U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

                                   (Mark One)

          {X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended March 31, 2003

          { } 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: 000-49648

                                  TEXXON, INC.
        (Exact name of small business issuer as specified in its charter)


            Oklahoma                                    73-1554122
-----------------------------------        -------------------------------------
 (State or other jurisdiction of              (IRS Employer Identification No.)
 Incorporation or organization)



                    331 East Chilton Dr., Chandler, AZ 85225
                    (Address of Principal executive offices)


         Issuer's telephone number, including area code: (480) 926-5508

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15 (d) of the  Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject  to such  filing  requirements  for the past 90 days.)  YES X   NO
                                                                   ----    ----

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date: 15,794,070 shares as of May 1,
2003.





                                       1
<PAGE>


                                  TEXXON, INC.
                Form 10-QSB for the quarter ended March 31, 2003

              CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

         This discussion in this quarterly report regarding Texxon and our
business and operations contains "forward-looking statements." These
forward-looking statements use words such as "believes," "intends," "expects,"
"may," "will," "should," "plan," "projected," "contemplates," "anticipates," or
similar statements. These statements are based on our beliefs, as well as
assumptions we have used based upon information currently available to us.
Because these statements reflect our current views concerning future events,
these statements involve risks, uncertainties and assumptions. Actual future
results may differ significantly from the results discussed in the
forward-looking statements. A reader, whether investing in our common stock or
not, should not place undue reliance on these forward-looking statements, which
apply only as of the date of this report.

         When used in this Quarterly Report on Form 10-QSB, "Texxon," "we,"
"our," and "us" refers to Texxon, Inc., an Oklahoma corporation.

                                      INDEX

<TABLE>
<CAPTION>


Part I.  Financial Information

     Item 1.  Financial Information

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

         Balance Sheet at March 31, 2003 (Unaudited)..............................................         3

         Statements of Operations From Inception (October 6, 1998) Through March 31, 2003, and
         For The Three Months Ended March 31, 2003 and 2002 (Unaudited)...........................         4

         Statements of Cash Flows From Inception (October 6, 1998) Through March 31, 2003, and
         For The Three Months Ended March 31, 2003 and 2002 (Unaudited)...........................         5

     Item 2.  Management's Discussion and Analysis of Financial Condition and Results
     of Operations................................................................................        11

     Item 3.  Controls and Procedures.............................................................        11

Part II. Other Information

     Item 1.  Legal Proceedings...................................................................        18
     Item 2.  Changes in Securities and Use of Proceeds...........................................        18
     Item 3.  Defaults upon Senior Securities.....................................................        18
     Item 4.  Submission of Matters to a Vote of Security Holders.................................        18
     Item 5.  Other Information...................................................................        18
     Item 6.  Exhibits and Reports on Form 8-K....................................................        18

Signatures .......................................................................................        19



</TABLE>



                                       2
<PAGE>



                          PART 1. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                  Texxon, Inc.
                         (An Exploration Stage Company)

                                  Balance Sheet
                           March 31, 2003 (Unaudited)



                                        ASSETS
Current Assets
Cash                                                                 $ 1,187
Inventory                                                              1,520
Prepaid expenses                                                     290,979
                                                                   ---------
Total Current Assets                                                 293,686
                                                                   ---------
Property, Plant & Equipment, Net
Manufacturing equipment                                               72,687
Automobiles                                                           29,000
Office equipment                                                      19,684
Accumulated depreciation                                             (30,896)
                                                                   ---------
Total Property, Plant & Equipment, Net                                90,475
                                                                   ---------
Other Assets
Deposits                                                               6,375
                                                                   ---------
TOTAL ASSETS                                                       $ 390,536
                                                                   =========
                         LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable                                                    $ 10,443
Notes payable - shareholders                                          36,105
Accrued interest on shareholder notes                                  2,714
Accrued salaries                                                     300,000
Current maturities of long-term debt                                   4,780
                                                                   ---------
Total Current Liabilities                                            354,042
                                                                   ---------
Long-term debt - note payable                                         11,156
                                                                   ---------
Total Liabilities                                                    365,198
                                                                   ---------
Stockholders' Equity
Preferred stock, $.001 par value; 5,000,000 shares
   authorized; no shares issued or outstanding                             -
Common stock, $.001 par value; 45,000,000 shares
   authorized; 15,794,070 shares issued and outstanding               15,794
Additional paid-in capital                                         1,314,294
Deficit accumulated during the exploration stage                  (1,304,750)
                                                                   ---------
Total Stockholders' Equity                                            25,338
                                                                   ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $ 390,536
                                                                   =========


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




                                       3
<PAGE>


<TABLE>
<CAPTION>

                                  Texxon, Inc.
                         (An Exploration Stage Company)

                            Statements of Operations
          From Inception (October 6, 1998) Through March 31, 2003, and
         For The Three Months Ended March 31, 2003 and 2002 (Unaudited)


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

                                                 Inception             Three Months Ended
                                        October 6, 1998 to      ----------------------------------
                                            March 31, 2003      March 31, 2003      March 31, 2002
                                        ------------------      --------------      --------------

Revenue                                               $ -                 $ -                 $ -

Expenses
Platinum and chemical purchases                  $ 23,852             $ 9,559             $ 3,069
Other operating expenses                        1,276,678             387,168             117,320
                                        ------------------      --------------      --------------
Total operating expenses                        1,300,530             396,727             120,389
                                        ------------------      --------------      --------------
Operating loss                                 (1,300,530)           (396,727)           (120,389)

