Lexon Technologies Inc.: Form 10-Q - Filed by newsfilecorp.com

0001062993-11-002329.txt : 20110523 0001062993-11-002329.hdr.sgml : 20110523 20110523144247 ACCESSION NUMBER: 0001062993-11-002329 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20110331 FILED AS OF DATE: 20110523 DATE AS OF CHANGE: 20110523 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: 11864673 BUSINESS ADDRESS: STREET 1: 14830 DESMAN ROAD CITY: LA MIRADA STATE: CA ZIP: 90638 BUSINESS PHONE: 714-522-0260 MAIL ADDRESS: STREET 1: 14830 DESMAN ROAD CITY: LA MIRADA STATE: CA ZIP: 90638 FORMER COMPANY: FORMER CONFORMED NAME: REXFORD INC DATE OF NAME CHANGE: 19980630 10-Q 1 form10q.htm QUARTERLY REPORT FOR PERIOD ENDED MARCH 31, 2011 Lexon Technologies Inc.: Form 10-Q - Filed by newsfilecorp.com

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, 2011

[ ] 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 20, 2011, Lexon had 310,789,721 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,
		2011		2010
Current assets:
Cash and cash equivalents	$	-	$	10,218
Accounts receivable, net		-		276,764
Inventories		-		573,137
Other current assets		-		18,000
Total current assets		-		878,119
Due from related parties		-		138,000
Property and equipment, net		-		60,310
Other assets:
Intangibles, net of amortization		327,027		375,944
Security deposits		-		20,748
Goodwill		940,733		3,214,289
Total other assets		1,267,760		3,610,981
Total Assets	$	1,267,760	$	4,687,410

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,
		2011			2010
Current liabilities:
Bank overdraft	$	658		$	20,454
Accounts payable		26,844			616,637
Due to related parties		91,960			91,960
Line of credit		-			450,000
Current portion of notes payable		-			65,778
Current portion of capital lease obligations		-			20,447
Accrued expenses		77,400			317,694
Total current liabilities		196,862			1,582,970
Long-term liabilities:
Notes payable, net of current portion		-			31,203
Capital lease obligations, net of current portion		-			9,863
Settlement payable		206,548			206,548
Deferred rent		-			42,900
Total long-term liabilities		206,548			290,514
Total liabilities		403,410			1,873,484
Stockholders’ equity:
Common stock - $0.001 par value;
2,000,000,000 shares authorized,
310,789,721 and 510,789,721 shares issued and
outstanding as of March 31, 2011 and December 31, 2010, respectively		310,790			510,790
Additional paid-in capital		1,388,905			3,088,905
Stock subscription receivable		(100,000	)		(100,000	)
Retained earnings (accumulated deficit)		(735,345	)		(685,769	)
Total stockholders’ equity		864,350			2,813,926
Total liabilities and stockholders’ equity	$	1,267,760		$	4,687,410

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,
		2011			2010
Net sales	$	14,842		$	1,330,281
Cost of goods sold		-			1,041,550
Gross profits		14,842			288,731
Selling, general and administrative expenses		64,417			551,120
Income (loss) from operations		(49,575	)		(262,389	)
Other income (expenses):
Gain on forgiveness of debt		-			274,610
Interest expense		-			(16,963	)
Net other income (expense)		-			257,647
Income (loss) before income tax provision		(49,575	)		(4,742	)
Provision for income taxes		-			-
Net income (loss)	$	(49,575	)	$	(4,742	)
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		421,038,208			539,876,930

