Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10−Q/A

1st Amendment

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2009

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

For the transition period from ____________ to _____________

Commission File No. 0-33131

LEXICON UNITED INCORPORATED

(Exact name of small business issuer as specified in its charter)

DELAWARE		06-1625312
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4500 Steiner Ranch Blvd.

Suite # 1708, Austin, Texas 78732

(Address of Principal Executive Offices)

(512) 266-3507

(Registrant’s Telephone Number, Including Area Code)

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

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

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 ¨

Accelerated Filer ¨

Non-Accelerated Filer ¨

(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 ¨ No x

The numbers of shares outstanding of each of the issuer’s classes of common equity, as of June 1, 2009, are as follows:

Class of Securities		Shares Outstanding
Common Stock, $0.001 par value		8,691,134

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

ITEM 1.	INTERIM FINANCIAL STATEMENTS	3
ITEM 2.	MANAGEMENT'S DISCUSSION OF OPERATIONS AND FINANCIAL CONDITION	13
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20
ITEM 4A(T).	CONTROLS AND PROCEDURES	20

PART II - OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	20
ITEM 1A	RISK FACTORS	21
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES	21
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	21
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	21
ITEM 5.	OTHER INFORMATION	21
ITEM 6.	EXHIBITS	21

SIGNATURES		21

PART I - FINANCIAL INFORMATION

ITEM 1. INTERIM FINANCIAL STATEMENTS

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2009			2008
	RESTATED (Unaudited)

CURRENT ASSETS
Cash and cash equivalents	$	258,798		$	291,453
Accounts receivable		238,484			342,144
Other receivables		215,201			211,520
Prepaid expenses		851			163
Total current assets		713,334			845,280

FIXED ASSETS
Building, equipment, and leasehold improvements,
net of accumulated depreciation of $262,143 and
$237,570 at March 31, 2009 and December 31, 2008, respectively		461,018			478,896

OTHER ASSETS

Investment in receivable portfolios		524,353			529,742
Customer Lists, net of amortization of $166,959 and $154,116 at		346,774			359,617
March 31, 2009 and December 31, 2008, respectively
Tradenames, net of amortization of $71,555 and $66,050 at		148,616			154,120
March 31, 2009 and December 31, 2008, respectively
Goodwill		693,141			693,141
Security deposit		1,350			1,350
Total other assets		1,714,234			1,737,970

TOTAL ASSETS	$	2,888,586		$	3,062,146

CURRENT LIABILITIES
Loans payable to banks	$	267,525		$	267,039
Current portion of long term debt		279,694			365,782
Bank Overdrafts		300,051			301,282
Note payable to an individual		299,297			292,262
Accounts Payable		126,894			102,049
Loans payable to officer		220,983			187,605
Accrued Expenses		553,106			477,571
Accrued Municipal Service Taxes		120,569			125,017
Accrued Payroll and related taxes		949,330			984,358
Accrued Employee Benefits		109,833			113,919

Total Current Liabilities		3,227,282			3,216,884

LONG TERM LIABILITIES
Long term debt		158,560			167,872

Total Long Term Liabilities		158,560			167,872

TOTAL LIABILITIES		3,385,842			3,384,756

STOCKHOLDERS' EQUITY (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, 8,708,134 and 8,696,134 shares
issued and outstanding at March 31, 2009 and December 31, 2008
respectively		8,708			8,696
Paid in capital		2,749,942			2,725,954
Accumulated other comprehensive loss		(56,389	)		(99,028	)
Accumulated deficit		(3,151,260	)		(2,958,232	)
Total Lexicon Stockholders' Deficit		(448,999	)		(322,610	)

Non-Controlling Interest		(48,257	)		-
Total Deficit		(497,256	)		(322,610	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	2,888,586		$	3,062,146

See accompanying notes to financials

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended
	March 31,
	2009			2008
	RESTATED
REVENUES
Service revenue	$	779,836		$	884,865
Revenue from receivable portfolios		30,309
Total revenues		810,145			884,865

COST OF SERVICES		490,790			490,057

GROSS PROFIT		319,355			394,808

COSTS AND EXPENSES
Selling, general and administrative		350,901			512,904
Depreciation		22,424			40,769
Amortization		18,347			18,347
Total costs and expenses		391,672			572,020

OPERATING LOSS		(72,317	)		(177,212	)

OTHER INCOME (LOSS)
Interest expense		(163,596	)		(121,366	)
Interest income and other		(5,372	)		5,347
Total Other Income(loss)		(168,968	)		(116,019	)

