UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





**FORM
      10-KSB/A**




Amendment
      No. 1





(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, 2006**





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, Suite 300, 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 (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 x  No r
      (2) Yes x No r





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes r No x





Check
      if
      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




1




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act) Yes x No
r





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





State
      the
      aggregate market value of the voting stock held by nonaffiliates computed by
      reference to the price at which the stock was sold, or the average bid and
      asked
      prices of such stock, as of a specified date within the past 60
      days:





Based
      on
      the average bid and asked prices of the common stock at March 31, 2007, 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.





As
      of May
      14, 2007, Lexon had 34,183,778 shares of common stock outstanding.




DOCUMENTS
      INCORPORATED BY REFERENCE





List
      hereunder the following documents if incorporated by reference and the part
      of
      the form 10-KSB/A (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:





The
      following document is incorporated herein by reference: Form 10-K for the fiscal
      year ended December 31, 1999, filed on May 2, 2000, is incorporated in Part
      III,
      Item 13.





Transitional
      Small Business Disclosure Format (Check one): Yes: ____; No X




2


**TABLE
      OF CONTENTS**




PART I.ITEM 1.
            DESCRIPTION OF BUSINESS
            4ITEM 2.
            DESCRIPTION OF PROPERTIES
            5ITEM 3.
            LEGAL PROCEEDINGS
            5ITEM 4.
            SUBMISSION OF MATTERS TO A VOTE OF SECURITIES
              HOLDERS
            5PART II.ITEM 5.
            MARKET FOR COMMON EQUITY AND RELATED
              STOCKHOLDER MATTERS
            5ITEM 6.
            MANAGEMENT'S DISCUSSION AND ANALYSIS
              OR PLAN
              OF OPERATION
            6ITEM 7.
            FINANCIAL STATEMENTS
            7ITEM 8.
            CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
              ON
            8ITEM 8A.
            CONTROLS AND PROCEDURES
            8ITEM 9.
            DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS,
              AND CONTROL
            8PART III.ITEM 10.
            EXECUTIVE COMPENSATION
            9ITEM 11.
            SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
              OWNERS AND MANAGEMENT
            10ITEM 12.
            CERTAIN RELATIONSHIPS AND RELATED
              TRANSACTIONS
            11ITEM 13.
            EXHIBITS AND REPORTS ON FORM
              8-K
            11ITEM 14.
            PRINCIPAL ACCOUNTANT FEES AND
              SERVICES
            12SIGNATURES
            13EX-31.1 (06DEC PRIN EXEC
              AND FIN
              302 CERT)EX-31.2 (06DEC PRIN EXEC
              AND FIN
              302 CERT)EX-32 (06DEC PRIN EXEC AND
              FIN 906
              CERT)






3




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
      of Issuer





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.





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.





4


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





We
      did
      not submit any matters submitted to a vote of our securities holders during
      the
      quarter ended December 31, 2006.




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.





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




5




Fiscal
                Year 2005
            
            
            High
                Bid
            
            
            Low
                BidQuarter
                ended 12/31/05
            
            $
            0.12
            
            $
            0.11Quarter
                ended 9/30/05
            
            $
            0.16
            
            $
            0.10Quarter
                ended 6/30/05
            
            $
            0.18
            
            $
            0.10Quarter
                ended 3/31/05
            
            $
            0.27
            
            $
            0.18





Trading
      of our common stock has been limited or sporadic. The number of our shareholders
      of record at May 14, 2007 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.





Results
      of Operations for the Year Ended December 31, 2006 compared to December 31,
      2005





Revenues.
      We had no revenues for the year ended December 31, 2006 and had minimal revenues
      of $22,031 for the prior year. 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, 2006
      were
      $866,724, consisting of $785,264 in selling, general and administrative
      expenses, $26,559 in research and development, $38,058 in depreciation and
      amortization, and $16,843 in bad debt expense. Operating expenses for the year
      ended December 31, 2005 were $1,089,538, consisting of $974,134 in selling,
      general and administrative expenses, $64,129 in research and development, and
      $51,275 in depreciation and amortization.





6


The
      decrease in operating expenses during the year ended December 31, 2006 from
      2005
      in the amount of $222,814 reflects a decline in the selling, general and
      administrative expenses by $188,860 and by $37,570 in the research and
      development expenses as a result of the suspended operations of Lexon Semi
      due
      to lack of funds.





Operating
      expenses since inception (July 18, 2001) total $4,474,902. Our net loss per
      share for the year ended December 31, 2006 was $0.09, based on a weighted
      average of 34,183,778 shares outstanding.





Other
      Income (Expense). Other expenses for the year ended December 31, 2006, consisted
      of an impairment loss of goodwill
      of $1,851,692 as a result of suspended operations of Lexon Semi and inactivity.
      Other income for the period year consisted of a gain on the foreclosure of
      assets of Lexon Semi of $1,315,469, and $16,991 in interest income, offset
      by
      $713,224 in interest expense.




