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, 1999

                                   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. $14,631,838 as of March 31, 2000

     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, 2000, we had
7,352,735 shares of common stock, $0.001 par value, outstanding.


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INFORMATION REQUIRED IN REGISTRATION STATEMENT

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 for colon  cancer and certain  types of ovarian  and  testicular
cancers.  The Ebaf Assay is being  developed for commercial use by scientists at
North Shore University and requires approval by the FDA before it can be sold in
the United  States.  We also own,  through our  wholly-owned  subsidiary  Cancer
Diagnostics,  Inc.  ("CDI"),  the exclusive  worldwide license to the Telomerase
Assay, a blood screening test for lung cancer. The Telomerase Assay is presently
being  developed for commercial  use and requires FDA approval  before it 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 the 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,  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.  Prior to the Gentest
transaction,  UTEK was not affiliated with us. UTEK became an affiliate  because
it owns  1,000,000  shares  of our  common  stock  as a  result  of the  Gentest
transaction.  At December 31, 1999,  UTEK owned about 14.69% 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 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. To secure the promissory  note,
we pledged all of the shares of common  stock of CDI.  The shares were placed in
escrow and will be released to us upon payment in full of the secured promissory
note to UTEK.

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<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. We have two products
currently in development.  The Ebaf Assay for colon cancer is being developed by
scientists at North Shore Long Island Jewish  Medical  Center in Manhasset,  New
York ("North Shore") and the Telomerase Assay for lung cancer is being developed
by scientists at the University of Maryland, Baltimore ("UMB").

     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, embarassing 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 now Chief of  Experimental  Pathology  and Professor in
Pathology at North  Shore,  where he is directing  the  development  of the Ebaf
Assay for the ELISA format.  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.

     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

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<PAGE>

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.

     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 our  potential
products,   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 be unable to find a  collaborative  partner,  enter into an  alliance  on
favorable  terms or enter into an alliance that will 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.

     3. Status of Publicly Announced Products or Services

     EBAF ASSAY

     The  Ebaf  Assay  is  still in  development.  The  development  plan in our
sponsored  research  agreement with North Shore calls for a team of researchers,
under the direction of Dr. Tabibzadeh, to:

o    Identify and classify a polyclonal antibody to the ebaf protein
o    Identify and classify a monoclonal antibody to the ebaf protein
o    Make a small number of ELIZA  format test kits o Compare and analyze  blood
     tests using the ELISA and the Western Blot methods
o    Determine  the normal  amounts  of the ebaf  protein in the blood of normal
     individuals
o    Determine the amount of ebaf protein in the blood of cancer patients

     Dr.  Tabibzadeh has identified and classified the monoclonal and polyclonal
antibodies.  He is presently making a small number of Ebaf Assay ELISA test kits
and is  determining  how many tests will be  conducted.  After the test kits are
made,  he will sample the blood of persons who have colon  cancer and of persons
who do not have colon  cancer.  The blood  samples will then be tested using the
Western Blot method and the ELISA  method to determine  whether the ELISA method
produces  results  similar to the Western  Blot  method.  We  estimate  that the
comparative  analysis of tests using the Western Blot and ELISA  methods will be
completed  by the end of the third  quarter of 2000.  The data from these  tests
will then be used as the basis for our preliminary  proposal for clinical trials
to the FDA. We do not know how much data the FDA will require and  consequently,
how long the  clinical  trials will take.  The Ebaf Assay  requires FDA approval
before it can be sold in the U.S.

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<PAGE>


     TELOMERASE ASSAY

     The  Telomerase  Assay is still in  development.  On August 27,  1999,  our
wholly-owned  subsidiary,  CDI, agreed 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 at  UMB.  The  development  plan  calls  for a team of
researchers, under the direction of Dr. Highsmith, to:

o    Develop a series of monoclonal  antibodies to telomerase (estimated time to
     complete: 8-10 months).
o    Develop an ELISA format test,  using a  commercially  available  polyclonal
     antibody  and  the  monoclonal  antibodies  developed  above  to  test  for
     telomerase  in human  blood  (estimated  time  complete:  2-4 months  after
     development of the monoclonal antibodies).
o    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).

     We do not know how much data the FDA will  require  and  consequently,  how
long the clinical  trials will take. The Telomerase  Assay requires FDA approval
before it can be sold in the U.S.

     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.

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     6. Dependence on one or a few major customers

     Not Applicable

     7. Patents, trademarks, licenses, royalty agreements or labor contracts

     PATENTS

     We do not own any 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 be issued.

     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.  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  December  31,  1999,  we paid  $27,504  and will pay the
balance of $54,108  during 2000. The Company is current in its payments to North
Shore.

     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

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<PAGE>

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,  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 is due on or before January 1, 2001. The  development  plan calls for a
team of researchers, under the direction of Dr. Highsmith, to:

o    Develop a series of monoclonal  antibodies to telomerase (estimated time to
     complete: 8-10 months)
o    Develop an immunoassay  (ELISA format) to detect  telomerase in human blood
     (estimated  time complete:  2-4 months after  development of the monoclonal
     antibodies)
o    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)

     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.

