10-Q

UNITED STATES
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 fiscal period ended: March 31, 2010

[ ] 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.)

14830 Desman Road	90638
(Address of principal executive offices)	(Zip Code)

Issuer's telephone number, including area code: (714) 522-0270

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 issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. [ ]

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

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 [ x ] No [ ]

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

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [ x ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [ x ]

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 14, 2010, Lexon had 515,289,722 shares of common stock, par value $0.001 outstanding.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS

	Page
Financial Statements:
Balance Sheets (unaudited)	3
Statements of Operations (unaudited)	5
Statements of Cash Flows (unaudited)	6
Notes to Financial Statements (unaudited)	8

LEXON TECHNOLOGIES, INC.

BALANCE SHEETS

ASSETS
		(Unaudited)
		March 31,		December 31,
		2010		2009
Current assets:
Cash and cash equivalents	$	16,506	$	61,661
Accounts receivable, net		558,644		468,821
Inventories		598,122		838,220
Other current assets		18,000		18,000
Total current assets		1,191,272		1,386,702
Due from related parties		160,000		190,000
Property and equipment, net		97,832		112,392
Other assets:
Intangibles, net of amortization		533,566		276,365
Security deposits		20,748		20,748
Goodwill		3,214,289		3,214,289
Total other assets		3,768,603		3,511,402
Total Assets	$	5,217,707	$	5,200,496

The accompanying notes are an integral part of the unaudited financial statements.

LEXON TECHNOLOGIES, INC.

BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS’ EQUITY
		(Unaudited)
		March 31,			December 31,
		2010			2009
Current liabilities:
Accounts payable	$	485,357		$	552,634
Due to related parties		91,960			91,960
Line of credit		450,000			450,000
Current portion of notes payable		250,673			249,534
Current portion of capital lease obligations		20,116			21,888
Accrued expenses		164,058			110,747
Total current liabilities		1,462,164			1,476,763
Contingent liabilities		-			274,610
Long-term liabilities:
Notes payable, net of current portion		78,267			99,460
Capital lease obligations, net of current portion		23,173			28,561
Deferred rent		48,140			53,398
Total long-term liabilities		149,580			181,419
Total liabilities		1,611,744			1,932,792
Stockholders’ equity:
Common stock - $0.001 par value;             2,000,000,000 shares authorized,             510,289,721 and 499,739,721 shares issued and              outstanding as of March 31, 2010 and December 31, 2009, respectively		510,290			499,740
Additional paid-in capital		3,077,905			2,737,454
Stock subscription receivable		(100,000	)		(100,000	)
Retained earnings		117,768			130,510
Total stockholders’ equity		3,605,963			3,267,704
Total liabilities and stockholders’ equity	$	5,217,707		$	5,200,496

The accompanying notes are an integral part of the unaudited financial statements.

LEXON TECHNOLOGIES, INC.

STATEMENTS OF OPERATIONS

(Unaudited)

		For the Three Months Ended
		March 31,
		2010			2009
Net sales	$	1,330,281		$	1,463,752
Cost of goods sold		1,041,550			857,772
Gross profits		288,731			605,980
Selling, general and administrative expenses		551,120			304,282
Income (loss) from operations		(262,389	)		301,698
Other income (expenses):
Gain on forgiveness of debt		274,610			-
Interest expense		(16,963	)		(12,409	)
Net other income (expense)		257,647			(12,409	)
Income (loss) before income tax provision		(4,742	)		289,289
Provision for income taxes		-			-
Net income (loss)	$	(4,742	)	$	289,289
Earnings per share of Common Stock – Basic		(0.00	)		0.00
Earnings per share of Common Stock – Diluted		(0.00	)		0.00
Weighted average shares of Common Stock outstanding		539,876,930			150,290,683

The accompanying notes are an integral part of the unaudited financial statements.

