United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-QSB


               X Quarterly Report Under Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

                For the quarterly period ended September 30, 1999



                         Commission File Number 0-26915


                                   Lexon, Inc.
                 (Name of Small Business Issuer in its charter)

                 Oklahoma                               73-1533326
     -------------------------------          ------------------------------
     (State or other jurisdiction of            (I.R.S. Employer I.D. No.)
      incorporation or organization)

                        8908 South Yale Avenue, Suite 409
                           Tulsa, Oklahoma 74137-3545
              (Address of principal executive offices and Zip Code)

                                 (918) 492-4125
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes  X            No   __

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

There were 6,802,013 shares of Common Stock, $0.001 par value, outstanding as of
September 30, 1999.


<PAGE>

                          PART I FINANCIAL INFORMATION

ITEM 1  FINANCIAL STATEMENTS

                                   Lexon, Inc.
                                 Balance Sheets
                    September 30, 1999 and December 31, 1998

                                                     September 30,
                                                             1999   December 31,
                            ASSETS                     (unaudited)         1998
                                                     ---------------------------
Current assets
Cash ..............................................   $    30,318    $   31,164
Other receivables .................................         9,703             0
Prepaid consulting expenses .......................        38,125       300,000
                                                      -----------    -----------
   Total current assets ...........................        78,146       331,164
                                                      -----------    -----------

Other assets
Licensed technology, net ..........................       149,162       156,265
Sponsored research, net ...........................       116,719       233,437
                                                      -----------    -----------
      Total other assets ..........................       265,881       389,702
                                                      -----------    -----------

TOTAL ASSETS ......................................   $   344,027    $  720,866
                                                      -----------    -----------

             LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities ..........   $    29,960    $   25,127
Interest payable ..................................         1,900        16,739
Notes payable to officer and shareholder ..........             0       230,000
Notes payable to shareholder ......................       100,000             0
Payable to North Shore University .................        67,635             0
Payable to UTEK Corporation .......................       132,000             0
                                                      -----------    -----------
   Total current liabilities ......................       331,495       271,866
                                                      -----------    -----------

Shareholders' equity
Preferred stock, $0.001 par value,
   5,000,000 shares authorized;  no shares
   issued and outstanding at September 30, 1999 and
   December 31, 1998, respectively ................             0             0
Common stock, $0.001 par value,
   45,000,000 shares authorized;
   6,802,013 shares and 6,279,313 shares
   issued and outstanding at September 30, 1999 and
   December 31, 1998, respectively ................         6,802         6,279
Paid in capital ...................................     2,768,775     1,177,571
Retained earnings .................................    (2,763,045)     (734,850)
                                                      -----------    -----------
   Total shareholders' equity .....................        12,532       449,000
                                                      -----------    -----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ........   $   344,027    $  720,866
                                                      -----------    -----------

   The accompanying notes are an integral part of these financial statements


                                       2
<PAGE>



                                   Lexon, Inc.
                            Statements of Operations
     For the three months and nine months ended September 30, 1999 and 1998
  and for the period from Inception (December 17, 1997) to September 30, 1999

<TABLE>
<CAPTION>
                                         From inception
                                           (December 16,     Three months    Three months      Nine months      Nine months
                                          1997) through             ended           ended            ended            ended
                                           September 30,    September 30,   September 30,    September 30,    September 30,
                                                    1999             1999            1998             1999             1998
                                             (unaudited)      (unaudited)     (unaudited)      (unaudited)      (unaudited)
                                        ------------------------------------------------------------------------------------
<S>                                      <C>                <C>             <C>              <C>              <C>
Revenue                                               $0               $0              $0               $0               $0

Expenses
Research and development                         727,890          127,051          41,273          583,842           41,273
General and administrative                     1,797,099          371,576          60,996        1,439,035          175,796
                                        ------------------------------------------------------------------------------------
   Total operating expenses                    2,524,989          498,627         102,269        2,022,877          217,069
                                        ------------------------------------------------------------------------------------

Operating loss                                (2,524,989)        (498,627)       (102,269)      (2,022,877)        (217,069)

Interest expense                                 238,056            1,900           6,977            5,318            6,977
                                        ------------------------------------------------------------------------------------

Net loss                                     ($2,763,045)       ($500,527)      ($109,246)     ($2,028,195)       ($224,046)
                                        ------------------------------------------------------------------------------------

Weighted average shares outstanding            5,256,014        6,802,013       5,245,772        6,659,988        3,510,039
                                        ------------------------------------------------------------------------------------

Loss per share                                    ($0.53)          ($0.07)         ($0.02)          ($0.30)          ($0.06)
                                        ------------------------------------------------------------------------------------

