---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,
D.C.20549

FORM 10-Q

(Mark One)

[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal period ended: September 30, 2010

[ ] 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.)
|                                                                     |                           
|                                                                     |                           
|14830 Desman Road                                                    | 90638                     
|(Address of principal executive offices)                             | (Zip Code)                

Issuer's telephone number, including area code:(714)
522-0270

Securities registered pursuant to section 12(b) of the Act:

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|None                | N/A                                      

Securities registered pursuant to section 12(g) of the Act:

Common Stock, par value $0.001 per share(Title
of class)

Check whether the issuer is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. [ ]

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 [ ](2) Yes [ x ] No [ ]

Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit
and post such files.) 
Yes [ x ] No [ ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer (as defined
in Rule 12b-2 of the Act). See the definitions of large accelerated filer,
accelerated filer, and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):

|Large accelerated filer [ ] | Accelerated filer [ ] | Non-accelerated filer [ ] | Smaller reporting company [ x ]
|--------------------------- | --------------------- | ------------------------- | -------------------------------

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

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date.

As of November 15, 2010, Lexon had 510,789,721 shares of common
stock, par value $0.001 outstanding.

---

PART I  FINANCIAL INFORMATION

|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

INDEX TO FINANCIAL STATEMENTS

|                                           | Page
|------------------------------------------ | ----
|                                           |     
|Financial Statements:                      |     
|Balance Sheets (unaudited)                 | 4   
|Statements of Operations
      (unaudited) | 6   
|Statements of Cash Flows (unaudited)       | 7   
|Notes to Financial Statements (unaudited)  | 9   

---

|LEXON TECHNOLOGIES, INC.
|------------------------
|BALANCE SHEETS          

|ASSETS                           |   |               |  |   |              | 
|-------------------------------- | - | ------------- |  | - | ------------ | 
|                                 |   | (Unaudited)   |  |   |              | 
|                                 |   | September 30, |  |   | December 31, | 
|                                 |   | 2010          |  |   | 2009         | 
|Current assets:                  |   |               |  |   |              | 
|Cash and cash equivalents        | $ | 2,300         |  | $ | 61,661       | 
|Accounts receivable,
      net   |   | 314,346       |  |   | 468,821      | 
|Inventories                      |   | 443,733       |  |   | 838,220      | 
|Other current assets             |   | 18,000        |  |   | 18,000       | 
|                                 |   |               |  |   |              | 
|Total current assets             |   | 778,379       |  |   | 1,386,702    | 
|                                 |   |               |  |   |              | 
|Due from related parties         |   | 130,000       |  |   | 190,000      | 
|                                 |   |               |  |   |              | 
|Property and equipment, net      |   | 71,814        |  |   | 112,392      | 
|                                 |   |               |  |   |              | 
|Other assets:                    |   |               |  |   |              | 
|Intangibles, net of amortization |   | 427,968       |  |   | 276,365      | 
|Security deposits                |   | 20,748        |  |   | 20,748       | 
|Goodwill                         |   | 3,214,289     |  |   | 3,214,289    | 
|                                 |   |               |  |   |              | 
|Total other assets               |   | 3,663,005     |  |   | 3,511,402    | 
|                                 |   |               |  |   |              | 
|Total assets                     | $ | 4,643,198     |  | $ | 5,200,496    | 

The accompanying notes are an integral part of the unaudited
financial statements.

---

|LEXON TECHNOLOGIES, INC.
|------------------------
|BALANCE SHEETS          

|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                                                           |   |               |   |   |              |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- | - | - | ------------ | -
|                                                                                                                                                                                                                                               |   | (Unaudited)   |   |   |              |  
|                                                                                                                                                                                                                                               |   | September 30, |   |   | December 31, |  
|                                                                                                                                                                                                                                               |   | 2010          |   |   | 2009         |  
|Current liabilities:                                                                                                                                                                                                                           |   |               |   |   |              |  
|                                                                                                                                                                                                                                               |   |               |   |   |              |  
|Accounts payable                                                                                                                                                                                                                               | $ | 660,069       |   | $ | 552,634      |  
|Due to related parties                                                                                                                                                                                                                         |   | 91,960        |   |   | 91,960       |  
|Line of credit                                                                                                                                                                                                                                 |   | 450,000       |   |   | 450,000      |  
|Current portion of notes payable                                                                                                                                                                                                               |   | 243,568       |   |   | 249,534      |  
|Current portion
      of capital lease obligations                                                                                                                                                                                             |   | 22,096        |   |   | 21,888       |  
|Accrued expenses                                                                                                                                                                                                                               |   | 312,599       |   |   | 110,747      |  
|Other current
      liabilities                                                                                                                                                                                                                |   | 25,695        |   |   | -            |  
|Total current liabilities                                                                                                                                                                                                                      |   | 1,805,987     |   |   | 1,476,763    |  
|Contingent liabilities                                                                                                                                                                                                                         |   | -             |   |   | 274,610      |  
|Long-term liabilities:                                                                                                                                                                                                                         |   |               |   |   |              |  
|                                                                                                                                                                                                                                               |   |               |   |   |              |  
|Notes payable, net of current
      portion                                                                                                                                                                                                    |   | 44,510        |   |   | 99,460       |  
|Capital lease
      obligations, net of current portion                                                                                                                                                                                        |   | 11,606        |   |   | 28,561       |  
|Deferred rent                                                                                                                                                                                                                                  |   | 37,622        |   |   | 53,398       |  
|Total long-term liabilities                                                                                                                                                                                                                    |   | 93,738        |   |   | 181,419      |  
|                                                                                                                                                                                                                                               |   |               |   |   |              |  
|Total liabilities                                                                                                                                                                                                                              |   | 1,899,725     |   |   | 1,932,792    |  
|                                                                                                                                                                                                                                               |   |               |   |   |              |  
|Stockholders equity:                                                                                                                                                                                                                          |   |               |   |   |              |  
|                                                                                                                                                                                                                                               |   |               |   |   |              |  
|Common stock - $0.001 par value;
              2,000,000,000 shares
      authorized,         510,789,721 and
      499,739,721 shares issued and outstanding
              as of September 30, 2010
      and December 31, 2009, respectively |   | 510,790       |   |   | 499,740      |  
|Additional paid-in capital                                                                                                                                                                                                                     |   | 3,088,904     |   |   | 2,737,454    |  
|Stock
      subscription receivable                                                                                                                                                                                                            |   | (100,000      | ) |   | (100,000     | )
|Retained earnings (accumulated
      deficit)                                                                                                                                                                                                  |   | (756,221      | ) |   | 130,510      |  
|Total stockholders equity                                                                                                                                                                                                                     |   | 2,743,473     |   |   | 3,267,704    |  
|                                                                                                                                                                                                                                               |   |               |   |   |              |  
|Total liabilities and stockholders equity                                                                                                                                                                                                     | $ | 4,643,198     |   | $ | 5,200,496    |  