LEXON TECHNOLOGIES, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)

		For the Three Months Ended
		March 31,
		2010			2009
Cash flows from operating activities:
Net income (loss)	$	(4,742	)	$	289,289
Adjustments to reconcile net income (loss)              to net cash provided by (used in) operating activities:
Depreciation and amortization		67,359			25,898
Gain on forgiveness of debt		(274,610	)		-
Noncash professional service		30,000			-
Changes in assets and liabilities:
Accounts receivable		(89,823	)		(188,541	)
Inventories		240,098			(115,430	)
Other assets		-			147
Accounts payable		(67,277	)		29,126
Accrued expenses		53,311			(4,407	)
Deferred rent		(5,258	)		117
Total adjustments		(46,200	)		(253,090	)
Net cash provided by (used in) operating activities		(50,942	)		36,199
Cash flows from investing activities:
Due from related parties		30,000			(21,650	)
Net cash provided by (used in) investing activities		30,000			(21,650	)
Cash flows from financing activities:
Payments on notes payable		(20,053	)		(23,791	)
Payments on capital lease obligations		(7,160	)		(7,205	)
Issuance of common stock		11,000			-
Distributions to stockholder		(8,000	)		(13,500	)
Net cash used in financing activities		(24,213	)		(44,496	)
Net decrease in cash		(45,155	)		(29,947	)
Cash and cash equivalents, at beginning of period		61,661			80,263
Cash and cash equivalents, at end of period	$	16,506		$	50,316

The accompanying notes are an integral part of the unaudited financial statements.

LEXON TECHNOLOGIES, INC.

STATEMENTS OF CASH FLOWS

		For the Three Months Ended
		March 31,
		2010		2009
Supplemental disclosures:
Cash paid during the period:
Income taxes	$	-	$	-
Interest expense	$	12,051	$	12,409
Noncash investing and financing activities:
Common stock issued for acquisition of intangibles	$	310,000	$	-

The accompanying notes are an integral part of the unaudited financial statements.

LEXON TECHNOLOGIES, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 1 - Nature of Business

Lexon Technologies, Inc. ("the Company" or "Lexon") was incorporated in April 1989 under the laws of state of Delaware, and owned 90.16% of Lexon Semiconductor Corporation ("Lexon Semi" or formerly known as Techone Co., Ltd ("Techone")) which had developed and manufactured 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.

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%.

On October 7, 2009, Paragon Toner, Inc. (Paragon), a California corporation, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with the Company whereby the Company issued 347,448,444 shares of common stock (the “Common Stock”) of the Company (the “Acquisition Shares”) to the shareholders of Paragon, representing approximately 72% of the issued and outstanding Common Stock after completion of the merger in October 2009. The effective date of the Merger was October 22, 2009 (“Effective Date”). The Company has decided to maintain the name of the predecessor company. The Merger has been accounted for as a recapitalization of Paragon with Paragon as the acquirer (reverse merger).

Shortly after the Merger, Lexon Semi was dissolved. The Company’s sole line of business is now in manufacturing, marketing and selling of recycled monochrome and color toner cartridges for laser printers and other related devices.

Note 2 - Summary of Significant Accounting Policies

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, who is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

LEXON TECHNOLOGIES, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are primarily used for depreciation of property and equipment, amortization of intangible assets, allowances for doubtful accounts and inventory valuation. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenues from product sales when earned. Specifically, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred (or services have been rendered), the price is fixed or determinable, and collectability is reasonably assured. Revenue is not recognized until title and risk of loss have transferred to the customer. The shipping terms for the majority of the Company’s revenue arrangements are FOB (free on board) destination. Revenue is recorded net of customer returns, allowances and discounts that occur under arrangements established with customers.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be categorized as cash and cash equivalents.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is computed based upon the management’s estimate of uncollectible accounts and historical experience. The Company performs ongoing credit evaluations of its customers to estimate potential credit losses. Amounts are written off against the allowance in the period the Company determines that the receivable is uncollectible.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out (FIFO) method. Appropriate consideration is given to obsolescence, slow moving items and other factors in evaluating net realizable value.