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,
		2011			2010
Cash flows from operating activities:
Net income (loss)	$	(49,575	)	$	(4,742	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		48,916			67,359
Gain on forgiveness of debt		-			(274,610	)
Noncash professional service		-			30,000
Changes in assets and liabilities:
Accounts receivable		276,764			(89,823	)
Security deposit		20,748
Goodwill		2,273,556
Inventories		573,137			240,098
Bank overdraft		(19,796	)		-
Accounts payable		(589,793	)		(67,277	)
Accrued expenses		(240,294	)		53,311
Deferred rent		(42,900	)		(5,258	)
Total adjustments		2,300,338			(46,200	)
Net cash provided by (used in) operating activities		2,250,763			(50,942	)
Cash flows from investing activities:
Property and equipment		60,310
Note receivable		18,000
Due from related parties		138,000			30,000
Net cash provided by (used in) investing activities		216,310			30,000
Cash flows from financing activities:
Payments on notes payable		(546,981	)		(20,053	)
Payments on capital lease obligations		(30,310	)		(7,160	)
Cancellation of common stock		(1,900,000	)
Issuance of common stock		-			11,000
Distributions to stockholder		-			(8,000	)
Net cash used in financing activities		(2,477,291	)		(24,213	)
Net decrease in cash		(10,218	)		(45,155	)
Cash and cash equivalents, at beginning of period		10,218			61,661
Cash and cash equivalents, at end of period	$	-		$	16,506

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,
		2011		2010
Supplemental disclosures:
Cash paid during the period:
Income taxes	$	-	$	-
Interest expense	$	-	$	12,051
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

ITEM 1. DESCRIPTION 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 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. The Company currently has no 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. Lexon Semi was dissolved on October 28, 2009 based on a decision of shareholders meeting. Lexon Semi has $241,000 of due to related party and $415,000 of liabilities relation to discontinued operations as of September 30,2009.

On October 7, 2009, Paragon Toner Inc, 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 We, representing approximately 67% 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”). We have decided to maintain the name of our predecessor company.

On December 31, 2010, all of the assets and all of the liabilities of the Paragon Toner Division of Lexon Technologies Inc. were exchanged for existing Lexon Technologies Inc. shares specifically 166,300,000 shares held by James Park and 66,700,000 shares held by Young Won.

The internet properties namely 7 inkjet.com, nanoinket.com and Yourcartridges.com remain with Lexon Technologies Inc., and is the main operation of the company. These companies generate revenue and potentially profits for the company. The revenues generated will maintain the company including the costs of remaining a public company.

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 generates revenues from the operation of the internet properties. The Company has subcontracted all of the operational activities of the Websites and has received 15% of all revenues generated from the Websites on a regular basis.

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, 2011 and December 31, 2010.

Goodwill - The Company accounts for intangible assets in accordance with the ASC 350, Intangibles - Goodwill and Other. ASC 350 requires that goodwill no longer be amortized, but instead be tested for impairment at least annually. Additionally, ASC 350 requires that recognized intangible assets be amortized over their respective estimated lives and reviewed for impairment in accordance with ASC 360, Property, Plant, and Equipment. Any recognized intangible assets determined to have an indefinite useful lives will not be amortized, but instead tested for impairment until its life is determined to no longer be indefinite. ASC 350 requires that the values of intangible assets be tested for impairment on at least an annual basis, by comparing the fair value of the assets to their carrying amounts. As a result of the impairment testing, the Company determined that goodwill was significantly impaired due to sales of Paragon Toner division. Goodwill amount was $940,733 and $3,214,289 as of March 31, 2011 and December 31, 2010, respectively.

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, 2011 and 2010 amounted to $0 and $44,363, respectively.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in the results of operations in the period that includes the enactment date. The realizability of deferred tax assets is evaluated based on a “more likely than not” standard, and to the extent this threshold is not met, a valuation allowance is recorded. See Note 14 Income Taxes for more information about the Company’s income taxes.

LEXON TECHNOLOGIES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS

Recent Accounting Pronouncements

In August 2010, the FASB issued Accounting Standards Update 2010-21, "Accounting for Technical Amendments to Various SEC Rules and Schedules". This Accounting Standards Update amends various SEC paragraphs pursuant to the issuance of Release No. 33-9026; Technical Amendments to Rules, Forms, Schedules and Codifications of Financial Reporting Policies. Management does not expect this update to have a material effect on the Company's financial statements.

In February 2010, the FASB issued Accounting Standards Update 2010-09, "Subsequent Events: Amendments to Certain Recognition and Disclosure Requirements." This FASB retracts the requirement to disclose the date through which subsequent events have been evaluated and whether that date is the date the financial statements were issued or were available to be issued. ASU 2010-09 is effective for interim and annual financial periods ending after February 24, 2010, and has been applied with no material impact on the Company's financial statements.