LOSS BEFORE INCOME TAX		(241,285	)		(293,231	)

Income tax		-			-

NET LOSS		(241,285	)		(293,231	)

Less: Net loss attributable to the noncontrolling interest		(48,257	)

NET LOSS ATTRIBUTABLE TO LEXICON UNITED INCORPORATED	$	(193,028	)	$	(293,231	)

NET LOSS PER COMMON SHARE	$	(0.02	)	$	(0.03	)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING		8,705,334			8,461,250

See accompanying notes to financials

LEXICON UNITED INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three Months Ended
	March 31,
	2009			2008

CASH FLOWS FROM OPERATING ACTIVITES
Net loss	$	(241,285	)	$	(293,231	)
Noncash items included in net loss
Depreciation		22,424			40,769
Amortization of intangibles		18,347			18,347
Accrued interest on loans to individual		18,829			-
Stock based compensation		24,000
Decrease (increase) in assets:
Accounts receivable		(24,973	)		(68,008	)
Other receivables		130,164			(7,503	)
Prepaid expenses		(687	)		(5,983	)
Security deposit		-			(1,350	)
Investment in receivable portfolio		30,976			-
Increase (decrease) in liabilities:
Accounts payable		3,436			(20,981	)
Accrued expenses		74,820			80,865

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		56,051			(257,075	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets		-			(2,897	)

NET CASH USED IN INVESTING ACTIVITIES		-			(2,897	)

CASH FLOWS FROM FINANCING ACTIVITIES
Loan from Keyano Invest, Inc		-			1,000,000
Loan from related party		30,235			9,308
Repayment of loans		(119,689	)		(121,567	)
					-

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(89,454	)		887,741

EFFECT OF EXCHANGE RATE OF CASH		748			(6,042	)

NET INCREASE (DECREASE) IN CASH		(32,655	)		621,727

CASH, beginning of period		291,453			467,195

CASH, end of period	$	258,798		$	1,088,922

LEXICON UNITED INCORPORATED AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

	For the three months ended March 31,
	2009		2008
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid	$	163,596	$	121,366

Non cash items
Purchase of furniture and equipment	$	-	$	27,571

See accompanying notes to financials

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED FINANCIAL STATEMENTS

March 31, 2009

NOTE A – RESTATEMENTS

The financial statements for the three months ended March 31, 2009 have been restated as follows:

	As Reported			As Restated
Consolidated Balance Sheets
Stockholders Equity (Deficit)
Accumulated deficit		(3,199,517	)		(3,151,260	)
Non-controlling interest					(48,257	)
Consolidated Statements of Operations
Net loss attributable to the noncontrolling interest					(48,257	)
Net loss attributable to Lexicon United Incorporated		(241,285	)		(193,028	)
Net loss per common share		(.03	)		(.02	)

The restatements were due to the adoption of FAS 160 as discussed in Note E.

NOTE B – BASIS OF PRESENTATION

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the financial statements not misleading have been included. Results for the three months ended March 31, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. For further information, refer to the financial statements and footnotes thereto included in the Lexicon United Incorporated annual report on Form 10-KSB for the year ended December 31, 2008 filed April 15, 2009.

NOTE C – GOING CONCERN

As indicated in the accompanying financial statements, the Company has an accumulated deficit of $3,151,260 and negative working capital of $2,513,948 at March 31, 2009. 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.

NOTE D – PRINCIPLES OF CONSOLIDATION

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. and United Oil Services, Inc. All material intercompany transactions have been eliminated in consolidation. Engepet and United were newly found in 2008 and their transactions were not deemed to be significant.

NOTE E – RECENT ACCOUNTING PRONOUNCEMENTS

Effective January 1, 2009, the Company adopted Financial Accounting Standards Board’s )FASB) Statement No. 160 (FAS 160), “Noncontrolling Interests in Consolidated Financial Statements – an Amendment of ARB No. 51.

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED FINANCIAL STATEMENTS

March 31, 2009

“FAS 160 changed the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity. FAS 160 required retrospective adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of FAS 160 will be applied prospectively. The adoption of FAS 160 did not have a material impact on the Company’s financial statements.

