U.S.
      SECURITIES AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





**FORM
      10-KSB**





(Mark
      One)


x ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      fiscal year ended: December
      31, 2007





o TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      fiscal year from __________________ to __________________





**Commission
      File No. 000-33131**





**LEXICON
      UNITED INCORPORATED**


(Name
      of
      Small Business Issuer in Its Charter)





DELAWARE
            
            06-1625312(State
                or other jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)





4500
                Steiner Ranch Blvd.
              Suite
                # 1708, Austin, Texas 78732 .
            
            (512)
                266-3507(Address
                of Principal Executive Office)
            
            (Issuer
                Telephone No. Including Area Code)




Securities
      registered under Section 12(b) of the Exchange Act: NONE




Securities
      registered under Section 12(g) of the Exchange Act: Common stock, $.001 par
      value




Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. o




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 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 o




Check
      if
      no disclosure of delinquent filers in response to Item 405 of Regulation S-B
      is
      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




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).




Yes o No x




The
      issuer’s revenues for its most recent fiscal year are $2,825,927.




The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates on December 31, 2007 was approximately $5,731,200.




The
      number of shares outstanding of the issuer's common stock as of April 15, 2007
      is 8,456,250.









**TABLE
      OF CONTENTS [repaginate]**


**PART
                  I**
              
              3Item
                  1. Description of Business
              
              3Item
                  2. Description of Property
              
              14Item
                  3. Legal Proceedings
              
              14Item
                  4. Submission of Matters to a Vote of Security Holders
              
              14**PART
                  II**
              
              14Item
                  5. Market for Common Equity, Related Stockholder Matters and Small
                  Business Issuer Purchases of Equity Securities
              
              14Item
                  6. Management’s Discussion and Analysis or Plan of
                  Operation
              
              16Item
                  7. Financial Statements
              
              21Item
                  8. Changes in and Disagreements with Accountants on Accounting
                  and
                  Financial Disclosure
              
              21Item
                  8A. Controls and Procedures
              
              21Item
                  8B. Other Information
              
              22**PART
                  III**
              
              22Item
                  9. Directors and Executive Officers, Promoters and Control Persons;
                  Compliance with Section 16(a) of the Exchange Act
              
              22Item
                  10. Executive Compensation
              
              24Item
                  11. Security Ownership of Certain Beneficial Owners and Management
                  and
                  Related Stockholder Matters
              
              25Item
                  12. Certain Relationships and Related Transactions
              
              26Item
                  13. Exhibits
              
              26Item
                  14. Principal Accountant Fees and Services
              
              27Signatures
              
              28Financial
                  Statements
              
              F
                  1




2




**FORWARD-LOOKING
      STATEMENTS**





This
      report contains forward-looking statements and information relating to Lexicon
      United Incorporated, that are based on the beliefs of our management as well
      as
      assumptions made by and information currently available to us. When used in
      this
      report, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,”
“plan” and similar expressions, as they relate to us or our management, are
      intended to identify forward-looking statements. These statements reflect our
      current view concerning future events and are subject to risks, uncertainties
      and assumptions, including among many others: a general economic downturn;
      a
      downturn in the securities markets; federal or state laws or regulations having
      an adverse effect on blank check companies, Securities and Exchange Commission
      regulations which affect trading in the securities of "penny stocks," and other
      risks and uncertainties. Should any of these risks or uncertainties materialize,
      or should underlying assumptions prove incorrect, actual results may vary
      materially from those described in this report as anticipated, estimated or
      expected. Readers should realize that we have only very limited assets and
      that
      for us to succeed requires that we either originate a successful business (for
      which we lack the funds) or acquire a successful business. The realization
      of
      our business aims will depend in the near future principally on the successful
      completion of our acquisition of a business, as discussed below.





When
      used
      in this report, the terms “Lexicon,” “Company,” “we,” “our,” and “us” refer to
      Lexicon United Incorporated.





**PART
      I**





**Item
      1. DESCRIPTION OF BUSINESS.**





***Background***




Our
      corporate name is Lexicon United Incorporated. We were incorporated on July
      17,
      2001 in the state of Delaware. We were a “blank check” company and had no
      operations other than organizational matters and conducting a search for an
      appropriate acquisition target until February 27, 2006 when we completed an
      acquisition transaction with ATN, a Brazilian limited company, that had
      commenced business in April 1997. ATN is engaged in the business of managing
      and
      servicing accounts receivables for large financial institutions in Brazil.





***Acquisition
      of ATN Capital & Participações Ltda***




On
      February 27, 2006, we completed an acquisition transaction with ATN whereby
      we
      acquired 400,000 shares of ATN common stock, constituting 80% of ATN’s issued
      and outstanding capital stock, from the two stockholders of ATN in exchange
      for
      2,000,000 shares our common stock. Upon the consummation of such share exchange,
      the two stockholders of ATN became holders of approximately 23.72% of our
      outstanding common stock in the aggregate and ATN became our majority-owned
      subsidiary. W hen
      we
      refer in this report to business for periods prior to the consummation of the
      acquisition, we are referring to the business of ATN.





***Our
      Business Generally***




Through
      our subsidiary, ATN, we are engaged in the business of managing and servicing
      accounts receivables for large financial institutions in Brazil. Our focus
      is on
      the recovery of delinquent accounts (generally, accounts that are 60 days or
      more past due).





We
      derive
      our revenues primarily from collection of distressed debt by entering into
      non-binding agreements with financial institutions to collect their debt. Once
      an agreement is reached with the debtor of the financial institution based
      upon
      established parameters, an installment agreement is established. We are then
      entitled to a commission on the agreed settlement. We earn and record the pro
      rata commission for each installment, when the installment payments are received
      from the debtors. Our average fee was approximately 15% during the fiscal
      year ended December 31, 2007 and 2006. We do not acquire accounts receivable
      for
      our own account. Our services are limited to managing the recovery of accounts
      receivable for our third-party clients.





The
      types
      of receivables that we generally manage include charged-off receivables, which
      are accounts receivable that have been written-off by the originators and may
      have been previously serviced by collection agencies, and semi-performing
      receivables, which are accounts receivable where the debtor is currently making
      partial or irregular monthly payments, but the accounts may have been
      written-off by the originators.




3




***An
      Overview of Our Industry***





The
      servicing and collection of charged-off and semi-performing consumer receivables
      in Brazil is a growing industry that is driven by:





·
            increasing
                levels of consumer debt;·
            increasing
                defaults of the underlying receivables; and·
            increasing
                utilization of third-party providers to collect such
                receivables.





According
      to financial bulletins, consumer credit in Brazil has been increasing at an
      annual rate of 15 percent on average and the credit card market will be steadily
      growing.





We
      believe that as a result of the difficulty in collecting these receivables
      and
      the desire of originating institutions to focus on their core businesses and
      to
      generate revenue from these receivables, originating institutions are
      increasingly electing to outsource the servicing of these
      receivables.





***Strategy***





Our
      primary objective is to utilize our management's experience and expertise to
      effectively grow our business by identifying, evaluating and servicing consumer
      receivable portfolios and maximizing collections of such receivables in a cost
      efficient manner.





Our
      strategy includes utilizing the systemization of our operations to reduce
      overhead costs and to provide intensive training to our call center
      representatives to increase our percentage of successful account receivable
      collections.





Our
      management team also includes statisticians that have developed models that
      guide our collection efforts and assist us in deciding the extent to which
      we
      believe we can successfully recover a charged-off or semi-performing receivable.





***Our
      Services***





Engagement
      Planning . ****





Our
      approach to accounts receivable management and collection for each client is
      determined by a number of factors, including account size and demographics,
      the
      client’s specific requirements and management’s estimate of the collectibility
      of the account. We have standard accounts receivable management and collection
      methods that we employ to collect accounts receivable. These methods were
      developed based on our 8 years of experience in this industry. In order to
      properly serve our customers we carefully study our customer’s account
      receivable needs and employ the proper collection method for each particular
      client. In most cases, our approach to accounts receivable collection changes
      over time as the relationship with the client develops and both parties evaluate
      the most effective means of recovering accounts receivable. Our standard
      approach, which may be tailored to the specialized requirements of each client,
      defines and controls the steps that will be undertaken by us on behalf of the
      client and the manner in which we will report data to the client. Through our
      systematic approach to accounts receivable management and collection, we remove
      most decision making from the recovery staff and ensure uniform, cost-effective
      performance.





Once
      the
      approach has been defined, we transfer pertinent client data into our
      information system. When the client’s records have been established in our
      system, we begin the recovery process.





Account
      Notification .





We
      initiate the recovery process by forwarding a preliminary letter that is
      designed to seek payment of the amount due or open a dialogue with client’s
      customers who cannot afford to pay at the current time. Telephone
      representatives remind the client’s customer of their obligation, inform them
      that their account has been placed for collection with us and begin a dialogue
      to develop a friendly payment program.




4




Determination
      of Obligor Contact Data .





In
      cases
      where the client’s customer’s contact information is unknown, we conduct
      research through the “CreditLink” system to determine a means of contacting the
      customer debtor. “CreditLink” is a paid service that assists with investigations
      into customer contact information, and costs approximately $300 per month.
      Once
      we have located the client’s customer, the notification process can
      begin.





