecured note payable to a shareholder, with interest at 7.5% per annum. Note is in default and is payable on demand.
  
$
5,000
    
$
5,000
    
                     
 
Expired convertible debt issued to a former employee, with interest at 7.5% per annum. The conversion maturity date was in October 2004.  The note is payable on demand.
    
30,000
      
30,000
    
                     
 
Expired convertible debt issued to a Director, with interest at 7.5% per annum. The conversion maturity date was in October 2005.  The note is payable on demand.
    
56,960
      
56,960
    
                     
 
Total notes payable
  
$
91,960
    
$
91,960
    


F-13

LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited, continued)

7. Notes Payable

Notes payable at March 31, 2009 and December 31, 2008 consisted of the following:


     
(Unaudited)
          
     
March 31,
2009
    
December 31,
2008
    
                 
 
Unsecured note payable to an unrelated individual, with interest at 7.5% per annum. The note is in default and is payable on demand.
  
$
20,000
    
$
20,000
    
                     
 
Unsecured note payable to an unrelated party, with interest at 7.5% per annum. As disclosed in Note 8, the creditor has filed suit to collect on this note.
    
149,982
      
149,982
    
                     
 
Total notes payable
  
$
169,982
    
$
169,982
    

8. Commitments and Contingencies

Contingent liabilities

The Company has contingent liabilities of $274,610 to various creditors of a predecessor company. Management determined that it is reasonably certain that the amount will be paid in future.

Legal Proceedings

On July 14, 2008, Advanced Digital Technology Co., Ltd., a Korea corporation (“ADT”) filed a claim against us as well as the other names parties whom are former and current officers of the Company, alleging breach of contract relating to an agreement to settle an earlier dispute involving the investment by ADT in Lexon and its subsequent unilateral decision to rescind the investment and calling for a refund of the partial investment made in Lexon.  The total amount of damages claimed under the pending lawsuit is $150,000 plus filing costs, interest and attorney fees for an aggregate amount of $178,522.

On September 5, 2008, Vivien and David Bollenberg, a current shareholder (the “Bollenbergs”), filed a claim against us and other third parties, including Byung Hwee Hwang (aka Ben Hwang) involved in the alleged fraudulent transaction.  The lawsuit is currently pending in the Orange County Superior Court in Santa Ana, California.  The filed complaint alleges that Ben Hwang together with his representatives, including his accountant, escrow agent and real estate agent/ broker, made certain representations to and solicited the Bollenbergs to make an investment in several companies and ventures including the Company with the intent to misappropriate the solicited funds for personal use.  The Bollenbergs allegedly invested a total of $1,500,000 among and between the various companies and ventures through Ben Hwang, of which investment amount approximately $550,000 was invested in Lexon ($150,000 for 600,000 shares at $0.25 per share and $400,000 initially invested in Lexon Korea and later converted into 1,150,000 shares in Lexon for a total of 1,750,000 shares in Lexon).  The outcome of this case is uncertain at this time.

F-14

LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited, continued)

 
Significant components of deferred tax assets are as follows:
 
   
(Unaudited)
      
   
March 31,
2009
  
December 31,
2008
  
           
Loss carry forwards
  
$
1,355,350
  
$
1,352,904
  
Intangible assets
  
793,265
  
793,265
  
Other
  
233,575
  
229,720
  
Total deferred tax asset
  
2,382,190
  
2,375,889
  
           
Valuation allowance
  
(2,382,190
)
(2,375,889
)
Total deferred tax asset, net
  
$
-
    
-
  
 

The following table accounts for the differences between the expected federal tax benefit (based on the statutory U.S. federal income tax rate of 34%) and the actual tax provision:
 
     
(Unaudited)
Three Months Ended March 31,
    
     
2009
    
2008
    
                 
 
Expected federal tax benefit
     34 %     34 %  
                     
 
State tax expense, net of expected federal tax benefit
     9 %     9 %  
 
Foreign loss not subject to U.S. federal income tax
     0 %     0 %  
 
Other
     0 %     0 %  
 
Increase (decrease) in valuation allowance
     (43 )%     (43 %  
                     
 
Total tax provision
     0 %     0 %  
 
As of March 31, the Company had approximately $3,411,000 of net operating loss (“NOL”) carryforwards for U.S. federal income tax purposes expiring in 2019 through 2028. In addition, the Company has California state NOL carryforwards of approximately $2,212,000 expiring in 2012 through 2018.

