UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-KSB
 
 (Mark
One)
 x
              ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
fiscal year ended:December 31,
2007
 
 r
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
transition period from ________________ to ________________
 
 Commission
File Number:0-24721
  LEXON TECHNOLOGIES,
INC.
 (Exact
name of registrant as specified in charter)
 Delaware
              87-0502701(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer I.D. No.)8
      Corporate Park,Suite300,Irvine,California
              92606(Address
      of principal executive offices)
              (Zip
      Code)
 
 Issuer's
telephone number, including area code:(949)
752-7700
 
 Securities
registered pursuant to section 12(b) of the Act:
 Title
      of each class
              Name
      of each exchange on which registeredNone
              N/A
 
 Securities
registered pursuant to section 12(g) of the Act:
 
 Common Stock,par value $0.001 per
share
 (Title of
class)
 
 Check
whether the issuer is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act. r
 
 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. (1) Yes ý   No r  (2)
Yes ý No  r
 
 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.  r
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ý   No
o
 
  
  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 stock was sold,
or the average bid and asked prices of such common equity, as of a specified
date within the past 60 days.
 
 As of
March 28, 2008, Lexon had 34,183,778 shares of common stock outstanding. Based
on the average bid and asked prices of the common stock at March 28, 2008, of
$0.035 per share, the market value of shares held by non-affiliates would be
$820,593.13, based on 23,445,518 shares. Lexon's stock is traded on the
over-the-counter bulletin board system under the symbol “LEXO” however trades
are thin and sporadic. Therefore, the bid and ask price may not be indicative of
any actual value in the stock.
  DOCUMENTS
INCORPORATED BY REFERENCE
 
 List
hereunder the following documents if incorporated by reference and the part of
the form 10-KSB (e.g., part I, part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or other
information statement; and (3) Any prospectus filed pursuant to rule 424(b) or
(c) under the Securities Act of 1933: None.
 
  
 
 
 TABLE OF
CONTENTS
  PART
    I.ITEM
      1.
              DESCRIPTION OF
      BUSINESS
              1ITEM
      2.
              DESCRIPTION OF
      PROPERTIES
              2ITEM
      3.
              LEGAL
      PROCEEDINGS
              2ITEM
      4.
              SUBMISSION OF MATTERS TO A VOTE
      OF SECURITIES HOLDERS
              2PART
    II.ITEM
      5.
              MARKET FOR COMMON EQUITY AND
      RELATED STOCKHOLDER MATTERS
              2ITEM
      6.
              MANAGEMENT'S DISCUSSION AND
      ANALYSIS OR PLAN OF OPERATION
              3ITEM
      7.
              FINANCIAL
      STATEMENTS
              5ITEM
      8.
              CHANGES IN AND DISAGREEMENTS WITH
      ACCOUNTANTS ON
              5ITEM
      8A.
              CONTROLS AND
      PROCEDURES
              5ITEM
      8B.
              OTHER
      INFORMATION
              5ITEM
      9.
              DIRECTORS AND EXECUTIVE OFFICERS,
      PROMOTERS, AND CONTROL
              5PART
      III.ITEM
      10.
              EXECUTIVE
      COMPENSATION
              6ITEM
      11.
              SECURITY OWNERSHIP OF CERTAIN
      BENEFICIAL OWNERS
      AND MANAGEMENT
              6ITEM
      12.
              CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS
              7ITEM
      13.
              EXHIBITS AND REPORTS ON FORM
      8-K
              8ITEM
      14.
              PRINCIPAL ACCOUNTANT FEES AND
      SERVICES
              8SIGNATURES
              9
   
  PART
I.
 
 ITEM
1.       DESCRIPTION OF BUSINESS
 
 Business
Development
 
 Lexon was
incorporated under the laws of the State of Delaware on April 20, 1989 under the
name of California Cola Distributing Company, Inc. The name was later changed to
Rexford, Inc. on October 1, 1992. Effective July 21, 1999, the name of the
Company was changed from Rexford, Inc. to Lexon Technologies, Inc.
 
 In May
2002, Lexon acquired all of the issued and outstanding stock of Phacon
Corporation, a privately-held California corporation pursuant to a Merger
Agreement. In connection with the acquisition, a majority of the Registrant's
shareholders approved a proposal to effect a 10-for-1 reverse split of the
outstanding securities, and appointed new directors nominated by Phacon. Lexon
issued 17,500,000 shares of its post-reverse common stock in exchange for a like
number of shares of Phacon plus the cancellation of an outstanding loan from
Phacon for $200,000 plus accrued interest.
 
 Following
the merger, Lexon intended to engage in the business of commercializing a
proprietary device and proprietary software package that reduces the amount of
electricity required to power various indoor lighting devices in commercial
buildings, factories, and office structures, as well as outdoor street and
parking lot lighting. However, market conditions and competition in the area of
electrical devices has caused the company to consider alternative business
strategies and to actively seek potential business acquisitions or opportunities
to enter in an effort to commence business operations outside the electrical
products area.
 
 In
December 2004, Lexon acquired majority control (90.16%) of Techone Company,
Ltd., a Republic of Korea corporation (“Techone”), through an investment of
$1,585,000. During February 2006, the Company changed the name of Techone to
Lexon Semiconductor Corporation (“Lexon Semi”). Lexon Semi is a corporation that
manufactures and sells Low Temperature Cofired Ceramic (LTCC) components. The
Company has operated Lexon Semi as a majority-owned subsidiary and the
business of Lexon Semi has been the operating business of the
Company.
 
 Most of
Lexon Semi's assets, however, were seized and sold at auction effective August
19, 2005 for $3,162,000 to satisfy certain secured creditors. Management
negotiated a lease arrangement with the acquirer to allow the Company to
continue operations and use the Lexon Semi facilities. The new landlord agreed
to lease the building, land, and equipment to the Company for 20 million South
Korean Won per month (approximately $18,000 U.S. dollars per month). However,
during July 2006, the operations of Lexon Semi were suspended due to lack of
funds. The Company presently does not have any business operations and is
seeking other business opportunities and/or potential merger
candidates.
 
 Business ofIssuer
 
 Lexon
does not propose to restrict its search for a business opportunity to any
particular industry or geographical area and may, therefore, engage in
essentially any business in any industry. Lexon's board of directors has
unrestricted discretion in seeking and participating in a business opportunity,
subject to the availability of such opportunities, economic conditions, and
other factors. Management of the Company, which in all likelihood will not be
experienced in matters relating to the business of a target business, will rely
upon its own efforts in accomplishing the business purposes of the
Company.
 
 The
analysis of new business opportunities will be undertaken by, or under the
supervision of an officer or director of the Company, who is not a professional
business analyst. In analyzing prospective business opportunities, management
may consider such matters as available technical, financial and managerial
resources; working capital and other financial requirements; history of
operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the perceived
public recognition or acceptance of products, services, or trades; name
identification; and other relevant factors.
 
 1
 The
selection of a business opportunity in which to participate is complex and
risky. Moreover, as Lexon has only limited resources, it may be difficult to
find good opportunities. There can be no assurance that the Lexon board of
directors will be able to identify and acquire any business opportunity which
will ultimately prove to be beneficial to Lexon and its shareholders. The board
of directors will select any potential business opportunity based on the
directors' and management's business judgment.
  In
implementing a structure for a particular business acquisition, the Company may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. It may also acquire
stock or assets of an existing business. On the consummation of a transaction,
it is likely that the present management and stockholders of the Company will no
longer be in control of the Company. In addition, it is likely that the
Company's officers and directors will, as part of the terms of the acquisition
transaction, resign and be replaced by one or more new officers and
directors.
 
 The
activities of the Company are subject to several significant risks which arise
primarily as a result of the fact that Lexon has no specific business at this
time and may acquire or participate in a business opportunity based on the
decision of the board of directors which potentially could act without the
consent, vote, or approval of Lexon's shareholders. The risks faced by Lexon are
further increased as a result of its lack of resources and its inability to
provide a prospective business opportunity with significant
capital.
 
