10-K

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x Annual Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934

for the fiscal year ended December 31, 2008

¨ Transition Report Under Section 13 or 15(D) of the Securities Exchange Act of 1934

for the transition period from _______________ to _______________

Commission File Number:  000-33131

LEXICON UNITED INCORPORATED

(Exact name of small Business Issuer as specified in its charter)

Delaware	06-1625312
(State or other jurisdiction of incorporation or	(IRS Employer Identification No.)
organization)
4500 Steiner Ranch Blvd., Suite 1708
Austin, TX	78732
(Address of principal executive offices)	(Zip Code)

Issuer's telephone number, including area code: (512) 266-3507

n/a

____________________________________________

Former address if changed since last report

Securities registered under Section 12(b) of the Exchange Act:   None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, par value $0.001 per share

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No ¨

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

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

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer o (Do not check if a smaller reporting company) Smaller Reporting Company þ

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

¨ Yes x No

State issuer's revenues for its most recent fiscal year: $4,331,355

As of April 14, 2009, the aggregate market value of voting Common Stock held by non-affiliates of the registrant based on the most recent quote on the OTCBB of $1.90 per share is $741,950.

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 8,696,134 shares of common stock par value $0.001 as of April 14, 2009.

2

TABLE OF CONTENTS

PART I
ITEM 1.	BUSINESS	4
ITEM 1A.	RISK FACTORS	9
ITEM 1B.	UNRESOLVED STAFF COMMENTS	16
ITEM 2.	PROPERTIES	16
ITEM 3.	LEGAL PROCEEDINGS	16
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	17
PART II
		17
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	17
ITEM 6.	SELECTED FINANCIAL DATA	18
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION	18
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	27
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	28
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	31
ITEM 9A(T).	CONTROLS AND PROCEDURES	31
ITEM 9B.	OTHER INFORMATION	32
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	32
ITEM 11.	EXECUTIVE COMPENSATION	35
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	36
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	37
ITEM 14	PRINCIPAL ACCOUNTANT FEES AND SERVICES	37
PART IV
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	38
SIGNATURES		40

3

FORWARD LOOKING STATEMENTS

Forward-Looking Statements

This Annual Report on Form 10-K (the “Report”), including ”Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding future events and the future results of Lexicon United Incorporated and its consolidated subsidiaries (the “Company”) that are based on management’s current expectations, estimates, projections and assumptions about the Company’s business. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “sees,” “estimates” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including, but not limited to, those discussed in the “Risk Factors” section in Item 1A, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and elsewhere in this Report as well as those discussed from time to time in the Company’s other Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions. Such forward-looking statements speak only as of the date of this Report or, in the case of any document incorporated by reference, the date of that document, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Report. If we update or correct one or more forward-looking statements, investors and others should not conclude that we will make additional updates or corrections with respect to other forward-looking statements.

When used in this report, the terms “Lexicon,” “Company,” “we,” “our,” and “us” refer to Lexicon United Incorporated.

PART I

ITEM 1. BUSINESS.

Background

Our corporate name is Lexicon United Incorporated. We were incorporated on July 17, 2001 in the state of Delaware. We were a “blank check” company and had no operations other than organizational matters and conducting a search for an appropriate acquisition target until February 27, 2006 when we completed an acquisition transaction with ATN Capital e Participacoes Ltd. ("ATN"), a Brazilian limited company, that had commenced business in April 1997. ATN is engaged in the business of managing and servicing accounts receivables for large financial institutions in Brazil.

Acquisition of ATN Capital & Participações Ltda

On February 27, 2006, we completed an acquisition transaction with ATN whereby we acquired 400,000 shares of ATN common stock, constituting 80% of ATN’s issued and outstanding capital stock, from the two stockholders of ATN in exchange for 2,000,000 shares our common stock. The purchase price was subsequently adjusted to an aggregate of 1,200,000 shares of our common stock.  Upon the consummation of such share exchange, the two stockholders of ATN became holders of approximately 13.8% of our outstanding common stock in the aggregate and ATN became our majority-owned subsidiary.  When we refer in this report to business for periods prior to the consummation of the acquisition, we are referring to the business of ATN.

Our Business Generally

The Company and its subsidiary, ATN, are engaged in the business of purchasing, managing and collecting defaulted consumer receivables for its own account and managing, collecting and servicing portfolios of defaulted and charged-off account receivables for large financial institutions in Brazil.  These receivables are acquired from consumer credit originators, primarily credit card issuers in Brazil.

4

ATN is was formed in 1997 and is a  financial service company specialized in collection and credit  recovery.  ATN employs a staff of more than 300, who seek to locate and contact customers and arrange payment or resolution of their debt on a friendly basis.

The Company intends to continue to raise the necessary capital to facilitate its subsidiary to purchase “selected” defaulted and charged-off account receivable portfolios.  The Company further intends to position ATN as one of the principal companies in the debt recovery market in Brazil with a proven operational platform.  We believe that purchasing and servicing our “own” debt portfolios can result in a saving of costs and time over servicing third party collections.

We derive our revenues primarily from collection of distressed debt by either entering into non-binding agreements with financial institutions to collect their debt or acquiring portfolios of distressed debt for our own account. Where we are collecting debt for a third party, an installment agreement is established. We are then entitled to a commission on the agreed settlement. We earn and record the pro rata commission for each installment, when the installment payments are received from the debtors.

The types of receivables that we generally manage include charged-off receivables, which are accounts receivable that have been written-off by the originators and may have been previously serviced by collection agencies, and semi-performing receivables, which are accounts receivable where the debtor is currently making partial or irregular monthly payments, but the accounts may have been written-off by the originators.

In addition, the Company also engages in the provision of oilfield services through its two subsidiaries, Engepet Energy Enterprises, Inc. and United Oil Services, Inc.  As of this date, these subsidiaries are in a start-up phase and have produced only minimal revenues.

An Overview of Our Industry

The servicing and collection of charged-off and semi-performing consumer receivables in Brazil is a growing industry that is driven by:

· increasing levels of consumer debt;

· increasing defaults of the underlying receivables; and

· increasing utilization of third-party providers to collect such receivables.

The Company believes that  consumer credit in Brazil has been increasing in the past several years and will continue growing in the future.

We believe that as a result of the difficulty in collecting these receivables and the desire of originating institutions to focus on their core businesses and to generate revenue from these receivables, originating institutions are increasingly electing to outsource the servicing of these receivables.

Strategy

Our primary objective is to utilize our management's experience and expertise to effectively grow our business by identifying, evaluating and servicing consumer receivable portfolios and maximizing collections of such receivables in a cost efficient manner.

Our strategy includes utilizing the systemization of our operations to reduce overhead costs and to provide intensive training to our call center representatives to increase our percentage of successful account receivable collections.

Our management team also includes statisticians that have developed models that guide our collection efforts and assist us in deciding the extent to which we believe we can successfully recover a charged-off or semi-performing receivable.

5

Our Services

Engagement Planning.

Our approach to accounts receivable management and collection for each client is determined by a number of factors, including account size and demographics, the client’s specific requirements and management’s estimate of the collectibility of the account. We have standard accounts receivable management and collection methods that we employ to collect accounts receivable. These methods were developed based on our 8 years of experience in this industry. In order to properly serve our customers we carefully study our customer’s account receivable needs and employ the proper collection method for each particular client. In most cases, our approach to accounts receivable collection changes over time as the relationship with the client develops and both parties evaluate the most effective means of recovering accounts receivable. Our standard approach, which may be tailored to the specialized requirements of each client, defines and controls the steps that will be undertaken by us on behalf of the client and the manner in which we will report data to the client. Through our systematic approach to accounts receivable management and collection, we remove most decision making from the recovery staff and ensure uniform, cost-effective performance.

Once the approach has been defined, we transfer pertinent client data into our information system. When the client’s records have been established in our system, we begin the recovery process.

Account Notification.

We initiate the recovery process by forwarding a preliminary letter that is designed to seek payment of the amount due or open a dialogue with client’s customers who cannot afford to pay at the current time. Telephone representatives remind the client’s customer of their obligation, inform them that their account has been placed for collection with us and begin a dialogue to develop a friendly payment program.

Determination of Obligor Contact Data.

In cases where the client’s customer’s contact information is unknown, we conduct research through the “CreditLink” system to determine a means of contacting the customer debtor. “CreditLink” is a third-party service that assists with investigations into customer contact information. Once we have located the client’s customer, the notification process can begin.

Payment Process.

After we receive payment from the client’s customer, depending on the terms of our contract with the client, we can either remit the amount received minus our fee to the client or remit the entire amount received to the client and subsequently bill the client for our collection services.  Where we own the accounts, the proceeds of collection are retained by the Company.

Activity Reports.

Clients are provided with a system-generated set of customized reports that fully describe all account activity and current status. These reports are typically generated daily; however, the information included in the report and the frequency that the reports are generated can be modified to meet the needs of the client.

Quality Tracking.

We emphasize quality control throughout all phases of the accounts receivable management and collection process. Some clients may specify an enhanced level of supervisory review and others may request customized quality reports. Large financial services organizations will typically have exacting performance standards which require sophisticated capabilities, such as documented complaint tracking.

6

Collection Strategy

In connection with each collection matter, we perform a collectibility analysis utilizing information prepared by our statisticians. This analysis is the basis for our collection efforts and dictates our strategy for any particular receivable or group of receivables. We continuously refine this analysis to determine the most effective collection strategy to pursue for each account.

Our collection strategies consist of:

· Call Centers. We maintain an inbound and outbound collection call center at ATN’s executive offices in Rio De Janeiro in Brazil. Our collections department is divided into two client teams, each team consisting of a collection manager and six or seven collection supervisors, each assigned to an individual client. Each collection supervisor is in charge of anywhere from 4 to 15 collectors. Collectors are trained to use a friendly but firm approach to assess the willingness of the customer to pay. They attempt to work with customers to evaluate sources and means of repayment to achieve a full or negotiated lump sum settlement or develop payment programs customized to the individual's ability to pay. In cases where a payment plan is developed, collectors encourage debtors to pay through automatic payment arrangements, if available.

· Legal Action. We generally outsource those accounts where it appears the debtor is able but unwilling to pay. We utilize lawyers that are independent from us, but who are located on our premises. These lawyers specialize in collection matters and we pay them a contingency fee on amounts collected. The name of the firm that we use is Andrada & Negreiros Associates. Prior to sending accounts to the law firm, our collectors communicate to the debtor our intention to have a lawyer evaluate the suitability of the account for litigation if payment arrangements cannot be established.

· Direct Mail. We have an in-house marketing team that develops mail campaigns. The mail campaigns generally offer debtors targeted discounts on their balance owed to encourage settlement of their accounts and provide us with a low cost recovery method.

· Removal from Restricted Lists. There are two restrictions imposed upon debtors in Brazil that fail to pay their debts when they come due. The first is called “Serasa”, which is a restriction imposed by every Brazilian bank. Such debtor’s names are put on the Serasa restricted list and no Brazilian Bank will provide them credit. The second restricted list is called “SPC”, which is a restriction imposed by Brazilian merchants. Once a debtor’s name is put on the SPC list, merchants will no longer provide the debtor with credit. Once we agree with the debtor on a payment program and the debtor makes the first installment towards such program, we notify our client that a payment has been made. The client then causes such debtor’s name to be removed from such lists. The removal of a debtor’s name from such lists is very beneficial to the debtor, who may then be able to obtain limited credit and who no longer has to suffer the other negative social effects of being on such lists.

Call Center

We provide our services through the operation of our main call center, located in Rio de Janeiro, Brazil, which utilizes approximately 300persons.

We maintain disaster recovery contingency plans and have implemented procedures to protect against the loss of data resulting from power outages, fire and other casualties. We believe fast recovery and continuous operation are ensured.

7

Quality Assurance and Client Service

In the accounts receivable management industry, a company’s reputation for quality service is of the utmost importance. We regularly measure the quality of our services by capturing and reviewing such information as the amount of time spent talking with clients’ customers, level of customer complaints and operating performance. In order to provide ongoing improvement to our telephone representatives’ performance and to ensure compliance with our policies and standards, quality assurance personnel supervise each telephone representative on a frequent basis and provide ongoing training to the representative based on this review.

We maintain a client service department to promptly address client issues and questions and alert senior executives of potential problems that require their attention. In addition to addressing specific issues, a team of client service representatives contacts clients on a regular basis in order to establish a close rapport, determine clients’ overall level of satisfaction, and identify practical methods of improving their satisfaction.

Major Customers

We have approximately 18 clients.  However, we rely on four major clients for approximately 68.09% of our income.  During fiscal year 2008 revenues from our clients Ativos, Banco do Brasil, Banco HSBC, Unibanco, Banco IBI, and Leader constituted approximately 10.75%, 12.26%, 11.5%, 8.9%,15.08%, and 9.31% of our total revenues, respectively.  None of these major clients are contractually obligated to continue use of our services at historic levels or at all, subject only to notice periods for termination.  If any of these customers were to significantly reduce their amount of service, fail to pay, or terminate their relationships with us altogether, our business could be harmed.

Personnel and Training

All of our call center personnel receive comprehensive training that instructs in each of the following topics:

· how to use the system;

· how to communicate with the client;

· scripts; and

· role playing.

These programs are conducted through a combination of classroom and role-playing sessions. New employees receive training on how to use our operating systems and on how to approach clients. Special orientations are also given out to employees on the respect of customer’s codes and how to respect creditors’ rights. Various upgrades and incentives are closely monitored by our human resource supervisor, including an upscale gradual commission that is awarded to each employee reaches at least 70% of the targeted performance.

Sales and Marketing

Our sales force is comprised of ATN’s senior management team, which markets our accounts receivable services to potential clients.

Competition

The accounts receivable management and collection industry in Brazil is highly competitive. We compete with a large number account receivable management providers, including Sincred, Mastercob and Easycob. Some of our competitors may offer more diversified services and/or operate in broader geographic areas than we do. In addition, many companies perform accounts receivable management services through their own in-house staff. Moreover, many larger clients retain multiple outsourcing providers, which exposes us to continuous competition in order to remain a preferred vendor. We believe that the primary competitive factors in obtaining and retaining clients are the ability to provide customized solutions to a client’s requirements, personalized quality service, sophisticated call and information systems, and price.