The ability to realize the tax benefits associated with deferred tax assets, which includes benefits related to NOL’s, is principally dependent upon the Company’s ability to generate future taxable income from operations.  The Company has provided a full valuation allowance for its net deferred tax assets due to the Company’s net operating losses.  The valuation allowance has increased by $6,301 during the three months ended March 31, 2009.

Section 382 of the Internal Revenue Code (“IRC”) imposes limitations on the use of NOL’s and credits following changes in ownership as defined in the IRC. The limitation could reduce the amount of benefits that would be available to offset future taxable income each year, starting with the year of an ownership change.

F-15
 
LEXON TECHNOLOGIES, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited, continued)

10. Stock Option Plan

The Company accounts for its stock options in accordance with SFAS 123(R) "Accounting for Stock - Based Compensation" and SFAS 148 "Accounting for Stock - Based compensation - Transition and Disclosure." Value of options granted has been estimated by the Black Scholes option pricing model. The assumptions are evaluated annually and revised as necessary to reflect market conditions and additional experience.

On September 14, 2000, the Company adopted a Non-Qualified Stock Option Plan (the "2000 Plan") under which options to acquire common stock of the Company may be granted to employees and consultants of the Company or its subsidiaries.  Under this Plan, a total of 250,000 (post-split) shares of options, subject to certain restrictions, are authorized to be granted. The exercise price of each option is determined by the Board of Directors on the date of grant.  The Board also determines the term, restrictions on vesting and exercise dates with expected life of the option term not exceeding 5 years.

There were no stock options granted during the three months ended March 31, 2009 and 2008.

 
F-16
 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this Report.

Cautionary Statement Regarding Forward-looking Statements

This report may contain “forward-looking” statements. Examples of forward-looking statements include, but are not limited to: (a) projections of revenues, capital expenditures, growth, prospects, dividends, capital structure and other financial matters; (b) statements of plans and objectives of our management or Board of Directors; (c) statements of future economic performance; (d) statements of assumptions underlying other statements and statements about us and our business relating to the future; and (e) any statements using the words “anticipate,” “expect,” “may,” “project,” “intend” or similar expressions.

Overview

Effective December 8, 2004, we acquired a majority control (90.16%) of Techone Company, Ltd., a Republic of South Korea corporation (“Techone” ), through an investment of $1,585,000 financed through the sale of our restricted common stock to two accredited investors. During February 2006, the Company changed the name of Techone to Lexon Semiconductor Corporation (“Lexon Semi”). Lexon Semi is a corporation that manufactures and sells Low Temperature Cofired Ceramic (LTCC) components. The Company has operated Lexon Semi as a majority-owned subsidiary and the business of Lexon Semi has been the operating business of the Company.

To date, our source of liquidity has been proceeds from the sale of our common stock, and the issuance of convertible notes and promissory notes to finance operations and business activities. In each year we incurred significant losses which evidently resulted in the suspension of the business operations of Lexon Semi as of July 2006.

Due to our sole reliance on debt and equity financing to fund our operations to date, we have incurred a loss and decided to shift our primary focus to seeking joint venture partners, business acquisitions and business alliances in an effort to commence business operations outside the LTCC-related market, although we have not reached any definitive agreements to date.

Our consolidated financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America and have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.