Note 3 - Inventories

The following table provides the components of inventories as of March 31, 2011 and December 31, 2010:

		March 31,		December 31,
		2011		2010
Finished goods	$	-	$	335,084
Raw materials		-		273,039
		-		608,123
Less: inventory reserve		-		(34,986	)
Total	$	-	$	573,137

Overhead allocated to the inventory amounted to $ 0 and $8,667 for the three months ended March 31, 2011 and 2010 , respectively.

Note 4 - Property and Equipment

Property and equipment consist of the following as of March 31, 2011 and December 31, 2010:

		March 31,		December 31,
		2011		2010
Automobile	$	-	$	34,092
Furniture and fixture		-		53,388
Leasehold improvement		-		5,060
Machinery and equipment		-		439,030
		-		531,570
Less: Accumulated depreciation		-		(471,260	)
Net property and equipment	$	-	$	60,310

Depreciation expense amounted to $0 and $14,560 for the three months ended March 31, 2011 and 2010, respectively.

LEXON TECHNOLOGIES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 5 - 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 $0 and $138,000 due from related parties as of March 31, 2011 and December 31, 2010, respectively.

Due to related parties

Interest bearing notes payable to related parties consisting of the following as of March 31, 2011 and December 31, 2010:

		March 31,		December 31,
		2011		2010
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 6 - 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 $0 and $450,000 as of March 31, 2011 and December 31, 2010.

The Company incurred interest expenses on this line of credit of $0 and $6,122 for the three months ended March 31, 2011 and 2010, respectively.

LEXON TECHNOLOGIES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 7 - Notes Payable

The Company has long term notes payable as follows:

		March 31,		December 31,
		2011		2010
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.	$	-	$	14,423
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.		-		82,539
Total notes payable		-		96,962
Less: Current portion		-		(65,778	)
Notes payable, net of current	$	-	$	31,203

Total interest expense on the notes payable were $0 and $5,686 for the three months ended March 31, 2011 and 2010, respectively.

Note 8 - 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, 2011 and December 31, 2010, these assets are carried as follows:

		March 31,		December 31,
		2011		2010
Equipment	$	-	$	162,889
Transportation vehicles		-		32,800
Less: Accumulated depreciation		-		(190,340	)
	$	-	$	5,349

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

		March 31,		December 31,
		2011		2010
Total minimum lease payments	$	-	$	34,868
Less: Amount representing interest		-		(4,558	)
Present value of net minimum lease payments		-		30,310
Less: Current portion		-		(20,447	)
Capital lease obligations, net of current portion	$	-	$	9,863

Total interest expenses from the capital lease obligations were $0 and $3,431 for the three months ended March 31, 2011 and 2010, respectively.

LEXON TECHNOLOGIES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 9 - 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, 2011 and December 31, 2010, are as follows:

		March 31,			December 31,
		2011			2010
Gross balance	$	633,589		$	633,589
Less: Accumulated amortization		(306,562	)		(257,646	)
Net balance	$	327,027		$	375,944

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

Years ending December 31,		Amount
Remainder of 2011	$	146,750
2012		180,277
Total	$	327,027

Total amortization expenses were $48,916 and $52,799 for the three months ended March 31, 2011 and 2010, respectively.

Note 10 - 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 November 9, 2010, judgment was entered against Lexon Technologies for the amount of 206,547.95. Lexon has already appealed such decision,. The amount of such loss is reflected in our financials.

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). On April 1, 2011, after a trial was concluded, judgment was entered in favor of the Lexon Technologies whereby Lexon was not found liable for any causes of action brought by the Plaintiff.

LEXON TECHNOLOGIES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 11 - Income Taxes

Significant components of deferred tax assets are as follows:

		March 31,			December 31,
		2011			2010
Loss carry forwards	$	2,229,187		$	2,179,612
Other		229,720			229,720
Total deferred tax asset		2,458,907			2,409,332
Valuation allowance		(2,458,907	)		(2,409,332	)
Total deferred tax asset, net	$	-		$	-

As of March 31, 2011, the Company had approximately $3,000,000 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 $2,600,000 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 $49,575 during the three months ended March 31, 2011.

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.

Note 12 – Sales of Paragon Toner Inc.

