UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                   FORM 10-KSB

                   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                      For the year ended December 31, 2000

                                   LEXON, INC.
             (Exact name of registrant as specified in its charter)


                           Oklahoma 0-26915 73-1533326
                           -------- ------- ----------
       (State of incorporation) (SEC File Number) (IRS Employer ID Number)



                             8908 South Yale Avenue
                                    Suite 409
                                 Tulsa, OK 74137
          (Address of principal executive offices, including zip code)

                                 (918) 492-4125
              (Registrant's Telephone Number, Including Area Code)

                                 (918) 492-2560
              (Registrant's Facsimile Number, Including Area Code)


Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001
par value

     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

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of Regulation S-B is not contained in this form,  and no disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]

     State issuer's revenues for its most recent fiscal year: $-0-

     State the aggregate market value of the voting and non-voting common equity
held by  non-affiliates  computed by  reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
a specified price within the past 60 days. $2,722,193 as of March 31, 2001

     State the number of shares  outstanding of each of the issuer's  classes of
common equity,  as of the latest  practicable date: As of March 31, 2001, we had
12,838,735 shares of common stock, $0.001 par value, outstanding.



<PAGE>

Certain Forward-Looking Information

         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.

                                     PART I

Item 1. Description of Business

(a) Business Development

         1.   Form and Year of Organization

         We are a development stage company incorporated in Oklahoma on December
16, 1997.  We own the  exclusive  worldwide  license to the Ebaf Assay,  a blood
screening test to indicate whether a person may require  diagnostic  testing for
colon cancer and certain types of ovarian and testicular  cancers.  We also own,
through our  wholly-owned  subsidiary  Cancer  Diagnostics,  Inc.  ("CDI"),  the
exclusive  worldwide  license to the Telomerase Assay, a blood screening test to
indicate whether a person may require  diagnostic  testing for lung cancer.  The
Ebaf Assay and the Telomerase Assay are in the development stage. The Ebaf Assay
and the  Telomerase  Assay will require FDA approval  before they can be sold in
the United States.

         2.   Bankruptcy or Receivership

         We have never been in bankruptcy or receivership.

         3.   Mergers, Reclassifications and Purchases of Assets

Gentest Merger and the Ebaf Assay

         We acquired the exclusive  worldwide  license to the Ebaf Assay on July
8, 1998 when we issued  1,000,000 shares of our $0.001 par value common stock in
exchange for all of the  outstanding  common  stock of Gentest,  Inc., a Florida
corporation,  that previously  owned the license.  We issued 1,000,000 shares of
our common stock to UTEK Corporation ("UTEK"),  the sole shareholder of Gentest.
Gentest  ceased  to  exist  by  reason  of this  transaction.  UTEK,  a  Florida
corporation,  specialized in the transfer of technology from major  universities
and  government  research  facilities  in the U.S.  and in Europe to the private
sector.  At March  31,  2001,  UTEK  owned  1,160,973  shares or about 9% of our
outstanding common shares.

Cancer Diagnostics, Inc. ("CDI") Common Stock Purchase and the Telomerase Assay

         CDI, our wholly-owned subsidiary,  owns the exclusive worldwide license
to the Telomerase  Assay.  We acquired CDI on January 29, 2000 when we purchased
100% of its common stock from its sole  shareholder,  UTEK,  for $50,000 in cash
and a secured promissory note for $150,000.  The secured promissory note accrued
interest  at 10% per  year and was  payable  in three  monthly  installments  of
$50,000  each,  due on April  30,  May 31 and  June  30,  2000.  To  secure  the
promissory note, we pledged all of the shares of common stock of CDI. The shares
were placed in escrow to be  released to us upon  payment in full of the secured
promissory  note to UTEK.  During 2000,  we paid UTEK  $120,000 in principal and
$1,233 in interest.  At December 31, 2000, we owed UTEK $30,000 in principal and
$8,080 in  interest,  which was paid in full with  236,000  shares of our common
stock on March 27, 2001.


                                       2
<PAGE>
(b)  Business of Issuer

         1. Principal Products and Services of Lexon and Their Markets

     We have no products or services  for sale at this time.  The Ebaf Assay and
the  Telomerase  Assay  are in the  development  stage.  The Ebaf  Assay and the
Telomerase Assay will require FDA approval before they can be sold in the United
States.

Ebaf Assay

         Colon cancer is the second leading cause of cancer deaths in the United
States.  Of  the  approximately  525,000  people  diagnosed  with  colon  cancer
worldwide,  more than 50% will die because  their cancer was not detected  early
enough for surgery to be  effective.  Most people  avoid being  tested for colon
cancer because current  screening  methods,  primarily  colonoscopy and flexible
sigmoidoscopy, are invasive, embarrassing and expensive. Yet colon cancer can be
cured if it is caught early. Unfortunately, there is no effective screening test
other than  colonoscopy  and most people who should be screened  for the disease
(e.g.  adults  aged 50 and  older or  adults  younger  than 50 who have a family
history of the disease) do not get a colonoscopy on a regular basis.

         The Ebaf Assay is a blood  screening test to indicate  whether a person
may  require  diagnostic  testing for colon  cancer.  It is our belief that most
people  who should be tested for colon  cancer  would be more  willing to have a
routine blood test to determine if an invasive  procedure  like  colonoscopy  is
necessary. The Ebaf Assay is a simple blood test that is being developed for the
ELISA   platform  so  it  can  be  performed   and  evaluated  by  most  medical
laboratories.

         The Ebaf Assay works by detecting  elevated  levels of the ebaf protein
in a person's blood. The discovery  linking the ebaf protein to colon cancer was
made by Dr. Siamak Tabibzadeh,  M.D., while he was a professor in the Department
of  Pathology  at the  University  of South  Florida  ("USF")  and an  attending
pathologist  at  the  Moffitt  Cancer  Center  at  USF.  Dr.  Tabibzadeh  tested
approximately  27 types of malignant  tumors for the presence of ebaf.  The ebaf
protein was not  demonstrable  in any of the tumors except for colon cancer (and
some forms of ovarian and testicular cancer.) Therefore, the ebaf protein marker
seemed to be unique to colon  cancer (and some forms of ovarian  and  testicular
cancer.)  Dr.  Tabibzadeh  is  presently  Chief of  Experimental  Pathology  and
Professor in Pathology at North Shore Long Island Jewish  Medical Center ("North
Shore") in Manhasset,  New York.  Dr.  Tabibzadeh is conducting  the  scientific
investigation of ebaf and its biological roles as a cellular messenger.

         The Enzyme Linked  Immunosorbent Assay, or ELISA format, is a generally
recognized  and widely used  immunological  testing  platform  currently used to
detect  HIV,  Herpes and a number of other  diseases.  Detecting  elevated  ebaf
levels in a person's  blood can currently be done using the Western Blot method.
Western Blot, however, is an expensive testing method that can only be performed
with highly  sophisticated  equipment  that most  laboratories  in hospitals and
clinics do not have.  Because  ELISA  format  tests are  inexpensive  and can be
performed by most  hospital and clinic  laboratories,  we believe this format is
ideal for the Ebaf Assay.

         An  ELISA-based  test  involves  an ELISA  plate which is coated with a
monoclonal  antibody.  When the plate is exposed to a sample of blood containing
the  marker  (e.g.  ebaf in the case of the  colon  cancer  screening  test,  or
telomerase  in the case of the  lung  cancer  screening  test),  the  monoclonal
antibody  captures  the marker and locks it onto the  surface of the plate.  The
plate is then rinsed and exposed to a  polyclonal  antibody  which has an enzyme
ligand attached to it. The polyclonal antibody also binds to the marker if it is
present.  This  technique  is called a  "sandwich"  ELISA  format,  because  the
substance being analyzed is  "sandwiched"  between a polyclonal and a monoclonal
antibody.  The entire  plate is then  exposed  to an  indicator  solution  which
changes color in the presence of the enzyme  ligand.  The degree of color change
is  dependent  on the  amount of enzyme  present  and hence on the amount of the
marker on the surface of the plate.  The degree of color change can then be read
in a standard laboratory colorimeter. If the level of the marker in the blood is
increased  relative  to  the  base  level,  further  diagnostic  testing  may be
necessary.

         Lexon has engaged  Diagnostic  Oncology CRO, Inc. ("DOCRO") of Seymour,
Connecticut to conduct a technology  assessment and development  program for the
Ebaf Assay (see "Patents,  Trademarks,  Licenses,  Royalty  Agreements and Labor
Contracts").  DOCRO is a nationally known clinical research organization that is
engaged  in  providing  technology  assessment,   technology  development,   and
laboratory  and  clinical  trial  services  to  medical  device  developers.  In
particular,   DOCRO  is  experienced  in  providing  technology  assessment  and
technology development services related to the development and commercialization
of in vitro  diagnostic  assays.

                                       3
<PAGE>
         DOCRO  has  produced  a  working   ELISA   prototype   test.   We  need
approximately  $1,495,000 to complete the  development  of the Ebaf Assay and to
gather  preclinical  data. If we are  successful in raising the  $1,495,000,  we
estimate that it will take DOCRO about 10 months to complete the  development of
the Ebaf  Assay and to  gather  preclinical  data.  If the  preclinical  data is
acceptable, then we will meet with the FDA to determine the extent of a clinical
trial.  We  estimate  that a  clinical  trial  for  the  Ebaf  Assay  will  last
approximately 8-12 months and will require additional funding of $8-$10 million.
There is no assurance that we will be successful in raising $1,495,000 necessary
to  complete  the  development  of the Ebaf Assay and to gather the  preclinical
data. There is no assurance that the preclinical data will be acceptable. If the
preclinical data is acceptable, there is no assurance that we will be successful
in raising the $8-$10 million necessary for a clinical trial.

Telomerase Assay
         Lung cancer is the leading cause of cancer deaths in the United States.
The average survival rate for lung cancer that is diagnosed in the early stages,
before it has spread to other organs, is 49%. However,  only 15% of lung cancers
are diagnosed in their early stages  because no effective  early  screening test
exists. Usually, a person waits until symptoms of lung cancer are present before
requesting a chest x-ray,  CAT scan,  or similar test.  Like colon cancer,  lung
cancer can grow undetected and without symptoms. If one waits until symptoms are
present, it is generally too late for a cure.

          The  Telomerase  Assay is based on the  discovery of the  relationship
between  telomerase in the blood and cancerous tumors,  and  particularly,  lung
cancer in humans.  Telomerase is present in almost all  malignant  tumor tissue.
Telomerase  has been  detected  in more than 90% of over 3,000  malignant  tumor
tissues  tested,  making it the most prevalent  cancer marker known.  Dr. Edward
Highsmith,  who  leads  the  team of  researchers  at  UMB,  was  the  first  to
demonstrate  the presence of  telomerase  in the blood of lung cancer  patients,
thus  providing  the  opportunity  for the  development  of a lung cancer  blood
screening test. Dr.  Highsmith and his team are developing the Telomerase  Assay
for ELISA format.

         Detecting  telomerase in a person's blood can currently be done using a
modified TRAP assay.  The TRAP assay,  however,  is an expensive  testing method
that can  only be  performed  with  highly  sophisticated  equipment  that  most
laboratories in hospitals and clinics do not have. Because ELISA-based tests are
inexpensive  and can be performed by most hospital and clinic  laboratories,  we
believe this format is ideal for the Telomerase Assay.