8

Regulation

The accounts receivable management industry in Brazil is regulated by Brazil Consumer Defense Code (Law 8078 of September 11, 1990). The Consumer Defense Code is a regulatory entity designed to maintain a standard procedure to protect the privacy and rights of the debtors. It is intended to limit and outline the collection procedure so that such procedure remains within acceptable commercial practice. No pressure or harassment is permitted. We believe that we are in compliance in all material respects with all applicable regulations.

Employees

As of December 31, 2008, we had a total of approximately 300 full-time employees. Our employees are not represented by a labor union. We believe that our relations with our employees are satisfactory.

ITEM 1A.  RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below before you purchase any of our common stock. If any of these risks or uncertainties actually occurs, our business, financial condition or results of operations could be materially adversely affected. In this event you could lose all or part of your investment.

Financial Risks

We only have approximately $291,453 in cash and if we are unable to raise more money we will be required to delay, scale back or eliminate our marketing and development programs.

As of December 31, 2008, we had approximately $291,453 in cash available to fund our operations, which includes cash held by both Lexicon and ATN on a consolidated basis. The amounts and timing of our expenditures will depend primarily on our ability to raise additional capital. We may seek to satisfy our future funding requirements through new offerings of securities or from other sources, including loans from our controlling stockholders. Additional financing may not be available when needed or on terms acceptable to us. We have no current commitment for additional financing. Unavailability of financing may require us to delay, scale back or eliminate some or all of our marketing and development programs. To the extent we raise additional capital by issuing equity securities, your ownership interest would be diluted.

In February 2008, Keyano Invest Inc., a related party, loaned the Company $1,000,000 for working capital purposes on terms and conditions to be determined on an arms-length basis between the parties.  During the quarter ended June 3, 2008, the Company repaid Keyano Invest Inc $200,000 and converted the remaining balance of $800,000 to a 2% convertible debenture.  On June 4, 2008, the debenture was converted to 231,884 shares of common stock at a conversion price of $3.45 per share.

Risks Relating To Our Business

The company has a history of losses and may need additional financing to continue its operations, and such financing may not be available upon favorable terms, if at all.

We have incurred net losses of $760,747 in 2008 and $307,422 in 2007 and an accumulated deficit of $2,958,232 and has a negative working capital of $2,371,604 at December 31, 2008. There can be no assurances that we will be able to operate profitably in the future. In the event that we are not successful in implementing its business plan, we will require additional financing in order to succeed. There can be no assurance that additional financing will be available now or in the future on terms that are acceptable to us. If adequate funds are not available or are not available on acceptable terms, we may be unable to develop or enhance our services, take advantage of future opportunities or respond to competitive pressures, all of which could have a material adverse effect on our business, financial condition or operating results.

9

There is substantial doubt about our ability to continue as a going concern due to significant recurring losses from our operations and our accumulated deficit.

There is substantial doubt about our ability to continue as a going concern due to significant recurring losses from our operations and our accumulated deficit, all of which means that we may not be able to continue operations unless we obtain additional funding. Management’s plans include raising capital through the equity markets to fund future operations and generating of revenue through its business. Failure to raise adequate capital and generate adequate sales revenues could result in our having to curtail or cease operations. Additionally, even if we do raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable us to develop business to a level where we will generate profits and cash flows from operations.

Our business is dependent on our ability to grow internally and if we cannot achieve internal growth our business, results of operations and financial results will suffer.

Our business is dependent on our ability to grow internally, which is dependent upon:

· Our ability to retain existing clients and expand our existing client relationships; and

· Our ability to attract new clients.

Our ability to retain existing clients and expand those relationships is subject to a number of risks, including the risk that:

· We fail to maintain the quality of services we provide to our clients;

· We fail to maintain the level of attention expected by our clients;

· We fail to successfully leverage our existing client relationships to sell additional services; and

· We fail to provide competitively priced services to our clients.

Our ability to attract new clients is subject to a number of risks, including:

· The market acceptance of our service offerings;

· The quality and effectiveness of our sales personnel; and

· The competitive factors within the accounts receivable management industry in Brazil.

If our efforts to retain and expand our client relationships and to attract new clients do not prove effective, it could have a materially adverse effect on our business, results of operations and financial condition.

If we are not able to respond to technological changes in telecommunications and computer systems in a timely manner, we may not be able to remain competitive.

Our success depends in large part on our sophisticated telecommunications and computer systems. We use these systems to identify and contact large numbers of debtors and record the results of our collection efforts. If we are not able to respond to technological changes in telecommunications and computer systems in a timely manner, we may not be able to remain competitive. We anticipate that it will be necessary to invest in technology in the future to remain competitive. During the fiscal years ended December 31, 2008 and 2007, we invested approximately $26,000 and $182,000 in technology, respectively. We expect that in future years we will have to invest similar amounts in technology. Telecommunications and computer technologies are changing rapidly and are characterized by short product life cycles, so we must anticipate technological developments. If we are not successful in anticipating, managing, or adopting technological changes on a timely basis or if we do not have the capital resources available to invest in new technologies, our business could be materially adversely affected.

10

We are highly dependent on our telecommunications and computer systems.

As noted above, our business is highly dependent on our telecommunications and computer systems. These systems could be interrupted by terrorist acts, natural disasters, power losses, or similar events. Our business is also materially dependent on services provided by various local telephone companies. If our equipment or systems cease to work or become unavailable, or if there is any significant interruption in telephone services, we may be prevented from providing services. Because we generally recognize revenue only as accounts receivables are collected, any failure or interruption of services would mean that we would continue to incur payroll and other expenses without any corresponding income.

An increase in communication rates or a significant interruption in communication service could harm our business.

Our ability to offer services at competitive rates is highly dependent upon the cost of communication services provided by various local telephone companies. Any change in the telecommunications market that would affect our ability to obtain favorable rates on communication services could harm our business. Moreover, any significant interruption in communication service or developments that could limit the ability of telephone companies to provide us with increased capacity in the future could harm existing operations and prospects for future growth.

We compete with a large number of providers in the accounts receivable and collection industry in Brazil. We may be forced to lower our rates to compete effectively, which will result in lower profit margins.

In the accounts receivable management and service industry in Brazil, we compete with sizable corporations, as well as many regional and local firms. We may lose business to competitors that offer more diversified services and/or operate in broader geographic areas than we do. We may also lose business to regional or local firms who are able to use their proximity to or contacts with local clients as a marketing advantage. In addition, many companies perform the accounts receivable management services offered by us in-house. Many larger clients retain multiple accounts receivable service providers, which exposes us to continuous competition in order to remain a preferred provider. Because of this competition, in the future we may have to reduce our fees to remain competitive and this competition could have a materially adverse effect on our future financial results.

All of our clients are concentrated in the financial services sector. If this sector performs poorly or if there are any adverse trends in this sector, we will have fewer customers, which will result in lower revenues.

For the years ended December 31, 2008 and 2007, we derived approximately 95.8 and 100 percent of our revenue, respectively, from clients in the financial services sector. If this sector performs poorly, clients in this sector may do less business with us, or they may elect to perform the services provided by us in-house. If there are any trends in this sector to reduce or eliminate the use of third-party accounts receivable service providers, it could harm our business.

Our success depends on our senior management team and the senior management team of our operating subsidiary, ATN, and if we are not able to retain them, we will have significant operating problems.

We are highly dependent upon the continued services and experience of our senior management team. We depend on the services of our senior management team to, among other things, continue the development and implementation of our growth strategies, and maintain and develop our client relationships.

11

We are dependent on our employees and a higher turnover rate would result in higher costs to train new personnel and could lead to poor service, which would negatively affect our financial condition and operations.

We are dependent on our ability to attract, hire and retain qualified employees. The Brazilian accounts receivable service and management industry, by its nature, is labor intensive and experiences a high employee turnover rate. Many of our employees receive modest hourly wages and some of these employees are employed on a part-time basis. A higher turnover rate among our employees would increase our recruiting and training costs and could materially adversely impact the quality of services we provide to our clients. If we were unable to recruit and retain a sufficient number of employees, we would be forced to limit our growth or possibly curtail our operations. Growth in our business will require us to recruit and train qualified personnel at an accelerated rate from time to time. We cannot assure you that we will be able to continue to hire, train and retain a sufficient number of qualified employees to meet the needs of our business or to support our growth. If we are unable to do so, our results of operations could be harmed. Any increase in hourly wages, costs of employee benefits or employment taxes in Brazil could also have a materially adverse affect.

We may experience variations from quarter to quarter in operating results and net income that could adversely affect the price of our common stock.

Factors that could cause quarterly fluctuations include, among other things, the following:

· The timing of our clients’ accounts receivable collection programs and the commencement of new contracts and termination of existing contracts;

· Customer contracts that require us to incur costs in periods prior to recognizing revenue under those contracts;

· The effects of a change of business mix on profit margins;

· The timing of additional selling, general and administrative expenses to support new business;

· Fluctuations in foreign currency exchange rates;

· The amount and timing of new business; and

· That our business tends to be slower during summer and holiday seasons.

Most of our accounts receivable management contracts do not require clients to place accounts with us, may be terminated on 30 or 60 days notice and are on a contingent fee basis. We cannot guarantee that existing clients will continue to use our services at historical levels, if at all.

Under the terms of most of our accounts receivable management contracts, clients are not required to give accounts to us for collection and usually have the right to terminate our services on 30 or 60 days notice. Accordingly, we cannot guarantee that existing clients will continue to use our services at historical levels, if at all. In addition, most of these contracts provide that we are entitled to be paid only when we collect accounts. Therefore, under applicable accounting principles, we can recognize revenues only upon the collection of funds on behalf of clients.

We rely on six major clients for a significant portion of our revenues. The loss of these customers as our clients or their failure to pay us could reduce revenues and adversely affect the results of our operations.

We have approximately 18 clients.  However, in the fiscal year ended December 31, 2008 we relied on six major clients for approximately 68.09% or our income.  Revenues from our clients Ativos, Banco do Brasil, HSBC, Unibanco, Banco IBI, and Leader constituted approximately 10.75%, 12.26%, 11.5%, 8.8%, 15.08%, and 9.31% of our total revenues, respectively.  None of these major clients are contractually obligated to continue use of our services at historic levels or at all, subject only to notice periods for termination.  If any of these customers were to significantly reduce their amount of service, fail to pay, or terminate their relationships with us altogether, our business could be harmed.  The number of major clients on whom we rely has remained unchanged from fiscal year 2007 to 2008.  During fiscal year 2008, no one customer was responsible for more than 20% of our revenues during this period.

12

We have engaged in transactions with members of our Board of Directors, significant stockholders, and entities affiliated with them; future transactions with related parties could pose conflicts of interest.

In the past, we have engaged in transactions with members of our Board of Directors, significant stockholders, and entities affiliated with them, which inherently give rise to conflicts of interest. For example, certain of these parties have previously provided debt financing to us and have received additional equity interests, such as shares of our stock upon the conversion of such debt financing. Transactions with related parties such as these pose a risk that such transactions are on terms that are not as beneficial to us as those that may be arranged with third parties.

Risks of Doing Business in Brazil

The executive offices of our subsidiary and all of our operations are based in Brazil. Accordingly, we are subject to all of the risks inherent in doing business in a foreign jurisdiction.

The executive offices of our subsidiary and all of our material operations are in Brazil and we expect to make further investments in Brazil in the future. Therefore, our business, financial condition and results of operations are to a significant degree subject to economic, political and social events in Brazil, including the material risks outlined below.

Political or economic instability in Brazil could have an adverse impact on our results of operations due to diminished revenues.

All of our revenues are derived from Brazil. Political or economic instability in Brazil could have an adverse impact on our results of operations due to diminished revenues. Our future revenue, costs of operations and profit results could also be affected by a number of other factors related to our Brazilian operations, including changes in economic conditions in Brazil, changes in a country’s political condition, trade protection measures, licensing and other legal requirements, and local tax issues.

Fluctuations in currency exchange rates could negatively affect our performance

Unanticipated currency fluctuations in the Brazilian Real could lead to lower reported consolidated results of operations due to the translation of these currencies into U.S. dollars when we consolidate our financial results. We provide accounts receivable collection and management services to our Brazilian clients utilizing Brazilian labor sources. A decrease in the value of the U.S. dollar in relation to the Brazilian Real could increase our cost of doing business in Brazil.

Governmental policies in Brazil could impact our business.

Changes in Brazil’s governmental policies which could have a substantial impact on our business include:

● new laws and regulations or new interpretations of those laws and regulations;

● the introduction of measures to control inflation or stimulate growth;

● changes in the rate or method of taxation;

● the imposition of additional restrictions on currency conversion and remittances abroad; and

● any actions which limit our ability to finance and operate our business in Brazil.

13

Fluctuations in exchange controls could negatively affect our performance.

Exchange transactions are generally controlled by the Central Bank of Brazil which authorizes a series of banks to act in the foreign exchange market, selling and buying currencies. There is a commercial rate of exchange published daily by the Central Bank based upon market results on said day. A free market, and quotation system exists, mainly dealing with tourist activities. Both rates have been extremely close since the inception of the stabilization plan ("Plano Real") several years ago. Subject to certain registration requirements with the Central Bank of Brazil and compliance with certain regulations, we may repatriate U.S. Dollars earned from our Brazilian operations through the repayment of loans and the payment of dividends. On occasions in the past, Brazil has imposed temporary restrictions on the conversion and remittance of foreign capital, for example when there was a serious imbalance in Brazil's balance of payments. In such circumstances, we could be adversely affected, if the exchange control rules were changed to delay or deny remittances abroad from us.

Your ability to bring an action against us, ATN and those of our officers and directors that are based in Brazil, or to enforce a judgment against us and such officers and directors or to recover assets in the possession of us, ATN or such officers and directors, will be difficult since any such action or recovery of assets would be an international matter, involving Brazilian laws and geographic and temporal disparities.

We conduct all of our operations in Brazil through our subsidiary, ATN. All but one of our management personnel reside in Brazil and all of the assets of ATN and those Brazilian residents are located outside of the United States. As a result, it may be difficult or impossible for you to bring an action against us, ATN or these individuals in the United States in the event that you believe that your rights have been violated under applicable law or otherwise. Even if an action of this type is successfully brought, the laws of the United States and of Brazil may render a judgment unenforceable.

Concentrated Control Risk

The management team collectively has the power to make all major decisions regarding the company without the need to get consent from any stockholder or other person. This discretion could lead to decisions that are not necessarily in the best interests of minority shareholders.