     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.

     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

                                       7
<PAGE>

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 the 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

     From July 1998 to December  31, 1999,  we paid  $358,554 to North Shore for
development  of the Ebaf Assay.  Of this  amount,  $321,500 was paid during 1998
pursuant to our sponsored research agreement with North Shore,  $27,054 was paid
during  1999  as part  of our  commitment  to  fund  an  additional  $81,162  to
accelerate the  development of the Ebaf Assay,  and $10,000 was paid during 1999
to cover miscellaneous  laboratory expenses for Dr. Tabibzadeh.  No customer has
or is expected to bear any direct research and development expense.

     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.  Our sole  officer  and  director  and our
significant  employees  did not receive  cash  compensation  for their  services
during 1999 and have  received no such cash  compensation  to date.  There is no
assurance   that  these   individuals   will  continue  to  serve  without  cash
compensation.  There are no  written  employment  agreements.  During  1999,  we
prepaid $8,125 for one part-time person to perform  accounting duties until June
30, 2000.

Item 2.  Description of Property

     Our executive  offices are leased from Oklahoma National Bank. We share the
executive  offices with other  companies owned or controlled by our sole officer
and director.  Our portion of the $4,000 monthly lease payment is  approximately
$800 per month.

                                       8
<PAGE>

Item 3. Legal Proceedings

     None

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,  beginning  November 4, 1998,  when our common  stock was first
traded. 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
         -------------                               ----             ---
         December 31, 1998 (beginning 11/4/98)      $3.25            $2.00
         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

     (b) Holders

     As of December 31, 1999,  there were  approximately 50 holders of record of
our common stock.

     (c) Dividend Policy

     We have not  declared  or paid,  and for the  foreseeable  future we do not
anticipate declaring or paying, dividends on our common stock.

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.

     During  2000,  we  plan  to  raise  additional   capital  to  complete  the
development  of the  Ebaf  Assay  and to fund  the  gathering  of  data  for FDA
approval, and to seek strategic alliances or business combination partners.

     We plan to seek business alliance partners in the  pharmaceutical  industry
with existing manufacturing, distribution and marketing capabilities. We have no
such partners at this time.  There is no assurance that we will be successful in
making acceptable arrangements for business alliances.

     (i) Cash Requirements

     We require substantial  additional working capital to finish development of
the Ebaf Assay, to begin collecting data, and to commence and complete  clinical
trials required for FDA approval. We estimate that we will require approximately
$5.0 million in additional  capital during the year 2000.  There is no assurance
that the

                                       9
<PAGE>

additional  capital required will be available to Lexon on acceptable terms when
needed, if at all. Any additional  capital may involve  substantial  dilution to
the interests of Lexon's then existing shareholders.

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

     EBAF ASSAY

     During the next 12 months,  Dr. Tabibzadeh will make a small number of Ebaf
Assay ELISA test kits and will sample the blood of persons who have colon cancer
and of persons  who do not have colon  cancer.  The blood  samples  will then be
tested using the Western  Blot method and the ELISA method to determine  whether
the ELISA  method  produces  results  similar to the  Western  Blot  method.  We
estimate that the comparative analysis of tests using the Western Blot and ELISA
methods will be completed by the end of the third quarter of 2000. The data from
these  tests  will then be used as the basis for our  preliminary  proposal  for
clinical  trials to the FDA.  We do not know how much data the FDA will  require
and consequently, how long the clinical trials will take.

     TELOMERASE ASSAY

     During the next 12 months, Dr. Highsmith and his team will develop a series
of monoclonal antibodies to telomerase (estimated time to complete: 8-10 months)
and will develop an  immunoassay  (ELISA  format test) to detect  telomerase  in
human blood  (estimated  time  complete:  2-4 months  after  development  of the
monoclonal antibodies)

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

     None.

     (iv) Expected Significant changes in number of employees.

     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 58, 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 the sole officer and director of Maxxon,  Inc.  (OTC  Bulletin
Board:  MXON).  Mr.  Mabie is also an  officer  and  director  of the  following
privately-held emerging technology companies:

                                       10
<PAGE>

     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 50, is Medical Director for Lexon.  Prior to
joining Lexon, 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.).

     Rhonda R. Vincent,  age 36, 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. (OTCBB:  CVIA), then a multimedia software development
company.  For five years prior  thereto,  Ms.  Vincent held various  accounting,
finance 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.