 Management
intends to hold expenses to a minimum and to obtain outside services on a
contingency basis when possible. However, if Lexon engages outside advisors or
consultants to assist with the evaluation of a potential business opportunity,
it may be necessary to raise additional funds. At this time, Lexon has not
made any arrangements or definitive agreements to use outside advisors or
consultants or to raise any capital.
 
 Employees
  As of the
date hereof, we have one full-time employee. The Company believes that its
relation with its employee is good.
 
 ITEM
2.        DESCRIPTION OF
PROPERTIES
  Facilities
 
 Lexon
leases office space at 8 Corporate Park, Suite 300, Irvine,
California 92606. The lease is month to month at a rate of $800 per month.
Lexon does not anticipate requiring any additional space in the next six to
twelve months.
  ITEM
3.        LEGAL PROCEEDINGS
 
 To the
best knowledge of management, there are no pending or threatened legal
proceedings against us.
  ITEM
4.         SUBMISSION OF MATTERS TO
A VOTE OF SECURITIES HOLDERS
 
 None.
  PART II
 
 ITEM
5.         MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
 
 The
following table sets forth, for the respective periods indicated, the prices of
our Common Stock in the over the counter market as reported by a market maker on
the OTC Bulletin Board (the “OTCBB”) and the National Quotation Bureau's Pink
Sheets for the periods for which this report is being filed. Such over the
counter market quotations are based on inter-dealer bid prices, without markup,
markdown or commission, and may not necessarily represent actual
transactions.
 
 
 2
 
 Fiscal
      Year 2007
              
              High
      Bid
              
              
              Low
      BidQuarter
      ended 12/31/07
              
              $
              0.05
              
              
              $
              0.015Quarter
      ended 9/30/07
              
              $
              0.05
              
              
              $
              0.035Quarter
      ended 6/30/07
              
              $
              0.035
              
              
              $
              0.035Quarter
      ended 3/31/07
              
              $
              0.08
              
              
              $
              0.03
   Fiscal
      Year 2006
              
              High
      Bid
              
              
              Low
      BidQuarter
      ended 12/31/06
              
              $
              0.08
              
              
              $
              0.03Quarter
      ended 9/30/06
              
              $
              0.05
              
              
              $
              0.03Quarter
      ended 6/30/06
              
              $
              0.06
              
              
              $
              0.04Quarter
      ended 3/31/06
              
              $
              0.110
              
              
              $
              0.05
 
 Trading
of our common stock has been limited or sporadic. The number of our shareholders
of record at March 28, 2008 was approximately 325.
 
 We have
not paid any cash dividends to date and do not anticipate paying dividends in
the foreseeable future.
  ITEM
6.       MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 
 Cautionary Statement
Regarding Forward-Looking Statements
 
 This
report may contain “forward-looking” statements. Examples of forward-looking
statements include, but are not limited to: (a) projections of revenues, capital
expenditures, growth, prospects, dividends, capital structure and other
financial matters; (b) statements of plans and objectives of our management or
Board of Directors; (c) statements of future economic performance; (d)
statements of assumptions underlying other statements and statements about us
and our business relating to the future; and (e) any statements using the words
“anticipate,” “expect,” “may,” “project,” “intend” or similar expressions. All
forward-looking statements included in this Report are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward-looking statement. It is important to note
that the Company's actual results could differ materially from those in
such forward-looking statements. Additionally, the following discussion and
analysis should be read in conjunction with the Financial Statements and notes
thereto appearing elsewhere in this Report.
 
 General
 
 Effective
December 8, 2004, we acquired a majority control (90.16%) of Techone Company,
Ltd., a Republic of South Korea corporation (“Techone” ), through an investment
of $1,585,000 financed through the sale of our restricted common stock to two
accredited investors. During February 2006, the Company changed the name of
Techone to Lexon Semiconductor Corporation (“Lexon Semi”). Lexon Semi is a
corporation that manufactures and sells Low Temperature Cofired Ceramic (LTCC)
components. The Company has operated Lexon Semi as a majority-owned
subsidiary and the business of Lexon Semi has been the operating business of the
Company.
 
 To date,
our source of liquidity has been proceeds from the sale of our common stock, and
the issuance of convertible notes and promissory notes to finance operations and
business activities. In each year we incurred significant losses which evidently
resulted in the suspension of the business operations of Lexon Semi as of July
2006.
 
 Due to
our sole reliance on debt and equity financing to fund our operations to date,
in conjunction with the increased competition in this area, we have incurred a
loss and decided to shift our primary focus to seeking joint venture partners,
business acquisitions and business alliances in an effort to commence business
operations outside the LTCC-related market, although we have not reached any
definitive agreements to date.
 
 3
 Results of Operations for
the Year Ended December 31, 2007 compared to December 31,
2006
 
 Revenues.
We had no revenues for the year ended December 31, 2007 and December 31, 2006.
Until an appropriate business opportunity is identified, we cannot predict when
or if we will be able to generate revenues from operations.
 
 Operating
Expenses. Total operating expenses during the year ended December 31, 2007 were
$130,337, consisting of $129,127 in selling, general and administrative
expenses, and $1,210 in depreciation and amortization. Operating expenses for
the year ended December 31, 2006 were $866,724, consisting of $785,264 in
selling, general and administrative expenses, $26,559 in research and
development, $16,843 in bad debt expense, and $38,058 in depreciation and
amortization.
  Operating
expenses since inception (July 18, 2001) total $4,605,239. Our net earning per
share for the year ended December 31, 2007 was $0.02, based on a weighted
average of 34,183,778 shares outstanding.
 
 Other
Income (Expense). Other income for the year ended December 31, 2007, consisted
of a gain on debt cancellation of $888,000 as a result of an agreement with the
Company’s former officers in which the officers agreed to waive and forfeit a
portion of their respective unpaid accrued compensation, which is offset by
$8,324 in interest expense.
  Liquidity and Capital
Resources
 
 At
December 31, 2007, we had current assets of $5,255 and current liabilities of
$2,031,135 for negative working capital of $2,025,880. Current assets consisted
solely of cash and cash equivalents.
 
 At
December 31, 2007, we had net property and equipment of $1,176 as a result of
the disposal and liquidation of most of our tangible assets during the year. We
had other assets in investments of $104,189, and $5,609 in deposits and other
assets, for total other assets of $109,798. In 2003, Lexon Semi made an equity
investment of $125,967 in a 10% voting stock of Mirae Sojae Company, a Korean
entity. The value of this investment as of December 31, 2007 was
104,189.
 
 Current
liabilities at December 31, 2007, consisted of accounts payable of $535,433,
accounts payable-related parties of $402,118, accrued expenses of $831,642,
convertible notes payable of $86,960, and notes payable of $174,982, for total
current liabilities of $2,031,135. We also had contingent liabilities of
$274,610, including accrued payables to creditors.
 
 For the
year ended December 31, 2007, net cash flows used in operating activities
totaled $107,800 compared to net cash flows used in operating activities of
$318,858 in the prior year. Our operating activities since inception have been
funded by the sale of our common stock and the issuance of convertible notes and
promissory notes.
 
 For the
year ended December 31, 2007, net cash used in investing activities totaled
$1,217 for the acquisition of property and equipment of $1,460, offset by the
proceeds received on sale of fixed assets of $243. For the year ended December
31, 2006, cash flows provided by investing activities totaled $506,461 primarily
for cash received on a related party note receivable and proceeds received from
return of investment.
 
 Net cash
used in financing activities for the year ended December 31, 2007 consisted of
$108,367, including cash paid on notes payable offset by proceeds from notes
payable. In the prior year, cash provided by financing activities totaled
$189,226, including cash paid on notes payable offset by proceeds from notes
payable.
 
 To date,
our source of liquidity has been proceeds from the sale of our common stock, and
the issuance of convertible notes and promissory notes to finance operations and
business activities. In each year we incurred significant losses which have
resulted in an accumulated deficit of $5,175,231 and a working capital deficit
of approximately $2,300,000 at December 31, 2007, and limited internal financial
resources. Accordingly, our financial statements include a going concern
qualification raising substantial doubt about Lexon's ability to continue as a
going concern. Our management hopes to be able to find additional sources of
funding and/or a possible business opportunity or combination in order to
commence revenue producing business operations during fiscal year 2008, although
no definitive terms or agreements for funding or a business combination have
been reached.
  4
 ITEM
7.          FINANCIAL
STATEMENTS
 
 Our
financial statements for the reporting period are set forth immediately
following the signature page to this form 10-KSB.
   ITEM
8.          CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
 
 None.
 