         We  have  engaged  DOCRO  to  conduct  a  technology   assessment   and
development  program for the telomerase  tumor marker  technology  (see "Patent,
Trademarks,   Licenses,  Royalty  Agreements  and  Labor  Contracts").  We  need
approximately $1,859,000 to complete the development of the Telomerase Assay and
to gather  preclinical data. If we are successful in raising the $1,859,000,  we
estimate that it will take DOCRO about 14 months to complete the  development of
the Telomerase Assay and to gather  preclinical data. If the preclinical data is
acceptable, then we will meet with the FDA to determine the extent of a clinical
trial.  We estimate  that a clinical  trial for the  Telomerase  Assay will last
approximately 8-12 months and will require additional funding of $8-$10 million.
There is no assurance that we will be successful in raising $1,859,000 necessary
to  complete  the  development  of  the  Telomerase  Assay  and  to  gather  the
preclinical  data.  There is no  assurance  that the  preclinical  data  will be
acceptable. If the preclinical data is acceptable, there is no assurance that we
will be successful in raising the $8-$10 million necessary for a clinical trial.

         2.  Distribution Method of Products and Services

         Our success  depends,  in part, on our ability to market and distribute
our  potential  products  effectively.  We have  no  experience  in the  sale or
marketing  of  medical  products.   We  have  no  manufacturing,   marketing  or
distribution capabilities. In the event that we obtain FDA approval for the Ebaf
Assay and the  Telomerase  Assay,  we may require the  assistance of one or more
experienced  pharmaceutical  companies to market and  distribute  our  potential
products effectively.  If we seek an alliance with an experienced pharmaceutical
company, we may not be able to find a collaborative partner. If we enter into an
alliance,  it may not be on terms favorable to us. If we enter into an alliance,
it may not be successful.  Any partner to an alliance  might, at its discretion,
limit the amount and timing of resources it devotes to marketing  our  products.
Any  marketing  partner or licensee  may  terminate  its  agreement  with us and
abandon our products at any time for any reason without significant  payment. If
we do not enter into an  alliance  with a  pharmaceutical  company to market and
distribute our products,  we may not be successful in entering into  alternative
arrangements,  whether engaging independent distributors or recruiting, training
and retaining a marketing staff and sales force of our own.

                                       4
<PAGE>
         3. Status of Publicly Announced Products or Services

         Ebaf Assay

         The Ebaf Assay is still in  development.  DOCRO has  produced a working
prototype  of an ELISA test for the  detection  of ebaf.  We need  approximately
$1,495,000  to  complete  the  development  of the  Ebaf  Assay  and  to  gather
preclinical  data for the FDA.  There is no assurance that we will be successful
in obtaining the $1,495,000 we need on acceptable terms or at all.

         Telomerase Assay

         The Telomerase  Assay is still in  development.  We need  approximately
$1,859,000 to complete the  development  of the  Telomerase  Assay and to gather
preclinical  data for the FDA.  There is no assurance that we will be successful
in obtaining the $1,859,000 we need on acceptable terms or at all.

     4. Competitive  Business  Conditions,  Competitive  Position and Methods of
     Competition

         Competition in the medical  products and services  industry is intense.
Although  growth in the medical  industry in general and sales of medical cancer
screening  tests in particular is expected to expand as the population  ages and
cancer  awareness  increases,   the  number  of  potential  competitors  in  the
marketplace  makes  competitive  pressures  severe.  The medical  screening  and
diagnostic industry has attracted large and sophisticated  potential competitors
with  established  brand  names  who have  already  successfully  developed  and
marketed  products and who have  greater  financial,  technical,  manufacturing,
marketing, regulatory and distribution resources than we do.

         Regulation by  governmental  authorities in the United States and other
countries  could  be a  significant  factor  in  ongoing  research  and  product
development  activities.  Lexon's  diagnostic  products will require  regulatory
approval  by  the  FDA  and  possibly  other  governmental   agencies  prior  to
commercialization. Various statutes and regulations also govern or influence the
manufacturing,  safety, labeling,  storage,  recordkeeping and marketing of such
products.  The lengthy  process of seeking these  approvals,  and the subsequent
compliance with applicable statutes and regulations, requires the expenditure of
substantial  resources.  Our  failure  to  obtain,  or any  delay in  obtaining,
regulatory approvals could materially adversely affect us.

         In the United States and elsewhere,  sales of  diagnostic,  therapeutic
and other pharmaceutical products are dependent, in part, on the availability of
reimbursement  to the consumer from third-party  payors,  such as government and
private  insurance plans.  Third-party  payors are increasingly  challenging the
prices charged for medical products and services. There is no assurance that any
of our products will be considered cost effective and that  reimbursement to the
consumer  will be  available,  or will be  sufficient  to  allow  us to sell our
products  on a  competitive  and  profitable  basis.  Our  future  revenues  and
profitability,  if any, may be affected by the continuing  efforts of government
and third party  payors to contain or reduce the costs of  healthcare.  While we
cannot  predict  whether any such  legislative  or regulatory  proposals will be
adopted,  the adoption of such proposals could have a material adverse effect on
our company.

         Our  potential  competitors  are the  major  diagnostic  pharmaceutical
corporations, such as Abbott Pharmaceuticals, Roche, SmithKlineBeecham,  Johnson
& Johnson and Bayer. These companies have substantial  marketing,  distribution,
regulatory compliance,  financial, and research and development capabilities. If
any of these  competitors  were to develop a colon  cancer or lung cancer  blood
screening  tests not involving the Ebaf Assay or the Telomerase  Assay,  such an
event may have a  material  adverse  effect on our  ability  to  compete  in the
medical screening and diagnostic field.

         5.  Sources of Raw Materials and the Names of Principal Suppliers

          We do not  manufacture  any  products at this time,  so we have no raw
materials.  The Ebaf  Assay and the  Telomerase  Assay are  simple  products  to
manufacture.   Their  main  components  are  a  plastic  plate,  monoclonal  and
polyclonal  antibodies,  and  various  fluorescent  markers,  each of  which  is
commercially available.

         6.  Dependence on one or a few major customers

         Not Applicable

                                       5
<PAGE>
         7. Patents, trademarks, licenses, royalty agreements or labor contracts

         Patents
         -------
         The  University of South  Florida  ("USF") owns the patent for the Ebaf
Assay  screening  process.  The  patent  was  published  on June 29,  1999.  Any
improvements to the patent will be owned by North Shore, where the Ebaf Assay is
being developed.

         The Telomerase  Assay  screening  process is owned by the University of
Maryland,  Baltimore  ("UMB").  A patent  application  for the Telomerase  Assay
screening process was filed on February 16, 1998,  however, a patent has not yet
been issued and there is no assurance that a patent will issue.

         We have no  information  that would  lead us to  believe  that the Ebaf
Assay  patent or  Telomerase  Assay  pending-patent  infringe  the  intellectual
property rights of another, but we give no assurance to that effect. The filing,
prosecution  and maintenance of all patent rights are within the sole discretion
of the patent owners. As the exclusive  licensee to both of these  technologies,
we have the right to request that the patent  owners  seek,  obtain and maintain
such patent and other  protections to the extent that they are lawfully entitled
to do so, at our sole expense. There is no assurance that the patent owners will
seek,  obtain or  maintain  such patent and other  protection  to which they are
lawfully entitled and there is no assurance that we will have sufficient working
capital to fund their efforts.

         There is presently  no foreign  patent  protection  for the Ebaf Assay,
however, an international  patent application has been filed by USF. There is no
assurance  that any  foreign  patents  will  issue.  The lack of foreign  patent
protection  could  result in the  manufacturing  and sale of test kits copied by
competitors  who  are  not  obligated  to  pay  royalties.  As a  result,  these
competitors  could achieve  superior  operating  margins,  which could adversely
affect our ability to compete.

         License Agreement - Ebaf Assay
         ------------------------------
         We own the exclusive  worldwide  license to the Ebaf Assay. In exchange
for the  license,  we agreed to pay the  University  of South  Florida  Research
Foundation ("USFRF"), the licensor of USF, 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 through April 9, 2000;
$75,000 at the end of year three;  $100,000 at the end of year four; $125,000 at
the end of year five;  $150,000  at the end of year six 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. We
also agreed to pay North Shore a royalty equal to one-half of one 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 to North Shore are required.

         Sponsored Research Agreement - Ebaf Assay
         -----------------------------------------
         On July 8, 1998, we paid North Shore  $311,250 to fund the  development
of the Ebaf Assay for the ELISA format over a two year period  beginning July 1,
1998 and ending June 30, 2000.  In a letter  agreement  dated March 24, 1999, we
agreed to pay North Shore an additional  $81,162 to add two  researchers  to Dr.
Tabibzadeh's  staff to expedite the  development of a prototype  ELISA test kit.
The  $81,162  is  payable  in 6 equal  installments  of  $13,527  each,  payable
beginning October 1, 1999 and continuing every three months  thereafter  through
August 1, 2000.  As of March 31,  2001,  the Company had a remaining  balance of
$27,054  due to North  Shore  University.  We are  currently  negotiating  a new
agreement   that  will   continue   to  support  Dr.   Tabibzadeh's   scientific
investigation of ebaf.

         DOCRO Professional Services Agreement-Ebaf Assay
         ------------------------------------------------
         On August 2, 2000, we entered into a $1,495,000  Professional Services
and Mutual  Confidentiality  Agreement  with  Diagnostic  Oncology  CRO, Inc. of
Seymour,  Connecticut to conduct a technology assessment and development program
for the ebaf tumor  marker  technology.  The  Agreement,  which is  attached  as
Exhibit 10.36,  states that DOCRO will assess the current technical and clinical
performance of the existing ebaf reagents as provided by Dr.  Tabibzadeh.  DOCRO
must then  develop  purified  ebaf  antigens  for all four  known  forms of ebaf
protein  expressed  in  human  tissue.  Next,  DOCRO  will  raise a  variety  of
monoclonal  antibodies  and polyclonal  antibodies to these various  antigens to
determine  if any ebaf  protein is  overexpressed  in the tissue,  blood,  other
fluids of people  diagnosed  with  colorectal  cancer  when  compared to similar
specimens from  apparently  healthy,  normal people and to specimens from people
diagnosed with other malignant or non-malignant  diseases. If an ebaf protein is
determined  by  DOCRO  to be  overexpressed  in  malignant  disease  and  not in
non-malignant  disease or apparently  healthy  normals and we agree,  DOCRO will
then develop an enzyme  immunoassay for such ebaf protein


                                       6
<PAGE>


to confirm the results in the blood or other fluid  specimens of a statistically
significant number of patients (maximum of 400).

         License Agreement - Telomerase Assay
         ------------------------------------
         We own the exclusive  worldwide license to the Telomerase Assay through
our wholly-owned  subsidiary CDI. In exchange for the license, CDI agreed to pay
UMB a royalty of 4% of Net Sales of  products  sold using the  Telomerase  Assay
technology.  The license agreement provides for minimum annual royalties for the
life of the  license  agreement,  which  coincides  with the life of the last to
expire patent  covering the licensed  technology.  The minimum annual  royalties
range  from  $2,500 per year  beginning  in 2002 to a maximum of $4,000 per year
beginning  in 2006  and  continuing  each  year  thereafter  for the life of the
license agreement.  In addition, the license agreement provides for royalties of
2% of  Net  Sales  of  products  sold  by  sublicensees  of CDI  and  50% of all
consideration  received by CDI for  up-front,  milestone or other  payments from
sublicensees.