     Vicki L. Pippin, age 40, is Administrative Manager for Lexon. She has
had more than 20 years in senior  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.  The following  tables provide  details about the common stock
options that were granted to Mr. Mabie during 1999:
<TABLE>
<CAPTION>

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
<S>                       <C>                 <C>                   <C>                  <C>
                        Number of     % of Total Options
                       Securities             Granted to
               Underlying Options    Employees in Fiscal
Name                      Granted                   Year      Exercise Price        Expiration Date
-------------  ------------------    -------------------      --------------        ---------------

Gifford Mabie             250,000                 14.81%             $1.5625          March 3, 2009

</TABLE>

                                       11

<PAGE>

<TABLE>
<CAPTION>

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES

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

                                              Number of Securities
                       Shares               Underlying Unexercised     Value of Unexercised In-
                      Aquired      Value           Options/SARs at       the-Money Options/SARs
Name              On Exercise   Realized         December 31, 1999         at December 31, 1999
-------------     -----------   --------    ----------------------     ------------------------

Gifford Mabie             N/A        N/A                250,000 (1)                      N/A (2)

</TABLE>

(1)  All options  granted to Mr. Mabie during 1999 were  exercisable at December
     31, 1999.
(2)  The  closing  price of our common  stock on  December  31, 1999 was $1.125.
     Because Mr. Mabie's  250,000  options are exercisable at $1.5625 per share,
     none were "in-the-money" at December 31, 1999.

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, 2000 and  ownership  consists of sole voting and
investment power.


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


UTEK Corporation              Beneficial Owner          1,000,000         13.60%
202 Wheeler Street
Plant City, FL 33566

Gifford M. Mabie              Sole Officer and         750,000 (2)         9.86%
8908 S. Yale Ave. #409                Director
Tulsa, OK  74137

Rhonda R. Vincent             Beneficial Owner         490,300 (3)         6.53%
8908 S. Yale Ave. #409
Tulsa, OK  74137

Frederick K. Slicker          Beneficial Owner         400,000 (4)         5.23%
4444 E. 66TH, Suite 201
Tulsa, OK  74136

Thomas R. Coughlin            Beneficial Owner         737,500 (5)         9.35%
8908 S. Yale Ave. #409
Tulsa, OK  74137

Vicki L. Pippin               Beneficial Owner         377,500 (5)         5.03%
8908 S. Yale Ave. #409
Tulsa, OK  74137

Sole Officer and Director                                 750,000          9.86%

Beneficial Owners, as a group
(5 persons)                                             3,005,300          5.40%

Sole Officer and Director and
Beneficial Owners, as a group
(5 person)                                              3,755,300         42.97%

                                       12
<PAGE>

(1)  Includes  shares of common stock issuable upon the exercise of options that
     are  currently  exercisable  or will become  exercisable  within 60 days of
     March 31, 2000. For each beneficial  owner, his or her percentage of shares
     owned was based on 7,352,735  shares issued and outstanding as of March 31,
     2000 plus the shares which each  beneficial  owner has the right to acquire
     within 60 days of March 31, 2000.
(2)  Includes  250,000  shares of common  stock  issuable  upon the  exercise of
     options
(3)  Includes  200,000  shares of common  stock  issuable  upon the  exercise of
     options
(4)  Includes  300,000  shares of common  stock  issuable  upon the  exercise of
     options and 100,000 shares owned of record by Mr. Slicker.
(5)  Includes  537,500  shares of common  stock  issuable  upon the  exercise of
     options
(6)  Includes  150,000  shares of common  stock  issuable  upon the  exercise of
     options

     COMMON STOCK OPTIONS.

     At December 31, 1999, we had  outstanding  a total of 3,207,500  options to
purchase  our common  stock at prices  ranging from $1.20 per share to $3.00 per
share, of which 2,537,500 options were exercisable.  Of the options  exercisable
at December 31, 1999,  1,687,500 were exercisable by employees at prices ranging
from $1.20 per share to $1.5625  per share;  and  850,000  were  exercisable  by
non-employees  at prices  ranging  from  $1.20 per share to  $1.5625  per share.
Details about the options  outstanding  and exercisable at December 31, 1999 can
be found in the notes to our financial statements.

Item 12. Certain Relationships and Related Transactions

     On August 4, 1999, we borrowed  $100,000 from a non-affiliated  shareholder
at a 10% interest rate due December 31, 2000.  Subsequent to year end, we repaid
the shareholder the $100,000 plus accrued interest.

     On August  4,  1999,  we  entered  into a  consulting  agreement  with UTEK
Corporation,  a  beneficial  owner  of our  common  stock,  under  which we were
obligated to pay UTEK $132,000 in consulting fees in cash or common stock during
the year 2000. Subsequent to year end, the consulting agreement was cancelled by
mutual consent.

     On July 1, 1998, we borrowed  $230,000 from an officer and a non-affiliated
shareholder.  The Notes  accrued  interest at 12% per year through  December 31,
1998 and at 14% per annum  thereafter.  The Notes,  including  accrued interest,
were paid in full in February,  1999. In connection with these loans,  the Board
granted  the  officer  options to  purchase  50,000  shares of common  stock and
granted the  non-affiliated  shareholder  options to purchase  180,000 shares of
common stock,  each at an exercise price of $1.20 per share.  The exercise price
was deemed by the Board to be the fair market  value of the stock on the date of
grant. The options expire ten years from the date of grant.

