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 September 30, 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)



              207 N. Gilbert Road - Suite 210-D, Gilbert, AZ 85234
                    (Address of Principal executive offices)


         Issuer's telephone number, including area code: (480) 215-0195

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 November
16, 2004.








                                       1
<PAGE>


                                  TEXXON, INC.
              Form 10-QSB for the quarter ended September 30, 2004

              CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

         The discussion in this quarterly report regarding Texxon and our
business operations contain "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>

Part I.  Financial Information

     Item 1.  Financial Information

         Balance Sheet at September 30, 2004 (Unaudited)..........................................         3

         Statements of Operations From Inception (October 6, 1998) Through September 30, 2004, and For
         The Nine Months Ended September 30, 2004 and 2003 and For The Three Months Ended September
         30, 2004 and 2003 (Unaudited)............................................................         4

         Statements of Cash Flows From Inception (October 6, 1998) Through September 30, 2004 and For
         The Nine Months Ended September 30, 2004 and 2003 (Unaudited)............................         5

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

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

Part II. Other Information

     Item 1.  Legal Proceedings...................................................................        16
     Item 2.  Changes in Securities and Use of Proceeds...........................................        16
     Item 3.  Defaults upon Senior Securities.....................................................        16
     Item 4.  Submission of Matters to a Vote of Security Holders.................................        16
     Item 5.  Other Information...................................................................        16
     Item 6.  Exhibits and Reports on Form 8-K....................................................        16

Signatures .......................................................................................        17


</TABLE>




                                       2
<PAGE>


                          PART 1. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                  Texxon, Inc.
                         (An Exploration Stage Company)

                                  Balance Sheet
                         September 30, 2004 (Unaudited)



                                        ASSETS
Current Assets
Cash                                                                    $ 1,736
Note Receivable                                                           8,000
Total Current Assets                                                      9,736

Property and Equipment, Net
Manufacturing equipment                                                     807
Office equipment                                                         15,699
Accumulated depreciation                                                 (8,405)
Total Property and Equipment, Net                                         8,101

TOTAL ASSETS                                                           $ 17,837

                    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable                                                       $ 16,964
Notes payable - related parties                                         116,305
Accrued interest on related party notes                                  23,023
Accrued salaries                                                        660,000
Total Current Liabilities                                               816,292

Total Liabilities                                                       816,292

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                                              915,593
Deficit accumulated during the exploration stage                     (1,724,773)
Total Stockholders' Equity (Deficit)                                   (798,455)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                   $ 17,837


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 September 30, 2004, and
            For The Nine Months Ended September 30, 2004 and 2003 and
       For The Three Months Ended September 30, 2004 and 2003 (Unaudited)

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



                                              Inception       Nine Months Ended September 30,   Three Months Ended September 30,
                                   (October 6, 1998) to       ------------------------------    --------------------------------
                                     September 30, 2004                  2004          2003              2004              2003
                                    -------------------         -------------    ----------        ----------        ----------

Revenue                                             $ -               $ -               $ -               $ -               $ -

Expenses
Platinum and chemical purchases                $ 28,520             $ (25)         $ 14,247             $ (25)            $ 926
Other operating expenses                      1,671,021           220,576           449,016          $ 62,186         $ 105,099
                                    -------------------         -------------    ----------        ----------        ----------
Total operating expenses                      1,699,541           220,551           463,263            62,161           106,025
                                    -------------------         -------------    ----------        ----------        ----------
Operating loss                               (1,699,541)         (220,551)         (463,263)          (62,161)         (106,025)

Interest expense                                 26,205            12,700             6,660           $ 4,417           $ 3,111

Interest income                                     973                 -                 -                 -                 -
                                    -------------------         -------------    ----------        ----------        ----------
Net loss                                   $ (1,724,773)       $ (233,251)       $ (469,923)        $ (66,578)       $ (109,136)
                                    ===================         =============    ==========        ==========        ==========

Weighted average shares outstanding           5,971,295        10,724,640        13,838,522        10,724,640        10,723,110
                                    -------------------         -------------    ----------        ----------        ----------

Loss per share, basic and diluted               $ (0.29)          $ (0.02)          $ (0.03)          $ (0.01)          $ (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 September 30, 2004, and
        For The Nine Months Ended September 30, 2004 and 2003 (Unaudited)