         Sponsored Research Agreement - Telomerase Assay
         -----------------------------------------------
         On August  27,  1999,  our  wholly-owned  subsidiary  CDI agreed to pay
University  of  Maryland,  Baltimore  $249,458  to fund the  development  of the
Telomerase Assay for the ELISA format over a two year period  beginning  January
4, 2000 and ending January 3, 2002. CDI paid $124,921 upon signing the sponsored
research  agreement.  The  balance of $124,537  was due on or before  August 27,
2000. The development plan calls for a team of researchers,  under the direction
of Dr. Highsmith, to:

          *    Develop  a  series  of   monoclonal   antibodies   to  telomerase
               (estimated time to complete: 8-10 months)

          *    Develop an  immunoassay  (ELISA  format) to detect  telomerase in
               human  blood   (estimated   time   complete:   2-4  months  after
               development of the monoclonal antibodies)

          *    Obtain  preliminary  data  demonstrating  the clinical utility of
               telomerase  as a  tumor  marker  in  patients  with  lung  cancer
               (estimated  time to complete:  6 months after  development of the
               test kit)

         As of March 31, 2001, the $124,537 balance remains outstanding. UMB may
terminate the Sponsored  Research  Agreement  upon 10 days notice if any payment
due from us is not received by the date  specified in the  agreement,  or within
the 10 day notice period.  As of the date of this filing, we have not received a
notice from the UMB.  There is no  assurance  that UMB will not send us a notice
demanding  payment.  If  notice  is sent and we do not have the funds to pay the
demand within the specified time period, the Sponsored Research Agreement may be
terminated by UMB.

         DOCRO Professional Services Agreement- Telomerase Assay
         -------------------------------------------------------
     On June 21, 2000, Lexon entered into a $1,859,000 Professional Services and
Mutual Confidentiality  Agreement with Diagnostic Oncology CRO, Inc. of Seymour,
Connecticut for DOCRO to conduct a technology assessment and development program
for the telomerase tumor marker technology. The Agreement is attached as Exhibit
10.35. This program requires DOCRO to assess the current technical and clinical
performance of the existing  telomerase  reagents as provided by Dr.  Highsmith,
then for DOCRO to  develop or obtain  purified  telomerase  antigens  (including
various  peptides and, if possible,  native and recombinant  protein,  for known
forms of the telomerase protein/nucleic acid complex) expressed in humans. DOCRO
will then  raise or obtain a variety of  monoclonal  antibodies  and  polyclonal
antibodies to these various  antigens to determine if any telomerase  antigen is
overexpressed  in the  tissue,  blood,  other body  fluids,  and other  specimen
matrices  from humans  diagnosed  with lung or other  cancers  when  compared to
similar specimens from apparently  healthy,  normal humans and from a variety of
humans diagnosed with other  non-malignant  diseases.  Further,  if a telomerase
antigen is determined by DOCRO to be overexpressed in malignant  disease and not
in non-malignant  disease or apparently healthy normals and Lexon agrees,  DOCRO
shall develop an enzyme immunoassay for such a telomerase antigen to confirm the
results  in  the  blood  or  other  fluid  specimen  matrix  of a  statistically
significant number (maximum of 400) of patients.

         National Institutes of Health
         -----------------------------
         A portion of the research and development related to the Ebaf Assay and
the Telomerase Assay was funded by grants from the National Institutes of Health
("NIH").  The Patent and  Trademark  Act (Public Law 96-517),  also known as the
Bayh-Dole Act,  created a uniform patent policy among federal agencies that fund
research.   The   Bayh-Dole  Act  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
perpetual, non-exclusive right to use for government purposes any invention that
results from its funding  without having to pay license fees and  royalties.  In
addition,  the U.S.  government  is protected  from  lawsuits  and  infringement
claims. There is no assurance that the interests of the U.S. government will not
materially adversely affect us or our business.

                                       7
<PAGE>
         Employment Agreements
         ---------------------
         On January 3, 2001, we entered into written employment  agreements with
our Gifford Mabie,  our sole officer and director,  and Rhonda  Vincent,  Thomas
Coughlin  and  Vicki  Pippin,  our  employees.  The  terms of  their  respective
employment agreements are the same, except that Mr. Mabie's employment agreement
states he will not compete with us for one-year after he resigns  voluntarily or
is  terminated  for cause.  If Mr. Mabie is  terminated  without  cause or if he
resigns because a change of control has occurred, then the non-compete clause of
his employment agreement will not be applicable.  The employment  agreements are
attached as Exhibits 10.37 through 10.40.

         The term of each employment  agreement is for one year,  ending January
3, 2002 with an  automatic  and  continuous  renewal  for  consecutive  two year
periods.  Each  agreement  can be ended either by us or by the employee  upon 30
days' written notice.  Each agreement  provides for an annual salary of at least
$100,000 with an annual  salary  increase  equal to no less than the  percentage
increase in the Consumer  Price Index during the previous  calendar  year.  Each
employee's salary will be accrued by the Company and paid in whole or in part as
cash is available.  If an employee resigns or is terminated for any reason,  his
or her  accrued  and unpaid  salary plus  severance  pay ranging  from three (3)
months to twenty-four (24) months,  depending on the circumstances of his or her
departure,  will be due and payable within 30 days of his or her  resignation or
termination.   Under  each  employment  agreement,  we  provide  certain  fringe
benefits,  including,  but not  limited  to,  participation  in  pension  plans,
profit-sharing plans, employee stock ownership plans, stock appreciation rights,
hospitalization  and  health  insurance,  disability  and life  insurance,  paid
vacation and sick leave.  We will reimburse each employee for any reasonable and
necessary  business expenses,  including travel and entertainment  expenses that
are  necessary  to carry out his or her duties.  Each  employee has the right to
participate in other  businesses as long as those businesses do not compete with
us and so long as the employee devotes the necessary working time, as determined
in his or her sole  discretion,  to our business  activities.  We will indemnify
each  employee  for  all  legal  expenses  and  liabilities  incurred  with  any
proceeding  involving  the  employee  by reason of his or her being an  officer,
director, employee or agent of the Company. We will pay reasonable attorney fees
and expenses as incurred in the event that, in the employee's sole judgment,  he
or she needs to retain counsel or otherwise expend personal funds for his or her
defense. If there is a change in control, each employee has the right to resign.
A change in control is defined as a change in the majority of  Directors  within
any twelve  month  period  without 2/3  approval of the shares  outstanding  and
entitled  to vote,  or a merger  where less than 50  percent of the  outstanding
common stock survives and a majority of the Board of Directors  remains,  or the
sale of  substantially  all of our  assets,  or if any  other  person  or  group
acquires more than 50 percent of the voting capital.

         8.  Need for Governmental Approval

         Our products are considered medical devices, which are regulated by the
FDA. Medical devices are categorized into one of three classes, depending on the
controls  the FDA  considers  are  necessary to  reasonably  ensure the device's
safety and  effectiveness.  Class I devices (e.g. dental floss,  manual surgical
instruments) are the least risky and least complicated devices.  Class I devices
are subject to general controls, which include labeling, premarket notification,
and  adherence to Quality  System  Regulations,  which are based on the old Good
Manufacturing  Practices  regulations.  Class II devices (e.g.  x-ray  machines,
oxygen masks, and many diagnostic assays similar to our products) are subject to
general  controls and special  controls  that relate to  performance  standards,
post-market  surveillance,  patient  registries,  etc.) Class III devices  (e.g.
drugs) are the most rigorously  regulated and usually require premarket approval
by the FDA to ensure their safety and effectiveness,  and which require clinical
testing prior to approval and marketing.

         FDA  approval is required  prior to sale of our  products in the United
States.  The  Ebaf  Assay  and the  Telomerase  Assay  are  considered  in-vitro
diagnostic  devices.  Most in-vitro  diagnostic devices on the market today fall
into  Class I or Class II,  however,  a few  high-risk  diagnostic  devices  are
subject to the more rigorous regulation of Class III.

         Depending  on the class of the  device,  FDA  approval  can be obtained
through  one of two ways.  If the  device  is  "substantially  equivalent"  to a
legally  marketed  Class I or Class II device or to a Class III device for which
the FDA has not called for a PMA, the  manufacturer  may seek clearance from the
FDA by  filing a 510(k)  premarket  notification.  A 510(k)  filing  includes  a
description of the device, its intended use, draft labeling,  and an explanation
of why the  device  should  be  deemed  substantially  equivalent  to a  legally
marketed device. The 510(k) needs to be supported by appropriate preclinical and
clinical  data  establishing  the  claim  of  substantial   equivalence  to  the
satisfaction  of the FDA.  The general  review time after  filing a  traditional
510(k) is 90-150 days, but it could be longer.

                                       8
<PAGE>
         If substantial  equivalence  cannot be  established,  then we must seek
pre-market  approval through submission of a PMA application,  which is the most
vigorous form of FDA regulatory review. The PMA application must be supported by
valid scientific  evidence,  including  pre-clinical and clinical trial data, as
well as extensive literature to demonstrate a reasonable assurance of safety and
effectiveness  of the  device.  The PMA review and  approval  process  generally
requires  one year or more to complete  from the date the FDA accepts the filing
for review.

         The  use  for  which  a  product  is   intended   dictates   the  FDA's
determination of its classification.  If we intend to use the product to monitor
patients for disease progression, response to therapy, or detection of recurrent
or residual  illness,  the product will likely fall into Class II and be subject
to 510(k)  clearance.  If we plan to use the product in screening  for the early
detection or  diagnosis  of cancer,  the product will likely fall into Class III
and be subject to the rigorous PMA approval  process.  We may initially seek FDA
approval  through a 510(k) to market the Ebaf Assay as a monitoring  device.  At
the same time, and using much of the same data collected for the 510(k),  we may
seek FDA approval through a PMA to market the Ebaf Assay as a screening test.

         The FDA requires a separate  approval for each proposed  indication for
the use of our products.  We expect that our first  indication for both the Ebaf
Assay and the Telomerase Assay will only involve their use as monitoring devices
for cancer patients. Subsequently, we expect to expand each product's indication
for use as a  screening  method.  In  order  to do so,  we will  have to  design
additional clinical trials,  submit the trial designs to the FDA for review, and
complete  those  trials  successfully.  We  cannot  guarantee  that the FDA will
approve our  products for any  indication.  We can only promote our products for
indications which have been approved by the FDA.  Moreover,  it is possible that
the FDA may require a label  cautioning  against the use of our products for any
or all other indications.

         There  may  be   regulatory   requirements,   other   than   those  FDA
requirements, applicable to our products prior to their sale in other countries.
If we choose to market our products in countries outside of the US, it will have
to comply with any applicable requirements before such sales can be made.

         9.  Effect of Existing or Probable Governmental Regulation

         It is quite possible that new  regulations  which may become  effective
and be  applicable  to blood  screening  tests for cancer  could be proposed and
adopted which could restrict marketing of our products.  We are not aware of any
such pending or proposed regulations,  however,  there is no assurance that they
will not be imposed.

         10.  Estimate of the amount spent on research and development

         During  the past two years  (from  April 1, 1999 to March 31,  2001) we
spent $234,700 on research and development activities.  Of this amount, $139,617
was paid to DOCRO,  $90,779 was paid to North Shore,  $4,304 was paid to UMB. No
customer has or is expected to bear any direct research and development expense.

         In  addition,  we have  committed to spend  $1,495,000  pursuant to our
agreements  with DOCRO to develop the Ebaf Assay and $1,859,000  pursuant to our
agreement  with  DOCRO to develop  the  Telomerase  Assay.  We must also pay UMB
$124,527  pursuant to our sponsored  research  agreement  with them. We estimate
that we will need $400,000 to support Dr. Tabibzadeh's ebaf research for another
year.

         11.  Costs and effects of environmental compliance

         We have not incurred any environmental  compliance costs to date and we
do not expect to incur any environmental compliance costs in the future.

         12.  Number of total employees and number of full time employees

         We have no full time employees.  We have five employees,  including our
sole officer and director,  who provide services to us on a part-time basis. Our
employees are each engaged in other business  activities and devote such time as
he or she feels is reasonably necessary to carry out our business. Our employees
are employed by the same four other  companies.  Although these other  companies
are engaged in business  activities that are different from our business,  there
may exist  potential  conflicts in the amount of time each person devotes to our
business. Consequently,  developing our business may require a greater period of
time than if our employees were employed by us on a full time basis.