Liquidity
      and Capital Resources





At
      December 31, 2006, we had current assets of $227 and current liabilities of
      $2,780,408 for negative working capital of $2,780,181. Current assets consisted
      solely of cash and cash equivalents.





At
      December 31, 2006, we had net property and equipment of $0 as a result of the
      disposal and liquidation of most of our tangible assets during the year. We
      had
      other assets in investments of $104,839, and $6,568 in deposits and other
      assets, for total other assets of $111,407. 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 was adjusted to $104,839 in 2003, and
      still
      remains at this amount as of December 31, 2006.





Current
      liabilities at December 31, 2006, consisted of accounts payable of $546,764,
      accounts payable-related parties of $421,753, accrued expenses of $1,658,316,
      convertible notes payable of $128,575, and notes payable of $25,000, for total
      current liabilities of $2,780,408. We also had contingent liabilities of
      $274,610, including accrued payables to creditors.





For
      the
      year ended December 31, 2006, net cash flows used in operating activities
      totaled $318,858 compared to net cash flows used in operating activities of
      $80,379 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, 2006, net cash provided by investing activities totaled
      $506,461 for cash received on a related party note receivable ($167,000) and
      proceeds from return of investment of $271,939, of which the Company’s
      investment of $250,000 in Nano Plasma Center Company, Ltd. (“NPC”) was
      liquidated and the proceeds of such liquidation was received in cash. For the
      year ended December 31, 2005, cash flows used by investing activities totaled
      $268,407 primarily for cash received on a related party note receivable.





Net
      cash
      used in financing activities for the year ended December 31, 2006 consisted
      of
      $189,226, including cash paid on notes payable offset by proceeds from notes
      payable. In the prior year, cash provided by financing activities totaled
      $172,406, 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 $5,924,570 at December 31, 2006, a working
      capital deficit 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 2007, although no definitive terms or agreements
      for funding or a business combination have been reached.




ITEM
      7.
      FINANCIAL STATEMENTS





Our
      financial statements for the reporting period are set forth immediately
      following the signature page to this form 10-KSB/A.




7




ITEM
      8.
      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON


ACCOUNTING
      AND FINANCIAL DISCLOSURE





We
      have
      had no disagreements with our certified public accountants with respect to
      accounting practices or procedures or financial disclosure.





At
      April
      12, 2007, the Company’s Board of Directors has engaged Kim and Lee Corporation
      (“Kim and Lee”), of Los Angeles, California, as its certifying accountants for
      the period ending December 31, 2006. The financial statements of the Company
      as
      of December 31, 2005 were audited by the Company’s prior principal accountant,
      Chisholm, Bierwolf & Nilson, LLC, of Salt Lake City, Utah (“CB&N”).
      However, as of April 12, 2007, the Company accepted CB&N’s resignation and
      engaged Kim and Lee as its independent auditor.





Other
      than a going concern qualification, the reports of CB&N on the financial
      statements for the year ended December 31, 2005 contained no adverse opinion
      or
      disclaimer of opinion and were not qualified or modified as to uncertainty,
      audit scope or accounting principles. The Company has not had any disagreements
      with CB&N on any matter of accounting principles or practices, financial
      statement disclosure, or auditing scope or procedure which disagreements if
      not
      resolved to CB&N’s satisfaction, would have caused CB&N to make
      reference to the subject matter of the disagreement in connection with its
      report.





The
      Company has not consulted Kim and Lee on either the effectiveness of the
      Company’s internal control over financial reporting or the application of
      accounting principles to a specified transaction, completed or proposed, or
      the
      type of audit opinion that might be rendered on the Company’s financial
      statements.




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.





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
            
            
            55
            
            
            CEO,
                CFO, Director
            
            
            3/07
                to presentKyu
                Hong Hwang
            
            
            61
            
            
            Director
            
            
            7/01
                to present





Effective
      March 30, 2007, J. Jehy Lah and Kenneth J. Eaken resigned as the Chairman of
      the
      Board and President/ Director of the Company, respectively. In their place,
      Joon
      Ho Chang and Hyung Soon Lee were appointed on March 30, 2007 by the single
      remaining director, Kyu Hong Hwang, as Chairman of the Board and CEO/ CFO and
      Director of the Company, respectively.





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.





8


Biographical
      Information





Set
      forth
      below is a brief background of the executive officers and directors of the
      Company, based on the information supplied by them.





Joon
      Ho
      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.





Prior
      to
      his appointment as the CEO of the Company, Hyung Soon 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.




Kyu
      Hong
      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.





Audit
      Committee





The
      Company has not established an audit committee. The board of directors acts
      as
      the audit committee.





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.