Property and Equipment

Property and equipment are stated at cost. The straight-line method is used to calculate depreciation over their estimated useful lives ranging as follows:

Automobile	3 years
Furniture & fixture	5 to 7 years
Leasehold improvement	5 years
Machinery and equipment	5 years

Leasehold improvements are depreciated to expense over the shorter of the life of the improvement or the remaining lease term. Capital expenditures that enhance the value or materially extend the useful life of the related assets are reflected as additions to property and equipment. Expenditures for repairs and maintenance are charged to expense as incurred. Upon a sale or disposition of assets, a gain or a loss is included in the statement of operations.

LEXON TECHNOLOGIES, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Impairment of Long-lived Assets

The Company periodically reviews the recoverability of its long-lived assets using the methodology prescribed in accounting guidance now codified as FASB ASC Topic 360, “Property, Plant and Equipment.” The Company also reviews these assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted future net cash flows from the operations to which the assets relate, based on management’s best estimates using appropriate assumptions and projections at the time, to the carrying amount of the assets. If the carrying value is determined not to be recoverable from future operating cash flows, the asset is deemed impaired and an impairment loss is recognized equal to the amount by which the carrying amount exceeds the estimated fair value of the asset. In management’s opinion, no such impairment existed as of March 31, 2010 and December 31, 2009.

Accrued Expenses

The Company’s accrued expenses consist of amounts payable for salaries, payroll taxes and sales taxes.

Deferred Rent

The Company recognizes rent expense equal to the total of the payments and free rent received due over the lease term, divided by the number of months of the lease term applying the straight-line method. The difference between rent expense recorded and the amount paid is credited or charged to deferred rent.

Shipping and Handling

Certain shipping and handling fees are charged to customers and these are classified as revenue. The costs associated with all shipping to customers are recorded as operating expenses. Shipping expenses for the three months ended March 31, 2010 and 2009 amounted to $44,363 and $43,630, respectively.

Income Taxes

The Company elected to be subject to the S corporation provisions of the Internal Revenue Code for federal and state income tax purposes effective January 27, 2004. Accordingly, as an S corporation, the Company’s taxable income or losses and applicable tax credits are passed through to its shareholder and reported on shareholder’s individual income tax return. However, the State of California requires S Corporation to pay a state franchise tax (currently 1.5% on its taxable income).

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162 (“Statement No. 168”). This Statement establishes the FASB Accounting Standards Codification (the “Codification” or “ASC”) as the single source of authoritative GAAP. All previous GAAP standards have been superseded by the Codification. Rules and interpretive releases of the U.S. Securities and Exchange Commission (the “SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants, and the Codification neither replaces nor affects that guidance. Statement No. 168 is effective for interim and annual financial statements issued for periods ending after September 15, 2009, and references to GAAP in this report have been updated as a result. Subsequent changes to GAAP will be incorporated into the Codification through the issuance of Accounting Standards Updates (“ASU”) rather than FASB Statements, Staff Positions, Interpretations or Emerging Issues Task Force (“EITF”) Abstracts. The adoption of Statement No. 168 did not impact the Company’s financial condition, results of operations or cash flows.

In August 2009, the FASB issued Accounting Standards Update (ASU) 2009-05, Fair Value Measurements and Disclosures (Topic 820) – Measuring Liabilities at Fair Value. ASU 2009-05 provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value of such liability using one or more of the techniques prescribed by the update. The adoption of this guidance is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

LEXON TECHNOLOGIES, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

In April 2008, the FASB issued staff position FSP FAS 142-3 (FSP 142-3), "Determination of the Useful Life of Intangible Assets", and has subsequently been codified under FASB ASC 350-30-35, "Determining the Useful Life of an Intangible Asset" and is hereon referred to as ASC 350-30-35, amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The intent of ASC 350-30-35 is to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset as outlined by the U.S. generally accepted accounting principles (GAAP). ASC 350-30-35 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years and should be applied prospectively to intangible assets acquired after the effective date. Early adoption is prohibited. The Company does not expect this to have an impact on its results of operations, financial position or cash flows at the date of adoption, but it could have a material impact on its results of operations, financial position or cash flows in future periods.

