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

                                  FORM 10-KSB/A
                                  Amendment #2

                   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                     THE SECURITIES AND EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2004

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

           Oklahoma                     000-49648               73-1554122
           --------                     ---------               ----------
(State or other jurisdiction of     (SEC File Number)        (I.R.S. Employer
incorporation or organization)                            Identification Number)


                207 North Gilbert Suite 210-D, Gilbert, AZ 85234
          (Address of Principal Executive Offices, Including ZIP Code)

                                 (480) 215-0195
              (Registrant's Telephone Number, Including Area Code)


Securities registered pursuant to Section 12(b) of the Act:   None


Securities registered pursuant to Section 12(g) of the Act:
                                    Common Stock, $0.001 par value


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 [ ]


Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB/A or any amendment to this Form 10-KSB/A.[ X ]


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


State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified price within the past 60 days. $1,394,203 as of February 14, 2005.


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of February 14, 2005, we had
10,724,640 shares of common stock, $0.001 par value, outstanding.




                                       1
<PAGE>



              CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

         This discussion in this annual 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 Annual Report on Form 10-KSB/A, "Texxon," "we,"
"our," and "us" refers to Texxon, Inc., an Oklahoma corporation.

                                     Part I.

Item 1.  Description of Business

(a)  Business Development

     (1)  Form and year of organization

              Texxon, Inc. (the "Company") was incorporated in Oklahoma on
         October 6, 1998. The Company has been in the exploration stage since
         inception and has no operating history other than organizational
         matters until February of 2001. 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.

              As an exploration-stage company, we presently do not have any
         products for sale. If the Company is successful in building a
         production facility, it may take us several more years before we have
         enough production to be profitable. We may not be successful in
         building a production facility.

     (2)  There have been no bankruptcy, receivership or similar proceedings.

     (3)  There has been no material reclassification,  merger, consolidation or
          purchase or sale of assets not in the ordinary course of business.

(b)  Business of Issuer

     (1)  Principal products or services and their markets

              The principal product of the Company is platinum. Platinum is a
         silvery metallic chemical element, a member of the six transition
         elements in Group VIII of the periodic table known collectively as the
         platinum group metals (ruthenium, rhodium, palladium, osmium, iridium,
         and platinum). Platinum has unique chemical and physical properties
         that make it essential in a wide range of industrial and environmental
         applications. It is also considered one of the finest of all jewelry
         metals. Further statements about platinum and the precious metals
         market are based on reports published by either Anglo Platinum, the
         largest commercial producer of platinum or Johnson Matthey, the largest
         refiner of platinum and precious metals. Both of these sources may be
         found on the web at www.platinum.matthey.com and www.angloplatinum.com.



                                       2
<PAGE>

              Platinum is the rarest of the precious metals. According to
         Platinum 2002 an annual report published by Johnson Matthey, 5.86
         million ounces of platinum were produced during 2001 and the industry
         demand for platinum rose to 6.15 million ounces exceeding 6 million
         ounces for the first time. 4.1 million ounces were supplied by South
         Africa and 1.3 million ounces were supplied by Russia combining to
         provide over 92% of the total platinum supplied to the market. Using
         traditional mining methods, approximately 10 tons of raw ore must be
         mined to produce one pure ounce of platinum. For example, according to
         Platinum 2002, page 13, The Anglo Platinum mines processed 26.8 million
         tonnes of ore to produce 2.11 million ounces of platinum. That is an
         average of 12.70 tonnes of ore processed to produce 1 ounce of
         platinum.


              The Company has licensed a process to extract platinum from
         mineralized water that appears to contain no platinum when analyzed by
         fire assay. Fire assay is an industry standard method to determine
         platinum content in suspected ores and solutions. The platinum recovery
         process ("the process") is an electro-chemical procedure utilizing
         platinum metal dissolved in Aqua Regia, an industry standard for the
         dissolution of platinum, as a catalyst to recover platinum from
         mineralized water sources. The process, using a series of
         electro-chemical steps, concentrates and precipitates not only the
         platinum used as a catalyst in the process, but additional platinum.
         The precipitate is then further refined to bring the purity into the
         95% to 99% range and made available for reuse in the process or sale to
         a refiner. The process has several distinct steps, which are described
         in general terms so as not to disclose any proprietary information.

                  Process

1.                    Mineralized water is pumped to a process tank. Chemicals
                      are added to precondition the water. Platinum dissolved in
                      acid (Aqua Regia) is then added to the process tank.
                      Further chemicals are added to the tank to precipitate the
                      platinum out of solution.

2.                    The process tank is filtered. The spent water is pumped
                      through a series of bag filters and then a resin column to
                      remove any remaining chemicals. The resultant water is
                      then pumped to the drain.

3.                    The precipitate is dried for a period of 12 hours. The
                      dried precipitate is then dissolved in acid. A saturated
                      chloride solution is added to the dissolved precipitate
                      forming a platinum chloride.

4.                    The chloride is washed and dried. The dried chloride is
                      then placed in a kiln and allowed to heat to 1200 degrees
                      F. The result is platinum sponge with a purity of 95% or
                      greater. Platinum sponge is pure platinum metal in a
                      spongy form that is derived from the reduction of platinum
                      chloride. Platinum sponge is the final product from the
                      process and will be sold to refiners previously identified
                      by the company.

              On October 16, 2003, the Company sold the majority of its
         manufacturing equipment to PGM which is owned by Russell Twiford, the
         inventor of the licensed technology.

