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

                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 2003

                                  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, 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
or any amendment to this Form 10-KSB.[ 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. $-0- as of March 15, 2004.


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of March 15, 2004, 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, "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.


                  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.



                                       3
<PAGE>

                         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.

          (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.

               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



                                       4
<PAGE>

               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.

          (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,
          2003, 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 2003.



                                       5
<PAGE>

               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.

          (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



                                       6
<PAGE>

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  August 31,  2004.  This office  space is
     shared with another company and the monthly lease amount is $1,200.

     (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

                                     PART II

Item 5.  Market of Common Equity Related Stockholder Matters

     (a)  Market Information

          (1)  The Company's  Common Stock is currently not traded on any public
               trading market. Management does not currently anticipate that any
               market for its Common Stock will develop until such time, if any,
               as the Company has successfully implemented its business plan.

     (b)  Holders

          As of March 15,  2004,  there  were 72 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.



                                       7
<PAGE>

                     RECENT SALES OF UNREGISTERED SECURITIES

     During April 2002 the company sold  another  33,000  shares of common stock
for aggregate  consideration  of $16,500 under another private  offering at $.50
per share and 7,500  shares of common stock to an existing  shareholder  for the
aggregate  consideration of $2,625 at $.35 per share. The share price was raised
from the previous price of $.14 based on the recent successful sale of 3,146,784
shares of common stock for $440,550  from a previous  offering.  The shares were
sold without  registration in reliance upon the exemption provided by Regulation
D,  Rule  504.  The  Company  relied  on this  exemption  based  on its  current
"non-reporting"  status  and  having  not  had  sales  of  securities  exceeding
$1,000,000 in a 12 month period.

     On May 13, 2002,  the Company issued 20,000 shares of its common stock with
a basis of $.35 a share for  consulting  services to Dr. Mick  Bjelopavlic.  The
consulting  services  were  valued at  $7,000.  This price was  selected  by the
Company  based on the recent sale of common stock at $.35 per share.  The shares
were sold  without  registration  in  reliance  upon the  exemption  provided by
Regulation  D, Rule 504.  The  Company  relied  on this  exemption  based on its
current  "non-reporting"  status  and  the  Company  not  having  had  sales  of
securities exceeding $1,000,000 in a 12 month period.

     On October 1, 2002,  the company  sold  285,714  shares of common stock for
aggregate  consideration  of  $40,000.  The  shares  were  sold  to an  existing
accredited  shareholder  for $.14 per share based on the  shareholders  original
purchase price.  The shares were sold without  registration in reliance upon the
exemption  provided  by  Regulation  D, Rule  506.  The  Company  relied on this
exemption based on the shareholder's "accredited investor" status and having not
exceeded the 35 purchaser limitation.

     In December  2002,  the company issued  approximately  3,515,714  shares of
common stock for consulting  services.  The  consulting  services were valued at
$492,200  and were  made in the  ordinary  course  of  business.  In June  2003,
1,500,000 of the above mentioned shares were cancelled due to non-performance.

     On December 31, 2002, the Company issued 300,000 shares of its common stock
as repayment to shareholders  who had made loans to the Company over the past 12
months. The loans and accumulated  interest totaled $42,963. The price per share
of $0.14 was based on the most recent sales of common stock.

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

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

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

     During May 2003,  the Company sold  200,000  shares of its $0.001 par value
common stock to one  accredited  investor  for $20,000 in cash.  The shares were
valued  at $0.10  per share  which  was  determined  by the board to be the fair
market value of the stock.

     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,  are due on December  31, 2003 and provide for an interest
rate of 12%  that  changes  to 16% upon  default.  At  December  31,  2003,  the
accumulated interest associated with this transaction amounted to $797.

     During  August  2003,  the  Company  sold 2,000  shares of $0.001 par value
common stock to one  investor for $200 in cash.  The shares were valued at $0.10
per share which was  determined  by the board to be the fair market value of the
stock.