“Business Combinations" (ASC 805) (formerly SFAS No. 141 and its revision 141(R)) changes how business acquisitions are accounted for and will impact financial statements both on the acquisition date and in subsequent periods. ASC 805 as it relates to recognizing all (and only) the assets acquired and liabilities assumed in a business combination, costs an acquirer expects but it not obligated to incur in the future to exit an activity of an acquiree or to terminate or relocate an acquiree's employees are not liabilities at the acquisition date but must be expensed in accordance with other applicable generally accepted accounting principles. Additionally, during the measurement period, which should not exceed one year from the acquisition date, any adjustments that are needed to assets acquired and liabilities assumed to reflect new information obtained about facts and circumstances that existed as of that date will be adjusted retrospectively. The acquirer will be required to expense all acquisition-related costs in the periods such costs are incurred other than costs to issue debt or equity securities. ASC 805 will have no impact on the Company’s results of operations, financial position or cash flows at the date of adoption, but it could have a material impact on the Company’s results of operations, financial position or cash flows in the future when it is applied to acquisitions which occur in the fiscal year beginning after November 1, 2009.

In April 2009, the FASB issued new guidance codified primarily in ASC Topic 825, “Financial Instruments.” This guidance requires an entity to provide disclosures about fair value of financial instruments in interim financial information and is to be applied prospectively and is effective for interim and annual periods ending after June 15, 2009 with early adoption permitted for periods ending after March 15, 2009. The adoption of this guidance did not have a material impact on the consolidated financial statements. Refer to Note 5, “Fair Value of Financial Instruments,” for the disclosures required in accordance with this guidance.

In May 2009, the FASB issued authoritative guidance establishing general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. This guidance, which was incorporated into ASC Topic 855, "Subsequent Events", was effective for interim or annual periods ended after June 15, 2009, and the adoption did not have any impact on the Company's financial statements.

Note 3 - Merger

On October 7, 2009, Paragon Toner, Inc. (Paragon), a California corporation, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with the Company whereby the Company issued 347,448,444 shares of common stock (the “Common Stock”) of the Company (the “Acquisition Shares”) to the shareholders of Paragon, representing approximately 72% of the issued and outstanding Common Stock after completion of the merger in October 2009. The effective date of the Merger was October 22, 2009 (“Effective Date”). The Company has decided to maintain the name of the predecessor company. The Merger has been accounted for as a recapitalization of Paragon with Paragon as the acquirer (reverse merger).

LEXON TECHNOLOGIES, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 4 - Inventories

The following table provides the components of inventories as of March 31, 2010 and December 31, 2009:

		March 31,			December 31,
		2010			2009
Finished goods	$	281,647		$	582,603
Raw materials		351,461			290,603
		633,108			873,206
Less: inventory reserve		(34,986	)		(34,986	)
Total	$	598,122		$	838,220

Overhead allocated to the inventory amounted to $8,667 and $9,041 for the three months ended March 31, 2010 and 2009, respectively.

Note 5 - Property and Equipment

Property and equipment consist of the following as of March 31, 2010 and December 31, 2009:

		March 31,			December 31,
		2010			2009
Automobile	$	34,092		$	34,092
Furniture and fixture		53,388			53,388
Leasehold improvement		5,060			5,060
Machinery and equipment		439,030			439,030
		531,570			531,570
Less: Accumulated depreciation		(433,738	)		(419,178	)
Net property and equipment	$	97,832		$	112,392

Depreciation expense amounted to $14,560 and $22,016 for the three months ended March 31, 2010 and 2009, respectively.