Interest expense                                    5,193               1,408                   -

Interest income                                       973                   -                   2
                                        ------------------      --------------      --------------
Net loss                                     $ (1,304,750)         $ (398,135)         $ (120,387)
                                        ==================      ==============      ==============
Weighted average shares outstanding             4,129,193          15,659,701          10,711,034
                                        ------------------      --------------      --------------
Loss per share, basic and diluted                 $ (0.32)            $ (0.03)            $ (0.01)
                                        ------------------      --------------      --------------

</TABLE>


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





                                       4
<PAGE>


<TABLE>
<CAPTION>


                                  Texxon, Inc.
                         (An Exploration Stage Company)

                            Statements of Cash Flows
          From Inception (October 6, 1998) Through March 31, 2003, and
         For The Three Months Ended March 31, 2003 and 2002 (Unaudited)



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

                                                                       Inception               Three Months Ended
                                                            (October 6, 1998) to      -----------------------------------
                                                                  March 31, 2003      March 31, 2003       March 31, 2002
                                                            --------------------      --------------       --------------
Operating Activities:
Net loss                                                            $ (1,304,750)         $ (398,135)          $ (120,387)
Adjustments to reconcile net loss to
 net cash used in operating activities:
Depreciation expense                                                      30,896               4,841                4,793
Issuance of stock and options for services                               770,700             125,000                    -
Changes in operating assets and liabilities:
Inventory                                                                 (1,520)              8,709                2,430
Prepaid expenses                                                        (290,978)            178,607               36,938
Accrued interest                                                           3,677               1,079                    -
Accrued salaries                                                         300,000              60,000                    -
Accounts payable                                                          10,443              (8,810)              53,804
                                                            --------------------      --------------       --------------
Net Cash Used in Operating Activities                                   (481,532)            (28,709)             (22,422)
                                                            --------------------      --------------       --------------
Investing Activities:
Deposits                                                                  (6,375)                  -                    -
Purchases of property and equipment                                     (117,871)                  -                    -
                                                            --------------------      --------------       --------------
Net Cash Used in Investing Activities                                   (124,246)                  -                    -
                                                            --------------------      --------------       --------------
Financing Activities:
Loans from related parties                                               103,104              21,999               20,000
Proceeds from issuance of long-term debt                                  20,000                   -                    -
Payments on loans from related parties                                   (25,000)                  -                    -
Payments on long-term debt                                                (4,064)             (1,138)                   -
Proceeds from issuance of common stock                                   512,925               6,750                2,625
                                                            --------------------      --------------       --------------
Net Cash Provided by Financing Activities                                606,965              27,611               22,625
                                                            --------------------      --------------       --------------
Change in Cash                                                             1,187              (1,098)                 203
Cash at Beginning of Period                                                    -               2,285                2,697
                                                            --------------------      --------------       --------------
Cash at End of Period                                                    $ 1,187             $ 1,187              $ 2,900
                                                            ====================      ==============       ==============

Supplemental disclosure of cash flow information
Cash Paid for Interest                                                     2,512                 329                    -
                                                            --------------------      --------------       --------------

Non-cash investing and financing activities
Common stock issued for office equipment                                 $ 3,500                 $ -              $ 3,500
Common stock issued as payment of loans to related parties                42,963                   -                    -
                                                            --------------------      --------------       --------------


</TABLE>



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




                                       5
<PAGE>


                                  Texxon, Inc.
                         (An Exploration Stage Company)

                          Notes to Financial Statements
                       March 31, 2003 and 2002 (Unaudited)


Note 1--Organization and Summary of Significant Accounting Policies

Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with  United  States  generally  accepted  accounting   principles  for  interim
financial  statements and do not include all information and footnotes  required
by  U.S.  generally  accepted  accounting   principles  for  complete  financial
statements.   However,  the  information  furnished  reflects  all  adjustments,
consisting only of normal  recurring  adjustments,  which are, in the opinion of
management, necessary in order to make the financial statements not misleading.

Organization and Nature of Operations
Texxon, Inc. ("Texxon" or "the Company") is an exploration stage company that
owns the exclusive worldwide license to a proprietary process for the extraction
of platinum group metals from water.

Exploration Stage Operations
The Company was incorporated on October 5, 1998 under the laws of the state of
Oklahoma. Since inception, the Company's primary focus has been raising capital
and paying for the exclusive license.

The Company will be considered to be in the "exploration stage," as defined in
the SEC regulations, until the platinum extraction process proves commercially
feasible to economically recover platinum from the large quantities of water
that must be processed.

Inventory
Inventory consists of unprocessed platinum on hand which is used in the
production process and is stated at the lower of cost (using the first-in,
first-out method) or market. Platinum inventory produced as a result of the
extraction process and held for resale is classified as a current asset and is
stated at the lower of cost (using the first-in, first-out method) or market.

Prepaid Expenses
Prepaid expenses represent the unamortized portion of the cost of consulting
agreements for process enhancement, financing, and investor relations.

Income Taxes
The Company uses the liability method of accounting for income taxes as set
forth in Statement of Financial Accounting Standards ("SFAS") No. 109,
"Accounting for Income Taxes." Under the liability method, deferred taxes are
determined based on the differences between the financial statements and tax
bases of assets and liabilities at enacted tax rates in effect in the years in
which the differences are expected to reverse.