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments.” This FASB Staff Position amends FASB Statement NO. 107, “Disclosures about Fair Value of Financial Instruments,” to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FASB Staff Position also amends APB Opinion No. 28, “Interim Financial Reporting,” to require certain disclosures in summarized financial information at interim reporting periods. This standard will be effective for the Company’s second quarter ended June 30, 2009. The Company is in the process of determining the effects of the adoption of this standard on its consolidated financial statement disclosures.

In April 2009, the FASB issued FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.” This FASB Staff Position provides additional guidance for estimating fair value in accordance with FASB Statement No. 157, “Fair Value Measurements,” when the volume and level of activity for the asset or liability have significantly decreased. It also includes guidance on identifying circumstances that indicate a transaction is not orderly. This standard will be effective for the Company for its second quarter ended June 30, 2009. The Company does not expect that the adoption of this standard will have a material impact on its consolidated financial statements.

NOTE F – FAIR VALUE MEASUREMENTS

On January 1, 2008, The Company adopted Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”), for financial assets and liabilities. On January 1, 2009, the Company adopted the provisions of FAS 157 for non-financial assets and non-financial liabilities that are recognized and disclosed at fair value on a nonrecurring basis. FAS 157 defines fair-value, provides guidance for measuring fair value and requires certain disclosures. It does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements.

FAS 157 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The Company’s financial instruments measured at fair value on a recurring basis are summarized below:

		Fair
	Fair	Value at		Fair Value at
	Value	March 31,		December 31,
Financial Instruments	Hierarchy	2009		2008

Cash and cash equivalents	Level 1	$	258,798	$	291,453

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED FINANCIAL STATEMENTS

March 31, 2009

The Company does not have any non-financial assets or liabilities that are measured at fair value on a non-recurring basis.

NOTE G– 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. During the three months ended March 31, 2009, the Company actually collected $30,309 which was $19,163 less than the amount provided in its original projections on a quarterly basis. The Company believes that its original projections are still accurate and attributes the decreased collections to a reduction in manpower used during the quarter. Management expects to boost its efforts during the second quarter and therefore no impairment has been recognized. The excess cash collections from 2008 combined with the decreased cash collections for the three months ended March 31, 2009 and the changes in exchange rates resulted in a reduction to the projected ended carrying amount of $12,307.

The following table reflects the carrying amount and cash flows expected to be collected for the quarters ending March 31 and December 31, 2009 and the years ending December 31, 2010 through 2013:

Year Ended 31-Dec	Beginning Carrying Amount		Cash Flows Expected to be Collected		Interest Income		Reduction of Carrying Amount		Ending Carrying Amount

Mar 2009	$	547,147	$	30,309	$	19,822	$	10,487	$	536,660
2009		536,660		167,580		109,593		57,987		478,673
2010		478,673		197,889		113,220		84,669		394,004
2011		394,004		197,889		93,193		104,696		289,308
2012		289,308		197,889		68,617		129,272		160,036
2013		160,036		197,889		37,853		160,036		0

Totals			$	989,445	$	442,298	$	547,147

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED FINANCIAL STATEMENTS

March 31, 2009

Accretable yield has been calculated as follows:

Cash flows expected to be collected as of 3/31/09	$	989,445
Less: Beginning carrying amount			547,147
Yield accreted March 31, 2009			19,822

Accretable Yield as of 3/31/09	$	422,476

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 $561,272 at March 31, 2009. The difference of $255,022 is included in accumulated other comprehensive loss.

NOTE H – USE OF ESTIMATES

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

NOTE I – 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, and installment agreement is established. The Company is then entitled to a commission on the agreed settlement. The Company earns and records the pro rata commission for each installment, when the installment payments are received from the debtors. 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 flows. Revenue from receivable portfolios is accrued based on each pool’s effective interest rate applied to each pool’s adjusted cost. See Note C to Financial Statements.

NOTE J – RELATED PARTY

On January 7, 2009, the Company borrowed funds totaling approximately $30,200 from a shareholder. The interest rate is 2% per month. There is no maturity date, however, if either party decides to end the agreement, the loan must be repaid within 30 days.

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 this individual is deemed to be a related party because of his affiliation with the Company. At March 31, 2009, the balance of the loan from officer is $63,182 and the loan from this individual is $263,259.

LEXICON UNITED INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED FINANCIAL STATEMENTS

March 31, 2009

On a periodic basis the Company borrows funds from shareholders for working capital. At March 31, 2009 these borrowings total $127,566.