Results of Operation for Three Months Ended March 31, 2009 as Compared to Three Months Ended March 31, 2008

You should read the selected financial data set forth below along with out discussion of our plan of operation and our financial statements and the related notes. We have derived the financial data from our unaudited financial statements. We believe the financial data shown in the table below include all adjustments consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of such information. Operating results for the period are not necessarily indicative of the results that may be expected in the future.
 
   
Three Months 
Ended
March 31, 2009
    
Three Months  Ended
March 31, 2008
    
Percentage
Change
    
   
(Unaudited)
    
(Unaudited)
          
Revenue     $ -     $ -     $ -    
                           
Operating expenses          11,429       22,570       49.4 %  
                           
Net (loss)    $ (14,710 )    $ (24,664 )      $  40.4 %  
                           
Net (loss) per share    $ (.000 )     $  (.001 )    $ 100 %  
 
 
3
 
Revenues.

There were no revenues from operations for the three months ended March 31, 2009 and 2008.

Operating Expenses.

Operating expenses decreased by $11,141 to $11,429 for the three months ended March 31, 2008 as compared to $22,570 for the three months ended March 31, 2008.

Operating expenses for the three months ended March 31, 2009 were $11,429 in selling, general and administrative expenses. Operating expenses for the prior year period were $22,570, consisting of $22,304 in selling, general and administrative expenses, and $266 in depreciation and amortization. The decrease in operating expenses is due to the suspension of the business operations of the Company since July 2006 and our continued efforts to reduce expenses due to limited resources.

Operating expenses since inception (July 18, 2001) total $3,798,113.  Our net earnings per share for the three months ended March 31, 2009 was zero, based on a weighted average of 34,183,778 shares outstanding.

Other Expense.

Other expense for the three months ended March 31, 2009 consisted of $3,281 all in interest expense.  Other expense for the prior year period totaled $2,094 also in interest expense.

Liquidity and Capital Resources.

At March 31, 2009, we had current assets of $971 and current liabilities of $1,912,200 for negative working capital of $1,911,229.  Current assets consisted entirely of property and equipment.

At March 31, 2009, we had property and equipment, net totaling $971, consisting of computer and equipment, furniture and fixtures in the aggregate amount of $14,737 less the accumulated depreciation of $13,766.  

Current liabilities at March 31, 2009, consisted of accounts payable of $27,408, accounts payable due to related parties of $1,306,994, accrued expenses of $52,556, notes payable of $169,982, and liabilities related to discontinued operations of $335,260. We also had contingent liabilities of $274,610, including accrued payables to creditors.

For the three months ended March 31, 2009, net cash used in operating activities totaled $3,727 compared to net cash used in operating activities of $60,797 in the prior year period. Our operating activities since inception have been funded primarily by the sale of our common stock and the issuance of convertible notes and promissory notes.

There were no net cash used in investing activities for the three months ended March 31, 2009 and the same previous year period.   

There was no net cash provided by financing activities for the three months ended March 31, 2009. In the prior year period, net cash provided by financing activities totaled $15,720 in proceeds from notes payable.

To date, our primary source of liquidity has been proceeds from the sale of our common stock and notes payable to finance operations and business activities. In each year we incurred significant recurring losses which have resulted in an accumulated deficit of $5,027,642, and a working capital deficit of approximately $1,912,000, as of March 31, 2009.  Accordingly, our financial statements include a going concern qualification raising substantial doubt about Lexon’s ability to continue as a going concern. Our management hopes to be able to find additional sources of funding and/or a possible business opportunity in order to commence revenue producing business operations during fiscal year 2010. No definitive terms or agreements for funding or a business combination have been reached at the date of this Report.

Off-Balance Sheet Arrangements.

None.