Our management team, including the management of our subsidiary, ATN, collectively owns approximately 95% of the outstanding common stock. Management, therefore, has the power to make all major decisions regarding our affairs, including decisions regarding whether or not to issue stock and for what consideration, whether or not to sell all or substantially all of our assets and for what consideration and whether or not to authorize more stock for issuance or otherwise amend our charter or bylaws. The management team is in a position to elect all of our directors and to dictate all of our policies.

Market Risks

There has been no established public trading market for our common stock. If a market in our stock is ever developed, our stock price may become highly volatile.

Since we are relatively thinly capitalized and our stock is a penny stock, if a market in our stock is ever developed, our stock price may become highly volatile. There has been no established public trading market for our common stock and, none of our shares are currently eligible for sale in a public trading market. The likely market for our stock would be the Over-the-Counter Bulletin Board or the Pink Sheets. As a result, investors may find it difficult to dispose of our securities, or to obtain accurate quotations of the price of our securities This lack of information limits the liquidity of our common stock, and likely will have an adverse effect on the market price of our common stock and on our ability to raise additional capital.

If an active trading market does develop, the market price of our common stock is likely to be highly volatile due to, among other things, the relatively low revenue nature of our business and because we are a thinly capitalized company. Further, even if a public market develops, the volume of trading in our common stock will presumably be limited and likely be dominated by a few individual stockholders. The limited volume, if any, will make the price of our common stock subject to manipulation by one or more stockholders and will significantly limit the number of shares that one can purchase or sell in a short period of time.

14

The equity markets have, on occasion, experienced significant price and volume fluctuations that have affected the market prices for many companies’ securities that have often been unrelated to the operating performance of these companies. Any such fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. As a result, stockholders may be unable to sell their shares, or may be forced to sell them at a loss.

We do not intend to pay dividends to our stockholders, so you will not receive any return on your investment in our company prior to selling your interest in us. 

We have never paid any dividends to our stockholders. We currently intend to retain any future earnings for funding growth and, therefore, do not expect to pay any dividends in the foreseeable future. If we determine that we will pay dividends to the holders of our common stock, we cannot assure that such dividends will be paid on a timely basis. As a result, you will not receive any return on your investment prior to selling your shares in our company and, for the other reasons discussed in this “Risk Factors” section, you may not receive any return on your investment even when you sell your shares in our company and your shares may become worthless.

A significant number of our shares will be eligible for sale and their sale or potential sale may depress the market price of our common stock. 

Sales of a significant number of shares of our common stock in the public market could harm the market price of our common stock. We have authorized 40,000,000 shares of common stock. As of February 27, 2009, we had outstanding 8,696,134 shares of common stock. Accordingly, we have 31,303,866 shares of common stock available for future sale.

Because our stock is considered a penny stock, any investment in our stock is considered to be a high-risk investment and is subject to restrictions on marketability. 

Our common stock is a "penny stock" within the meaning of Rule 15g-9 to the Securities Exchange Act of 1934, which is generally an equity security with a price of less than $5.00. Our common stock is subject to rules that impose sales practice and disclosure requirements on certain broker-dealers who engage in certain transactions involving a penny stock. Under the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or "accredited investor" must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net worth in excess of $1,000,000 or annual income exceeding $200,000 individually or $300,000 together with his or her spouse is considered an accredited investor.

In addition, the penny stock regulations require the broker-dealer to:

· deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt;

· disclose commissions payable to the broker-dealer and the Registered Representative and current bid and offer quotations for the securities; and

· send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account, the account's value and information regarding the limited market in penny stocks.

Because of these regulations, broker-dealers may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of holders of our capital stock to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities. In addition, the liquidity of our securities may be decreased, with a corresponding decrease in the price of our securities. Our common stock in all probability will be subject to such penny stock rules and our stockholders will, in all likelihood, find it difficult to sell their securities.

15

Certain provisions of our Certificate of Incorporation and Delaware law may make it more difficult for a third party to effect a change- in-control. 

Our Certificate of Incorporation authorizes the Board of Directors to issue up to 10,000,000 shares of preferred stock. The preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by the Board of Directors without further action by the stockholders. These terms may include voting rights including the right to vote as a series on particular matters, preferences as to dividends and liquidation, conversion rights, redemption rights and sinking fund provisions. The issuance of any preferred stock could diminish the rights of holders of our common stock, and therefore could reduce the value of such common stock. In addition, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell assets to, a third party. The ability of the Board of Directors to issue preferred stock could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change-in-control.In addition, we are also subject to Section 203 of the Delaware General Corporation Law that, subject to certain exceptions, prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder. The preceding provisions of our Certificate of Incorporation, as well as Section 203 of the Delaware General Corporation Law, could discourage potential acquisition proposals, delay or prevent a change-in-control and prevent changes in our management, even if such things would be in the best interests of our stockholders

ITEM 1B.  UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES.

Our executive offices in the U.S.A. are located at 4500 Steiner Ranch Boulevard, Suite 1708, Austin, Texas 78732. This space is the residence of our Secretary and we utilize the space on a rent-free basis pursuant to a verbal understanding with our Secretary.

ATN’s executive offices are located on the 8th Floor of a modern 11-storey executive office building located at Largo de São Francisco de Paula 42, Centro Historico Rio de Janeiro, CEP 20.051-070. ATN’s office space consists of 500 square meters: of which 300 square meters is used as a call center; 50 square meters is used for administrative offices; 20 square meters is used for our conference room; and 60 square meters is used for a training room with a 30-person capacity. The Company also owns 16 parking spaces in the building which is an added benefit to conducting business in the middle of Rio de Janeiro’s downtown historical center. ATN’s President, Omar Malheiro Silva Araújo, has purchased the 9th floor of the same building and has leased it to the Company for annual rent of $27,500.

ITEM 3.    LEGAL PROCEEDINGS

As of December 31, 2008, the Company was not a party to any pending or threatened legal proceedings.  ATN is a party to several employment-based lawsuits which the Company does not consider material.  The Company has accrued approximately $57,000 as a reserve for liability in connection with these matters.

16

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

No matters were submitted to a vote or for the written consent of security shareholders, through the solicitation of proxies or otherwise, during the fiscal year ended December 31, 2008, and no meeting of shareholders was held.

PART II.

ITEM 5.     MARKET FOR REGISTRANT’S COMMON EQUITY; RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

Market Price

Our common stock is quoted on OTC Bulletin Board, under the trading symbol “LXUN.OB”. The market for our stock is highly volatile. We cannot assure you that there will be a market in the future for our common stock. The OTC Bulletin Board securities are not listed and traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Bulletin Board stocks are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.

The following table shows the high and low prices of our common shares on the OTC Bulletin Board for each quarter since our common stock began to trade on the OTC Bulletin Board. The following quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions:

Common Stock	High		Low
2007
Third Quarter	$	2.50	$	2.50
Fourth Quarter	$	2.50	$	2.35
2008
First Quarter	$	4.25	$	2.50
Second Quarter	$	5.50	$	2.95
Third Quarter	$	5.00	$	3.00
Fourth Quarter	$	4.00	$	0.70

Options and Warrants

None of the shares of our common stock are subject to outstanding options or warrants.

Status of Outstanding Common Stock

As of December 31, 2008, we had a total of 8,696,134 shares of our common stock outstanding.  Of these shares, 8,300,634 are held by “affiliates” of the Company and the remaining shares are either registered or  may be transferred subject to the requirements of Rule 144.  We have not agreed to register any additional outstanding shares of our common stock under the Securities Act.

17

Holders

We have issued an aggregate of 8,696,134 shares of our common stock to approximately 100 record holders.

Dividends

We have not paid any dividends to date, and have no plans to do so in the immediate future.

Recent Sales of Unregistered Securities

During the quarter ended March 31, 2008, Keyano Invest Inc., a related party, loaned the Company $1,000,000 for working capital purposes. During the quarter ended June 30, 2008, the Company repaid Keyano Invest Inc $200,000 and converted the remaining balance of $800,000 to a 2.5% convertible debenture. On June 5, 2008, the Company issued 231,884 shares of its commons shares in conversion of an $800,000 debenture from Keyano Invest, Inc, a related party. The shares were converted at $3.45 per share.

On May 13, 2008 the Company issued 3,000 shares of its common shares for $10,500, or $3.50 per share.

Purchases of Equity Securities

The Company has never purchased nor does it own any equity securities of any other issuer.

ITEM 6.     SELECTED FINANCIAL DATA

Year Ended	12/31/2008			12/31/2007			12/31/2006
Revenues		4,331,355			2,825,927			2,512,205
Net Loss		(760,747	)		(307,422	)		(1,264,576	)
Net loss per share		(0.09	)		(0.04	)		(16.00	)
Weighted average no shares		8,597,205			8,456,250			8,143,921
Stockholders' deficit		(322,610	)		(924,179	)		(117,372	)
Total assets		3,062,146			2,984,733			3,288,172
Total liabilites		3,384,756			3,908,912			3,405,544

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion should be read in conjunction with our financial statements and the notes thereto.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND USE OF TERMS

This annual report contains forward-looking statements, which reflect our views with respect to future events and financial performance.  These forward-looking statements are subject to certain uncertainties and other factors that could cause actual results to differ materially from such statements.  These forward-looking statements are identified by, among other things, the words “anticipates”, “believes”, “estimates”, to expects”, “plans”, “projects”, “targets” and similar expressions.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.  We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  Important factors that may cause actual results to differ from those projected include the following factors:

18

· our potential inability to raise additional capital;

· our potential inability to obtain the right to develop our target markets or to exploit the rights currently held by us;

· our potential inability to compete with other finance companies that may be more experienced and better capitalized than us;

· changes in domestic and foreign laws, regulations and taxes;

· changes in economic conditions;

· lack of resources compared to our competitors;

· uncertainties and risks related to the legal systems and economics in our target markets, including Brazil’s legal system and economic, political and social events in Brazil and other target markets;

· fluctuations in currency exchange rates;

· the effects of any applicable currency restrictions, including any restrictions on the repatriation of funds back to the United States;

· a general economic downturn or a downturn in the securities markets;

· Regulations of the Commission which affect trading in the securities of “penny stocks;” and

· other risks and uncertainties.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future. Except as otherwise indicated by the context, references in this report to:

· “Lexicon,” “we,” “us,” “our,” or the “Company,” are references to Lexicon United Incorporated, and its consolidated subsidiary, including, after February 27, 2006, ATN;

· “ATN” are to ATN Capital E Participações Ltda.

· “Brazil” are to the Federative Republic of Brazil;

· “U.S. dollar,” “$” and “US$” are to the legal currency of the United States;

· “Real,” “R$,” and “Reais” are to the legal currency of Brazil;

· the “SEC” or the “Commission” are to the United States Securities and Exchange Commission;

· the “Securities Act” are to Securities Act of 1933, as amended; and

· the “Exchange Act” are to the Securities Exchange Act of 1934, as amended.

19

Overview

Our Background and History

Our corporate name is Lexicon United Incorporated. We were incorporated on July 17, 2001 in the state of Delaware. We were a “blank check” company and had no operations other than organizational matters and conducting a search for an appropriate acquisition target until February 27, 2006 when we completed an acquisition transaction with ATN, a Brazilian limited company that had commenced business in April 1997. ATN is engaged in the business of managing and servicing accounts receivables for large financial institutions in Brazil.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with US generally accepted accounting principles and our discussion and analysis of our financial condition and results of operations require our management to make judgments, assumptions, and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates and such differences may be material.

Management believes our critical accounting policies and estimates are those related to revenue recognition and the valuation of goodwill and intangible assets. Management believes these policies to be critical because they are both important to the portrayal of our financial condition and results, and they require management to make judgments and estimates about matters that are inherently uncertain.

Revenue Recognition

We derive our revenues primarily from collection of distressed debt by entering into non binding agreements with financial institutions to collect their debt. Once an agreement is reached with the debtor of the financial institution based upon established parameters, an installment agreement is established. We are then entitled to a commission on the agreed settlement. We earn and record the pro rata commission for each installment, when the installment payments are received from the debtors. Our average fee was approximately 15% during the fiscal years ended December 31, 2008 and 2007.

Revenue from the collection of distressed debt owned by the Company is recognized based on the AICPA Statement of Position 03-3 using the interest method.  The interest method applies an effective interest rate to the cost basis of each pool, which remains unchanged throughout the life of the pool unless there is an increase or decrease in subsequent cash glows.  Revenue from receivable portfolios is accrued based on each pool’s effective interest rate applied to each pool’s adjusted cost.  The cost basis of each pool is increased by revenue earned and decreased by gross collections and impairments.

Goodwill and Intangible Impairment

The company accounts for goodwill in accordance with Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets.  As required by SFAS No. 142, the Company tests for impairment of goodwill annually (at year-end) or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.  The required two-step approach uses accounting judgments and estimates of future operating results.  Changes in estimates or the application of alternative assumptions could produce significantly different results.  Impairment testing is done at a reporting unit level.  The company performs this testing for its Brazilian operating segment which is considered a reporting unit under SFAS No. 142. An impairment loss generally is recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit.  The fair value of the company’s reporting unit was estimated using the expected present value of future cash flows using estimates, judgments, and  assumptions that management believes were appropriate in the circumstances.  The estimates and judgments that most significantly affect the fair value calculation are assumptions related to revenue growth, collection processes, and the discount rate.

20

Industry Wide Factors that are Relevant to Our Business

We are in the business of managing the recovery of credit accounts receivable in Brazil for our third-party clients who are either credit card issuers or transferees of credit accounts receivable. Our business, therefore, depends on the growth of the credit card sector in Brazil.

The credit card sector in Brazil became the third largest issuer worldwide after the United States and China, and according to the projections of major sources such as the Brazilian Association of Credit Cards Issuers (ABECS), the Brazilian Institute of Statistics (IBGE), the Brazilian Banks Federation (FERBABAN) and Citibank, this sector is poised to continue its double-digit growth.

During the last decade the volume of transactions has soared from 1.36 billion in 2004 to over 2 billion in 2006, with the number of plastic credit and debit cards dramatically increasing from 17 million in 1996 to 80 million in 2006. This trend reflects the inclusion of low-income consumers where at 32% of the GDP in Brazil, it is still well below the Chileans who are at 63% and the Bolivians who are at 42%.

This economic growth of the commercial credit sector is following the same pattern with the same projections. New bank accounts increased from 31.4 million in the year 2000 to 95.1 million in 2005 where consumers view the credit card as a financial instrument to be used in lieu of the check. The number of checks used dropped 27% from 1999 to 2005 while credit card payments increased by 240%. According to data from the Brazilian Central Bank, in 2005, payments by credit cards surpassed payments made by check.