Payment
      Process .





After
      we
      receive payment from the client’s customer, depending on the terms of our
      contract with the client, we can either remit the amount received minus our
      fee
      to the client or remit the entire amount received to the client and subsequently
      bill the client for our collection services.





Activity
      Reports .





Clients
      are provided with a system-generated set of customized reports that fully
      describe all account activity and current status. These reports are typically
      generated daily; however, the information included in the report and the
      frequency that the reports are generated can be modified to meet the needs
      of
      the client.




Quality
      Tracking .





We
      emphasize quality control throughout all phases of the accounts receivable
      management and collection process. Some clients may specify an enhanced level
      of
      supervisory review and others may request customized quality reports. Large
      financial services organizations will typically have exacting performance
      standards which require sophisticated capabilities, such as documented complaint
      tracking.





***Collection
      Strategy***





At
      the
      outset of each engagement, we perform a collectibility analysis utilizing
      information prepared by our statisticians. This analysis is the basis for our
      collection efforts and dictates our strategy for any particular receivable
      or
      group of receivables. We continuously refine this analysis to determine the
      most
      effective collection strategy to pursue for each account.





Our
      collection strategies consist of:





·
            Call
                Centers.
                We maintain an inbound and outbound collection call center at ATN’s
                executive offices in Rio De Janeiro in Brazil. Our collections department
                is divided into two client teams, each team consisting of a collection
                manager and six or seven collection supervisors, each assigned to
                an
                individual client. Each collection supervisor is in charge of anywhere
                from 4 to 15 collectors. Collectors are trained to use a friendly
                but firm
                approach to assess the willingness of the customer to pay. They attempt
                to
                work with customers to evaluate sources and means of repayment to
                achieve
                a full or negotiated lump sum settlement or develop payment programs
                customized to the individual's ability to pay. In cases where a payment
                plan is developed, collectors encourage debtors to pay through automatic
                payment arrangements, if available.





·
            Legal
                Action.
                We generally outsource those accounts where it appears the debtor
                is able
                but unwilling to pay. We utilize lawyers that are independent from
                us, but
                who are located on our premises. These lawyers specialize in collection
                matters and we pay them a contingency fee on amounts collected. The
                name
                of the firm that we use is Andrada & Negreiros Associates. Prior to
                sending accounts to the law firm, our collectors communicate to the
                debtor
                our intention to have a lawyer evaluate the suitability of the account
                for
                litigation if payment arrangements cannot be
                established.





·
            Direct
                Mail.
                We have an in-house marketing team that develops mail campaigns.
                The mail
                campaigns generally offer debtors targeted discounts on their balance
                owed
                to encourage settlement of their accounts and provide us with a low
                cost
                recovery method.




5




·
            Removal
                from Restricted Lists.
                There are two restrictions imposed upon debtors in Brazil that fail
                to pay
                their debts when they come due. The first is called “Serasa”, which is a
                restriction imposed by every Brazilian bank. Such debtor’s names are put
                on the Serasa restricted list and no Brazilian Bank will provide
                them
                credit. The second restricted list is called “SPC”, which is a restriction
                imposed by Brazilian merchants. Once a debtor’s name is put on the SPC
                list, merchants will no longer provide the debtor with credit. Once
                we
                agree with the debtor on a payment program and the debtor makes the
                first
                installment towards such program, we notify our client that a payment
                has
                been made. The client then causes such debtor’s name to be removed from
                such lists. The removal of a debtor’s name from such lists is very
                beneficial to the debtor, who may then be able to obtain limited
                credit
                and who no longer has to suffer the other negative social effects
                of being
                on such lists.




***Technology
      and Infrastructure***





Our
      customer contact center utilizes the NEO system. Our Information Technology
      staff is comprised of approximately four employees. We provide our services
      through the operation of our main call center, located in Rio de Janeiro,
      Brazil, which utilizes 140 **** persons,
      and a smaller call center located in Vitoria, Brazil which uses about 15
      people.





We
      maintain disaster recovery contingency plans and have implemented procedures
      to
      protect against the loss of data resulting from power outages, fire and other
      casualties. We believe fast recovery and continuous operation are
      ensured.





***Quality
      Assurance and Client Service***





In
      the
      accounts receivable management industry, a company’s reputation for quality
      service is of the utmost importance. We regularly measure the quality of our
      services by capturing and reviewing such information as the amount of time
      spent
      talking with clients’ customers, level of customer complaints and operating
      performance. In order to provide ongoing improvement to our telephone
      representatives’ performance and to ensure compliance with our policies and
      standards, quality assurance personnel supervise each telephone representative
      on a frequent basis and provide ongoing training to the representative based
      on
      this review.





We
      maintain a client service department to promptly address client issues and
      questions and alert senior executives of potential problems that require their
      attention. In addition to addressing specific issues, a team of client service
      representatives contacts clients on a regular basis in order to establish a
      close rapport, determine clients’ overall level of satisfaction, and identify
      practical methods of improving their satisfaction.





***Major
      Customers***





We
      have
      approximately 15 clients. However, we rely on four major clients for
      approximately 58.23% or our income. During fiscal year 2007 revenues from our
      clients Ativos, HSBC Bank, Banco IBI, and Leader constituted approximately
      16.44%, 16.59%, 10.05%, and 15.16% of our total revenues, respectively. None
      of
      these major clients are contractually obligated to continue use of our services
      at historic levels or at all, subject only to notice periods for termination.
      If
      any of these customers were to significantly reduce their amount of service,
      fail to pay, or terminate their relationships with us altogether, our business
      could be harmed.




***Personnel
      and Training***





All
      of
      our call center personnel receive comprehensive training that instructs in
      each
      of the following topics:





·
            how
                to use the system;·
            how
                to communicate with the client;


·
            scripts;
                and·
            role
                playing.




6




These
      programs are conducted through a combination of classroom and role-playing
      sessions. New employees receive training on how to use our operating systems
      and
      on how to approach clients. Special orientations are also given out to employees
      on the respect of customer’s codes and how to respect creditors’ rights. Various
      upgrades and incentives are closely monitored by our human resource supervisor,
      including an upscale gradual commission that is awarded to each employee reaches
      at least 70% of the targeted performance.





As
      of
      April 1, 2008, we had a total of approximately 120 full-time employees. Our
      employees are not represented by a labor union. We believe that our relations
      with our employees are satisfactory.





***Sales
      and Marketing***





Our
      sales
      force is comprised of ATN’s senior management team, which markets our accounts
      receivable services to potential clients.





***Competition***





The
      accounts receivable management and collection industry in Brazil is highly
      competitive. We compete with a large number account receivable management
      providers, including Sincred, Mastercob and Easycob. Some of our competitors
      may
      offer more diversified services and/or operate in broader geographic areas
      than
      we do. In addition, many companies perform accounts receivable management
      services through their own in-house staff. Moreover, many larger clients retain
      multiple outsourcing providers, which exposes us to continuous competition
      in
      order to remain a preferred vendor. We believe that the primary competitive
      factors in obtaining and retaining clients are the ability to provide customized
      solutions to a client’s requirements, personalized quality service,
      sophisticated call and information systems, and price.





***Regulation***





The
      accounts receivable management industry in Brazil is regulated by Brazil
      Consumer Defense Code (Law 8078 of September 11, 1990). The Consumer Defense
      Code is a regulatory entity designed to maintain a standard procedure to protect
      the privacy and rights of the debtors. It is intended to limit and outline
      the
      collection procedure so that such procedure remains within acceptable commercial
      practice. No pressure or harassment is permitted. We believe that we are in
      compliance in all material respects with all applicable
      regulations.





***Risk
      Factors***





*Investing
      in our common stock involves a high degree of risk. You should carefully
      consider the risks and uncertainties described below before you purchase any
      of
      our common stock. If any of these risks or uncertainties actually occurs, our
      business, financial condition or results of operations could be materially
      adversely affected. In this event you could lose all or part of your
      investment.*





*Financial
      Risks*





*We
      only have approximately* $467,195 *in
      cash and if we are unable to raise more money we will be required to delay,
      scale back or eliminate our marketing and development
      programs.*





As
      of
      December 31, 2007, we had approximately $467,195 in cash available to fund
      our
      operations, which includes cash held by both Lexicon and ATN on a consolidated
      basis. The amounts and timing of our expenditures will depend primarily on
      our
      ability to raise additional capital. We may seek to satisfy our future funding
      requirements through new offerings of securities or from other sources,
      including loans from our controlling stockholders. Additional financing may
      not
      be available when needed or on terms acceptable to us. We have no current
      commitment for additional financing. Unavailability of financing may require
      us
      to delay, scale back or eliminate some or all of our marketing and development
      programs. To the extent we raise additional capital by issuing equity
      securities, your ownership interest would be diluted.




