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, 2004

          { } 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: 10,724,640 shares as of May 1,
2004.








                                       1
<PAGE>



                                  TEXXON, INC.
              Form 10-QSB for the quarter ended September 30, 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>


<S>      <C>                                                                                             <C>

Part I.  Financial Information

     Item 1.  Financial Information

         Balance Sheet at March 31, 2004 (Unaudited)..............................................         3

         Statements of Operations From Inception (October 6, 1998) Through March 31 2004, and For The
         Three Months Ended March 31, 2004 and 2003 (Unaudited)...................................         4

         Statements of Cash Flows From Inception (October 6, 1998) Through March 31, 2004 and For The
         Three Months Ended March 31, 2004 and 2003 (Unaudited)...................................         5

         Notes to Financial Statements (Unaudited)................................................         6

     Item 2.  Plan of Operation...................................................................        11

     Item 3.  Controls and Procedures.............................................................        16

Part II. Other Information

     Item 1.  Legal Proceedings...................................................................        17
     Item 2.  Changes in Securities and Use of Proceeds...........................................        17
     Item 3.  Defaults upon Senior Securities.....................................................        17
     Item 4.  Submission of Matters to a Vote of Security Holders.................................        17
     Item 5.  Other Information...................................................................        17
     Item 6.  Exhibits and Reports on Form 8-K....................................................        17

Signatures .......................................................................................        18



</TABLE>



                                       2
<PAGE>


                          PART 1. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                  Texxon, Inc.
                         (An Exploration Stage Company)

                                  Balance Sheet
                           March 31, 2004 (Unaudited)



                                        ASSETS
Current Assets
Cash                                                                   $ 1,159
Note Receivable                                                          9,000
Prepaid expenses                                                         1,052
                                                                     ---------
Total Current Assets                                                    11,211
                                                                     ---------

Property and Equipment, Net
Manufacturing equipment                                                    807
Office equipment                                                        15,699
Accumulated depreciation                                                (7,043)
                                                                     ---------
Total Property and Equipment, Net                                        9,463
                                                                     ---------
Other Assets
Deposits                                                                   314
                                                                     ---------

TOTAL ASSETS                                                          $ 20,988
                                                                     =========

                    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable                                                      $ 16,651
Notes payable - shareholders                                           103,305
Accrued interest on shareholder notes                                   14,303
Accrued salaries                                                       540,000
                                                                     ---------
Total Current Liabilities                                              674,259
                                                                     ---------
Total Liabilities                                                      674,259

Stockholders' Equity (Deficit)
Preferred stock, $.001 par value; 5,000,000 shares
   authorized; no shares issued or outstanding                               -
Common stock, $.001 par value; 100,000,000 shares
   authorized; 10,724,640 shares issued and outstanding                 10,725
Additional paid-in capital                                             911,992
Deficit accumulated during the exploration stage                    (1,575,988)
                                                                     ---------
Total Stockholders' Equity (Deficit)                                  (653,271)
                                                                     ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                  $ 20,988
                                                                     =========


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, 2004, and
         For The Three Months Ended March 31, 2004 and 2003 (Unaudited)

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


                          Inception Three Months Ended
              (October 6, 1998) to --------------------------------
                                             March 31, 2004    March 31, 2004    March 31, 2003
                                       --------------------    --------------    --------------

Revenue                                                 $ -               $ -               $ -

Expenses
Platinum and chemical purchases                    $ 28,545               $ -           $ 9,559
Other operating expenses                          1,530,932            80,487           387,168
                                       --------------------    --------------    --------------
Total operating expenses                          1,559,477            80,487           396,727
                                       --------------------    --------------    --------------
Operating loss                                   (1,559,477)          (80,487)         (396,727)

Interest expense                                     17,484             3,979             1,408

Interest income                                         973                 -                 -
                                       --------------------    --------------    --------------
Net loss                                       $ (1,575,988)        $ (84,466)       $ (398,135)
                                       ====================    ==============    ==============

Weighted average shares outstanding               5,537,016        10,724,640        15,659,701
                                       --------------------    --------------    --------------

Loss per share, basic and diluted                   $ (0.28)          $ (0.01)          $ (0.03)
                                       --------------------    --------------    --------------



</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, 2004, and
         For The Three Months Ended March 31, 2004 and 2003 (Unaudited)


