-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GogeDoe68hM856U1wkFfnZJMZdLKww0nb6jEpCTYtN40bk8NT6RXrXNxemtiBgTV FOY6PWP7FcO1EQCwFMtpOQ== 0001179350-03-000061.txt : 20030514 0001179350-03-000061.hdr.sgml : 20030514 20030514130633 ACCESSION NUMBER: 0001179350-03-000061 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEXON TECHNOLOGIES INC CENTRAL INDEX KEY: 0001065189 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 870502701 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-24721 FILM NUMBER: 03697935 BUSINESS ADDRESS: STREET 1: 18001 COWAN, SUITE G-H CITY: IRVINE STATE: CA ZIP: 92614 BUSINESS PHONE: 949-477-4000 FORMER COMPANY: FORMER CONFORMED NAME: REXFORD INC DATE OF NAME CHANGE: 19980630 10QSB 1 f03m10q.txt LEXON 03MAR FORM 10QSB 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended March 31, 2003 Commission File Number 0-24721 LEXON TECHNOLOGIES, INC. ----------------------------------------------------- (Exact Name of Registrant, as Specified in its Charter) Delaware 87-0502701 - ------------------------------- ---------------------------------- (State or other Jurisdiction of (IRS Employer Identification Number) Incorporation or Organization) 18001 Cowan, Suite G-H, Irvine, California 92614 ------------------------------------------------ (Address of Principle Executive Offices) (949)477-4000 -------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Indicate, by check mark, whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (1) Yes X No (2) Yes X No --- --- --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $.001 par value 20,628,778 - ----------------------------- ---------------------------- Title of Class Number of Shares Outstanding as of March 31, 2003 2 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS LEXON TECHNOLOGIES, INC. AND SUBSIDIARY FINANCIAL STATEMENTS (UNAUDITED) The accompanying financial statements have been prepared by the Company, without audit, in accordance with the instructions to Form 10-QSB pursuant to the rules and regulations of the Securities and Exchange Commission and, therefore may not include all information and footnotes necessary for a complete presentation of the financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made. These financial statements should be read in conjunction with the accompanying notes, and with the historical financial information of the Company. 3 LEXON TECHNOLOGIES, INC. AND SUBSIDIARY (A Development Stage Company) Consolidated Balance Sheets ASSETS March 31, December 31, 2003 2002 ----------- ----------- (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 344,150 $ 86,801 Advances to related parties 52,769 52,769 ----------- ----------- Total Current Assets 396,919 139,570 ----------- ----------- PROPERTY AND EQUIPMENT, net 7,212 8,074 ----------- ----------- TOTAL ASSETS $ 404,131 $ 147,644 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Accounts payable $ 5,312 $ 5,811 Accounts payable - related party 26,774 15,126 Accrued wages 196,750 172,500 ----------- ----------- Total Current Liabilities 228,836 193,437 ----------- ----------- CONTINGENT LIABILITIES 460,874 460,874 ----------- ----------- STOCKHOLDERS' EQUITY (DEFICIT) Common stock, par value $0.001 per share; authorized 100,000,000 shares; 20,628,778 and 19,548,778 shares issued and outstanding, respectively 20,629 19,549 Additional paid-in capital 878,394 469,474 Other comprehensive loss (5,396) - Deficit accumulated during the development stage (1,179,206) (995,690) ----------- ----------- Total Stockholders' Equity (Deficit) (285,579) (506,667) ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 404,131 $ 147,644 =========== =========== The accompanying notes are an integral part of these consolidated financial statements. 4 LEXON TECHNOLOGIES, INC. AND SUBSIDIARY (A Development Stage Company) Consolidated Statements of Operations (Unaudited) From Inception For the on July 18, 2001 Three Months Ended Through March 31, March 31, 2003 2002 2003 ----------- ----------- ----------- REVENUES $ - $ - $ - ----------- ----------- ----------- EXPENSES Research and development - - 405,000 Selling, general and administrative 182,654 48,372 773,298 Depreciation and amortization 862 589 4,045 ----------- ----------- ----------- Total Expenses 183,516 48,961 1,182,343 ----------- ----------- ----------- LOSS FROM OPERATIONS (183,516) (48,961) (1,182,343) ----------- ----------- ----------- OTHER INCOME (EXPENSE) Interest income - 1,687 3,137 ----------- ----------- ----------- Total Other Income (Expense) - 1,687 3,137 ----------- ----------- ----------- NET LOSS (183,516) (47,274) (1,179,206) ----------- ----------- ----------- OTHER COMPREHENSIVE LOSS Loss on foreign currency adjustments (5,396) - (5,396) ----------- ----------- ----------- NET COMPREHENSIVE LOSS $ (188,912) $ (47,274) $ (1,184,602) =========== =========== =========== BASIC LOSS PER SHARE $ (0.01) $ (0.00) =========== =========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 19,752,778 17,500,000 =========== =========== The accompanying notes are an integral part of these consolidated financial statements. 