LEXON TECHNOLOGIES, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 6 - Transactions with Related Parties

Due from related parties

Advances to family members of the stockholder are unsecured, non-interest bearing and due on demand. The Company has $160,000 and $190,000 due from related parties as of March 31, 2010 and December 31, 2009, respectively.

Due to related parties

Interest bearing notes payable to related parties consisting of the following as of March 31, 2010 and December 31, 2009:

		March 31,		December 31,
		2010		2009
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

Note 7 - Line of Credit

The Company has a line of credit with a bank with a maximum borrowing limit of $450,000. The outstanding balance was $450,000 as of both March 31, 2010 and December 31, 2009. This line of credit matures on June 7, 2010 and is secured by the Company’s accounts receivable, inventory and other miscellaneous assets. Interest is accrued at the bank’s prime plus 1.00% (5.50% as of March 31, 2010).

The Company incurred interest expenses on this line of credit of $6,122 and $6,844 for the three months ended March 31, 2010 and 2009, respectively.

LEXON TECHNOLOGIES, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 8 - Notes Payable

The Company has long term notes payable as follows:

		March 31,			December 31,
		2010			2009
A note payable to a bank, due in monthly installments of $2,931, including interest at the bank’s prime plus 1.25% (4.50% as of March 31, 2010). The note matures in May 2011, and is collateralized by substantially all the assets of the Company. The note is subject to various restrictive covenants, including maintenance of financial ratios at all times.	$	39,882		$	48,162
A note payable to a bank, due in monthly installments of $4,587, including interest at the bank’s prime plus 1.50% with minimum interest rate of 6.25% (6.25% as of March 31, 2010). The note matures in January 2012, and is collateralized by substantially all the assets of the Company.		119,076			130,850
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 11, the creditor has filed suit to collect on this note.		149,982			149,982
Total notes payable		328,940			348,994
Less: Current portion		(250,673	)		(249,534	)
Notes payable, net of current	$	78,267		$	99,460

Maturities of notes payable as of March 31, 2010 are as follows:

Years ending December 31,		Amount
2010	$	229,480
2011		66,567
2012		32,893
Total	$	328,940

Total interest expense on the notes payable were $5,686 and $1,853 for the three months ended March 31, 2010 and 2009, respectively.

LEXON TECHNOLOGIES, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 9 - Capital Lease Obligations

The Company entered into numerous capital lease agreements with leasing companies to purchase certain equipment and transportation vehicles. As of March 31, 2010 and December 31, 2009, these assets are carried as follows:

		March 31,			December 31,
		2010			2009
Equipment	$	162,889		$	162,889
Transportation vehicles		32,800			32,800
Less: Accumulated depreciation		(182,317	)		(179,643	)
	$	13,372		$	16,046

The related future minimum lease payments under the capital lease obligations are as follows:

		March 31,			December 31,
		2010			2009
Total minimum lease payments	$	53,275		$	62,752
Less: Amount representing interest		(9,986	)		(12,303	)
Present value of net minimum lease payments		43,289			50,449
Less: Current portion		(20,116	)		(21,888	)
Capital lease obligations, net of current portion	$	23,173		$	28,561

Maturities of capital lease obligations as of March 31, 2010, are as follows:

Years ending December 31,		Amount
2010	$	14,728
2011		20,447
2012		8,114
Total	$	43,289

Total interest expenses from the capital lease obligations were $3,431 and $3,712 for the three months ended March 31, 2010 and 2009, respectively.