</TABLE>

    The accompanying notes are an integral part of these financial statements




<PAGE>



                                   Lexon, Inc.
                             Statement of Cash Flows
     For the three months and nine months ended September 30, 1999 and 1998
  and for the period from Inception (December 17, 1997) to September 30, 1999
<TABLE>
<CAPTION>
                                                                               From inception
                                                                                (December 16,   Nine months    Nine months
                                                                                1997) through         ended          ended
                                                                                September 30, September 30,  September 30,
                                                                                         1999          1999           1998
                                                                                  (unaudited)    (unaudited)    (unaudited)
                                                                               -------------- -------------- --------------
<S>                                                                            <C>            <C>            <C>
Net loss .....................................................................   ($2,763,045)   ($2,028,195)   ($224,046)
Plus non-cash charges:
   Amortization of license and sponsored research agreements .................       206,371        123,822       41,273
   Value of common stock options granted to non-employees for services .......       990,700       870,700              0
   Value of common stock options granted to non-employee lenders .............       216,000              0
   Value of services contributed by employees ................................       431,479        210,000      165,000
   Common stock issued for services ..........................................       209,750        209,750            0
Change in working capital accounts:
   Increase in prepaid expenses ..............................................        (8,125)        (8,125)           0
   Increase in other receivables .............................................        (9,703)        (9,703)           0
   Increase in accounts payable and accrued liabilities ......................        29,960          4,833       13,615
   Increase (decrease) in interest payable ...................................         1,900        (14,839)       6,977
   Increase in payable to North Shore University .............................        67,635         67,635            0
   Increase (decrease) in interest payable ...................................       132,000        132,000            0
                                                                               -------------- -------------- --------------
      Total operating activities .............................................      (495,078)      (442,122)       2,819
                                                                               -------------- -------------- --------------

Financing activities
Loans from officer and shareholder ...........................................       230,000              0      230,000
Payment of loans from office and shareholder .................................      (230,000)      (230,000)           0
Loans from shareholder .......................................................       100,000        100,000            0
Sale of common stock for cash
   To founders ...............................................................         5,000              0        5,000
   To third-party investors ..................................................     1,012,145        643,487      250,410
   Less:  issue costs ........................................................      (120,499)       (72,211)     (16,144)
                                                                               -------------- -------------- --------------
      Total financing activities .............................................       996,646        441,276      469,266
                                                                               -------------- -------------- --------------

Investing activities
Purchase of exclusive licenses ...............................................      (160,000)             0     (160,000)
Payment of sponsored research contract .......................................      (311,250)             0     (311,250)
                                                                               -------------- -------------- --------------
      Total investing activities .............................................      (471,250)             0     (471,250)
                                                                               -------------- -------------- --------------

Change in cash ...............................................................   $    30,318    ($      846)   $     835
Cash at beginning of period ..................................................   $         0    $    31,164    $       0
                                                                               -------------- -------------- --------------
Cash at end of period ........................................................   $    30,318    $    30,318    $     835
                                                                               -------------- -------------- --------------

Supplemental disclosure of cash flow information:
   Cash paid for interest and taxes during the period ........................   $    20,156    $    20,156    $       0
                                                                               -------------- -------------- --------------

Non-cash financing and investing activities:
   Common stock issued in Gentest Merger .....................................   $     1,000    $         0    $   1,000
                                                                               -------------- -------------- --------------
</TABLE>

    The accompanying notes are an integral part of these financial statements





                                   Lexon, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements
                               September 30, 1999


Note 1- Organization and Summary of Significant Accounting Policies

         Basis of Presentation
         The accompanying  unaudited financial  statements have been prepared in
accordance with generally accepted  accounting  principles for interim financial
statements  and do  not  include  all  information  and  footnotes  required  by
generally  accepted  accounting  principles for complete  financial  statements.
However, the information furnished reflects all adjustments,  consisting only of
normal recurring adjustments which are, in the opinion of management,  necessary
in order to make the financial statements not misleading.

         Organization and Nature of Operations
         Lexon,   Inc.  ("Lexon"  or  "the  Company")  is  a  development  stage
corporation that own the exclusive  worldwide  license to develop,  manufacture,
obtain FDA approval  for, and market a cancer  screening  test kit for detecting
the ebaf  protein,  which  allows for early,  non-invasive  screening  for colon
cancer and certain types of ovarian and testicular cancers.

         Development Stage Operations
         The Company was incorporated on December 16, 1997 under the laws of the
state of Oklahoma. Since inception, the Company's primary focus has been raising
capital and developing the Ebaf blood screening process.

         Cash and Cash Equivalents
         The Company  considers  highly liquid  investments  with  maturities of
three months or less to be cash equivalents.

         Income Taxes
         The Company uses the liability method of accounting for income taxes as
set forth in Statement of Financial  Accounting  Standards No. 109,  "Accounting
for Income  Taxes." Under the liability  method,  deferred  taxes are determined
based on the  differences  between  the  financial  statements  and tax bases of
assets and  liabilities at enacted tax rates in effect in the years in which the
differences are expected to reverse.

          At September  30, 1999,  the Company had a net  operating  tax loss of
approximately  $2,763,000,  which  expires  from  December  31, 2013 to 2014.  A
valuation  allowance fully offsets the benefit of the net operating loss,  since
the Company does not meet the "more probable than not" criteria of FASB 109.

         Compensation of Officers and Employees
         The Company's  officers and other  employees serve without pay or other
non-equity compensation. The fair value of their services, however, is estimated
by management and is recognized as an expense with an offsetting  credit to paid
in capital.  For the nine months ended  September  30, 1999 and 1998 and for the
period from  inception  (December  16, 1997) to  September  30, 1999 the Company
recorded   $210,000,   $110,000  and  $361,479,   respectively,   as  a  capital
contribution by the officers and other employees.