ITEM
      10.
      EXECUTIVE COMPENSATION





The
      following table sets forth certain summary information concerning the
      compensation paid or accrued to our chief executive officer and each of its
      other executive officers that received compensation in excess of $100,000 during
      such periods (as determined at December 31, 2006, the end of our last completed
      fiscal year for which this report is being filed):




Long-Term
            
            CompensationAnnual
            
            Compensation
            
            
            
            Awards
            
            PayoutsName
                and
              Principal/
              Position
            
            Year
            
            Salary
            
            Bonus
                ($)
            
            Other
              Annual
              Compensation
            
            Restricted
              Stock
              Awards
            
            Options
                /
              SARS
            
            LTIP
              Payout
            
            All
              Other
              CompensationJ.
                Jehy Lah
            
            
            2006
            
            $
            135,000
                (1
            )
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0Chairman
            
            
            2005
            
            $
            135,000
                (1
            )
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            02004
            
            $
            135,000
                (1
            )
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0Ken
                Eaken
            
            
            2006
            
            $
            125,000
                (2
            )
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0CEO
            
            
            2005
            
            $
            125,000
                (2
            )
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            02004
            
            $
            125,000
                (2
            )
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0




(1)Resigned
      as of March 30,
      2007. Accrued but not paid.


(2)Resigned
      as of March 30,
      2007. Accrued but not paid.





9


Employment
      Agreements





Prior
      to
      his resignation, Kenneth Eaken signed an employment contract with Lexon in
      February 2000 which was amended September 2000 upon his appointment as Chief
      Executive Officer. The contract was for a term of three years, automatically
      renewing for additional one year terms subject to thirty days notice of
      termination. On completion of the merger with Phacon, Mr. Eaken was the only
      officer who continued as an employee of the company. At this filing date, Mr.
      Eaken’s employment agreement is the only written employment agreement in place,
      calling for annual compensation of $125,000.





Since
      July 1, 2002, J. Jehy Lah has been accruing salary at an annual rate of $135,000
      per year, and a former director, Ben Hwang, has been accruing salary at an
      annual rate of $85,000 per year, pursuant to a resolution of the board of
      directors. In fiscal year 2003, Mr. Lah received payments of $50,000 towards
      his
      accrued salary, and Mr. Hwang received payments of $44,936 towards his accrued
      salary. In fiscal 2004, Mr. Hwang received a payment of $10,000.





The
      Company has accrued an aggregate of unpaid compensation owed to its officers
      in
      the amount of $1,658,316 as of December 31, 2006.





Pursuant
      to a resolution of the Board of Directors, Joon Ho Chang and Ben Hwang will
      receive $1 per month beginning April 1, 2007. In addition, Hyung Soon Lee has
      been accruing salary at an annual rate of $36,000 per year, pursuant to a
      resolution of the Board of Directors.





Compensation
      Pursuant to Plans





None.





Pension
      Table





Not
      Applicable.





Other
      Compensation





None.





Compensation
      of Directors





The
      directors are reimbursed for expenses incurred in connection with their service
      as directors but are not otherwise compensated.





ITEM
      11.
      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT





The
      following table sets forth as of May 14, 2007 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.





10




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
            
            
            0
            
            
            0%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)**
            
            
            **5,930,000**
            
            
            **17.35%**





(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.




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, 2006 and 2005, 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.




ITEM
      13.
      EXHIBITS AND REPORTS ON FORM 8-K





(a)(1)
      FINANCIAL STATEMENT SCHEDULES. The following financial statement schedules
      are
      included as part of this report: None.




11




(a)(2)
      EXHIBITS. The following exhibits are included as part of this
      report:


Exhibit
                No.
            
            Description3
            
            Bylaws
                of Lexon Technologies, Inc.131.1
            
            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


Information
      required by Item 9(c) of Schedule 14A





1)
      Audit
      Fees - The aggregate fees billed us for each of the last two fiscal years for
      professional services rendered by CB&N for the audit of our annual financial
      statements and review of our quarterly financial statements for the year ended
      December 31, 2005 is $33,500 and $25,000 for the services rendered by our
      current principal accountant, Kim and Lee, for the audit of our annual
      statements for the year ended December 31, 2006 and quarterly financials for
      period ended March 31, 2007.





2)
      Audit-Related Fees. None.





3)
      Tax
      Fees. None.





4)
      All
      Other Fees. None.





5)
      Not
      applicable.





6)
      Not
      Applicable.








1
      Incorporated by reference from our Form 10-K for the fiscal year ended December
      31, 1999, filed on May 2, 2000.




12


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:
      May
      16, 2007 By
      /S/
      Hyung 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.





LEXON
      TECHNOLOGIES, INC.





Date:
      May
      16, 2007 By
      /S/
      Joon Ho Chang, Chairman of the Board of Directors





Date:
      May
      16, 2007 By
      /S/
      Hyung Soon Lee, President, Chief Executive Officer and Chief Financial
      Officer





Date:
      May
      16, 2007 By
      /S/
      Kyu Hong Hwang, Director








13


**LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
  CONSOLIDATED
        FINANCIAL STATEMENTS
  DECEMBER
        31, 2006
  WITH
  INDEPENDENT
        ACCOUNTANTS’ REPORT
 
 14
  **LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
  **CONSOLIDATED
        FINANCIAL STATEMENTS**
  **DECEMBER
        31, 2006**
  **CONTENTS**
              **PAGE****REPORT
                  OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
              3**FINANCIAL
                  STATEMENTS**Consolidated
                  Balance Sheet
              4Consolidated
                  Statements of Operations
              6Consolidated
                  Statements of Stockholders’ Deficit
              7Consolidated
                  Statements of Cash Flows
              9Notes
                  to Consolidated Financial Statements
              11
                  - 18
 