NOTE K - STOCKHOLDERS’ EQUITY

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 January 22, 2009, the Company has included 12,000 of its common shares as issued and outstanding for consulting fees incurred. The shares were valued at $2.00 per share. Consulting expense charged to operations as of March 31, 2009 was $24,000. These shares are included as outstanding but have not yet been issued.

NOTE L – SUBSEQUENT EVENTS

Effective May, 1, 2009, the Company has entered into an agreement with DME Capital to provide a plan and coordinate its execution, for various investor and public relation services as agreed upon. The term of the agreement is for a minimum period of six months for a total of $24,600.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN 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:

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.

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 flows. 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.

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 from 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 than 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.

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).

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. During the three months ended March 31, 2009, the Company actually collected $30,309 which was $19,163 less than the amount provided in its original projections on a quarterly basis. The Company believes that its original projections are still accurate and attributes the decreased collections to a reduction in manpower used during the quarter. Management expects to boost its efforts during the second quarter and therefore no impairment has been recognized. The excess cash collections from 2008 combined with the decreased cash collections for the three months ended March 31, 2009 and the changes in exchange rates provided a reduction to the projected ended carrying amount of $12,307.

The following table reflects the carrying amount and cash flows expected to be collected for the quarters ending March 31 and December 31, 2009 and the years ending December 31, 2010 through 2013:

	Beginning		Cash Flows Expected				Reduction		Ending
Year Ended	Carrying		to be		Interest		of Carrying		Carrying
31-Dec	Amount		Collected		Income		Amount		Amount

Mar 2009	$	547,147	$	39,309	$	19,822	$	10,487	$	536,660
2009		536,660		167,580		109,593		57,987		478,673
2010		478,673		197,889		113,220		84,669		394,004
2011		394,004		197,889		93,193		104,696		289,308
2012		289,308		197,889		68,617		129,272		160,036
2013		160,036		197,889		37,853		160,036		0

Totals			$	989,445	$	442,298	$	547,147

Accretable yield has been calculated as follows:

Cash flows expected to be collected as of 3/31/09	$	989,445
Less: Beginning carrying amount		547,147
Yield accreted March 31, 2009		19,822

Accretable Yield as of 3/31/09	$	422,476

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 March 31, 2009, the balance of the loan including accrued interest, from officer is $63,182 and the loan from an individual is $263,259. 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 $561,272 at March 31, 2009. The difference of $255,022 is included in accumulated other comprehensive loss.

Results of Operations

Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008.

The following table summarizes the results of our operations during the three month period ended March 31, 2009, and 2008 and provides information regarding the dollar and percentage increase or (decrease) from the three month period ended March 31, 2009 to the same period of 2008.

	3/31/09			3/31/08			Increase (Decrease)			Percentage Increase (Decrease)

Revenues		810,145			884,865			(74,720	)		(8.44	)
Cost of Services		490,790			490,057			733			0
Selling, General and Administrative Expense		350,901			512,904			(162,003	)		(31.59	)

Interest expense		163,596			121,366			42,230			34.80
Depreciation & amortization		40,771			59,116			(18,345	)		(31.03	)
Interest income & other		(5,372	)		5,347			(10,719	)		(200.47	)
Net income (loss)		(193,028	)		(293,231	)		100,203			34.17
Earnings (Loss) per common share		(.03	)		(.03	)		0			0

We had revenues of $810,145 for the three month period ended March 31, 2009, compared to revenues of $884,865 during the same period in 2008. Our revenues decreased 8.44% in the three month period ended March 31, 2009 primarily due to a decrease in collections of receivables.

Our cost of services for the three month period ended March 31, 2009 was $490,790 as compared to $490,057 during the same period in 2008. This increase of $733 is primarily the result of increased postal and mail services offset by a decrease in salaries and related expenses of ATN.

Selling, general and administrative expenses decreased by $162,003 or 31.59 %, to $350,901 in the three month period ended March 31, 2009 compared to $512,904 in the same period in 2008. The change is the result of decreases in software rent, bank fees and telephone expenses as well as inactivity in Engepet Energy Enterprises.

Interest expense for the three month period ended March 31, 2009 was $163,596 and interest expense in the same period of 2008 was $121,366. Interest expense increased 34.8% in the three month period ended March 31, 2009 mainly due to the increase of new borrowings over the past year.

During the three month period ended March 31, 2009 we incurred a net loss of $(193,028) compared with $(293,231) for the same period in the prior year. The decrease in our loss is primarily due to the decrease in expenses as described above offset by decreased revenues in addition to the adoption of FAS 160 which allocated ($48,257) loss to the non-controlling interest.