 ITEM
8A.       CONTROLS AND
PROCEDURES
 
 Our
principal executive and financial officer has participated with management in
the evaluation of effectiveness of the controls and procedures required by
paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Exchange Act as of the end
of the period covered by this report. Based on that evaluation, our principal
executive and financial officer believes that our disclosure controls and
procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange
Act) are effective as of the end of the period covered by the report. There have
been no changes in our internal controls that have materially affected, or are
reasonably likely to materially affect, our internal controls over financial
reporting during the period covered by this report.
 
 ITEM
8B.       OTHER INFORMATION
 
 None.
 PART III
 
 ITEM
9.          DIRECTORS AND
EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
 
 The names
and ages of our current executive officers and directors and the positions held
by each of them are set forth below:
 
 Name
              
              
              Age
              
              
              Position
              
              
              Dates
      ServedJoon
      Ho Chang
              
              
              62
              
              
              Chairman
      of the Board
              
              
              3/07
      to presentHyung
      Soon Lee
              
              
              56
              
              
              CEO,
      CFO, Secretary, Director
              
              
              3/07
      to presentKyu
      Hong Hwang
              
              
              61
              
              
              Director
              
              
              7/01
      to present
 
 All of
our directors will hold office until the next Annual Meeting of Shareholders and
until their successors have been elected and qualified. The term of office for
each Officer is one year and until a successor is elected at the annual meeting
of the Board of Directors and is qualified, subject to removal by the Board of
Directors. We will reimburse Directors for their expenses associated with
attending Directors' meetings. However, Directors have not, nor is it
anticipated they will, receive any additional compensation for attending
Directors' meetings.
 
 Joon Ho Chang.  Mr. Chang is the
founder of Orda Korea Co., Ltd., in Seoul, Korea, and was elected Chairman and
Chief Executive Officer in 1992, upon incorporation of the company
(1992-present). Mr. Chang has been in the IT/software business and served
various companies in various capacities, including Chairman of Hyun Young
Systems Co., Ltd. (1992-1988), and was elected a board member in 1988 of Dong-A
Computer Co. and served until 1992, and of Jung Won Systems Co.
(1984-1989). Mr. Chang received his Bachelor of Arts degree in Business and
Economics from Yonsei University in 1968.
 
 Hyung Soon Lee. Prior to his appointment as
the CEO of the Company, Me. Lee served as the Project Manager of the Company
from 2004-2007 and was responsible for overseeing the expansion of the Company's
facilities. Mr. Lee served as the CEO and President of Group of Environmental
Architecture in Seoul, Korea from 1998 to 2004. Previously, Mr. Lee served in
various management positions, including his position as project manager of
Heerim Architects and Engineers (1994-1998), and Managing Director of Sungjo
Construction Co. (1992-1994). Mr. Lee received his Bachelor of Arts degree in
Architecture and Engineering from Hanyang University in Korea in
1975.
  5
 Kyu Hong Hwang. Mr. Hwang is a successful
private investor currently engaged in the ownership of Hongha restaurant in
Seoul. As a private investor and entrepreneur Mr. Hwang owned Choyung Industrial
Corporation representing Polaroid and Alcon in Korea. Mr. Hwang started his
business career with Daewoo in the office of planning and coordination. Prior to
his military service form 1969-1972, Mr. Hwang received a law degree from
Yonsei University in 1968.
 
 Compliance with Section
16(a) of the Exchange Act
 
 Section
16(a) of the Securities and Exchange Act of 1934, as amended, requires our
directors and certain officers, as well as persons who own more than 10% of a
registered class of our equity securities, (“Reporting Persons”) to file reports
of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities
and Exchange Commission. To the best of our knowledge, we believe that all
Reporting Persons have not complied on a timely basis with all filing
requirements applicable to them.
 
 Code of
Ethics
 
 None.
  ITEM
10.        EXECUTIVE
COMPENSATION
 
 Summary Compensation
Table
 
 None of
our officers or directors is currently receiving any cash compensation for their
services.
  Compensation Pursuant to
Plans
 
 None.
 
 Pension
Table
 
 Not
Applicable.
 
 Other
Compensation
 
 None.
 
 Compensation of
Directors
 
 Our
directors do not receive any cash compensation, but are entitled to
reimbursement of their reasonable expenses incurred in attending directors’
meetings.
 
 We do not
have any audit, nominating, compensation or other committee of our Board of
Directors.
 
 ITEM
11.          SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ANDMANAGEMENT
 
 The
following table sets forth as of March 28, 2008 the name and address and the
number of shares of our Common Stock, par value $0.001 per share, held of record
or beneficially by each person who held of record, or was known by us to own
beneficially, more than 5% of the shares of our Common Stock issued and
outstanding, and the name and shareholdings of each director and of all
officers and directors as a group.
 
 
 6
  Name and Address
              
              
              Number of
      Shares
              
              
              % of
      ClassJ.
      Jehy Lah
                8
      Corporate Park, #300
                Irvine,
      CA 92606
              
              
              3,232,000
      (1
              )
              
              9.45%Kenneth
      Eaken
                12131
      Drujon Lane
                Dallas,
      TX 75244
              
              
              2,576,260
      (2
              )
              
              7.54%Ben
      Hwang
                PO
      Box 17869
                Irvine,
      CA 92623
              
              
              2,366,250
      (3
              )
              
              6.92%Kyoung
      Ho Lim
                #106-530
      Apt. Hanbit-876
                Binchun-Dong,
      Pyeongtaek-Shi
                Gyeonggi-Do,
      Korea
              
              
              4,000,000
              
              
              11.70%
 
 Securities Ownership of
Officers and Directors
 Name and Address
              
              
              Number of
      Shares
              
              
              % of
      ClassHyung
      Soon Lee, CEO and CFO
                9
      Acropolis Aisle
                Irvine,
      CA 92614
              
              
              725,000(4)
              
              
              0.02%Kyu
      Hong Hwang, Director
                701
      Kwanghwamoon, #145
                Jongro-ku,
      Seoul, Korea
              
              
              4,930,000
              
              
              14.42%Joon
      Ho Chang, Chairman
                227-8
      Yatap-Dong, Bundang-Gu
                Kyung
      Gi Do, Korea
              
              
              1,000,000
              
              
              2.93%Total (3
      persons)
              
              
              6,655,000
              
              
              17.37%
 
 (1)  Mr.
Lah is the manager and controlling member of JSL Group, LLC, an entity which
holds 2,500,000 shares. JSL also holds a 50% interest in PAC21C, LLC, an entity
which holds 1,465,000 shares. Mr. Lah is also the manager of PAC21C,
LLC.
 (2)  The
number of shares held by Mr. Eaken includes shares representing his 25%
membership interest in PAC21C, LLC, an entity which holds 1,465,000
shares.
 (3)  Mr.
Hwang is the manager and controlling partner of JB Hwang, LLC, a family limited
liability company which holds 2,000,000 shares, and also has a 25% membership
interest in PAC21C, LLC, an entity which holds 1,465,000 shares.
 (4) All
of Mr. Lee’s shares are held through his wife, Kyung Joo Kang.
  ITEM
12.          CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
 
 Except as
indicated below, and for the periods indicted, there were no material
transactions, or series of similar transactions, during the fiscal years ended
December 31, 2007 and 2006, or any currently proposed transactions, or series of
similar transactions, to which we are a party, in which the amount involved
exceeds $60,000, and in which any director or executive officer, or any security
holder who is known by us to own of record or beneficially more than 5% of any
class of our common stock, or any member of the immediate family of any of the
foregoing persons, has an interest.
  7
 ITEM
13.          EXHIBITS
 
 (a)(1)
FINANCIAL STATEMENT SCHEDULES. The following financial statement schedules are
included as part of this report.
  (a)(2)
EXHIBITS. The following exhibits are included as part of this
report:
 Exhibit
      No.
              