 
 
 15
 
 **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 sheet of Lexon Technologies,
        Inc.
        and Subsidiaries (a
        development stage company) (the “Company”) as of December 31, 2006, and the
        related consolidated statements
        of operations, stockholders’ equity and other comprehensive income, and cash
        flows for the year 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 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, 2006, and the results
        of its operations and its cash flows for the year 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, 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.
  /s/
        Kim
& Lee Corporation
  Los
        Angeles, California
 May
        4, 2007
 
 16
  **LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
        Development Stage Company)**
 **Consolidated
        Balance Sheet**
 **December
        31, 2006**
   **ASSETS**
 CURRENT
                  ASSETSCash
                  and cash equivalents (Note 2)
              
              $
              227Due
                  from related party (Note 5)
              
              
              -Total
                  Current Assets
              
              
              227PROPERTY
                  AND EQUIPMENT, net (Notes 1 and 3)
              
              
              -OTHER
                  ASSETSInvestments
                  (Note 4)
              
              
              104,839Goodwill
                  (Note 2)
              
              
              -Deposits
                  and other assets
              
              
              6,568Total
                  Other Assets
              
              
              111,407TOTAL
                  ASSETS
              
              **$**
              **111,634**
  
 The
        accompanying notes are an integral part of these consolidated financial
        statements.
  17
  **LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
        Development Stage Company)**
 **Consolidated
        Balance Sheet**
 **December
        31, 2006**
   **LIABILITIES
        AND STOCKHOLDERS' DEFICIENCY**
  CURRENT
                  LIABILITIESAccounts
                  payable
              
              $
              546,764Due
                  to related parties (Note 5)
              
              
              421,753Accrued
                  expenses (Note 6)
              
              
              1,658,316Convertible
                  notes payable (Note 11)
              
              
              128,575Notes
                  payable (Note 7)
              
              
              25,000Total
                  Current Liabilities
              
              
              2,780,408CONTINGENT
                  LIABILITIES (Note 6)
              
              
              274,610STOCKHOLDERS'
                  DEFICIENCYCommon
                  stock, par value $0.001 per share;100,000,000
                  shares authorized; 34,183,778 shares issued and
                  outstanding
              
              
              34,184Additional
                  paid-in capital
              
              
              3,066,839Accumulated
                  other comprehensive loss (Note 10)
              
              
              (119,837
              )Deficit
                  accumulated during the development stage
              
              
              (5,924,570
              )Total
                  Stockholders' Deficiency
              
              
              (2,943,384
              )TOTAL
                  LIABILITIES AND STOCKHOLDERS' DEFICIENCY
              
              **$**
              **111,634**
  The
        accompanying notes are an integral part of these consolidated financial
        statements.
  18
  **LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
        Development Stage Company)**
 **Consolidated
        Statements of Operations**
 **For
        the Years Ended December 31, 2006 and 2005 and**
 **the
        Period from Inception on July 18, 2001 through December 31, 2006**
   For
                  the Years Ended
                December
                  31,
              
              From
                  Inception on
                  July 18, 2001
                Through
                December
                  31,
                20062006
              
              2005
              
              2006REVENUES
              
              $
              -
              
              $
              22,031
              
              $
              22,031EXPENSESResearch
                  and development
              
              
              26,559
              
              
              64,129
              
              
              495,688Selling,
                  general and administrative
              
              
              785,264
              
              
              974,134
              
              
              3,826,341Bad
                  debt expense
              
              
              16,843
              
              
              -
              
              
              52,784Depreciation
                  and amortization
              
              
              38,058
              
              
              51,275
              
              
              100,089Total
                  Expenses
              
              
              866,724
              
              
              1,089,538
              
              
              4,474,902LOSS
                  FROM OPERATIONS
              
              
              (866,724
              )
              
              (1,067,507
              )
              
              (4,452,871
              )OTHER
                  INCOME (EXPENSES)Interest
                  income
              
              
              732
              
              
              16,991
              
              
              40,543Other
                  income
              
              
              -
              
              
              -
              
              
              6,000Gain
                  (loss) on sale or foreclosure of assets (Note 3)
              
              
              (17,968
              )
              
              1,315,469
              
              
              1,296,367Gain
                  on forgiveness of debt
              
              
              -
              
              
              -
              
              
              19,872Interest
                  expense
              
              
              (11,518
              )
              
              (713,224
              )
              
              (768,358
              )Impairment
                  of goodwill (Note 2)
              
              
              (1,851,692
              )
              
              -
              
              
              (1,851,692
              )Loss
                  from investment (Note 4)
              
              
              (11,667
              )
              
              -
              
              
              (11,667
              )Loss
                  from discontinued operation
              
              
              (202,764
              )
              
              -
              
              
              (202,764
              )Total
                  Other Income (Expenses)
              
              
              (2,094,877
              )
              