              Currently, the Company has ceased all process enhancement
         activities related to the technology and has focused its efforts on
         raising capital. Once the necessary funding has been obtained the
         Company plans to outsource the process enhancement to an independent
         laboratory that can help finalize the process.




                                       3
<PAGE>


                  Markets
                           According to Platinum 2002, page 21, over 40% of the
                      overall platinum demand in 2001 was used in catalytic
                      converters. European use of platinum in autocatalysts
                      increased by 375,000 oz. or 55% last year to 1.055 million
                      ounces. According to Anglo Platinum Annual Report in 2001,
                      the diesel segment used around 70% of the estimated
                      980,000 ounces of platinum required for autocatalyst
                      applications in Europe. One of the significant growth
                      areas for platinum demand is for catalysts fitted to
                      diesel vehicles. The growth in this application is
                      expected to contribute some 25% of the expected increase
                      in platinum demand by 2010.

                           According to Johnson Matthey, The ability of platinum
                      to inhibit cell growth has been exploited to treat various
                      forms of cancer. Most testicular cancer patients are
                      treated with platinum based drugs. The cure rate for this
                      type of cancer has increased with the introduction of the
                      platinum anti-cancer drug Cisplatin. Platinum is also used
                      in medical equipment because of its biocompatibility,
                      electrical conductivity and visibility on x-ray images.
                      Platinum is used in the electrodes of pacemakers and on
                      the tips of catheters. Platinum is used to manufacture
                      acetaminophen, the most common non-aspirin pain reliever.
                      A wide range of platinum group metal catalysts are used in
                      the manufacture of a variety of drugs, including
                      treatments for asthma, heart disease, epilepsy and
                      bacterial infections.

     (2)  Distribution methods of the products or services.

              Platinum produced by the process is not in its purest form. It
         will be sold to refining companies for further processing. The platinum
         sponge produced via the process may be less than 99.99% pure. Refiners
         will further refine the product to the 99.99% pure form to sell on the
         metals market.

              The company has contacted three refiners of precious metals and
         obtained terms under which they will purchase the product from the
         Company. The material terms from each refiner vary, and summaries of
         the terms are provided in the table below.

<TABLE>
<CAPTION>

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

      Refiner          Accountability        Refining Charges         Min Lot Size        Settlement Time
--------------------- ------------------ ------------------------- ------------------- ----------------------
Sabin Metals          100% of Assay      $15.00 per Troy Ounce     None                4 weeks from receipt
Engelhard Corp.       99% of Assay       $7.50 per Troy Ounce      50 Troy Ounces      5 weeks from receipt
Glines & Rhodes       95% of Assay       $1.00 per Troy Ounce      None                4 weeks from receipt


</TABLE>

     (3)  Status of any publicly announced new product or service.

               The  Company  has  made no  public  announcements  regarding  new
          products or services.

     (4)  Competitive   business   conditions  and  the  Company's   competitive
          position.

              There are platinum mining and processing operations located
         throughout the world. In addition to these operations there are a
         variety of companies that reclaim and re-refine platinum. All of these
         operations supply a world market that is estimated to exceed 5 million
         ounces per year. While a few large traditional mining companies
         dominate the platinum metals industry, the Company believes its
         competitive position is the ability to recover platinum from
         mineralized water at a lower cost than traditional mining methods on a
         per ounce basis. This will allow the Company to produce and sell into
         the world platinum market even if the commodity takes a sharp downturn
         in price.

              A few large traditional mining companies dominate the platinum
         industry. According to the USGS and Johnson Matthey, the largest
         producer of platinum in the world is Rustenburg Platinum Mines Limited
         a subsidiary of Anglo American Platinum Corp. Ltd. in South Africa.
         Norilisk Nickel is the primary PGM producer in Russia, the second
         largest producing country of the world's supply. The largest
         competition in the United States is Stillwater Mining Company. The
         primary source of platinum from non-traditional mining operations is
         the recovery of platinum from spent catalysts, waste, scrap and coins.



                                       4
<PAGE>

              The precious metals market is a global commodity market. As is
         with any commodity, the price of the metals market is driven based on
         supply and demand of the commodity. Since the Company is selling its
         product into this global commodity market in initial quantities well
         below what the larger mining companies produce, we believe the
         Company's production will have little, if any, material effect on the
         price established by the global metal market.

              Platinum is traded on the New York Mercantile Exchange (NYMEX),
         which is the largest physical commodities futures exchange in the
         world. The exchange trades in oil, gasoline, heating oil, natural gas,
         propane, silver, gold, platinum and palladium. The prices quoted for
         commodities, energy products and precious metals traded on the NYMEX
         form the basis for prices consumers pay for these products worldwide.
         http://www.platts.com

              The Company has contacted three major refiners of precious
         metals--Engelhard Corporation, Sabin Metals Corporation, and Glines &
         Rhodes. Engelhard Corporation of Islen, NJ and Sabin Metal Corporation
         of East Hampton, NY are listed on the NYMEX Official List of Approved
         Assayer and Assayer/Refiners. Each refiner assayed a sample of the
         Company's product on which to base the afore-mentioned contract. Based
         on those analyses, the Company believes it will be able to sell the
         product to any refiner willing to accept platinum with a purity of 99%
         or greater. All contracts based the sale of the platinum metal
         recovered from the process on the daily platinum spot price less any
         applicable refining and processing charges.

              The Company does not make any claims that these refiners validated
         the recovery process, only that the refiners have expressed the
         willingness to purchase the final product produced by the Company.

     (5)  Sources and  availability  of raw materials and the names of principal
          suppliers.