Uncertainties that Affect our Financial Condition

We have approximately eighteen clients, but we currently rely on six major clients for a significant portion of our revenue.  None of these major clients are contractually obligated to continue use of our services at historic levels or at all, subject only to notice periods for termination.  If any of these clients were to significantly reduce their amount of service, fail to pay, or terminate their relationships with us altogether, our business could be harmed.  The number of major clients on whom we rely has increased for fiscal years 2007 to 2008.  During fiscal year 2008, no one customer has been responsible for more than 20% of our revenues.

The portfolios of consumer receivables that we service consist of one or more of the following types of consumer receivables:

· charged-off receivables - accounts that have been written-off by the originators and may have been previously serviced by collection agencies;

· semi-performing receivables - accounts where the debtor is making partial or irregular monthly payments, but the accounts may have been written-off by the originators; and performing receivables - accounts where the debtor is making regular monthly payments that may or may not have been delinquent in the past.

Charged-off receivables accounted for more approximately 99% of our business in 2008, while semi-performing and performing receivables each accounted for less than 1% of our business in the period.

ATN’s long period of operations and its demonstrated capacity to process millions of receivables, large and small, have made ATN an attractive resource for customers desiring to secure their receivables.  Our success rate is measured by how long an outstanding debt is past due as well as whether such debt has been categorized as a performing, semi-performing or charged-off item.  On average we recover between 2.5% and 8% of face value of our debt. Due to our level of professionalism and our successful performance we believe that we are in the top 5% of businesses in this field in Brazil.  

21

In order to further increase our revenue base and eliminate the uncertainty of our ability to continue as a going concern, with adequate capitalization, we plan to start using ATN’s consumer database and its vast experience in collections to start buying defaulted outstanding consumer loans and other assets, which are usually discounted to their legal principal balance or appraised value. We believe that the impact on our liquidity would be highly improved and we would have the opportunity to build our own short and long-term portfolio of restructured receivables.  Purchased debts for our own account would also suppress the efforts and costs of collection monitoring and reporting back to original holders to the benefit of our bottom line.

Investment in Receivable Portfolio

The Company’s subsidiary ATN Capital e Participacoes Limitada ( “ATN”) has extensive experience in the field of distressed credit card and consumer loan receivable collections.  It had previously only collected distressed debt for large credit card companies and financial institutions in Brazil, on a commission basis.  In 2008, in addition to working for the large institutions, it decided to purchase its own portfolio of distressed debt.  The portfolio was purchased for R$1,299,458 (approximately US$816,294) on June 2, 2008.  The portfolio includes past due and unpaid debt from more than 41,000 Brazilian consumers and has a face value of approximately R$500,000,000 (or US$305 million as of the purchase date).

The Company has adopted AICPA Statement of Position 03-3 (“SOP 03-3”), “Accounting for Loans or Certain Securities Acquired in a Transfer”.  In accordance with SOP 03-3, the company has divided the portfolio into three pools, with each pool recorded at cost.  SOP 3-03 addresses accounting for differences between contractual cash flows expected to be collected from an investor’s initial investment in loans or debt securities acquired in a transfer if those differences are attributable, at least in part, to credit quality.  SOP 03-3, limits accretable yield to the excess of the investor’s estimate of undiscounted cash flows over the investor’s initial investment in the loan and prohibits the recognition of the non-accretable difference.  Under SOP 3-03, subsequent increases in cash flows expected to be collected generally should be recognized prospectively through adjustment of the loan’s yield over its remaining life while any decreases in cash flows expected to be collected should be recognized as impairments.

During the six months ended December 31, 2008, the Company actually collected $169,936 which was $79,914 in excess of the amount provided in its original projections.  The Company believes that its original projections are still accurate and attributes the excess collections to the sale of a batch of accounts spread amongst the three pools.  The excess cash collections provided a reduction to the projected ended carrying amount in $12,301.

The following table reflects the initial carrying value and cash flows expected to be collected for the period of inception June 2, 2008 to December 31, 2008 and for the years ending December 31, 2009 through 2013:

			Cash Flows
Year Ended	Beginning Carrying		Expected to be		Interest		Reduction of Carrying		Ending Carrying
31-Dec	Amount		Collected		Income		Amount		Amount
2008		556,037		90,022		76,028		13,994		542,043
2008		542,043		196,043		128,208		67,835		474,208
2010		474,208		196,043		112,164		83,879		390,329
2011		390,329		196,043		92,323		103,720		286,609
2012		286,609		196,043		67,977		128,066		158,543
2013		158,543		196,043		37,500		158,543		0
Totals			$	1,070,237	$	514,200	$	556,037

22

Initial accretable yield has been calculated as follows:

Cash flows expected to be collected as of 12/31/08	$	1,070,236
Less: Initial Investment		556,037
Yield accreted to date		90,022
Accretable Yield as of 12/31/08	$	424,177

The Company financed the purchase with two Notes Payable totaling R$626,200.  The notes are due December 2009 and bear interest at the rate of 2.0% per month.  The notes are included in the caption loans from officer and loan from an individual on the balance sheet.  The loan from an individual is deemed to be a related party because of his affiliation with the Company. At December 31, 2008, the balance of the loan including accrued interest,  from officer is $58,982 and the loan from an individual is $245,761.

Due to the strengthening US dollar, there has been a change in the value of the purchase price of the receivable portfolio from $816,294 at June, 2, 2008 to $556,037 at December 31, 2008.  The difference of $260,257 is included as accumulated other comprehensive loss.

Results of Operations 

Year  Ended December 31, 2008 Compared to Year Ended December 31, 2007.

The following table summarizes the results of our operations during the year ended December 31, 2008, and 2007 and provides information regarding the dollar and percentage increase or (decrease) from the year ended December 31,  2008 to the same period of 2007.

	12/31/08			12/31/07			Increase  (Decrease)			Percentage  Increase  (Decrease)
Revenues		4,331,355			2,825,927			1,505,428			53.27
Cost of Services		2,558,467			1,945,827			612,640			31.48
Selling, General and Administrative Expense		1,669,749			663,276			1,006,473			151.74
Interest expense		594,547			360,263			234,284			65.03
Depreciation & amortization		208,298			203,096			5,202			2.56
Interest income & other		(61,041	)		39,133			(100,174	)		(255.98	)
Net income (loss)		(760,747	)		(307,422	)		(453,325	)		(147.46	)
Earnings (Loss) per common share		(.09	)		(.04	)		(.05	)		(125.00	)

We had revenues of $4,331,355 for the year ended December 31, 2008, compared to revenues of $2,825,927 during the same period in 2007.  Our revenues increased $1,505,428 or 53.27% in the year ended December 31, 2008 primarily due to an increase in collections of receivables in ATN and revenue from Engepet Energy Enterprises and United Oil Services, Inc.

23

Our cost of services for the year ended December 31, 2008 was $2,558,467 as compared to $1,945,827 during the same period in 2007.  This increase of $612,640 or 31.48% is primarily the result of increased salaries and related expenses , transportation expenses ,and  internship program expenses from ATN and expenses related to Engepet Energy Enterprises and United Oil Services, Inc.

Selling, general and administrative expenses increased by $1,006,473 or 151.74%, to $1,669,749 in the year ended December 31, 2008 compared to $663,276 in the same period in 2007. The change is primarily due to the successful negotiations  in 2007with the Brazilian authorities to favorably settle previously recorded taxes approximating $934,001.  The change is also the result of an increase in officer compensation, software rent, communication expenses and professional fees and other administrative expenses.

Interest expense for the year ended December 31, 2008 was $594,547 and interest expense in the same period of 2007 was $360,263.  Interest expense increased $234,284 or 65.03% in the year ended December 31, 2008 mainly due to the increase of new borrowings over the past year.

During the year ended December 31, 2008 we incurred a net loss of $(760,747) compared with $(307,422) for the same period in the prior year.  The decrease in our loss is primarily due to an increase in expenses as described above offset by increased revenues.

Loss per common share for the year ended December 31, 2008 was $(.09) as compared to a loss of $(.04) during the same period of 2007.  This increase in the loss per share is due to the increased loss for the year ended December 31, 2008.

Cash Flow Items

The following table provides the statements of net cash flows for the year ended December 31, 2008:

	Year Ended December 31,
	2008			2007
Net Cash Provided By (used in) Operating Activities		(660,213	)		(581,067	)
Net Cash Used in Investing Activities		(302,481	)		(52,936	)
Net Cash Provided by Financing Activities		871,100			179,097
Net Increase (decrease)  in Cash and Cash Equivalents		(175,751	)		(429,336	)
Cash and Cash Equivalents - Beginning of Period		467,195			896,531
Cash and Cash Equivalents - End of Period		291,453			467,195

We used $660,213 of cash from our operating activities during the year ended December 31, 2008 as compared to $581,067 cash used during the year ended December 31, 2007.  The difference of $79,146 is mainly attributable to an increase in net loss of $453,325 offset by the settlement of tax provisions of $792,978 and decreases in accrued taxes of $239,085.

We used $302,481 in cash from our investing activities during the year ended December 31, 2008, as compared to $52,936 used in the prior year ending December 31, 2007.  These funds were used for the purchase of a receivable portfolio in the amount of $282,126 and fixed assets for $20,355.  

We provided a net $871,100 from financing activities during the year ended December 31, 2008 as compared to $179,097 during the year ended December 31, 2007.  The change is primarily due to a increase in new borrowings from a related party $1,000,000 offset by payments on notes payable.  In June 2008, the balance of  the related party borrowing ($800,000) was converted to 231,884 shares of common stock.

24

Balance Sheet Items

As of December 31, 2008, we had total current assets of $845,280, as compared to $963,941 as of December 31, 2007.  Our total assets as of December 31, 2008 were $3,062,146 as compared to $2,984,733 as of December 31, 2007.  We had total current liabilities of $3,216,884 as of December 31, 2008 as compared to $3,555,914 as of December 31, 2007, and we had total liabilities of $3,384,756  as of December 31, 2008 as compared to $3,908,912 as of December 31, 2007.

The increase in total assets is primarily due to the purchase of a debt receivable portfolio with a balance at December 31, 2008 of $529,742 offset by a decrease in cash of $175,742. The decrease in total liabilities is primarily due to a decrease in accrued taxes and benefits of 496,544.

As of December 31, 2008, our total Stockholders’ Equity (deficit) was $(322,610) as compared to $(924,179) at December 31, 2007.  This change was due to an increase in capital stock and paid in capital of $823,000 offset by operating losses and gains due to foreign exchange rates.

Liquidity and Capital Resources   

We believe that we will be able to pay our normal and operating expenditures during the next twelve months with our cash reserves and additional cash generated from operations, and by reducing our accrued municipal services tax liability by restructuring such debt.  We do not have any material capital commitments during the next twelve months, other than repayment of debt as it comes due, and we do not anticipate the issuance of additional debt (other than to refinance existing debt).  We also do not anticipate any material changes in our operations during the next twelve months.  As such, we believe that our current cash position is sufficient to retire our current short-term debt as it comes due and, if we are successful in adequately restructuring our municipal services tax liability, we believe that cash generated from operations will be sufficient to pay our operating expenses during the next twelve months.  We had cash and cash equivalents of approximately $291,453 as of December 31, 2008 and we had short-term liabilities in the amount of $3,216,884, as well as long-term liabilities in the amount of $167,872 as of December 31, 2008.  The Company intends to use its cash to retire current debt as it comes due as well as to pay operating expenses as necessary. During 2007, the Company successfully negotiated with Brazilian authorities to favorably settle previously recorded municipal service taxes of $730,000.  In addition, the company further evaluated related payroll tax provisions and reduced same by approximately $200,000.

If we are required to make any material and unplanned expenditures during the next twelve months, the company believes that it can raise additional capital in the equity markets through private placements in order to meet its short-term cash requirements.  The company believes that such equity funding could also be used to liquidate all or a portion of the Company’s current bank loans or pay other operating expenses.  However, we can provide no assurances that we will be able to raise additional capital in the equity markets on favorable terms, if at all or on a timely basis.

As of December 31, 2008, we had cash assets of $291,453 and total assets of $3,062,146 as compared to cash assets of $467,195 and total assets of $2,984,733 as of December 31, 2007. This increase is primarily due to the purchase of a debt receivable portfolio with a balance at December 31, 2008 of $529,742.   We have a $(2,371,604) negative working capital at December 31, 2008, of which $1,223,294 relates to municipal taxes and payroll expenses in connection with ATN’s prior and ongoing operations.

Loans Payable to Banks

The Company has several loans with various Brazilian banks and financial institutions.  The loans are secured by personal guarantees of the Company’s principal shareholders.  The loans mature at various months throughout the year and are generally renewed at maturity.  The interest rates are fixed and bear interest at rates ranging from 26% to 42% per year.  The balance of the loans at December 31, 2008 was $267,039.   

25

Long-Term Debt

On April 17, 2006, the Company closed on a Real Estate transaction to purchase the 8th floor of an executive office building for ATN Capital E Participacoes, Ltda.’s executive offices. The purchase price of approximately $176,489 was funded with a 20% down payment payable over four months and an 8 year adjustable rate mortgage currently at 13.29%.  At December 31, 2008, the balance of the loan is $123,676.

In August 2006, the Company purchased new computer equipment from DELL Brazio. The equipment valued at approximately $38,395 is financed over a three year period at 14.4% per year.  At December 31, 2008, the balance of the loan is $10,678..

In September 2006, the Company purchased new furniture.  The furniture valued at approximately $112,161 is financed over a five year period at 5.69% per year plus the inflation index.  The loan is payable in 48 monthly installments commencing October 8, 2007.  The loan is secured by the furniture.  At December 31, 2008, the balance of the loan is $70,544.

In June, 2007, the Company borrowed two working capital loans from Caixa Economica Federal. The loans are valued at approximately $113,000 and are payable in 24 monthly installments plus interest of 2.73% per month, commencing July, 2007. The loans are personally guaranteed by ATN’s directors. At December 31, 2008 the balance is $26,225.

In June, 2007, the Company borrowed a working capital loan from Banco Bradesco. The loan is valued at approximately $207,400 and is payable in 24 monthly installments plus interest of 2.60% per month, commencing July, 2007. The loan is personally guaranteed by ATN’s directors. At December 31, 2008, the balance is $18,043.