The internet properties namely 7 inkjet.com, nanoinket.com and Yourcartridges.com remain with Lexon Technologies Inc., and become the main operation of the company.

Note 13 – Services Contract

On January 1, 2011, Lexon and Paragon have decided to enter into contractual relationship regarding Lexon’s internet properties. Lexon has subcontracted all of the operational activities to Paragon Toner including but not limited to billing, collection, maintenance of website, advertising and all other activities related to the operation of the Websites. In return for the operation of the Websites, Paragon hereby agrees to pay to Lexon the agreed amount of 15% of all revenues generated from the Websites. This agreement shall be enforceable between the Parties for a period of 2 years from the date of agreement. However, it is subject to renegotiation at end of each year.

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

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.

The internet properties namely 7 inkjet.com, nanoinket.com and Yourcartridges.com remain with Lexon Technologies Inc., and become the main operation of the company. As these websites are ongoing concerns and revenue generating, we have an operation in place. We are also anticipating a reverse merger or sale of the company in the near future.

Results of Operation for the Three Months Ended March 31, 2011 as Compared to the Three Months Ended March 31, 2010

Revenues.

Revenues decreased by $1,315,457 to $14,842 for the three months ended March 31, 2011 as compared to $1,330,281 for the three months ended March 31, 2010. This decline was primarily attributed to the disposition of the toner manufacturing division.

Cost of Goods Sold.

Cost of Goods Sold decreased by $1,041,550 to 0 for the three months ended March 31, 2011 as compared to $1,041,550 for the three months ended March 31, 2010.

Selling, General and Administrative Expenses.

Selling, General and Administrative Expenses (“SG&A”) decreased by $486,703 to $64,417 for the three months ended March 31, 2011 as compared to $551,120 for the three months ended March 31, 2010. This decrease of $486,703 in SG&A was attributed to the disposition of the toner manufacturing division.

Other Income and Expenses.

Other income for the three months ended March 31, 2011 consisted of $0 compared with other expenses of $257,647 for the three months ended March 31, 2010. Interest expenses for the three months ended March 31, 2011 was 0 compared to $16,963 in interest expenses for the three months ended March 31, 2010.

Net income.

As a result, we recorded a net loss of $49,575 for the three months ended March 31, 2011 compared with a net loss of $4,742 for the three months ended March 31, 2010.

Liquidity and Capital Resources.

At March 31, 2011, we had current assets of $0 and current liabilities of $196,862.

Current liabilities at March 31, 2011, consisted of a bank overdraft of $658, accounts payable of $26,844 and accounts payable due to related parties of $91,960 and accrued expenses of $77,400.

For the three months ended March 31, 2011, net cash provided by operating activities totaled $2,250,763 compared to net cash provided by operating activities of $50,942 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, 2011 amounted to $216,310 compared to net cash used in investment activities of $30,000 for the same previous year period.

Net cash used in financing activities for the three months ended March 31, 2010 was $2,477,291 compared to net cash used in financing activities of $24,213 for the three months ended March 31, 2010.

Net cash and cash equivalents at March 31, 2011 was $0.

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, we have one pending legal proceeding and one recently concluded lawsuit.

kOn 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 November 9, 2010, judgment was entered against Lexon Technologies for the amount of 206,547.95. Lexon has already appealed such decision. The amount of such loss is reflected in our financials.

However, 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). On April 1, 2011, after a trial was concluded, judgment was entered in favor of the Lexon Technologies whereby Lexon was not found liable for any causes of action brought by the Plaintiff.

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.

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 21, 2011

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 2 exhibit31-1.htm SECTION 302 CERTIFICATION Lexon Technologies Inc.: Exhibit 31.1 - Filed by newsfilecorp.com

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 21, 2011

EX-31.2 3 exhibit31-2.htm SECTION 302 CERTIFICATION Lexon Technologies Inc.: Exhibit 31.2 - Filed by newsfilecorp.com

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;

(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 21, 2011

EX-32 4 exhibit32.htm SECTION 906 CERTIFICATION Lexon Technologies Inc.: Exhibit 32 - Filed by newsfilecorp.com

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, 2011, 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 21, 2011

/s/ Bong S. Park
Bong S. Park
Chief Financial Officer
Date: May 21, 2011