The accompanying notes are an integral part of the unaudited
financial statements.

---

|LEXON TECHNOLOGIES, INC.
|------------------------
|STATEMENTS OF OPERATIONS
|(Unaudited)             

|                                                          |   | Three Months Ended |   |   | Nine Months Ended |  
|--------------------------------------------------------- | - | ------------------ | - | - | ----------------- | -
|                                                          |   | September 30,      |   |   | September 30,     |  
|                                                          |   | 2010               |   |   | 2009              |  
|Net sales                                                 | $ | 985,926            |   | $ | 1,496,128         |  
|Cost of goods sold                                        |   | 921,260            |   |   | 925,737           |  
|Gross profits                                             |   | 64,666             |   |   | 570,391           |  
|Selling, general and administrative expenses              |   | 401,065            |   |   | 483,062           |  
|Income (loss) from operations                             |   | (336,399           | ) |   | 87,329            |  
|Other income (expenses):                                  |   |                    |   |   |                   |  
|Gain on forgiveness of
      debt                         |   | -                  |   |   | -                 |  
|Interest expense                                          |   | (14,943            | ) |   | (6,934            | )
|Net other income (expense)                                |   | (14,943            | ) |   | (6,934            | )
|Income (loss) before income tax provision                 |   | (351,342           | ) |   | 80,395            |  
|Provision for income taxes                                |   | -                  |   |   | -                 |  
|Net income (loss)                                         | $ | (351,342           | ) | $ | 80,395            |  
|Earnings per share of common stock  Basic                |   | (0.00              | ) |   | 0.00              |  
|Earnings per share of common stock - Diluted              |   | (0.00              | ) |   | 0.00              |  
|Weighted average shares of common stock
      outstanding |   | 548,623,187        |   |   | 34,183,778        |  

The accompanying notes are an integral part of the unaudited
financial statements.

---

|LEXON TECHNOLOGIES, INC.
|------------------------
|STATEMENTS OF CASHFLOWS 
|(Unaudited)             

|                                                            |   | Nine Months Ended |  
|----------------------------------------------------------- | - | ----------------- | -
|                                                            |   | September 30,     |  
|                                                            |   | 2010              |  
|Cash flows from operating
      activities:                 |   |                   |  
|                                                            |   |                   |  
|Net income
      (loss)                                     | $ | (878,731          | )
|Adjustments
      to reconcile net income (loss)            |   |                   |  
|to net cash provided by (used in) operating activities:     |   |                   |  
|                                                            |   |                   |  
|Bad debt expense                                            |   | 42,450            |  
|Depreciation and amortization                               |   | 198,975           |  
|Gain on forgiveness of debt                                 |   | (274,610          | )
|Noncash professional service                                |   | 30,000            |  
|Noncash employee compensation                               |   | 20,000            |  
|                                                            |   |                   |  
|Changes in assets and liabilities:                          |   |                   |  
|                                                            |   |                   |  
|Accounts receivable                                         |   | 112,025           |  
|Inventories                                                 |   | 394,487           |  
|Accounts payable                                            |   | 107,435           |  
|Accrued expenses                                            |   | 193,352           |  
|Deferred rent                                               |   | (15,776           | )
|Other current liabilities                                   |   | 25,695            |  
|Total adjustments                                           |   | 834,033           |  
|Net cash used in operating activities                       |   | (44,698           | )
|                                                            |   |                   |  
|Cash flows from investing activities:                       |   |                   |  
|                                                            |   |                   |  
|Note receivable                                             |   | -                 |  
|Due from related
      parties                              |   | 60,000            |  
|                                                            |   |                   |  
|Net cash provided by investing
      activities             |   | 60,000            |  
|                                                            |   |                   |  
|Cash flows from financing
      activities:                 |   |                   |  
|                                                            |   |                   |  
|Net proceeds from line of credit                            |   | -                 |  
|Payments on notes payable                                   |   | (60,916           | )
|Payments on
      capital lease obligations                 |   | (16,747           | )
|Proceeds from convertible bonds                             |   | -                 |  
|Issuance of
      common stock                              |   | 11,000            |  
|Distributions to stockholder                                |   | (8,000            | )
|Net cash used in financing
      activities                 |   | (74,663           | )
|                                                            |   |                   |  
|Net decrease in cash                                        |   | (59,361           | )
|                                                            |   |                   |  
|Cash and cash equivalents, at the beginning
      of period |   | 61,661            |  
|                                                            |   |                   |  
|Cash and cash equivalents, at the end of
      period       | $ | 2,300             |  

The accompanying notes are an integral part of the unaudited
financial statements.