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

                                                                          Inception            Three Months Ended
                                                               (October 6, 1998) to     ----------------------------------
                                                                     March 31, 2004     March 31, 2004      March 31, 2003
                                                               --------------------     --------------      --------------
Operating Activities:
Net loss                                                               $ (1,575,988)         $ (84,466)         $ (398,135)
Adjustments to reconcile net loss to
 net cash used in operating activities:
Depreciation expense                                                         39,181                681               4,841
Gain on sale of assets                                                         (324)              (324)                  -
Issuance of stock and options for services                                  374,529                  -             125,000
Write off of assets                                                           4,012                  -                   -
Value of office space                                                           600                600                   -
Changes in operating assets and liabilities:
Inventory                                                                         -                  -               8,709
Notes Receivable                                                             (9,000)            13,000                   -
Prepaid expenses                                                             (1,052)              (869)            178,607
Deposits                                                                       (314)             4,626                   -
Accrued interest                                                             15,266              3,979               1,079
Accrued salaries                                                            540,000             60,000              60,000
Accounts payable                                                             16,651                467              (8,810)
                                                               --------------------     --------------      --------------
Net Cash Used in Operating Activities                                      (596,439)            (2,306)            (28,709)
                                                               --------------------     --------------      --------------
Investing Activities:
Purchases of property and equipment                                        (117,871)                 -                   -
Proceeds from sale of property and equipment                                 69,039              3,000                   -
                                                               --------------------     --------------      --------------
Net Cash Provided By (Used in) Investing Activities                         (48,832)             3,000                   -
                                                               --------------------     --------------      --------------
Financing Activities:
Loans from related parties                                                  175,305                  -              21,999
Proceeds from issuance of long-term debt                                     20,000                  -                   -
Payments on loans from related parties                                      (42,000)                 -                   -
Payments on long-term debt                                                  (20,000)                 -              (1,138)
Proceeds from issuance of common stock                                      513,125                  -               6,750
                                                               --------------------     --------------      --------------
Net Cash Provided by Financing Activities                                   646,430                  -              27,611
                                                               --------------------     --------------      --------------
Change in Cash                                                                1,159                694              (1,098)
Cash at Beginning of Period                                                       -                465               2,285
                                                               --------------------     --------------      --------------
Cash at End of Period                                                       $ 1,159            $ 1,159             $ 1,187
                                                               ====================     ==============      ==============

Supplemental disclosure of cash flow information
Cash Paid for Interest                                                        2,818                  -                 329
                                                               --------------------     --------------      --------------

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




</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, 2004 and 2003 (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 6, 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.

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 of America 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.

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




                                       6
<PAGE>


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 March 31, 2004 were excluded from the EPS calculation as their
effect was anti-dilutive due to the Company realizing net losses for the periods
ended March 31, 2004 and 2003.

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.

New Accounting Standards
In January  2003,  the  Finanacial  Accounting  Standards  Board  issued FIN 46,
"Consolidation  of  Variable  Interest  Entities",  that  provides  guidance  in
determining  when  variable  interest  entities  should be  consolidated  in the
financial  statements  of  the  primary   beneficiary.   For  the  Company,  the
consolidation  provisions  of FIN 46, as revised,  are effective in fiscal years
beginning after December 15, 2004.The adoption of FIN 46 is not expected to have
a material effect on the Company's financial position or results of operations.

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 $1,575,988
during the period from October 6, 1998 (date of inception) to March 31, 2004.
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, 2004, includes $540,000 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.




                                       7
<PAGE>


Note 4--Property and Equipment

On October 16, 2003, the Company sold the majority of its manufacturing
equipment to the inventor of the licensed technology for $40,000 so that work
could continue related to the development of the manufacturing process. The
assets had a historic value of $66,205 and accumulated depreciation of $19,500,
creating a net book value of $46,705. As a result of this transaction, the
Company received $19,000 on the execution date. During the first quarter of
2004, the Company received an additional $13,000 in cash. At March 31, 2004, the
Company's Balance Sheet showed a note receivable for the remaining balance in
the amount of $9,000.

During the period ended March 31, 2004, the Company sold its office furniture to
a third party for $3,000 in cash.

At March 31, 2004, the Company's property and equipment consists of the
following:

      Manufacturing Equipment                              $  807
               Less Accumulated Depreciation                 (298)
                                                     --------------
      Total Manufacturing Equipment                        $  509
                                                     --------------
      Office Equipment                                   $ 15,699
               Less Accumulated Depreciation               (6,745)
                                                     --------------
      Total Office Equipment                              $ 8,954
                                                     --------------
      Total Property and Equipment                        $  9,463
                                                     ==============

Note 5--Notes Payable And 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 had been used to calculate other recent stock transactions at
the time. The Company paid the remaining principal balance during 2003. At March
31, 2004, the accumulated interest owed amounts to $2,711.

During January 2003, the Company borrowed $22,000 from its President and
Vice-President. The loans are unsecured, were due on December 31, 2003 and
provided for an interest rate of 12% that changed to 16% upon default. At March
31, 2004, the remaining unpaid portion of these loans is $19,105 and the related
accumulated interest is $3,039.

During the quarter ended June 30, 2003, the Company borrowed $47,000 from 2 of
its shareholders. The loans are unsecured, were due on December 31, 2003 and
provided for an interest rate of 12% that changed to 16% upon default. At March
31, 2004, the remaining unpaid portion of these loans is $47,000 and the related
accumulated interest is $5,272.