Stock-based Compensation
The Company accounts for stock-based compensation arrangements for employees in
accordance with Accounting Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees," and complies with the disclosure provisions of
SFAS No. 123, "Accounting for Stock-Based Compensation." Under APB No. 25,
compensation expense is based on the difference, if any, on the date of grant,
between the fair value of the Company's stock and the exercise price. The
Company accounts for stock issued to non-employees in accordance with the
provisions of SFAS No. 123 and related interpretations.

On January 1, 2001, the Company issued to its officers options to purchase
1,500,000 shares of the Company's common stock at an exercise price of $0.001
per share. These options expire ten years from the date of grant and are only
exercisable upon the completion of the first quarter of profitable production
plant operation.

Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported revenues and expenses
during the reporting period. Actual results could differ from those estimates.





                                       6
<PAGE>

Earnings (Loss) per Share
The Company  computes net income  (loss) per share in  accordance  with SFAS No.
128,  "Earnings  per Share."  Under the  provisions  of SFAS No. 128,  basic net
income (loss) per share is calculated by dividing net income (loss) available to
Common  Stockholders  for the period by the  weighted  average  shares of Common
Stock of the Company  outstanding  during the period.  Diluted net income (loss)
per share is computed by  dividing  the net income  (loss) for the period by the
weighted  average  number of common and  common  equivalent  shares  outstanding
during the period.  The calculation of diluted income (loss) per share of Common
Stock  assumes the  dilutive  effect of stock  options.  All  1,500,000  options
outstanding at December 31, 2002 were excluded from the EPS calculation as their
effect was anti-dilutive.

Long-Lived Assets
Property, plant and equipment, including significant improvements, are stated at
cost and are depreciated using the straight line method over the estimated
useful lives of the assets ranging from 5 to 7 years. Expenditures for
maintenance and repairs are charged to operating expenses as incurred. When
properties are retired or otherwise disposed of, the cost of the asset and the
related accumulated depreciation are removed from the accounts with the
resulting gain or loss being reflected in results of operations.

Management assesses the recoverability of long-lived assets whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable from its future undiscounted cash flows. If it is determined that
impairment has occurred, an impairment loss is recognized for the amount by
which the carrying amount of the asset exceeds its estimated fair value.

Reclassifications
Certain reclassifications have been made to the prior year financial statements
to conform to the current period presentation.

Note 2--Uncertainties

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company is in the early exploration stage
and has not yet established sources of revenues sufficient to fund the
development of business and pay current operating expenses. As shown in the
accompanying financial statements, the Company incurred a net loss of $1,304,750
during the period from October 6, 1998 (date of inception) to March 31, 2003.
Management intends to provide the necessary development and operating capital
through sales of its common stock and commencement of sales of the platinum
derived from the licensed product. The ability of the Company to continue as a
going concern during the next year depends on the successful completion of the
Company's efforts to raise capital and commencement of sales of the platinum
derived from the licensed product. The financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.

Note 3--Accrued Salaries

Effective January 1, 2002, the Company began accruing compensation pursuant to
employment agreements dated August 1, 2001. The accrued salaries balance at
March 31, 2003, includes $300,000 that the Company owes its officers pursuant to
the employment agreements. The Company has breached the employment agreements,
and there is no assurance that the officer and employees subject to such
agreements will continue to serve the Company without being paid.

Note 4--Notes Payable

Included in current liabilities is $36,105 in notes payable to two stockholders.
The notes are unsecured, accrue interest at 12% and at a default rate of 16% and
are due on demand (see Note 8 "Related Party Transactions). As of March 31,
2003, the Company had recorded accrued interest in the amount of $3,779 related
to these notes as shown on the Balance Sheet.




                                       7
<PAGE>

Note 5--Long-term Debt

Long-term Debt - note payable is comprised of the following:

      Note payable to a bank, interest at 7.88%, principal and interest
      payments of $489 due monthly through April 2005, secured by an
      automobile

      Principal maturities in years subsequent to March 31, 2003 are as
follows:

       Year Ending
       December 31,

           2003                                  $    3,549
           2004                                       5,070
           2005                                       5,484
           2006                                       1,833
                                                 ------------
                                                 $   15,936
                                                 ------------

Note 6--Commitments and Contingencies

Texxon leases approximately 5,800 square feet of commercial office space under a
one year operating lease dated May 20, 2002 and effective June 1, 2002. The
office space is shared with another company in which Texxon's officers are
officers, directors, employees or shareholders. The contract calls for monthly
payments of $4,080. The current lease is a renewal of the original lease dated
July 20, 2001. Under the original lease agreement, the Company was obligated to
pay $3,908 per month. For the period from inception to March 31, 2003 and for
the three months ended March 31, 2003 and 2002, the Company recorded rent
expense of $81,347, $8,240 and $7,972, respectively. The Company was required to
pay a deposit for this space in the amount of $5,435. This amount is included in
"Deposits" on the Company's balance sheet. During the three months ended March
31, 2003, the Company received $4,000 from the other company for the shared
office space which was offset against rent expense.