---

|LEXON TECHNOLOGIES, INC.
|------------------------
|STATEMENTS OF CASHFLOWS 
|(Unaudited)             

|                                                         |   | Nine Months Ended
|-------------------------------------------------------- | - | -----------------
|                                                         |   | September 30,    
|                                                         |   | 2010             
|Supplemental disclosures:                                |   |                  
|Cash paid during the period:                             |   |                  
|Income taxes                                             | $ | -                
|Interest expense                                         | $ | 30,154           
|                                                         |   |                  
|Noncash investing and financing activities:              |   |                  
|Common stock
      issued for acquisition of intangibles | $ | 310,000          
|Common stock issued for employee
      compensation      | $ | 11,500           

The accompanying notes are an integral part of the unaudited
financial statements.

---

LEXON TECHNOLOGIES, INC.NOTES TO UNAUDITED
FINANCIAL STATEMENTS

Note 1 - Nature 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 had developed and manufactured 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.

Initially registered as California Cola Distributing Company,
Inc, the Company changed its name twice; first to Rexford, Inc. in October 1992,
and to the current name in July 1999.

In July 1999, Lexon acquired 100% of the outstanding common
stock of Chicago Map Corporation (CMC) in exchange for 10,500,000 shares of the
Company's common stock through a reverse acquisition accompanied by a
recapitalization. The surviving entity, Lexon, reflected the assets and
liabilities of Lexon and CMC at their historical book values. Lexon dissolved
CMC in 2002.

In April 2002, Lexon acquired 100% of the outstanding common
stock of Phacon Corporation (Phacon) in exchange for 17,500,000 shares of
Company's common stock through a reverse acquisition accompanied by a
recapitalization. As part of the agreement, the Company elected a 1 for 10
reverse stock split and the acquired shares of Phacon were entirely canceled
leaving the Company as the surviving entity.

In March 2003, the Company incorporated Lexon Korea Corporation
(LexonKorea) as a wholly-owned subsidiary in Korea for the purpose of entering
into potential business combinations with Korean operating entities. LexonKorea
was reorganized in August 2005, and as a result, the Companys equity share in
LexonKorea was reduced to 10%.

On October 7, 2009, Paragon Toner, Inc. (Paragon), a California
corporation, entered into an Agreement and Plan of Merger (the Merger
Agreement) with the Company whereby the Company issued 347,448,444 shares of
common stock (the Common Stock) of the Company (the Acquisition Shares) to
the shareholders of Paragon, representing approximately 72% of the issued and
outstanding Common Stock after completion of the merger in October 2009. The
effective date of the Merger was October 22, 2009 (Effective Date). The
Company has decided to maintain the name of the predecessor company. The Merger
has been accounted for as a recapitalization of Paragon with Paragon as the
acquirer (reverse merger).

Shortly after the Merger, Lexon Semi was dissolved. The
Companys sole line of business is now in manufacturing, marketing and selling
of recycled monochrome and color toner cartridges for laser printers and other
related devices.

Note 2 - Summary of Significant Accounting Policies

This summary of significant accounting policies of the Company
is presented to assist in understanding the Companys financial statements. The
financial statements and notes are representations of the Companys management,
who is responsible for their integrity and objectivity. These accounting
policies conform to accounting principles generally accepted in the United
States of America and have been consistently applied in the preparation of the
financial statements.

Use of Estimates

The preparation of the financial statements in conformity 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 accompanying notes. Estimates are
primarily used for depreciation of property and equipment, amortization of
intangible assets, allowances for doubtful accounts and inventory valuation.
Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenues from product sales when earned.
Specifically, revenue is recognized when persuasive evidence of an arrangement
exists, delivery has occurred (or services have been rendered), the price is
fixed or determinable, and collectability is reasonably assured. Revenue is not
recognized until title and risk of loss have transferred to the customer. The
shipping terms for the majority of the Companys revenue arrangements are FOB
(free on board) destination. Revenue is recorded net of customer returns,
allowances and discounts that occur under arrangements established with
customers.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased
with original maturities of three months or less to be categorized as cash and
cash equivalents.

---

Allowance for Doubtful Accounts

The allowance for doubtful accounts is computed based upon the
managements estimate of uncollectible accounts and historical experience. The
Company performs ongoing credit evaluations of its customers to estimate
potential credit losses. Amounts are written off against the allowance in the
period the Company determines that the receivable is uncollectible.

Inventories

Inventories are stated at the lower of cost or market. Cost is
determined by the first-in, first-out (FIFO) method. Appropriate consideration
is given to obsolescence, slow moving items and other factors in evaluating net
realizable value.

Property and Equipment

Property and equipment are stated at cost. The straight-line
method is used to calculate depreciation over their estimated useful lives
ranging as follows:

|Automobile              | 3 years     
|----------------------- | ------------
|Furniture & fixture     | 5 to 7 years
|Leasehold improvement   | 5 years     
|Machinery and equipment | 5 years     

Leasehold improvements are depreciated to expense over the
shorter of the life of the improvement or the remaining lease term. Capital
expenditures that enhance the value or materially extend the useful life of the
related assets are reflected as additions to property and equipment.
Expenditures for repairs and maintenance are charged to expense as incurred.
Upon a sale or disposition of assets, a gain or a loss is included in the
statement of operations.