7




*Following
      the end of the year ended December 31, 2007, we borrowed $1,000,000 from a
      company controlled by an affiliate of the Company.*





** In
      February 2008, Keyano Invest Inc., a related party, loaned the Company
      $1,000,000 for working capital purposes on terms and conditions to be determined
      on an arms-length basis between the parties. The Company may not produce
      sufficient cash flow to repay this loan and/or the Company may not be able
      to
      negotiate reasonable terms for repayment which can allow the repayment of the
      loan from the Company’s cash flow. In either event, the Company’s financial
      viability may be jeopardized which could seriously impact the value of your
      ownership interest.





*Risks
      Relating To Our Business*




*The
      company has a* *history
      of losses and may need additional financing to continue its operations, and
      such
      financing may not be available upon favorable terms, if at
      all.*





We
      have
      incurred net losses of $135,182 in 2007 and $1,264,576 in 2006 and an
      accumulated deficit of $2,025,245 and has a negative working capital of
      $2,579,733 at December 31, 2007. There can be no assurances that we will be
      able
      to operate profitably in the future. In the event that we are not successful
      in
      implementing its business plan, we will require additional financing in order
      to
      succeed. There can be no assurance that additional financing will be available
      now or in the future on terms that are acceptable to us. If adequate funds
      are
      not available or are not available on acceptable terms, we may be unable to
      develop or enhance our services, take advantage of future opportunities or
      respond to competitive pressures, all of which could have a material adverse
      effect on our business, financial condition or operating results.





*There
      is substantial doubt about our ability to continue as a going concern due to
      significant recurring losses from our operations and our accumulated
      deficit.*





There
      is
      substantial doubt about our ability to continue as a going concern due to
      significant recurring losses from our operations and our accumulated deficit,
      all of which means that we may not be able to continue operations unless we
      obtain additional funding. Management’s plans include raising capital
      through the equity markets to fund future operations and generating of revenue
      through its business. Failure to raise adequate capital and generate adequate
      sales revenues could result in our having to curtail or cease operations.
      Additionally, even if we do raise sufficient capital to support its operating
      expenses and generate adequate revenues, there can be no assurances that the
      revenue will be sufficient to enable us to develop business to a level where
      we
      will generate profits and cash flows from operations.





*Our
      business is dependent on our ability to grow internally and if we cannot achieve
      internal growth our business, results of operations and financial results will
      suffer.*





Our
      business is dependent on our ability to grow internally, which is dependent
      upon:





·
            Our
                ability to retain existing clients and expand our existing client
                relationships; and·
            Our
                ability to attract new clients.





Our
      ability to retain existing clients and expand those relationships is subject
      to
      a number of risks, including the risk that:





·
            We
                fail to maintain the quality of services we provide to our
                clients;·
            We
                fail to maintain the level of attention expected by our
                clients;


·
            We
                fail to successfully leverage our existing client relationships to
                sell
                additional services; and·
            We
                fail to provide competitively priced services to our
                clients.





Our
      ability to attract new clients is subject to a number of risks,
      including:





·
            The
                market acceptance of our service offerings;·
            The
                quality and effectiveness of our sales personnel;
                and


·
            The
                competitive factors within the accounts receivable management industry
                in
                Brazil.





If
      our
      efforts to retain and expand our client relationships and to attract new clients
      do not prove effective, it could have a materially adverse effect on our
      business, results of operations and financial condition.




8




*If
      we
      are not able to respond to technological changes in telecommunications and
      computer systems in a timely manner, we may not be able to remain
      competitive.*





Our
      success depends in large part on our sophisticated telecommunications and
      computer systems. We use these systems to identify and contact large numbers
      of
      debtors and record the results of our collection efforts. If we are not able
      to
      respond to technological changes in telecommunications and computer systems
      in a
      timely manner, we may not be able to remain competitive. We anticipate that
      it
      will be necessary to invest in technology in the future to remain competitive.
      During the fiscal years ended December 31, 2007 and 2006, we invested
      approximately $182,000 and $40,000 in technology, respectively. We expect that
      in future years we will have to invest similar amounts in technology.
      Telecommunications and computer technologies are changing rapidly and are
      characterized by short product life cycles, so we must anticipate technological
      developments. If we are not successful in anticipating, managing, or adopting
      technological changes on a timely basis or if we do not have the capital
      resources available to invest in new technologies, our business could be
      materially adversely affected.





*We
      are highly dependent on our telecommunications and computer
      systems.*





As
      noted
      above, our business is highly dependent on our telecommunications and computer
      systems. These systems could be interrupted by terrorist acts, natural
      disasters, power losses, or similar events. Our business is also materially
      dependent on services provided by various local telephone companies. If our
      equipment or systems cease to work or become unavailable, or if there is any
      significant interruption in telephone services, we may be prevented from
      providing services. Because we generally recognize revenue only as accounts
      receivables are collected, any failure or interruption of services would mean
      that we would continue to incur payroll and other expenses without any
      corresponding income.





*An
      increase in communication rates or a significant interruption in communication
      service could harm our business.*





Our
      ability to offer services at competitive rates is highly dependent upon the
      cost
      of communication services provided by various local telephone companies. Any
      change in the telecommunications market that would affect our ability to obtain
      favorable rates on communication services could harm our business. Moreover,
      any
      significant interruption in communication service or developments that could
      limit the ability of telephone companies to provide us with increased capacity
      in the future could harm existing operations and prospects for future
      growth.





*We
      compete with a large number of providers in the accounts receivable and
      collection industry in Brazil. We may be forced to lower our rates to compete
      effectively, which will result in lower profit margins.*





In
      the
      accounts receivable management and service industry in Brazil, we compete with
      sizable corporations, as well as many regional and local firms. We may lose
      business to competitors that offer more diversified services and/or operate
      in
      broader geographic areas than we do. We may also lose business to regional
      or
      local firms who are able to use their proximity to or contacts with local
      clients as a marketing advantage. In addition, many companies perform the
      accounts receivable management services offered by us in-house. Many larger
      clients retain multiple accounts receivable service providers, which exposes
      us
      to continuous competition in order to remain a preferred provider. Because
      of
      this competition, in the future we may have to reduce our fees to remain
      competitive and this competition could have a materially adverse effect on
      our
      future financial results.





*All
      of our clients are concentrated in the financial services sector. If this sector
      performs poorly or if there are any adverse trends in this sector, we will
      have
      fewer customers, which will result in lower revenues.*





For
      the
      years ended December 31, 2007 and 2006, we derived approximately 100 percent
      of
      our revenue from clients in the financial services sector. If this sector
      performs poorly, clients in this sector may do less business with us, or they
      may elect to perform the services provided by us in-house. If there are any
      trends in this sector to reduce or eliminate the use of third-party accounts
      receivable service providers, it could harm our business.




9




*Our
      success depends on our senior management team and the senior management team
      of
      our operating subsidiary, ATN, and if we are not able to retain them, we will
      have significant operating problems.*





We
      are
      highly dependent upon the continued services and experience of our senior
      management team. We depend on the services of our senior management team to,
      among other things, continue the development and implementation of our growth
      strategies, and maintain and develop our client relationships.





*We
      are dependent on our employees and a higher turnover rate would result in higher
      costs to train new personnel and could lead to poor service, which would
      negatively affect our financial condition and operations.*





We
      are
      dependent on our ability to attract, hire and retain qualified employees. The
      Brazilian accounts receivable service and management industry, by its nature,
      is
      labor intensive and experiences a high employee turnover rate. Many of our
      employees receive modest hourly wages and some of these employees are employed
      on a part-time basis. A higher turnover rate among our employees would increase
      our recruiting and training costs and could materially adversely impact the
      quality of services we provide to our clients. If we were unable to recruit
      and
      retain a sufficient number of employees, we would be forced to limit our growth
      or possibly curtail our operations. Growth in our business will require us
      to
      recruit and train qualified personnel at an accelerated rate from time to time.
      We cannot assure you that we will be able to continue to hire, train and retain
      a sufficient number of qualified employees to meet the needs of our business
      or
      to support our growth. If we are unable to do so, our results of operations
      could be harmed. Any increase in hourly wages, costs of employee benefits or
      employment taxes in Brazil could also have a materially adverse
      affect.





*We
      may experience variations from quarter to quarter in operating results and
      net
      income that could adversely affect the price of our common
      stock.*





Factors
      that could cause quarterly fluctuations include, among other things, the
      following:





·
            The
                timing of our clients’ accounts receivable collection programs and the
                commencement of new contracts and termination of existing
                contracts;·
            Customer
                contracts that require us to incur costs in periods prior to recognizing
                revenue under those contracts;


·
            The
                effects of a change of business mix on profit margins;·
            The
                timing of additional selling, general and administrative expenses
                to
                support new business;


·
            Fluctuations
                in foreign currency exchange rates;·
            The
                amount and timing of new business;
                and


·
            That
                our business tends to be slower during summer and holiday
                seasons.