Item 13. Exhibits and Reports on Form 8-K

     None

                                       13

<PAGE>


                                    PART III

INDEX TO AND DESCRIPTION OF EXHIBITS

Exhibit
Number       Description of Exhibit
--------------------------------------------------------------------------------

2.1  Agreement and Plan of Merger between Registrant and Gentest, Inc. dated May
     11, 1998 and Certificate of Merger (1)

2.2  Agreement and Plan of Merger  between  Registrant  and Cancer  Diagnostics,
     Inc. dated August 5, 1999 (2)

2.3  Stock Purchase  Agreement between Registrant and Cancer  Diagnostics,  Inc.
     dated January 28, 2000 (3)

3.1  Certificate of Incorporation of the Registrant (1)

3.2  Bylaws of the Registrant (1)

10.1 License  Agreement  between Gentest,  Inc., the University of South Florida
     and the University of South Florida Research  Foundation,  Inc. dated April
     9, 1998 (1)

10.2 Research  and  License  Agreement  between  Gentest,  Inc.  and North Shore
     University Hospital Research Corporation dated June 22, 1998 (1)

10.3 Agreement between Registrant and North Shore Office of Grants and Contracts
     dated March 8, 1999 (1)

10.4 Investor   Relations   Services  Agreement  and  Option  Agreement  between
     Registrant and Morgan-Phillips, Inc. dated November 1, 1998 (1)

10.5 Consulting Agreement between Registrant and the Viking Group dated November
     1, 1998 (1)

10.6 Sponsorship  Commitment  Agreement between Registrant and Celebrity Images,
     representatives  for Eric Davis and the Score  Against  Colon Cancer Event,
     dated March 15, 1999 (1)

10.7 Consulting  Agreement  between  Registrant and SSP  Management  Corporation
     dated March 31, 1999 (1)

10.8 Confidentiality  Agreement between Registrant
     and Ortho-Clinical Diagnostics Corporation, dated April 19, 1999 (1)

10.9 Confidentiality   Agreement  between   Registrant  and  Chiron  Diagnostics
     Corporation, dated April 21, 1999 (1)

10.10Confidentiality Agreement between Registrant and Abbott Laboratories, dated
     June 29, 1999 (1)

10.11Consulting  Agreement  between  Registrant  and Jonathan  Dariyanani  dated
     March 1, 1999 (1)

10.12Consulting Agreement between Registrant and Dr. Tabibzadeh (1)

10.13Form of Indemnification Agreement (1)

10.14Lexon,  Inc.  1998  Stock  Option  Plan dated  August 15,  1998 and Form of
     Option Agreement (1)

10.15Consulting  Agreement  between  Registrant and UTEK  Corporation  effective
     August 4, 1999 (2)

10.16License  Agreement  between  Cancer  Diagnositics,  Inc. and  University of
     Maryland,  Baltimore  dated August 27, 1999 and amended  September 23, 1999
     (3)

10.17Sponsored   Research  Agreement  between  Cancer   Diagnostics,   Inc.  and
     University  of  Maryland,  Baltimore  dated  August  27,  1999 and  amended
     September 23, 1999 (3)

10.18Secured Promissory Note dated January 28, 2000 (3)

10.19Pledge and Security Agreement dated January 28, 2000 (3)

10.20Mutual  Release  and  Settlement  Agreement  between  Registrant  and  UTEK
     Corporation dated January 28, 2000 (4)

23.0 Consent of Tullius Taylor Sartain & Sartain LLP (4)

27.0 Financial Data Schedule at December 31, 1999 (for  electronic  filers only)
     (4)

     (1)  Incorporated herein by reference to our Form 10-SB, as amended.

     (2)  Incorporated  herein  by  reference  to our Form  10-QSB  for the nine
          months ended September 30, 1999, as amended

     (3)  Incorporated  herein by  reference  to our Form 8-K dated  January 28,
          2000 and filed February 14, 2000.

     (4)  Filed herewith

                                       14

<PAGE>


                                   SIGNATURES

In  accordance  with  Section 12 of the  Securities  Exchange  Act of 1934,  the
registrant caused this registration  statement to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                   LEXON, INC.



                                           -------------------------------------
                                   By:  Gifford Mabie, Sole Officer and Director

Date:    April 14, 2000

                                       15

<PAGE>

                                    Part F/S


                 INDEX TO FINANCIAL STATEMENTS AND RELATED NOTES


AUDITED FINANCIAL STATEMENTS

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

Balance Sheet at December 31, 1999......................................... F-2

Statement of Operations from inception (December 16, 1997)................. F-3
through December 31, 1999

Statement of Cash Flows from inception (December 16, 1997)................. F-4
through December 31, 1999

Statement of Stockholders' Equity from inception (December 16, 1997)
through December 31, 1999.................................................. F-5

Notes to Financial Statements from inception (December 16, 1997)
through December 31, 1999.................................................. F-6