                                       9
<PAGE>
         On January 3, 2001, we entered into written employment  agreements with
Gifford Mabie, Dr. Thomas Coughlin, Rhonda Vincent and Vicki Pippin. For details
about the  employment  agreements,  see Item 7. Patents,  Trademarks,  Licenses,
Royalty Agreements or Labor Contracts.


Item 2.  Description of Property

         Our executive  office is located at 8908 South Yale Avenue,  Suite 409,
Tulsa,  Oklahoma,  74137.  We lease our 2,700  square  feet  office  space  from
Oklahoma  National Bank. Our office is shared with other companies owned in part
by our sole officer and director and our employees.  The lease expires March 31,
2002. Our portion of the present $3,600 monthly lease payment is $800 per month.


Item 3. Legal Proceedings

         There are no legal  proceedings  pending or  threatened as of March 31,
2000.  The Company is currently  negotiating  the  resolution  of a dispute with
Swartz  Private  Equity,  LLC  over a  $100,000  non-usage  fee  related  to the
Investment  Agreement  dated  May 19,  2000.  No  legal  action  is  pending  or
threatened and both parties are working to resolve the matter.

Item 4. Submission of Matters to a Vote of Security Holders

         None

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

         (a) Market information.

         Our common stock is traded in the over-the-counter market and is quoted
on the OTC Bulletin Board under the trading symbol "LXXN".

         The  following  table sets forth the high and low sales  prices for our
common  stock for each  quarter in the last two fiscal  years as reported by the
OTC Bulletin Board. The quotations shown represent  inter-dealer  prices without
adjustments  for  retail  markups,   markdowns  or  commissions,   and  may  not
necessarily reflect actual transactions.

         Quarter ended                        High              Low
         -------------                       -----             -----
         March 31, 1999                      $2.28             $1.12
         June 30, 1999                       $5.50             $2.43
         September 30, 1999                  $4.00             $2.00
         December 31, 1999                   $2.81             $0.93
         March 31, 2000                      $3.56             $0.87
         June 30, 2000                       $2.75             $1.34
         September 30, 2000                  $1.43             $0.66
         December 31,2000                    $0.91             $0.22

         (b)  Holders

         As of March 31, 2001, there were  approximately 61 holders of record of
our common stock.

         (c)  Dividend Policy

         We do not pay dividends.

 Item 6. Plan of Operation

         We have no operating  history  prior to December  16, 1997.  We have no
revenues  from the sale of  products  to date and  have  funded  our  activities
through the sale of our common stock and through loans by our shareholders.

                                     10
<PAGE>
         During the next twelve months, we must raise  approximately  $4,500,000
to complete the  development of the Ebaf Assay and the  Telomerase  Assay and to
gather the  preclinical  data for the FDA. If we are  successful  in raising the
capital  required,  we  estimate  that it will take  approximately  10 months to
complete the  development of the Ebaf Assay and to gather its  preclinical  data
and we  estimate  that it will take  approximately  14 months  to  complete  the
development of the Telomerase  Assay and to gather its  preclinical  data. It is
our understanding  that preclinical data will be used to determine the extent of
the clinical trial.  The clinical trial is necessary to obtain FDA approval.  If
the  preclinical  data is acceptable to DOCRO and us, then we will meet with the
FDA to determine  the extent of a clinical  trial.  We estimate  that a clinical
trial for the Ebaf Assay will last  approximately  8-12  months and will cost us
$8-$10 million.  We estimate that a clinical trial for the Telomerase Assay will
last approximately 8-12 months and will cost us $8-$10 million.


         (i)  Cash Requirements

         During  the  next  twelve   months,   we  will  require   approximately
$4,500,000.  Of this amount,  $1,495,000 is required by our agreement with DOCRO
to  develop  the Ebaf  Assay and to  gather  the  preclinical  data for the FDA,
$1,859,000  is required by our  agreement  with DOCRO to develop the  Telomerase
Assay and to gather the  preclinical  data for the FDA,  $124,527 is required by
our sponsored  research agreement with UMB, $400,000 is our estimate of the cost
for Dr. Tabibzadeh's continued scientific investigation of ebaf for one year and
$600,000 is our estimate of the operating  expenses of the Company for one year.
There is no assurance that the $4,500,000  will be available to us on acceptable
terms when we needed it. Any additional capital may involve substantial dilution
to the interests of our existing shareholders.

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

         Ebaf Assay
         ----------
         If we are  successful in raising the  $1,495,000  required,  DOCRO will
complete the  development of the Ebaf Assay and will then gather the preclinical
data for the FDA. We estimate the  development  and data gathering  process will
take about 10 months. Our agreement with DOCRO states that DOCRO will assess the
current  technical  and clinical  performance  of the existing  ebaf reagents as
provided by Dr.  Tabibzadeh.  DOCRO must then develop purified ebaf antigens for
all four known forms of ebaf protein expressed in human tissue. Next, DOCRO will
raise a variety of  monoclonal  antibodies  and  polyclonal  antibodies to these
various  antigens  to  determine  if any ebaf  protein is  overexpressed  in the
tissue,  blood,  other fluids of people  diagnosed with  colorectal  cancer when
compared to similar  specimens  from  apparently  healthy,  normal people and to
specimens from people diagnosed with other malignant or non-malignant  diseases.
If an ebaf  protein is  determined  by DOCRO to be  overexpressed  in  malignant
disease and not in  non-malignant  disease or apparently  healthy normals and we
agree,  DOCRO will then develop an enzyme  immunoassay  for such ebaf protein to
confirm  the results in the blood or other fluid  specimens  of a  statistically
significant number of patients (maximum of 400).

         Telomerase Assay
         ----------------

         If we are  successful in raising the  $1,859,000  required,  DOCRO will
complete the development of the Telomerase Assay and will gather the preclinical
data for the FDA. We estimate the  development  and data gathering  process will
take about 14 months. Our agreement with DOCRO states that DOCRO will assess the
current technical and clinical  performance of the existing  telomerase reagents
as  provided  by Dr.  Highsmith,  then for DOCRO to develop  or obtain  purified
telomerase  antigens  (including  various peptides and, if possible,  native and
recombinant  protein,  for known forms of the  telomerase  protein/nucleic  acid
complex)  expressed  in  humans.  DOCRO  will then  raise or obtain a variety of
monoclonal  antibodies  and polyclonal  antibodies to these various  antigens to
determine if any telomerase antigen is overexpressed in the tissue, blood, other
body fluids,  and other  specimen  matrices from humans  diagnosed  with lung or
other cancers when compared to similar specimens from apparently healthy, normal
humans and from a variety of humans diagnosed with other non-malignant diseases.
Further,  if a telomerase  antigen is determined by DOCRO to be overexpressed in
malignant disease and not in non-malignant disease or apparently healthy normals
and  Lexon  agrees,  DOCRO  shall  develop  an  enzyme  immunoassay  for  such a
telomerase  antigen to confirm the results in the blood or other fluid  specimen
matrix of a statistically significant number (maximum of 400) of patients.

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

         None.

         (iv)  Expected Significant changes in number of employees.


                                       11
<PAGE>

         None.

Item 7. Financial Statements

         See Part F/S

Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure

         None

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act

         (a)  Identify Directors and Executive Officers

     Gifford M. Mabie, age 60, is our sole officer and director.  He has been an
executive  officer and director of the Company since December 1997  (inception).
From 1982 to 1994, Mr. Mabie was Senior Vice President of CIS Technologies, Inc.
(NASD:  CISI), a leading  healthcare  information  company that was purchased by
National Data  Corporation  (NYSE:  NDC) in 1996. Mr. Mabie was  instrumental in
raising  over $40 million in capital  that funded  acquisitions  and new product
development.  As a result, that company's revenues grew from $105,000 in 1987 to
over $40 million in 1995. Prior to CIS, Mr. Mabie was with Honeywell Information
Systems, Inc., where he ranked as one of its top five salesmen worldwide.  Prior
to joining Honeywell,  he was corporate controller with W.B. Dunavant & Company,
one of the world's  largest cotton  brokers.  He holds degrees in accounting and
economics from Memphis State University and served for eight years in the United
States Navy.

     Mr.  Mabie is also the sole  officer  and  director  of Maxxon,  Inc.  (OTC
Bulletin  Board:  MXON).  Mr.  Mabie is also an officer  and/or  director of the
following privately-held emerging technology companies:  Image Analysis, Inc., a
color magnetic resonance imaging technology  company;  Centrex,  Inc., an e.coli
detection and  measurement  company;  and Nubar  Enterprises,  Inc., a laminated
carbon fiber reinforcing bar company.

(b)  Significant Employees

     The following  individuals  are not executive  officers but are expected by
the Company to make a significant contribution to our business:

     Thomas R.  Coughlin,  M.D.,  age 52, is Medical  Advisor for Lexon.  For 25
years prior to joining Lexon in January, 1999, Dr. Coughlin was a cardiovascular
surgeon.  From 1992 to 1995, he was Medical Director of Cardiovascular  Surgical
Services at Alexandria  Hospital in  Alexandria  Virginia and from 1991 to 1995,
was Assistant Clinical Professor,  Thoracic and Cardiovascular Surgery at George
Washington  University  Medical  Center  in  Washington,  D.C.  He has  received
numerous  professional  honors and has  published  25 research  papers.  He is a
graduate  of the  University  of  Rochester  School of Medicine  and  Dentistry,
Rochester,  New York  (M.D.) and of Seton  Hall  University  (B.S.).  He is also
Medical  Advisor  for  Maxxon,  Inc.  and  Centrex,  Inc.  and is an officer and
director of Image Analysis, Inc. and Nubar Enterprises, Inc.

     Rhonda R. Vincent,  age 37, is Financial  Reporting Manager for Lexon. From
incorporation  until July 16, 1999, when she resigned as an officer and director
of Lexon, Ms. Vincent was Vice President, Secretary and Treasurer of Lexon. From
1994 to 1997, Ms. Vincent was Vice President,  Secretary, Treasurer and Director
of Corporate Vision,  Inc., a multimedia software  development company. For five
years prior thereto,  Ms. Vincent held various accounting and investor relations
positions  with  CIS  Technologies,   Inc.,  a  leading  healthcare  information
processing  company that was purchased by National Data Corporation in 1996. She
began her  career  as an audit  associate  with the  public  accounting  firm of
Coopers & Lybrand.  Ms.  Vincent is a Certified  Public  Accountant  and holds a
Bachelor of Science degree in accounting  from Oral Roberts  University.  She is
also Financial Reporting Manager for Maxxon,  Inc. and Centrex,  Inc., and is an
officer and director of Image Analysis, Inc. and Nubar Enterprises, Inc.

     Vicki L. Pippin,  age 41, is Administrative  Manager for Lexon. She is also
Administrative  Manager for Maxxon, Inc., Image Analysis,  Inc., Centrex,  Inc.,
Nubar  Enterprises,  Inc.  She has had more  than 20 years in  senior


                                       12
<PAGE>



executive  administration  for various  public  companies in the  aerospace  and
healthcare software industries,  including McDonnell Douglas,  Burtek Industries
and CIS Technologies.

(c)  Family Relationships

         None.

(d) Involvement in Legal Proceedings of Officers, Directors and Control Persons

         None.

Item 10.  Executive Compensation

     Mr. Mabie,  our sole officer and director,  has received no salary or bonus
since inception.  There were no common stock options granted to Mr. Mabie during
2000.