Note 7--Related Party Transactions

During 2002, the Company borrowed $56,105 from its President and Vice-President
and certain related parties. The loans were unsecured, were due December 31,
2002 and provided for an interest rate of 12% that changed to 16% upon default.
During December 2002, the Company repaid $42,000 of the outstanding loans and
$963 of accrued interest on those loans with 300,000 shares of the Company's
common stock, par value $0.001. The shares were valued at $.14 per share which
is the price that has been used to calculate other recent stock transactions.
Currently, the Company is in default on these loans and as such, on January 1,
2003, the Company began accruing interest at 16%. At March 31, 2003, the
outstanding unpaid principal amount of these loans was $14,105. The accumulated
interest on these loans amounted to $2,191.

During January 2003, the Company borrowed $22,000 from its President and
Vice-President. The loans are unsecured, are due on December 31, 2003 and
provide for an interest rate of 12% that changes to 16% upon default. At March
31, 2003, the remaining unpaid portion of these loans is $22,000 and the related
accumulated interest is $523.




                                       8
<PAGE>


Note 8--Common Stock and Paid In Capital

Texxon is authorized to issue 45,000,000 Shares of Common Stock, par value
$0.001 per share, of which 15,794,070 shares were outstanding as of March 31,
2003. Texxon is also authorized to issue 5,000,000 Shares of Preferred Stock,
par value $0.001 per share, of which there are no shares presently outstanding.

Voting and Preemptive Rights
Holders of shares of Common Stock are entitled to one vote per share on all
matters submitted to a vote of the stockholders. Voting rights are
non-cumulative. No preemptive rights extend to common stockholders to subscribe
for or to purchase any stock, obligations or other securities of Texxon.

Liquidation Rights
Upon any liquidation, dissolution or winding up of Texxon, holders of shares of
Common Stock are entitled to receive pro rata all of the assets of Texxon
available for distribution to stockholders after liabilities are paid and
distributions are made to the holders of Texxon's Preferred Stock. Preferred
stock preferences, if any, will be fixed by the Company's board of directors at
the time of issuance.

Common Stock Transactions
The Company issued 3,000,000 shares of its common stock at par value to its
founders in exchange for subscriptions during 2000. During 2001, the
subscriptions were paid in full in cash. In addition, the Company issued
3,500,000 shares of its common stock at par value to its founders on June 1,
2001.

On August 22, 2001, the Company completed a private offering of common stock,
resulting in the issuance of 3,146,784 shares for $440,550 ($0.14/share).

On August 28, 2001, the Company issued 1,000,000 shares, valued at $140,000
($0.14 per share) to a consultant in exchange for general business and
consulting services. The term of the agreement was for 1 year. The shares were
valued at $0.14 based on the recent private placement of the Company's stock at
the same $0.14 per share.

In September and October 2001, the Company initiated a private offering of
common stock and issued 33,000 shares for $16,500 ($0.50/share).

In January 2002, the Company sold 7,500 shares of the Company's common stock to
an accredited investor for $0.35 per share. The Company received $2,625 in the
transaction.

In May 2002, the Company issued 20,000 shares of restricted common stock valued
at $7,000 to a consultant for consulting services related to the chemical
reactions and enhancements to the recovery process. The Term of the agreement is
for 1 year. The shares were valued at $0.35 per share based on the recent sale
of stock to an existing shareholder at the same $0.35 per share. The Company has
appropriately recorded an expense for a like amount.

On September 22, 2002, the Company sold 285,714 shares of the Company's common
stock to an accredited investor for $0.14 per share. The Company received
$40,000 as a result of the transaction.

On December 16, 2002, the Company issued 30,000 shares of the Company's common
stock to a consultant in connection with a consulting agreement signed on the
same date. The term of the agreement is six months during which time the
consultant will provide services to the Company related to the identification
and evaluation of financing options available to the Company. The shares were
valued at $0.14 per share based on the share price of other stock transactions
recently completed. The Company recorded prepaid consulting expense related to
the transaction in the amount of $4,200.




                                       9
<PAGE>


On December 16, 2002, the Company issued 1,500,000 shares of common stock to a
consultant pursuant to an agreement executed on that same date. The shares were
valued at $0.14 per share based on the share price of other stock transactions
recently completed. As outlined in the agreement, the consultant will provide
services that include but are not limited to advice to the Company's management
regarding possible financing options and marketing strategies and the
performance of investor relations services. The length of the agreement is six
months. The Company recorded prepaid consulting expense related to this
transaction in the amount of $210,000.

On December 19, 2002, the Company issued 485,714 shares of the Company's common
stock to a consultant in connection with a consulting agreement signed on the
same date. The term of the agreement is one year during which time the
consultant will assist the Company in the enhancement of the platinum recovery
process currently in use. The shares were valued at $0.14 per share based on the
share price of other stock transactions recently completed. The Company recorded
prepaid consulting expense related to the transaction of approximately $68,000.

On December 20, 2002, the Company reserved 1,000,000 shares for and issued
500,000 shares to Madison and Wall, Inc. pursuant to an investor relations
service agreement signed on that same day. The shares were valued at $0.14,
based on the share price of other stock transactions recently completed. The
1,000,000 reserved shares will be issued based on Madison and Wall's ability to
perform which will be determined at the sole discretion of the Company. At March
31, 2003, none of the remaining 1,000,000 shares had been issued.

On December 31, 2002, the Company issued 300,000 shares of common stock to
certain stockholders as repayment of their outstanding loans to the Company. The
shares were valued at $0.14 per share based on the share price of other stock
transactions recently completed. The 300,000 shares paid an outstanding
principal balance of $42,000 and accrued interest of $963.