         Fair Market Value of Stock Options and Stock Issued for Services
         The fair  market  value of stock  options  granted  or stock  issued as
payment for services is equal to the closing price of the Company's common stock
on the date  options  are granted or on the date  agreements  for  services  are
signed. On November 4, 1998, the Company's common stock began trading on the OTC
Bulletin Board under the symbol "LXXN".  Prior to trading, the fair market value
of stock options  granted or stock issued as payment for services was determined
by the Board of Directors.

                                       5

<PAGE>
         Stock-based Compensation
         The Company accounts for stock-based employee compensation arrangements
in accordance with provisions of Accounting Principles Board ("APB") Opinion No.
25, "Accounting for Stock Issued to Employees," and complies with the disclosure
provisions of SFAS No. 123, "Accounting for Stock-Based Compensation." Under APB
No. 25, compensation expense is based on the difference,  if any, on the date of
the grant, between the fair value of the Company's stock and the exercise price.
The Company  accounts for stock issued to  non-employees  in accordance with the
provisions of SFAS No. 123 and the Emerging Issues Task Force Consensus in Issue
No. 96-18.

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

         Fiscal Year End
         The Company's fiscal year ends on December 31.

         Research and Development ("R&D") Costs
         The Company is  amortizing  the $311,250 paid pursuant to the Sponsored
Research  Agreement over two years,  which is the life of the service agreement.
Any other costs related to  developing  the Ebaf Assay are expensed as incurred.
Compensation cost associated with stock options granted to Dr.  Tabibzadeh,  the
inventor of the Ebaf Assay, is recorded by the Company as R&D expense.

         New Accounting Standards
         The Company adopted SFAS No. 130, "Reporting  Comprehensive Income" and
SFAS  No.  131,  "Disclosures  about  Segments  of  an  Enterprise  and  Related
Information" during 1998. The Company has no comprehensive  income items for the
year ended  December 31, 1998 and for the nine months ended  September 30, 1999.
Therefore,  net loss equals  comprehensive  income. The Company operates in only
one  business  segment.  The Company  will adopt SFAS No. 133,  "Accounting  for
Derivative  Investments  and Hedging  Activities"  during 1999.  Currently,  the
Company  does  not  engage  in  hedging  activities  or  transactions  involving
derivatives.

Note 2- Gentest Merger

         On May 11, 1998,  the Company  entered  into an  Agreement  and Plan of
Merger with Gentest, Inc., a Florida corporation,  whereby the Company agreed to
issue  1,000,000  shares of its common stock for all the issued and  outstanding
common stock of Gentest,  Inc. Gentest was formed in March, 1998 for the purpose
of securing the License  Agreement and Sponsored  Research  Agreement related to
the Ebaf Assay. Under the terms of the Agreement and Plan of Merger, the Company
issued to UTEK Corporation ("UTEK"), the sole shareholder of Gentest,  1,000,000
shares  of  common  stock of  Lexon.  Gentest  ceased  to exist by reason of the
merger,  and the assets and  liabilities of Gentest,  including those rights and
obligations  associated with the exclusive  License  Agreement and the Sponsored
Research Agreement, became assets and liabilities of Lexon. On July 8, 1998, the
Company paid  $105,000 for the exclusive  license,  $311,250 to develop the test
kit  and  $55,000  for  services   rendered  in  connection  with  securing  the
agreements.  The Gentest  merger was accounted  for as a purchase.  The purchase
price of $1,000 was based on the number of shares  issued at par value of $0.001
per share.

         Par value per share was used to value the purchase because all previous
share issuances,  consisting solely of issuances to founders,  were based on par
value, and there was no public market for the Company's stock.  Gentest had only
recently  been formed for the purpose of entering into the License and Sponsored
Research  Agreements.  The value assigned to the License and Sponsored  Research
Agreements and the related obligations,  were therefore based on Gentest's cost.
Since Gentest had no prior  operations,  no pro forma  financial  information is
presented.

        The Gentest assets  acquired and  liabilities  assumed are summarized as
follows:

          License Agreements                                   $161,000
          Sponsored Research Agreement                          311,250
                                                        -----------------
          Total Cost of Assets Acquired                         472,250
          Obligations Assumed                                  (471,250)
                                                        -----------------
          Purchase Cost                                          $1,000
                                                        -----------------

                                       6
<PAGE>

Note 3- Exclusive License

         On July 8, 1998,  the Company paid $100,000 to the  University of South
Florida  Research  Foundation  ("USFRF")  and $5,000 to North  Shore  University
Hospital Research Foundation ("North Shore") for the exclusive worldwide license
to develop and market the cancer  screening test kits. In addition,  the Company
paid  $55,000 to UTEK for  services  rendered in  connection  with  securing the
License agreements. The exclusive license is being amortized over 17 years using
the  straight-line  method.  As of  September  30, 1999 and  December  31, 1998,
accumulated amortization was $11,838 and $4,735, respectively.