Impairment of Long-lived Assets

The Company periodically reviews the recoverability of its
long-lived assets using the methodology prescribed in accounting guidance now
codified as FASB ASC Topic 360, Property, Plant and Equipment.The
Company also reviews these assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of these assets is determined by comparing the
forecasted undiscounted future net cash flows from the operations to which the
assets relate, based on managements best estimates using appropriate
assumptions and projections at the time, to the carrying amount of the assets.
If the carrying value is determined not to be recoverable from future operating
cash flows, the asset is deemed impaired and an impairment loss is recognized
equal to the amount by which the carrying amount exceeds the estimated fair
value of the asset. In managements opinion, no such impairment existed as of
September 30, 2010 and December 31, 2009.

Accrued Expenses

The Companys accrued expenses consist of amounts payable for
salaries, payroll taxes and sales taxes.

Deferred Rent

The Company recognizes rent expense equal to the total of the
payments and free rent received due over the lease term, divided by the number
of months of the lease term applying the straight-line method. The difference
between rent expense recorded and the amount paid is credited or charged to
deferred rent.

Shipping and Handling

Certain shipping and handling fees are charged to customers and
these are classified as revenue. The costs associated with all shipping to
customers are recorded as operating expenses. Shipping expenses for the nine
months ended September 30, 2010 and 2009 amounted to $119,482 and $139,044,
respectively.

Income Taxes

The Company elected to be subject to the S corporation
provisions of the Internal Revenue Code for federal and state income tax
purposes effective January 27, 2004. Accordingly, as an S corporation, the
Companys taxable income or losses and applicable tax credits are passed through
to its shareholder and reported on shareholders individual income tax return.
However, the State of California requires S Corporation to pay a state franchise
tax (currently 1.5% on its taxable income). The Merger described in Note 3
resulted in the termination of S status.

The Company uses the asset and liability method of accounting
for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and net operating
loss and tax credit carry-forwards. Deferred tax assets and liabilities are
measured using enacted income tax rates expected to apply to taxable income in
the years in which those differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in income tax
rates is recognized in the results of operations in the period that includes the
enactment date. The realizability of deferred tax assets is evaluated based on a
more likely than not standard, and to the extent this threshold is not met, a
valuation allowance is recorded. See Note 14 Income Taxes for more information
about the Companys income taxes.

---

Recent Accounting Pronouncements

In August 2010, the FASB issued Accounting Standards Update
2010-21, "Accounting for Technical Amendments to Various SEC Rules and
Schedules". This Accounting Standards Update amends various SEC paragraphs
pursuant to the issuance of Release No. 33-9026; Technical Amendments to Rules,
Forms, Schedules and Codifications of Financial Reporting Policies. Management
does not expect this update to have a material effect on the Company's financial
statements.

In February 2010, the FASB issued Accounting Standards Update
2010-09, "Subsequent Events: Amendments to Certain Recognition and Disclosure
Requirements." This FASB retracts the requirement to disclose the date through
which subsequent events have been evaluated and whether that date is the date
the financial statements were issued or were available to be issued. ASU 2010-09
is effective for interim and annual financial periods ending after February 24,
2010, and has been applied with no material impact on the Company's financial
statements.

In February 2010, the FASB issued Accounting Standards Update
2010-08, "Technical Corrections to Various Topics." This FASB eliminates
inconsistencies and outdated provisions in GAAP and provides needed
clarification on others. ASU 2010-08 is effective for interim and annual
financial periods ending after February 2010, and has been applied with no
material impact on the Company's financial statements.

Note 3 - Merger

On October 7, 2009, Paragon Toner, Inc. (Paragon), a California
corporation, entered into an Agreement and Plan of Merger (the Merger
Agreement) with the Company whereby the Company issued 347,448,444 shares of
common stock (the Common Stock) of the Company (the Acquisition Shares) to
the shareholders of Paragon, representing approximately 72% of the issued and
outstanding Common Stock after completion of the merger in October 2009. The
effective date of the Merger was October 22, 2009 (Effective Date). The
Company has decided to maintain the name of the predecessor company. The Merger
has been accounted for as a recapitalization of Paragon with Paragon as the
acquirer (reverse merger).

Note 4 - Inventories

The following table provides the components of inventories as
of September 30, 2010 and December 31, 2009:

|                        |   | September 30, |   |   | December 31, |  
|----------------------- | - | ------------- | - | - | ------------ | -
|                        |   | 2010          |   |   | 2009         |  
|                        |   |               |   |   |              |  
|Finished goods          | $ | 185,770       |   | $ | 582,603      |  
|Raw materials           |   | 292,673       |   |   | 290,603      |  
|                        |   | 478,443       |   |   | 873,206      |  
|Less: Inventory reserve |   | (34,710       | ) |   | (34,986      | )
|Total                   | $ | 443,733       |   | $ | 838,220      |  

Overhead allocated to the inventory amounted to $45,853 and
$19,897 for the nine months ended September 30, 2010 and 2009, respectively.

Note 5- Property and Equipment

Property and equipment consist of the following as of September
30, 2010 and December 31, 2009:

|                               |   | September 30, |   |   | December 31, |  
|------------------------------ | - | ------------- | - | - | ------------ | -
|                               |   | 2010          |   |   | 2009         |  
|                               |   |               |   |   |              |  
|Automobile                     | $ | 34,092        |   | $ | 34,092       |  
|Furniture and fixture          |   | 53,388        |   |   | 53,388       |  
|Leasehold improvement          |   | 5,060         |   |   | 5,060        |  
|Machinery and equipment        |   | 439,030       |   |   | 439,030      |  
|                               |   | 531,570       |   |   | 531,570      |  
|Less: Accumulated depreciation |   | (459,756      | ) |   | (419,178     | )
|Net property and equipment     | $ | 71,814        |   | $ | 112,392      |  

---

Depreciation expense amounted to $40,578 and $64,218 for the
nine months ended September 30, 2010 and 2009, respectively.