              619,236
              
              
              (1,471,699
              )NET
                  LOSS
              
              $
              (2,961,601
              )
              $
              (448,271
              )
              $
              (5,924,570
              )BASIC
                  LOSS PER SHARE
              
              $
              (0.09
              )
              $
              (0.01
              )WEIGHTED
                  AVERAGE NUMBER OF COMMON STOCKS OUTSTANDING
              
              
              34,183,778
              
              
              34,183,778
 
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements.
  19
 
  **LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
        Development Stage Company)**
 **Consolidated
        Statements of Stockholders' Equity and Other Comprehensive
        Income**
 **Period
        from Inception on July 18, 2001 through December 31, 2006**
   
 **Common
                  Stock**
              
              **Additional**
                **Paid-in**
                **Capital**
              
              **Subscription**
                **Receivable**
              
              **Accumulated**
                **Other**
                **Comprehensive**
                **Income
                  (loss)**
              
              **Deficit**
                **Accumulated**
                **During
                  the**
                **Development**
                **State****Shares**
              
              **Amount**Balance,
                  July 18, 2001
              
              
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -July
                  2001 - stock issued for services at $0.001 per share
              
              
              13,720,000
              
              
              13,720
              
              
              -
              
              
              -
              
              
              -
              
              
              -August
                  2001 - stock issued for cash at $0.25 per share
              
              
              2,280,000
              
              
              2,280
              
              
              567,720
              
              
              (220,000
              )
              
              -
              
              
              -October
                  2001 - stock issued for technology at $0.25 pr share
              
              
              1,500,000
              
              
              1,500
              
              
              373,500
              
              
              -
              
              
              -
              
              
              -Net
                  loss for the period 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 acquire Phacon Corporation (Note 1)
              
              
              1,648,778
              
              
              1,649
              
              
              (641,346
              )
              
              -
              
              
              -
              
              
              -September
                  2002 - stock issued for cash at $0.25 per share
              
              
              280,000
              
              
              280
              
              
              69,720
              
              
              -
              
              
              -
              
              
              -December
                  2002 - stock issued for cash at $0.83 per share
              
              
              120,000
              
              
              120
              
              
              99,880
              
              
              -
              
              
              -
              
              
              -Net
                  loss for the period endedDecember
                  31, 2002
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (473,510
              )Balance,
                  December 31, 2002
              
              
              19,548,778
              
              
              19,549
              
              
              469,474
              
              
              -
              
              
              
              
              
              (995,690
              )January
                  2003 - stock issued for cash at $0.83 per share
              
              
              240,000
              
              
              240
              
              
              199,760
              
              
              
              
              
              
              
              
              -March
                  2003 - stock issued for cash at $0.25 per share
              
              
              840,000
              
              
              840
              
              
              209,160
              
              
              -
              
              
              
              
              
              -December
                  2003 - stock issued for cash at $0.25 per share
              
              
              60,000
              
              
              60
              
              
              14,940
              
              
              -
              
              
              -
              
              
              -Foreign
                  currency translation
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              4,729
              
              
              -Net
                  loss for the period ended December 31, 2003
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (611,808
              )Balance,
                  December 31, 2003
              
              
              20,688,778
              
              $
              20,689
              
              $
              893,334
              
              $
              -
              
              $
              4,729
              
              $
              (1,607,498
              )
 
  The
          accompanying notes are an integral part of these
          consolidated financial statements.
 20
 **LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
        Development Stage Company)**
 **Consolidated
        Statements of Stockholders' Equity and Other Comprehensive Income
        (Continued)**
 **The
        Period from Inception on July 18, 2001 through December 31, 2006**
   
 **Common
                  Stock**
              
              **Additional**
                **Paid-in**
                **Capital**
              
              **Subscription**
                **Receivable**
              
              **Accumulated**
                **Other**
                **Comprehensive**
                **Income
                  (loss)**
              
              **Deficit**
                **Accumulated**
                **During
                  the**
                **Development**
                **State****Shares**
              
              **Amount**Balance,
                  December 31, 2003
              
              
              20,688,778
              
              $
              20,689
              
              $
              893,334
              
              $
              -
              
              $
              4,729
              
              $
              (1,607,498
              )October
                  2004 - stock issued for cash at $0.25 per share
              
              
              4,000,000
              
              
              4,000
              
              
              996,000
              
              
              -
              
              
              -
              
              
              -December
                  2004 - stock issued for cash at $0.11 per share
              
              
              6,125,000
              
              
              6,125
              
              
              693,875
              
              
              -
              
              
              -
              
              
              -December
                  2004 - stock issued for services at $0.25 pr share
              
              
              1,000,000
              
              
              1,000
              
              
              249,000
              
              
              
              
              
              
              
              
              -December
                  2004 - stock issued in lieu of outstanding debt at $0.10 per
                  share
              
              
              2,370,000
              
              
              2,370
              
              
              234,630
              
              
              
              
              
              
              
              
              -Foreign
                  currency translation
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,589
              