Note 10 - Capitalized Website Costs

The Company amortizes its website over the estimated useful life of three years. Amortizable intangible assets are tested for impairment when impairment indicators are present, and, if impaired, written down to fair value based on either discounted cash flows or appraised values. No impairment of website costs has been identified during the periods presented. The carrying amount and accumulated amortization related to the website costs as of March 31, 2010 and December 31, 2009, are as follows:

		March 31,			December 31,
		2010			2009
Gross balance	$	633,589		$	323,589
Less: Accumulated amortization		(100,023	)		(47,224	)
Net balance	$	533,566		$	276,365

LEXON TECHNOLOGIES, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Estimated aggregate amortization expense for each of the succeeding years is as follows:

Years ending December 31,		Amount
2010	$	157,622
2011		195,667
2012		180,277
Total	$	533,566

Total amortization expenses were $52,799 and $3,882 for the three months ended March 31, 2010 and 2009, respectively.

Note 11 - Commitments and Contingencies

Legal Proceedings

On July 14, 2008, Advanced Digital Technology Co. Ltd., a Korean corporation (“ADT”), filed a claim against Lexon and certain named individuals who are former and current officers of the Company. The claim alleges breach of an agreement to settle an earlier dispute, involving ADT's investment of $150,000 in Lexon on or about January 16, 2007 and ADT's subsequent unilateral decision to rescind and demand a refund of this investment. The total amount of damages claimed under the pending lawsuit is the investment amount of $150,000 plus filing costs, interest and attorney fees for an aggregate amount of $178,522. On or about May 2, 2009, Lexon became aware of a default judgment entered in the amount above. Such judgment was entered on December 22, 2009. On or about May 8, 2009, Lexon has retained the law firm of Smith, Chapman & Campbell for the purpose of setting aside the default judgment as the Company was never in receipt of the notice of default entry. On or about July 21, 2009, the court set aside the default as the court agreed that service was never properly served.

On September 5, 2008, Vivien and David Bollenberg, a current shareholder (the “Bollenbergs”), filed a claim against Lexon and other third parties, including Byung Hwee Hwang (also referred to as "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 allege that they invested a total of $1,500,000 among and between the various companies and ventures recommended by 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 final disposition of this case has not yet been resolved.

Operating lease

The Company leases its warehouse and office from a non-affiliate. Future minimum rental payments under these leases as of March 31, 2010, are as follows:

Years ending December 31,		Amount
2010	$	205,246
2011		279,619
2012		23,301
Total	$	508,166

LEXON TECHNOLOGIES, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Rent expenses amounted to $56,782 and $62,731 for the three months ended March 31, 2010 and 2009, respectively. The Company allocated $52,700 and $58,495 of rent expenses to cost of goods sold for the three months ended March 31, 2010 and 2009, respectively.

Note 12 - Dissolution of Subsidiary

As discussed in Note 1, on October 29, 2009, the subsidiary, Lexon Semiconductor Corporation was formally dissolved with the approval of the City of Pyongtaek in Korea. The subsidiary had been previously classified as a discontinued operation. With the dissolution, the Company recognized a forgiveness of debt totaling $418,970.

Note 13 - Distributions to Stockholder

Prior to the Merger described in Note 3, Paragon operated as a private S Corporation. As such, Paragon made periodic distribution to the sole stockholder at the time. Distributions paid to the stockholder aggregated $8,000 and $13,500 for the three months ended March 31, 2010 and 2009.

Note 14 - Income Taxes

Significant components of deferred tax assets are as follows:

		March 31,			December 31,
		2010			2009
Loss carry forwards	$	1,606,904		$	1,602,904
Other		229,720			229,720
Total deferred tax asset		1,836,624			1,832,624
Valuation allowance		(1,836,624	))		(1,832,624	)
Total deferred tax asset, net	$	-		$	-

As of March 31, 2010, the Company had approximately $4,100,000 of net operating loss (“NOL”) carryforwards for U.S. federal income tax purposes expiring in 2020 through 2030. In addition, the Company has California state NOL carryforwards of approximately $2,900,000 expiring in 2013 through 2020.

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 $4,000 during the three months ended March 31, 2010.

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.

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.

Results of Operation for the Three Months Ended March 31, 2010 as Compared to the Three Months Ended March 31, 2009

Revenues.