5 LEXON TECHNOLOGIES, INC. AND SUBSIDIARY (A Development Stage Company) Consolidated Statements of Cash Flows (Unaudited) CAPTION> From Inception on July 18, 2001 For the Three Months Ended Through March 31, March 31, 2003 2002 2003 ----------- ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (183,516) $ (47,274) $ (1,179,206) Adjustments to reconcile net loss to net cash (used) in operating activities: Depreciation and amortization 862 589 4,045 Stock for services - - 13,720 Stock for technology - - 375,000 Changes in assets and liabilities: Increase in other assets - (1,687) - Change in currency conversion (5,396) - (5,396) Increase (decrease) in accounts payable and accrued expenses 35,399 (3,438) 15,605 ----------- ----------- ----------- Net Cash (Used) in Operating Activities (152,651) (51,810) (776,232) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Cash paid for property and equipment - - (11,257) Cash paid for related party notes receivables - (1,000) (67,769) Cash received from related party notes receivables - - 15,000 Advances to officers - (40,805) - Cash placed into escrow - - (150,000) Cash received from escrow - 150,000 150,000 Cash paid for note receivable - (150,000) (200,000) Note receivable converted in acquistion - - 200,000 Cash received in acquisition - - 34,408 ----------- ----------- ----------- Net Cash Used in Investing Activities - (41,805) (29,618) ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Receipt of subscription receivable - 220,000 220,000 Cash received from issuance of common stock 410,000 - 930,000 ----------- ----------- ----------- Net Cash Provided by Financing Activities 410,000 220,000 1,150,000 ----------- ----------- ----------- NET INCREASE IN CASH AND CASH EQUIVALENTS 257,349 126,385 344,150 CASH AND CASH EQUIVALENTS AT BEG OF PERIOD 86,801 36,134 - ----------- ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 344,150 $ 162,519 $ 344,150 ----------- ----------- ----------- SUPPLEMENTAL CASH FLOW INFORMATION Cash Payments For: Interest $ - $ - $ - Income taxes $ - $ - $ - Non-Cash Investing and Financing Activities Stock issued for technology $ - $ - $ 375,000 Stock issued for services $ - $ - $ 13,720
The accompanying notes are an integral part of these consolidated financial statements. 6 LEXON TECHNOLOGIES, INC. AND SUBSIDIARY (A Development Stage Company) Notes to the Consolidated Financial Statements March 31, 2003 and December 31, 2002 NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying unaudited condensed financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed financial statements include normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed financial statements be read in conjunction with the Company's audited financial statements and notes thereto included in its December 31, 2002 Annual Report on Form 10-KSB. Operating results for the three months ended March 31, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. NOTE 2 - GOING CONCERN The Company's consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has historically incurred significant losses which have resulted in an accumulated deficit of $1,179,206 at March 31, 2003 and limited internal financial resources. These factors combined, raise substantial doubt about the Company's ability to continue as a going concern. The Company was able to raise an additional $410,000 through the issuance of common stock during the three months ended March 31, 2003 which will be used for operations and investment acquisitions (See Note 4). The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty. It is the intent of management to continue to raise additional funds to sustain operations and to pursue acquisitions of operating companies in order to generate future profits for the Company. NOTE 3 - MATERIAL EVENTS On January 17, 2003, the Company issued 120,000 shares of common stock to a private investor at $0.835 per share for total proceeds of $100,000. On January 31, 2003, the Company issued 120,000 shares of common stock to a private investor at $0.835 per share for total proceeds of $100,000. On March 28, 2003, the Company issued 840,000 shares of common stock to a related party at $0.25 per share for total proceeds of $210,000. 