In September, 2007, the Company borrowed $51,000 from Santander. The loan is payable in 16 monthly installments plus interest of 3.9% per month, commencing October, 2007. The loan is personally guaranteed by ATN’s directors. At December 31, 2008, the balance is $11,302.

During the year ended December 31, 2007, the Company purchased new computer equipment from DELL Brazio. The equipment valued at approximately $189,500 is financed over a three year period plus interest at rates ranging from 12% to 12.84% per year. The loan is secured by the computer equipment. The balance of the loan at December 31, 2008 is $19,642.

In January 2008, the Company purchased new air conditioning equipment.  The equipment valued at approximately $28,000 is being financed over a three year period at 12% per year. The balance of the loan at December 31, 2008 is 14,445.

In July, 2008, the Company borrowed approximately $77,000 from Banco ITAU. The loan is payable in 18 monthly installments plus interest of 2.28% per month, commencing August, 2008. The loan is personally guaranteed by ATN’s directors. At December 31, 2008, the balance is $58,743.

In July, 2008, the Company borrowed approximately $3,500 from Officer Distrib. The loan is payable in 36 monthly installments plus interest of 1.15% per month, commencing August, 2008. The loan is personally guaranteed by ATN’s directors. At December 31, 2008, the balance is $1,231.

In October, 2008, the Company borrowed approximately $60,000 from Banco ITAU. The loan is payable in 9 monthly installments plus interest of 2.88% per month, commencing August, 2009. The loan is personally guaranteed by ATN’s directors. At December 31, 2008, the balance is $54,278.

26

In November, 2008, the Company borrowed approximately $43,000 from Banco Bradesco. The loan is payable in 12 monthly installments plus interest of 3.3% per month, commencing November, 2008. The loan is personally guaranteed by ATN’s directors. At December 31, 2008, the balance is $39,224

In November, 2008, the Company borrowed approximately $52,000 from Unibanco-Capital De Giro. The loan is payable in 12 monthly installments plus interest of 3.3% per month, commencing November, 2008. The loan is personally guaranteed by ATN’s directors. At December 31, 2008, the balance is $48,584.

During the year ended December 31, 2008, the Company purchased new computer equipment from DELL Brazio. The equipment valued at approximately $15,500 is financed over a three year period plus interest at rates ranging from 11.4% to 13.8% per year. The loan is secured by the computer equipment. The balance of the loan at December 31, 2008 is $7,087.

In December, 2008, the Company borrowed approximately $30,000 from Banco Real. The loan is payable in 12 monthly installments plus interest of 3.2% per month, commencing December, 2008. The loan is personally guaranteed by ATN’s directors. At December 31, 2008, the balance is $29,952.

An analysis of the current and long-term portion of the debt at December 31, 2008 is as follows:

Total loans outstanding	$	533,654
Less:  current portion	$	365,782
Long-term portion	$	167,872

Our financial statements have been prepared on the basis that we will continue as a going concern, which contemplates the realization and satisfaction of our liabilities and commitments in the normal course of business.

We believe that our increased revenues and our cash on hand will be sufficient to sustain our operations at our current levels for the next twelve months.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Seasonality

Our operating results are not affected by seasonality.

Inflation

Our business and operating results are not affected in any material way by inflation.

ITEM 7A.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

27

ITEM 8.          FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Set forth below are the audited financial statements for the Company as of and for the fiscal years ended December 31, 2008 and 2007 (restated) and the reports thereon of Meyler & Company, LLC.

28

LEXICON UNITED INC. AND SUBSIDIARIES

AUDITED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 (RESTATED)

29

CONTENTS
Report of Independent Registered Public Accounting Firm	Page	F 1
Consolidated Balance Sheets		F 2
Consolidated Statements of Operations		F 3
Consolidated Statements of Cash Flows		F 4
Consolidated Statement of Stockholders’ Deficit		F 6
Notes to Consolidated Financial Statements		F 7

30

MEYLER & COMPANY, LLC

CERTIFIED PUBLIC ACCOUNTANTS

ONE ARIN PARK

1715 HIGHWAY 35

MIDDLETOWN, NJ 07748

Report of Independent Registered Public Accounting Firm

To the Board of Directors

Lexicon United Incorporated

Austin, TX

We have audited the accompanying consolidated balance sheets of Lexicon United Inc. and Subsidiaries as of December 31, 2008 and 2007 (Restated)  and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2008 and 2007 (Restated). These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting.  Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Lexicon United Inc. and Subsidiaries as of December 31, 2008 and 2007 (Restated), and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2008 and 2007 (Restated), in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note B to the consolidated financial statements, the Company incurred net losses of $760,747 and $307,422 in 2008 and 2007, respectively, and had an accumulated deficit of $2,958,232 at December 31, 2008. There are existing uncertain conditions the Company faces relative to its ability to obtain capital and operate successfully. These conditions raise substantial doubt about its ability to continue as a going concern.  Management’s plans regarding these matters are described in Note B.  The Financial Statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Meyler & Company, LLC

Middletown, NJ

April 15, 2009

F-1

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,
	2008			2007
				(Restated)
CURRENT ASSETS
Cash and equivalents	$	291,453		$	467,195
Accounts receivable		342,144			288,588
Other receivables		211,520			205,013
Prepaid expenses		163			3,145
Total Current Assets		845,280			963,941
FIXED ASSETS
Building, equipment, and leasehold improvements,
net of accumulated depreciation of $237,570 and
$471,766 at December 31, 2008 and 2007, respectively		478,896			740,525
OTHER ASSETS
Investment in receivable portfolio		529,742
Customer lists, net of amortization of $154,116 and $102,744 at
December 31, 2008 and 2007, respectively		359,617			410,989
Trade names, net of amortization of $66,050 and $44,034 at
December 31, 2008 and 2007, respectively		154,120			176,137
Goodwill		693,141			693,141
Security deposit		1,350
Total Other Assets		1,737,970			1,280,267
TOTAL ASSETS	$	3,062,146		$	2,984,733
CURRENT LIABILITIES
Loans payable to banks	$	267,039		$	491,474
Current portion of long term debt		365,782			270,603
Bank Overdrafts		301,282			378,514
Note payable to an individual		292,262
Accounts Payable		102,049			176,022
Loans payable to officer		187,605			52,504
Accrued Expenses		477,571			466,959
Accrued Municipal Service Taxes		125,017			159,841
Accrued Payroll and related taxes		984,358			1,379,178
Accrued Employee Benefits		113,919			180,819
Total Current Liabilities		3,216,884			3,555,914
LONG TERM LIABILITIES
Long term debt		167,872			352,998
Total Long Term Liabilities		167,872			352,998
TOTAL LIABILITIES		3,384,756			3,908,912
STOCKHOLDERS' DEFICIT
Preferred stock $0.001 par value, 10,000,000
shares authorized, none issued and outstanding
Common stock $0.001 par value, 40,000,000
shares authorized, 8,696,134 and 8,456,250 shares
issued and outstanding at December 31, 2008 and 2007,
respectively		8,696			8,456
Paid in capital		2,725,954			1,903,194
Accumulated other comprehensive loss		(99,028	)		(638,344	)
Accumulated deficit		(2,958,232	)		(2,197,485	)
Total Stockholders' Deficit		(322,610	)		(924,179	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	3,062,146		$	2,984,733

See accompanying notes to financials

F-2

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the year ended December 31,
	2008			2007
				(Restated)
REVENUES
Service revenues	$	4,331,355		$	2,825,927
COST OF SERVICES		2,558,467			1,945,827
GROSS PROFIT		1,772,888			880,100
COSTS AND EXPENSES
Selling, general and administrative (including reversal of $141,023 and
$934,001 for Municipal Service taxes and payroll related taxes
and benefits in 2008 and 2007, respectively)		1,669,749			663,276
Depreciation		134,909			129,707
Amortization		73,389			73,389
Total Costs and Expenses		1,878,047			866,372
OPERATING INCOME (LOSS)		(105,159	)		13,728
OTHER INCOME (LOSS)
Interest expense		(594,547	)		(360,263	)
Interest income and other		(61,041	)		39,113
Total Other Income (Expenses)		(655,588	)		(321,150	)
NET LOSS	$	(760,747	)	$	(307,422	)
NET LOSS PER COMMON SHARE	$	(0.09	)	$	(0.04	)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING		8,597,205			8,456,250

See accompanying notes to financials

F-3

LEXICON UNITED INCORPORATED

AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF

STOCKHOLDERS' EQUITY

												Accumulated
												Other
	Common Stock					Paid in			Accumulated			Comprehensive
	Shares			Amount		Capital			Deficit			Loss			Total
Balance, December 31, 2006		8,456,250		$	8,456	$	1,903,194		$	1,890,063	)	$	(138,959	)	$	(117,372	)
2006 acquisition share adjustment		(800,000	)				(160,000	)								(160,000	)
Issuance of common stock to officers for compensation at $0.20 per share		560,000					112,000									112,000
Issuance of common stock to consultants for compensation at $0.20 per share		240,000					48,000									48,000
Net loss for the year ended December 31, 2007										(307,422	)					(307,422	)
Other comprehensive loss													(499,385	)		(499,385	)
Balance, December 31, 2007		8,456,250			8,456		1,903,194			(2,197,485	)		(638,344	)		(924,179	)
Issuance of common stock at $3.50 per share		3,000			3		10,497									10,500
Issuance of common stock in conversion of an $800,000 debenture from Keyano Invest, Inc. a related party $3.45 per share		231,884			232		799,768									800,000
Fair value of common stock issued in connection with consulting services at $2.50 per share		5,000			5		12,495									12,500
Net loss for the year ended December 31, 2008										(760,747	)					(760,747	)
Other comprehensive gain													539,316			539,316
Balance, December 31, 2008		8,696,134		$	8,696	$	2,725,954		$	(2,958,232	)	$	(99,028	)	$	(322,610	)

See accompanying notes to financials

F-4

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the year ended December 31,
	2008			2007
				(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(760,747	)	$	(307,422	)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities
Depreciation and amortization		134,909			129,707
Amortization of intangibles		73,389			73,389
Net assets disposition		30,849
Stock based compensation		12,500			160,000
Provision for contingencies		(141,023	)		(934,001	)
Decrease (increase) in assets:
Accounts receivable		7,212			(49,315	)
Other receivables		(185,267	)		(91,192	)
Prepaid expenses		730			1,461
Security deposit		(1,350	)
Decrease (increase) in liabilities:
Accounts payable		(11,029	)		(54,639	)
Accrued expenses		120,368			192,614
Accrued municipal service taxes					134,408
Accrued payroll and related taxes		60,193			144,057
Accrued employee benefits		(947	)		19,866
NET CASH USED IN OPERATING ACTIVITIES		(660,213	)		(581,067	)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in receivable portfolio		(282,126	)
Purchase of fixed assets		(20,355	)		(52,936	)
NET CASH USED IN INVESTING ACTIVITIES		(302,481	)		(52,936	)
CASH FLOWS FROM FINANCING ACTIVITIES
Loan from Keyano Invest, Inc		1,000,000
Loan from related party		78,329			52,504
Loan from an individual		65,000
Net change in bank loans		(99,680	)		165,764
Proceeds from new loans		599,915			415,246
Repayment of loans		(782,964	)		(454,417	)
Issuance of common stock		10,500
NET CASH PROVIDED BY FINANCING ACTIVITIES		871,100			179,097
EFFECT OF EXCHANGE RATE OF CASH		(84,148	)		25,570
NET DECREASE IN CASH		(175,742	)		(429,336	)
CASH, beginning of period		467,195			896,531
CASH, end of period	$	291,453		$	67,195

See accompanying notes to financials

F-5

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

	For the year ended December 31,
	2008		2007
			(Restated)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid	$	594,547	$	360,263
Non cash items
Purchase of furniture and equipment	$	43,095	$	255,595
Conversation of loan from Keyano Invest, Inc. to common stock	$	800,000
Loans and accounts payable incurred for acquisition of receivable portfolio	$	267,950
Goodwill acquisition adjustment			$	(160,000	)
Effect on paid-in capital for goodwill acquisition adjustment			$	160,000

See accompanying notes to financials

F-6

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007 (Restated)

NOTE A - RESTATEMENT

The Company’s financial statements for the year ended December 31, 2007 have been restated as follows:

	Previously
	Reported			As Restated
Goodwill (1)	$	853,141		$	693,141
Accrued payroll and related taxes (2)		1,366,938			1,379,178
Selling, general and administrative expenses (1)		491,036			651,036
Accumulated deficit		(2,085,245	)		(2,197,485	)

Notes:

(1) To adjust goodwill for a subsequent reduction of 800,000 shares originally issued in connection with the purchase of ATN Capital E Participacoes, Ltda.   The equivalent reduction in shares were then distributed to officers, employees, and consultants as stock based compensation.  Such shares were valued at $0.20 per share.

(2)  To accrue employer portion of payroll taxes.

NOTE B – NATURE OF BUSINESS AND GOING CONCERN

Organization

Lexicon United Incorporated was incorporated on July 17, 2001 under the laws of the State of Delaware and had been a blank check company until February 27, 2006, when it acquired ATN Capital E Participacoes, Ltda., a Brazilian Company (“ATN”). ATN was incorporated in April 1997 and its focus is on the recovery of delinquent accounts (generally, accounts that are 60 days or more past due) for large Brazilian financial institutions. The Company is paid a commission on the settlement of delinquent accounts. The Company formed two new subsidiaries in 2008, Engepet Energy Enterprises, Inc. and United Oil Services, Inc, to work with companies to recover additional oil from oil wells whose production had diminished.  See Note F.

Going Concern

As indicated in the accompanying financial statements, the Company has an accumulated deficit of $2,958,232 and negative working capital of $2,371,604 at December 31, 2008. Management’s plans include raising adequate capital through the equity markets to fund future operations and generating of revenue through its businesses. Failure to raise adequate capital and generate adequate sales revenues could result in the Company having to curtail or cease operations. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. However, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

F-7

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007 (Restated)

NOTE C – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with a maturity of three months or less as cash equivalents. There were cash equivalents of $53,781 and $64,260 in 2008 and 2007, respectively.

Equipment and Depreciation

Equipment is stated at cost and is depreciated using the straight line method over the estimated useful lives of the respective assets. Routine maintenance, repairs and replacement costs are expensed as incurred and improvements that extend the useful life of the assets are capitalized.

When equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is recognized in operations.  During the year ended December 31, 2008, approximately $188,000 of fully depreciated assets and $30,000 of undepreciated assets were written off.