              The primary raw material that the Company uses in the process is
         mineralized water. The Company has identified 300 acres of land with
         sufficient water resources and well capacities that have been tested
         for platinum. The land is either owned or leased by PGM Corporation.
         There are no formal agreements with PGM Corporation to draw mineralized
         water from the wells located on the property.

              The Company may purchase the other necessary chemicals from any
         chemical supply business. The Company has obtained quotes from two
         chemical suppliers in the Phoenix, AZ area. The pricing for these
         chemicals is not definitive and is subject to change. Currently the
         Company has not drawn up agreements or supply contracts with these
         suppliers, but will explore those areas as the need for those chemicals
         is increased. The Company may purchase the platinum sponge needed in
         the process from either Sabin Metals Corporation or Engelhard
         Corporation and has done so in the past.

     (6)  Dependence on one or a few major customers.

              Buyers of platinum are located throughout the world. The Company
         has contacted three major refiners of precious metals, Engelhard
         Corporation, Sabin Metals Corporation, and Glines & Rhodes. Each
         refiner has analyzed the Company's product and offered terms under
         which they will purchase platinum from the Company.



                                       5
<PAGE>


     (7)  Patents,  trademarks,   licenses,  franchises,   concessions,  royalty
          agreements or labor contracts.

              On February 22, 2001, the Company was granted a perpetual license
         to use the method of precious metal extraction by the inventor and
         owner of the process, Russell Twiford. Mr. Twiford as the owner,
         meaning no rights to the process may be claimed by anyone else, has
         authorized the rights to the patent, when filed and granted, to be
         assigned to Texxon, Inc. The license agreement provides for a $500,000
         license fee payable to the inventor after the successful raising of two
         million dollars by the Company. The license agreement also provides a
         5% royalty payable to the inventor based on platinum sales made by the
         Company using the extraction process. As of December 31, 2004, the
         Company had raised $660,375 through private placements of the Company's
         common stock. The Company intends to raise the remaining $1,339,625 of
         the $2 million with further private placements of the Company's common
         stock. The Company will raise the remaining funds to achieve the $2
         million goal on a best efforts basis and cannot predict or anticipate
         when those funds will be successfully raised.

              On August 1, 2001, the Company entered into written employee
         agreements with Gifford M. Mabie III and Mark L. Lindsey. The
         agreements are the same for each employee of the company. These
         employment agreements are for a term of 2 years and renew
         automatically. Additionally, the agreements call for an increase in
         salary at each renewal date. Mr. Mabie and Mr. Lindsey have consented
         to no increases in their respective salaries for the year ended 2004.

              On October 18, 2001, the Company consulted a patent attorney to
         file a provisional patent for the process. To date the patent
         application is still under review by the attorney and has not been
         filed. The Company cannot predict the filing date of our provisional
         patent application due to the fact the recovery process is still
         undergoing process enhancements to become commercially viable. The
         result of our consultation with the patent attorney required more
         information to be gathered and the process to be more thoroughly
         defined.

     (8)  Need for any government approval of principal products or services

              The Company is not aware of any government approval required for
         the product.

     (9)  Effects  of  existing  or  probable  governmental  regulations  on the
          business.

              The company does not anticipate any effect from governmental
         regulations on the business. The Company is not currently engaged in
         process enhancement related to the technology and any further
         enhancements will be outsourced to an independent laboratory.

     (10) Research  and  Development  expenditures  during  each of the last two
          fiscal years.

              During the last two years, the Company spent approximately $17,980
         on research and development expenditures. These costs were primarily
         for the purchase of chemicals and platinum sponge.

     (11) Costs and effects of compliance with environmental laws.

              The company does not anticipate any cost or effect from compliance
         with environmental laws. The Company is not currently engaged in
         process enhancement related to the technology and any further
         enhancements will be outsourced to an independent laboratory.

              If at some time in the future it is determined by the Arizona
         Department of Environmental Quality (ADEQ) that an Aquifer Protection
         Permit (APP) is required, the Company will have to comply with the
         regulations and submit a permit application. The costs to obtain an APP
         are estimated to be $75,000. The yearly maintenance and sampling
         requirements are estimated to be $7,500 per year.



                                       6
<PAGE>


     (12) Number of total employees and number of full time employees.

              The Company currently has no full time employees. We have two part
         time employees. On August 1, 2001, we entered into written employment
         agreements with Gifford M. Mabie III and Mark L. Lindsey. Our employees
         are each engaged in other business activities, subject to the
         limitations of their respective employment agreements. Therefore,
         potential conflicts exist as the employees must divide their time and
         divide their efforts in areas that are common to exploration stage
         companies.

(c)  Reports to security holders

              We file annual, quarterly and periodic reports, proxy statements
         and other information with the Securities and Exchange Commission using
         the Commission's EDGAR system. The Commission maintains a web site,
         http://www.sec.gov, containing reports, proxy and information
         statements and other information regarding registrants that file
         electronically with the Commission. You may read and copy any materials
         filed with the SEC at the SEC's Public Reference Room at 450 Fifth
         Street, N.W., Washington, D.C. 20549. You may obtain information on the
         operation of the Public Reference Room by calling the SEC at
         1-800-SEC-0330.

              We furnish our shareholders with annual reports containing audited
         financial statements and with such other periodic reports as we, from
         time to time, deem appropriate or as may be required by law. We use the
         calendar year as our fiscal year.

              You should rely only on the information contained in this filing
         and the information to which we have referred you. We have not
         authorized any person to provide you with any information that is
         different.