<PAGE>


                                      F-1

                          INDEPENDENT AUDITORS' REPORT




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


We have audited the  acompanying  balance  sheet of Lexon,  Inc., a  Development
Stage  Company,  as  of  December  31,  1999,  and  the  related  statements  of
operations,  cash flows and  stockholders'  equity for the period from inception
(December 16, 1997) to December 31, 1999,  and for the years ended  December 31,
1999  and  1998.  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 generally accepted auditing standards
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of  material  misstatements.  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,
1999,  and the results of its  operations and its cash flows for each of the two
years in the period then  ended,  and the period from  inception,  December  16,
1997, to December 31, 1999, in conformity  with  generally  accepted  accounting
principles in the United States.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 12 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 12. 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
February 21, 2000


<PAGE>

                                      F-2

                                   Lexon, Inc.
                           (A Development Stage Company)

                                   Balance Sheet
                                 December 31, 1999




                             ASSETS
Current assets
Cash                                                           $10,041
Due from related parties                                         9,703
Prepaid consulting expenses                                      4,062
                                                     ------------------
   Total current assets                                         23,806
                                                     ------------------

Other assets
Licensed technology, net                                       146,794
Sponsored research, net                                         77,813
                                                     ------------------
      Total other assets                                       224,607
                                                     ------------------

TOTAL ASSETS                                                  $248,413
                                                     ------------------

              LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities                       $37,214
Interest payable                                                 4,900
Payable to North Shore University                               54,108
Related party payables                                         251,627
                                                     ------------------
   Total current liabilities                                   347,849
                                                     ------------------

Shareholders' deficiency
Preferred stock, $0.001 par value,
   5,000,000 shares authorized;  no shares
   issued and outstanding at December 31, 1999 and
   December 31, 1998, respectively                                  -
Common stock, $0.001 par value,
   45,000,000 shares authorized;
   6,809,513 shares and 6,279,313 shares
   issued and outstanding at December 31, 1999 and
   December 31, 1998, respectively                               6,810
Paid in capital                                              3,249,558
Deficit accumulated during the development stage            (3,355,804)
                                                     ------------------
                                                               (99,436)
                                                     ------------------

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY                $248,413
                                                     ------------------


     The accompanying notes are an integral part of the financial statements

                                  Page 1 of 13


<PAGE>

                                      F-3

                                   Lexon, Inc.
                          (A Development Stage Company)

                            Statements of Operations
        From Inception (December 16, 1997) through December 31, 1999 and
                 For the Years Ended December 31, 1999 and 1998


                                   From inception
                                    (December 16,
                                    1997) through     Year ended     Year ended
                                     December 31,   December 31,   December 31,
                                             1999           1999           1998
                                   --------------   ------------   ------------

Revenue                                       $ -            $ -            $ -

Expenses
Research and development                  807,655        626,122        181,533
General and administrative              2,166,747      1,768,198        396,830
                                   --------------   ------------   ------------
   Total operating expenses             2,974,402      2,394,320        578,363

Operating loss                         (2,974,402)    (2,394,320)      (578,363)

Interest expense                          381,402          8,318        373,084
                                   --------------   ------------   ------------
Net loss                             $ (3,355,804)  $ (2,402,638)    $ (951,447)

Weighted average shares outstanding     5,448,007      6,698,089      4,253,702
                                   --------------   ------------   ------------
Loss per share                            $ (0.62)       $ (0.36)       $ (0.22)
                                   --------------   ------------   ------------

     The accompanying notes are an integral part of the financial statements

                                  Page 2 of 13


<PAGE>

<TABLE>
<CAPTION>

                                      F-4

                                   Lexon, Inc.
                          (A Development Stage Company)

                            Statements of Cash Flows
        From Inception (December 16, 1997) through December 31, 1999 and
                 For the Years Ended December 31, 1999 and 1998


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

                                                                            From inception
                                                                             (December 16,
                                                                             1997) through       Year ended       Year ended
                                                                              December 31,     December 31,     December 31,
                                                                                      1999             1999             1998
                                                                            --------------     ------------     ------------
Operating activities
Net loss                                                                      $ (3,355,804)    $ (2,402,638)      $ (951,447)
Plus non-cash charges:
   Amortization of license and sponsored research agreements                       247,645          165,096           82,549
   Value of common stock options granted to non-employees for services           1,299,219        1,101,249          197,970
   Amortization of Stock Options Issued to Non-employee Lenders                    356,346                           356,346
   Value of services contributed by employees                                      501,479          280,000          220,000
   Value of stock issued for services                                              221,675          221,675                -
Change in working capital accounts:
   Increase in prepaid expenses                                                     (4,063)          (4,063)               -
   Increase in other receivables                                                    (9,703)          (9,703)               -
   Increase in accounts payable and accrued liabilities                             37,214           12,087           24,887
   Increase (decrease) in interest payable                                           4,900          (11,839)          16,739
   Future Obligation for research and consulting expenses                          186,108          186,108                -
                                                                            --------------      -----------      -----------
      Total operating activities                                                  (514,984)        (462,028)         (52,956)
                                                                            --------------      -----------      -----------
Financing activities
Loans from officer and shareholder                                                 349,627          119,627          230,000
Payment of loans from officer and shareholder                                     (230,000)        (230,000)               -
Sale of common stock for cash
   To founders                                                                       5,000                -            5,000
   To third-party investors                                                        926,208          557,550          368,658
   Less:  issue costs                                                             (140,498)         (92,210)         (48,288)
   To employees upon exercise of employee stock options                             85,938           85,938                -
                                                                            --------------      -----------      -----------
      Total financing activities                                                   996,275          440,905          555,370
                                                                            --------------      -----------      -----------
Investing activities
Purchase of exclusive licenses                                                    (160,000)               -         (160,000)
Payment of sponsored research contract                                            (311,250)               -         (311,250)
                                                                            --------------      -----------      -----------
      Total investing activities                                                  (471,250)               -         (471,250)
                                                                            --------------      -----------      -----------