                                       8
<PAGE>

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

               On  October  16,  2003,  the  Company  sold the  majority  of its
          manufacturing equipment to the inventor of the licensed technology for
          $40,000. See Part F/S for more information related to the value of the
          assets  sold and how the Company  accounted  for the  transaction.  No
          other  purchases  or sales  of plant  and  significant  equipment  are
          anticipated.

          (iv) Any expected significant changes in number of employees

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

     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 March 14, 2003.

     On March 7, 2003,  the Company  notified  Rodefer  Moss and  Company,  PLLC
("Rodefer  Moss") the principal  accountants that were engaged to audit Texxon's
financial  statements,   that  it  had  been  dismissed  as  Texxon's  principal
accountants.  Rodefer  Moss was engaged by Texxon on October 26, 2001 and issued
reports on the  financial  statements  of Texxon  from that time until  March 7,
2003.  During the period  subsequent to October 26, 2001 and  preceding  Rodefer
Moss'  dismissal,  there were no  disagreements  between Texxon on any matter of
accounting principles or practices,  financial statements disclosure or auditing
scope of procedure,  which disagreement(s),  if not resolved to the satisfaction
of Rodefer  Moss,  would have caused  Rodefer  Moss to make a  reference  to the
subject  matter  of the  disagreement(s)  in  connection  with it's  reports  on
Texxon's financial statements.

     Rodefer Moss' reports on Texxon's financial statements for the period since
their   engagement  on  October  26,  2001  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.




                                       9
<PAGE>

     Texxon  requested a letter from  Rodefer  Moss as to whether  Rodefer  Moss
agrees or disagrees with the above statements and received response from Rodefer
Moss dated March 12, 2003 that stated that it agreed with the above statements.

     On March 7, 2003,  Texxon  engaged  Tullius  Taylor Sartain and Sartain LLP
("Tullius Taylor") to replace Rodefer Moss as Texxon's new principal accountants
to audit Texxon's financial statements.  The decision to change accountants from
Rodefer Moss to Tullius Taylor was recommended and approved by Texxon's Board of
Directors.


Item 8A.   Controls and Procedures

     (a)  Within  the 90 days prior to the date of this  report,  the  Company's
Chief  Executive  Officer  and  principal   financial  officer  carried  out  an
evaluation  of the  effectiveness  of the design and  operation of the Company's
disclosure  controls and procedures pursuant to Exchange Act Rules 13a-15(e) and
15d-15(e).  Based on that evaluation,  the Chief Executive Officer and principal
financial  officer  concluded  that  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) Subsequent to the date of this  evaluation,  there have been no changes
in the Company's internal controls over financial  reporting or in other factors
that could  significantly  affect  these  controls,  and no  discoveries  of any
significant  deficiencies  or material  weaknesses  in such  controls that would
require the Company to take corrective action.

                                    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 34, 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 34, 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.




                                       10
<PAGE>

          Dr.  Robert  Yoe,  age 69, is a  director  of the  Company.  Dr Yoe is
     currently a retired  cardiologist after the operation of a private practice
     for nearly 35 years.  Dr. Yoe  served in the United  States  Army in a MASH
     unit during the Korean War.  After  returning from the war in 1945, Dr. Yoe
     operated a private practice in Birmingham Alabama until he retired in 1990.
     During those years he has served as a board member of two local foundations
     and Co-Founded both an Insurance Company and a multi-surgeon Cardiovascular
     Private Practice. Dr Yoe holds a Bachelor of Science degree from Birmingham
     Southern and a Doctorate of Medicine Degree from the prestigious Vanderbilt
     Medical School.

     (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.

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

Gifford M. Mabie III   2002    $120,000 (2)  $0           $5,000 (1)    $0               0                    $0           $0
President & CEO
                       2003    $120,000 (2)  $0           $0            $0               0                    $0           $0
Mark L. Lindsey        2002    $120,000 (4)  $0           $5,000 (3)    $0               0                    $0           $0
Vice Pres, Treasurer
                       2003    $120,000 (4)  $0           $0            $0               0                    $0           $0

</TABLE>


(1)  $5,000 paid to Gifford M. Mabie III as a consulting fee during 2002.