         The Company's website is http://www.texxoninc.com

Item 2.  Description of Property

(a)  Location

              The Company currently leases 400 square feet of office space at
         207 North Gilbert, Gilbert, AZ, 85234. The lease is through a
         non-affiliated party to the Company and expires February 28, 2005. This
         office space is shared with another company and the monthly lease
         amount is $3,600.

(b)  Investment Policies

              The Company does not currently engage in investment activities
         relating to real estate, interests in real estate, real estate
         mortgages or securities of or interest in person primarily engaged in
         real estate activities.

(c)  Description of Real Estate and Operating Data

              None

Item 3.  Legal Proceedings

              None

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

              None



                                       7
<PAGE>


                                     PART II

Item 5.  Market of Common Equity Related Stockholder Matters

(a)  Market Information

               The  Company's  Common  Stock  began trading on the Over The
Counter Bulletin Board under the symbol "TXXN" on November 24, 2004. The high
and low prices for  our common stock during the calendar quarter ended were:

                  Quarter ended            High         Low
                  -------------            ----         ---
                  December 31, 2004        $0.36       $0.14


(b)  Holders

               As of February 14,  2005,  there were 45 holders of record of our
          common stock.

(c)  Dividends

               The Board has not declared and does not anticipate  declaring any
          dividends.  We have  not  declared  or paid,  and for the  foreseeable
          future we do not  anticipate  declaring  or paying,  dividends  on our
          common stock.



                     RECENT SALES OF UNREGISTERED SECURITIES

There were no sales of securities made by the Company during 2004 and through
the date of this filing.

Item 6.  Management's Discussion and Analysis or Plan of Operation

(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
         outsource its process enhancement activities to an independent
         laboratory.

         (ii) Process Enhancement 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.
               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

              None



                                       8
<PAGE>


         (iv) Any expected significant changes in number of employees

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

          (v) Off-Balance Sheet Arrangements

              None

Item 7.  Financial Statements

        See Part F/S

Item 8.  Changes In and Disagreements With Accountants on Accounting and
         Financial Disclosure

        The following information can be found in the Company's Form 8-K filed
with the Securities and Exchange Commission on November 18, 2004.

         On November 15, 2004, Texxon notified Tullius Taylor Sartain and
Sartain LLP ("Tullius Taylor") the principal accountants that were engaged to
audit Texxon's financial statements, that it had been dismissed as Texxon's
principal accountants. Tullius Taylor was engaged by Texxon on March 7, 2003 and
issued reports on the financial statements of Texxon from that time through the
date of the filing of this report on Form 8-K. During the period subsequent to
March 7, 2003 and preceding Tullius Taylor's dismissal, there were no
disagreements between Texxon and Tullius Taylor on any matter of accounting
principles or practices, financial statement disclosures or auditing scope or
procedure, which disagreement(s), if not resolved to the satisfaction of Tullius
Taylor, would have caused Tullius Taylor to make a reference to the subject
matter of the disagreement(s) in connection with its reports on Texxon's
financial statements.

         Tullius Taylor's reports on Texxon's financial statements for the
period since their engagement on March 7, 2003 contained no adverse opinions or
disclaimers of opinion but were modified as to uncertainty relating to Texxon's
ability to continue as a going concern. There were no modifications relating to
audit scope or accounting principles.

         Texxon requested a letter from Tullius Taylor as to whether Tullius
Taylor agrees or disagrees with the above statements and received response from
Tullius Taylor that it agrees with the above statements.

         On November 15, 2004, Texxon engaged Sutton, Robinson, Freeman and Co.,
P.C. ("Sutton Robinson Freeman") to replace Tullius Taylor as Texxon's new
principal accountants to audit Texxon's financial statements. The decision to
change accountants from Tullius Taylor to Sutton Robinson Freeman was
recommended and approved by Texxon's Board of Directors.

Item 8A.   Controls and Procedures

        (a) Disclosure Controls and Procedures.  The Company's Chief Executive
Officer and principal financial officer, have 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 the end of the period covered by this report.  Based
on such evaluation, the Chief Executive Officer and principal financial officer,
have  concluded  that, as of the end of such period,  the  Company's  disclosure
controls  and  procedures  are  effective  in timely  alerting  them to material
information  related to the  Company  that is  required  to be  included  in the
Company's periodic SEC filings.

         (b) Internal  Control  Over  Financial  Reporting.  There have not been
any changes in the Company's internal control over financial  reporting (as such
term is defined in Rules  13a-15(f) and 15d-15(f) under the Exchange Act) during
the  period  covered  by this  report  and  subsequent  to that period that have
materially  affected,  or  are  reasonably  likely  to  materially  affect,  the
Company's internal control over financial reporting.



                                       9
<PAGE>


                                    Part III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance With Section 16(a) of the Exchange Act

(a)  Directors and Executive Officers

     Gifford Mabie III, age 35, has been President and Director of the Company
since January 1, 2001 and will continue to devote approximately 50% of his time
toward the business. From June 1998 to March 2000, Mr. Mabie completed the Year
2000 (Y2K) Audit for Nissan Motor Manufacturing Corporation, the largest
manufacturing facility (6 million square feet) under one roof in North America.
This included the project management and documentation for 8 individual plants
located on the Smyrna, TN and Decherd, TN sites. From 1996 to 1999 Mr. Mabie
worked as a senior engineer for Instrument Controls Service with
responsibilities including project management and engineering team management.
From 1999 to 2001, Mr. Mabie was previously the Engineering Sales Manager for
Performance Technical Services, Inc., an integration and engineering firm in
Murfreesboro, TN. His responsibilities included business development for the
Mid-South Region, engineering sales and regional office management. He holds a
Bachelors of Science degree in Engineering Technology with a major in computer
systems from Memphis State University.