Change in cash                                                                      10,041          (21,123)          31,164
Cash at beginning of period                                                              -           31,164                -
                                                                            --------------      -----------      -----------
Cash at end of period                                                             $ 10,041         $ 10,041         $ 31,164
                                                                            --------------      -----------      -----------
Supplemental disclosure of cash flow information:
   Cash paid for interest and taxes during the period                                    -                -                -
                                                                            --------------      -----------      -----------
Non-cash financing and investing activities:
   Common stock issued in Gentest Merger                                             1,000                -            1,000
                                                                            --------------      -----------      -----------

</TABLE>

     The accompanying notes are an integral part of the financial statements

                                  Page 3 of 13


<PAGE>

<TABLE>
<CAPTION>

                                      F-5

                                   Lexon, Inc.
                          (A Development Stage Company)

                        Statements of Shareholders' Equity
        From Inception (December 16, 1997) through December 31, 1999 and
                 For the Years Ended December 31, 1999 and 1998


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

                                                       Shares of          Common        Paid In      Net Income
                                                           Stock           Stock        Capital           (Loss)          Total
                                                       ---------          ------      ---------      ----------       ---------
Balance at December 16, 1997 (Inception)                       -          $    -      $       -      $        -       $       -

Services contributed by officer                                                           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
Services contributed 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)
                                                       ---------          ------      ---------      ----------       ---------


</TABLE>

     The accompanying notes are an integral part of the financial statements

                                  Page 4 of 13


<PAGE>

                                      F-6

                                   LEXON, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
        FROM INCEPTION (DECEMBER 16, 1997) THROUGH DECEMBER 31, 1999 AND
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998


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.

DEVELOPMENT STAGE OPERATIONS

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

CASH AND CASH EQUIVALENTS

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

INCOME TAXES

The Company  uses the  liability  method of  accounting  for income taxes as set
forth in Statement of Financial  Accounting  Standards No. 109,  "Accounting for
Income Taxes".  Under the liability method,  deferred taxes are determined based
on the differences between the financial  statements and tax basis 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 officers and 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, 1999 and
1998 and for the period from inception  (December 16, 1997) to December 31, 1999
the Company recorded $280,000, 220,000, and $501,479, respectively, as a capital
contribution by the officers and other employees.

FAIR MARKET VALUE OF STOCK OPTIONS AND STOCK ISSUED FOR SERVICES

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


                                  Page 5 of 13
<PAGE>



FISCAL YEAR END

The Company's fiscal year ends on December 31.

RESEARCH AND DEVELOPMENT ("R&D") COSTS

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

NEW ACCOUNTING STANDARDS

The Company adopted SFAS No. 130, "Reporting  Comprehensive Income" and SFAS No.
131,  "Disclosures  about  Segments of an  Enterprise  and Related  Information"
during  1998.  The  Company  has no  comprehensive  income  items  during  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

                                                                ================

                                  Page 6 of 13

<PAGE>


NOTE 3--  EXCLUSIVE LICENSE

On July 8, 1998,  the Company paid  $100,000 to the  University of South Florida
Research  Foundation  ("USFRF")  and $5,000 to North Shore  University  Hospital
Research  Foundation  ("North  Shore") for the  exclusive  worldwide  license to
develop and market the cancer screening test kits. In addition, the Company paid
$55,000 to UTEK for services  rendered in  connection  with securing the license
agreements.  The exclusive  license is being  amortized  over 17 years using the
straight-line   method.   At  December  31,  1999,  the  amount  of  accumulated
amortization related to the Exclusive License was $14,206.

NOTE 4--  SPONSORED RESEARCH CONTRACT

On July 8, 1998,  the Company paid  $311,250 to North Shore under the terms of a
Sponsored  Research  Agreement to develop the cancer  screening  test kits.  The
contract  specifies  a  24-month  development  period  with  costs not to exceed
$311,250.  The Sponsored  Research Agreement is amortized over 2 years using the
straight-line  method,  with  amortization  costs  recorded as R&D expenses.  At
December  31,  1999,  the  amount of  accumulated  amortization  related  to the
Sponsored Research Agreement was $233,438.