Revenues decreased by $133,471 to $1,330,281 for the three months ended March 31, 2010 as compared to $1,463,752 for the three months ended March 31, 2009. This decline was primarily attributed to a decrease in international sales.

Cost of Goods Sold.

Cost of Goods Sold increased by $183,778 to $1,041,550 for the three months ended March 31, 2010 as compared to $857,772 for the three months ended March 31, 2009.

Selling, General and Administrative Expenses.

Selling, General and Administrative Expenses (“SG&A”) increased by $246,838 to $551,120 for the three months ended March 31, 2010 as compared to $304,282 for the three months ended March 31, 2009. This increase of $246,838 in SG&A was attributed to professional services and filing expenses related to our public listing on the OTC Bulletin Board and increased sales and marketing efforts, including efforts to increase our Internet related direct sales.

Other Income and Expenses.

Other income for the three months ended March 31, 2010 consisted of $257,647 compared with other expenses of $12,409 for the three months ended March 31, 2009. The other income for the three months ended March 31, 2010 was primarily attributed to $274,610 in gains from the extinguishment of a debt obligation. Interest expenses for the three months ended March 31, 2010 was $16,963 compared to $12,409 in interest expenses for the three months ended March 31, 2010.

Net income.

As a result, we recorded a net loss of $4,742 for the three months ended March 31, 2010 compared with a net income of $289,289 for the three months ended March 31, 2009.

Liquidity and Capital Resources.

At March 31, 2010, we had current assets of $1,191,272 and current liabilities of $1,462,164. Current assets consisted primarily of accounts receivable and inventories.

Current liabilities at March 31, 2010, consisted of accounts payable of $485,357, accounts payable due to related parties of $91,960, credit line of $450,000, accrued expenses of $164,058, notes payable of $250,673 and capital lease obligations of $20,116.

For the three months ended March 31, 2010, net cash used in operating activities totaled $50,942 compared to net cash provided by operating activities of $36,199 in the prior year period. Our operating activities since inception have been funded primarily by income organically generated by the company and by the limited sale of our common stock.

Net cash provided by investing activities for the three months ended March 31, 2010 amounted to $30,000 compared to net cash used in investment activities of $21,650 for the same previous year period.

Net cash provided by financing activities for the three months ended March 31, 2010 was $24,213 compared to net cash provided of $44,496 for the three months ended March 31, 2009. This decrease in net cash provided by financing activities was largely attributed to $11,000 in issuance of common stock and a decline of $8,000 in distributions to shareholders.

Net cash and cash equivalents at March 31, 2010 was $16,506.

Off-Balance Sheet Arrangements.

None.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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.

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 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.

PART II

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 Korean corporation (“ADT”), filed a claim against Lexon and certain named individuals who are former and current officers of the Company. The claim alleges breach of an agreement to settle an earlier dispute, involving ADT's investment of $150,000 in Lexon on or about January 16, 2007 and ADT's subsequent unilateral decision to rescind and demand a refund of this investment. The total amount of damages claimed under the pending lawsuit is the investment amount of $150,000 plus filing costs, interest and attorney fees for an aggregate amount of $178,522. On or about May 2, 2009, Lexon became aware of a default judgment entered in the amount above. Such judgment was entered on December 22, 2009. On or about May 8, 2009, Lexon has retained the law firm of Smith, Chapman & Campbell for the purpose of setting aside the default judgment as the Company was never in receipt of the notice of default entry. On or about July 21, 2009, the court set aside the default as the court agreed that service was never properly served. We are currently in the discovery stage of the proceedings.

On September 5, 2008, Vivien and David Bollenberg, a current shareholder (the “Bollenbergs”), filed a claim against Lexon and other third parties, including Byung Hwee Hwang (also referred to as "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 allege that they invested a total of $1,500,000 among and between the various companies and ventures recommended by 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 final disposition of this case has not yet been resolved.