Note 4- Sponsored Research Contract

         On July 8, 1998,  the  Company  paid  $311,250 to North Shore under the
terms of a Sponsored  Research  Agreement to develop the cancer  screening  test
kits.  The contract  specifies a 24-month  development  period with costs not to
exceed  $311,250.  The Sponsored  Research  Agreement is amortized  over 2 years
using  the  straight-line  method,  with  amortization  costs  recorded  as  R&D
expenses.  As  of  September  30,  1999  and  December  31,  1998,   accumulated
amortization was $194,531 and $77,813, respectively.

Note 5-Notes Payable

         On July 1, 1998,  the  Company  borrowed  $50,000  from an officer  and
$180,000 from a shareholder.  The Company  executed notes payable which were due
December 31, 1998 at an interest  rate of 12% per year,  which  increased to 14%
per year after the due date.  As of September  30, 1999,  the notes  payable and
accrued interest were paid in full.

         In connection  with the loans,  the Board granted 50,000 options to the
officer and 180,000  options to the  shareholder.  Because no trading market for
the common stock was yet  established,  the option  exercise  price of $1.20 per
share was  determined  by the Board based on the most recent  offering  price of
$2.00  per  share  less  a 40%  discount.  The  discount  was  determined  to be
appropriate as stock issued when these options are exercised may be restricted.

         The Company  recorded no  compensation  cost for the options granted to
the officer. For the year ended December 31, 1998, the Company recorded $216,000
as  interest  expense  for the options  granted to the  shareholder  based on an
estimated  fair value of $1.20 per share.  The fair value of $1.20 per share was
estimated on the date of grant using the Black-Scholes option pricing model with
the following  assumptions:  exercise  price of $1.20 per share,  stock price of
$1.20 per share,  risk-free  interest rate of 6.0%,  expected  dividend yield of
0.0; expected life of ten years; and estimated volatility of 151%.

         On August 4, 1999,  the Company  borrowed  $100,000 from a shareholder.
The note accrues interest at 12% per year and is an unsecured  obligation of the
Company.

Note 6- Commitments and Contingencies

         Future Royalty Obligations Under Exclusive License Agreement
         In connection with the exclusive license agreement,  the Company agreed
to pay to USFRF a  royalty  equal to the  greater  of (a) five  percent  (5%) of
revenue  from the sale of products  based on the concept  for the  diagnosis  of
selected adenocarcinomas and any additions,  extensions and improvements thereto
or as a minimum  (b) zero (0) dollars  for the first  twenty  four (24)  months;
$75,000  at the end of year  three  (3);  $100,000  at the end of year four (4);
$125,000  at the end of year five (5);  $150,000  at the end of year six (6) and
for each  successive year  thereafter  during the term of the exclusive  license
agreement.  The royalty  obligation  will expire after the longer of twenty (20)
years or the  expiration  of the last to expire  patent that covers the licensed
intellectual  property.  The Company also agreed to pay to North Shore a royalty
equal to one-half  percent  (0.5%) of revenue from the sale of such products and
ten percent  (10%) of any  consideration  received by the Company from  granting
sublicenses.  No  minimum  royalty  payments  are  required  under  the  License
Agreement with North Shore.

                                       7

<PAGE>
         Future Obligations to North Shore University
         On March 8, 1999, the Company  agreed to fund an additional  $81,162 to
North  Shore in six equal  installments  of $13,257  each,  payable on or before
October 1, 1999, December 1, 1999, February 1, 2000, April 1, 2000, June 1, 2000
and  August  1,  2000.  On  September  30,  1999,  the  Company  paid the  first
installment of $13,257.

         Statutory Rights of the National Institutes of Health ("NIH")
         The Patent &  Trademark  Act  (Public  Law  96-517),  also known as the
Bayh-Dole Act,  created a uniform patent policy among Federal agencies that fund
research.  Bayh-Dole  enables small  businesses  and  non-profit  organizations,
including  universities,  to retain title to materials  and products they invent
with Federal  funding.  In return,  the U.S.  government  retains a nonexclusive
right to make or use the invention for  government  purposes.  Dr.  Tabibzadeh's
research was funded in part with grants from the National  Institutes of Health.
If the U.S.  government  decides to make or use Dr.  Tabibzadeh's  invention for
government  purposes,  then it would not be  obligated  to pay  license  fees or
royalties.  In addition,  the U.S.  government  is protected  from  lawsuits and
infringement claims.

         Foreign Patent Protection
         The U.S.  patent  covering  the Ebaf  Assay  does not extend to foreign
countries, and the Company does not presently have any foreign patent protection
for its product.