NOTE 5--  NOTES PAYABLE

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

In connection  with the loans,  the Board granted  50,000 options to the officer
and 180,000 options to the  shareholder,  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%.

NOTE 6--  COMMITMENTS AND CONTINGENCIES

FUTURE ROYALTY OBLIGATIONS UNDER EXCLUSIVE LICENSE AGREEMENT

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

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.

                                  Page 7 of 13

<PAGE>


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  controlled by the officers and directors of the Company.  During 1999
and 1998,  the  Company  recorded  $9,600 and  $11,531,  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

        ---------------------     --------------------   -------------------
                2000                          $44,594                $9,600
                2001                           45,587                 9,600
                2002                           11,462                 2,292


NOTE 7--  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 stockholders' equity.

                                  Page 8 of 13

<PAGE>

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 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. The Company recorded $200,000, $17,550
     and $4,125, respectively, as G&A expense.

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.

Lexon is authorized to issue 45,000,000 Shares of Common Stock, par value $0.001
per share, of which 6,809,513  shares were  outstanding as of December 31, 1999.
Lexon is also authorized to issue 5,000,000 Shares of Preferred Stock, par value
$0.001 per share, of which there are no shares presently  outstanding.  There is
no present intent to issue any Preferred Stock.

VOTING RIGHTS

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

DIVIDEND RIGHTS

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

LIQUIDATION RIGHTS

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

PREEMPTIVE RIGHTS

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

                                  Page 9 of 13

<PAGE>

NOTE 8--  STOCK OPTIONS

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

On October 15, 1998,  the Board  granted  300,000  options to a consultant at an
exercise price of $1.20 per share.  In exchange for the options,  the consultant
will provide the Company  financial  and  investment  consulting  services for a
one-year period beginning  October 29, 1998.  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%.  During 1998 the Company  recorded  $593,910 as a
prepaid  consulting  expense and an increase to paid in capital.  The Company is
amortizing the prepaid expense over a 12-month period,  which is the life of the
agreement.  Amortization expense included in general and administrative  expense
was $494,925 in 1999 and $98,985 in 1998.

During 1998, the Company  entered into an agreement  with an investor  relations
firm whereby the Board  granted  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

                                              ----------------

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. During the year ended December 31, 1999, 260,000 options
at exercise prices ranging from $1.20 to $2.00 per share were forfeited. 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 G&A expense. The following  assumptions for the Black-Scholes option
pricing  model were used:  exercise  price of $1.50 per share,  market  price on
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%.

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 R&D expense. The following  assumptions for the Black-Scholes option
pricing  model were used:  exercise  price of $1.5625,  market price of $1.5265,
risk- free interest rate of 5.87%, expected dividend yield of 0.0; expected life
of ten years; and estimated volatility of 117%.

                                 Page 10 of 13

<PAGE>

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 certain  officers,  directors  and
employees of the Company.  The exercise  price was equal to the closing price of
the  Company's  common  stock on the date of  grant.  No  compensation  cost was
recorded.  SFAS No. 123, "Accounting for Stock-Based  Compensation" ("SFAS 123")
provides an  alternative  method of determining  compensation  cost for employee
stock  options,  which  alternative  method  may be adopted at the option of the
Company. Had compensation cost for the 1,692,500 options granted to employees on
March 4, 1999 been  determined  consistent with SFAS 123, the Company's net loss
and EPS would have been reduced to the following pro forma amounts:

         Net loss:

                  As reported              $(2,402,638)
                  Pro forma                 (3,966,169)

         Basic and diluted EPS:

                  As reported              $     (0.36)
                  Pro forma                      (0.59)

A summary of the status of the Company's stock options at December 31, 1999, and
changes during the period then ended is presented below:

                                                      December 31, 1999

                                             -----------------------------------

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

 EMPLOYEES

 Outstanding, beginning of period                 50,000               $1.20
 Granted                                       1,692,500             $1.5625
 Exercised                                       (55,000)            $1.5625
 Forfeited                                          ---                 ---
                                             -------------    ------------------

 Outstanding, December 31, 1999                1,687,500             $1.5518
                                             -------------    ------------------

 Exercisable, December 31, 1999                1,687,500             $1.5518
                                             -------------    ------------------


 Weighted average fair value
 of options granted                                $1.49
                                             -------------


                                                      December 31, 1999

                                             -----------------------------------

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

 NON-EMPLOYEES

 Outstanding, beginning of period              1,530,000                $1.95
 Granted or Vested                               250,000              $1.5625
 Exercised                                          ---                  ---
 Forfeited                                      (260,000)               $1.77
                                             -------------    ------------------

 Outstanding, December 31, 1999                1,520,000             $1.9152

 Exercisable, December 31, 1999                  850,000             $1.3313
                                             -------------    ------------------


 Weighted average fair value
 of options granted                                $1.49
                                             -------------