              Description31.1
              
              Certification
      of Chief Executive Officer per Section 302 of the Sarbanes-Oxley Act of
      200231.2
              
              Certification
      of Chief Financial Officer per Section 302 of the Sarbanes-Oxley Act of
      200232
              
              Certification
      of Chief Executive and Financial Officer per Section 906 of the
      Sarbanes-Oxley Act of 2002
  ITEM
14.          PRINCIPAL
ACCOUNTANT FEES AND SERVICES
 
 Kim and
Lee
 
 Kim and
Lee was our independent auditor and examined our financial statements for the
year ended December 31, 2007 and the fiscal year ended December 31, 2006. Kim
and Lee performed the services listed below and was paid the fees listed below
for the year ended December 31, 2007.
 
 Audit
Fees
 
 Kim and
Lee was paid aggregate fees of $31,000 for the year ended December 31, 2007 for
professional services rendered for the audit of our annual financial statements
and for the reviews of the financial statements included in our quarterly
reports on Form 10-QSB during these periods.
 
 Audited-Related
Fees
 
 Kim and
Lee was not paid additional fees for either the year ended December 31, 2007, or
the fiscal year ended December 31, 2006 for assurance and related services
reasonably related to the performance of the audit or review of our financial
statements.
 
 Tax Fees
 
 Kim and
Lee was not paid fees for the year ended December 31, 2007 or professional
services rendered for tax compliance, tax advice and tax planning during this
fiscal year period.
 
 All Other
Fees
 
 Kim and
Lee was not paid any other fees for professional services during the year ended
December 31, 2007 or the fiscal year ended December 31, 2006.
  8
  SIGNATURES
 
 In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
 LEXON
      TECHNOLOGIES, INC.Date:
      March 28, 2008
                By:
                /s/ Hyung
      Soon LeeHyung
      Soon Lee
                  President,
      Chief Executive Officer and Chief Financial Officer
  
 In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates stated.
 
 
 9




LEXON
TECHNOLOGIES, INC. AND SUBSIDIARIES
 
  CONSOLIDATED
FINANCIAL STATEMENTS
  DECEMBER
31, 2007 AND 2006
  WITH
  REPORTOFINDEPENDENTREGISTERED PUBLIC ACCOUNTING
FIRM
  
 1
  
 LEXON
TECHNOLOGIES, INC. AND SUBSIDIARIES
  CONSOLIDATED
FINANCIAL STATEMENTS
  DECEMBER 31, 2007AND2006
 CONTENTS
                    PAGEREPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                    3FINANCIAL
      STATEMENTSConsolidated
      Balance Sheets
                    4Consolidated
      Statements of Operations
                    6Consolidated
      Statement of Stockholders' Deficit and Other Comprehensive Income
      (Loss)
                    7Consolidated
      Statements of Cash Flows
                    9Notes
      to Consolidated Financial Statements
                    11
      - 18
 2
  REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
 To the
Board of Directors and Stockholders
 of Lexon
Technologies, Inc. and Subsidiaries
 
 We have
audited the accompanying consolidated balance sheets of Lexon Technologies, Inc.
and Subsidiaries (development stage companies) (collectively, the “Company”) as
of December 31, 2007 and 2006, and the related consolidated statements of
operations, stockholders’ deficit and other comprehensive income (loss),
and cash flows for the years then ended.  These consolidated
financial statements are the responsibility of the company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
 The
financial statements of Lexon Technologies, Inc. and Subsidiaries as of December
31, 2005 and for the period from inception on July 18, 2001 through December 31,
2005 were audited by other auditors whose report dated April 15, 2006, on those
statements included an explanatory paragraph that the Company’s recurring losses
and negative working capital raise substantial doubt about its ability to
continue as a going concern as discussed in Note 1 to the consolidated financial
statements.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  The Company is not
required to have, nor were we engaged to perform, audits of its internal control
over financial reporting.  Our audits included consideration of
internal control over financial reporting as a basis for designating audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal
control over financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. 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 2007 and 2006 consolidated financial statements referred to
above present fairly, in all material respects, the financial position of Lexon
Technologies, Inc. and Subsidiaries as of December 31, 2007 and 2006, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note 1
to the consolidated financial statements, the Company has suffered recurring
losses from operations and had working capital deficiencies as of December 31,
2007 and 2006, which raise substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 1. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
 
 
 Los
Angeles, California
 March 25,
2008
  3
  LEXON
      TECHNOLOGIES, INC. AND SUBSIDIARIES(Development
      Stage Companies)Consolidated
      Balance SheetsDecember
      31, 2007 and 2006
  ASSETS2007
                
                
                2006CURRENT
      ASSETSCash
      and cash equivalents (Note 2)
                
                $
                5,255
                
                
                $
                227PROPERTY
      AND EQUIPMENT, net (Notes 1 and 3)
                
                
                1,176
                
                
                
                -OTHER
      ASSETSInvestments
      (Note 4)
                
                
                104,189
                
                
                
                104,839Deposits
      and other assets
                
                
                5,609
                
                
                
                6,568Total
      Other Assets
                
                
                109,798
                
                
                
                111,407TOTAL
      ASSETS
                
                $
                116,229
                
                
                $
                111,634
  4
  LEXON
      TECHNOLOGIES, INC. AND SUBSIDIARIES(Development
      Stage Companies)Consolidated
      Balance SheetsDecember
      31, 2007 and 2006
  LIABILITIES
      AND STOCKHOLDERS' DEFICIT2007
                
                
                2006CURRENT
      LIABILITIESAccounts
      payable
                
                $
                535,433
                
                
                $
                546,764Due
      to related parties (Note 5)
                
                
                402,118
                
                
                
                421,753Accrued
      expenses (Note 6)
                
                
                831,642
                
                
                
                1,658,316Convertible
      debentures (Note 11)
                
                
                86,960
                
                
                
                128,575Notes
      payable (Note 7)
                
                
                174,982
                
                
                
                25,000Total
      Current Liabilities
                
                
                2,031,135
                
                
                
                2,780,408CONTINGENT
      LIABILITIES (Note 6)
                
                
                274,610
                
                
                
                274,610STOCKHOLDERS'
      DEFICITCommon
      stock, par value $0.001 per share;100,000,000
      shares authorized;34,183,778
      shares issued and outstanding
                
                
                34,184
                
                
                
                34,184Additional
      paid-in capital
                
                
                3,066,839
                
                
                
                3,066,839Accumulated
      other comprehensive loss (Note 10)
                
                
                (115,308
                )
                
                
                (119,837
                )Deficit
      accumulated during the development stage
                
                
                (5,175,231
                )
                
                
                (5,924,570
                )Total
      Stockholders' Deficit
                
                
                (2,189,516
                )
                
                
                (2,943,384
                )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                
                $
                116,229
                
                
                $
                111,634
  5
 LEXON
      TECHNOLOGIES, INC. AND SUBSIDIARIES(Development
      Stage Companies)Consolidated
      Statements of OperationsFor
      the Years Ended December 31, 2007 and 2006 andthe
      Period from Inception on July 18, 2001 through December 31,
      2007
  From
      Inceptionon
      July 18, 2001For
      the Years Ended
              
              
              ThroughDecember
      31,
              
              
              December
      31,2007
              
              
              2006
              
              
              2007REVENUES
              
              $
              -
              
              
              $
              -
              
              
              $
              22,031EXPENSESResearch
      and development
              
              
              -
              
              
              
              26,559
              
              
              
              495,688Selling,
      general and administrative
              
              
              129,127
              
              
              
              785,264
              
              
              
              3,955,468Bad
      debt expense
              
              
              -
              
              
              
              16,843
              
              
              
              52,784Depreciation
      and amortization
              
              
              1,210
              
              
              
              38,058
              
              
              
              101,299Total
      Expenses
              
              
              130,337
              
              
              
              866,724
              
              
              
              4,605,239LOSS
      FROM OPERATIONS
              
              
              (130,337
              )
              
              
              (866,724
              )
              