         Leases
         The Company's  executive office is leased from a third-party  under the
terms of a lease  agreement  that expires  March 31, 2002.  The office is shared
with other  companies  controlled  by the officers and directors of the Company.
The minimum  annual lease  payments  pursuant to the Agreement and the Company's
estimated share are scheduled as follows:

                                                      Minimum         Company's
                                                       Annual         Estimated
      Period                                   Lease Payments             Share
      ------------------------------------     ---------------      ------------

      For the year ended December 31, 1999            $40,265           $13,422
      For the year ended December 31, 2000            $44,594           $14,865
      For the year ended December 31, 2001            $45,587           $15,196
      For the period ended March 31, 2002             $11,462           $3,821


Note 7-  Common Stock and Paid in Capital

         During the nine months ended  September 30, 1999, the following  common
stock transactions occurred:

               1. The Company sold 385,700 shares of common stock to third-party
investors for $557,549 in cash.

               2. The Company  issued a total of 82,000  shares of common  stock
              for  services  rendered  by outside  consultants.  The shares were
              valued based on the closing price of the Company's common stock on
              the date the services were rendered or agreements were signed.  Of
              the  shares  issued,  80,000  were  issued at $2.50 per share to a
              consultant  to  develop  and  market an  Internet  web site and to
              prepare and distribute via e-mail a detailed profile report on the
              Company.  The  remaining  2,000  shares  were issued at $4.875 per
              share  for legal  services.  The  Company  recorded  $200,000  and
              $9,750, respectively, as G&A expense.

               3.  The  Company  issued  55,000  shares  of  common  stock to an
              employee who  exercised  stock  options at $1.5625 per share.  The
              Company  received $85,938 in cash when the options were exercised.
              The exercise price was equal to the closing price of the Company's
              common stock on the date the options were granted.

         Lexon is authorized  to issue  45,000,000  Shares of Common Stock,  par
value  $0.001  per share,  of which  6,802,013  shares  were  outstanding  as of
September  30,  1999.  Lexon is also  authorized  to issue  5,000,000  shares of
Preferred  Stock,  par value  $0.001  per  share,  of which  there are no shares
presently outstanding. There is no present intent to issue any Preferred Stock.

                                       8
<PAGE>
         Voting  Rights.  Holders of shares of Common  Stock are entitled to one
vote per share on all matters submitted to a vote of the shareholders. Shares of
Common Stock do not have cumulative voting rights,  which means that the holders
of a  majority  of the  shareholder  votes  eligible  to vote and voting for the
election  of the  Board of  Directors  can  elect  all  members  of the Board of
Directors.  Holders of a majority of the issued and outstanding shares of Common
Stock may take action by written consent without a meeting.

         Dividend  Rights.  Holders  of record  of  shares  of Common  Stock are
entitled to receive dividends when and if declared by the Board of Directors. To
date,  Lexon has not paid cash dividends on its Common Stock.  Holders of Common
Stock are  entitled to receive  such  dividends as may be declared and paid from
time to time by the Board of Directors out of funds legally available  therefor.
Lexon  intends to retain any earnings  for the  operation  and  expansion of its
business  and does not  anticipate  paying  cash  dividends  in the  foreseeable
future. Any future determination as to the payment of cash dividends will depend
upon future  earnings,  results of  operations,  capital  requirements,  Lexon's
financial  condition  and such  other  factors  as the  Board of  Directors  may
consider.

         Liquidation Rights. Upon any liquidation,  dissolution or winding up of
Lexon, holders of shares of Common Stock are entitled to receive pro rata all of
the assets of Lexon available for distribution to shareholders after liabilities
are paid and distributions are made to the holders of Lexon's Preferred Stock.

         Preemptive  Rights.  Holders of Common Stock do not have any preemptive
rights  to  subscribe  for  or to  purchase  any  stock,  obligations  or  other
securities of Lexon.

Note 8- Stock Options

         On August 15, 1998,  the Board of Directors and  shareholders  approved
the  adoption of the Lexon Option Plan,  pursuant to which  3,000,000  shares of
Common Stock were  reserved.  Stock  options  granted  under the Plan expire ten
years from the date of grant.

         On  October  15,  1998,  the  Company  granted  300,000  options  to  a
consultant at an exercise price of $1.20 per share. In exchange for the options,
the consultant will provide the Company financial  consulting services for a one
year period beginning  October 29, 1998. The Company recorded $360,000 as a cost
of capital and prepaid consulting  services and is amortizing the expense over a
12 month  period.  For the nine months ended  September  30,  1999,  the Company
recorded $270,000 as G&A expense for the consultant's services.

         On March 4, 1999,  the Company  granted  1,692,500  options to purchase
common  stock at an  exercise  price of $1.5625  per share to certain  officers,
directors  and  employees  of the Company.  The exercise  price was equal to the
closing  price  of  the  Company's  common  stock  on  the  date  of  grant.  No
compensation cost was recorded.

         On March 4, 1999,  the  Company  granted  250,000  options to  purchase
common  stock at an  exercise  price of  $1.5625  per  share to Dr.  Tabibzadeh,
inventor of the Ebaf Assay  screening  process.  The exercise price was equal to
the closing  price of the common  stock on the date of grant.  The options  were
valued at $1.49 per share based on the  Black-Scholes  option  pricing model and
the Company recorded $372,500 as R&D expense. The following  assumptions for the
Black-Scholes option pricing model were used: exercise price of $1.5625,  market
price of $1.5265,  risk-free interest rate of 5.87%,  expected dividend yield of
0.0; expected life of ten years; and estimated volatility of 117%