                                 Page 11 of 13

<PAGE>


The following table summarizes information about fixed stock options outstanding
at December 31, 1999:


<TABLE>
<CAPTION>



                                           Options Outstanding                  Options Exercisable

                                ------------------------------------------ ------------------------------
                                                    Weighted
               <S>                      <C>             <C>         <C>             <C>            <C>
                                                     Average     Weighted
                                       Number      Remaining      Average         Number         Weighted
         Range of exercise        Outstanding    Contractual     Exercise    Exercisable          Average
         prices                   at 12/31/99           Life        Price    at 12/31/99   Exercise Price

         ---------------------- -------------- -------------- ------------ -------------- ---------------

         EMPLOYEES

         $1.20-$1.5625             1,687,500      9.67 years     $1.5518      1,687,500         $1.5518

         NON-EMPLOYEES

         $1.20-$1.5625             1,520,000      9.37 years     $1.9152        850,000         $1.3313


</TABLE>

NOTE 9--  INCOME TAXES

The components of deferred income tax are as follows:


                              Inception (December    Year ended      Year ended
                              16, 1997) to         December 31,    December 31,
                              December 31, 1999            1999            1998
                              -------------------  ------------    -------------
Net operating loss                    $ 332,209       $ 271,902        $ 60,225
Stock-based compensation                562,892         374,425         188,467
Valuation allowance                    (895,101)       (646,327)       (248,692)
                              -------------------  ------------    -------------
Net deferred tax asset                $       0       $       0        $      0


From  inception to December 31, 1999 the Company had a net operating tax loss of
approximately $3,355,841, which expires 2019 and 2020, and temporary differences
related to stock-based  compensation of $1,452,000.  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.

NOTE 10-- EARNINGS PER SHARE

                                                  December 31,    December 31,
                                                         1999            1998
BASIC AND DILUTED EPS COMPUTATION:                ------------    ------------


Net loss applicable to common stockholders        $(2,402,638)     $ (951,447)
                                                  ------------    ------------
Weighted average shares outstanding                 6,698,089       4,253,702
                                                  ------------    ------------
Basic and Diluted EPS                             $     (0.36)     $    (0.22)
                                                  ------------    ------------

For the years ended  December 31, 1999 and 1998,  all options were excluded from
the EPS calculation, as their effect was anti-dilutive.

NOTE 11-- SUBSEQUENT EVENTS

         On January 29, 2000, Lexon purchased 100% of the common stock of Cancer
Diagnostic,  Inc. ("CDI"),  a Florida  corporation,  according to the terms of a
Stock  Purchase  Agreement.  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.

                                 Page 12 of 13

<PAGE>

         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 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 place in escrow and will be released upon payment in full of Lexon's
obligation to UTEK.

         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 14.7% of the  outstanding  shares) of
Lexon Common Stock.

         By reason of the stock purchase,  CDI became a wholly-owned  subsidiary
of Lexon.  CDI still owns the  exclusive  worldwide  license  to the  Telomerase
Assay.  Under  the  terms  of the  sponsored  research  agreement,  CDI must pay
$124,537 to UMB on or before January 1, 2001.  CDI is also  obligated  under the
terms of the license  agreement  to pay a royalty of 4% of Net Sales of products
sold by Lexon. The license  agreement  provides for minimum annual royalties for
the life of the agreement,  which  coincides with the life of the last to expire
patent covering the licensed technology. 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  Agreement.  In
addition,  the  Agreement  provides for royalties of 2% of Net Sales of products
sold by sublicensees and 50% of all consideration  received by CDI for up-front,
milestone or other payments from sublicensees.

         The Agreement and Plan of Merger dated August 5, 1999 between Lexon and
CDI was cancelled by agreement of the parties.  The consulting  agreement  dated
August 4, 1999 between Lexon and UTEK in which Lexon agreed to pay UTEK $132,000
was also cancelled by agreement of the parties.

NOTE 12-- 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
$2,402,638 in 1999.  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 13-- RELATED PARTY TRANSACTIONS

         On August 4, 1999,  the Company  executed a consulting  agreement  with
UTEK Corporation,  a Florida  corporation and the sole shareholder of CDI, which
was  purchased  by Lexon  subsequent  to the year end (see  Note  11).  Lexon is
required to pay UTEK $132,000,  either in cash or in stock in consideration  for
technology merchant consulting services including identification, evaluation and
recommendation  of potential  technology  acquisitions that are synergistic with
the Company's existing cancer diagnostic testing technologies. The first payment
of $44,000 is due on or before April 1, 2000 with remaining  payments of $44,000
each being due on or before September 1 and December 1, 2000. Subsequent to year
end this agreement was canceled by mutual consent of the parties.

         On August 4, 1999, the Company borrowed  $100,000 from a related party.
The  agreement  requires that payment be received by December 31, 2000 and bears
an  interest  rate of 10%.  Subsequent  to year  end the  note  and all  accrued
interest related to it were paid in full.

                                 Page 13 of 13