     Mark L. Lindsey, age 35, has been Vice President and Director of the
Company since January 1, 2001 and will continue to devote approximately 50% of
his time toward the business. From 1991 to 2001, Mr. Lindsey worked as an
electrical engineer in industrial automation, process design and process
automation. This experience was gained under the employment of several
engineering and automation firms including; Instrument Controls Service, Behrent
Engineering, AZO Inc. and Performance Technical Services, Inc. From 1996 to
2001, he was a Senior Project Engineer with responsibilities including project
cost tracking, hardware design, control system specification and implementation,
and management of staff Project Engineers. From 1999 to 2001, Mr. Lindsey served
as the Engineering Manager for Performance Technical Services, Inc., an
integration and engineering firm in Murfreesboro, TN. His responsibilities
included project cost analysis, project feasibility and viability studies and
management of engineers from both the home and regional offices. He holds a
Bachelors of Science degree in Engineering Technology with a major in electrical
engineering from Memphis State University.

(b)  Significant Employees

         None

(c)  Family relationships

         None

(d)  Involvement in certain legal proceedings

         None

Item 10.   Executive Compensation

     Mr. Mabie and Mr. Lindsey have been compensated for consulting services. It
is anticipated that upon funding of the production facility, Mr. Mabie and Mr.
Lindsey will each receive an annual salary and devote full time to the affairs
of the Company.




                                       10
<PAGE>


(a)  Summary compensation table

<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE


<S>                    <C>     <C>              <C>         <C>           <C>              <C>                  <C>          <C>
                                                                                      Long Term Compensation
                                                                        --------------------------------------------------
                                         Annual Compensation                           Awards                   Payouts
                               ---------------------------------------- ------------------------------------- ------------
           (a)          (b)         (c)          (d)          (e)             (f)                (g)              (h)         (i)

                                                             Annual       Restricted         Securities                    All Other
        Name and                 Other                    Compen-sation  Stock Award(s)      Underlying          LTIP      Compen-
   Principle Position   Year     Salary ($)   Bonus ($)       ($)             ($)         Options/SARs (#)     Payout($)   sation($)
---------------------- ------- ------------- ------------ ------------- ---------------- -------------------- ------------ ---------

Gifford M. Mabie III   2003    $120,000 (1)  $0           $0            $0               0                    $0           $0
President & CEO
                       2004    $120,000 (1)  $0           $0            $0               0                    $0           $0
Mark L. Lindsey        2003    $120,000 (2)  $0           $0            $0               0                    $0           $0
Vice Pres, Treasurer
                       2004    $120,000 (2)  $0           $0            $0               0                    $0           $0

</TABLE>


(1)  Represents salary accrued but not paid during 2003 and 2004. As of the date
     of this filing, the Company has not paid this accrual.

(2)  Represents salary accrued but not paid during 2003 and 2004. As of the date
     of this filing, the Company has not paid this accrual.





Item 11.   Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth information as of February 17, 2004, with
respect to Common Stock of the Company owned by, the directors and officers of
the Company, and other individuals who own more than 5% of the outstanding and
voting Common Stock.

<TABLE>
<CAPTION>

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

 Title of Class   Name and Address of Beneficial Owner    Relationship to Company    Common Shares Owned   Percent of Class
                                                                                                              Outstanding
----------------- ------------------------------------- ---------------------------- -------------------- --------------------

     Common       Ronald C. Kaufman                          Corporate Counsel                 2,500,000               18.22%
                  324 South Boston
                  10th Floor
                  Tulsa, OK 74119

     Common       Gifford M. Mabie III                     Officer and Director                1,214,286                8.85%
                  1460 East Oxford Lane
                  Gilbert, AZ 85296

     Common       Mark L. Lindsey                          Officer and Director               1,192,857,                8.69%
                  4069 East Wrangler Ct
                  Gilbert, AZ 85297

     Common       Dr. Robert H. Yoe Jr.                      Beneficial Owner                  1,000,000                7.29%
                  2844 Shook Hill Road
                  Birmingham, AL 35223

     Common       Robert H. Yoe III                          Beneficial Owner                  1,000,000                7.28%
                  1000 Laurel Lane
                  Ft. Payne, AL 35967
                                                                                     --------------------

Officers, Directors and Employees as a Group (2 Persons)                                       2,407,143               17.54%
                                                                                     --------------------

Corporate Counsel as a Group (1 Person)                                                        2,500,000               18.22%
                                                                                     --------------------

Officers, Directors, Beneficial Owners and Consultants as a Group (5 Persons)                  6,907,143               50.33%
                                                                                     --------------------
</TABLE>


(b)  Changes in Control

          There are no  arrangements  that may  result in a change in control of
     the Company



                                       11
<PAGE>



Item 12.   Certain Relationships and Related Transactions

     To this date, the Company has had no operating business and engaged in no
transactions in which Mr. Mabie or Mr. Lindsey has had any direct or indirect
material interest. Should the Company engage in any such transaction in the
future, Mr. Mabie's and Mr. Lindsey's interest therein would arise only from his
ownership of Common Stock of the Company and would receive no extra or special
benefit that was not shared equally (pro rata) by all holders of Common Stock of
the Company.