<TABLE>
<CAPTION>

Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values

     <S>                 <C>              <C>                <C>                         <C>

----------------- ----------------- ---------------- ------------------------ -------------------------
                                                        Number of Securities      Value of Unexercised
                                                      Underlying Unexercised              In-the-Money
                   Shares Acquired                           Options/SARs at           Options/SARs at
Name                   On Exercise   Value Realized        December 31, 2001         December 31, 2001
----------------- ----------------- ---------------- ------------------------ -------------------------

Gifford Mabie                  N/A              N/A                  250,000                   N/A (1)
----------------- ----------------- ---------------- ------------------------ -------------------------
</TABLE>

(1)  The  closing  price of our common  stock on  December  31,  2001 was $0.34.
     Because Mr. Mabie's 250,000 options were  exercisable at $1.5625 per share,
     none were "in-the-money" at December 31, 2000.



                                       13
<PAGE>


Item 11.  Security Ownership of Certain Beneficial Owners and Management

         The following  shareholders  are known to us to own more than 5% of the
outstanding  common stock of the Company.  Except as  otherwise  indicated,  all
information  is as of March 31, 2001 and  ownership  consists of sole voting and
investment power.

<TABLE>
<CAPTION>

             <S>                            <C>                      <C>                  <C>
                                                                                      Percent of
                                                                 Common Shares       Outstanding
       Name and Address             Relationship to Company          Owned (1)            Shares
       ----------------             -----------------------      -------------       -----------

       UTEK Corporation                    Beneficial Owner       1,160,973 (2)            9.04%
       202 Wheeler Street
       Plant City, FL 33566

       Goodbody International, Inc.        Beneficial Owner         750,000 (3)            5.62%
       4546 Barclay Drive, Suite C
       Atlanta, GA  30338

       Gifford M. Mabie                    Sole Officer and       1,164,286                9.07%
       8908 S. Yale Ave. #409                      Director
       Tulsa, OK  74137

       Rhonda R. Vincent                           Employee       1,044,552 (4)            8.14%
       8908 S. Yale Ave. #409
       Tulsa, OK  74137

       Thomas R. Coughlin                          Employee         814,285                6.34%
       8908 S. Yale Ave. #409
       Tulsa, OK  74137

       Vicki L. Pippin                             Employee         741,286                5.77%
       8908 S. Yale Ave. #409
       Tulsa, OK  74137

       Sole Officer and Director and  Employees
       as a Group (4 persons)                                     3,764,410               29.32%

       Beneficial  Owners,   Sole  Officer  and
       Director and Employees as a Group                          5,675,383               42.55%
       (6 persons)

</TABLE>

(1)  With the  exception of Goodbody  International,  the  percentage  of shares
     owned was based on 12,838,735 shares issued and outstanding as of March 31,
     2001. There are no unexercised  stock options  presently  outstanding.  For
     Goodbody  International,  the  percentage  of  shares  owned  was  based on
     12,838,735  shares issued and  outstanding  as of March 31, 2001 plus their
     500,000 warrants.

(2)  Consists  of 250,000  shares  owned of record  plus  warrants  to  purchase
     500,000 shares of common stock.

(3)  UTEK is a publicly-traded corporation. UTEK's common stock is traded on the
     NASDAQ Small Cap market under the symbol "UTOB".

(4)  Includes 98,000 shares owned by Investor  Relations  Corporation,  of which
     Ms. Vincent is the sole officer, director and shareholder.

Common Stock Options and Warrants Outstanding
---------------------------------------------
         At March 31, 2000, the Company had  outstanding  options to purchase up
to 850,000  shares of common  stock at  exercise  prices  ranging  from $1.20 to
$1.5625 per share and outstanding warrants to purchase up to 1,016,062 shares of
common stock at prices ranging from $0.48 to $2.06 per share.

Item 12. Certain Relationships and Related Transactions

         During the past two years,  we have had the following  transactions  in
excess of $60,000 with related parties:

         On  August  4,  1999,  we  borrowed   $100,000  from  a  non-affiliated
shareholder  at a 10% interest rate due December 31, 2000. On March 23, 2000, we
repaid the shareholder the $100,000 plus $6,444 in accrued interest.

                                       14
<PAGE>


         During  the  past two  years,  Gifford  Mabie,  our  sole  officer  and
director, advanced us $96,407 of which we have repaid $48,200 to date.

         On February 23, 2001,  Gifford Mabie,  Thomas Coughlin,  Rhonda Vincent
and Vicki Pippin each  exercised an option to purchase  714,286 shares of common
stock at an exercise  price of $0.25 per share.  Each person gave the Company an
unsecured  promissory  note in the  amount  of  $178,571.50.  The  notes are due
February  23, 2008 and accrued  interest at a rate of 8% per year. A form of the
note is included as Exhibit 10.41.

Item 13. Exhibits and Reports on Form 8-K

         None


                                       15
<PAGE>

                                    PART III

Index to and Description of Exhibits


Ex.
No.       Description of Exhibit
----      ----------------------
10.34     Professional   Services   and   Confidentiality    Agreement   between
          Registrant and Diagnostic Oncology CRO, Inc. dated April 4, 2000
10.35     Professional   Services   and   Confidentiality    Agreement   between
          Registrant and Diagnostic Oncology CRO, Inc. dated June 9, 2000
10.36     Professional   Services   and   Confidentiality    Agreement   between
          Registrant and Diagnostic Oncology CRO, Inc. dated July 17, 2000
10.37     Employment Agreement with Gifford Mabie dated January 3, 2001
10.38     Employment  Agreement  with Dr. Thomas  Coughlin dated January 3, 2001
10.39     Employment Agreement with Rhonda Vincent dated January 3, 2001
10.40     Employment Agreement with Vicki Pippin dated January 3, 2001
10.41     Form of Promissory Note dated February 23, 2001
23.0      Consent of Tullius Taylor Sartain & Sartain LLP
27.0      Financial  Data Schedule at December 31, 2000 (for  electronic  filers
          only)




                                       16
<PAGE>
                                   SIGNATURES


         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.


                                  LEXON, INC.

                                  /s/ GIFFORD MABIE
                                  -------------------------------------
                                  By:  Gifford Mabie, Sole Officer and Director


Date:    April 16, 2001


                                       17

<PAGE>


                                    Part F/S


                 INDEX TO FINANCIAL STATEMENTS AND RELATED NOTES


AUDITED FINANCIAL STATEMENTS

Independent Auditors' Report............................................... F-1

Balance Sheet at December 31, 2000......................................... F-2

Statement of Operations from inception (December 16, 1997)................. F-3
through December 31, 2000

Statement of Cash Flows from inception (December 16, 1997)................. F-4
through December 31, 2000

Statement of Shareholders' Equity from inception (December 16, 1997)
through December 31, 2000.................................................. F-5

Notes to Financial Statements from inception (December 16, 1997)
through December 31, 2000.................................................. F-6


<PAGE>




                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
of Lexon, Inc.


We have audited the  accompanying  balance sheets of Lexon,  Inc., a Development
Stage Company,  as of December 31, 2000 and 1999, and the related  statements of
operations,  cash flows and  shareholders'  equity for the period from inception
(December 16, 1997) to December 31, 2000.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Lexon, Inc. as of December 31,
2000 and 1999,  and the  results  of its  operations  and its cash flows for the
years then ended, and the period from inception (December 16, 1997) to December
31, 2000, in conformity  with   accounting  principles generally accepted in the
United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 14 to the
financial   statements,   the  Company  is  a  development  stage  company  with
insufficient revenues to fund development and operating expenses. This condition
raises  substantial  doubt about its  ability to  continue  as a going  concern.
Management's  plan  concerning  this  matter is also  described  in Note 14. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


/s/ Tullius Taylor Sartain & Sartain LLP
Tulsa, Oklahoma
January 26, 2001

                                      F-1
<PAGE>


                                   Lexon, Inc.
                          (A Development Stage Company)

                                 Balance Sheets
                     December 31, 2000 and December 31, 1999



                                                     December 31,  December 31,
                             ASSETS                          2000          1999
                                                     ------------  ------------
Current assets
Cash                                                         $820       $10,041
Due from related parties                                    6,532         9,703
Prepaid expenses                                                -         4,062
                                                     ------------  ------------
   Total current assets                                     7,352        23,806
                                                     ------------  ------------
Other assets
Licensed technology, net                                  207,397       146,794
Sponsored research, net                                   124,729        77,813
                                                     ------------  ------------
      Total other assets                                  332,126       224,607
                                                     ------------  ------------
TOTAL ASSETS                                             $339,478      $248,413
                                                     ============  ============
              LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities                  $91,429       $37,214
Interest payable                                           19,834         4,900
Payable to DOCRO                                          350,000             -
Payable to UTEK                                            30,000       132,000
Payable to North Shore University                          27,054        54,108
Payable to University of Maryland                         124,537             -
Related party payables                                    188,709       119,627
                                                     ------------  ------------
   Total current liabilities                              831,563       347,849
                                                     ------------  ------------
Shareholders' equity
Preferred stock, $0.001 par value,
   5,000,000 shares authorized;  no shares
   issued and outstanding at December 31, 2000 and
   December 31, 1999, respectively                              -             -
Common stock, $0.001 par value,
   45,000,000 shares authorized;
   9,202,735 shares and 6,809,513 shares
   issued and outstanding at December 31, 2000 and
   December 31, 1999, respectively                          9,203         6,810
Paid in capital                                         7,490,720     3,249,558
Deficit accumulated during the development stage       (7,992,008)   (3,355,804)
                                                     ------------  ------------
                                                         (492,085)      (99,436)
                                                     ------------  ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY               $339,478      $248,413
                                                     ============  ============


The accompanying notes are an integral part of the financial statements



                                       F-2

<PAGE>

                                   Lexon, Inc.
                          (A Development Stage Company)

                            Statements of Operations
        From Inception (December 16, 1997) Through December 31, 2000 and
                 For the Years Ended December 31, 2000 and 1999

<TABLE>
<CAPTION>


                                         From inception
                                          (December 16,
                                          1997) through   December 31,   December 31,
                                      December 31, 2000           2000           1999
                                      -----------------   ------------   ------------
<S>                                   <C>                <C>            <C>
Revenue                                             $ -            $ -            $ -

Expenses
Research and development                      1,388,048        580,393        626,122
General and administrative                    6,198,178      4,031,431      1,768,198
                                      -----------------   ------------   ------------
   Total operating expenses                   7,586,226      4,611,824      2,394,320
                                      -----------------   ------------   ------------
Operating loss                               (7,586,226)    (4,611,824)    (2,394,320)

Interest expense                                405,782         24,380          8,318
                                      -----------------   ------------   ------------
Net loss                                   $ (7,992,008)  $ (4,636,204)  $ (2,402,638)
                                      -----------------   ------------   ------------
Weighted average shares outstanding           6,691,339      7,780,466      6,698,089

Loss per share                                  $ (1.19)       $ (0.60)       $ (0.36)

</TABLE>

The accompanying notes are an integral part of the financial statements


                                       F-3

<PAGE>

                                   Lexon, Inc.
                          (A Development Stage Company)

                            Statements of Cash Flows
        From Inception (December 16, 1997) through December 31, 2000 and
                 For the Years Ended December 31, 2000 and 1999