         During 1998,  the Company  entered  into an agreement  with an investor
relations  firm  whereby the  Company  granted an option to issue the firm up to
1,000,000  shares of common stock over a two year period.  Exercise prices range
from $1.20 to $3.00 per share.  Vesting of the  options is  contingent  upon the
achievement  of certain  market  conditions  surrounding  the  Company's  stock.
Compensation  cost  will be  recognized  for the  options  when  and if they are
vested.  All vested options are exercisable  until October 27, 2008.  During the
nine months  ended  September  30, 1999,  45,000  options at $1.20 per share and
95,000 options at $1.75 were forfeited,  and 70,000 options exercisable at $1.50
per share  became  vested on June 30,  1999.  The vested  options were valued at
$3.26 per share based on the Black-Scholes  option pricing model and the Company
recorded   $228,200  as  G&A  expense.   The  following   assumptions   for  the
Black-Scholes option pricing model were used: exercise price of $1.50 per share,
market price on June 30, 1999 (vesting date) of $3.375,  risk-free interest rate
of 5.87%,  expected  dividend  yield of 0.0;  expected  life of ten  years;  and
estimated volatility of 117%.

         SFAS No. 123,  "Accounting for Stock-Based  Compensation"  ("SFAS 123")
provides an  alternative  method of determining  compensation  cost for employee
stock  options,  which  alternative  method  may be adopted at the

                                       9
<PAGE>
option of the Company.  Had compensation  cost for the 1,692,500 options granted
to  employees  on March 4, 1999 been  determined  consistent  with SFAS 123, the
Company's  net loss and EPS for the period from  inception  (December  16, 1997)
through  September  30, 1999 and for the nine months  ended  September  30, 1999
would have been reduced to the following pro forma amounts:


                                           From inception
                                            (December 16,      For the nine
                                            1997) through      months ended
                                            September 30,     September 30,
                                                     1999              1999
                                         ------------------ -----------------
      Net income (loss):
           As reported                       ($2,763,045)      $(2,028,195)
           Pro forma                         $(4,326,577)      $(3,591,727)

      Basic and diluted EPS:
           As reported                            $(0.53)           $(0.30)
           Pro forma                              $(0.82)           $(0.43)

          A summary of the status of the  Company's  stock  options at September
30, 1999, and changes during the period then ended is presented below:

                                                                     Weighted
                                                                      Average
      Period                                        Shares     Exercise Price
      --------------------------------------   ------------- ----------------

      Employees:
           Outstanding, beginning of period         50,000           $1.2000
           Granted                               1,692,500           $1.5625
           Exercised                               (55,000)          $1.5625
           Canceled                                    ---               ---
                                               ------------- ----------------
      Outstanding, September 30, 1999            1,687,500     $1.20-$1.5625
                                               ------------- ----------------
      Exercisable, September 30, 1999            1,687,500     $1.20-$1.5625
                                               ------------- ----------------
      Weighted average fair value of
      options granted                                                $1.4814
                                                             ----------------


      Consultants:
           Outstanding, beginning of period        530,000           $1.2000
           Granted                                 320,000     $1.50-$1.5625
           Exercised                                   ---               ---
           Canceled                                    ---               ---
                                               --------------- ----------------
      Outstanding, September 30, 1999              850,000     $1.20-$1.5625
                                               --------------- ----------------
      Exercisable, September 30, 1999              850,000     $1.20-$1.5625
                                               --------------- ----------------
      Weighted average fair value of
      options granted                                                $1.4549
                                                               ----------------

     The  following  table  summarizes  information  about fixed  stock  options
outstanding at September 30, 1999:
<TABLE>
                                     Options outstanding                          Options exercisable
                    ------------------------------------------------------ -----------------------------------

                              Number          Weighted                              Number
                      outstanding at           average          Weighted    exercisable at          Weighted
Range of exercise      September 30,         remaining           average     September 30,           average
prices                          1999  contractual life    exercise price              1999    exercise price
------------------- ----------------- ----------------- ----------------- ----------------- -----------------
<S>                  <C>               <C>                <C>              <C>                <C>
Employees:
$1.20-$1.5625              1,687,500        9.42 years           $1.5493         1,687,500           $1.5493
                    ----------------- ----------------- ----------------- ----------------- -----------------

Consultants:
$1.20-$1.5625                850,000        9.17 years           $1.3313           850,000           $1.3313
                    ----------------- ----------------- ----------------- ----------------- -----------------
</TABLE>

                                       10

<PAGE>
Note 9-  Earnings per Share

         Basic  and  diluted  EPS for the three  months  and nine  months  ended
September 30, 1999 and 1998 and for the period of Inception  (December 17, 1997)
to September 30, 1999 were computed as follows:
<TABLE>
                                   Inception
                               (December 17,      Three months      Three months      Nine months       Nine months
                                    1997) to   ended September   ended September            ended   ended September
                               September 30,          30, 1999          30, 1998    September 30,          30, 1998
                                        1999                                                 1999
                             ---------------- ----------------- ----------------- ---------------- -----------------
<S>                           <C>              <C>               <C>               <C>              <C>
Net income (loss)
applicable to common
stockholders                    $(2,763,045)        $(500,527)        $(109,246)     $(2,028,195)        $(224,046)