     The Company currently does not have written into its By-Laws or Articles of
Incorporation any procedures for resolving conflicts of interest. However, the
By-Laws do provide for the amendment of the Articles of Incorporation to include
such procedures if deemed necessary by the board of directors.

Item 13.   Exhibits and Reports on Form 8-K

     Exhibits:    See Part III Index to Exhibits

     Form 8-K:    Form 8-K filed with the Securities and Exchange Commission on
                  November 18, 2004 in relation to change in accountants.

Item 14.   Principal Accountant Fees and Services

         The following summarizes the fees billed by Tullius Taylor Sartain &
Sartain, our independent accountants, during 2003 and 2004 and Sutton Robinson
Freeman and Company PC during 2004:

                                                   2003             2004
                                               -----------      -----------
         Tullius Taylor
                  Audit Fees (1)                 $  19,850        $  13,350
                  Audit-Related Fees             $      --        $      --
                  Tax Fees (2)                   $     750        $     875
                  All Other Fees (3)             $     360        $     675
         Sutton Robinson Freeman and Company
                  Audit Fees (1)                 $      --        $   1,500
                  Audit-Related Fees             $      --        $      --
                  Tax Fees (2)                   $      --        $      --
                  All Other Fees (3)             $      --        $     300


(1)   Includes fees billed or to be billed during 2003 and 2004 for the audit of
      our financial statements for the years ended December 31, 2003 and 2004,
      as well as the review of our quarterly financial statements included in
      our Forms 10-QSB filed during the year 2003 and 2004.

(2)   Includes fees billed or to be billed during 2003 and 2004 for the
      preparation of our federal and state income tax returns, franchise tax
      returns, and personal property tax returns for the years ended December
      31, 2003 and 2004.

(3)   Includes fees billed during 2004 for tax related consulting and review of
      regulatory filings.




                                       12
<PAGE>

<TABLE>
<CAPTION>

                                    PART F/S


                 INDEX TO FINANCIAL STATEMENTS AND RELATED NOTES
<S>                                                                                                      <C>

Audited Financial Statements

Independent Auditors' Report.......................................................................      13

Balance Sheet At December 31, 2004.................................................................      14

Statements Of Operations From Inception (October 6, 1998) Through December 31, 2004
And For The Years Ended December 31, 2004 and 2003................................................       15

Statements Of Cash Flows From Inception (October 6, 1998) Through December 31, 2004
And For The Years Ended December 31, 2004 and 2003.................................................      16

Statements Of Shareholders' Equity From Inception (October 6, 1998) Through
December 31, 2004..................................................................................      17

Notes To Financial Statements From Inception (October 6, 1998) Through
December 31, 2004, And For The Years Ended December 31, 2004 and 2003..............................      18




</TABLE>

<PAGE>


                          Independent Auditor's Report


To the Shareholders of
Texxon, Inc.
Tulsa, Oklahoma

We have audited the  accompanying  balance sheet of Texxon,  Inc. (a development
stage  company) for the years ended  December 31, 2004 and 2003, and the related
statements of  operations,  shareholders'  equity,  and cash flows for the years
ended  December  31,  2004 and 2003 and for the period  from  December  16, 1997
(inception)  to  December  31,  2004.   These   financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Texxon, Inc. as of December 31,
2004 and 2003,  and the  results  of its  operations  and its cash flows for the
years ended December 31, 2004 and 2003 and for the period from December 16, 1997
(inception)  to  December  31,  2004  in  conformity  with  generally   accepted
accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial statements,  the Company has suffered recurring losses from operations
and has a net  capital  deficiency,  which  raises  substantial  doubt about its
ability to continue  as a going  concern.  Management's  plans  regarding  those
matters also are  described in Note 2. The  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.


/s/Sutton Robinson Freeman & Co.
----------------------------------------
Sutton Robinson Freeman & Co., P. C.
Certified Public Accountants
Tulsa, Oklahoma

February 23, 2005



                                       13
<PAGE>


                                  Texxon, Inc.
                         (An Exploration Stage Company)

                                  Balance Sheet
                                December 31, 2004



                                     ASSETS
Current Assets
Cash                                                                $ 74
Prepaid Expense                                                    1,200
Note Receivable                                                    8,000
                                                              ----------
Total Current Assets                                               9,274
                                                              ----------
Property and Equipment, Net
Manufacturing equipment                                              807
Office equipment                                                  15,699
Accumulated depreciation                                          (9,086)
                                                              ----------
Total Property and Equipment, Net                                  7,420
                                                              ----------
TOTAL ASSETS                                                    $ 16,694
                                                              ==========

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable                                                 $ 3,601
Notes payable - related parties                                  116,304
Accrued interest on related party notes                           27,856
Accrued salaries                                                 720,000
                                                              ----------
Total Current Liabilities                                        867,761
                                                              ----------
Total Liabilities                                                867,761
                                                              ----------
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                                       937,378
Deficit accumulated during the exploration stage              (1,799,170)
                                                              ----------
Total Stockholders' Equity (Deficit)                            (851,067)
                                                              ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)            $ 16,694
                                                              ==========


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



                                       14
<PAGE>

<TABLE>
<CAPTION>

                                  Texxon, Inc.
                         (An Exploration Stage Company)

                            Statements of Operations
         From Inception (October 6, 1998) Through December 31, 2004, and
                 For The Years Ended December 31, 2004 and 2003


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


                                                         Inception                      Year Ended
                                               (October 6, 1998) to      ----------------------------------------
                                                  December 31, 2004      December 31, 2004      December 31, 2003
                                               --------------------      -----------------      -----------------

Revenue                                                         $ -                    $ -                    $ -