On January 2, 2003, the Company issued 214,286 shares of its $0.001 par value
common stock to the Company's three board members role as directors. The shares
were valued at $0.14 per share which is the share price of other stock
transactions recently completed. The Company recognized $90,000 in compensation
cost relating to the issuance of these shares.

On January 27, 2003, the Company issued 250,000 shares of common stock to its
corporate attorney for legal services. The shares were valued at $0.14 per share
which is the share price of other stock transactions recently completed. The
Company recognized $35,000 in legal expenses relating to the issuance of these
shares.

During February and March 2003, the Company sold 67,500 shares of its $0.001 par
value common stock to three accredited investors for $6,750 in cash. The shares
were valued at $0.10 per share which was determined by the board to be the fair
market value of the stock.

Stock Options
On August 28, 2001, the Company adopted a stock option plan (the "Plan"). Under
the Plan, incentive stock options (ISOs) may be granted to the Company's
officers, key employees and key advisors for the purchase of up to 3,000,000
shares of the Company's common stock. Scheduled vesting is at the discretion of
the Plan's committee, and expiration dates for the grants may extend up to ten
years from grant date. The exercise prices of the ISOs shall be not less than
100%, of the fair market value of the Company's common stock at grant date. At
December 31, 2002, there were 1,500,000 options issued pursuant to the plan.




                                       10
<PAGE>


In January, 2001, the Company granted certain consultants options to purchase up
to 2,000,000 shares of the Company's common stock at an exercise price of
$0.001. These options were exercisable only after the Company's common stock had
been trading for thirty days on a listed exchange or on the OTC Bulletin Board.
The value of these options, $2,000, was recorded as compensation expense during
2001. The value was calculated using the Black-Scholes option-pricing model with
the following weighted-average assumptions: 500% volatility, expected life of
the options of ten years, zero dividend yield, and a risk-free interest rate of
5.50%. These options were canceled during 2002.

At March 31, 2003, no options were exercisable, 2,000,000 options were canceled,
no options were granted, vested or forfeited and 1,500,000 options were
outstanding.

Note 9--Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The components of the
Company's deferred income tax asset are as follows:

                                                      From inception
                                                     (October 6, 1998)
                                                          through
                                                      March 31, 2003
                                                    --------------------

 Net Operating Loss carryforward                               181,577
 Valuation allowance for deferred tax asset                  $(181,577)
                                                    --------------------

 Net deferred tax asset                                      $      --
                                                    --------------------


As the Company has generated net operating losses from its inception and these
is no assurance of the Company's ability to generate future taxable income, a
valuation allowance has been established to recognize its deferred tax assets
only to the extent of deferred tax liabilities.

Note 10--Subsequent Events

On April 3, 2003, the Company borrowed $9,000 from its President and
Vice-President. The loans are unsecured, are due on December 31, 2003 and
provide from an interest rate of 12% that changes to 16% upon default.






                                       11
<PAGE>




ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

(a)      Plan of Operation

(ii)     Cash Requirements

              The Company's plan of operation for the next 12 months is to fund
         the acquisition of a license for the precious metal recovery
         technology. Provisions of the license agreement call for the Company to
         pay the inventor, Russell Twiford, $500,000 upon successfully raising
         $2,000,000 or more. To date, a payment of $25,000 toward the $500,000
         license agreement has been paid. The Company's plan is also to fund the
         expansion of the pilot plant and to fund, construct and operate a
         production facility. The Company will have to raise approximately
         $6,000,000 to operate the pilot plant and construct and equip the
         processing facility.

(ii) Research and Development objectives during the next 12 months are:

1. Verify the platinum recovery using water from different sources. 2.
Investigate alternative filtering methods to decrease the time required to
filter platinum concentrate from the water. 3. Investigate drying techniques to
increase the yield from the platinum concentrate. 4. Design remedial systems to
insure that the production facility does not discharge improperly. 5. Using the
process described above, investigate the recovery of other platinum group
metals.

         (iii) Any expected purchase or sale of plant and significant equipment

         Upon the completion of efforts to raise capital, the Company intends to
         purchase the necessary equipment to achieve its objectives for the next
         twelve months. There is no planned sale of any equipment.

         (iv) Any expected significant changes in number of employees

         We do not expect any significant changes in the number of employees.




                                       12
<PAGE>


                                  RISK FACTORS



     Some of the statements contained in this registration statement, including
information incorporated by reference, discuss future expectations, or state
other forward-looking information. Those statements are subject to known and
unknown risks, uncertainties and other factors, several of which are beyond the
Company's control that could cause the actual results to differ materially from
those contemplated by the statements. The forward-looking information is based
on various factors and was derived using numerous assumptions. In light of the
risks, assumptions, and uncertainties involved, there can be no assurance that
the forward looking information contained in this Registration Statement will in
fact transpire or prove to be accurate.


We Have A Limited Operating History
     We have only been operating since October 1998. Accordingly, we have a
limited operating history upon which an evaluation of our performance and
prospects can be based. We face all of the risks common to companies in their
early stage of development, including:

                      -Under Capitalization
                      -Cash Shortages
                      -An Unproven Business Model
                      -A Product in the Development Stage
                      -Lack of Revenue, Cash flow, and Earnings to be
                       Self-sustaining

     Our failure to successfully address any of the risks described above will
have a material adverse effect on our business, financial condition and on the
price of our common stock.