Note 6 - Capitalized Website Costs

The Company amortizes its website over the estimated useful
life of three years. Amortizable intangible assets are tested for impairment
when impairment indicators are present, and, if impaired, written down to fair
value based on either discounted cash flows or appraised values. No impairment
of website costs has been identified during the periods presented. The carrying
amount and accumulated amortization related to the website costs as of September
30, 2010 and December 31, 2009, are as follows:

|                               |   | September 30, |   |   | December 31, |  
|------------------------------ | - | ------------- | - | - | ------------ | -
|                               |   | 2010          |   |   | 2009         |  
|                               |   |               |   |   |              |  
|Gross balance                  | $ | 633,589       |   | $ | 323,589      |  
|Less: Accumulated amortization |   | (205,621      | ) |   | (47,224      | )
|                               |   |               |   |   |              |  
|Net balance                    | $ | 427,968       |   | $ | 276,365      |  

Estimated aggregate amortization expense for each of the
succeeding years is as follows:

|Years ending
      December 31, |   | Amount  | 
|------------------------------- | - | ------- | 
|                                |   |         | 
|Remainder of 2010               | $ | 52,025  | 
|2011                            |   | 195,667 | 
|2012                            |   | 180,276 | 
|Total                           | $ | 427,968 | 

Total amortization expenses were $158,397 and $11,647 for the
nine months ended September 30, 2010 and 2009, respectively.

Note 7 - Transactions with Related Parties

Due from Related Parties

Advances to family members of the stockholder are unsecured,
non-interest bearing and due on demand. The Company has $130,000 and $190,000
due from related parties as of September 30, 2010 and December 31, 2009,
respectively.

Due to Related Parties

Interest bearing notes payable to related parties consisting of
the following as of September 30, 2010 and December 31, 2009:

|                                                                                                                                                                                    |   | September 30, |  |   | December 31, | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- |  | - | ------------ | 
|                                                                                                                                                                                    |   | 2010          |  |   | 2009         | 
|                                                                                                                                                                                    |   |               |  |   |              | 
|Unsecured note payable to a shareholder,
      with interest at 7.5% per annum. Note is in default and is payable on
      demand.                                                  | $ | 5,000         |  | $ | 5,000        | 
|                                                                                                                                                                                    |   |               |  |   |              | 
|Expired convertible debt issued to a former
      employee, with interest at 7.5% per annum. The conversion maturity date
      was in October 2004. The note is payable on demand. |   | 30,000        |  |   | 30,000       | 
|                                                                                                                                                                                    |   |               |  |   |              | 
|Expired convertible debt issued to a
      Director, with interest at 7.5% per annum. The conversion maturity date
      was in October 2005. The note is payable on demand.        |   | 56,960        |  |   | 56,960       | 
|                                                                                                                                                                                    |   |               |  |   |              | 
|Total notes payable                                                                                                                                                                 | $ | 91,960        |  | $ | 91,960       | 

---

Note 8- Line of Credit

The Company has a line of credit with a bank with a maximum
borrowing limit of $450,000. The outstanding balance was $450,000 as of both
September 30, 2010 and December 31, 2009. This line of credit matures on
December 7, 2010 and is secured by the Companys accounts receivable, inventory
and other miscellaneous assets. Interest is accrued at the banks prime plus
1.00% (4.25% as of September 30, 2010).

The Company incurred interest expenses on this line of credit
of $26,872and $15,170 for the nine months ended September 30, 2010 and 2009,
respectively.

Note 9 - Notes Payable

The Company has long term notes payable as follows:

|                                                                                                                                                                                                                                                                                                                                                                                                     |   | September 30, |   |   | December 31, |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- | - | - | ------------ | -
|                                                                                                                                                                                                                                                                                                                                                                                                     |   | 2010          |   |   | 2009         |  
|                                                                                                                                                                                                                                                                                                                                                                                                     |   |               |   |   |              |  
|A note payable to a bank, due in monthly
      installments of $2,931, including interest at the banks prime plus 1.25%
      (4.50% as of September 30, 2010). The note matures in May 2011, and is
      collateralized by substantially all the assets of the Company. The note is
      subject to various restrictive covenants, including maintenance of
      financial ratios at all times. | $ | 23,053        |   | $ | 48,162       |  
|                                                                                                                                                                                                                                                                                                                                                                                                     |   |               |   |   |              |  
|A note payable to a bank, due in monthly
      installments of $4,587, including interest at the banks prime plus 1.50%
      with minimum interest rate of 6.25% (6.25% as of September 30, 2010). The
      note matures in January 2012, and is collateralized by substantially all
      the assets of the Company.                                                                             |   | 95,043        |   |   | 130,850      |  
|                                                                                                                                                                                                                                                                                                                                                                                                     |   |               |   |   |              |  
|Unsecured note payable to an unrelated
      individual, with interest at 7.5% per annum. The note is in default and is
      payable on demand.                                                                                                                                                                                                                                                     |   | 20,000        |   |   | 20,000       |  
|                                                                                                                                                                                                                                                                                                                                                                                                     |   |               |   |   |              |  
|Unsecured note payable to an unrelated
      party, with interest at 7.5% per annum. As disclosed in Note 11, the
      creditor has filed suit to collect on this note.                                                                                                                                                                                                                             |   | 149,982       |   |   | 149,982      |  
|                                                                                                                                                                                                                                                                                                                                                                                                     |   |               |   |   |              |  
|                                                                                                                                                                                                                                                                                                                                                                                                     |   |               |   |   |              |  
|Total notes payable                                                                                                                                                                                                                                                                                                                                                                                  |   | 288,078       |   |   | 348,994      |  
|                                                                                                                                                                                                                                                                                                                                                                                                     |   |               |   |   |              |  
|Less: Current portion                                                                                                                                                                                                                                                                                                                                                                                |   | (243,568      | ) |   | (249,534     | )
|                                                                                                                                                                                                                                                                                                                                                                                                     |   |               |   |   |              |  
|Notes payable, net of current                                                                                                                                                                                                                                                                                                                                                                        | $ | 44,510        |   | $ | 99,460       |  