              
              (4,583,208
              )OTHER
      INCOME (EXPENSES)Interest
      income
              
              
              -
              
              
              
              732
              
              
              
              40,543Other
      income
              
              
              -
              
              
              
              -
              
              
              
              6,000Gain
      (loss) on sale or foreclosure of assets
              
              
              -
              
              
              
              (17,968
              )
              
              
              1,296,367Gain
      on debt cancellation (Note 6)
              
              
              888,000
              
              
              
              -
              
              
              
              907,872Interest
      expense
              
              
              (8,324
              )
              
              
              (11,518
              )
              
              
              (776,682
              )Impairment
      of goodwill
              
              
              -
              
              
              
              (1,851,692
              )
              
              
              (1,851,692
              )Loss
      from investment
              
              
              -
              
              
              
              (11,667
              )
              
              
              (11,667
              )Loss
      from discontinued operation
              
              
              -
              
              
              
              (202,764
              )
              
              
              (202,764
              )Total
      Other Income (Expenses)
              
              
              879,676
              
              
              
              (2,094,877
              )
              
              
              (592,023
              )NET
      INCOME (LOSS)
              
              $
              749,339
              
              
              $
              (2,961,601
              )
              
              $
              (5,175,231
              )BASIC
      EARNING (LOSS) PER SHARE
              
              $
              0.02
              
              
              $
              (0.09
              )WEIGHTED
      AVERAGE NUMBER OFCOMMON
      STOCKS OUTSTANDING
              
              
              34,183,778
              
              
              
              34,183,778




6


LEXON
      TECHNOLOGIES, INC. AND SUBSIDIARIES(Development
      Stage Companies)Consolidated
      Statement of Stockholders' Deficit and Other Comprehensive Income
      (Loss)the
      Period from Inception on July 18, 2001 through December 31,
      2007
  DeficitAccumulated
              
              
              AccumulatedAdditional
              
              
              
              
              
              Other
              
              
              During
      theCommon
      Stock
              
              
              Paid-in
              
              
              Subscription
              
              
              Comprehensive
              
              
              DevelopmentShares
              
              
              Amount
              
              
              Capital
              
              
              Receivable
              
              
              Income
      (loss)
              
              
              StageBalance,
      July 18, 2001
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -July
      2001 - stock issued forservices
      at $0.001 per share
              
              
              13,720,000
              
              
              
              13,720
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -August
      2001 - stock issued forcash
      at $0.25 per share
              
              
              2,280,000
              
              
              
              2,280
              
              
              
              567,720
              
              
              
              (220,000
              )
              
              
              -
              
              
              
              -October
      2001 - stock issued fortechnology
      at $0.25 pr share
              
              
              1,500,000
              
              
              
              1,500
              
              
              
              373,500
              
              
              
              -
              
              
              
              -
              
              
              
              -Net
      loss for the year endedDecember
      31, 2001
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (522,180
              )Balance,
      December 31, 2001
              
              
              17,500,000
              
              
              
              17,500
              
              
              
              941,220
              
              
              
              (220,000
              )
              
              
              -
              
              
              
              (522,180
              )Receipt
      of subscription receivable
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              220,000
              
              
              
              -
              
              
              
              -April
      2002 - stock issued to acquirePhacon
      Corporation (Note 1)
              
              
              1,648,778
              
              
              
              1,649
              
              
              
              (641,346
              )
              
              
              -
              
              
              
              -
              
              
              
              -September
      2002 - stock issued forcash
      at $0.25 per share
              
              
              280,000
              
              
              
              280
              
              
              
              69,720
              
              
              
              -
              
              
              
              -
              
              
              
              -December
      2002 - stock issued forcash
      at $0.83 per share
              
              
              120,000
              
              
              
              120
              
              
              
              99,880
              
              
              
              -
              
              
              
              -
              
              
              
              -Net
      loss for the year endedDecember
      31, 2002
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (473,510
              )Balance,
      December 31, 2002
              
              
              19,548,778
              
              
              
              19,549
              
              
              
              469,474
              
              
              
              -
              
              
              
              -
              
              
              
              (995,690
              )January
      2003 - stock issued forcash
      at $0.83 per share
              
              
              240,000
              
              
              
              240
              
              
              
              199,760
              
              
              
              -
              
              
              
              -
              
              
              
              -March
      2003 - stock issued forcash
      at $0.25 per share
              
              
              840,000
              
              
              
              840
              
              
              
              209,160
              
              
              
              -
              
              
              
              -
              
              
              
              -December
      2003 - stock issued forcash
      at $0.25 per share
              
              
              60,000
              
              
              
              60
              
              
              
              14,940
              
              
              
              -
              
              
              
              -
              
              
              
              -Foreign
      currency translation
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              4,729
              
              
              
              -Net
      loss for the year endedDecember
      31, 2003
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (611,808
              )Balance,
      December 31, 2003
              
              
              20,688,778
              
              
              $
              20,689
              
              
              $
              893,334
              
              
              $
              -
              
              
              $
              4,729
              
              
              $
              (1,607,498
              )
  7
  LEXON
      TECHNOLOGIES, INC. AND SUBSIDIARIES(Development
      Stage Companies)Consolidated
      Statement of Stockholders' Deficit and Other Comprehensive Income (Loss)
      (Continued)the
      Period from Inception on July 18, 2001 through December 31,
      2007
  DeficitAccumulated
              
              
              AccumulatedAdditional
              
              
              
              
              
              Other
              
              
              During
      theCommon
      Stock
              
              
              Paid-in
              
              
              Subscription
              
              
              Comprehensive
              
              
              DevelopmentShares
              
              
              Amount
              
              
              Capital
              
              
              Receivable
              
              
              Income
      (loss)
              
              
              StageBalance,
      December 31, 2003
              
              
              20,688,778
              
              
              $
              20,689
              
              
              $
              893,334
              
              
              $
              -
              
              
              $
              4,729
              
              
              $
              (1,607,498
              )October
      2004 - stock issued forcash
      at $0.25 per share
              
              
              4,000,000
              
              
              
              4,000
              
              
              
              996,000
              
              
              
              -
              
              
              
              -
              
              
              
              -December
      2004 - stock issued forcash
      at $0.11 per share
              
              
              6,125,000
              
              
              
              6,125
              
              
              
              693,875
              
              
              
              -
              
              
              
              -
              
              
              
              -December
      2004 - stock issued forservices
      at $0.25 pr share
              
              
              1,000,000
              
              
              
              1,000
              
              
              
              249,000
              
              
              
              -
              
              
              
              -
              
              
              
              -December
      2004 - stock issuedin
      lieu of outstanding debtat
      $0.10 per share
              
              
              2,370,000
              
              
              
              2,370
              
              
              
              234,630
              
              
              
              -
              
              
              
              -
              
              
              
              -Foreign
      currency translation
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,589
              
              
              
              -Net
      loss for the year endedDecember
      31, 2004
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (907,200
              )Balance,
      December 31, 2004
              
              
              34,183,778
              
              
              
              34,184
              
              
              
              3,066,839
              
              
              
              -
              
              
              
              6,318
              
              
              
              (2,514,698
              )Foreign
      currency translation
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (82,678
              )
              
              
              -Net
      loss for the year endedDecember
      31, 2005
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (448,271
              )Balance,
      December 31, 2005
              
              
              34,183,778
              
              
              
              34,184
              
              
              
              3,066,839
              
              
              
              -
              
              
              
              (76,360
              )
              
              
              (2,962,969
              )Foreign
      currency translation
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (20,773
              )
              
              
              -Investment
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (22,704
              )
              
              
              -Net
      loss for the year endedDecember
      31, 2006
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (2,961,601
              )Balance,
      December 31, 2006
              
              
              34,183,778
              
              
              
              34,184
              
              
              
              3,066,839
              
              
              
              -
              
              
              
              (119,837
              )
              
              
              (5,924,570
              )Foreign
      currency translation
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              4,529
              
              
              
              -Net
      income for the year endedDecember
      31, 2007
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              749,339Balance,
      December 31, 2007
              
              
              34,183,778
              
              
              $
              34,184
              
              
              $
              3,066,839
              
              
              $
              -
              
              
              $
              (115,308
              )
              