<TABLE>
<CAPTION>



                                                                              From inception
                                                                               (December 16,
                                                                               1997) through         Year Ended          Year Ended
                                                                           December 31, 2000  December 31, 2000   December 31, 1999
                                                                           -----------------  -----------------   -----------------
<S>                                                                            <C>                <C>                 <C>
Operating activities
Net loss                                                                        $ (7,992,008)      $ (4,636,204)       $ (2,402,638)
Plus non-cash charges to earnings:
   Amortization of license and sponsored research agreements                         464,663            217,018             165,096
   Value of common stock options granted to non-employees for services             1,299,218                  -           1,101,248
   Amortization of Stock Options Issued to Non-employee Lenders                      356,346                  -                   -
   Value of services contributed by employees                                        911,479            410,000             280,000
   Value of stock issued for services                                              3,375,336          3,153,661             221,675
Change in working capital accounts:
  (Increase) decrease in prepaid expenses                                                  -              4,063              (4,062)
  (Increase) decrease in other receivables                                            (6,532)             3,171              (9,703)
   Increase in accounts payable and accrued liabilities                               91,429             54,214              12,087
   Increase (decrease) in interest payable                                            19,834             14,934             (11,839)
   Increase in payable to DOCRO                                                      350,000            350,000                   -
   Increase (decrease) in payable to North Shore                                      27,054           (159,054)            186,108
                                                                           -----------------  -----------------   -----------------
      Total operating activities                                                  (1,103,181)          (588,197)           (462,028)
                                                                           -----------------  -----------------   -----------------
Financing activities
Loans from related parties                                                           533,309            183,682             119,627
Repayment of loans from related parties                                             (344,600)          (114,600)           (230,000)
Sale of common stock for cash:
   To founders                                                                         5,000                  -                   -
   To third-party investors                                                        1,371,727            445,519             557,550
   Payment of issue costs                                                           (140,498)                 -             (92,210)
   To employees upon exercise of employee stock options                              320,313            234,375              85,938
                                                                           -----------------  -----------------   -----------------
      Total financing activities                                                   1,745,251            748,976             440,905
                                                                           -----------------  -----------------   -----------------
Investing activities
Purchase of Cancer Diagnostics Inc.                                                 (170,000)          (170,000)                  -
Purchase of exclusive licenses                                                      (160,000)                 -                   -
Payment of sponsored research contract                                              (311,250)                 -                   -
                                                                           -----------------  -----------------   -----------------
      Total investing activities                                                    (641,250)          (170,000)                  -
                                                                           -----------------  -----------------   -----------------
Change in cash                                                                           820             (9,221)            (21,123)
Cash at beginning of period                                                                -             10,041              31,164
                                                                           -----------------  -----------------   -----------------
Cash at end of period                                                                  $ 820              $ 820            $ 10,041
                                                                           =================  =================   =================
Supplemental disclosure of cash flow information:
   Cash paid for interest during the period                                         $ 21,389            $ 1,233            $ 20,156

Non-cash financing and investing activities:
   Common stock issued in Gentest Merger                                             $ 1,000                $ -                 $ -


</TABLE>

The accompanying notes are an integral part of the financial statements



                                       F-4

<PAGE>

                                   Lexon, Inc.
                          (A Development Stage Company)

                        Statement of Shareholders' Equity
        From Inception (December 16, 1997) through December 31, 2000 and
                 For the Years Ended December 31, 2000 and 1999

<TABLE>
<CAPTION>

                  <S>                                          <C>          <C>         <C>          <C>             <C>


                                                            Shares of     Common      Paid In
                                                                Stock      Stock      Capital      Net Loss         Total
                                                            ---------     ------      -------      ---------       -------

Balance at December 16, 1997 (Inception)                            -        $ -          $ -           $ -           $ -

Contribution of services by officer and employees                   -          -        1,479             -         1,479
Net Loss through December 31, 1997                                  -          -            -        (1,719)       (1,719)
                                                            ---------     ------      -------      ---------       -------
Balance at December 31, 1997                                        -          -        1,479        (1,719)         (240)
                                                            ---------     ------      -------      ---------       -------
Common stock issued for cash:
To Founders                                                 5,000,000      5,000            -             -         5,000
To Third-Party Investors                                      164,621        165      368,494             -       368,659
Issuance of additional shares to
Third party Investors                                          81,151         81          (81)            -             -
Less issue costs                                                    -          -      (48,288)            -       (48,288)
Common stock issued for services                               33,541         33          (33)            -             -
Common stock issued in Gentest Merger                       1,000,000      1,000            -             -         1,000
Value of stock options to non-employees                             -          -    1,049,241             -     1,049,241
Contribution of services by officer and employees                   -          -      220,000             -       220,000
Net Loss through December 31, 1998                                  -          -            -      (951,447)     (951,447)
                                                            ---------     ------      -------      ---------       -------
Balance at December 31, 1998                                6,279,313      6,279    1,590,812      (953,166)      643,925
                                                            ---------     ------      -------      ---------       -------
Common stock issued for cash:
    To third-party investors                                  385,700        386      557,164             -       557,550
     Less issue costs                                               -          -      (92,210)            -       (92,210)
To employees upon exercise of stock options                    55,000         55       85,883             -        85,938
Common stock issued for services                               89,500         90      221,585             -       221,675
Value of stock options granted to non-employees                     -          -      606,324             -       606,324
Contribution of services by officer and employees                   -          -      280,000             -       280,000
Net Loss through December 31, 1999                                  -          -            -    (2,402,638)   (2,402,638)
                                                            ---------     ------      -------      ---------       -------
Balance at December  31, 1999                               6,809,513      6,810    3,249,558    (3,355,804)      (99,436)
                                                            ---------     ------      -------      ---------       -------
Common stock issued for cash:
    To third-party investors                                  312,530        313      215,754             -       216,067
To employees upon exercise of stock options                   150,000        150      234,225             -       234,375
     Less cost of capital                                           -          -       (4,922)            -        (4,922)
Common stock issued for services                            1,543,222      1,543    1,672,019             -     1,673,562
Value of stock issued in anticipation of puts with Swartz     387,470        387         (387)            -             0
Value of stock warrants granted to non-employees                    -          -    1,714,473             -     1,714,473
Contribution of services by officer and employees                   -          -      410,000             -       410,000
Net Loss through December 31, 2000                                  -          -            -    (4,636,204)   (4,636,204)
                                                            ---------     ------      -------      ---------       -------
Balance at December  31, 2000                               9,202,735    $ 9,203  $ 7,490,720  $ (7,992,008)   $ (492,085)
                                                            ---------     ------      -------      ---------       -------

</TABLE>

The accompanying notes are an integral part of the financial statements



                                       F-5

<PAGE>
                                  Lexon, Inc.
                          (A Development Stage Company)

                          Notes to Financial Statements
        From Inception (December 16, 1997) through December 31, 2000 and
                 For the Years Ended December 31, 2000 and 1999


Note 1--  Organization and Summary of Significant Accounting Policies

Organization and Nature of Operations
Lexon,  Inc.  ("Lexon" or "the Company") is a development stage corporation that
acquires,  develops,  and markets emerging medical technologies.  Lexon owns 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.   The  Company  also  owns,  through  Cancer
Diagnostics,  Inc.  ("CDI"),  the exclusive  worldwide license to the Telomerase
Assay, a blood screening test for lung cancer.

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.

Income Taxes
The Company  uses the  liability  method of  accounting  for income taxes as set
forth  in  Statement  of  Financial   Accounting  Standards  ("SFAS")  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.

Compensation of Officers and Employees
The Company's  sole officer and director and its other  employees  serve without
pay or other  non-equity  compensation.  The fair  value  of these  services  is
estimated by management  and is recognized  as a capital  contribution.  For the
years  ended  December  31,  2000 and 1999,  and for the period  from  inception
(December  16,  1997) to  December  31,  2000,  the Company  recorded  $410,000,
$280,000,  and $911,479,  respectively,  as a capital  contribution  by its sole
officer and director and its other employees.

Fair Market Value of Stock Issued for Services
The fair market  value of stock  issued as payment for  services is equal to the
closing price of the Company's Common Stock on the date shares 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 Board of  Directors  determined  the fair market value of
stock issued as payment for services.

Stock-based Compensation
The Company  accounts for  stock-based  compensation  arrangements in accordance
with 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" ("SFAS 123"). Under APB No. 25,
compensation  expense is based on the difference,  if any, on the date of 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
accounting 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.


                                       F-6

<PAGE>
Research and Development ("R&D") Costs
The Company is amortizing  the $311,250 paid pursuant to the Sponsored  Research
Agreement  for the Ebaf assay over two years,  which is the life of the  service
agreement.  The $249,458 to be paid pursuant to the Sponsored Research Agreement
for the Telomerase assay acquired through the purchase of CDI is being amortized
over two years,  which is the life of the  service  agreement  (See Note 5). Any
other costs relating to the  development  of the Ebaf and Telomerase  Assays 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 during 2000 or 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  Instruments  and Hedging  Activities"  during 2001.  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. The obligations of
Gentest were to pay $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.  Lexon paid the  obligations  in full on July 8, 1998.  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
                                              ================


                                       F-7

<PAGE>
Note 3--  Exclusive License--Ebaf Assay

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.   At  December  31,  2000,  the  amount  of  accumulated
amortization related to the Exclusive License was $23,676.

Note 4--  Sponsored Research Contract--Ebaf Assay

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  research  and
development   expenses.   At  December  31,  2000,  the  amount  of  accumulated
amortization related to the Sponsored Research Agreement was $311,250.

Note 5--  Purchase of Cancer Diagnostics, Inc.

         On January 29, 2000, Lexon purchased 100% of the Common Stock of CDI, a
Florida  corporation,  according to the terms of a Stock Purchase Agreement.  By
reason of the stock purchase, CDI became a wholly-owned subsidiary of Lexon. CDI
owns the exclusive  worldwide  license to the Telomerase Assay, a patent-pending
blood test for lung  cancer  being  developed  at the  University  of  Maryland,
Baltimore  ("UMB").  CDI is party to 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.

         Lexon purchased all of the  outstanding  Common Stock of CDI from CDI's
sole shareholder UTEK Corporation  ("UTEK") for a total of $200,000.  Lexon paid
$50,000  in cash and gave  UTEK a  secured  promissory  note for  $150,000.  The
secured  promissory  note bears interest at 10% per year and is payable in three
monthly installments of $50,000 each, due on April 30, May 31 and June 30, 2000.
The Company has paid $70,000 to UTEK to date. The interest rate will increase to
12% per year on any unpaid principal  balance after June 30, 2000. To secure the
promissory note, Lexon pledged all of the shares of Common Stock of CDI pursuant
to a Pledge and Security Agreement. The shares were placed in escrow and will be
released upon payment in full of Lexon's  obligation to UTEK. As of December 31,
2000,  UTEK  Corporation  has  agreed  to  extend  the due date for the  secured
promissory  note to March 31, 2001. The rate of interest on the $30,000  balance
is 12%.

         UTEK, a Florida corporation,  is a technology merchant that specializes
in  the  transfer  of  technology  from  universities  and  government  research
facilities to the private sector. UTEK has relationships with major universities
and  government  research  facilities  in the  U.S.  and in  Europe.  UTEK  owns
approximately  1,000,000  shares (or about 12.9% of the  outstanding  shares) of
Lexon Common Stock.

Note 6--  Exclusive License--Telomerase Assay

Lexon owns the exclusive  worldwide  license to the Telomerase Assay through its
wholly-owned  subsidiary CDI. In exchange for the license, CDI agreed to pay UMB
a royalty  of 4% of Net  Sales of  products  sold  using  the  Telomerase  Assay
technology.  The exclusive  license is being  amortized  over 15 years using the
straight-line   method.   At  December  31,  2000,  the  amount  of  accumulated
amortization related to the exclusive license was $5,005.



                                       F-8

<PAGE>
Note 7--  Sponsored Research Contract--Telomerase Assay

On August 27, 1999,  CDI agreed to pay UMB $249,458 to fund the  development  of
the  Telomerase  Assay for the ELISA  format  over a two year  period  beginning
January 4, 2000,  and ending January 3, 2002. CDI paid $124,921 upon signing the
sponsored  research  agreement.  The  balance  of  $124,537  is due on or before
January 1, 2001.  The Sponsored  Research  Agreement is being  amortized  over 2
years  using the  straight-line  method,  with  amortization  costs  recorded as
research  and  development  expenses.  At  December  31,  2000,  the  amount  of
accumulated  amortization  related  to  the  Sponsored  Research  Agreement  was
$124,729.