Maturities of notes payable as of September 30, 2010 are as
follows:

|Years ending
      December 31, |   | Amount  | 
|------------------------------- | - | ------- | 
|                                |   |         | 
|2010                            | $ | 193,821 | 
|2011                            |   | 63,045  | 
|2012                            |   | 31,212  | 
|Total                           | $ | 288,078 | 

Total interest expense on the notes payable were $6,742 and
$4,086 for the nine months ended September 30, 2010 and 2009, respectively.

Note 10 - Capital Lease Obligations

The Company entered into numerous capital lease agreements with
leasing companies to purchase certain equipment and transportation vehicles. As
of September 30, 2010 and December 31, 2009, these assets are carried as
follows:

---

|                               |   | September 30, |   |   | December 31, |  
|------------------------------ | - | ------------- | - | - | ------------ | -
|                               |   | 2010          |   |   | 2009         |  
|Equipment                      | $ | 162,889       |   | $ | 162,889      |  
|Transportation vehicles        |   | 32,800        |   |   | 32,800       |  
|Less: Accumulated depreciation |   | (187,666      | ) |   | (179,643     | )
|                               | $ | 8,023         |   | $ | 16,046       |  

The related future minimum lease payments under the capital
lease obligations are as follows:

|                                                        |   | September 30, |   |   | December 31, |  
|------------------------------------------------------- | - | ------------- | - | - | ------------ | -
|                                                        |   | 2010          |   |   | 2009         |  
|                                                        |   |               |   |   |              |  
|Total minimum lease payments                            | $ | 39,837        |   | $ | 62,752       |  
|Less: Amount representing interest                      |   | (6,135        | ) |   | (12,303      | )
|Present value of net minimum lease payments             |   | 33,702        |   |   | 50,449       |  
|                                                        |   |               |   |   |              |  
|Less: Current portion                                   |   | (22,096       | ) |   | (21,888      | )
|                                                        |   |               |   |   |              |  
|Capital lease obligations, net of current
      portion | $ | 11,606        |   | $ | 28,561       |  

Maturities of capital lease obligations as of September 30,
2010, are as follows:

|Years ending
      December 31, |   | Amount | 
|------------------------------- | - | ------ | 
|                                |   |        | 
|Remainder of 2010               | $ | 5,141  | 
|2011                            |   | 20,447 | 
|2012                            |   | 8,114  | 
|Total                           | $ | 33,702 | 

Total interest expenses from the capital lease obligations were
$6,103 and $10,919 for the nine months ended September 30, 2010 and 2009,
respectively.

Note 11 - Commitments and Contingencies

Legal Proceedings

On July 14, 2008, Advanced Digital Technology Co. Ltd., a
Korean corporation (ADT), filed a claim against Lexon and certain named
individuals who are former and current officers of the Company. The claim
alleges breach of an agreement to settle an earlier dispute, involving ADT's
investment of $150,000 in Lexon on or about January 16, 2007 and ADT's
subsequent unilateral decision to rescind and demand a refund of this
investment. The total amount of damages claimed under the pending lawsuit is the
investment amount of $150,000 plus filing costs, interest and attorney fees for
an aggregate amount of $178,522. On or about May 2, 2009, Lexon became aware of
a default judgment entered in the amount above. Such judgment was entered on
December 22, 2009. On or about May 8, 2009, Lexon has retained the law firm of
Smith, Chapman & Campbell for the purpose of setting aside the default
judgment as the Company was never in receipt of the notice of default entry. On
or about July 21, 2009, the court set aside the default as the court agreed that
service was never properly served.

On September 5, 2008, Vivien and David Bollenberg, a current
shareholder (the Bollenbergs), filed a claim against Lexon and other third
parties, including ByungHwee Hwang (also referred to as "Ben Hwang") and other
financial agents and institutions involved in the alleged fraudulent
transaction. The lawsuit is currently pending in the Orange County Superior
Court in Santa Ana, California. The filed complaint alleges that Ben Hwang
together with his representatives, including his accountant, escrow agent and
real estate agent/broker, made certain representations to and solicited the
Bollenbergs to make an investment in several companies and ventures including
Lexon with the intent to misappropriate the solicited funds for personal use.
The Bollenbergs allege that they invested a total of $1,500,000 among and
between the various companies and ventures recommended by Ben Hwang, of which
investment amount approximately $550,000 was invested in Lexon ($150,000 for
600,000 shares at $0.25 per share and $400,000 initially invested in Lexon Korea
and later converted into 1,150,000 shares in Lexon for a total of 1,750,000
shares in Lexon). The final disposition of this case has not yet been
resolved.

Operating lease

The Company leases its warehouse and office from a
non-affiliate. Future minimum rental payments under these leases as of September
30, 2010, are as follows:

|Years ending December 31, |   | Amount  | 
|------------------------- | - | ------- | 
|Remainder of 2010         | $ | 69,266  | 
|2011                      |   | 279,619 | 
|2012                      |   | 23,301  | 
|Total                     | $ | 372,186 | 

---

Rent expenses amounted to $166,228 and $189,243 for the nine
months ended September 30, 2010 and 2009, respectively. The Company allocated
$155,292 and $174,517 of rent expenses to cost of goods sold for the nine months
ended September 30, 2010 and 2009, respectively.