Revenue Recognition

The Company derives its revenue primarily from collection of distressed debt by entering into non binding agreements with financial institutions to collect their delinquent debt.  Once an agreement is reached with the debtor of the financial institution based upon established parameters, an installment agreement is established.  The Company is then entitled to a commission on the agreed settlement.  The Company earns and records a pro rata commission for each installment, when the installment payments are received from the debtors.  Revenue from the collection of distressed debt, included in a portfolio, by the Company is recognized based on AICPA Statement of Position 03-3 (“SOP-03-3”) using the interest method.  The interest method applies an effective interest rate to the cost basis of each pool in which the distressed debt has been categorized and remains unchanged throughout the life of the pool unless there is an increase or decrease in subsequent expected cash flows.  Revenue from the receivable portfolios is accrued based on each pool’s effective interest rate applied to each pool’s adjusted cost.  See Note E to Financial Statements.

Consolidated Financial Statements

The consolidated financial statements include the accounts of Lexicon United Incorporated, its 80% owned subsidiary, ATN Capital E Participacoes Ltda and its 100% owned subsidiaries Engepet Energy Enterprises, Inc. (“Engepet”) and United Oil Services, Inc. (“United”).  All material intercompany transactions have been eliminated in consolidation.  Engepet and United were newly formed in 2008 and their transactions were not deemed to be significant.

F-8

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007 (Restated)

NOTE C – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Intangible Assets

Intangible assets of customer lists and trade names are amortized over a ten year life. The amortization recorded is $220,166 and $146,778 at December 31, 2008 and 2007 respectively.

Fair Values of Financial Instruments

The Company uses financial instruments in the normal course of business. The carrying values of cash equivalents, accounts receivable, accounts payable, accrued expenses and other current liabilities approximate their fair value due to the short-term maturities of these assets and liabilities.

Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”).  SFAS 109 requires the determination of deferred tax assets and liabilities based on the differences between the financial statement and income tax bases of assets and liabilities, and using estimated tax rates in effect for the year in which the differences are expected to reverse.  The measurement of a deferred tax asset is adjusted by a valuation allowance, if necessary, to recognize tax benefits only to the extent that, based on available evidence, it is more likely than not that they will be realized.  In determining the valuation allowance, the Company considers factors such as the reversal of deferred income tax liabilities, projected taxable income and the character of income tax assets and tax planning strategies.  A change to these factors could impact the estimated valuation allowance and income tax expense.

Effective January 1, 2007, the Company adopted the provisions of FIN 48, which clarifies the accounting for income tax positions by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements.  FIN 48 also provides guidance on the derecognition of previously recognized

deferred tax items, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition.  Under FIN 48, the Company recognizes the tax benefit from an uncertain tax position only if it is more  likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the tax position.  The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution.  Adoption of FIN 48 did not have a material impact on the Company’s operations or financial condition.

Net Loss Per Common Share

The Company computes per share amounts in accordance with Statement of Financial Accounting standards (“SFAS”) No. 128, “Earnings per Share.” SFAS per share (“EPS”) requires presentation of basic and diluted EPS. Basic EPS is computed by dividing the income (loss) available to Common Stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock and common stock equivalents outstanding during the periods, however, no potential common shares are included in the computation of any diluted per share amounts when a loss from continuing operations exists.

F-9

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007 (Restated)

NOTE C – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Foreign Currency Translation

The Company considers the Brazilian currency (Reais) to be the functional currency of ATN. Assets and liabilities were translated into U.S. dollars at the period end exchange rates. The equity accounts were translated at historical rates. Statement of Operations amounts were translated using the average rate during the year. Gains and losses resulting from translating foreign currency financial statements are accumulated in other comprehensive income (loss), a separate component of stockholder’s deficit.

Goodwill and Intangible Impairment

The company accounts for goodwill in accordance with Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets.  As required by SFAS No. 142, the Company tests for impairment of goodwill annually (at year-end) or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.  The required two-step approach uses accounting judgments and estimates of future operating results.  Changes in estimates or the application of alternative assumptions could produce significantly different results.  Impairment testing is done at a reporting unit level.  The company performs this testing for its Brazilian operating segment which is considered a reporting unit under SFAS No. 142. An impairment loss generally is recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit.  The fair value of the company’s reporting unit was estimated using the expected present value of future cash flows using estimates, judgments, and  assumptions that management believes were appropriate in the circumstances.  The estimates and judgments that most significantly affect the fair value calculation are assumptions related to revenue growth, collection processes, and the discount rate.  There was no impairment of assets at December 31, 2008,

Stock-Based Compensation

The Company accounts for stock-based compensation using the fair value method.

The Company accounts for employee stock-based compensation and stock issued for services using the fair value method.  In accordance with Emerging Issues Task Force (“EITF”) 96-18, the measurement date of shares used for services is the date at which the counterparty’s performance is complete.

For services for which the Company issues its common stock, the Company utilizes the fair value of its common stock at month-end and accrues the value of shares to be issued in Stockholders’ Equity, even if the shares have not yet been issued.  Accordingly, earnings per share computations are adjusted.

Effective January 1, 2006, the Company adopted the provisions of (1) FAS 123 R, which requires the Company to recognize stock-based compensation in the financial statements for all share-based payment awards made to employees and directors based upon the grant date fair value of those awards, and (2) SAB 107, which provides guidance to public companies relating to adoption of FAS 123 R.

Fair Value Measurements

In September 2006, the FASB No. 157, “Fair Value Measurements,” which defines fair value, establishes a framework for measuring fair value under other accounting pronouncements that

F-10

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007 (Restated)

NOTE C – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value Measurements (Continued)

permit or require fair value measurements, changes the methods used to measure fair value and expands disclosures about fair value measurements.  In particular, disclosures are required to provide information on the extent to which fair value is used to measure assets and liabilities; the inputs used to develop measurements; and the effect of certain of the measurements on earnings (or changes in net assets).  In February 2008, the FASB approved a FASB Staff Position ("FSP") that permits companies to partially defer the effective date of SFAS No. 157 for one year for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. The FSP did not permit companies to defer recognition and disclosure requirements for financial assets and financial liabilities or for nonfinancial assets and nonfinancial liabilities that are remeasured at least annually.  SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years.  Early adoption, as of the beginning of an entity’s fiscal year, is also permitted, provided interim financial statements have not yet been issued.  The Company intends to defer adoption of SFAS No. 157 for one year for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis.  The Company adopted SFAS 157 on January 1, 2008.  Adoption of SFAS 157 did not have a material impact on the consolidated results of operations, cash flows or financial position.

In February, 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”).  SFAS 159 allows entities to measure at fair value many financial instruments and certain other assets and liabilities that are not otherwise required to be measured at fair value.  SFAS 159 is effective for fiscal years beginning after November 15, 2007.  The Company adopted SFAS 159 on January 1, 2008.  Adoption of SFAS 157 did not have a material impact on the Company results of operations, cash flows or financial position.

NOTE D – RECENT ACCOUNTING PRONOUNCEMENTS

In December 2007, the FASB issued SFAS No. 141R, Business Combinations.  This standard establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and non-controlling interest in the acquiree and the goodwill acquired.  This statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination.  SFAS No. 141R is effective for acquisitions made after November 30, 2009.

The Company is currently evaluating the potential impact, if any, that the adoption of SFAS No. 141R will have on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements.  This standard outlines the accounting and reporting for ownership interest in a subsidiary held by parties other than the parent.  SFAS No. 160 is effective for the first quarter of 2010.  The Company is currently evaluating the potential impact, if any, the adoption of SFAS No. 160 will have on its consolidated financial statements.

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles." SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles. SFAS No. 162 became effective in November 2008. Its adoption is not expected to have a material impact on the Company's consolidated financial statements.

F-11

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007 (Restated)

NOTE D – RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In May 2008, the FASB issued FSP No. APB 14-1, "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)." FSP No. APB 14-1 requires that issuers of convertible debt instruments that may be settled in cash upon conversion separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP No. APB 14-1 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years, and is required to be retrospectively applied. The Company is currently evaluating the impact that the adoption of FSP No. APB 14-1 will have on its consolidated financial statements.

In December 2007, the FASB also issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements”. SFAS 160 requires all entities to report noncontrolling (i.e., minority) interests in subsidiaries as equity in the Consolidated Financial Statements and to account for transactions between an entity and noncontrolling owners as equity transactions if the parent retains its controlling financial interest in the subsidiary. SFAS 160 also requires expanded disclosure that distinguishes between the interests of the controlling owners and the interests of the noncontrolling owners of a subsidiary. SFAS is effective for the Corporation’s financial statements for the year

beginning on January 1, 2009 and earlier adoption is not permitted. The Company has not yet determined the impact from adoption of this new pronouncement on our financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 allows entities to measure at fair value many financial instruments and certain other assets and liabilities that are not otherwise required to be measured at fair value. SFAS 159 is effective for fiscal years beginning after November 15, 2007. We have not determined what impact, if any, that adoption will have on our results of operations, cash flows or financial position.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which defines fair value, establishes a framework for measuring fair value under other accounting pronouncements that permit or require fair value measurements, changes the methods used to measure fair value and expands disclosures about fair value measurements. In particular, disclosures are required to provide information on the extent to which fair value is used to measure assets and liabilities; the inputs used to develop measurements; and the effect of certain of the measurements on earnings (or changes in net assets).

In February 2008, the FASB approved a FASB Staff Position ("FSP") that permits companies to partially defer the effective date of SFAS No. 157 for one year for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. The FSP did not permit companies to defer recognition and disclosure requirements for financial assets and financial liabilities or for nonfinancial assets and nonfinancial liabilities that are remeasured at least annually.  SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Early adoption, as of the beginning of an entity’s fiscal year, is also permitted, provided interim financial statements have not yet been issued. The Company intends to defer adoption of SFAS No. 157 for one year for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis.  The Company is currently evaluating the potential impact, if any, that the adoption of SFAS No. 157 will have on its consolidated financial statements.

F-12

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007 (Restated)

NOTE E  -  INVESTMENT IN RECEIVABLE PORTFOLIO

The Company’s subsidiary ATN Capital e Participacoes Limitada ( “ATN”) has extensive experience in the field of distressed credit card and consumer loan receivable collections.  It had previously only collected distressed debt for large credit card companies and financial institutions in Brazil, on a commission basis.  In 2008, in addition to working for the large institutions, it decided to purchase its own portfolio of distressed debt.  The portfolio was purchased for R$1,299,458 (approximately US$816,294) on June 2, 2008.  The portfolio includes past due and unpaid debt from more than 41,000 Brazilian consumers and has a face value of approximately R$500,000,000 (or US$305 million as of the purchase date).

The Company has adopted AICPA Statement of Position 03-3 (“SOP 03-3”), “Accounting for Loans or Certain Securities Acquired in a Transfer”.  In accordance with SOP 03-3, the company is required to segregate the portfolio into pools.  Accordingly, the Company has defined three distinct pools and identified the related cost allocations by pool.   SOP 3-03 addresses accounting for differences between contractual cash flows expected to be collected from an investor’s initial investment in loans or debt securities acquired in a transfer if those differences are attributable, at least in part, to credit quality.  SOP 03-3, limits accretable yield to the excess of the investor’s estimate of undiscounted cash flows over the investor’s initial investment in the loan and prohibits the recognition of the non-accretable difference.  Under SOP 3-03, subsequent increases in cash flows expected to be collected generally should be recognized prospectively through adjustment of the loan’s yield over its remaining life while any decreases in cash flows expected to be collected should be recognized as impairments.

During the six months ended December 31, 2008, the Company actually collected $169,936 which was $79,914 in excess of the amount provided in its original projections.  The Company believes that its original projections are still accurate and attributes the excess collections to the sale of a batch of accounts spread amongst the three pools.  The excess cash collections resulted in a reduction to the projected ended carrying amount in $12,301.

During the six months ended December 31, 2008, the Company actually collected $169,936 which was $79,914 in excess of the amount provided in its original projections.  The Company believes that its original projections are still accurate and attributes the excess collections to the sale of a batch of accounts spread amongst the three pools.  The excess cash collections resulted in a reduction to the projected ended carrying amount in $12,301.

The following table reflects the initial carrying value and cash flows expected to be collected for the period of inception June 2, 2008 to December 31, 2008 and for the years ending December 31, 2009 through 2013:

	Beginning		Cash Flows Expected				Reduction		Ending
Year Ended	Carrying		to be		Interest		of Carrying		Carrying
December 31,	Amount		Collected		Income		Amount		Amount
2008	$	556,037	$	90,022	$	76,028	$	13,994	$	542,043
2009		542,043		196,043		128,208		67,835		474,208
2010		474,208		196,043		112,164		83,879		390,329
2011		390,329		196,043		92,323		103,720		286,609
2012		286,609		196,043		67,977		128,066		158,543
2013		158,543		196,043		37,500		158,543
Totals			$	1,070,237	$	514,200	$	556,037

Initial accretable yield has been calculated as follows:

Cash flows expected to be collected as of 12/31/08	$	1,070,236
Less: Initial Investment		556,037
Yield accreted to date		90,022
Accretable Yield as of 12/31/08	$	424,177

F-13

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007 (Restated)

NOTE E  -  INVESTMENT IN RECEIVABLE PORTFOLIO (CONTINUED)

The Company financed the purchase of the portfolio with two Notes Payable totaling R$626,200.  The notes are due December 2009 and bear interest at the rate of 2.0% per month.  The notes are included in the captions loans from officer and loan from an individual on the balance sheet.  The loan from an individual is deemed to be a related party because of his affiliation with the Company. At December 31, 2008, the balance of the loan including accrued interest,  from officer is $58,982 and the loan from an individual is $245,761.

Due to the strengthening US dollar, there has been a change in the value of the purchase price of the receivable portfolio from $816,294 at June, 2, 2008 to $556,037 at December 31, 2008.  The difference of $260,257 is included in accumulated other comprehensive loss.

NOTE F – ENGEPET ENERGY ENTERPRISES, INC. AND UNITED OIL SERVICES, INC.

The Company formed two new subsidiaries, Engepet Energy Enterprises, Inc. and United Oil Services, Inc. to work with companies to recover additional oil production from oil wells whose production had diminished.  During the year, the Company engaged in pipe cleaning activities only.  In connection with such activities, the Company collected revenues of approximately $180,000 and advanced approximately $140,000 for costs which were not adequately documented.