Expenses
Platinum and chemical purchases                            $ 28,520                  $ (25)              $ 14,252
Other operating expenses                                  1,740,585                290,140                560,935
                                               --------------------      -----------------      -----------------
Total operating expenses                                  1,769,105                290,115                575,187
                                               --------------------      -----------------      -----------------
Operating loss                                           (1,769,105)              (290,115)              (575,187)

Interest expense                                             31,038                 17,533                  9,720

Interest income                                                 973                      -                      -
                                               --------------------      -----------------      -----------------
Net loss                                               $ (1,799,170)            $ (307,648)            $ (584,907)
                                               ====================      =================      =================
Weighted average shares outstanding                       6,163,265             10,724,640             13,053,653
                                               --------------------      -----------------      -----------------
Loss per share, basic and diluted                           $ (0.29)               $ (0.03)               $ (0.04)
                                               --------------------      -----------------      -----------------

</TABLE>



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



                                       15
<PAGE>


<TABLE>
<CAPTION>

                                  Texxon, Inc.
                         (An Exploration Stage Company)

                            Statements of Cash Flows
         From Inception (October 6, 1998) Through December 31, 2004, and
                 For The Years Ended December 31, 2004 and 2003


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

                                                                          Inception                     Year Ended
                                                               (October 6, 1998) to      ----------------------------------------
                                                                  December 31, 2004      December 31, 2004      December 31, 2003
                                                               --------------------      -----------------      -----------------

Operating Activities:
Net loss                                                               $ (1,799,170)           $ (307,648)            $ (584,907)
Adjustments to reconcile net loss to
 net cash used in operating activities:
Depreciation expense                                                         41,224                 2,724                 12,445
Gain on sale of assets                                                         (324)                 (324)                     -
Issuance of stock and options for services                                  374,529                     -               (271,171)
Write off of assets                                                           4,012                     -                  4,012
Value of office space                                                        25,986                25,986                      -
Changes in operating assets and liabilities:
Inventory                                                                         -                     -                 10,229
Notes Receivable                                                             (8,000)               14,000                (22,000)
Prepaid expenses                                                             (1,200)               (1,017)               469,402
Deposits                                                                          -                 4,940                  1,435
Accrued interest                                                             28,819                17,532                  8,689
Accrued salaries                                                            720,000               240,000                240,000
Accounts payable                                                              3,600               (12,584)                (3,069)
                                                               --------------------      -----------------      -----------------
Net Cash Used in Operating Activities                                      (610,524)              (16,391)              (134,935)
                                                               --------------------      -----------------      -----------------
Investing Activities:
Purchases of property and equipment                                        (117,871)                    -                      -
Proceeds from sale of property and equipment                                 69,039                 3,000                 66,039
                                                               --------------------      -----------------      -----------------
Net Cash Provided By (Used in) Investing Activities                         (48,832)                3,000                 66,039
                                                               --------------------      -----------------      -----------------
Financing Activities:
Loans from related parties                                                  188,305                13,000                 94,200
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                 67,076
                                                               --------------------      -----------------      -----------------
Change in Cash                                                                   74                  (391)                (1,820)
Cash at Beginning of Period                                                       -                   465                  2,285
                                                               --------------------      -----------------      -----------------
Cash at End of Period                                                          $ 74                  $ 74                  $ 465
                                                               ====================      =================      =================

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 financial statements.




                                       16
<PAGE>

<TABLE>
<CAPTION>

                                  Texxon, Inc.
                         (An Exploration Stage Company)

                  Statements of Changes in Stockholders' Equity
           From Inception (October 6, 1998) Through December 31, 2004

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

                                                                                                             Deficit
                                                                                                          Accumulated
                                          Preferred Stock        Common Stock     Additional      Common   During the
                                          ---------------      ----------------      Paid-In       Stock  Exploration
                                           Shares  Amount      Shares    Amount      Capital  Subscribed         Stage       Total
                                           ------  ------  ----------  --------   ----------  ----------  ------------   ---------

Balance at inception  (October 6, 1998)         -     $ -           -       $ -          $ -         $ -           $ -         $ -
Common stock issued to founders                 -       -   3,000,000     3,000            -      (3,000)            -           -

Balance, December 31, 2000                      -       -   3,000,000     3,000            -      (3,000)            -           -
                                           ------  ------  ----------  --------   ----------  ----------  ------------   ---------

Payment of common stock subscribed              -       -           -         -            -       3,000             -       3,000
Options to non-employees                        -       -           -         -        3,500           -             -       3,500
Common stock issued to founders                 -       -   3,500,000     3,500            -           -             -       3,500
Common stock issued to third parties            -       -   3,179,784     3,180      453,870                               457,050
Common stock issued for services                -       -   1,000,000     1,000      139,000           -             -     140,000
Common stock issued for assets                  -       -      25,000        25        3,475           -             -       3,500
Net loss                                        -       -           -         -            -           -      (394,570)   (394,570)

Balance, December 31, 2001                      -       -  10,704,784    10,705      599,845           -      (394,570)    215,980
                                           ------  ------  ----------  --------   ----------  ----------  ------------   ---------

Common stock issued to third parties                          293,214       293       42,332           -             -      42,625
Common stock issued for services                -       -   3,535,714     3,536      498,664           -             -     502,200
Common stock issued as payment of debt          -       -     300,000       300       42,663           -             -      42,963
Net loss                                        -       -           -         -            -           -      (512,045)   (512,045)