Note 12 - Dissolution of Subsidiary

As discussed in Note 1, on October 29, 2009, the subsidiary,
Lexon Semiconductor Corporation was formally dissolved with the approval of the
City of Pyongtaek in Korea. The subsidiary had been previously classified as a
discontinued operation. With the dissolution, the Company recognized a
forgiveness of debt totaling $418,970.

Note 13 - Distributions to Stockholder

Prior to the Merger described in Note 3, Paragon operated as a
private S Corporation. As such, Paragon made periodic distribution to the sole
stockholder at the time. Distributions paid to the stockholder aggregated $8,000
and $299,807 for the nine months ended September 30, 2010 and 2009.

Note 14 - Income Taxes

Significant components of deferred tax assets are as
follows:

|                              |   | September 30, |   |   | December 31, |  
|----------------------------- | - | ------------- | - | - | ------------ | -
|                              |   | 2010          |   |   | 2009         |  
|                              |   |               |   |   |              |  
|Loss carry forwards           | $ | 2,408,245     |   | $ | 1,602,904    |  
|Other                         |   | 229,720       |   |   | 229,720      |  
|Total deferred tax asset      |   | 2,637,965     |   |   | 1,832,624    |  
|                              |   |               |   |   |              |  
|Valuation allowance           |   | (2,637,965    | ) |   | (1,832,624   | )
|Total deferred tax asset, net | $ | -             |   | $ | -            |  

As of September 30, 2010, the Company had approximately
$4,100,000 of net operating loss (NOL) carryforwards for U.S. federal income
tax purposes expiring in 2020 through 2030. In addition, the Company has
California state NOL carryforwards of approximately $3,300,000 expiring in 2013
through 2020.

The ability to realize the tax benefits associated with
deferred tax assets, which includes benefits related to NOLs, is principally
dependent upon the Companys ability to generate future taxable income from
operations. The Company has provided a full valuation allowance for its net
deferred tax assets due to the Companys net operating losses. The valuation
allowance has increased by $454,000 during the nine months ended September 30,
2010.

Section 382 of the Internal Revenue Code (IRC) imposes
limitations on the use of NOLs and credits following changes in ownership as
defined in the IRC. The limitation could reduce the amount of benefits that
would be available to offset future taxable income each year, starting with the
year of an ownership change.

Note 15 - Subsequent Events

The Company has evaluated all subsequent events to the balance
sheet date of December 31, 2009 through the date that the financial statements
were issued on November 12, 2010, and has determined that there are no
subsequent events that require disclosure under FASB Accounting Standards
Codification Topic 855, Subsequent Events.

---

|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF
      FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------------

The following discussion and analysis should be read in
conjunction with our financial statements, including the notes thereto,
appearing elsewhere in this Report.

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.

Results of Operation for the Three Months Ended September
30, 2010 as Compared to the Three Months Ended September 30, 2009

Revenues.

Revenues decreased by $510,202 to $985,926 for the three months
ended September 30, 2010 as compared to $1,496,128 for the three months ended
September 30, 2009. This decline was primarily attributed to a sharp decrease in
sales caused by the downturn in the economy, our ability to source empty
cartridges as our entire industry has experienced a shortage of empty
cartridges.

Cost of Goods Sold.

Cost of Goods Sold decreased by $ 4,477 to $921,260 for the
three months ended September 30, 2010 as compared to $925,737 for the three
months ended September 30, 2009.

Selling, General and Administrative Expenses.

Selling, General and Administrative Expenses (SG&A)
decreased by $81,997 to $401,065 for the three months ended September 30, 2010
as compared to $483,062 for the three months ended September 30, 2009. This
decrease of $81,997 in SG&A was attributed to an effort by the Company to
restructure current personnel as well as the minimization of professional
service related to our public listing on the OTC Bulletin Board.

Other Income and Expenses.

Other expense for the three months ended September 30, 2010 was
$14,943 compared with other expenses of $6,934 for the three months ended
September 30, 2009. Interest expenses for the three months ended September 30,
2010 was $14,943 compared to $6,934 in interest expenses for the three months
ended September 30, 2010.

Net income.

As a result, we recorded a net loss of $351,342 for the three
months ended September 30, 2010 compared with a net income of $80,395 for the
three months ended September 30, 2009.

Results of Operation for the Nine Months Ended September 30,
2010 as Compared to the Nine Months Ended September 30, 2009

Revenues.

Revenues decreased by $1,270,656 to $3,200,503 for the nine
months ended September 30, 2010 as compared to $4,471,159 for the nine months
ended September 30, 2009. This decline was primarily attributed to a sharp
decrease in sales caused by the downturn in the economy, our ability to source
empty cartridges as our entire industry has experienced a shortage of empty
cartridges.

Cost of Goods Sold.

Cost of Goods Sold decreased by $ 181,476 to $2,896,815 for the
nine months ended September 30, 2010 as compared to $3,078,291 for the nine
months ended September 30, 2009.

Selling, General and Administrative Expenses.

Selling, General and Administrative Expenses (SG&A)
increased by $350,947 to $1,412,140 for the nine months ended September
30, 2010 as compared to $1,061,193 for the nine months ended September 30, 2009.
This increase of $350,947 in SG&A was attributed to professional services
and filing expenses related to our public listing on the OTC Bulletin Board as
we completed our reverse merger in the 4th quarter of 2009.

---

Other Income and Expenses.

Other income for the nine months ended September 30, 2010 was
$229,721 compared with other expenses of $30,479 for the nine months ended
September 30, 2009. Interest expenses for the nine months ended September 30,
2010 was $44,889 compared to $30,479 in interest expenses for the three months
ended September 30, 2010.