              
              -Net
                  loss for the period ended December 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 period ended December 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 period ended December 31, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (2,961,601
              )Balance,
                  December 31, 2006
              
              
              34,183,778
              
              $
              34,184
              
              $
              3,066,839
              
              $
              -
              
              $
              (119,837
              )
              $
              (5,924,570
              )
 
  The
        accompanying notes are an integral part of these
        consolidated financial statements.
 21
 **LEXON
          TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
          Development Stage Company)**
 **Consolidated
          Statements of Cash Flows**
 **For
          the Years Ended December 31, 2006 and 2005 and**
 **the
          Period from Inception on July 18, 2001 through December 31, 2006**
  
 For
                    the Years Ended
                  December
                    31,
                
                From
                    Inception
                  on
                    July 18, 2001
                  Through
                  December
                    31,
                  20062006
                
                2005
                
                2006CASH
                    FLOWS FROM OPERATIONG ACTIVITIES:Net
                    loss
                
                $
                (2,961,601
                )
                $
                (448,271
                )
                $
                (5,924,570
                )Adjustments
                    to reconcile net income (loss) to net cash used in operating
                    activitiesDepreciation
                    and amortization
                
                
                38,058
                
                
                51,275
                
                
                100,089Stock
                    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
                
                
                (1,315,469
                )
                
                (1,297,501
                )Change
                    in assets and liabilities (net of acquisition):
                
                
                -
                
                
                
                
                
                -(Increase)
                    decrease in other assets
                
                
                6,425
                
                
                (24,644
                )
                
                (18,219
                )(Increase)
                    decrease in other receivable
                
                
                385,250
                
                
                (15,086
                )
                
                359,992Decrease
                    in prepaid expenses
                
                
                4,684
                
                
                21,749
                
                
                4,684Increase
                    in accrued interest
                
                
                -
                
                
                (82,678
                )
                
                (76,360
                )Decrease
                    in inventory
                
                
                5,255
                
                
                -
                
                
                5,255Increase
                    in accounts payable
                
                
                323,136
                
                
                -
                
                
                323,136Increase
                    in accrued expenses
                
                
                -
                
                
                1,732,745
                
                
                2,466,111Net
                    Cash Used in Operating Activities
                
                
                (318,858
                )
                
                (80,379
                )
                
                (1,540,627
                )CASH
                    FLOWS FROM INVESTING ACTIVITIES:Acquisition
                    of property and equipment
                
                
                10,161
                
                
                -
                
                
                (3,116
                )Proceeds
                    received on sale of fixed assets
                
                
                80,065
                
                
                -
                
                
                119,223Payments
                    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
                
                
                268,407
                
                
                271,939Net
                    Cash Provided by (Used in) Investing Activities
                
                
                506,461
                
                
                268,407
                
                
                (1,239,472
                )CASH
                    FLOWS FROM FINANCING ACTIVITIES:Receipt
                    of subscription receivable
                
                
                -
                
                
                -
                
                
                220,000Proceeds
                    from related party notes
                
                
                -
                
                
                -
                
                
                239,731Proceeds
                    from notes payable
                
                
                -
                
                
                75,575
                
                
                148,575Payments
                    made on notes payable
                
                
                (189,226
                )
                
                (247,981
                )
                
                (452,207
                )Proceeds
                    from issuance of common stock
                
                
                -
                
                
                -
                
                
                2,645,000Net
                    Cash Provided by (Used in) Financing Activities
                
                
                (189,226
                )
                
                (172,406
                )
                
                2,801,099NET
                    INCREASE (DECREASE) IN CASH AND CASH EQUIVALENT
                
                
                (1,623
                )
                
                15,622
                
                
                21,000EFFECT
                    OF CURRENCY EXCHANGE RATE CHANGESON
                    CASH AND CASH EQUIVALENTS
                
                
                (20,773
                )
                
                -
                
                
                (20,773
                )CASH
                    AND CASH EQUIVALENT AT BEGINNING OF YEAR
                
                
                22,623
                
                
                7,001
                
                
                -CASH
                    AND CASH EQUIVALENT AT END OF YEAR
                
                $
                227
                
                $
                22,623
                
                $
                227
  The
          accompanying notes are an integral part of these consolidated financial
          statements.
 
 22
 
 **LEXON
          TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
          Development Stage Company)**
 **Consolidated
          Statements of Cash Flows**
 **For
          the Years Ended December 31, 2006 and 2005 and**
 **the
          Period from Inception on July 18, 2001 through December 31, 2006**
 For
                  the Years Ended December 31,
              
              From
                  Inception on July 18, 2001
                Through
                December
                  31, 20062006
              
              2005
              
              2006SUPPLEMENTAL
                  CASH FLOW INFORMATIONCash
                  Payments For:Interest
              
              $
              -
              
              $
              717,548
              
              $
              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
 
 23
  **LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **December
        31, 2006 and 2005**
  **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 has
        had a
        number of name
        changes: it changed the name 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 reflected the assets
        and
        liabilities of Lexon and CMC at their historical book values and the historical
        operations of the Company were originally
        those of CMC. CMC was dissolved during 2002 by leaving Lexon as the surviving
        entity.
 