Note 8--  Notes Payable

During 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.  The notes  payable and accrued  interest were paid in full during
1999.  On October 15, 1998, in  connection  with these notes,  the Board granted
50,000 options to the officer and 180,000 options to the shareholder, each at an
exercise  price of $1.20 per share.  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 $356,346 as
interest  expense  for  the  options  granted  to the  shareholder  based  on an
estimated  fair value of $1.98 per share.  The fair value of $1.98 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
$2.00 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%.

During 1998, the Company  borrowed  $1,377 from a related party.  As of December
31, 2000, the balance on this loan was $1,377.

During 1999, the Company borrowed $118,250 from non-affiliated shareholders. The
Company executed notes payable,  which are due December 31, 2000, at an interest
rate of 10% per year.  Subsequent to December 31, 2000,  these notes will accrue
interest at a default rate of 16%. As of December 31, 2000, the balance on these
loans was $18,250.

During 2000, the Company  borrowed  $76,500 from its  shareholders.  The Company
executed notes payable,  which are due December 31, 2000, at an interest rate of
10% per year.  Subsequent to December 31, 2000, these notes will accrue interest
at a default  rate of 16%. As of December  31, 2000,  the  remaining  balance on
these notes was $71,500

Note 9--  Commitments and Contingencies

Future Royalty Obligations Under Exclusive License Agreement--Ebaf Assay
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.


                                       F-9
<PAGE>
Future Royalty Obligations Under Exclusive License Agreement--Telomerase Assay
In exchange for the exclusive license agreement, CDI agreed to pay UMB a royalty
of 4% of Net Sales of products sold using the Telomerase Assay  technology.  The
license  agreement  provides for minimum  annual  royalties  for the life of the
license  agreement,  which  coincides with the life of the last to expire patent
covering the licensed technology. The minimum annual royalties range from $2,500
per year beginning in 2002 to a maximum of $4,000 per year beginning in 2006 and
continuing  each  year  thereafter  for the life of the  license  agreement.  In
addition,  the license  agreement  provides for  royalties of 2% of Net Sales of
products sold by  sublicensees of CDI and 50% of all  consideration  received by
CDI for up-front, milestone or other payments from sublicensees.

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.  At December  31,  2000,  the balance on the  Company's  obligation  is
$27,054.

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  decided 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  owned in part by the sole officer and  director and the  employees of
the  Company.  During  2000 and 1999,  the Company  recorded  $9,600 and $9,600,
respectively,  for rent expense.  The minimum annual lease payments  pursuant to
the lease agreement and the Company's estimated share are scheduled as follows:

For the Periods Ended     Minimum Annual Lease   Company's Estimated
          December 31                 Payments                 Share
---------------------- ------------------------ ---------------------
     2001                              $45,587                $9,600
     2002                               11,462                 2,292

Swartz Investment Agreement
The Company  entered into an investment  agreement on May 19, 2000,  with Swartz
Private  Equity,  LLC to raise up to $30  million  through  a series of sales of
Lexon's Common Stock ("the Investment Banking Agreement").  The dollar amount of
each sale is limited by the  Company's  Common  Stock's  trading  volume,  and a
minimum  period of time must  elapse  between  each  sale.  Each sale will be to
Swartz. In turn, Swartz will either sell Lexon's stock in the open market, place
Lexon's stock through  negotiated  transactions  with other  investors,  or hold
Lexon's stock in their own portfolio.

If Lexon has not put at least  $1,000,000  oc common stock to Swartz  during any
six calendar month period  following the effective  date of the Agreement,  then
Lexon shall pay a  non-usage  of $100,000  les 10% of the  aggregate  put dollar
amount put to Swartz during the period.

Lexon may  terminate  its right to initiate  puts or  terminate  the  Investment
Banking  Agreement at any time by providing Swartz with notice of such intention
to terminate;  however, any such termination will not affect any other rights or
obligations Lexon has concerning the Investment Banking Agreement or any related
agreement.  Should Lexon  terminate the Investment  Banking  Agreement  prior to
initiating  puts in the amount of  $2,000,000  during the 36 month period of the
Investment Banking Agreement, the Company may be required to pay a Non-Usage fee
of a maximum of $200,000.


                                       F-10
<PAGE>
DOCRO Services Agreement
On June 21, 2000 and August 2, 2000,  the Company  entered  into two  consulting
agreements with Diagnostic  Oncology CRO, Inc.  ("DOCRO"),  a company engaged in
providing  technology  assessment,  technology  development,  and laboratory and
clinical trial services to medical  device  developers,  to conduct a technology
assessment and development  program for Lexon's Ebaf and Telomerase tumor marker
technologies.  For these  services,  Lexon  agreed to pay DOCRO  $1,495,000  and
$1,858,900,  respectively,  which  will be paid  upon  achievement  by  DOCRO of
specific  milestones in the operation.  As of December 31, 2000, the Company had
recorded a payable to DOCRO under the agreements of $350,000.

Note 10-- Common Stock and Paid in Capital

During the year ended December 31, 1998, the following Common Stock transactions
occurred:

o    Under the terms of an  offering  dated  April 1,  1998,  the  Company  sold
     5,000,000  shares  of its  Common  Stock to the  founders  at par value for
     $5,000 cash.

o    On July 8, 1998, the Company issued 1,000,000 shares of its Common Stock in
     connection with the Gentest merger.

o    On May 18, 1998, Lexon commenced its Rule 504 private offering at $2.00 per
     share.  This price was  determined  by the Board of  Directors.  There were
     125,205 shares of Common Stock sold to  third-party  investors for $250,410
     in cash. The $2.00  offering was terminated on July 31, 1998,  when Lexon's
     15c211  application  was filed with the NASD.  The  Company's  Common Stock
     began trading on November 4, 1998, at $2.50 per share. On November 6, 1998,
     Lexon commenced a Rule 504 private offering at $3.00 per share, which price
     was  greater  than the  closing  price  of the  Company's  Common  Stock on
     November 6, 1998 (the date of the offering  memorandum).  There were 39,416
     shares of Common Stock sold to third-party  investors for $118,248 in cash.
     The Company incurred  expenses of $48,287 in connection with the offerings.
     On  January  18,  1999,  the  Company  terminated  the $3.00  offering  and
     commenced  an offering  at $1.50 per share,  which was equal to the closing
     price of the  Company's  Common Stock on January 19, 1999.  Although  there
     were no obligations to do so, the Board  determined  that the investors who
     paid cash in the $2.00 and $3.00 private  offerings should be treated as if
     they had  purchased  their  shares at $1.50  per  share.  Accordingly,  the
     Company  issued an  additional  81,151  shares to those  investors  (41,735
     shares to the $2.00  investors and 39,416  shares to the $3.00  investors).
     The issuance of the additional shares was treated as a capital transaction,
     with no effect on shareholders' equity.

o    During 1998,  the Company issued 33,541 shares of its Common Stock at $2.00
     per share for services rendered in connection with the Offering.  The $2.00
     per share value was determined by the Board of Directors  based on the most
     recent offering price of $2.00 per share.

During the year ended December 31, 1999, the following Common Stock transactions
occurred:

o    The  Company  sold  385,700  shares  of its  Common  Stock to  third  party
     investors for $557,550 in cash.

o    The Company  issued a total of 89,500  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.  An additional  7,500 shares were issued at $2.34 per share
     to a public  relations  specialist in connection  with the Company's  colon
     cancer  awareness  activities.  The  remaining  2,000 shares were issued at
     $4.875 per share for legal services.

o    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. The exercise price was equal to the closing price of the Company's
     Common Stock on the date the options were granted.


                                       F-11

<PAGE>
During the year ended December 31, 2000, the following Common Stock transactions
occurred:

o    The  Company  issued  150,000  shares of its Common  Stock  pursuant to the
     exercise of employee stock options, for which the Company received $234,375
     in cash. The employees  exercised  their options at $1.5625 per share.  The
     exercise price was equal to the closing price of the Company's Common Stock
     on the date the options were granted.

o    The Company  issued a total of 293,222  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,  190,000 were
     issued  at  $.9375  per  share to  consultants  for  services  rendered  in
     connection with accounting and legal services; 65,000 shares were issued at
     $.9375  per share for  general  business  consulting  services;  and 22,222
     shares  were  issued at $1.125 per share to a  consultant  to  develop  and
     maintain an Internet web site for the Company.

o    The Company issued a total of 1,000,000 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,  600,000 were
     issued at $.84 per share for  general  business  consulting  services,  and
     400,000  shares  were  issued at $.84 per  share  pursuant  to an  investor
     relations agreement.

o    The  Company  sold  250,000  restricted  shares  of stock to a  third-party
     investor in conjunction with a consulting agreement signed on May 23, 2000.
     The purchase price for the shares was $.001 and the stock is restricted for
     a period of 10 months.  The $554,250  difference between the purchase price
     of the stock and the fair market value of the stock on the date of purchase
     was  recorded  as a  general  and  administrative  expense  on  the  income
     statement.

o    In connection with the issuance of stock for services, the Company recorded
     $1,895,237,  $1,673,562 and $221,675,  respectively, as G&A expense for the
     period from  inception  (December 16, 1997) through  December 31, 2000, and
     for the years ended December 31, 2000 and 1999.

o    The  Company  placed  700,000  shares of stock in escrow for a third  party
     investor  pursuant to an  investment  banking  agreement  signed on May 19,
     2000. As of December 31, 2000, 260,160 and 52,365 shares had been purchased
     through  puts.  The  sales  prices  for  the  shares  was  $0.75  and  $.40
     respectively,  which were the sales  prices  calculated  using the formulas
     outlined in the Investment Banking Agreement.  Total proceeds from sales of
     stock under the Investment Banking Agreement are $216,066.

Lexon is authorized to issue 45,000,000 Shares of Common Stock, par value $0.001
per share, of which 9,202,735  shares were  outstanding as of December 31, 2000.
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.

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,


                                       F-12
<PAGE>
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, if any.

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 11  Stock Options

Employee 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 Board  granted  50,000  options to an officer at an
exercise price of $1.20 per share in connection  with a loan made by the officer
to the  Company.  The  Company  recorded  no  compensation  cost for the options
granted to the officer.

On March 4, 1999, the Board granted  1,692,500  options to purchase Common Stock
at an  exercise  price of $1.5625 per share to  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 August 7, 2000, the Board granted  1,250,000 options to purchase Common Stock
at an exercise price of $.84 per share to 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.

SFAS 123,  provides an alternative  method of determining  compensation cost for
employee stock options, which alternative method may be adopted at the option of
the Company.  Had  compensation  cost for the options  granted to employees been
determined  consistent  with SFAS 123, the Company's net loss for the year ended
December 31, 2000,  would have been increased and EPS would have been reduced to
the following pro forma amounts:

                                From Inception
                                       Through             Year Ended
                             December 31, 2000      December 31, 2000
 Net loss:
          As reported             $(7,992,008)            $(4,636,204)
          Pro forma                (9,555,540)             (6,199,736)
 Basic and diluted EPS:
          As reported             $     (1.19)            $     (0.60)
          Pro forma                     (1.42)                  (0.80)

Compensation cost was based on an estimated fair value of $1.98 per share, which
was calculated using the  Black-Scholes  option pricing model with the following
assumptions:  exercise price of $1.20 per share; stock price of $2.00 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%.