Net income.

As a result, we recorded a net loss of $878,731 for the nine
months ended September 30, 2010 compared with a net income of $301,196 for the
nine months ended September 30, 2009.

Liquidity and Capital Resources.

At September 30, 2010, we had current assets of $778,379 and
current liabilities of $1,805,987. Current assets consisted primarily of
accounts receivable and inventories.

Current liabilities at September 30, 2010, consisted of
accounts payable of $660,069, accounts payable due to related parties of
$91,960, credit line of $450,000, accrued expenses of $312,599, notes payable of
$243,568 and capital lease obligations of $22,098.

For the nine months ended September 30, 2010, net cash used in
operating activities totaled $(44,698) compared to net cash provided by
operating activities of $5,469 in the prior year period. Our operating
activities since inception have been funded primarily by income organically
generated by the company and by the limited sale of our common stock.

Net cash provided by investing activities for the nine months
ended September 30, 2010 amounted to $60,000 compared to net cash provided by
investment activities of $57,450 for the same previous year period.

Net cash used in financing activities for the nine months ended
September 30, 2010 was $74,663 compared to net cash used in of $103,289 for the
nine months ended September 30, 2009

Net cash and cash equivalents at September 30, 2010 was
$2,300.

---

None.

|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK
|------- | ----------------------------------------------------------------

We are a smaller reporting company as defined by Rule 12b-2 of
the Exchange Act and are not required to provide the information under this
item.

|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Our Chief Executive Officer, President, and Chief Financial
Officer (the Certifying Officer) is responsible for establishing and
maintaining disclosure controls and procedures for the Company. The Certifying
Officer has designed such disclosure controls and procedures to ensure that
material information is made known to them, particularly during the period in
which this report was prepared. The Certifying Officer has evaluated the
effectiveness of the Company's disclosure controls and procedures within 90 days
of the date of this report and believes that the Companys disclosure controls
and procedures are effective based on the required evaluation. There have been
no significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

|ITEM 4T. | CONTROLS AND PROCEDURES
|-------- | -----------------------

We are a smaller reporting company as defined by Rule 12b-2 of
the Exchange Act and are not required to provide the information under this
item.

PART II

|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

To the best knowledge of management, there are two pending
legal proceedings against us.

On July 14, 2008, Advanced Digital Technology Co. Ltd., a
Korean corporation (ADT), filed a claim against Lexon and certain named
individuals who are former and current officers of the Company. The claim
alleges breach of an agreement to settle an earlier dispute, involving ADT's
investment of $150,000 in Lexon on or about January 16, 2007 and ADT's
subsequent unilateral decision to rescind and demand a refund of this
investment. The total amount of damages claimed under the pending lawsuit is the
investment amount of $150,000 plus filing costs, interest and attorney fees for
an aggregate amount of $178,522. On or about May 2, 2009, Lexon became aware of
a default judgment entered in the amount above. Such judgment was entered on
December 22, 2009. On or about May 8, 2009, Lexon has retained the law firm of
Smith, Chapman & Campbell for the purpose of setting aside the default
judgment as the Company was never in receipt of the notice of default entry. On
or about July 21, 2009, the court set aside the default as the court agreed that
service was never properly served. We are currently in the discovery stage of
the proceedings.

---

On September 5, 2008, Vivien and David Bollenberg, a current
shareholder (the Bollenbergs), filed a claim against Lexon and other third
parties, including ByungHwee Hwang (also referred to as "Ben Hwang") and other
financial agents and institutions involved in the alleged fraudulent
transaction. The lawsuit is currently pending in the Orange County Superior
Court in Santa Ana, California. The filed complaint alleges that Ben Hwang
together with his representatives, including his accountant, escrow agent and
real estate agent/broker, made certain representations to and solicited the
Bollenbergs to make an investment in several companies and ventures including
Lexon with the intent to misappropriate the solicited funds for personal use.
The Bollenbergs allege that they invested a total of $1,500,000 among and
between the various companies and ventures recommended by Ben Hwang, of which
investment amount approximately $550,000 was invested in Lexon ($150,000 for
600,000 shares at $0.25 per share and $400,000 initially invested in Lexon Korea
and later converted into 1,150,000 shares in Lexon for a total of 1,750,000
shares in Lexon). The final disposition of this case has not yet been
resolved.

|ITEM 2.     | UNREGISTERED SALES OF EQUITY SECURITIES AND
      USE OF PROCEEDS
|----------- | -----------------------------------------------------------------
|            |                                                                  
|**ITEM 3.** | DEFAULT UPON SENIOR SECURITIES                                   

None.

|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF
      SECURITIES HOLDERS
|------- | -----------------------------------------------------------

None.

|ITEM 5. | OTHER INFORMATION
|------- | -----------------

None.

|ITEM 6. | EXHIBITS
|------- | --------

|Exhibit 31.1 -
        CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO THE SECURITIES EXCHANGE
        ACT OF 1934, RULES 13(A)-14 AND 15(D)-14, AS ADOPTED PURSUANT TO SECTION
        302 OF THE SARBANES-OXLEY ACT OF 2002.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                   
|Exhibit 31.2 - CERTIFICATION OF
        CHIEF FINANCIAL OFFICER PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934,
        RULES 13(A)-14 AND 15(D)-14, AS ADOPTED PURSUANT TO SECTION 302 OF THE
        SARBANES-OXLEY ACT OF 2002.
|                                                                                                                                                                                                                                   
|Exhibit 32 - CERTIFICATION
        PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906
        OF THE SARBANES-OXLEY ACT OF 2002.                                                                               

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: November 19, 2010 | By:                     
|                        |                         
|                        |                         

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.

---