We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

4

ITEM 4. CONTROLS AND PROCEDURES

Our Chief Executive Officer, President, and Chief Financial Officer (the “Certifying Officer”) is responsible for establishing and maintaining disclosure controls and procedures for the Company.  The Certifying Officer has designed such disclosure controls and procedures to ensure that material information is made known to them, particularly during the period in which this report was prepared.  The Certifying Officer has evaluated the effectiveness of the Company's disclosure controls and procedures within 90 days of the date of this report and believes that the Company’s disclosure controls and procedures are effective based on the required evaluation.  There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

ITEM 4T. CONTROLS AND PROCEDURES

We are smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

To the best knowledge of management, there are two pending legal proceedings against us.

On July 14, 2008, Advanced Digital Technology Co., Ltd., a Korea corporation (“ADT”) filed a claim against us as well as the other names parties whom are former and current officers of the Company, alleging breach of contract relating to an agreement to settle an earlier dispute involving the investment by ADT in Lexon and its subsequent unilateral decision to rescind the investment and calling for a refund of the partial investment made in Lexon. The investment was made by ADT on or about January 16, 2007. The total amount of damages claimed under the pending lawsuit is $150,000 plus filing costs, interest and attorney fees for an aggregate amount of $178,522.05.

On September 5, 2008, Vivien and David Bollenberg, a current shareholder (the “Bollenbergs”), filed a claim against us and other third parties, including Byung Hwee Hwang (aka Ben Hwang) and other financial agents and institutions involved in the alleged fraudulent transaction. The lawsuit is currently pending in the Orange County Superior Court in Santa Ana, California. The filed complaint alleges that Ben Hwang together with his representatives, including his accountant, escrow agent and real estate agent/ broker, made certain representations to and solicited the Bollenbergs to make an investment in several companies and ventures including Lexon with the intent to misappropriate the solicited funds for personal use.  The Bollenbergs allegedly invested a total of $1,500,000 among and between the various companies and ventures through Ben Hwang, of which investment amount approximately $550,000 was invested in Lexon ($150,000 for 600,000 shares at $0.25 per share and $400,000 initially invested in Lexon Korea and later converted into 1,150,000 shares in Lexon for a total of 1,750,000 shares in Lexon).  The outcome of this case is uncertain at this time.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

None.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit 31.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934, RULES 13(A)-14 AND 15(D)-14, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

Exhibit 31.2 - CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934, RULES 13(A)-14 AND 15(D)-14, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

Exhibit 32 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.

5

SIGNATURES

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

Date: May 20, 2009

LEXON TECHNOLOGIES, INC.


/s/ Hyung Soon Lee                                                            
Hyung Soon Lee
Chief Executive Officer and Chief Financial Officer
 
6
 
 EX-31.1 2 lexon_10q-ex3101.htm CERITIFCATION lexon_10q-ex3101.htm
Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934,
RULES 13a-14 AND 15d-14
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Hyung Soon Lee, certify that:

1. I have reviewed this Report;

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of, and for, the periods presented in this Report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
 
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
 
(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
 
(d) disclosed in this Report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
 
(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
 
(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: May 20, 2009

 
/s/ Hyung Soon Lee                                                 
Chief Executive Officer and President
 EX-31.2 3 lexon_10q-ex3102.htm CERIFICATION lexon_10q-ex3102.htm
Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIALOFFICER
PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934,
RULES 13a-14 AND 15d-14
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Hyung Soon Lee, certify that:

1. I have reviewed this Report;

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of, and for, the periods presented in this Report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
 
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
 
(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
 
(d) disclosed in this Report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
 
(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
 
(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: May 20, 2009

/s/ Hyung Soon Lee                       
Chief Financial Officer
 EX-32 4 lexon_10q-ex0032.htm CERTIFICATION lexon_10q-ex0032.htm
Exhibit 32
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with the Quarterly Report of Lexon Technologies, Inc. (“Company”) on Form 10-Q for the period ended March 31, 2009, as filed with the Securities and Exchange Commission on the date hereof (“Report” ), I, Hyung Soon Lee, Principal Executive Officer and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.


Date: May 20, 2009

/s/ Hyung Soon Lee                          
Principal Executive Officer
Principal Financial Officer
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