Balance, December 31, 2002                      -     $ -  14,833,712  $ 14,834  $ 1,183,504         $ -    $ (906,615)  $ 291,723
                                           ------  ------  ----------  --------   ----------  ----------  ------------   ---------

Common stock issued to third parties            -       -      69,500        69        6,881           -             -       6,950
Common stock issued for services                -       -     892,858       893      124,107           -             -     125,000
Common stock retired - third party              -       -  (2,071,430)   (2,071)      (9,929)          -             -     (12,000)
Common stock retired - consultants              -       -  (3,000,000)   (3,000)    (393,171)          -             -    (396,171)
Net loss                                        -       -           -         -            -           -      (584,907)   (584,907)
Balance, December 31, 2003                      -     $ -  10,724,640  $ 10,725    $ 911,392         $ -  $ (1,491,522)  $(569,405)
                                           ------  ------  ----------  --------   ----------  ----------  ------------   ---------

Value of donated office space                                                        $ 6,001                                 6,001
Value of contributed capital                                                        $ 19,985                                19,985
Net loss                                                                                                      (307,648)   (307,648)

Balance, December 31, 2004                      -     $ -  10,724,640  $ 10,725    $ 937,378         $ -  $ (1,799,170)  $(851,067)
                                           ======  ======  ==========  ========   ==========  ==========  ============   =========


</TABLE>

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



                                       17
<PAGE>




                                  Texxon, Inc.
                         (An Exploration Stage Company)

                          Notes to Financial Statements
                           December 31, 2004 and 2003

Note 1--Organization and Summary of Significant Accounting Policies

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 December 31, 2004 and 2003.




                                       18
<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 December 2004, the Financial  Accounting  Standards Board issued Statement of
Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment. This
Statement  replaces FASB  Statement No. 123 and  supersedes  APB Opinion No. 25.
Statement  No.  123(R) will  require the fair value of all stock  option  awards
issued to  employees  to be  recorded  as an expense  over the  related  vesting
period. The Statement also requires the recognition of compensation  expense for
the fair value of any unvested  stock option awards  outstanding  at the date of
adoption.  We are evaluating these new rules, but expect no material impact upon
adoption relating to outstanding options.

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 $1,799,170
during the period from October 6, 1998 (date of inception) to December 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
December 31, 2004, includes $720,000 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.




                                       19
<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 December 31, 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 December 31, 2004, the Company's property and equipment consists of the
following:

         Manufacturing Equipment                     $  807
                  Less Accumulated Depreciation        (384)
                                                   ----------
         Total Manufacturing Equipment               $  423
                                                   ----------

         Office Equipment                          $ 15,699
                  Less Accumulated Depreciation      (8,702)
                                                   ----------
         Total Office Equipment                     $ 6,997
                                                   ----------

         Total Property and Equipment               $  7,420
                                                   ==========

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
December 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
December 31, 2004, the remaining unpaid portion of these loans is $19,105 and
the related accumulated interest is $5,049.

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
December 31, 2004, the remaining unpaid portion of these loans is $47,000 and
the related accumulated interest is $10,938.

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 December 31, 2004, the
remaining unpaid portion of these notes is $12,000 and the accumulated interest
associated with this transaction amounts to $2,722.



                                       20
<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 December 31, 2004, the remaining unpaid
portion of these loans is $24,200 and the related accumulated interest is
$4,957.

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 December 31, 2004, the remaining unpaid portion of these loans is $1,000 and
the related accumulated interest is $128.

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 December 31, 2004, the remaining unpaid portion of this loan was
$13,000 and the related accumulated interest is $1,111.

Note 6--Commitments and Contingencies

During the year ended December 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 $6,001 value of this space for the year ended
December 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 December 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 year ended December 31, 2004.

Stock Options

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



                                       21
<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
                                               December 31, 2004
                                             --------------------

Net Operating Loss carryforward                        $ 484,378
Valuation allowance for deferred tax asset              (484,378)
                                             --------------------

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.




                                       22
<PAGE>


<TABLE>
<CAPTION>

                                    Part III

                      Index to and Description of Exhibits

<S>              <C>

Exhibit
Number           Description of Exhibit
---------------- ------------------------------------------------------------------------------------------------

2.1 *            Articles of Incorporation dated October 6, 1998
2.2 *            By-laws of Texxon, Inc. adopted October 6, 1998
3.1 *            Sample Stock Certificate
6.1 **           Texxon, Inc. Non-Qualified Stock Option Plan
6.2 *            License Agreement dated February 22, 2001
6.3 *            Joint Venture Agreement dated February 22, 2001
6.4 *            Employee Agreement for Gifford M. Mabie III dated August 1, 2001
6.5 *            Employee Agreement for Mark L. Lindsey dated August 1, 2001
6.6 *            Indemnification Agreement for Gifford M. Mabie III dated August 1, 2001
6.7 *            Indemnification Agreement for Mark L. Lindsey dated August 1, 2001
6.8 *            Dean Guise Agreement dated August 28, 2001
6.9 *            Dr. Mick Bjelopavlic Agreement dated May 13, 2002
31.1 ***         Certification of Chief Executive Officer and Chief
                 Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 ***         Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C.
                 Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


</TABLE>

*   Filed with Amended Form 10-SB filed November 1, 2002.
**  Filed with S-8 Registration Statement filed January 27, 2003
*** Filed as an Exhibit to this Form 10-KSB/A



                                       23

<PAGE>


                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.



                                                Texxon, Inc.


                                                /s/ GIFFORD M. MABIE III

                                                -------------------------------
                                                Gifford M. Mabie III

March 28, 2005




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