7 LEXON TECHNOLOGIES, INC. AND SUBSIDIARY (A Development Stage Company) Notes to the Consolidated Financial Statements March 31, 2003 and December 31, 2002 NOTE 3 - MATERIAL EVENTS (Continued) On March 18, 2003, the Company incorporated a wholly-owned subsidiary in the Republic of Korea named Lexon Korea Corporation for the purpose of entering into potential business combinations with Korean operating entities (See Note 4). NOTE 4 - SUBSEQUENT EVENT Effective April 2, 2003, Lexon Korea Corporation invested a total of $250,000 for an initial approximate three percent (3%) ownership (30,000 shares) in a Republic of Korea entity called NPC Corporation. The investment will be recorded at the Company's initial cost of $250,000. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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. General - ------- The Company was formed in July of 2001 to commercialize a proprietary device and proprietary software package that reduces the amount of electricity required to power various indoor lighting devices in commercial buildings, factories, and office structures, as well as outdoor street and parking lot lighting. Since inception, our business activities have included raising capital, developing prototype devices and attempting to establish a marketing and sales distribution network. Because market conditions and competition have increased substantially in this area, we have shifted our primary focus to seeking joint venture partners, business acquisitions and business alliances in an effort to commence business operations outside the electrical products area, although we have not reached any definitive agreements to date. Results of Operations - --------------------- Three Months Ended March 31, 2003 compared to March 31, 2002 - ------------------------------------------------------------ We had no revenues for the three months ended March 31, 2003 and have had no revenues from inception (July 18, 2001) to date. Until an appropriate business opportunity is identified, we cannot predict when or if we will be able to generate revenues from operations. Operating expenses for the three months ended March 31, 2003 were $183,516, consisting primarily of $182,654 for general and administrative expenses. Operating expenses for the prior year period was $48,961. The increase in operating expenses from the same period in 2002 includes a payment of $50,000 to Jehy Lah for accrued salary and a payment of $12,000 to Ben Hwang for accrued salary. The remaining increase reflects additional accrued salaries, travel, consultation and due diligence expenses related to management's continuing efforts to identify a business partner. Operating expenses since inception (July 18, 2001) total $1,182,343, consisting primarily of $405,000 for research and development, and $773,298 for general and administrative expenses. Our net loss per share for the three months ended March 31, 2003 was $0.01, based on a weighted average of 19,752,778 shares outstanding. Management hopes to keep expenses to a minimum in the next twelve months or until a business opportunity is identified. Provided a business acquisition and/or partnership is identified and adequate funding is found, we anticipate that operating expenses will increase substantially as research and production staff is hired and sales and marketing operations commence. 9 Liquidity and Capital Resources - ------------------------------- Our primary source of liquidity has been cash proceeds from the sale of our common stock. We anticipate that we will need to raise significant additional capital to complete a business acquisition. At this date we have no agreements or commitments for funding. At March 31, 2003, we had a working capital of $168,083. We had cash and cash equivalents of $344,150. We also have related party advances of $52,769. We expect these advances to be repaid within the next twelve months. Current liabilities at March 31, 2003 total $228,836, consisting primarily of accounts payable of $5,312, accounts payable - related party of $26,774, and accrued wages of $196,750. In August 2002, we entered into an oral agreement to pay J. Jehy Lah, the chairman of our board of directors, a salary of $135,000 per year. We also entered into an oral agreement to pay Ben Hwang, our Secretary, a salary of $85,000 per year. Other than the payments of accrued salary amounts to Mr. Lah ($50,000) and Mr. Hwang ($12,000) listed above (see Results of Operations), these salaries and the salary of Kenneth Eaken, our C.E.O. and President, are all being accrued until such time as operating revenues or other funds are available sufficient to pay the accrued amounts. For