*Most
      of our accounts receivable management contracts do not require clients to place
      accounts with us, may be terminated on 30 or 60 days notice and are on a
      contingent fee basis. We cannot guarantee that existing clients will continue
      to
      use our services at historical levels, if at all.*





Under
      the
      terms of most of our accounts receivable management contracts, clients are
      not
      required to give accounts to us for collection and usually have the right to
      terminate our services on 30 or 60 days notice. Accordingly, we cannot guarantee
      that existing clients will continue to use our services at historical levels,
      if
      at all. In addition, most of these contracts provide that we are entitled to
      be
      paid only when we collect accounts. Therefore, under applicable accounting
      principles, we can recognize revenues only upon the collection of funds on
      behalf of clients.





*We
      rely on foue major clients for a significant portion of our revenues. The loss
      of these customers as our clients or their failure to pay us could reduce
      revenues and adversely affect the results of our operations.*





We
      have
      approximately 15 clients. However, in the fiscal year ended December 31, 2007
      we
      relied on four major clients for approximately 58.23% or our income. Revenues
      from our clients Ativos, HSBC Bank, Banco IBI, and Leader constituted
      approximately 16.44%, 16.59%, 10.05%, and 15.16% of our total revenues,
      respectively. None of these major clients are contractually obligated to
      continue use of our services at historic levels or at all, subject only to
      notice periods for termination. If any of these customers were to significantly
      reduce their amount of service, fail to pay, or terminate their relationships
      with us altogether, our business could be harmed. The number of major clients
      on
      whom we rely has decreased from five during fiscal year 2006 to four during
      fiscal year 2007. During fiscal year 2007, no one customer was responsible
      for
      more than 17% our revenues during this period.




10




*We
      have engaged in transactions with members of our Board of Directors, significant
      stockholders, and entities affiliated with them; future transactions with
      related parties could pose conflicts of interest.*





In
      the
      past, we have engaged in transactions with members of our Board of Directors,
      significant stockholders, and entities affiliated with them, which inherently
      give rise to conflicts of interest. For example, certain of these parties have
      previously provided debt financing to us and have received additional equity
      interests, such as shares of our stock upon the conversion of such debt
      financing. Transactions with related parties such as these pose a risk that
      such
      transactions are on terms that are not as beneficial to us as those that may
      be
      arranged with third parties.




*Risks
      of Doing Business in Brazil*





*The
      executive offices of our subsidiary and all of our operations are based in
      Brazil. Accordingly, we are subject to all of the risks inherent in doing
      business in a foreign jurisdiction.*





The
      executive offices of our subsidiary and all of our material operations are
      in
      Brazil and we expect to make further investments in Brazil in the future.
      Therefore, our business, financial condition and results of operations are
      to a
      significant degree subject to economic, political and social events in Brazil,
      including the material risks outlined below.





*Political
      or economic instability in Brazil could have an adverse impact on our results
      of
      operations due to diminished revenues.*





All
      of
      our revenues are derived from Brazil. Political or economic instability in
      Brazil could have an adverse impact on our results of operations due to
      diminished revenues. Our future revenue, costs of operations and profit results
      could also be affected by a number of other factors related to our Brazilian
      operations, including changes in economic conditions in Brazil, changes in
      a
      country’s political condition, trade protection measures, licensing and other
      legal requirements, and local tax issues.





F *luctuations
      in currency exchange rates could negatively affect our
      performance*





Unanticipated
      currency fluctuations in the Brazilian Real could lead to lower reported
      consolidated results of operations due to the translation of these currencies
      into U.S. dollars when we consolidate our financial results. We provide accounts
      receivable collection and management services to our Brazilian clients utilizing
      Brazilian labor sources. A decrease in the value of the U.S. dollar in relation
      to the Brazilian Real could increase our cost of doing business in Brazil.





*Governmental
      policies in Brazil could impact our business.*





Changes
      in Brazil’s governmental policies which could have a substantial impact on our
      business include:





●
            new
                laws and regulations or new interpretations of those laws and regulations;




●
            the
                introduction of measures to control inflation or stimulate growth;




●
            changes
                in the rate or method of taxation;




●
            the
                imposition of additional restrictions on currency conversion and
                remittances abroad; and




●
            any
                actions which limit our ability to finance and operate our business
                in
                Brazil.




11




*Fluctuations
      in exchange controls could negatively affect our performance.*





Exchange
      transactions are generally controlled by the Central Bank of Brazil which
      authorizes a series of banks to act in the foreign exchange market, selling
      and
      buying currencies. There is a commercial rate of exchange published daily by
      the
      Central Bank based upon market results on said day. A free market, and quotation
      system exists, mainly dealing with tourist activities. Both rates have been
      extremely close since the inception of the stabilization plan ("Plano Real")
      several years ago. Subject to certain registration requirements with the Central
      Bank of Brazil and compliance with certain regulations, we may repatriate U.S.
      Dollars earned from our Brazilian operations through the repayment of loans
      and
      the payment of dividends. On occasions in the past, Brazil has imposed temporary
      restrictions on the conversion and remittance of foreign capital, for example
      when there was a serious imbalance in Brazil's balance of payments. In such
      circumstances, we could be adversely affected, if the exchange control rules
      were changed to delay or deny remittances abroad from us.





*Your
      ability to bring an action against us, ATN and those of our officers and
      directors that are based in Brazil, or to enforce a judgment against us and
      such
      officers and directors or to recover assets in the possession of us, ATN or
      such
      officers and directors, will be difficult since any such action or recovery
      of
      assets would be an international matter, involving Brazilian laws and geographic
      and temporal disparities* **.**





We
      conduct all of our operations in Brazil through our subsidiary, ATN. All but
      one
      of our management personnel reside in Brazil and all of the assets of ATN and
      those Brazilian residents are located outside of the United States. As a result,
      it may be difficult or impossible for you to bring an action against us, ATN
      or
      these individuals in the United States in the event that you believe that your
      rights have been violated under applicable law or otherwise. Even if an action
      of this type is successfully brought, the laws of the United States and of
      Brazil may render a judgment unenforceable.





*Concentrated
      Control Risk*





*The
      management team collectively has the power to make all major decisions regarding
      the company without the need to get consent from any stockholder or other
      person. This discretion could lead to decisions that are not necessarily in
      the
      best interests of minority shareholders.*





Our
      management team, including the management of our subsidiary, ATN, collectively
      owns 95.70% of the outstanding common stock. Management, therefore, has the
      power to make all major decisions regarding our affairs, including decisions
      regarding whether or not to issue stock and for what consideration, whether
      or
      not to sell all or substantially all of our assets and for what consideration
      and whether or not to authorize more stock for issuance or otherwise amend
      our
      charter or bylaws. The management team is in a position to elect all of our
      directors and to dictate all of our policies.





*Market
      Risks*





*There
      has been no established public trading market for our common stock. If a market
      in our stock is ever developed, our stock price may become highly
      volatile.*





Since
      we
      are relatively thinly capitalized and our stock is a penny stock, if a market
      in
      our stock is ever developed, our stock price may become highly volatile. There
      has been no established public trading market for our common stock and, none
      of
      our shares are currently eligible for sale in a public trading market. The
      likely market for our stock would be the Over-the-Counter Bulletin Board or
      the
      Pink Sheets. As a result, investors may find it difficult to dispose of our
      securities, or to obtain accurate quotations of the price of our securities
      This
      lack of information limits the liquidity of our common stock, and likely will
      have an adverse effect on the market price of our common stock and on our
      ability to raise additional capital.





If
      an
      active trading market does develop, the market price of our common stock is
      likely to be highly volatile due to, among other things, the relatively low
      revenue nature of our business and because we are a thinly capitalized company.
      Further, even if a public market develops, the volume of trading in our common
      stock will presumably be limited and likely be dominated by a few individual
      stockholders. The limited volume, if any, will make the price of our common
      stock subject to manipulation by one or more stockholders and will significantly
      limit the number of shares that one can purchase or sell in a short period
      of
      time.





The
      equity markets have, on occasion, experienced significant price and volume
      fluctuations that have affected the market prices for many companies’ securities
      that have often been unrelated to the operating performance of these companies.
      Any such fluctuations may adversely affect the market price of our common stock,
      regardless of our actual operating performance. As a result, stockholders may
      be
      unable to sell their shares, or may be forced to sell them at a
      loss.




12




*We
      do
      not intend to pay dividends to our stockholders, so you will not receive any
      return on your investment in our company prior to selling your interest in
      us.*





We
      have
      never paid any dividends to our stockholders. We currently intend to retain
      any
      future earnings for funding growth and, therefore, do not expect to pay any
      dividends in the foreseeable future. If we determine that we will pay dividends
      to the holders of our common stock, we cannot assure that such dividends will
      be
      paid on a timely basis. As a result, you will not receive any return on your
      investment prior to selling your shares in our company and, for the other
      reasons discussed in this “Risk Factors” section, you may not receive any return
      on your investment even when you sell your shares in our company and your shares
      may become worthless.





*A
      significant number of our shares will be eligible for sale and their sale or
      potential sale may depress the market price of our common
      stock.*





Sales
      of
      a significant number of shares of our common stock in the public market could
      harm the market price of our common stock. We have authorized 40,000,000 shares
      of common stock. As of April 1, 2008, we had outstanding **** 8,456,250
      shares of common stock. Accordingly, we have 31,543,750 shares of common stock
      available for future sale.