NOTE G– FIXED ASSETS

Fixed Assets are comprised of the following at December 31,

	2008		2007
Building	$	202,396	$	255,140
Office furniture and equipment		390,986		794,758
Vehicles		47,056		62,084
Leasehold improvements		76,028		100,309
		716,466		1,212,291
Less accumulated depreciation		237,570		471,766
	$	478,896	$	740,525

NOTE H - LOANS PAYABLE TO BANKS

The Company has several loans with various Brazilian banks and financial institutions. The loans are secured by personal guarantees of the Company’s principal shareholders and bear interest at rates ranging from 26% to 42%. Two loans from Unibanco totaling $200,000 were borrowed in US dollars resulting in foreign currency transaction losses.  Approximately $64,000 of transaction losses were recorded for year ended December 31, 2008.  The balance of the loans at December 31, 2008 and 2007 was $267,039 and $491,474, respectively.

NOTE I– LONG TERM DEBT

On April 17, 2006, the Company closed on a Real Estate transaction to purchase the 8th floor of an executive office building for ATN Capital E Participacoes, Ltda.’s executive offices. The purchase price of

F-14

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007 (Restated)

NOTE I– LONG TERM DEBT (CONTINUED)

approximately $176,489 was funded with a 20% down payment payable over four months and an 8 year adjustable rate mortgage currently at 13.29%.  The loan is secured by the company’s facility.  At December 31, 2008 and 2007, the balance of the loan is $123,676 and $177,835 respectively.

In August 2006, the Company purchased new computer equipment from DELL Brazio. The equipment valued at approximately $38,395 is financed over a three year period at 14.4% per year. The loan is secured by the computer equipment.   At December 31, 2008 and 2007, the balance of the loan is $10,678 and $26,838 respectively.

In September 2006, the Company purchased new furniture.  The furniture valued at approximately $112,161 is financed over a five year period at 5.69% per year plus the inflation index.  The loan is payable in 48 monthly installments commencing October 8, 2007.  The loan is secured by the furniture.  At December 31, 2008 and 2007, the balance of the loan is $70,544 and $126,920 respectively.

In June, 2007, the Company borrowed two working capital loans from Caixa Economica Federal. The loans are valued at approximately $113,000 and are payable in 24 monthly installments plus interest of 2.73% per month, commencing July, 2007. The loans are personally guaranteed by ATN’s directors. At December 31, 2008 and 2007, the balance is $26,225 and $91,052 respectively.

In June, 2007, the Company borrowed a working capital loan from Banco Bradesco. The loan is valued at approximately $207,400 and is payable in 24 monthly installments plus interest of 2.60% per month, commencing July, 2007. The loan is personally guaranteed by ATN’s directors. At December 31, 2008 and 2007, the balance is $18,043 and $80,939, respectively.

In September, 2007, the Company borrowed $51,000 from Santander. The loan is payable in 16 monthly installments plus interest of 3.9% per month, commencing October, 2007. The loan is personally guaranteed by ATN’s directors. At December 31, 2008 and 2007,  the balance is $11,302 and $41,182, respectively.

During the year ended December 31, 2007, the Company purchased new computer equipment from DELL Brazio. The equipment valued at approximately $189,500 is financed over a three year period plus interest at rates ranging from 12% to 12.84% per year. The loan is secured by the computer equipment. The balance of the loan at December 31, 2008 and 2007 is $19,642 and $78,835, respectively.

In January 2008, the Company purchased new air conditioning equipment.  The equipment valued at approximately $28,000 is being financed over a three year period at 12% per year. The balance of the loan at December 31, 2008 is $14,445.

In July, 2008, the Company borrowed approximately $77,000 from Banco ITAU. The loan is payable in 18 monthly installments plus interest of 2.28% per month, commencing August, 2008. The loan is personally guaranteed by ATN’s directors. At December 31, 2008, the balance is $58,743.

In July, 2008, the Company borrowed approximately $3,500 from Officer Distribution Production. The loan is payable in 36 monthly installments plus interest of 1.15% per month, commencing August, 2008. The loan is personally guaranteed by ATN’s directors. At December 31, 2008, the balance is $1,231.

F-15

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007 (Restated)

NOTE I – LONG TERM DEBT (CONTINUED)

In October, 2008, the Company borrowed approximately $60,000 from Banco ITAU. The loan is payable in 9 monthly installments plus interest of 2.88% per month, commencing August, 2009. The loan is personally guaranteed by ATN’s directors. At December 31, 2008, the balance is $54,278.

In November, 2008, the Company borrowed approximately $43,000 from Banco Bradesco. The loan is payable in 12 monthly installments plus interest of 3.3% per month, commencing November, 2008. The loan is personally guaranteed by ATN’s directors. At December 31, 2008, the balance is $39,224

In November, 2008, the Company borrowed approximately $52,000 from Unibanco-Capital De Giro. The loan is payable in 12 monthly installments plus interest of 3.3% per month, commencing November, 2008. The loan is personally guaranteed by ATN’s directors. At December 31, 2008, the balance is $48,584.

In December, 2008, the Company borrowed approximately $30,000 from Banco Real. The loan is payable in 12 monthly installments plus interest of 3.2% per month, commencing December, 2008. The loan is personally guaranteed by ATN’s directors. At December 31, 2008, the balance is $29,952.

During the year ended December 31, 2008, the Company purchased new computer equipment from DELL Brazio. The equipment valued at approximately $15,500 is financed over a three year period plus interest at rates ranging from 11.4% to 13.8% per year. The loan is secured by the computer equipment. The balance of the loan at December 31, 2008 is $7,087.

An analysis of the current and long-term portion at December 31, is as follows:

	2008		2007
Total loans outstanding	$	533,654	$	623,601
Less: current portion		365,782		270,603
Long-term portion	$	167,872	$	352,998

At December 31, 2008, maturities of long term debt are as follows:

2009	$	63,472
2010		41,354
2011		21,015
2012		21,015
2013 and thereafter		21,016
Total	$	167,872

F-16

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007 (Restated)

NOTE J – ACCRUED MUNICIPAL SERVICE AND PAYROLL ACCRUALS

The Company is responsible to the Brazilian taxing authorities for a municipal service tax at the rate of 5% based upon salaries by location. During 2007, the Company successfully negotiated with Brazilian authorities to favorably settle previously recorded taxes approximating $730,000. In addition, the Company further evaluated related payroll tax and related accruals and reduced amounts previously recorded by approximately $200,000. These savings are reflected in the 2007 financial statements as a reduction in selling, general and administrative expenses. Accruals for such Municipal tax and related payroll tax accruals at December 31, 2008 and 2007 are $1,211,054 and $1,707,598 respectively.

NOTE K - INCOME TAXES

The Company accounts for income taxes in accordance with SFAS No 109, Accounting for Income Taxes. Under this method, the Company recognizes a deferred tax liability or asset for temporary differences between the tax basis of an asset or liability and the related amount reported on the financial statements.

The principal types of differences, which are measured at current tax rates, are net operating loss carryforwards. At December 31, 2008, these differences resulted in a deferred tax asset of $1,075,300. SFAS No. 109 requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Since realization is not assured, the Company has recorded a valuation allowance for the entire deferred tax asset, and the accompanying financial statements do not reflect any net asset for deferred taxes at December 31, 2008.

The Company has a US net operating carry forward loss of approximately $797,000 which expires commencing in 2028 and a $2,689,000 carryforward loss in Brazil with an unlimited carryforward period.

NOTE L – RELATED PARTY

During the quarter ended March 31, 2008, Keyano Invest Inc., a related party, loaned the Company $1,000,000 for working capital purposes on terms and conditions to be determined on an arms length basis between the parties.

During the quarter ended June 30, 2008, the Company repaid Keyano Invest Inc $200,000 and converted the remaining balance of $800,000 to a convertible debenture which was converted immediately.  On June 4, 2008, the debenture was converted to 231,884 shares of common stock at a conversion price of $3.45 per share.

During the quarter ended September 30, 2008, the Company borrowed approximately $352,000 from two related parties to finance the purchase a receivable portfolio.  The notes are due December 2009 and bear interest at the rate of 2.0% per month.  The notes are included in the caption loans from officer and loan from an individual on the balance sheet.  The loan from an individual is deemed to be a related party because of his affiliation with the Company. At December 31, 2008, the balance of the loan from officer is $58,982 and the loan from an individual is $245,761.

On a periodic basis the Company borrows funds from shareholders for working capital.  At December 31, 2008 these borrowings total $128,773.

NOTE M - LOAN FROM AN INDIVIDUAL

In July, 2008, the Company borrowed approximately $65,000 from an individual for working capital.  The loan is due January 12, 2010 and bears interest at the rate of 21.6% per year.  The balance of the loan at December 31, 2008 is $42,827.

F-17

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007 (Restated)

NOTE N -  RENT EXPENSE

The Company currently is leasing one floor of its office facilities from the President of the Brazilian subsidiary. The lease commenced on May 26, 2006 and is renewable annually. The annual rent is $27,500 per year. The Company sub-leases space in New York City.  The lease commenced March 1, 2008 and is cancelable upon 90 days notice.  The annual rent is $16,200.   Rent expense for the year ended December 31, 2008 was $49,097.

NOTE O - REVENUE CONCENTRATIONS

For the year ended December 31, 2008, revenues from three major customers exceeded 10% individually and represented 36.62% of total revenues. During 2007, four major customers exceeded 10% individually and represented 58.23% of total revenues.

NOTE P - STOCKHOLDERS’ EQUITY

In January 2007, in connection with the reduction of 800,000 shares of the Company’s stock (See Note A - Restatement) issued for the 2006 acquisition of ATN Capital E Participacoes, Ltda., such shares were then redistributed as stock based compensation to officers and employees of the Company (560,000 shares) and consultants (240,000 shares).  These shares were valued at $0.20 per share.

As of January 1, 2008, the Company has included 5,000 of its common shares as issued and outstanding for professional fees incurred.  The shares were valued at $2.50 per share.  Consulting expense charged to operations as of December 31, 2008 was $12,500.  These shares are included as outstanding but have not yet been issued.

On May 13, 2008 the Company issued 3,000 shares of its common stock for $10,500.

On June 4, 2008 the Company issued 231,884 shares of common stock in conversion of an $800,000 debenture from Keyano, Invest, Inc., a related party.  The shares were valued at $3.45.

F-18

ITEM 9.          CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A(T). CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer, Elie Saltoun, (“CFO), and Secretary, Jeffrey Nunez have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Report (December 31, 2008).  Based on such evaluation, our CEO and Secretary have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are not effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and are not effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s CEO and Secretary, as appropriate to allow timely decisions regarding required disclosure.  A discussion of the material weaknesses in our control and procedures is described below.

Management’s Report on Internal Control over Financial Reporting

Management of Lexicon United Inc., which consists primarily of our CEO/CFO and Secretary are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act).  The Company’s internal control over financial reporting has been designed 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 generally accepted in the United States of America.

The Company’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets of the Company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only in accordance with authorization of management and directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting at December 31, 2008. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework.  During our assessment of the effectiveness of internal control over financial reporting as of December 31, 2008, management identified significant deficiencies  related to (i) the absence of U.S. GAAP expertise of management and the internal accounting staff, (ii) internal audit functions and (iii) the absence of an Audit Committee and (iv) lack of controls relating to the issuance, recording, and control of Company stock and shareholder ledgers all of which contributed to an ineffective system of internal control at December 31, 2008.  

31

Management also identified a material weakness in our internal control over financial reporting in that significant expenditures were made without adequate support documentation.

Based on our evaluation under the frameworks described above, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2008.

In order to correct the above mentioned deficiencies, we plan on taking the following remediation measures:

1) We intend to hire an individual in the accounting area who is familiar with US GAAP and SEC Reporting Requirements.

2) We intend to designate an independent Audit Committee as soon as we can identify appropriate members.

3) We intend to segregate duties and implement appropriate review procedures throughout the accounting and administration controls.

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.

/S/    Elie Saltoun

Elie Saltoun

Chief Executive Officer

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting during the fiscal year ended December 31, 2008 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B.   OTHER INFORMATION

None

PART III.

ITEM 10.        DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors, Executive Officers and Significant Employees

Set forth below are the names of our directors, officers and significant employees, their ages, all positions and offices that they hold with us, the period during which they have served as such, and their business experience during at least the last five years.

Name	Age	Positions Held	Experience
Elie Saltoun	69	ChiefExecutive Officer, President and Treasurer since November 2004	Elie Saltoun has served as our Chief Executive Officer, President and Treasurer, and as the Chairman of our board of directors since November 2004. Mr. Saltoun also served as our Secretary from July 2001 until he resigned to assume his current role with our Company. Since May 2005, Mr. Saltoun has also acted as a principal of Keyano Invest Inc., a corporate consulting firm based in Brazil. Mr. Saltoun is an expert at structuring complex foreign debt recoveries and debt to equity transactions. He has successfully coordinated the use and conversion of past due unpaid sovereign debt into equity in privatized Brazilian State-owned companies, and has supervised the purchase and swap of unpaid obligations from a State-owned reinsurance organization.

32

Jeffrey Nunez	49	Secretary since November 2004	During the period from our inception until November 4, 2004, Mr. Nunez was our director, Chief Executive Officer, President and Treasurer. He resigned from all of those positions (except he remained a director) on November 4, 2004 and on such date he was appointed as our Secretary. From October 2003 to present Mr. Nunez has been self employed acting as a consultant to public companies under the name Broad Street Capital.
Omar Malheiro Silva Araújo	54	President, Chief Executive Officer and director of ATN since April 1997	Mr. Araújo has been the President, Chief Executive Officer and director of our subsidiary ATN since April 1997. Mr. Araújo is the co-founder of ATN. From 1991 to 1997, Mr. Araújo served as the Chief Financial Officer and director of Cartao Unibanco Visa where he supervised the cash flow of the credit card division. Mr. Araújo has a MBA in Finance.
Manuel da Costa Fraguas	61	General Manager and director of ATN since April 1997	Mr. Fraguas has been the General Manager and director of our subsidiary ATN since its inception on April 1997. Mr. Fraguas is the co-founder of ATN. Mr. Fraguas has a master in Production Engineering.

There are no agreements or understandings for any of our executive officers or directors to resign at the request of another person and no officer or director is acting on behalf of nor will any of them act at the direction of any other person.