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

                                                                          Inception          Nine Months Ended September 30,
                                                               (October 6, 1998) to          -------------------------------
                                                                 September 30, 2004               2004                2003
                                                               --------------------         ----------          -----------
Operating Activities:
Net loss                                                               $ (1,724,773)        $ (233,251)         $ (469,923)
Adjustments to reconcile net loss to
 net cash used in operating activities:
Depreciation expense                                                         40,543              2,043              11,622
Gain on sale of assets                                                         (324)              (324)                  -
Issuance of stock and options for services                                  374,529                  -            (271,171)
Write off of assets                                                           4,012                  -                   -
Value of office space                                                         4,201              4,201                   -
Changes in operating assets and liabilities:
Inventory                                                                         -                  -              10,229
Notes Receivable                                                             (8,000)            14,000                   -
Prepaid expenses                                                                  -                183             454,541
Deposits                                                                          -              4,940               1,435
Accrued interest                                                             23,986             12,699               5,587
Accrued salaries                                                            660,000            180,000             180,000
Accounts payable                                                             16,964                780              (5,996)
                                                               --------------------         ----------          -----------
Net Cash Used in Operating Activities                                      (608,862)           (14,729)            (83,676)
                                                               --------------------         ----------          -----------
Investing Activities:
Purchases of property and equipment                                        (117,871)                 -                   -
Proceeds from sale of property and equipment                                 69,039              3,000              19,333
                                                               --------------------         ----------          -----------
Net Cash Provided By (Used in) Investing Activities                         (48,832)             3,000              19,333
                                                               --------------------         ----------          -----------
Financing Activities:
Loans from related parties                                                  188,305             13,000              93,199
Proceeds from issuance of long-term debt                                     20,000                  -                   -
Payments on loans from related parties                                      (42,000)                 -             (17,000)
Payments on long-term debt                                                  (20,000)                 -             (17,074)
Proceeds from issuance of common stock                                      513,125                  -               6,950
                                                               --------------------         ----------          -----------
Net Cash Provided by Financing Activities                                   659,430             13,000              66,075
                                                               --------------------         ----------          -----------
Change in Cash                                                                1,736              1,271               1,732
Cash at Beginning of Period                                                       -                465               2,285
                                                               --------------------         ----------          -----------
Cash at End of Period                                                       $ 1,736            $ 1,736             $ 4,017
                                                               ====================         ==========          ===========

Supplemental disclosure of cash flow information
Cash Paid for Interest                                                        2,818                  -                 635
                                                               --------------------         ----------          -----------

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 from third parties                              -                  -              12,000
Common stock returned to treasury from consultants                                -                  -
                                                               --------------------         ----------          -----------

</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
                     September 30, 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 the Standards of the Public Company Accounting Oversight Board (United
States) for interim financial statements and do not include all information and
footnotes required by the Standards of the Public Company Accounting Oversight
Board (United States) 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
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 June 30, 2004 were excluded from the EPS calculation as their
effect was anti-dilutive due to the Company realizing net losses for the periods
ended September 30, 2004 and 2003.


                                       6
<PAGE>

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 Financial 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 $1,724,773
during the period from October 6, 1998 (date of inception) to September 30,
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
September 30, 2004, includes $660,000 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 September 30, 2004,
the Company's Balance Sheet showed a note receivable for the remaining balance
in the amount of $8,000.

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

At September 30, 2004, the Company's property and equipment consists of the
following:

 Manufacturing Equipment                                        $  807
          Less Accumulated Depreciation                           (355)
                                                          --------------
 Total Manufacturing Equipment                                  $  452
                                                          --------------

 Office Equipment                                             $ 15,699
          Less Accumulated Depreciation                         (8,050)
                                                          --------------
 Total Office Equipment                                        $ 7,649
                                                          --------------

 Total Property and Equipment                                  $  8,101
                                                          ==============

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
September 30, 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
September 30, 2004, the remaining unpaid portion of these loans is $19,105 and
the related accumulated interest is $4,451.

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
September 30, 2004, the remaining unpaid portion of these loans is $47,000 and
the related accumulated interest is $9,042.

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 September 30, 2004, the
remaining unpaid portion of these notes is $12,000 and the accumulated interest
associated with this transaction amounts to $2,238.



                                       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 September 30, 2004, the remaining
unpaid portion of these loans is $24,200 and the related accumulated interest is
$3,750.

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 September 30, 2004, the remaining unpaid portion of these loans is $1,000 and
the related accumulated interest is $113.

During the period ended June 30, 2004, the Company borrowed $13,000 from a
company of which Mr. Lindsey is CEO. The loan is unsecured, is due on December
31, 2004 and provides for an interest rate of 12% that changes to 16% upon
default. At September 30, 2004, the remaining unpaid portion of this loan was
$13,000 and the related accumulated interest is $718.

Note 6--Commitments and Contingencies

During the period ended June 30, 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 $1,800 value of this space for the period ended
September 30, 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 September
30, 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 nine months of 2004.

Stock Options

At September 30, 2004, no options were exercisable, no 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
                                                        September 30, 2004
                                                      -----------------------

Net Operating Loss carryforward                                   $ 459,083
Valuation allowance for deferred tax asset                         (459,083)
                                                      -----------------------

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 plan also includes ongoing
         research and development of the technology as well as the construction
         and operation of a production facility. The Company will have to raise
         approximately $6,000,000 to continue product development and construct,
         equip and operate 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 September 30, 2004, we have losses of $1,724,773 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 initial operation of our 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. 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 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. Accordingly, these groups of
shareholders exercise substantial influence over our business and the election
of members to the Board of Directors.

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
     Effective November 8, 2004, the Company's Common Stock was approved by NASD
for trade on the over-the-counter Bulletin Board (OTCBB: TXXN). Approval was
received for an opening quote of $.05 Bid and $.15 Ask. Over-the-counter stocks
are 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.

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 do to the



                                       14
<PAGE>


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.

There Is Limited Likelihood Of A Regular Trading Market For The Common Stock
     While the Company's common stock has been approved for trade on the
over-the-counter Bulletin Board (OTCBB: TXXN), there can be no assurance that a
regular market will ever develop, or if developed, will continue. If a regular
market is not developed, 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, if ever. 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.




                                       15
<PAGE>


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.


                           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:

          Form 8-K filed November 18, 2004




                                       16
<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:  November 22, 2004




                                       17