*Because
      our stock is considered a penny stock, any investment in our stock is considered
      to be a high-risk investment and is subject to restrictions on
      marketability.*





Our
      common stock is a "penny stock" within the meaning of Rule 15g-9 to the
      Securities Exchange Act of 1934, which is generally an equity security with
      a
      price of less than $5.00. Our common stock is subject to rules that impose
      sales
      practice and disclosure requirements on certain broker-dealers who engage in
      certain transactions involving a penny stock. Under the penny stock regulations,
      a broker-dealer selling penny stock to anyone other than an established customer
      or "accredited investor" must make a special suitability determination for
      the
      purchaser and must receive the purchaser's written consent to the transaction
      prior to the sale, unless the broker-dealer is otherwise exempt. Generally,
      an
      individual with a net worth in excess of $1,000,000 or annual income exceeding
      $200,000 individually or $300,000 together with his or her spouse is considered
      an accredited investor.





In
      addition, the penny stock regulations require the broker-dealer to:




·
            deliver,
                prior to any transaction involving a penny stock, a disclosure schedule
                prepared by the Securities and Exchange Commission relating to the
                penny
                stock market, unless the broker-dealer or the transaction is otherwise
                exempt;·
            disclose
                commissions payable to the broker-dealer and the Registered Representative
                and current bid and offer quotations for the securities;
                and


·
            send
                monthly statements disclosing recent price information with respect
                to the
                penny stock held in a customer's account, the account's value and
                information regarding the limited market in penny
                stocks.





Because
      of these regulations, broker-dealers may encounter difficulties in their attempt
      to sell shares of our common stock, which may affect the ability of holders
      of
      our capital stock to sell their shares in the secondary market and have the
      effect of reducing the level of trading activity in the secondary market. These
      additional sales practice and disclosure requirements could impede the sale
      of
      our securities. In addition, the liquidity of our securities may be decreased,
      with a corresponding decrease in the price of our securities. Our common stock
      in all probability will be subject to such penny stock rules and our
      stockholders will, in all likelihood, find it difficult to sell their
      securities.




*Certain
      provisions of our Certificate of Incorporation and Delaware law may make it
      more
      difficult for a third party to effect a change-
      in-control.*





Our
      Certificate of Incorporation authorizes the Board of Directors to issue up
      to
      10,000,000 shares of preferred stock. The preferred stock may be issued in
      one
      or more series, the terms of which may be determined at the time of issuance
      by
      the Board of Directors without further action by the stockholders. These terms
      may include voting rights including the right to vote as a series on particular
      matters, preferences as to dividends and liquidation, conversion rights,
      redemption rights and sinking fund provisions. The issuance of any preferred
      stock could diminish the rights of holders of our common stock, and therefore
      could reduce the value of such common stock. In addition, specific rights
      granted to future holders of preferred stock could be used to restrict our
      ability to merge with, or sell assets to, a third party. The ability of the
      Board of Directors to issue preferred stock could make it more difficult, delay,
      discourage, prevent or make it more costly to acquire or effect a
      change-in-control.




13




In
      addition, we are also subject to Section 203 of the Delaware General
      Corporation Law that, subject to certain exceptions, prohibits a Delaware
      corporation from engaging in any business combination with any interested
      stockholder for a period of three years following the date that the stockholder
      became an interested stockholder. The preceding provisions of our Certificate
      of
      Incorporation, as well as Section 203 of the Delaware General Corporation
      Law, could discourage potential acquisition proposals, delay or prevent a
      change-in-control and prevent changes in our management, even if such things
      would be in the best interests of our stockholders.





**Item
      2. DESCRIPTION OF PROPERTY.**





Our
      executive offices in the U.S.A. are located at 4500 Steiner Ranch Boulevard,
      Suite 1708, Austin, Texas 78732. This space is the residence of our Secretary
      and we utilize the space on a rent-free basis pursuant to a verbal understanding
      with our Secretary.




On
      November 16, 2006 we reported our closing on April 17, 2006 of a real estate
      transaction to purchase the 8 th floor of
      an executive office building for ATN’s executive offices, for a purchase price
      of approximately $208,000. The purchase price was funded with a 20% down payment
      payable over four months and an 8-year adjustable rate mortgage currently at
      12%.




ATN’s
      new
      executive offices are located on the 8 th Floor of
      a modern 11-storey executive office building located at Largo de São Francisco
      de Paula 42, Centro Historico Rio de Janeiro, CEP 20.051-070. ATN’s office space
      consists of 500 square meters: of which 300 square meters is used as a call
      center; 50 square meters is used for administrative offices; 20 square meters
      is
      used for our conference room; and 60 square meters is used for a training room
      with a 30-person capacity. The Company also owns 16 parking spaces in the
      building which is an added benefit to conducting business in the middle of
      Rio
      de Janeiro’s downtown historical center. ATN’s President, Omar Malheiro Silva
      Araújo, has purchased the 9 th floor of
      the same building and has leased it to the Company for annual rent of
      $27,500.




ATN
      also
      has a second office in Vitoria, Brazil with a space of 100 square meters and
      15
      employees. This office engages primarily in recovering delinquent accounts
      in
      the state of Espirito Santo.




ATN
      has
      given up a third office space in Niteroi, Brazil and has consolidated the
      services once provided by the Niteroi office in its new executive
      offices.




**Item
      3. LEGAL PROCEEDINGS.**





There
      are
      no legal proceedings which are pending or have been threatened against us or
      any
      officer, director or control person of which management is aware.





**Item
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.**





No
      matters were submitted during the fourth quarter of our fiscal year to a vote
      of
      security holders, through the solicitation of proxies or otherwise.





**PART
      II**





**Item
      5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
      ISSUER PURCHASE OF EQUITY SECURITIES.**





***Market
      Price***





Our
      common shares commenced trading on the Over-the-Counter Bulletin Board (OTCBB)
      on October 19, 2007 under the symbol “LXUN.OB”. The following table sets forth,
      for the periods indicated, the range of quarterly high and low sales prices
      for
      our Common Stock.




14


**Common
                  Stock**
              
              **High**
              
              **Low**2007Third
                  Quarter
              
              $
              2.50
              
              $
              2.50Fourth
                  Quarter
              
              $
              2.50
              
              $
              2.35




***Holders***





As
      of
      April 1, 2008, our common stock was held by approximately 100 stockholders
      of
      record. The issued and outstanding shares of Lexicon’s common stock were issued
      in accordance with the exemptions from registration afforded by Section 4(2)
      of
      the Securities Act of 1933 and Regulations S and D promulgated under the
      Securities Act.




***Dividends***





Lexicon
      has not paid any dividends to date, and has no plans to do so in the immediate
      future.





***Transfer
      Agent***





Continental
      Stock Transfer and Trust Company is currently acting as our transfer agent.
      Contact information for Continental Stock Transfer and Trust Company is as
      follows: 17 Battery Place, New York, New York 10004, telephone (212)
      509-4000.




***Recent
      Sales of Unregistered Securities***





On
      November 22, 2005, we entered into a Debt Conversion Agreement with Keyano
      Invest Inc. or Keyano, the holder of our convertible promissory note having
      a
      principal amount plus accrued interest of $1,063,750. Under the Debt Conversion
      Agreement, we converted Keyano’s note and any accrued interest into our common
      stock at a rate of $0.20 per share. 5,318,750 shares of our common stock were
      delivered to Keyano and the note was cancelled. The shares were offered and
      sold
      in reliance upon an exemption from registration requirements of the Securities
      Act afforded by Section 4(2) of the Securities Act for offers and sales of
      securities that do not involve a public offering.





On
      February 27, 2006, we issued 2,000,000 shares of our common stock to the two
      stockholders of ATN, Omar Malheiro Silva Araújo and Manuel da Costa Fraguas. The
      shares were offered and sold in reliance upon an exemption from registration
      requirements of the Securities Act afforded by Section 4(2) of the Securities
      Act for offers and sales of securities that do not involve a public offering.





In
      issuing securities in reliance on Section 4(2) of the Securities Act as
      specified above, our reliance was based upon the following factors: (a) the
      issuance of the securities was an isolated private transaction by us which
      did
      not involve a public offering; (b) there were only a limited number of offerees;
      (c) there were no subsequent or contemporaneous public offerings of the
      securities by us; (d) the securities were not broken down into smaller
      denominations; and (e) the negotiations for the sale of the stock took place
      directly between the offeree and us.




15




**Item
      6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION.**





***Overview***




*General*




Our
      corporate name is Lexicon United Incorporated. We were incorporated on July
      17,
      2001 in the state of Delaware. We were a “blank check” company and had no
      operations other than organizational matters and conducting a search for an
      appropriate acquisition target until February 27, 2006 when we completed an
      acquisition transaction with ATN, a Brazilian limited company, that had
      commenced business in April 1997. ATN is engaged in the business of managing
      and
      servicing accounts receivables for large financial institutions in Brazil.