the three months ended March 31, 2003, cash flows used by operating activities totaled $152,651, compared to $51,810 in the prior year period. Our operating activities since inception have been funded by the sale of our common stock. We did not engage in any investing activities in the three months ended March 31, 2003. In the prior year period, we used $41,805 for a related party note receivable ($1,000) and advances to officers ($40,805). Cash provided by financing activities consisted of $410,000 received from the sale of our common stock, compared to the prior year when we received $220,000 for payment of a subscription receivable. On March 18, 2003, we incorporated a wholly-owned subsidiary in the Republic of Korea named Lexon Korea Corporation. This subsidiary was formed to facilitate entering into potential business combinations with Korean operating entities. On April 2, 2003, this subsidiary invested a total of $250,000 for an approximate 3% equity ownership in a private Republic of Korea entity, NPC Corporation. NPC Corporation is an entity which controls the worldwide marketing rights to certain nanotechnology. Management is actively engaged in discussions concerning the acquisition of this entity and is seeking the necessary financing to complete the acquisition. Because we have had no operations, have an operating loss and are dependent on financing to continue operations, our financial statements contain a going concern qualification. We intend to continue to seek financing from traditional lending sources, loans from or private sales of our securities to our existing officers, directors, and shareholders, or such other debt or equity offerings that may be available to us. There is no assurance that we will be able to obtain funding when and if needed, or that such funding, if available, can be obtained on terms reasonable or acceptable to us. 10 ITEM 3. CONTROLS AND PROCEDURES (a) Evaluation of disclosure controls and procedures. We believe our disclosure controls and procedures (as defined in Sections 13a-14(c) and 15d- 14(c) of the Securities Exchange Act of 1934, as amended) are adequate, based on our evaluation of such disclosure controls and procedures on May 1, 2003. (b) Changes in internal controls. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS We are not aware of any material pending or threatened litigation. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS In January 2003, we issued 240,000 shares of our common stock to two private investors at $0.835 per share for total proceeds of $200,000. In March 2003, we issued 840,000 shares of our common stock to the spouse of Kyu Hong Hwang who is a director, at $0.25 per share for total proceeds of $210,000. The shares issued in the foregoing transactions were issued in reliance on the exemption from registration and prospectus delivery requirements of the Act set forth in Section 3(b) and/or Section 4(2) of the Securities Act and the regulations promulgated thereunder. ITEM 3. DEFAULT BY THE COMPANY ON ITS SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS None. ITEM 5. OTHER INFORMATION We have scheduled a shareholders' meeting to be held Tuesday, May 20, 2003, 9:00am PST, at the Dry Creek Room, Sutton Place Hotel, 4500 MacArthur Blvd., Newport Beach, CA 92660. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits -------- Exhibit 99 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002. (b) Reports on Form 8-K ------------------- None. 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, we have duly caused this report to be signed on our behalf by the undersigned, thereunto duly authorized. LEXON TECHNOLOGIES, INC. Date: May 14, 2003 /S/Kenneth J. Eaken, President, C.E.O. and C.F.O. 12 CERTIFICATIONS I, Kenneth J. Eaken, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Lexon Technologies, Inc.; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function); a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether of not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 14, 2003 /S/Kenneth J. Eaken Principal Executive Officer Principal Financial Officer EX-99 3 f03mex99.txt CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER 1 Exhibit 99 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-QSB for the period ending March 31, 2003 as filed with the Securities and Exchange Commission on this date (the "Report"), I, Kenneth J. Eaken, Chief Executive Officer and 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: (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/ Kenneth J. Eaken Kenneth J. Eaken Chief Executive Officer and Chief Financial Officer May 14, 2003 -----END PRIVACY-ENHANCED MESSAGE-----