We Expect Future Losses
     As of March 31, 2003, we have lost $1,304,750 since the date of inception,
October 6, 1998. We expect to continue to incur losses until we commence the
operation of our production plant. We expect to incur losses during the
operation of our pilot plant. There is no assurance that we will be able to
develop commercially viable products or to generate net revenue from the sale of
our products, or to achieve or maintain profitable operations.


Our Products Are Still In Development
     Texxon has no products or services for sale at this time. The platinum
extraction process is still in the process enhancement stage. Platinum has not
yet been produced using a continuous process that will be required for
profitable operations. We have not submitted to or received environmental
approval from regulatory authorities. Permits may be required before we can
operate the extraction process in the United States. There is no assurance that
the process will be commercially viable or that the regulators will approve the
process for use in the U.S.



If We Cannot Generate Adequate, Profitable Sales Of Our Products, We Will Not Be
Successful
     In order to succeed as a Company, we must develop a commercially viable
product and sell adequate quantities at a high enough price to generate a
profit. We may not accomplish these objectives. Even if we succeed in developing
a commercially viable product, a number of factors may affect future sales of
our product. These factors include:

     - The world market price of platinum;
     - Acceptance of the grade of platinum as produced by our technology by
     manufacturers and other purchasers; - Whether the cost of our product is
     competitive in the marketplace.





                                       13
<PAGE>



We Must Raise Additional Funds To Commence Operations
     We require substantial additional working capital to build, equip and
commence production after completing pilot plant operations. There is no
assurance that the additional capital required will be available to Texxon on
acceptable terms when needed, if at all. To the extent that additional financing
proves to be unavailable when needed, the Company would, in all likelihood, be
compelled to abandon plans of constructing a production facility, and would have
minimal capital remaining to pursue other opportunities. The failure by the
Company to secure additional financing, if needed, could also have a material
adverse effect on the continued development or growth of planned operations. The
Company has no arrangements with any bank or financial institution to secure
additional financing and there can be no assurance that any such arrangement, if
required or otherwise sought, would be available on terms deemed to be
commercially acceptable and in the best interests of the Company. Any additional
capital may involve substantial dilution to the interests of Texxon's then
existing shareholders.


We May Not Be Able To Borrow Funds If Needed
     There currently are no limitations on the Company's ability to borrow funds
to increase the amount of capital available to the Company to complete its
business plan. However, the limited resources of the Company and lack of
operating history will make it difficult to borrow funds. The amount and nature
of any borrowings by the Company will depend on numerous considerations,
including the Company's capital requirements, the Company's perceived ability to
meet debt service on any such borrowings and the then prevailing conditions in
the financial markets, as well as general economic conditions. There can be no
assurance that debt financing, if required or sought, would be available on
terms deemed to be commercially acceptable by and in the best interests of the
Company. The inability of the Company to borrow funds required to fund the pilot
operations, or to provide funds for an additional infusion of capital into a
production facility, may have a material adverse effect on the Company's
financial condition and future prospects. Additionally, to the extent that debt
financing ultimately proves to be available, any borrowings may subject the
Company to various risks traditionally associated with indebtedness, including
the risks of interest rate fluctuations and insufficiency of cash flow to pay
principal and interest.

We Are Unable To Ascertain Risks Relating To The Industry
     The Company has limited experience in the precious metals industry and may
not be aware of all the customs, practices and competitors in that industry. The
consultants that the Company plans to retain may not have had sufficient
experience to enable the Company to completely understand the characteristics of
the industry. The Company will become subject to numerous risks inherent in the
business and operations of financially unstable and early stage or potential
emerging growth companies. An extremely high level of risk frequently
characterizes certain industries, which experience rapid growth. Although
management will endeavor to evaluate the risks inherent in this particular
industry, there can be no assurance that the Company will properly ascertain or
assess all such risks.


We May Not Be Able To Market And Distribute Our Products
     Our success depends, in part, on our ability to market and distribute our
products effectively. We have no experience in the sale or marketing of precious
metals. We have no marketing or distribution capabilities and we will need to
retain consultants that have contacts in and understand the precious metals
marketplace. We may not be successful in entering into marketing arrangements,
whether engaging independent distributors or recruiting, training and retaining
a marketing staff and sales force of our own.


Intense Competition Could Harm Our Financial Performance
     There are a number of companies, universities and research organizations
actively engaged in research and development of technology that may be similar
to the precious metals extraction process that has been licensed by Texxon. Our
competitors may have substantially greater assets, technical staffs, established
market shares, and greater financial and operating resources than we do. There
is no assurance that we can successfully compete.




                                       14
<PAGE>


We Do Not Own The Process And Will Not Own Any Improvements
     The precious metals extraction technology is owned by Russell Twiford and
licensed to Texxon. Improvements to the process will be owned by Mr. Twiford.
The process owner is responsible for recording all parts and specifications of
the invention and to cooperate and coordinate with Texxon on any patent filings
and to provide copies of material documents relevant to any such filings. The
process owner may be unwilling or unable to provide the information required for
the protection of the invention.


There May Be Competing Products In The Future
     If competing products are able to generate an increased supply of platinum,
the Company could suffer the adverse effects of a price decline which may affect
the profitability of the Company. There is no assurance that competing products
will not be developed.


Our  Lack Of Patent Protection Could Adversely Affect Our Ability To Compete
     The precious metal extraction process is not currently covered by any U.S.
or foreign patent. If part or all of the process is acquired by others, the
Company will not have any patent protection and if patents were filed by others,
the Company may be prevented from continuing operations if the extraction
process infringes on the patent filed by others.