Mr. Saltoun devotes approximately 80% of his business time to our affairs with the remaining time being spent on the affairs of Keyano Invest Inc. Mr. Nunez devotes approximately 70% of his time to our affairs with the remaining time being spent on the affairs of Broad Street Capital. Each of Mr. Araújo and Fraguas devotes 100% of his business time to the operation and business of our subsidiary ATN.

Family Relationships

There are no family relationships among our directors or officers.

Involvement in Certain Legal Proceedings

To the best of our knowledge, except as set forth herein, none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC. Except as described below, none of the directors, director designees or executive officers to our knowledge has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement.

33

On July 28, 2005, the SEC issued an order in connection with the settlement of an administrative proceeding against our Secretary, Jeffrey G. Nunez. The order indicates that Mr. Nunez, who at the time was a registered representative (broker) at the brokerage firm of Providential Securities, Inc., played an active role in the distribution of hundreds of thousands of unregistered shares of stock of Morgan Cooper, Inc. in violation of Section 5 of the Securities Act. Morgan Cooper, Inc., formerly Gong Hei Investment Co., Ltd., is the successor company in a reverse merger transaction that occurred on November 18, 1999 when Morgan Cooper, Inc., then a private company engaged in the garment business, effected a business combination with Gong Hei Investment Co., Ltd., then a public reporting shell company. Mr. Nunez acted as a broker in connection with the sale of the shares by James Caprio and James Morse, who were principals of the shell company prior to the reverse merger, to the brokerage clients of Providential Securities. The Commission permanently enjoined Nunez from future violations of Section 5(a) and 5(c) of the Securities Act, ordered Nunez to pay a $55,000 civil penalty, suspended Mr. Nunez from association with any broker-dealer for a period of six months, and required Mr. Nunez to provide an accounting and to disgorge any profits made as a result of the sales. To date, Mr. Nunez has not paid the $55,000 civil penalty.

Code of Ethics

Our board of directors has adopted a code of ethics that our principal financial officer, principal accounting officer or controller and any person who may perform similar functions are subject to. Currently Elie Saltoun, our Chief Executive Officer, President and Treasurer, Jeffrey G. Nunez, our Secretary,Omar Malheiro Silva Araújo, the Chief Executive Officer and President of ATN, and Manuel da Costa Fraguas, the General Manager of ATN, are our and ATN’s only officers and directors, therefore, they are the only persons subject to the Code of Ethics. If we retain additional officers in the future to act as our principal financial officer, principal accounting officer, controller or persons serving similar functions, they would become subject to the Code of Ethics. The Code of Ethics does not indicate the consequences of a breach of the code. If there is a breach, our board of directors would review the facts and circumstances surrounding the breach and take action that it deems appropriate, which action may include dismissal of the employee who breached the code. Currently, since Messrs Saltoun and Nunez serve as directors and are also our officers, they are largely responsible for reviewing their own conduct under the Code of Ethics and determining what action to take in the event of their own breach of the Code of Ethics.

Compliance with Section 16(a) of the Securities Exchange Act

Section 16(a) of the Exchange Act required our executive officers and directors, and person who beneficially own more than ten percent of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. Based on our review of the copies of such forms received by us, we believe that during the year ended December 31, 2007, Elie Saltoun and Jeffrey Nunez each failed to make the required filings under Section 16(a). These officers have indicated that they intend to make the required filings promptly after the filing of this Form 10-KSB.

Board Composition and Committees

Our Board of Directors is composed of 2 members, Mr. Saltoun and Mr. Nunez. Directors are elected until their successors are duly elected and qualified.

34

Audit Committee and Audit Committee Financial Expert

We do not currently have an audit committee financial expert, nor do we have an audit committee.  Our entire board of directors, which currently consists of Messrs. Saltoun and Nunez, handle the functions that would otherwise be handled by an audit committee.  We do not currently have the capital resources to pay director fees to a qualified independent expert who would be willing to serve on our board and who would be willing to act as an audit committee financial expert.  As our business expands and as we appoint others to our board of directors we expect that we will seek a qualified independent expert to become a member of our board of directors.  Before retaining any such expert our board would make a determination as to whether such person is independent.

Section 16(a) Beneficial Ownership Reporting Compliance.

Section 16(a) of the Securities Act of 1934 requires the Company's officers and directors, and greater than 10% stockholders, to file reports of ownership and changes in ownership of its securities with the Securities and Exchange Commission. Copies of the reports are required by SEC regulation to be furnished to the Company. Based on management's review of these reports during the fiscal year ended December 31, 2008, all reports required to be filed were filed on a timely basis.

ITEM 11.  EXECUTIVE COMPENSATION.

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to our Chief Executive Officer, for services during the last three fiscal years in all capacities to us, our subsidiaries and predecessors. No executive officer received compensation of $100,000 or more in any of the last three fiscal years.

Summary Compensation Table

Name and Principal  Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non- Equity Incentive Plan Compensation Earnings ($)		Non- qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Elie Saltoun CEO		2007 2008		0 0		0 0		0 0		0 0		0 0		0 0		72,000 75,097		72,000 75,097
Jeffrey Nunez Secretary		2007 2008		0 0		0 0		0 0		0 0		0 0		0 0		40,000 26,693		40,000 26,693

Outstanding Equity Awards at Fiscal Year End

None of our executive officers received any equity awards, including, options, restricted stock or other equity incentives, during the fiscal year ended December 31, 2008.

Additional Narrative Disclosures

All of our employees, including our executive officers, are employed at will and none of our employees has entered into an employment agreement with us. We do not have any bonus, deferred compensation or retirement plan.

Director Compensation

We have no standard arrangements in place to compensate our directors for their service as directors or as members of any committee of directors. In the future, if we retain non-employee directors, we may decide to compensate them for their service to us as directors and members of committees.

35

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information regarding beneficial ownership of our common stock as of January 1, 2009 (i) by each person who is known by us to beneficially own more than five percent of our common stock; (ii) by each of our officers and directors; and (iii) by all of our officers and directors as a group:

Title of Class	Name & Address of Beneficial Owner	Office, If Any	Amount & Nature of Beneficial Ownership1			Percent of Class2
Common Stock $0.001 par value	Omar Malheiro Silva Araújo 177 Av. Rio Branco, 7th Floor Rio de Janeiro, Brazil 20040-007	President, Chief Executive Officer and director of ATN		900,000			10.35	%
Common Stock $0.001 par value	Keyano Invest Inc. C/o VP Bank attention Mr. Diego Piccoli Bleicherweg 50 CH 8039 Zurich Switzerland			5,882,034	3		67.63	%
Common Stock $0.001 par value	Elie Saltoun 4500 Steiner Ranch Blvd. Suite 1708 Austin, Texas 78732	President, CEO, Treasurer and Director		5,882,034	3		67.63	%
Common Stock $0.001 par value	Jeffrey Nunez 4500 Steiner Ranch Blvd. Suite 1708 Austin, Texas 78732	Secretary and Director		412,047			4.74	%
Common Stock $0.001 par value	All officers and directors as a group (2 persons named above)			6,294,081			72.38	%

(1) Beneficial Ownership is determined in accordance with Rule 13d-3 of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Each of the beneficial owners listed above has direct ownership of and sole voting power and investment power with respect to the shares of our common stock.  For each Beneficial Owner above, any options exercisable within 60 days have been included in the denominator.

(2) Based on 8,696,134 shares of our Common Stock outstanding as of January 1, 2009. 

(3) Our president, CEO, Treasurer and director, Elie Saltoun, owns fifty percent of Keyano Invest Inc. Accordingly, Mr. Saltoun and Keyano are deemed to be affiliates. Mr. Saltoun is deemed to be the beneficial owner of any securities owned by Keyano, and vice versa. Therefore, the 5,882,034 shares of our common stock owned by Keyano include the 500,000 shares of common stock held by Mr. Saltoun. Conversely, the 5,882,034 shares of our common stock owned by Mr. Saltoun include the 5,382,034 shares held by Keyano.

Changes in Control

We do not currently have any arrangements which if consummated may result in a change of control of our Company.

36

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Certain Relationships and Transactions with Related Persons

On November 22, 2005, we entered into a Debt Conversion Agreement with Keyano, the holder of our convertible promissory note having a principal amount plus accrued interest of $1,063,750. Under the Debt Conversion Agreement, we converted Keyano’s note and any accrued interest into our common stock at a rate of $0.20 per share. 5,318,750 shares of our common stock were delivered to Keyano and the note was cancelled. Keyano is an affiliate of our director and current Chief Executive Officer, President and Treasurer, Elie Saltoun, who is the owner of a 50% interest in Keyano.

On February 27, 2006, we consummated the transactions contemplated by a share exchange agreement among us, ATN, Omar Malheiro Silva Araújo and Manuel da Costa Fraguas, both directors and officers of ATN. Pursuant to the share exchange agreement, we acquired 80% of the outstanding capital stock of ATN in exchange for 2,000,000 shares of our common stock, in the aggregate. The purchase price was subsequently adjusted to an aggregate of 1,200,000 shares of our common stock.  As a result of this transaction, Messrs. Araújo and Fraguas became the owners of 13.8% of our outstanding capital stock.

During the quarter ended March 31, 2008, Keyano Invest Inc., a related party, loaned the Company $1,000,000 for working capital purposes. During the quarter ended June 30, 2008, the Company repaid Keyano Invest Inc $200,000 and converted the remaining balance of $800,000 to a 2.5% convertible debenture. On June 5, 2008, the Company issued 231,884 shares of its commons shares in conversion of an $800,000 debenture from Keyano Invest, Inc, a related party. The shares were converted at $3.45 per share.

Director Independence

The Board of Directors is currently composed of 2 members, Mr. Saltoun and Mr. Nunez. None of our directors are “independent” directors, as that term is defined under the Nasdaq listing standards.

Elie Saltoun

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

The aggregate fees billed for each of the fiscal year ended December 31, 2008 and 2007 for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements and review of the financial statements included in the registrant’s Form 10-K or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were $39,566 and $44,800, respectively.

Audit Related Fees

The aggregate fees billed in the fiscal year ended December 31, 2008 and 2007 for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the registrant’s financial statements and are not reported under the paragraph captioned “Audit Fees” above are $21,000 and $26,400, respectively.

Tax Fees

The aggregate fees billed in the fiscal years ended December 31, 2008 and 2007 for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning were $0 and $0, respectively.

All Other Fees

The aggregate fees billed in the fiscal years ended December 31, 2008 and 2007 for products and services provided by the principal accountant, other than the services reported above under other captions of this Item 14 are $0 and $0, respectively.

37

Pre-Approval Policies and Procedures

Our board of directors adopted resolutions in accordance with the Sarbanes-Oxley Act of 2002 requiring pre-approval of all auditing services and all audit related, tax or other services not prohibited under Section 10A(g) of the Securities Exchange Act of 1934, as amended to be performed for us by our independent auditors, subject to the de minimus exception described in Section 10A(i)(1)(B) of the Exchange Act. These resolutions authorized our independent auditor to perform audit services required in connection with the annual audit relating to the fiscal year ended December 31, 2008 and the quarterly reviews for the subsequent fiscal quarters of 2009 through the review for the quarter ended September 30, 2009 at which time additional pre-approvals for any additional services to be performed by our auditor would be sought from the Board. Our board of directors also appointed and authorized Elie Saltoun to grant pre-approvals of other audit, audit-related, tax and other services requiring board approval to be performed for us by our independent auditor, provided that the designee, following any such pre-approvals, thereafter reports the pre-approvals of such services at the next following regular meeting of the Board.

The percentage of audit-related, tax and other services that were approved by the board of directors is 100%.

PART IV

ITEM 15.             EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this 10-K:

1.  FINANCIAL STATEMENTS

The following documents are filed in Part II, Item 8 of this annual report on Form 10-K:

· Report of Meyler & Company, LLC, Independent Registered Certified Public Accounting Firm

· Balance Sheets as of December 31, 2008 and 2007 (audited)

· Statements of Operations for the years ended December 31, 2008 and 2007 (audited)

· Statements of Stockholders’ Deficit from 2006 through December 31, 2008 (audited)

· Statements of Cash Flows for the years ended December 31, 2008 and 2007 (audited)

· Notes to Financial Statements (audited)

2.  FINANCIAL STATEMENT SCHEDULES

All financial statement schedules have been omitted as they are not required, not applicable, or the required information is otherwise included.

3.  EXHIBITS

The exhibits listed below are filed as part of or incorporated by reference in this report.

38

Exhibit

Number           Description

23.1.                Consent of Meyler & Company, LLC regarding audited financial statements as of and for the period ending December 31, 2008.

31.1.                Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1                 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

39

SIGNATURES

In accordance with section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this Report on Form 10-KSB to be signed on its behalf by the undersigned, thereto duly authorized individual.

Date: April 15, 2009

LEXICON UNITED INCORPORATED
By:	/s/ Elie Saltoun
	Elie Saltoun
	Chief Executive Officer, Chief Financial Officer
	President and Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacity and on the date indicated.

By
	/s/ Elie Saltounz
	Elie Saltoun
	Director
Date
	April 15, 2009
By
	/s/ Jeffrey Nunez
	Jeffrey Nunez
	Director
Date
	April 15, 2009

40

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation in this Form 10-K of our reports dated April 15, 2009, on our audit of the financial statements of Lexicon United Incorporated as of December 31, 2008 and 2007 and for the years ended December 31, 2008 and 2007.

/s/ Meyler& Company, LLC

Middletown, NJ

April 15, 2009

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

I, Elie Saltoun, certify that:

1. I have reviewed this Form 10-K for the period ended December 31, 2008 of Lexicon United Incorporated;

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 registrant as of, and for, the periods presented in this report;

4. I am the registrant's principal executive officer and principal and 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 registrant 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 registrant, 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 registrant'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 registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant'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 registrant'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 registrant's internal control over financial reporting.

Date: April 15, 2009

/s/ Elie Saltoun

Elie Saltoun

Principal Executive Officer and Principal Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of Lexicon United Incorporated, a Nevada corporation (the "Company"), does hereby certify, to such officer's knowledge, that:

The annual report on Form 10-K for the fiscal year ended December 31, 2008 (the "Form 10-K") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 15, 2009

/s/ Elie Saltoun

Elie Saltoun

Principal Executive Officer and Principal

Accounting Officer

A signed original of this written statement required by Section 906 has been provided to LEXICON UNITED INCORPORATEDand will be retained by LEXICON UNITED INCORPORATED and furnished to the Securities and Exchange Commission or its staff upon request.