Loss per common share for the three month period ended March 31, 2009 was $(.02) as compared to a loss of $(.03) during the same period of 2008.

Cash Flow Items

The following table provides the statements of net cash flows for the three month period ended March 31, 2009.

	Three Months Ended March 31,
	2009			2008
Net Cash Provided By (Used in) Operating Activities		56,051			(257,075	)
Net Cash Used in Investing Activities					(2,897	)
Net Cash Provided By (Used In) Financing Activities		(89,454	)		887,741
Net Increase (decrease) in Cash and Cash Equivalents		(32,655	)		621,727
Cash and Cash Equivalents - Beginning of Period		291,453			467,195
Cash and Cash Equivalents - End of Period		258,798			1,088,922

We provided $56,051 of cash from our operating activities during the three month period ended March 31, 2009 as compared to $257,075 cash used during the three month period ended March 31, 2008. The difference of $313,126 is mainly attributable to a decrease in net loss of $51,946 and a decrease in other receivables of $137,677.

We used $0 in cash from our investing activities during the three month period ended March 31, 2009, as compared to $2,897 used in the prior period ending March 31, 2008. These funds were used for the purchase of fixed assets.

We used a net of $89,454 from financing activities during the three month period ended March 31, 2009 as compared to providing funds of $887,741 during the three month period ended March 31, 2008. The change is primarily due to a decrease in new borrowings for the three months ended March 31, 2009.

Balance Sheet Items

As of March 31, 2009, we had total current assets of $713,334, as compared to $1,673,467 as of March 31, 2008. Our total assets as of March 31, 2009 were $2,888,586 as compared to $3,676,646 as of March 31, 2008. We had total current liabilities of $3,227,282 as of March 31, 2009 as compared to $4,512,355 as of March 31, 2008, and we had total liabilities of $3,385,842 as of March 31, 2009 as compared to $4,933,395 as of March 31, 2008.

The decrease in total assets is primarily due to the collection of other receivables of $121,775, a decrease in cash of $830,124 offset by the investment in receivable portfolio of $524,353. The decrease in total liabilities is primarily due to the conversion of $1,000,000 loan into common stock.

As of March 31, 2009, our total Stockholders’ Equity (deficit) was $(497,256) as compared to $(1,256,749) at March 31, 2008. 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 $258,798 as of March 31, 2009 and we had short-term liabilities in the amount of $3,227,282, as well as long-term liabilities in the amount of $158,560 as of March 31, 2009. The Company intends to use its cash to retire current debt as it comes due as well as to pay operating expenses as necessary.

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 March 31, 2009, we had cash assets of $258,798 and total assets of $2,888,586 as compared to cash assets of $1,088,922 and total assets of $3,676,646 as of March 31, 2008. This decrease in total assets is primarily due to the collection of other receivables of $121,775, a decrease in cash of $830,124 offset by the investment in receivable portfolio of $524,353. We have a $(2,513,948) negative working capital at March 31, 2009, of which $1,179,732 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 March 31, 2009 was $267,525.

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%.

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.

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.

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.

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.

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..

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.

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..

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.

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..

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.

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..

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..

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.

An analysis of the current and long-term portion of the debt at March 31, 2009 is as follows:

Total loans outstanding	$	438,254

Less: current portion	$	279,694

Long-term portion	$	158,560

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 3. 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.

Item 4A(T). CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of March 31, 2009. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that our disclosure and controls are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Internal Controls Over Financial Reporting

During the quarter ended March 31, 2009, there were no changes in our internal control over financial reporting identified in connection with the evaluation performed that occurred during the fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

There are no legal proceedings which are pending or have been threatened against us or any officer, director or control person of which management is aware.

ITEM 1A. RISK FACTORS.

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.

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

We have not sold any equity securities during the fiscal quarter ended March 31, 2009 that were not previously disclosed in a report that was filed during that period.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

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

No matters were submitted during the first quarter of fiscal year 2009 to a vote of security holders, through the solicitation of proxies or otherwise.

ITEM 5. OTHER INFORMATION.

None

ITEM 6. EXHIBITS.

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

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

SIGNATURES

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

DATED: June 12, 2009

LEXICON UNITED INCORPORATED

By:	/s/ Elie Saltoun
	Elie Saltoun
	Chief Executive Officer,

EXHIBIT INDEX

Exhibit

Number

Description

31.1

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

32.1

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