(2)  Represents salary accrued but not paid during 2002 and 2003. As of the date
     of this filing, the Company has not paid this accrual.

(3)  $5,000 paid to Mark L. Lindsey as a consulting fee during 2002.

(4)  Represents salary accrued but not paid during 2002 and 2003. As of the date
     of this filing, the Company has not paid this accrual.



                                       11
<PAGE>



Item 11.   Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth information as of March 15, 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                   750,000                6.99%
                  324 South Boston
                  10th Floor
                  Tulsa, OK 74119

     Common       Romaine Minde                              Beneficial Owner                    771,200                7.19%
                  #10 Harolds Hollow
                  Whitecourt
                  Alberta Canada, T7S-1T4

     Common       Gifford M. Mabie III                     Officer and Director                1,321,429               12.32%
                  1460 East Oxford Lane
                  Gilbert, AZ 85296

     Common       Mark L. Lindsey                          Officer and Director                1,300,000               12.12%
                  4069 East Wrangler Ct
                  Gilbert, AZ 85297

     Common       Dr. Robert H. Yoe Jr.                          Director                      1,000,000                9.32%
                  2844 Shook Hill Road
                  Birmingham, AL 35223

     Common       Robert H. Yoe III                          Beneficial Owner                  1,000,000                9.32%
                                                                                     --------------------
                  1000 Laurel Lane
                  Ft. Payne, AL 35967


Officers, Directors and Employees as a Group (3 Persons)                                       3,621,429               33.76%
                                                                                     --------------------

Corporate Counsel as a Group (1 Person)                                                          750,000                6.99%
                                                                                     --------------------

Officers, Directors, Beneficial Owners and Consultants as a Group (7 Persons)                  6,142,629               57.27%
                                                                                     --------------------


</TABLE>

(b)  Changes in Control

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



                                       12
<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.

     On January 1, 2003, the Company appointed Dr. Robert H. Yoe to its Board of
Directors.  For  further  information  about  Dr.  Yoe see  Item  9.  Directors,
Executive Officers, Promoters and Control Persons; Compliance With Section 16(a)
of the Exchange Act.

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
                March 14, 2003 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 2002 and 2003:

                                         2002            2003
                                    ---------        --------
         Audit Fees (1)             $   8,000        $ 19,850
         Audit-Related Fees         $      --        $     --
         Tax Fees (2)               $     700        $    750
         All Other Fees (3)         $      --        $    360

(1)   Includes fees billed or to be billed during 2002 and 2003 for the audit of
      our financial statements for the years ended December 31, 2002 and 2003,
      as well as the review of our quarterly financial statements included in
      our Forms 10-QSB filed during the year 2002 and 2003.

(2)   Includes fees billed or to be billed during 2002 and 2003 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, 2002 and 2003.

(3)   Includes fees billed during 2003 for tax related consulting.




                                       13
<PAGE>

<TABLE>
<CAPTION>

                                    Part F/S


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

Audited Financial Statements

Independent Auditors' Report.......................................................................      15

Balance Sheet At December 31, 2003.................................................................      16

Statements Of Operations From Inception (October 6, 1998) Through December 31, 2003
And For The Years Ended December 31, 2003 and 2002................................................       17

Statements Of Cash Flows From Inception (October 6, 1998) Through December 31, 2003
And For The Years Ended December 31, 2003 and 2002.................................................      18

Statements Of Shareholders' Equity From Inception (October 6, 1998) Through
December 31, 2003..................................................................................      19

Notes To Financial Statements From Inception (October 6, 1998) Through
December 31, 2003, And For The Years Ended December 31, 2003 and 2002..............................      20


</TABLE>



                                       14
<PAGE>


                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Shareholders
of Texxon, Inc.

We have audited the accompanying  balance sheet of Texxon,  Inc., an Exploration
Stage  Company,  as  of  December  31,  2003,  and  the  related  statements  of
operations, cash flows and shareholders' equity for the years ended December 31,
2003 and 2002, and for the period from  inception  (October 6, 1998) to December
31, 2003.  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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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  audits  provide  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,
2003,  and the results of its  operations and its cash flows for the years ended
December 31, 2003 and 2002, and for the period from inception  (October 6, 1998)
to December  31,  2003,  in  conformity  with  accounting  principles  generally
accepted in the United States of America.