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

On November 3, 2009, 4,200,000 shares were issued to Fresh Cure Inc. in exchange for assets as per our 8k dated November 4, 2009.

On November 3, 2009, 2,500,000 shares were issued to Stacey Park for $50,000.00. Use of proceeds were for working capital purposes.

On November 9, 2009, 50,000 shares were issued to Todd W. Henreckson for $1,000.00. Use of proceeds were for working capital purposes.

On November 9, 2009, 12,500 shares were issued to Michael T. Henreckson for $250.00. Use of proceeds were for working capital purposes.

On November 9, 2009, 5,000 shares were issued to Sara L. Henreckson for $100.00. Use of proceeds were for working capital purposes.

On November 9, 2009, 5,000 shares were issued to Jonathan D. Henreckson for $100.00. Use of proceeds were for working capital purposes.

On November 9, 2009, 2,500 shares were issued to Rebecca M. Henreckson for $50.00. Use of proceeds were for working capital purposes.

On November 9, 2009, 50,000 shares were issued to Todd Henreckson for $1,000.00. Use of proceeds were for working capital purposes.

On November 10, 2009, 500,000 shares were issued to Paul N. Carson for $10,000.00. Use of proceeds were for working capital purposes.

On November 11, 2009, 100,000 shares were issued to Joshua Gluckman for $2,000.00. Use of proceeds were for working capital purposes.

On November 11, 2009, 200,000 shares were issued to Kimberly Yoshizawa for $4,000.00. Use of proceeds were for working capital purposes.

On November 12, 2009, 25,000 shares were issued to Winton Low for $500.00. Use of proceeds were for working capital purposes.

On November 13, 2009, 5,000,000 shares were issued to Peter Pak for $100,000.00. Use of proceeds were for working capital purposes.

On November 13, 2009, 50,000 shares were issued to Peter Park for $1,000.00. Use of proceeds were for working capital purposes.

On November 13, 2009, 2,500,000 shares were issued to Samuel Shim for $50,000.00. Use of proceeds were for working capital purposes.

On November 13, 2009, 1,500,000 shares were issued to Samuel Shim for $30,000.00. Use of proceeds were for working capital purposes.

On November 16, 2009, 50,000 shares were issued to The Wurtzer Trust for $100,000.00. Use of proceeds were for working capital purposes.

On November 16, 2009, 375,000 shares were issued to Ji Soon Lee for $7,500.00. Use of proceeds were for working capital purposes.

On November 16, 2009, 75,000 shares were issued to Sarah Kim for $1,500.00. Use of proceeds were for working capital purposes.

On November 20, 2009, 100,000 shares were issued to Carol Gluckman for $30,000.00. Use of proceeds were for working capital purposes.

On January 25, 2010, 5,000,000 shares were issued to Fresh Cure Inc. in exchange for assets as per our 8k dated January 28, 2010.

On February 3, 2010, 250,000 shares were issued to Juan Wozniak for $5,000.00. Use of proceeds were for working capital purposes.

On February 16, 2010, 300,000 shares were issued to Kyungwhan Doh for $6,000.00. Use of proceeds were for working capital purposes.

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.

SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LEXON TECHNOLOGIES, INC.
Date: May 14, 2010	By:	/s/ James Park
		James Park
		President, Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates stated.

EX-31.1

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, James Park, 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.

/s/ James Park
James Park
Chief Executive Officer
Date: May 14, 2010

EX-31.2

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, Bong S. Park, 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.

/s/ Bong S. Park
Bong S. Park
Chief Financial Officer
Date: May 14, 2010

EX-32.1

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. (the “Company”) on Form 10-Q for the period ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (“Report” ), I, James Park, Chief Executive Officer and I, Bong S. Park Chief 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.

/s/ James Park
James Park
Chief Executive Officer
Chief Financial Officer
Date: May 14, 2010

/s/ Bong S. Park
Bong S. Park
Chief Financial Officer
Date: May 14, 2010