              $
              (5,175,231
              )


8
 LEXON
      TECHNOLOGIES, INC. AND SUBSIDIARIES(Development
      Stage Companies)Consolidated
      Statements of Cash FlowsFor
      the Years Ended December 31, 2007 and 2006 andthe
      Period from Inception on July 18, 2001 through December 31,
      2007
  From
      Inceptionon
      July 18, 2001For
      the Years Ended
                
                
                ThroughDecember
      31,
                
                
                December
      31,2007
                
                
                2006
                
                
                2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income (loss)
                
                $
                749,339
                
                
                $
                (2,961,601
                )
                
                $
                (5,175,231
                )Adjustments
      to reconcile net income (loss) to net cashused
      in operating activitiesDepreciation
      and amortization
                
                
                501
                
                
                
                38,058
                
                
                
                100,590Stock
      for services
                
                
                -
                
                
                
                -
                
                
                
                263,720Stock
      for technology
                
                
                -
                
                
                
                -
                
                
                
                375,000Bad
      debt expense
                
                
                -
                
                
                
                16,843
                
                
                
                52,784Impairment
      of goodwill
                
                
                -
                
                
                
                1,845,124
                
                
                
                1,845,124Gain
      on forgiveness of debt
                
                
                -
                
                
                
                -
                
                
                
                (19,872
                )(Gain)
      loss on sale of assets
                
                
                -
                
                
                
                17,968
                
                
                
                (1,297,501
                )Change
      in assets and liabilities (net of acquisition):(Increase)
      decrease in other assets
                
                
                -
                
                
                
                6,425
                
                
                
                (18,219
                )Decrease
      in other receivable
                
                
                -
                
                
                
                385,250
                
                
                
                359,992Decrease
      in prepaid expenses
                
                
                -
                
                
                
                4,684
                
                
                
                4,684Increase
      in accrued interest
                
                
                -
                
                
                
                -
                
                
                
                (76,360
                )Decrease
      in inventory
                
                
                -
                
                
                
                5,255
                
                
                
                5,255(Decrease)
      increase in accounts payable
                
                
                (30,966
                )
                
                
                323,136
                
                
                
                292,170(Decrease)
      increase in accrued expenses
                
                
                (826,674
                )
                
                
                -
                
                
                
                1,639,437Net
      Cash Used in Operating Activities
                
                
                (107,800
                )
                
                
                (318,858
                )
                
                
                (1,648,427
                )CASH
      FLOWS FROM INVESTING ACTIVITIES:Acquisition
      of property and equipment
                
                
                (1,460
                )
                
                
                10,161
                
                
                
                (4,576
                )Proceeds
      received on sale of fixed assets
                
                
                243
                
                
                
                80,065
                
                
                
                119,466Payments
      made on related party notes
                
                
                -
                
                
                
                -
                
                
                
                (235,554
                )Proceeds
      received on related party notes
                
                
                -
                
                
                
                167,000
                
                
                
                477,407Acquisition
      of investments
                
                
                -
                
                
                
                (22,704
                )
                
                
                (1,869,371
                )Proceeds
      from return of investments
                
                
                -
                
                
                
                271,939
                
                
                
                271,939Net
      Cash Provided by (Used in) Investing Activities
                
                
                (1,217
                )
                
                
                506,461
                
                
                
                (1,240,689
                )CASH
      FLOWS FROM FINANCING ACTIVITIES:Receipt
      of subscription receivable
                
                
                -
                
                
                
                -
                
                
                
                220,000Proceeds
      from related party notes
                
                
                -
                
                
                
                -
                
                
                
                239,731Proceeds
      from notes payable
                
                
                149,982
                
                
                
                -
                
                
                
                298,557Payments
      made on notes payable
                
                
                (41,615
                )
                
                
                (189,226
                )
                
                
                (493,822
                )Proceeds
      from issuance of common stock
                
                
                -
                
                
                
                -
                
                
                
                2,645,000Net
      Cash Provided by (Used in) Financing Activities
                
                
                108,367
                
                
                
                (189,226
                )
                
                
                2,909,466NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                
                
                (650
                )
                
                
                (1,623
                )
                
                
                20,350EFFECT
      OF CURRENCY EXCHANGE RATE CHANGESON
      CASH AND CASH EQUIVALENTS
                
                
                5,678
                
                
                
                (20,773
                )
                
                
                (15,095
                )CASH
      AND CASH EQUIVALENT AT BEGINNING OF PERIOD
                
                
                227
                
                
                
                22,623
                
                
                
                -CASH
      AND CASH EQUIVALENT AT END OF PERIOD
                
                $
                5,255
                
                
                $
                227
                
                
                $
                5,255
  9
 LEXON
      TECHNOLOGIES, INC. AND SUBSIDIARIES(Development
      Stage Companies)Consolidated
      Statements of Cash FlowsFor
      the Years Ended December 31, 2007 and 2006 andthe
      Period from Inception on July 18, 2001 through December 31,
      2007
 From
      Inceptionon
      July 18, 2001For
      the Years Ended
                
                
                ThroughDecember
      31,
                
                
                December
      31,2007
                
                
                2006
                
                
                2007SUPPLEMENTAL
      CASH FLOW INFORMATIONCash
      Payments For:Interest
                
                $
                -
                
                
                $
                -
                
                
                $
                717,548Non-Cash
      Investing and Financing ActivitiesStock
      issued for technology
                
                $
                -
                
                
                $
                -
                
                
                $
                375,000Stock
      issued for services
                
                $
                -
                
                
                $
                -
                
                
                $
                263,720Stock
      issued for in lieu of debt
                
                $
                -
                
                
                $
                -
                
                
                $
                237,000
 10
 LEXON
TECHNOLOGIES, INC. AND SUBSIDIARIES
 (Development
Stage Companies)
 Notes
to Consolidated Financial Statements
 December 31, 2007 and
2006
 Note
1 – Nature of Business and Going Concern
 
 (a)
              Description
      of Business
 
 Lexon
Technologies, Inc. ("the Company" or "Lexon") was incorporated in April 1989
under the laws of state of Delaware, and owns 90.16% of Lexon Semiconductor
Corporation ("Lexon Semi" or  formerly known as Techone Co., Ltd
("Techone")) which develops and manufactures Low Temperature Cofired Ceramic
(LTCC) components, including LTCC wafer probe cards, LTCC circuit boards, LTCC
Light Emitting Diode (LED) displays and related products for the semiconductor
testing and measurement, custom Printed Circuit Board (PCB), and cellular
phone industries.  The Company currently has no other business
activities.
 
 Initially
registered as California Cola Distributing Company, Inc, the Company changed its
name twice:  first to Rexford, Inc. in October 1992 and to the current
name in July 1999.
 
 In July
1999, Lexon acquired 100% of the outstanding common stock of Chicago Map
Corporation (CMC) in exchange for 10,500,000 shares of the Company's common
stock through a reverse acquisition accompanied by a recapitalization.  The
surviving entity, Lexon, reflected the assets and liabilities of Lexon and CMC
at their historical book values. Lexon dissolved CMC in 2002.
 
 In April
2002, Lexon acquired 100% of the outstanding common stock of Phacon Corporation
(Phacon) in exchange for 17,500,000 shares of Company's common stock through a
reverse acquisition accompanied by a recapitalization.  As part of the
agreement, the Company elected a 1 for 10 reverse stock split and the acquired
shares of Phacon were entirely canceled leaving the Company as the surviving
entity.
 
 In March
2003, the Company incorporated Lexon Korea Corporation (“Lexon Korea”) as a
wholly-owned subsidiary in Korea for the purpose of entering into potential
business combinations with Korean operating entities. Lexon Korea was
reorganized in August 2005, and as a result, the Company’s equity share in Lexon
Korea was reduced to 10%.
 