We Are Dependent Upon The Services Of The Researchers And Our Employees
     The precious metals extraction process has been developed by Russell
Twiford. The pilot plant and subsequent production facility will be operated by
the officers of the Company under the guidance of Mr. Twiford. The loss of the
services of Mr. Twiford and the inability to retain an acceptable substitute
could have a material adverse effect on Texxon. The License Agreement with Mr.
Twiford continues in effect in perpetuity.

     The Company is dependent upon the services of its officers and consultants.
The loss of the services of these key personnel or the inability to retain such
experienced personnel could have a material adverse effect on Texxon. The
officers of Texxon have entered into employee agreements with the Company that
provide for automatic two-year renewals after the expiration of the initial
term, August 1, 2002. The Company does not currently maintain key man insurance
on the officers of the Company.

Concentration Of Stock Ownership
     Our officers, consultants and our key employees own a substantial number of
shares of the outstanding common stock. The joint venture agreement provides
that Texxon must exercise the right to acquire PGM within 30 days after the end
of the first fiscal year of profitable operations. Texxon will exercise the
right to acquire PGM. The Joint Venture Agreement requires the issuance of up to
12,000,000 shares pursuant to the acquisition of PGM Corporation. Accordingly,
these groups of shareholders, and potential shareholders, exercise substantial
influence over our business and the election of members to the Board of
Directors. If the acquisition of PGM occurs, the shareholders of PGM may impose
conditions that would have a negative impact on the operations of the Company.

Unanticipated Obstacles to Execution of the Business Plan
     The Company's business plans may change significantly. Many of the
Company's potential business endeavors are capital intensive and may be subject
to statutory or regulatory requirements. Management reserves the right to make
significant modifications to the Company's stated strategies depending on future
events.


Protection for Proprietary Rights; Reliance on Trade Secrets
     In certain cases, for example exact timing, operating temperatures or
measurements, where the disclosure of this or similar information required to
obtain a patent would divulge proprietary data, the Company may choose not to
patent parts of the proprietary technology and processes which the Company has
developed or may develop in the future and rely on trade secrets to protect the
proprietary technology and processes. The protection of proprietary technology
through claims of trade secret status has been the subject of increasing claims
and litigation by various companies both in order to protect proprietary rights
as well as for competitive reasons even where proprietary claims are
unsubstantiated. The prosecution of proprietary claims or the defense of such
claims is costly and uncertain given the uncertainty and rapid development of
the principles of law pertaining to this area. The Company may also be subject
to claims by other parties with regard to the use of technology information and
data which may be deemed proprietary to others.




                                       15
<PAGE>

Broker - Dealer Sales of Shares
     The Company's Common Stock is not presently included for trading on any
exchange, and there can be no assurances that the Company will ultimately be
registered on any exchange. The NASDAQ Stock Market, Inc. has recently enacted
certain changes to the entry and maintenance criteria for listing eligibility on
the NASDAQ SmallCap Market. The entry standards require at least $4 million in
net tangible assets or $750,000 net income in two of the last three years. The
proposed entry standards would also require a public float of at least 1 million
shares, $5 million value of public float, a minimum bid price of $2.00 per
share, at least three market makers, and at least 300 shareholders. The
maintenance standards (as opposed to entry standards) require at least $2
million in net tangible assets or $500,000 in net income in two of the last
three years, a public float of at least 500,000 shares, a $1 million market
value of public float, a minimum bid price of $1.00 per share, at least two
market makers, and at least 300 shareholders.

     There is no trading market for our common stock and there is no assurance
that a trading market will ever be established, developed or maintained. Even if
our common stock is approved for trading over-the-counter, we will be subject to
the "penny stock rules" adopted pursuant to Section 15(g) of the Securities
Exchange Act of 1934, as amended. In general, the penny stock rules apply to
non-NASDAQ or non-national stock exchange companies whose common stock trades at
less than $5.00 per share or which have tangible net worth of less than
$5,000,000 ($2,000,000 if the Company has been operating for three or more
years). Such rules require, among other things, that brokers who trade "penny
stock" to persons other than "established customers" complete certain
documentation, make suitability inquiries of investors and provide investors
with certain information concerning trading in the security, including a risk
disclosure document, quote information, broker's commission information and
rights and remedies available to investors in penny stocks. Many brokers have
decided not to trade "penny stock" because of the requirements of the penny
stock rules and, as a result, the number of broker-dealers willing to act as
market makers in such securities is limited. These "penny stock rules,"
therefore, may make it difficult, if not impossible, to sell your shares.

Offering Price
     The price of the Shares offered has been arbitrarily established by Texxon,
Inc., considering such matters as the state of the Company's business
development and the general condition of the industry in which it operates. The
offering price bears little relationship to the assets, net worth, or any other
objective criteria of value applicable to Texxon, Inc.