 In
        April
        2002, Lexon acquired 100% of the outstanding common stock of Phacon Corporation
        (Phacon) in exchange for 17,500,000 (post-split) 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 the Republic of Korea for the purpose of entering into potential
        business combinations with Korean operating entities. During August 2005,
        the
        Company completed a reorganization
        of Lexon Korea, such that the Company became a 10% equity holder in the reorganized
        company. This 10% equity holding in Lexon Korea has been reduced to a zero
        valuation as
        of
        December 31, 2005.
 
 In
        December 2004, the Company acquired a majority control (90.16%) of Techone
        Company, Ltd, a Korean
        corporation, through an investment of $1,585,000 in cash and recorded goodwill
        of $1,851,692
        from the acquisition. The Company acquired Techone as its core operating
        business in Korea
        for
        manufacturing and selling LTCC related products. However, the Company failed
        to successfully
        develop the LTCC related products as planned and became highly leveraged
        financially. In
        August
        2005, certain creditors filed an involuntary foreclosure and sold Techone’s
        assets through public
        auction to satisfy certain 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.
 
 24
  **LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **December
        31, 2006 and 2005**
 
 ***(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 $5,924,570 and a working capital deficit of approximately $2,780,000 as
        of
        December 31, 2006.
        These factors raise 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 sale
        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., its wholly- owned
        subsidiary, Lexon Korea Corporation (through August 2005 - the time of
        reorganization), and
        its
        majority-owned subsidiary, Lexon Semiconductor Co., Ltd. All material
        intercompany accounts and transactions have been eliminated in the
        consolidation.
 
 Minority
        interests are recorded to the extent of their equity. Losses in excess of
        minority interest equity
        capital are charged against the majority interest and will be reversed when
        the
        losses reverse.
  
 25
  **LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **December
        31, 2006 and 2005**
  *(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)***  ***Government
        Grants***
 
 Government
        grants are recognized as income over the periods necessary to match them
        with
        the related
        costs that they are intended to compensate.
 
 ***(f)***  ***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.
  26
 **LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **December
        31, 2006 and 2005**
  ***(g)***  ***Cash
        and Cash Equivalents***
 
 Highly
        liquid investments with maturities of three months or less when purchased
        are
        considered cash
        equivalents and recorded at cost, which approximates fair value.
 
 ***(h)***  ***Allowance
        for Doubtful Accounts***
 
 An
        allowance for doubtful accounts is computed based on the Company’s historical
        experience and management’s
        analysis of possible bad debts.
 
 ***(i)***  ***Properties
        and Equipment***
 
 Properties
        and equipment are stated at cost. Major renewals and betterments are capitalized
        and expenditures
        for repairs and maintenance are charges 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.
 
 ***(j)***  ***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.
 
 ***(k)***  ***Intangible
        Assets***
 
 Intangible
        assets such as cost of obtaining industrial rights and patents are stated
        at
        cost, net of depreciation computed using the straight-line method over five
        to
        ten years.
 
 ***(l)***  ***Goodwill***
 
 Goodwill
        represents the excess of cost over fair value of net assets acquired through
        acquisitions. In accordance
        with Statement of Financial Accounting Standards No. 142, goodwill recorded
        by
        the Company
        has not been amortized and will be evaluated on an annual basis, or sooner
        if
        deemed necessary,
        in connection with other long-lived assets, for potential impairment. As
        of
        December 31, 2006,
        the
        Company determined that the goodwill was entirely impaired and recorded an
        impairment loss
        of
        $1,851,692.
 
 ***(m)***  ***Basic
        (Loss) Per Share***
 
 The
        computations of basic 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
 
 27
  **LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **December
        31, 2006 and 2005**
 
 included
        in the calculation as their effect is anti-dilutive for the periods
        presented.
 **December
                    31,****2006**
                
                **2005**Numerator
                    - loss for the year
                
                $
                (2,961,601
                )
                $
                (448,271
                )Denominator
                    - weighted average number of shares
                  outstanding
                
                
                34,183,778
                
                
                34,183,778Loss
                    per share
                
                $
                (0.09
                )
                $
                (0.01
                )
  ***(n)***  ***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.
 
 ***(o)***  ***Recent
        Accounting Pronouncements***
 
 On
        December 16, 2004, the FASB issued SFAS No. 123(R), *Share-Based
        Payment ,* which
        is
        an amendment
        to SFAS No. 123, *Accounting
        for Stock-Based Compensation.* This
        new
        standard eliminates the ability to account for share-based compensation
        transactions using Accounting Principles
        Board (“APB”) Opinion No. 25, *Accounting
        for Stock Issued to Employees,* and
        generally requires such transactions to be accounted for using a
        fair-value-based method and the resulting cost recognized
        in our financial statements. This new standard is effective for awards that
        are
        granted, modified
        or settled in cash in interim and annual periods beginning after December
        15,
        2005. In addition, this new standard applies to unvested options granted
        prior
        to the effective date. The Company
        adopted this new standard during the fourth fiscal quarter of 2005, but had
        no
        share-based employee
        compensation during the year ended December 31, 2005.
 