We
      derive
      our revenues primarily from collection of distressed debt by entering into
      non
      binding agreements with financial institutions to collect their debt. Once
      an
      agreement is reached with the debtor of the financial institution based upon
      established parameters, an installment agreement is established. We are then
      entitled to a commission on the agreed settlement. We earn and record the pro
      rata commission for each installment, when the installment payments are received
      from the debtors. Our average fee was approximately 15% during the fiscal
      year ended December 31, 2007 and 2006. We do not acquire accounts receivable
      for
      our own account. Our services are limited to managing the recovery of accounts
      receivable for our third-party clients.


**Critical
        Accounting Policies**
 
 The
        preparation of financial statements and related disclosures in conformity
        with
        US generally accepted accounting principles and our discussion and analysis
        of
        our financial condition and results of operations require our management
        to make
        judgments, assumptions, and estimates that affect the amounts reported in
        our
        consolidated financial statements and accompanying notes. We base our estimates
        on historical experience and on various other assumptions we believe to be
        reasonable under the circumstances, the results of which form the basis for
        making judgments about the carrying values of assets and liabilities. Actual
        results may differ from these estimates and such differences may be
        material.
 
 Management
        believes our critical accounting policies and estimates are those related
        to
        revenue recognition and the valuation of goodwill and intangible assets.
        Management believes these policies to be critical because they are both
        important to the portrayal of our financial condition and results, and they
        require management to make judgments and estimates about matters that are
        inherently uncertain.
 
 *Revenue
        Recognition*
 
 We
        derive
        our revenues primarily from collection of distressed debt by entering into
        non
        binding agreements with financial institutions to collect their debt. Once an
        agreement is reached with the debtor of the financial institution based upon
        established parameters, an installment agreement is established. We are then
        entitled to a commission on the agreed settlement. We earn and record the
        pro
        rata commission for each installment, when the installment payments are received
        from the debtors. Our average fee was approximately 15% during the fiscal
        years ended December 31, 2007 and 2006. We do not acquire accounts receivable
        for our own account. Our services are limited to managing the recovery of
        accounts receivable for our third-party clients.
 
 *Valuation
        of Goodwill and Other Intangible Assets*
 
 In
        accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” we
        are required to compare the fair values of goodwill and other intangible
        assets
        to their carrying amounts. If the fair value is less than the carrying value,
        an
        impairment loss is recognized. The Company had an independent valuation
        performed of its goodwill, customer lists and trademarks as of December 31,
        2007.
 
 Based
        upon this valuation, we believe that, as of December 31, 2007, there is no
        impairment loss of goodwill or other intangible assets and an adjustment
        to the
        carrying values of the assets is not required.




**Industry
      Wide Factors that are Relevant to Our Business**




We
      are in
      the business of managing the recovery of credit accounts receivable in Brazil
      for our third-party clients who are either credit card issuers or transferees
      of
      credit accounts receivable. Our business, therefore, depends on the growth
      of
      the credit card sector in Brazil.




The
      credit card sector in Brazil became the third largest issuer worldwide after
      the
      United States and China, and according to the projections of major sources
      such
      as the Brazilian Association of Credit Cards Issuers (ABECS), the Brazilian
      Institute of Statistics (IBGE), the Brazilian Banks Federation (FERBABAN) and
      Citibank, this sector is poised to continue its double-digit
      growth.





During
      the last decade the volume of transactions has soared from 1.36 billion in
      2004
      to over 2 billion in 2006, with the number of plastic credit and debit cards
      dramatically increasing from 17 million in 1996 to 80 million in 2006. This
      trend reflects the inclusion of low-income consumers where at 32% of the GDP
      in
      Brazil, it is still well below the Chileans who are at 63% and the Bolivians
      who
      are at 42%.





This
      economic growth of the commercial credit sector is following the same pattern
      with the same projections. New bank accounts increased from 31.4 million in
      the
      year 2000 to 95.1 million in 2005 where consumers view the credit card as a
      financial instrument to be used in lieu of the check. The number of checks
      used
      dropped 27% from 1999 to 2005 while credit card payments increased by 240%.
      According to data from the Brazilian Central Bank, in 2005, payments by credit
      cards surpassed payments made by check.





With
      its
      database of consumers and its 10-year collections track record, we believe
      that
      ATN is well-positioned to benefit from the rapidly expanding credit card sector.




16




**Uncertainties
      that Affect our Financial Condition**




We
      have
      approximately 15 clients. However, in the fiscal year ended December 31, 2007
      we
      relied on four major clients for approximately 58.23% or our income. Revenues
      from our clients Ativos, HSBC Bank, Banco IBI, and Leader constituted
      approximately 16.44%, 16.59%, 10.05%, and 15.16% of our total revenues,
      respectively. None of these major clients are contractually obligated to
      continue use of our services at historic levels or at all, subject only to
      notice periods for termination. If any of these customers were to significantly
      reduce their amount of service, fail to pay, or terminate their relationships
      with us altogether, our business could be harmed. The number of major clients
      on
      whom we rely has decreased from five during fiscal year 2006 to four during
      fiscal year 2007. During fiscal year 2007, no one customer was responsible
      for
      more than 17% our revenues during this period.




The
      portfolios of consumer receivables that we service consist of one or more of
      the
      following types of consumer receivables:




·
            charged-off
                receivables - accounts that have been written-off by the originators
                and
                may have been previously serviced by collection
                agencies;




·
            semi-performing
                receivables - accounts where the debtor is making partial or irregular
                monthly payments, but the accounts may have been written-off by the
                originators; and




·
            performing
                receivables - accounts where the debtor is making regular monthly
                payments
                that may or may not have been delinquent in the past.




Charged-off
      receivables accounted for more approximately 99% of our business in 2007, while
      semi-performing and performing receivables each accounted or less than 1% of
      our
      business in the period.




Our
      acquisition of ATN and its operations has had a large impact on our costs and
      our Management resources. Prior to our acquisition of ATN in February 2006,
      we
      were a shell company with no revenues. Accordingly, our Management dedicated
      only 25% of their time to our business and our general and administrative
      expenses were minor and related only to fulfilling our duties as a public
      company. Since our acquisition of ATN, our revenues have increased from $0
      revenues in fiscal year 2005 to $2,825,927 in fiscal year 2007. However, our
      cost of sales have increased from $0 for fiscal year 2005 to $1,945,827 for
      fiscal year 2007, primarily due to increased expenses for salaries, telegraph
      and mail, and taxes. Rather than dedicating only 25% of his time to our
      business, our President and Chief Executive Officer, Elie Saltoun, now dedicates
      80% of his time to the management of our company. We have updated our IT
      infrastructure and we are ready to support the acquisition and the handling
      up
      to 2,500,000 cases per month.





With
      its
      extensive consumer database and over a decade of experience in credit
      collections, ATN has proven expertise in the recovery of accounts receivable.
      Due to our level of professionalism and our successful performance we believe
      that we are in the top 5% of businesses in this field in Brazil. Our success
      rate is measured by how long an outstanding debt is past due as well as whether
      such debt has been categorized as a performing, semi-performing or charged-off
      item. On average we recover between 2.5% and 8% of face value of our
      debt.





In
      order
      to further increase our revenue base and eliminate the uncertainty of our
      ability to continue as a going concern, we plan to start using ATN’s consumer
      database and its vast experience in collections to start buying selected
      receivables for our own account. We believe that the impact on our liquidity
      would be highly improved and we would have the opportunity to build our own
      short and long-term portfolio of restructured receivables. Purchased debts
      for
      our own account would also suppress the efforts and costs of collection
      monitoring and reporting back to original holders to the benefit of our bottom
      line.





**Results
      of Operations**





***Year
      Ended December 31, 2007 Compared to Year Ended December 31,
      2006.***




The
      following table summarizes the results of our operations during the year ended
      December 31, 2007 and 2006 and provides information regarding the dollar and
      percentage increase or (decrease) from the year ended December 31, 2007 to
      the
      same period of 2006.




17




12/31/07
            
            12/31/06
            
            Diff.
            
            % ChangeRevenues
            
            
            2,825,927
            
            
            2,512,205
            
            
            313,722
            
            
            12.49Cost
                of Services
            
            
            1,945,827
            
            
            1,901,898
            
            
            43,929
            
            
            2.31Selling,
                General and Administrative Expense
            
            
            491,036
            
            
            1,447,267
            
            
            (956,231
            )
            
            (66.07
            )Interest
                expense
            
            
            360,263
            
            
            108,893
            
            
            251,370
            
            
            230.84Other
                expense
            
            
            203,096
            
            
            363,127
            
            
            (160,031
            )
            
            44.07Interest
                income
            
            
            39,113
            
            
            44,404
            
            
            (5,291
            )
            
            11.92Net
                loss
            
            
            (135,182
            )
            
            (1,264,576
            )
            
            1,129,394
            
            
            89.31Loss
                per common share
            
            
            (0.02
            )
            
            (0.16
            )
            
            0.14
            
            
            87.50





We
      had
      revenues of $2,825,927 in year ended December 31, 2007, compared to revenues
      of
      $2,512,205 during the same period in 2006.  Our revenues increased $313,722
      or 12.49% in the year ended December 31, 2007 primarily due to an increase
      in
      collections.