Projections:  Forward Looking Information
     Management has prepared projections regarding Texxon, Inc.'s anticipated
financial performance. The Company's projections are hypothetical and based upon
the historical financial performance of the Company, the addition of a
sophisticated and well funded marketing plan, and other factors influencing the
business of Texxon, Inc. The projections are based on Management's best estimate
of the probable results of operations of the Company, based on present
circumstances, and have not been reviewed by Texxon, Inc.'s independent
accountants. These projections are based on several assumptions, set forth
therein, which Management believes are reasonable. Some assumptions upon which
the projections are based, however, invariably will not materialize due the
inevitable occurrence of unanticipated events and circumstances beyond
Management's control. Therefore, actual results of operations will vary from the
projections, and such variances may be material. Assumptions regarding future
changes in sales and revenues are necessarily speculative in nature. In
addition, projections do not and cannot take into account such factors as
general economic conditions, unforeseen regulatory changes, the entry into
Texxon, Inc.'s market of additional competitors, the terms and conditions of
future capitalization, and other risks inherent to the Company's business. While
Management believes that the projections accurately reflect possible future
results of Texxon, Inc.'s operations, those results cannot be guaranteed.

Limited Experience Of Management And Potential Conflicts Of Interest
     The officers and consultants of Texxon have had limited experience in the
precious metals industry. In addition, the consultants retained by the Company
are associated with other firms involved in a range of business activities.
Consequently, there are potential conflicts of interest. The Company may suffer
damage if the consultants are involved with other companies that are pursuing
the development of a similar technology and inadvertently or intentionally
disclose proprietary information to these companies. The Articles of
Incorporation and the bylaws of the Company do not provide for the resolution of
conflicts of interest, however the agreements with the inventor and consultant
provide for arbitration of disputes. If a conflict of interest develops, the
Company will seek resolution by arbitration. Management estimates that not more
than 50% of the consultants' time will be devoted to Texxon's activities.




                                       16
<PAGE>


There Is Limited Likelihood Of A Regular Trading Market For The Common Stock A
     public market for the common stock does not exist and there can be no
assurance that one will ever develop, or if developed, will continue. Creation
of a public market for the common stock depends on, (i) acceptance of the
Company on an exchange or interdealer quotation system, (ii) filing of a Form
15c211 with NASDAQ for trading on the bulletin board, or (iii) registration of
the shares through a registration statement filed under the Securities Act of
1933, as amended (the "Securities Act"). Such actions may be costly and
difficult and could potentially fail. If so, it would substantially hinder the
liquidity of the common stock. If no market develops, it may be difficult or
impossible for the holders of the common stock to sell their securities if they
should desire to do so. In addition, there are substantial restrictions on the
sale or transfer of common stock imposed by federal and state security laws, if
the shares of common stock of the Company are not registered through a
registration statement. If the shares are registered, there are no assurances
that a regular trading market will develop for any of the common stock and that,
if developed, any such market will be sustained.

Going Concern
     We are an Exploration stage Company with no revenues. We will not have
revenues until such time as a commercially viable production facility is
developed. Until then, development efforts will depend upon our ability to raise
sufficient operating capital. If such capital is not raised, we will not be able
to continue as a going concern.

(c) Off Balance Sheet Arrangements

None

ITEM 3.  CONTROLS AND PROCEDURES

Texxon's Chief Executive Officer has evaluated the effectiveness of Texxon's
disclosure controls and procedures (as such term is defined in Rules 13a-14(c)
and 15d-14(c) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") as of a date within 90 days prior to the filing date of this
quarterly report. Based on such evaluation, the officer has concluded that
Texxon's disclosure controls and procedures are effective in alerting him on a
timely basis to material information relating to Texxon required to be included
in Texxon's periodic filings under the Exchange Act. There have not been any
significant changes in Texxon's internal controls or in other factors that could
significantly affect such controls subsequent to the date of this evaluation.




                                       17
<PAGE>


                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

         None.

Item 2.  Changes in Securities and Use of  Proceeds

         Our notes to the financial statements for the three months ended March
         31, 2003 contain details about of sales of common stock during the
         period and any changes in the rights of the holders of any class of
         registered securities. The financial statements for the three months
         ended March 31, 2003 and the accompanying notes are incorporated herein
         by reference.

Item 3.  Defaults upon Senior Securities

         None.

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

         None.

Item 5.  Other Information

         None.

Item 6.  Exhibits and Reports on Form 8-K

         (a) Exhibits.

          99.1 Certification  Pursuant to 18 U.S.C. 1350, as adopted pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002

(b) Form 8-K:

          Form 8-K filed with the  Securities  and Exchange  Commission on March
     14, 2003 which relates to Texxon, Inc.'s change in accountants.




                                       18
<PAGE>




                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned as
duly authorized.

                                  Texxon, Inc.
                                  (Registrant)


                                  /s/ Gifford Mabie, III
                                  ------------------------------------
                                  Gifford Mabie III, President and CEO


Dated:  May 15, 2003



                                       19
<PAGE>


                                  CERTIFICATION

I, Gifford Mabie, III, certify that:

         1. I have reviewed this quarterly report on Form 10-QSB of Texxon,
Inc.;

         2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances made, not misleading
with respect to the period covered by this quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;

         4. I am responsible for establishing for maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and have:

                  a. designed such disclosure controls and procedures to ensure
that material information relating to the registrant is made known to me by
others within the entity, particularly during the period in which this quarterly
report is being prepared;

                  b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

                  c. presented in this quarterly report my conclusions about the
effectiveness of the disclosure controls and procedures based on my evaluation
as of the Evaluation Date.

         5. I have disclosed, based on my most recent evaluation, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):

                  a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

                  b. any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's
internal controls.

         6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

         May 15, 2003

                                  By: /s/ Gifford Mabie, III
                                  ----------------------------
                                  Gifford Mabie, III,
                                  President and CEO,
                                  Principal Accounting Officer




                                       20