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  is  an  exploration  stage  company  with
insufficient  revenues to fund development and operating  expenses.  The Company
also  has  insufficient  cash to fund  obligations  as they  become  due.  These
conditions  raise  substantial  doubt  about its  ability to continue as a going
concern.  Management's  plan concerning this matter is also described in Note 2.
The financial  statements do not include any adjustments  that might result from
the outcome of this uncertainty.

/s/ Tullius Taylor Sartain & Sartain LLP

Tulsa, Oklahoma
March 11, 2004






                                       15
<PAGE>






                                  Texxon, Inc.
                         (An Exploration Stage Company)

                                  Balance Sheet
                                December 31, 2003



                                     ASSETS
Current Assets
Cash                                                                    $ 465
Note Receivable                                                        22,000
Prepaid expenses                                                          183
                                                                   ----------
Total Current Assets                                                   22,648
                                                                   ----------
Property, Plant and Equipment, Net
Manufacturing equipment                                                   807
Office equipment                                                       19,684
Accumulated depreciation                                               (7,671)
                                                                   ----------
Total Property, Plant and Equipment, Net                               12,820
                                                                   ----------
Other Assets
Deposits                                                                4,940
                                                                   ----------
TOTAL ASSETS                                                         $ 40,408
                                                                   ==========

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable                                                     $ 16,184
Notes payable - shareholders                                          103,305
Accrued interest on shareholder notes                                  10,324
Accrued salaries                                                      480,000
                                                                   ----------
Total Current Liabilities                                             609,813
                                                                   ----------
Total Liabilities                                                     609,813
                                                                   ----------

Stockholders' Equity (Deficit)
Preferred stock, $.001 par value; 5,000,000 shares
   authorized; no shares issued or outstanding                              -
Common stock, $.001 par value; 100,000,000 shares
   authorized; 10,724,640 shares issued and outstanding                10,725
Additional paid-in capital                                            911,392
Deficit accumulated during the exploration stage                   (1,491,522)
                                                                   ----------
Total Stockholders' Equity (Deficit)                                 (569,405)
                                                                   ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                 $ 40,408
                                                                   ==========

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





                                       16
<PAGE>

<TABLE>
<CAPTION>

                                  Texxon, Inc.
                         (An Exploration Stage Company)

                            Statements of Operations
         From Inception (October 6, 1998) Through December 31, 2003, and
                 For The Years Ended December 31, 2003 and 2002

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

                                            Inception               Years Ended
                                 (October 6, 1998) to   -------------------------------------
                                    December 31, 2003   December 31, 2003   December 31, 2002
                                    -----------------   -----------------   -----------------

Revenue                                           $ -                 $ -                 $ -

Expenses
Platinum and chemical purchases              $ 28,545            $ 14,252            $ 10,493
Other operating expenses                    1,450,445             560,935             497,769
                                    -----------------   -----------------   -----------------
Total operating expenses                    1,478,990             575,187             508,262
                                    -----------------   -----------------   -----------------
Operating loss                             (1,478,990)           (575,187)           (508,262)
                                    -----------------   -----------------   -----------------
Interest expense                               13,505               9,720               3,785
                                    -----------------   -----------------   -----------------
Interest income                                   973                   -                   2
                                    -----------------   -----------------   -----------------
Net loss                                 $ (1,491,522)         $ (584,907)         $ (512,045)
                                    =================   =================   =================

Weighted average shares outstanding         5,290,115          13,053,653          10,739,843
                                    -----------------   -----------------   -----------------

Loss per share, basic and diluted             $ (0.28)            $ (0.04)            $ (0.05)
                                    -----------------   -----------------   -----------------


</TABLE>

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



                                       17
<PAGE>

<TABLE>
<CAPTION>


                                  Texxon, Inc.
                         (An Exploration Stage Company)

                            Statements of Cash Flows
         From Inception (October 6, 1998) Through December 31, 2003, and
                 For The Years Ended December 31, 2003 and 2002