 In
December 2004, the Company acquired 90.16% of the voting stock of Techone
Company, Ltd, a company in Korea, by investing $1,585,000.  The
Company recognized goodwill of $1,851,692 in the acquisition.  The Company
acquired Techone to develop it as the Company’s core operating business in Korea
for manufacturing and selling LTCC related products.  However, the
development of the LTCC related products was not successful, and the operations
of Techone became highly leveraged financially.  In August 2005,
certain creditors filed an involuntary foreclosure and sold Techone’s assets
through public auction to satisfy secured debts.  This disposal of assets
resulted in a gain $1,315,469 for the year ended December 31,
2005.  In February 2006, Techone changed its name to Lexon
Semiconductor Corporation and all of its operation has been suspended due to
lack of operating working capital.
 
 11
 
 LEXON
TECHNOLOGIES, INC. AND SUBSIDIARIES
 (Development
Stage Companies)
 Notes
to Consolidated Financial Statements
 December 31, 2007 and
2006
 (b)
              Going
      Concern
 
 The
Company’s consolidated financial statements are presented on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business.  The Company has experienced
recurring losses which have resulted in an accumulated deficit of
$5,175,231 and a working capital deficit of approximately $2,300,000 as of
December 31, 2007.   The development of the LTCC related products by Lexon
Semi, which had been pursued as the Company’s core business, was unsuccessful,
and most of assets of Lexon Semi were foreclosed and sold by creditors in August
2005. Since then, the operations of Lexon Semi have been
suspended.  This situation raises substantial doubt about the
Company's ability to continue as a going concern.   The Company’s ability
to continue as a going concern is contingent upon its ability to secure
additional financing, initiate sales of its products and attain profitable
operations.
 
 As
discussed earlier within this Note and Note 3, the development of planned
products of Lexon Semi, the Company’s core business operation, was unsuccessful
and most of assets of Lexon Semi were foreclosed and sold by creditors in August
2005. Since then, the operations of Lexon Semi have been suspended.
 
 The
Company’s management is currently pursuing various sources of equity or debt
financing, although there can be no assurance that the Company will be able to
secure financing when needed or obtain on such terms that are satisfactory to
the Company.
 
 The
accompanying consolidated financial statements do not include any adjustments
relating to the recoverability and classification of asset carrying amounts or
the amount and classification of liabilities that might result from the outcome
of this uncertainty.  It is the intent of management to continue to raise
additional funds to sustain operations and to pursue acquisitions of operating
companies in order to generate future profits for the Company.
 
 
 Note
2 - Significant Accounting Policies
 
 The
following summary of significant accounting polices of the Company is presented
to assist in understanding the Company’s financial statements. These accounting
policies conform to the accounting principles generally accepted in the United
States of America, and have been consistently applied in the preparation of the
financial statements.
 
 (a)
                Basis
      of Financial Statement
Presentation
 
 These
financial statements have been prepared with the assumption that the Company
will be able to realize its assets and discharge its liabilities in the normal
course of business.
 
 (b)
                Basis of
      Consolidation
 
 The
consolidated financial statements include the accounts of Lexon Technologies,
Inc., and its majority-owned subsidiary, Lexon Semiconductor Co.,
Ltd.  All material intercompany accounts and transactions have been
eliminated in the consolidation.
 
 12
 
 LEXON
TECHNOLOGIES, INC. AND SUBSIDIARIES
 (Development
Stage Companies)
 Notes
to Consolidated Financial Statements
 December 31, 2007 and
2006
 Minority
interests are recorded to the extent of equity owned. Losses in excess of
minority interest equity capital are charged against the majority interest and
will be reversed when the losses reverse.
 
 (c)
                Unit
      of Estimates
 
 Preparation
of financial statements in accordance with accounting principles generally
accepted in the United States of America requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
related notes to financial statements.  These estimates are based on
management's best knowledge of current events and actions the Company may
undertake in the future. Actual results may ultimately differ from estimates,
although management does not believe such changes will materially affect the
financial statements in any individual year.
 
 (d)
                Revenue
      Recognition
  Revenue
is recognized, in accordance with Staff Accounting Bulletin No. 101 "Revenue
Recognition in Financial Statements" ("SAB No. 101"), when delivery has occurred
provided there is persuasive evidence of an agreement, the fee is fixed or
determinable and collection of the related receivable is probable.  As
such, the Company recognizes revenue for its products generally when the product
is shipped and title passes to the buyer.  There are no
multi-deliverables or product warranties requiring accounting
recognition.
 
 (e)
                Currency
      Translation
 
 For the
Company's foreign subsidiaries, the functional currency has been determined to
be the local currency, Korean Won.  In accordance with the Statement of
Financial Accounting Standard No. 52, “Foreign Currency Translation”, the assets
and liabilities are translated at year-end exchange rates, and operating
statement items are translated at average exchange rates prevailing during the
year.  The resultant cumulative translation adjustments to the assets and
liabilities are recorded as other comprehensive income (loss) as a separate
component of stockholders’ equity.  Exchange adjustments resulting from
foreign currency transactions are included in the determination of net income
(loss).  Such amounts are immaterial for all years presented.
 
 In
accordance with Statement of Financial Accounting Standards No. 95, "Statement
of Cash Flows," cash flows from the Company's foreign subsidiaries are
calculated based upon the local currencies.  As a result, amounts related
to assets and liabilities reported on the consolidated statements of cash flows
will not necessarily agree with changes in the corresponding balances on the
consolidated balance sheets.
 
 Since the
subsidiary's financial statements must be translated into U.S. Dollars, major
changes in the currency exchange rate between the foreign denominations and U.S.
Dollars may have a significant impact on the operations of the Company.
 Although the Company does not anticipate the currency exchange rate to be
significantly different over the next twelve months, no such assurances can be
given.
 
 (f)
                Cash andCashEquivalents
 
 Highly
liquid investments with maturities of three months or less when purchased are
considered cash equivalents and recorded at cost, which approximates fair
value.
 
 13
 
 LEXON
TECHNOLOGIES, INC. AND SUBSIDIARIES
 (Development
Stage Companies)
 Notes
to Consolidated Financial Statements
 December 31, 2007 and
2006
 (g)
                Properties
      and Equipment
 
 Properties
and equipment are stated at cost.  Major renewals and betterments are
capitalized and expenditures for repairs and maintenance are charged to expense
as incurred.  Depreciation is computed using the straight-line method
over the following periods:
 
 Buildings
      and improvements
              20-40
      yearsMachinery
      and equipment
              10
      yearsComputer
      equipment
              3
      yearsAutomobiles
              5
      yearsOffice
      and other equipment
              5
      years
 
 In
accordance with Statement of Financial Accounting Standards No. 144, the Company
records impairment of long-lived assets to be held and used or to be disposed of
when indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the carrying amount.
 
 (h)
              Investments
 
 Investments
in available-for-sale securities are being recorded in accordance with Statement
of Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities".  Equity securities that are not held
principally for the purpose of selling in the near term are reported at fair
market value with unrealized holding gains and losses excluded from earnings and
reported as a separate component of stockholders' equity.  Investments
in equities where the Company has the ability to exercise influence over the
operations are accounted for using the equity method.
  (j)
              Intangible
      Assets
 
 Intangible
assets such as cost of obtaining industrial rights and patents are stated at
cost, net of   amortization computed using the straight-line
method over five to ten years.
 
 (k)
              Basic
      Earning (Loss) Per Share
 
 The
computations of basic earning (loss) per share of common stock are based on the
weighted average number of common shares outstanding during the each period of
the consolidated financial statements.  Common stock equivalents,
consisting of stock options and warrants, have not been included in the
calculation as their effect is anti-dilutive for the periods
presented.
 