 In
        May
        2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections" ("SFAS
        154"), which replaces Accounting Principles Board ("APB") Opinion No. 20,
        "Accounting Changes",
        and SFAS No. 3, "Reporting Accounting Changes in Interim Financial Statements
        An Amendment
        of APB Opinion No. 28". SFAS No. 154 provides guidance on the accounting
        for and reporting
        of changes in accounting principles and error corrections. SFAS No. 154 requires
        retrospective application to prior period financial statements of voluntary
        changes in accounting principle and changes required by new accounting standards
        when the standard does not include specific
        transition provisions, unless it is impracticable to do so. SFAS No. 154
        also
        requires certain disclosures
        for restatements due to correction of an error. SFAS No. 154 is effective
        for
        accounting changes
        and corrections of errors made in fiscal years beginning after December 15,
        2005. The Company
        adopted this pronouncement as of January 1, 2006. The implementation of the
        provisions of
        this
        pronouncement had no significant effect on the Company’s consolidated financial
        statement presentation.
 
 28
  **LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **December
        31, 2006 and 2005**
 
 **Note
        3 - Property and Equipment**
 
 Property
        and equipment consists of the following at December 31, 2006:
 
 Computer
                  and equipment
              
              $
              8,990Furniture
                  and fixture
              
              
              4,28713,277Less:
                  accumulated depreciation
              
              
              (13,277
              )Net
                  property and equipment
              
              $
              --
 
 Depreciation
        expenses for the years ended December 31, 2006 and 2005 were $38,058 and
        $50,522, respectively.
 
 On
        June
        21, 2005, in the District Administrative Court in Pyeongtaek, Korea, most
        of
        fixed assets of Techone
        were auctioned at 3,751,345,451 Korean Won in an involuntary foreclosure
        to
        satisfy debts of the
        secured creditors. The Company recognized a gain of $1,315,469 from this
        involuntary sale.
 
 **Note
        4 - Investments**
 
 In
        2004,
        Lexon Korea invested $11,667 for about three percent (3%) equity interest
        in
        G2K, a Korean entity.
        During 2006, G2K became insolvent, and the entire investment was written
        off as
        of December 31, 2006.
 
 In
        2003,
        Techone invested $125,967 in a 10% voting stock of Mirae Sojae Company, a
        Korean
        entity. The
        investment is recorded under the equity method. The value of this investment
        was
        adjusted to $104,839 in 2003, and still remains at this amount as of December
        31, 2006.
 
 **Note
        5 - Related Party Transactions**
 
 The
        Company had loans receivable of $7,769 from a company which shares a common
        officer, and $18,000
        from the Company’s employees. These receivables were written off as of December
        31, 2006.
 
 As
        of
        December 31, 2006, the Company has loans payable totaling $421,753 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 compensation to its officers on time, and
        the
        past due compensation aggregated $1,658,316 as of December 31,
        2006.
 
 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.
 
 
 29
  **LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **December
        31, 2006 and 2005**
 
 **Note
        7 - Notes Payable**
 
 Notes
                  payable consisted of the following at December 31, 2006:Note
                  payable to a related party with interest at 7.5% per annum, unsecured.
                  Note is in default and due on demand
              
              $
              20,000Note
                  payable to an individual with interest at 7.5% per annum, unsecured.
                  Note
                  is in default and due on demand
              
              
              5,000Total
                  notes due
              
              $
              25,000
 
 **Note
        8 - Income Taxes**
 
 Deferred
        income tax assets amounted to approximately $2,014,353 as of the December
        31,
        2006, 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 year ended December 31, 2006.
 
 **Note
        10 - Other Comprehensive Income (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:
 
 30
  **LEXON
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **December
        31, 2006 and 2005**
 
 
 **2006**
              
              **2005**Balance,
                  beginning of year
              
              $
              (76,360
              )
              $
              6,318Effect
                  of currency translation
              
              
              (20,773
              )
              
              (82,678
              )Unrealized
                  loss on investment
              
              
              (22,704
              )
              
              --Balance,
                  end of year
              
              $
              (119,837
              )
              $
              (76,360
              )
 
 **Note
        11 - Convertible Notes Payable**
 
 The
                  Company has the following convertible debenture notes outstanding
                  as of
                  December 31, 2006:A
                  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$7,337.
              
              $
              30,000Two
                  notes with 7.5% interest, convertible to 227,840 shares of commonstock,
                  matured on October 30, 2005 with interest accrued at
                  $8,585.
              
              
              56,960A
                  note with 7.5% interest, convertible to 166,460 shares of commonstock,
                  matured on April 25, 2006 with interest accrued at $5,321.
              
              
              41,615Total
                  notes due
              
              $
              128,575
 
 **Note
        12 - Subsequent Events**
 
 In
        April
        2007, the Company’s senior officer resigned and was replaced by a new officer.
        Management believes
        that this change in senior corporate officer will not significantly affect
        the
        operations of the Company.
  31