Weighted average shares
outstanding                       5,256,014         6,802,013         5,245,772        6,659,988          3,510,039
                             ---------------- ----------------- ----------------- ---------------- -----------------
Basic and Diluted EPS                $(0.53)           $(0.07)           $(0.02)          $(0.30)           $(0.06)
                             ---------------- ----------------- ----------------- ---------------- -----------------

</TABLE>
     Weighted average shares outstanding were calculated as follows:
<TABLE>
                                   Inception
                               (December 17,      Three months      Three months      Nine months       Nine months
                                    1997) to   ended September   ended September            ended   ended September
                               September 30,          30, 1999          30, 1998    September 30,          30, 1998
                                        1999                                                 1999
                             ---------------- ----------------- ----------------- ---------------- -----------------
<S>                           <C>              <C>               <C>               <C>              <C>

Common stock outstanding
                                  6,802,013         6,802,013         5,245,772        6,802,013         5,245,772

Effect of using weighted
average common and common
equivalent shares
outstanding
                                 (1,545,999)                0                 0         (142,025)       (1,735,733)
                             ---------------- ----------------- ----------------- ---------------- -----------------

Weighted average shares           5,256,014         6,802,013         5,245,772        6,659,988         3,510,039
outstanding
                             ---------------- ----------------- ----------------- ---------------- -----------------
</TABLE>
     The 2,537,500  options  outstanding at September 30, 1999 were not included
in the EPS calculation as their effect was anti-dilutive.


Note 10- Related Party Transactions

     On  August  4,  1999,  the  Company  entered  into an  Agreement  with UTEK
CORPORATION  ("UTEK"),  whereby UTEK will provide technology merchant consulting
services to the Company.  Such  services  include  identifying,  evaluating  and
recommending potential technology acquisitions that are synergistic with Lexon's
existing cancer diagnostic testing technologies.  UTEK owns 1,000,000 shares (or
14.7% of the outstanding shares) of Lexon Common Stock.

     The  $132,000  consulting  fee is payable in three  equal  installments  of
$44,000 each,  due on April 1, 2000,  September 1, 2000 and December 1, 2000. If
Lexon is unable  to pay this fee in cash,  then  Lexon  may issue  shares of its
restricted  common stock to UTEK equal to 200% of the amount owed divided by the
price of the shares on the date the payment is due.

                                       11
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     Certain  statements  included in this report which are not historical facts
are forward looking statements,  including the information provided with respect
to  future  business  opportunities,  expected  financing  sources  and  related
matters.  These forward  looking  statements are based on current  expectations,
estimates,  assumptions and beliefs of management,  and words such as "expects",
"anticipates",  "intends", "believes",  "estimates", and similar expressions are
intended to identify such forward looking statements.  Since this information is
based on current  expectations  that  involve  risks and  uncertainties,  actual
results  could differ  materially  from those  expressed in the forward  looking
statements.

(a) Plan of Operation

     1. Plan of Operation Over the Next Twelve Months

     Lexon plans to continue to develop and improve the Ebaf Assay,  to commence
and  complete  standardization  testing,  to  complete  field  testing  and data
gathering for its FDA 510(k)  application.  It is  anticipated  that a prototype
test will be completed by the first  quarter of 2000.  Subsequent  thereto,  the
Company  expects  to begin  collecting  data from  field  tests and  anticipates
submitting its FDA pre-clinical application in 2000.

     Lexon is seeking to  consummate a business  combination  by way of tax-free
merger,  exchange of stock, sale of assets or other business  combination with a
pharmaceutical  company or manufacturing and distribution  company with existing
manufacturing,   quality   control,   marketing,   distribution  and  regulatory
compliance capabilities in place.  Alternatively,  but simultaneously,  Lexon is
seeking strategic  alliances with  pharmaceutical and other companies willing to
provide Lexon with manufacturing,  marketing and distribution capacities.  Lexon
has no such  agreements at this time.  There is no assurance  that Lexon will be
successful  in making  acceptable  arrangements  for a business  combination  or
strategic alliances.

     Lexon plans to continue to develop and improve the Ebaf Assay,  to commence
and  complete  standardization  testing,  to  complete  field  testing  and data
gathering for its FDA 510(k)  application.  It is  anticipated  that a prototype
test will be completed by the fourth quarter of 1999.  Subsequent  thereto,  the
Company  expects  to begin  collecting  data from  field  tests and  anticipates
submitting its FDA application in 2000.

     (i) Cash Requirements

         Management  does not believe  that Lexon can  satisfy its current  cash
     needs out of  available  cash and will have to engage in a sale of  Lexon's
     securities  during the next three  months.  Until such time as the  Company
     completes a sale of its securities,  the officers,  directors and employees
     may loan the Company funds to cover its operating expenses,  however, there
     is no assurance that such loans will be made. Lexon intends to engage in an
     offering of its common  stock to fund the costs  associated  with  required
     field  tests,  file and process  applications  for FDA  approval,  identify
     manufacturers  to mass produce the test kits,  and identify and  consummate
     strategic  business  alliances.  There is no assurance  that any additional
     capital needed will be available to Lexon on acceptable  terms when needed,
     if at all. Any additional capital may involve  substantial  dilution to the
     interests of Lexon's then existing stockholders.