Non-Employee Options
On October 15, 1998,  the Board  granted  300,000  options to a consultant at an
exercise price of $1.20 per share.  In exchange for the options,  the consultant
provided the Company financial and investment consulting services for a one-year
period.  During  1998 the  Company  recorded  $593,910  as a prepaid  consulting
expense and an


                                       F-13
<PAGE>
increase to paid in capital.  The Company  amortized the prepaid  expense over a
12-month  period,  which  was the life of the  agreement.  Amortization  expense
included in general and administrative  expense was $494,925 in 1999 and $98,985
in 1998.

Also on October 15, 1998,  the Board granted 50,000 options at an exercise price
of $1.20 per share to the inventor of the Ebaf  screening  process.  The Company
recorded the compensation cost of $98,985 as research and development expense on
the date the options were granted.

On October 15, 1998, the Board also granted  180,000 options to a shareholder at
an  exercise  price of $1.20  per  share in  connection  with a loan made by the
shareholder to the Company.  The Company recorded  compensation cost of $356,346
as interest expense on the date the options were granted.

Compensation  cost for the October 15,  1998,  options was based on an estimated
fair  value of $1.98 per share,  which was  calculated  using the  Black-Scholes
option pricing model with the following assumptions: exercise price of $1.20 per
share; stock price of $2.00 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 November 1, 1998,  the Company  entered  into an  agreement  with an investor
relations  firm  whereby the Board  granted  the firm  options to purchase up to
1,000,000  shares of Common Stock over a two-year  period.  Amounts and exercise
prices are as follows:

                                                 Number of   Exercise Price
             Vesting Period                        Options        Per Share
------------------------------------------ ---------------- ----------------
January 1, 1999 to March 31, 1999                   45,000            $1.20
April 1, 1999 to June 30, 1999                      70,000            $1.50
July 1, 1999 to September 30, 1999                  95,000            $1.75
October 1, 1999 to December 31, 1999               120,000            $2.00
January 1, 2000 to March 31, 2000                  135,000            $2.25
April 1, 2000 to June 30, 2000                     160,000            $2.50
July 1, 2000 to September 30, 2000                 175,000            $2.75
October 1, 2000 to December 31, 2000               200,000            $3.00
                                           ----------------
Total                                            1,000,000
                                           ----------------

The  options  are  eligible  to  vest  on a  quarterly  basis,  subject  to  the
achievement of certain market conditions surrounding the Company's stock. If the
vesting  conditions are not met, the options eligible for vesting are forfeited.
Compensation  cost will be  recorded  for the  options  when and if they  become
vested. Only vested options are exercisable.  All vested options are exercisable
until October 27, 2008. On June 30, 1999,  70,000  options  exercisable at $1.50
per share became  vested.  To determine  compensation  cost,  the 70,000  vested
options were valued at $3.26 per share based on the Black-Scholes option pricing
model, and the Company recorded $228,200 as general and administrative  expense.
The following  assumptions for the Black-Scholes option pricing model were used:
exercise price of $1.50 per share, market price on 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%. During the year ended December 31,
1999,  260,000  options at exercise prices ranging from $1.20 to $2.00 per share
were  forfeited.  During the nine months ended September 30, 2000, the remaining
670,000  options at exercise  prices  ranging from $2.50 to $3.00 per share were
forfeited.

On March 4, 1999, the Board 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 research and development 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%.

On March 28, 2000, the Board granted  484,809  warrants to purchase Common Stock
to Swartz Institutional Finance ("Swartz") pursuant to the Equity Line Letter of
Agreement  signed on that day. 280,000 warrants


                                       F-14
<PAGE>
have an exercise price of $2.062 per share.  The exercise price was equal to the
lowest  closing  price for 5 trading  days prior to the date of execution of all
Closing  Documents on May 19, 2000. The warrants were valued at $1.575 per share
based on the  Black-Scholes  option  pricing  model,  and the  Company  recorded
$441,000  as a deferred  cost of  capital,  to be charged  against  the  capital
received from each put transaction  with Swartz.  The following  assumptions for
the  Black-Scholes  option  pricing model were used:  exercise  price of $2.062,
market price of $2.625,  risk-free  interest  rate of 8.00%,  expected  dividend
yield of 0.0,  expected  life of one  year,  and  estimate  volatility  of 142%.
Subsequent  to signing the banking  agreement,  Lexon filed an S-8  registration
statement  registering  additional  outstanding  shares.  An additional  204,809
warrants  were  issued  to Swartz  to  comply  with the terms of the  Investment
Banking  Agreement which states that Swartz is entitled to own warrants equal to
10% of the total outstanding shares. The warrants have an initial exercise price
of $.68 per share.  If the date of  exercise  is more than six months  after the
date of  issuance,  the  exercise  price shall be reset  according  to the terms
outlined in the Warrant Agreement.  The warrants issued to Swartz were valued at
$1.19 per share  based on the S-8  filing and a  deferred  cost of  capital  was
recorded for $243,723. This amount is being charged against the capital received
from each put transaction with Swartz.  As of December 31, 2000, $4,922 had been
charged against paid in capital.

On May 23, 2000, the Board granted 500,000  warrants to purchase Common Stock at
an  exercise  price of $1.625  per share to  Goodbody  International,  Inc.  for
consulting  services and guidance on any matters relating to investor relations,
financial  relations,   stock  enhancement  and  public  relations  and  to  CEO
responsibilities,   including  any  financing  mergers,  acquisitions,  contract
negotiations and the possible sale of the Company.  The term of the agreement is
three years and is being amortized using the straight-line  method. The exercise
price was equal to the closing  price of the Common Stock on May 10,  2000.  The
warrants  were  valued at $2.0595 per share  based on the  Black-Scholes  option
pricing  model and the  Company  recorded  $114,422  as  consulting  expense and
$915,328  as prepaid  consulting  expense.  The  following  assumptions  for the
Black-Scholes  option pricing model were used: exercise price of $1.625,  market
price of $2.218,  risk-free  interest rate of 8.00%,  expected dividend yield of
0.0, expected life of five years, and estimated volatility of 146%.

On September 29, 2000,  the Board  granted  26,016  warrants to purchase  Common
Stock at an exercise price of $.825 per share to Swartz in conjunction  with the
first put pursuant to the Investment Banking Agreement.

On November 3, 2000, the Board granted 5,237  warrants to purchase  Common Stock
at an  exercise  price of $.4818  per share to  Swartz in  conjunction  with the
second put pursuant to the Investment Banking Agreement

Due to the uncertainty  surrounding the Company's  ability to raise  significant
amounts of capital,  effective  December 31,  2000,  the costs  associated  with
issuing   warrants  to  Swartz  and   Goodbody   were  charged  to  general  and
administrative expenses

A summary of the status of the Company's stock options at December 31, 2000, and
changes during the year then ended is presented below:

                                                         December 31, 2000
                                                  ------------------------------
                                                                Weighted Average
                                                       Shares     Exercise Price
                                                  ------------  ----------------
 Employees
 Outstanding, beginning of period                  1,687,500               $1.56
 Granted                                           1,250,000                0.84
 Exercised                                          (150,000)               1.56
 Forfeited                                          (300,000)               1.50
                                                  ------------  ----------------
 Outstanding, December 31, 2000                    2,487,500               $1.20
                                                  ------------  ----------------
 Exercisable, December 31, 2000                    2,487,500               $1.20
                                                  ------------  ----------------
 Weighted average fair value of options granted        $0.83
                                                  ------------


                                       F-15
<PAGE>
                                                        December 31, 2000
                                                  ------------------------------
                                                                Weighted Average
                                                       Shares     Exercise Price
                                                  ------------  ----------------
 Non-employees
 Outstanding, beginning of period                  1,520,000               $1.41
 Granted or Vested                                 1,016,062                1.53
 Exercised                                               ---                 ---
 Forfeited                                          (670,000)               1.50
                                                  ------------  ----------------
 Outstanding, December 31, 2000                    1,866,062               $1.44
                                                  ------------  ----------------
 Exercisable, December 31, 2000                    1,866,062               $1.44
                                                  ------------  ----------------
 Weighted average fair value of options granted        $1.71
                                                  ------------

The following table summarizes information about fixed stock options outstanding
at December 31, 2000:

<TABLE>
<CAPTION>

                                           Options Outstanding                  Options Exercisable
                                ------------------------------------------ ------------------------------
              <S>                     <C>              <C>          <C>           <C>             <C>
                                                    Weighted
                                                     Average     Weighted                       Weighted
                                       Number      Remaining      Average         Number         Average
         Range of exercise        Outstanding    Contractual     Exercise    Exercisable  Exercise Price
         prices                   at 12/31/00           Life        Price    at 12/31/00
         ---------------------- -------------- -------------- ------------ -------------- ---------------

         Employees
         $0.84-$1.5625             2,487,500      8.91 years       $1.20      2,487,500           $1.20
         Non-employees
         $0.4818-$2.062            1,866,062      5.96 years       $1.44      1,866,062           $1.44

</TABLE>


Note 12-- Income Taxes

The components of deferred income tax are as follows:

                          Inception (December                        Year Ended
                                16, 1997)  to        Year Ended    December 31,
                            December 31, 2000 December 31, 2000            1999
                          ------------------- -----------------  --------------
Net operating loss               $ 1,181,258          $474,624       $ 457,860
Stock-based compensation             581,742           393,274         188,467
Valuation allowance               (1,763,000)       (  867,898)       (646,327)
                          ------------------- -----------------  -------------
Net deferred tax asset               $   ---           $   ---         $   ---
                          ------------------- -----------------  -------------

From  inception to December 31, 2000,  the Company had a net  operating tax loss
carryforward  of  approximately  $7,992,008,  which  expires 2019 and 2020,  and
temporary  differences  related to stock-based  compensation  of  $1,895,237.  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.



                                       F-16
<PAGE>
Note 13-- Earnings per Share


 Basic and Diluted EPS Computation:                December 31,    December 31,
                                                           2000            1999
                                               ---------------- ---------------
 Net loss applicable to Common Stockholders        $(4,636,204)   $(2,402,638)
                                               ---------------- ---------------
 Weighted average shares outstanding                7,780,466       6,698,089
                                               ---------------- ---------------
 Basic and Diluted EPS                               $  (0.60)       $  (0.36)
                                               ---------------- ---------------

For the years ended  December 31, 2000 and 1999,  all options were excluded from
the EPS calculation, as their effect was anti-dilutive.

Note 14-- Uncertainties

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  The  Company  is in the  early  stages  of
development and has not established  sources of revenues  sufficient to fund the
development of business and pay operating  expenses,  resulting in a net loss of
$4,636,204 for the year ended December 31, 2000.  Management  intends to provide
the  necessary  development  and operating  capital  through sales of its Common
Stock and  increasing  revenues by gaining FDA  approval for the Ebaf Assay test
kit  and  marketing  the  test  kit  to  laboratories,   research  institutions,
hospitals,  clinics,  doctors and other  medical  professionals  throughout  the
world. The ability of the Company to continue as a going concern during the next
year depends on the  successful  completion  of the  Company's  efforts to raise
capital  and gain FDA  approval.  The  financial  statements  do not include any
adjustments  that might be  necessary  if the Company is unable to continue as a
going concern.

Note 15-- Subsequent Events

The Company is currently  negotiating  the  resolution  of a dispute with Swartz
Private  Equity,  LLC over a $100,000  non-usage  fee related to the  Investment
Banking Agreement dated May 19, 2000 (see Note 9). No legal action is pending or
threatened, and both parties are working to resolve the matter.

Subsequent to December 31, 2000,  the Company  settled the remaining  balance of
the note due to Cancer  Diagnostics,  Inc.  (see Note 5) for  236,000  shares of
Lexon, Inc. common stock. The shares issued are restricted for one year.


                                       F-17