During June 2003, the Company rescinded the stock transactions of four of its
shareholders. As such, the 2,071,430 shares were returned to treasury and
retired, and the original investment amounts totaling $12,000 became an
obligation of the Company. The Company issued notes payable for the $12,000. The
loans are unsecured, were due on December 31, 2003 and provided for an interest
rate of 12% that changed to 16% upon default. At March 31, 2004, the remaining
unpaid portion of these notes is $12,000 and the accumulated interest associated
with this transaction amounts to $1,276.



                                       8
<PAGE>


During the quarter ended September 30, 2003, the Company borrowed $10,000 from
one shareholder and $14,200 from its President and Vice-President. The loans are
unsecured, were due on December 31, 2003 and provided for an interest rate of
12% that changed to 16% upon default. At March 31, 2004, the remaining unpaid
portion of these loans is $24,200 and the related accumulated interest is
$1,963.

During the quarter ended December 31, 2003, the Company borrowed $1,000 from its
President and Vice-President. The loans are unsecured, are due on December 31,
2004 and provide for an interest rate of 12% that changes to 16% upon default.
At March 31, 2004, the remaining unpaid portion of these loans is $1,000 and the
related interest is $42.

Note 6--Commitments and Contingencies

During the quarter ended March 31, 2004, the Company cancelled its lease
agreement for 5,800 square feet of office and warehouse space and moved to a new
office space consisting of approximately 400 square feet which is shared with a
related company. The lease obligation for this new office space is that of the
related company. The lease agreement is dated March 1, 2004, is in effect for 6
months and calls for a monthly payment of $1,200. Texxon has entered into a
verbal agreement with the related company regarding Texxon's use of the office
space. Currently, Texxon is not required to pay for its use of the space. As
such, the Company has recorded the $600 value of this space for the quarter
ended March 31, 2004 as an addition to Paid-In-Capital.

Note 7--Common Stock and Paid In Capital

Texxon is authorized to issue 100,000,000 Shares of Common Stock, par value
$0.001 per share, of which 10,724,640 shares were outstanding as of March 31,
2004. 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

There were no stock transactions during the first quarter of 2004.

Stock Options

At March 31, 2004, no options were exercisable, 2,000,000 options were canceled,
no options were granted, vested or forfeited, and 1,500,000 options were
outstanding.



                                       9
<PAGE>


Note 8--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, 2004
                                               -----------------------

Net Operating Loss carryforward                            $ 408,496
Valuation allowance for deferred tax asset                  (408,496)
                                               -----------------------

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

As the Company has generated net operating losses from its inception and there
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.




                                       10
<PAGE>




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

(a)    Plan of Operation

(i)     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. During the first quarter of 2004, the Company sold
         office furniture to a related party for $3,000. The original cost of
         the equipment was $3,984 and the book value at the time of the sale was
         $2,676.

(iv)    Any expected significant changes in number of employees

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


                                  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 quarterly report will in fact
transpire or prove to be accurate.





                                       11
<PAGE>


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, 2004, we have losses of $1,575,988 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.

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.





                                       12
<PAGE>


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.

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.




                                       13
<PAGE>


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.

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.




                                       14
<PAGE>


     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.





                                       15
<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.

Although We Believe That Our System Of Disclosure Controls And Internal Controls
Over  Financial  Reporting Are  Adequate,  Such Controls Are Subject To Inherent
Limitations.
         Although we believe that our system of disclosure controls and internal
controls over financial reporting are adequate, we can not assure you that such
controls will prevent all errors or all instances of fraud. A control system, no
matter how well designed and operated, can provide only reasonable, not
absolute, assurance that the control system's objectives will be met. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within our company will be detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Controls can also be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of the controls. The
design of any system of controls is based in part upon certain assumptions about
the likelihood of future events, and any design may not succeed in achieving its
stated goals under all potential future conditions. Over time, controls may
become inadequate because of changes in conditions or deterioration in the
degree of compliance with policies or procedures. Because of the inherent
limitation of a cost-effective control system, misstatements due to error or
fraud may occur and not be detected.

ITEM 3.  CONTROLS AND PROCEDURES

     The Company's Chief Executive Officer has evaluated the effectiveness of
the Company's disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) 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 the Company's disclosure controls and procedures are effective in
alerting him on a timely basis to material information relating to the Company
(including its consolidated subsidiaries) required to be included in the
Company's periodic filings under the Exchange Act. There have not been any
significant changes in the Company's internal controls or in other factors that
could significantly affect such controls subsequent to the date of this
evaluation.




                                       16
<PAGE>


                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

         None.

Item 2.  Changes in Securities and Use of  Proceeds

         None

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.

     31.1 Certification  of Chief  Executive  Officer (and  Principal  Financial
          Officer) Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

     32.1 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:

                  None




                                       17
<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 17, 2004







                                       18