Our
      cost
      of services for the year ended December 31, 2007 was $1,945,827 as compared
      to
      $1,901,898 during the same period in 2006.  This increase of $43,929 or
      2.31% is primarily the result of increased salaries, salary related expenses
      and
      transport expenses offset by a decrease in mail/postal expenses.





Selling,
      general and administrative expenses decreased by $(956,231), or 66.07%, to
      $491,036 in the year ended December 31, 2007 compared to $1,447,267 in the
      same
      period in 2006. The change is primarily due to the successful negotiations
      with
      the Brazilian authorities to favorably settle previously recorded taxes
      approximating $934,001. The change is also the result of a decrease in agreement
      losses and legal services offset by an increase in software rent, communication
      expenses and professional fees and other administrative expenses




Interest
      expense for the year ended December 31, 2007 was $360,263 compared to $108,893
      for the same period of 2006.  Interest expense increased $251,370 or
      230.84% in the year ended December 31, 2007 mainly due to the increase of new
      borrowings over the past year.




During
      year ended December 31, 2007 we incurred a net loss of $(135,182) compared
      with
      $(1,264,576) for the same period in the prior year.  This change is
      primarily attributable to an adjustment of the provision for municipal taxes
      of
      $934,001, increased revenues from collections of $313,722 offset by increased
      expenses as described above.





Loss
      per
      common share for the year ended December 31, 2007 was $(.02) as compared to
      a
      loss of $(.16) during the same period of 2006.  This decrease in the loss
      per share is due to the decreased loss for the year ended December 31,
      2007.




18




***Cash
      Flow Items***




The
      following table provides the statements of net cash flows for the year ended
      December 31, 2007:





**Year
                Ended December****2007**
            
            **2006**Net
                Cash Provided By (used in) Operating Activities
            
            
            (581,067
            )
            
            (202,164
            )Net
                Cash Used in Investing Activities
            
            
            (52,936
            )
            
            (154,159
            )Net
                Cash Provided by Financing Activities
            
            
            179,097
            
            
            451,004Net
                Decrease in Cash and Cash Equivalents
            
            
            (429,336
            )
            
            (44,278
            )Cash
                and Cash Equivalents - Beginning of Period
            
            
            896,531
            
            
            940,809Cash
                and Cash Equivalents - End of Period
            
            
            467,195
            
            
            896,531




We
      used
      $581,067 of cash from our operating activities during the year ended December
      31, 2007 as compared to $202,164 cash used during the year ended December 31,
      2006.  The difference of $378,903 is mainly attributable to the following
      factors: (1) a decrease in accrued municipal service and payroll related taxes
      of $393,443 offset by an increase in accrued expenses of $242,985, increases
      in
      receivables of $119,235 and increases in non-cash items of $801,278, primarily
      due to the settlement of the provision for municipal taxes.




We
      used
      $52,936 in cash from our investing activities during the year ended December
      31,
      2007, as compared to $154,159 used in the prior year ending December 31, 2006.
       These funds were used for the purchase of fixed assets.





We
      provided a net $179,097 from financing activities during the year ended December
      31, 2007 as compared to $451,004 during year ended December 31, 2006.  The
      change is due to a increase in new borrowings by $55,578 and payments of
      $454,417 on our long –term debt obligations.




***Balance
      Sheet Items***




As
      of
      December 31 2007, we had total current assets of $963,941, as compared to
      $1,192,883 as of December 31, 2006.  Our total assets as of December 31,
      2007 were $3,144,733 as compared to $3,288,172 as of December 31, 2006.  We
      had total current liabilities of $3,543,674 as of December 31, 2007 as compared
      to $3,075,832 as of December 31, 2006, and we had total liabilities of
      $3,896,672 as of December 31, 2007 as compared to $3,405,544 as of December
      31,
      2006.




This
      increase in total liabilities is primarily due to new loans of $466,571 and
      increases in accrued expenses.




As
      of
      December 31, 2007, our total Stockholders’ Deficit was $751,939 as compared to
      $117,372 at December 31, 2006.  This was due to net losses from operations
      of $135,182 and exchange rate losses of $499,385.




***Liquidity
      and Capital Resources*** ****




We
      believe that we will be able to pay our normal and operating expenditures during
      the next twelve months with our cash reserves and additional cash generated
      from
      operations.  We do not have any material capital commitments during the
      next twelve months, other than repayment of debt as it comes due, and we do
      not
      anticipate the issuance of additional debt (other than to refinance existing
      debt).  We also do not anticipate any material changes in our operations
      during the next twelve months.  As such, we believe that our current cash
      position is sufficient to retire our current short-term debt as it comes due
      and
      we believe that cash generated from operations will be sufficient to pay our
      operating expenses during the next twelve months.




We
      had
      cash and cash equivalents of approximately $467,195 as of December 31, 2007
      and
      we had short-term liabilities in the amount of $3,543,674, as well as long-term
      liabilities in the amount of $352,998 as of December 31, 2007.  The Company
      intends to use its cash to retire current debt as it comes due as well as to
      pay
      operating expenses as necessary.




During
      2007, the Company successfully negotiated with Brazilian authorities to
      favorably settle previously recorded municipal service taxes of $730,000. In
      addition, the company further evaluated related payroll tax provisions and
      reduced same by approximately $200,000.




19




If
      we are
      required to make any material and unplanned expenditures during the next twelve
      months, the Company believes that it can raise additional capital in the equity
      markets through private placements in order to meet its short-term cash
      requirements. The Company believes that such equity funding could also be used
      to liquidate all or a portion of the Company’s current bank loans or pay other
      operating expenses.  However, we can provide no assurances that we will be
      able to raise additional capital in the equity markets on favorable terms,
      if at
      all or on a timely basis.




As
      of
      December 31, 2007, we had cash assets of $467,195 and total assets of $3,144,733
      as compared to cash assets of $896,531 and total assets of $3,288,172 as of
      December 31, 2006.  This decrease is primarily due to the use of cash in
      our operation.  Additional purchases of fixed assets during the year ended
      December 31, 2007 totaled $278,531.  We have a $2,579,733 negative working
      capital at December 31, 2007, of which $1,707,598 relates to municipal taxes
      and
      payroll expenses in connection with ATN’s prior and ongoing operations.





Following
      the close of the fiscal year ended December 31, 2007, in February 2008, Keyano
      Invest Inc., a related party, loaned the Company $1,000,000 for working capital
      purposes on terms and conditions to be determined on an arms-length basis
      between the parties. There is no guarantee that Company will produce sufficient
      cash flow to repay this loan and/or the Company may not be able to negotiate
      reasonable terms for repayment which can allow the repayment of the loan from
      the Company’s cash flow.





Loans
      Payable to Banks




The
      Company has several loans with various Brazilian banks and financial
      institutions.  The loans are secured by personal guarantees of the
      Company’s principal shareholders.  The loans mature at various months
      throughout the year and are generally renewed at maturity.  The interest
      rates are fixed and bear interest at rates ranging from 9,6% to 12.84% per
      year.
 The balance of the loans at December 31, 2007 was $491,474.




**Long-Term
      Debt**




During
      the year ended December 31, 2007, the Company purchased new computer equipment
      from DELL Brazil. The equipment valued at approximately $189,500 is financed
      over a three year period at rates ranging from 12% to 12.84% per year. The
      balance of the loan at December 31, 2007 is $78,835





In
      June,
      2007, the Company refinanced a working capital loan from Banco Bradesco. The
      loan is valued at approximately $114,000 and is payable in 24 monthly
      installments at 2.6% per month, commencing July, 2007. The loan is guaranteed
      by
      a promissory note signed by ATN’s directors. At December 31, 2007, the balance
      is $80,939.





In
      June,
      2007, the Company borrowed two working capital loans from Caixa Economica
      Federal. The loans are valued at approximately $113,000 and are payable in
      24
      monthly installments at 2.73% per month, commencing July, 2007. The loans are
      guaranteed by a promissory note signed by ATN’s directors. At December 31, 2007,
      the balance is $91,052.




In
      September, 2007 the Company borrowed a working capital loan from Santander
      in
      the amount of $48,942. The loan is valued at approximately $51,000 and is
      payable in 16 monthly installments at an interest rate of 46.8% per year. The
      loan is guaranteed by a promissory note signed by ATN’s directors. At December
      31, 2007, the balance is $41,182.





An
      analysis of the current and long-term portion of the debt at December 31, 2007
      is as follows:




Total
                loans outstanding
            
            $
            623,601Less:
                 current portion
            
            $
            270,603Long-term
                portion
            
            $
            352,998




Our
      financial statements have been prepared on the basis that we will continue
      as a
      going concern, which contemplates the realization and satisfaction of our
      liabilities and commitments in the normal course of business.




20




We
      believe that our increased revenues and our cash on hand will be sufficient
      to
      sustain our operations at our current levels for the next twelve
      months.





***Off-Balance
      Sheet Arrangements***




We
      do not
      have any off-balance sheet arrangements that have or are reasonably likely
      to
      have a current or future effect on our financial condition, changes in financial
      condition, revenues or expenses, results of operations, liquidity, capital
      expenditures or capital resources that is material to investors.