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


                                                                           Inception               Years Ended
                                                                (October 6, 1998) to   -----------------   -----------------
                                                                   December 31, 2003   December 31, 2003   December 31, 2002
                                                                --------------------   -----------------   -----------------
Operating Activities:
Net loss                                                               $ (1,491,522)         $ (584,907)         $ (512,045)
Adjustments to reconcile net loss to
 net cash used in operating activities:
Depreciation expense                                                         38,500              12,445              19,251
Issuance of stock and options for services                                  374,529            (271,171)            502,200
Write off of assets                                                           4,012               4,012                   -
Changes in operating assets and liabilities:
Inventory                                                                         -              10,229              (3,726)
Notes Receivable                                                            (22,000)            (22,000)                  -
Prepaid expenses                                                               (183)            469,402            (369,503)
Deposits                                                                     (4,940)              1,435                   -
Accrued interest                                                             11,287               8,689               2,598
Accrued salaries                                                            480,000             240,000             240,000
Accounts payable                                                             16,184              (3,069)              6,341
                                                                --------------------   -----------------   -----------------
Net Cash Used in Operating Activities                                      (594,133)           (134,935)           (114,884)
                                                                --------------------   -----------------   -----------------

Investing Activities:
Purchases of property and equipment                                        (117,871)                  -              (1,332)
Proceeds from sale of property and equipment                                 66,039              66,039                   -
                                                                --------------------   -----------------   -----------------
Net Cash Provided By (Used in) Investing Activities                         (51,832)             66,039              (1,332)
                                                                --------------------   -----------------   -----------------

Financing Activities:
Loans from related parties                                                  175,305              94,200              81,105
Proceeds from issuance of long-term debt                                     20,000                   -              20,000
Payments on loans from related parties                                      (42,000)            (17,000)            (25,000)
Payments on long-term debt                                                  (20,000)            (17,074)             (2,926)
Proceeds from issuance of common stock                                      513,125               6,950              42,625
                                                                --------------------   -----------------   -----------------
Net Cash Provided by Financing Activities                                   646,430              67,076             115,804
                                                                --------------------   -----------------   -----------------

Change in Cash                                                                  465              (1,820)               (412)
Cash at Beginning of Period                                                       -               2,285               2,697
                                                                --------------------   -----------------   -----------------

Cash at End of Period                                                         $ 465               $ 465             $ 2,285
                                                                ====================   =================   =================

Supplemental disclosure of cash flow information
Cash Paid for Interest                                                        2,183                   -               2,183
                                                                --------------------   -----------------   -----------------

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                   -              42,963
Common stock returned to treasury and retired from third parties             12,000              12,000                   -
                                                                --------------------   -----------------   -----------------

</TABLE>


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



                                       18
<PAGE>

<TABLE>
<CAPTION>

                                  Texxon, Inc.
                         (An Exploration Stage Company)

                  Statements of Changes in Stockholders' Equity
           From Inception (October 6, 1998) Through December 31, 2003

<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)
                                        ======  =======  ===========  ========  ===========  ===========  =============  ===========


</TABLE>


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



                                       19
<PAGE>


                                  Texxon, Inc.
                         (An Exploration Stage Company)

                          Notes to Financial Statements
                           December 31, 2003 and 2002

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.

Prepaid Expenses
Prepaid expenses represent the unexpensed portion of insurance premiums that
have been paid.

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 December 31, 2003 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, 2003 and 2002.




                                       20
<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 June 2002, the Financial Accounting Standards Board ("FASB") issued SFAS No.
146, "Accounting for Costs Associated with Exit or Disposal Activities." This
statement requires that a liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred. Under previous
guidance, a liability for an exit cost was recognized at the date of the
commitment to an exit plan. The provisions of this statement will be applied
prospectively, as applicable, and are effective for exit or disposal activities
that are initiated after December 31, 2002. The adoption of SFAS No. 146 did not
have a material effect on the Company's financial position or results of
operations.