     (ii) Product Development and Research Plan for the Next Twelve Months

         As of  September  30,  1999,  Lexon has paid North Shore  $335,027  and
     anticipates  spending  another  $67,635  over the  next  twelve  months  to
     complete the Ebaf Assay development.  The development of the Ebaf Assay for
     the  ELISA  platform  requires  that  both a  polyclonal  and a  monoclonal
     antibody to the Ebaf protein be produced. These antibodies must be specific
     for Ebaf and must be tested extensively to make sure that they do not react
     with any other similar proteins.  Dr. Tabibzadeh has identified an adequate
     polyclonal  antibody  for use in the ELISA  test.  This  antibody  has been
     tested in a  comprehensive  fashion and will be used as the carrier for the
     enzyme  ligand in the ELISA test.  Dr.  Tabibzadeh  is currently  analyzing
     monoclonal  antibodies  to find the  ideal  candidate  for use in the ELISA
     test. The ideal candidate for the monoclonal selection will be a monoclonal
     antibody  which is highly  specific  for Ebaf and does not  react  with any
     other   proteins.   Once  the   monoclonal   antibody  is  identified   and
     characterized,  a small number of  prototype  ELISA test kits will be made.
     These  test  kits will be used to  collect  data for  submission  of an FDA
     application.

     (iii) Expected Purchase or Sale of Plant and Significant Equipment

         None.

                                       12
<PAGE>
     (iv) Expected Significant changes in number of employees.

         None.


                            PART II OTHER INFORMATION

ITEM 1  LEGAL PROCEEDINGS

None

ITEM 2  CHANGES IN SECURITIES AND USE OF PROCEEDS

None

ITEM 3  DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5  OTHER INFORMATION

     On August 5, 1999, the Company entered into an Agreement and Plan of Merger
("Merger") with Cancer  Diagnostics,  Inc.  ("CDI"),  attached hereto as Exhibit
2.1. The terms of the Merger are for Lexon to issue 500,000 shares of its common
stock in exchange for all of the issued and outstanding common stock of CDI. The
Merger is subject to various  conditions,  some of which have not yet  occurred,
but all of which are expected to be fulfilled by the Closing,  which is expected
in early January 2000. There is no assurance that the Merger will close.

     If the Merger is  completed,  all the assets  and  liabilities  of CDI will
become assets and  liabilities of Lexon.  The CDI assets consist of an exclusive
worldwide license to a patent-pending  blood test for lung cancer,  known as the
Telomerase AssayTM, which was developed at the University of Maryland, Baltimore
and a  two-year  sponsored  research  agreement  to  fund  the  development  and
commercialization of the Telomerase Assay for the ELISA format at the University
of Maryland,  Baltimore. The liabilities consist of $124,537 payable in cash, on
or before  January 1, 2001, to the University of Maryland,  Baltimore  under the
terms of the sponsored research agreement.

     If the Merger is completed,  the Company will be obligated to pay a royalty
of 4% of Net Sales of products  sold by Lexon  under the terms of the  exclusive
license  agreement  ("Agreement").  The  Agreement  provides for minimum  annual
royalties for the life of the  Agreement,  which  coincides with the life of the
last to expire  patent  covering the licensed  technology.  Such minimum  annual
royalties  range from $2,500 per year  beginning in year 3 of the Agreement to a
maximum of $4,000  beginning in year 7 and continuing  each year  thereafter for
the life of the Agreement.  In addition, the Agreement provides for royalties of
2% of Net Sales of products sold by  sublicensees  and 50% of all  consideration
received  by  the  Company  for  up-front,  milestone  or  other  payments  from
sublicensees.

     On  August  4,  1999,  the  Company  entered  into an  Agreement  with UTEK
CORPORATION  ("UTEK"),  whereby UTEK will provide technology merchant consulting
services to the Company.  Such  services  include  identifying,  evaluating  and
recommending potential technology acquisitions that are synergistic with Lexon's
existing cancer diagnostic testing technologies.  UTEK owns 1,000,000 shares (or
14.7% of the outstanding shares) of Lexon Common Stock.

     The  $132,000  consulting  fee is payable in three  equal  installments  of
$44,000 each,  due on April 1, 2000,  September 1, 2000 and December 1, 2000. If
Lexon is unable  to pay this fee in cash,  then  Lexon  may issue  shares of its
restricted  common stock to UTEK equal to 200% of the amount owed divided by the
price of the shares on the date the payment is due.


                                       13

<PAGE>

ITEM 6  EXHIBITS AND REPORTS ON FORM 8-K

     Exhibit

     2.1       Agreement and Plan of Merger between Registrant and
               Cancer Diagnostics, Inc. dated August 5, 1999

    10.1       Consulting Agreement between Registrant and UTEK CORPORATION
               effective August 4, 1999

    27.0       Financial Data Schedule (for electronic filers only)



                                   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.

                                             LEXON, INC.


                                             /s/ GIFFORD M. MABIE
                                             ----------------------------
                                              President

Date:  November 15, 1999

                                       14