 The
following is a reconciliation of the numerators and denominators of the earning
(loss) per share computations at December 31:
 
 
 14
 LEXON
TECHNOLOGIES, INC. AND SUBSIDIARIES
 (Development
Stage Companies)
 Notes
to Consolidated Financial Statements
 December 31, 2007 and
2006
 2007
              
              
              2006Numerator
      – income (loss) for the year
              
              $
              749,339
              
              
              $
              (2,961,601
              )Denominator
      – weighted average number of shares outstanding
              
              
              34,183,778
              
              
              
              34,183,778Earning
      (loss) per share
              
              $
              0.02
              
              
              $
              (0.09
              )
  (l)
                Financial
    Instruments
 Fair
values of cash equivalents, short-term and long-term investments and short-term
debt approximate their costs.  The estimated fair values of other
financial instruments, including debt, equity and risk management instruments,
have been determined using market information and valuation methodologies,
primarily discounted cash flow analysis.  These estimates require
considerable judgment in interpreting market data, and changes in assumptions or
estimation methods could significantly affect the fair value estimates.
 (m)
                  Recent Accounting
  Pronouncements
 In June 2006, the FASB issued Interpretation No. 48,
Accounting for Uncertainty in Income Taxes (“FIN 48”). FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in the Company’s financial
statements in accordance with SFAS No. 109. FIN 48 prescribes a recognition
threshold and measurement attributes for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. The
provisions of FIN 48 are effective for the fiscal years beginning after
December 15, 2006. The Company does not expect that the adoption of FIN 48
will have a significant effect on its financial statements.
 
 In
February 2007, the Financial Accounting Standards Board ("FASB") issued SFAS No.
159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("SFAS No. 159"), which permits entities to measure many financial instruments
and certain other items at fair value that are not currently required to be
measured at fair value. An entity would report unrealized gains and losses on
items for which the fair value option has been elected in earnings at each
subsequent reporting date. SFAS No. 159 requires disclosures that facilitate
comparisons (a) between entities that choose different measurement attributes
for similar assets and liabilities and (b) between assets and liabilities in the
financial statements of an entity that selects different measurement attributes
for similar assets and liabilities. SFAS No. 159 is effective for financial
statements issued for fiscal years beginning after November 15, 2007. Early
adoption is permitted as of the beginning of a fiscal year provided the entity
also elects to apply the provisions of SFAS No. 157 "Fair Value Measurements.”
Upon implementation, an entity shall report the effect of the first
re-measurement to fair value as a cumulative-effect adjustment to the opening
balance of retained earnings. Since the provisions of SFAS No. 159 are applied
prospectively, any potential impact will depend on the instruments selected for
fair value measurement at the time of implementation. The Company does not
expect that the adoption of SFAS No. 159 will have a significant effect on its
financial statements.
 
 15
 LEXON
TECHNOLOGIES, INC. AND SUBSIDIARIES
 (Development
Stage Companies)
 Notes
to Consolidated Financial Statements
 December 31, 2007 and
2006
 Note 3 - Property and Equipment
 
 Property
and equipment consists of the following at December 31:
 
 2007
              
              
              2006Computer
      and equipment
              
              $
              10,450
              
              
              $
              8,990Furniture
      and fixture
              
              
              4,287
              
              
              
              4,28714,737
              
              
              
              13,277Accumulated
      depreciation
              
              
              (13,561
              )
              
              
              (13,277
              )Net
      property and equipment
              
              $
              1,176
              
              
              $
              -
 
 Depreciation
expenses for the years ended December 31, 2007 and 2006 were $1,210
and $38,058, respectively.
 
 
 Note
4 - Investments
 
 In 2003,
the Company’s subsidiary in Korea, Lexon Semi, invested $125,967 in a 10% voting
stock of Mirae Sojae Company, a Korean entity.  The investment is
recorded under the cost method.  The fair value of this investment as
of December 31, 2007 and 2006 was $104,189 and $104,839,
respectively.
 
 
 Note
5 - Related Party Transactions
 
 As of
December 31, 2007, the Company has loans payable totaling $402,118 to officers,
directors and shareholders of the Company and other related individuals. These
amounts are non-interest bearing and payable on demand.
 
 
 Note
6 - Commitments and Contingencies
 
 The Company has not been able to pay
compensations to its officers on time, and the past-due compensations aggregated
$1,690,014, of which $888,000 was waived by the former officers. As a result,
the balance of the past-due compensations was reduced to $802,014 as of December
31, 2007. The Company recorded the waived amount as gain on debt cancellation
for the year ended December 31, 2007.
 
 The
Company has contingent liabilities of $274,610 to various creditors of a
predecessor company. Management determined that it is reasonably certain that
the amount will be paid in future.
 
 16
 LEXON
TECHNOLOGIES, INC. AND SUBSIDIARIES
 (Development
Stage Companies)
 Notes
to Consolidated Financial Statements
 December 31, 2007 and
2006
 Note
7 - Notes Payable
 
 Notes
payable consisted of the following at December 31:
 
 2007
              
              
              2006Note
      payable to a related party with interest at 7.5% per annum, unsecured.
      Note is in default and due on demand
              
              $
              20,000
              
              
              $
              20,000Note
      payable to an individual with interest at 7.5% per annum, unsecured. Note
      is in default and due on demand
              
              
              5,000
              
              
              
              5,000Note
      payable to an unrelated party with interest at 7.5% per annum, unsecured.
      Note is due on demand
              
              
              149,982
              
              
              
              -Total
      notes payable
              
              $
              174,982
              
              
              $
              25,000
 
 
 Note 8 - Income Taxes
  Deferred
income tax assets amounted to approximately $2,153,000 as of the December 31,
2007, resulting primarily from net operating loss carryforwards.  The
Company established valuation allowance for these deferred taxes and did not
recognize them as assets, as it is more likely than not that these assets will
not be realized in the near future.
 
 
 Note
9 - Stock Option Plan
 
 The
Company accounts for its stock options in accordance with SFAS 123(R)
"Accounting for Stock - Based Compensation" and SFAS 148 "Accounting for Stock -
Based compensation - Transition and Disclosure." Value of options granted has
been estimated by the Black Scholes option pricing model. The assumptions are
evaluated annually and revised as necessary to reflect market conditions and
additional experience.
 
 On
September 14, 2000, the Company adopted a Non-Qualified Stock Option Plan (the
"2000 Plan") under which options to acquire common stock of the Company may be
granted to employees and consultants of the Company or its subsidiaries.
 Under this Plan, a total of 250,000 (post-split) shares of options,
subject to certain restrictions, are authorized to be granted.  The
exercise price of each option is determined by the Board of Directors on the
date of grant.  The Board also determines the term, restrictions on vesting
and exercise dates with expected life of the option term not exceeding 5
years.
 
 While
147,000 options remain available for grant under the 2000 Plan, there were no
stock options granted during the years ended December 31, 2007 and
2006.
 
 
 17
 LEXON
TECHNOLOGIES, INC. AND SUBSIDIARIES
 (Development
Stage Companies)
 Notes
to Consolidated Financial Statements
 December 31, 2007 and
2006
 Note
10 - Other Comprehensive Loss
 
 The
Company reports other comprehensive income in accordance with Statement of
Financial Accounting Standards No. 130, “Reporting Comprehensive Income” (“SFAS
No. 130").  SFAS No. 130 establishes standards for reporting in the
financial statements all changes in equity during a period, except those
resulting from investments by and distributions to owners.  The cumulative
effect of foreign currency translation adjustments from South Korean Won to U.S.
dollars, which is included in other comprehensive income in the
stockholders’ equity section, consisted of the following:
 
 2007
              
              
              2006Balance,
      beginning of year
              
              $
              (119,837
              )
              
              $
              (76,360
              )Effect
      of currency translation
              
              
              4,529
              
              
              
              (20,773
              )Unrealized
      loss on investment
              
              
              -
              
              
              
              (22,704
              )Balance,
      end of year
              
              $
              (115,308
              )
              
              $
              (119,837
              )
 
 
 Note 11 - Convertible Debentures
 
 The
Company has the following convertible debenture notes outstanding at December
31:
 
 2007
              
              
              2006A
      note with 7.5% interest, convertible to 30,000 shares of the Company’s
      common stock, matured on September 9, 2004 with interest accrued at
      $9,587.
              
              $
              30,000
              
              
              $
              30,000Two
      notes with 7.5% interest, convertible to 227,840 shares of common stock,
      matured on October 30, 2005 with interest accrued at $12,857.
              
              
              56,960
              
              
              
              56,960A
      note with 7.5% interest, convertible to 166,460 shares of common stock,
      matured on April 25, 2006.
              
              
              -
              
              
              
              41,615Total
      convertible debentures
              
              $
              86,960
              
              
              $
              128,575
    18