In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("FIN 45"). This interpretation elaborates
on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under specified guarantees that it has issued.
It also clarifies that a guarantor is required to recognize, at the inception of
a guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The disclosure requirements in this interpretation were
effective for financial statements of interim or annual periods ending after
December 15, 2002. Additionally, the recognition of a guarantor's obligation
should be applied on a prospective basis to guarantees issued after December 31,
2002. The adoption of FIN 45 did not have a material effect on the Company's
financial position or results of operations.

In January 2003, the FASB 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.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments With Characteristics of Both Liabilities and Equity." SFAS No. 150
changes the classification in the statement of financial position of certain
common financial instruments from either equity or mezzanine presentation to
liabilities and requires an issuer of those financial statements to recognize
changes in fair value or redemption amount, as applicable, in earnings. SFAS No.
150 is effective for financial instruments entered into or modified after May
31, 2003, and with one exception, is effective at the beginning of the first
interim period beginning after June 15, 2003. The effect of adopting SFAS No.
150 is recognized as a cumulative effect of an accounting change as of the
beginning of the period of adoption. Restatement of prior periods is not
permitted. SFAS No. 150 did not have any impact on the Company's financial
position or results of operations.




                                       21
<PAGE>


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 $1,491,522
during the period from October 6, 1998 (date of inception) to December 31, 2003.
Management intends to provide the necessary development and operating capital
through sales of its common stock and commencement of sales of the platinum
derived from the licensed product. The ability of the Company to continue as a
going concern during the next year depends on the successful completion of the
Company's efforts to raise capital and commencement of sales of the platinum
derived from the licensed product. The financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.

Note 3--Accrued Salaries

Effective January 1, 2002, the Company began accruing compensation pursuant to
employment agreements dated August 1, 2001. The accrued salaries balance at
December 31, 2003, includes $480,000 that the Company owes its officers pursuant
to the employment agreements. The Company has breached the employment
agreements, and there is no assurance that the officer and employees subject to
such agreements will continue to serve the Company without being paid.

Note 4--Property Plant 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. At December 31, 2003, the
Company's Balance Sheet showed a note receivable for the remaining balance in
the amount of $21,000. Subsequent to December 31, 2003, the Company received an
additional $13,000 leaving a remaining note receivable balance of $8,000.

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 has been used to calculate other recent stock transactions.
The Company paid the remaining principal balance during 2003. At December 31,
2003, the accumulated interest owed amounts to $2,711.




                                       22
<PAGE>

During January 2003, the Company borrowed $22,000 from its President and
Vice-President. The loans are unsecured, are due on December 31, 2003 and
provide for an interest rate of 12% that changes to 16% upon default. At
December 31, 2003, the remaining unpaid portion of these loans is $19,105 and
the related accumulated interest is $2,337.

During the quarter ended June 30, 2003, the Company borrowed $47,000 from 2 of
its shareholders. The loans are unsecured, are due on December 31, 2003 and
provide for an interest rate of 12% that changes to 16% upon default. At
December 31, 2003, the remaining unpaid portion of these loans is $47,000 and
the related accumulated interest is $3,397.

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, are due on December 31, 2003 and provide for an interest
rate of 12% that changes to 16% upon default. At December 31, 2003, the
remaining unpaid portion of these notes is $12,000 and the accumulated interest
associated with this transaction amounts to $797.

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, are due on December 31, 2003 and provide for an interest rate of 12%
that changes to 16% upon default. At December 31, 2003, the remaining unpaid
portion of these loans is $24,200 and the related accumulated interest is
$1,075.

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, 2003, the remaining unpaid portion of these loans is $1,000 and
the related interest is $8.

Note 6--Commitments and Contingencies

Texxon leases approximately 5,800 square feet of commercial office space under a
one year operating lease dated May 6, 2003 and effective June 1, 2003. The
office space is shared with another company in which Texxon's officers are
officers, directors, employees or shareholders. The contract calls for monthly
payments of $3,647. The current lease is a renewal of the original lease dated
May 20, 2001. Under the original lease agreement, the Company was obligated to
pay $3,908 per month. For the period from inception to December 31, 2003 and for
the years ended December 31, 2003 and 2002, the Company recorded rent expense of
$117,879, $40,052 and $53,177, respectively. The Company was required to pay a
deposit for this space in the amount of $5,435. Of this amount, $1,435 was
applied to the rent during the period ended September 30, 2003 leaving a deposit
balance of $4,000. This amount is included in "Deposits" on the Company's
balance sheet. During the year ended December 31, 2003, the Company received
approximately $4,000 from the other company for the shared office space which
was offset against rent expense.

Subsequent to December 31, 2003, the Company cancelled its lease agreement and
moved to a new office space. This new office space consists of approximately 400
square feet is shared with another company. The lease agreement is dated March
1, 2004 and is in effect for 6 months.




                                       23
<PAGE>

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,
2003. Texxon is also authorized to issue 5,000,000 Shares of Preferred Stock,
par value $0.001 per share, of which there are no shares presently outstanding.

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

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

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

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

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

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

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

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

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

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

On December 16, 2002, the Company issued 1,500,000 shares of common stock to a
consultant pursuant to an agreement executed on that same date. The shares were
valued at $0.14 per share based on the share price of other stock transactions
recently completed. As outlined in the agreement, the consultant will provide
services that include but are not limited to advice to the Company's management
regarding possible financing options and marketing strategies and the
performance of investor relations services. The length of the agreement is six
months. The Company recorded prepaid consulting expense related to this
transaction in the amount of $210,000. As of December 31, 2002, $17,500 of this
amount was amortized. During June 2003, the consulting agreement expired with no
services received. The underlying shares were cancelled. The Company reversed
the consulting expense related to this agreement in the amount of $192,500
during the three months ended June 30, 2003.



                                       24
<PAGE>


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

On December 20, 2002, the Company reserved 1,000,000 shares for and issued
500,000 shares to Madison and Wall, Inc. pursuant to an investor relations
service agreement signed on that same day. The shares were valued at $0.14,
based on the share price of other stock transactions recently completed. The
1,000,000 reserved shares will be issued based on Madison and Wall's ability to
perform which will be determined at the sole discretion of the Company. During
June, 2003, this consulting agreement and the related stock issued were
cancelled. The Company reversed the unamortized portion of the prepaid expense
related to this agreement at June 30, 2003.

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

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

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

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

During May 2003, the Company sold 200,000 shares of its $0.001 par value common
stock to one accredited investor for $20,000 in cash. The shares were valued at
$0.10 per share which was determined by the board to be the fair market value of
the stock.

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, are due on December 31, 2003 and provide for an interest
rate of 12% that changes to 16% upon default. At December 31, 2003, the
accumulated interest associated with this transaction amounted to $797.

During August 2003, the Company sold 2,000 shares of $0.001 par value common
stock to one investor for $200 in cash. The shares were valued at $0.10 per
share which was determined by the board to be the fair market value of the
stock.




                                       25
<PAGE>

Stock Options
On August 28, 2001, the Company adopted a stock option plan (the "Plan"). Under
the Plan, incentive stock options (ISOs) may be granted to the Company's
officers, key employees and key advisors for the purchase of up to 3,000,000
shares of the Company's common stock. Scheduled vesting is at the discretion of
the Plan's committee, and expiration dates for the grants may extend up to ten
years from grant date. The exercise prices of the ISOs shall be not less than
100%, of the fair market value of the Company's common stock at grant date. At
December 31, 2003, there were 1,500,000 options issued pursuant to the plan.

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

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

Note 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, 2003
                                                      -----------------------

Net Operating Loss carryforward                                   $ 186,000
Valuation allowance for deferred tax asset                         (186,000)
                                                      -----------------------
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.






                                       26
<PAGE>


                                    Part III

                      Index to and Description of Exhibits


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

31.0 *** Certification of Chief Executive Officer and Chief
         Financial Officer Pursuant to Rule 13a-14(a), as adopted
         pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.0 *** 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

23.0 *** Consent of Tullius Taylor Sartain & Sartain LLP



     *    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




                                       27
<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

April 2, 2004