**ITEM
      7. FINANCIAL STATEMENTS**





See
      pages
      F-1 *et.
      seq.*




**ITEM
      8.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURE**




None.




**ITEM
      8A. CONTROLS AND PROCEDURES**




Disclosure
      Controls and Procedures




We
      have
      adopted and maintain disclosure controls and procedures (as such term is defined
      in Rules 13a-15 (e) and 15d-15(e) under the Securities Exchange Act of 1934,
      as
      amended (the "Exchange Act")_) that are designed to ensure that information
      required to be disclosed in our reports under the Exchange Act, is recorded,
      processed, summarized and reported within the time periods required under the
      SEC's rules and forms and that the information is gathered and communicated
      to
      our management, including our Chief Executive Officer (Principal Executive
      Officer) and Chief Financial Officer (Principal Financial Officer), as
      appropriate, to allow for timely decisions regarding required disclosure.




As
      required by SEC Rule 15d-15(b) we carried out an evaluation, under the
      supervision and with the participation of management, including our principal
      executive officer and principal financial officer, of the effectiveness of
      the
      design and operation of our disclosure controls and procedures pursuant to
      Exchange Act 15d-14 as of the end of the year covered by this report. Based
      upon
      that evaluation, our principal executive officer and principal financial officer
      concluded that our disclosure controls and procedures are effective in timely
      alerting them to material information relating to us that is required to be
      included in our periodic SEC reports and to ensure that information required
      to
      be disclosed in our periodic SEC reports is accumulated and communicated to
      our
      management, including our CEO and CFO, to allow timely decisions regarding
      required disclosure as a result of any deficiency detected in our internal
      control over financial reporting.




Management's
      Annual Report on Internal Control Over Financial Reporting.




Our
      Management is responsible for establishing and maintaining adequate internal
      control over financial reporting for the Company in accordance with and as
      defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal
      control over financial reporting is designed to provide reasonable assurance
      regarding the reliability of financial reporting and the preparation of
      financial statements for external purposes in accordance with generally accepted
      accounting principles. Our internal control over financial reporting includes
      those policies and procedures that:




(i)  
         require the maintenance of records that, in reasonable detail,
      accurately and fairly reflect the transactions and dispositions of our
      assets;




(ii)  
         provide reasonable assurance that transactions are recorded as
      necessary to permit preparation of financial statements in accordance with
      generally accepted accounting principles and that receipts and expenditures
      of
      the Company are being made in accordance with authorizations of management
      and
      directors of the Company;




21




(iii)  
         provide reasonable assurance regarding prevention or timely
      detection of unauthorized acquisition, use, or disposition of the Company's
      assets that could have a material effect on the financial
      statements.




Because
      of its inherent limitations, internal control over financial reporting may
      not
      prevent or detect misstatements. Also, projections of any evaluation of
      effectiveness to future periods are subject to the risk that controls may become
      inadequate because of changes in conditions, or that the degree of compliance
      with the policies or procedures may deteriorate.




Management's
      assessment of the effectiveness of the Company’s internal control over financial
      reporting as of the year ended December 31, 2007 is effective. We have not
      identified any, current material weaknesses considering the nature and extent
      of
      our current operations and any risks or errors in financial reporting under
      current operations except as to the estimation of municipal service taxes and
      estimation of payroll taxes and related liabilities. The Company will continue
      to strengthen controls in this area during 2008.




This
      annual report does not include an attestation report of the Company’s registered
      public accounting firm regarding internal control over financial reporting.
      Management's report was not subject to attestation by the Company’s registered
      public accounting firm pursuant to temporary rules of the SEC that permit the
      Company to provide only management's report in this annual report.




Changes
      in Internal Control Over Financial Reporting.




There
      was
      no change in our internal control over financial reporting that occurred during
      the last fiscal year ended December 31, 2007 that has materially affected,
      or is
      reasonably likely to materially affect, our internal control over financial
      reporting





**Item
      8B. OTHER INFORMATION.**





None.




**PART
      III**





**Item
      9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
      WITH SECTION 16(a) OF THE EXCHANGE ACT.**





***Directors,
      Executive Officers and Significant Employees***




Set
      forth
      below are the names of our directors, officers and significant employees, their
      ages, all positions and offices that they hold with us, the period during which
      they have served as such, and their business experience during
      at
      least the last five years.




**Name**
            
            **Age**
            
            **Positions
                Held**
            
            **Experience**Elie
                Saltoun
            
            68
            
            Chief
                Executive Officer, President and Treasurer since November
                2004
            
            Elie
                Saltoun has served as our Chief Executive Officer, President and
                Treasurer, and as the Chairman of our board of directors since November
                2004. Mr. Saltoun also served as our Secretary from July 2001 until
                he
                resigned to assume his current role with our Company. Since May 2005,
                Mr.
                Saltoun has also acted as a principal of Keyano Invest Inc., a corporate
                consulting firm based in Brazil. Mr. Saltoun is an expert at structuring
                complex foreign debt recoveries and debt to equity transactions.
                He has
                successfully coordinated the use and conversion of past due unpaid
                sovereign debt into equity in privatized Brazilian State-owned companies,
                and has supervised the purchase and swap of unpaid obligations from
                a
                State-owned reinsurance organization.Jeffrey
                Nunez
            
            46
            
            Secretary
                since November 2004
            
            During
                the period from our inception until November 4, 2004, Mr. Nunez was
                our
                director, Chief Executive Officer, President and Treasurer. He resigned
                from all of those positions (except he remained a director) on November
                4,
                2004 and on such date he was appointed as our Secretary. From October
                2003
                to present Mr. Nunez has been self employed acting as a consultant
                to
                public companies under the name Broad Street Capital.Omar
                Malheiro Silva Araújo
            
            53
            
            President,
                Chief Executive Officer and director of ATN since April
                1997
            
            Mr.
                Araújo has been the President, Chief Executive Officer and director of
                our
                subsidiary ATN since April 1997. Mr. Araújo is the co-founder of ATN. From
                1991 to 1997, Mr. Araújo served as the Chief Financial Officer and
                director of Cartao Unibanco Visa where he supervised the cash flow
                of the
                credit card division. Mr. Araújo has a MBA in Finance.Manuel
                da Costa Fraguas
            
            60
            
            General
                Manager and director of ATN since April 1997
            
            Mr.
                Fraguas has been the General Manager and director of our subsidiary
                ATN
                since its inception on April 1997. Mr. Fraguas is the co-founder
                of ATN.
                Mr. Fraguas has a master in Production
                Engineering.




22




There
      are
      no agreements or understandings for any of our executive officers or directors
      to resign at the request of another person and no officer or director is acting
      on behalf of nor will any of them act at the direction of any other
      person.





Mr.
      Saltoun devotes approximately 80% of his business time to our affairs with
      the
      remaining time being spent on the affairs of Keyano Invest Inc. Mr. Nunez
      devotes approximately 70% of his time to our affairs with the remaining time
      being spent on the affairs of Broad Street Capital. Each of Mr. Araújo and
      Fraguas devotes 100% of his business time to the operation and business of
      our
      subsidiary ATN.





***Family
      Relationships***




There
      are
      no family relationships among our directors or officers.





***Involvement
      in Certain Legal Proceedings***




To
      the
      best of our knowledge, except as set forth herein, none of our directors,
      director nominees or executive officers has been involved in any transactions
      with us or any of our directors, executive officers, affiliates or associates
      which are required to be disclosed pursuant to the rules and regulations of
      the
      SEC. Except as described below, none of the directors, director designees or
      executive officers to our knowledge has been convicted in a criminal proceeding,
      excluding traffic violations or similar misdemeanors, or has been a party to
      any
      judicial or administrative proceeding during the past five years that resulted
      in a judgment, decree or final order enjoining the person from future violations
      of, or prohibiting activities subject to, federal or state securities laws,
      or a
      finding of any violation of federal or state securities laws, except for matters
      that were dismissed without sanction or settlement.





On
      July
      28, 2005, the SEC issued an order in connection with the settlement of an
      administrative proceeding against our Secretary, Jeffrey G. Nunez. The order
      indicates that Mr. Nunez, who at the time was a registered representative
      (broker) at the brokerage firm of Providential Securities, Inc., played an
      active role in the distribution of hundreds of thousands of unregistered shares
      of stock of Morgan Cooper, Inc. in violation of Section 5 of the Securities
      Act.
      Morgan Cooper, Inc., formerly Gong Hei Investment Co., Ltd., is the successor
      company in a reverse merger transaction that occurred on November 18, 1999
      when
      Morgan Cooper, Inc., then a private company engaged in the garment business,
      effected a business combination with Gong Hei Investment Co., Ltd., then a
      public reporting shell company. Mr. Nunez acted as a broker in connection with
      the sale of the shares by James Caprio and James Morse, who were principals
      of
      the shell company prior to the reverse merger, to the brokerage clients of
      Providential Securities. The Commission permanently enjoined Nunez from future
      violations of Section 5(a) and 5(c) of the Securities Act, ordered Nunez to
      pay
      a $55,000 civil penalty, suspended Mr. Nunez from association with any
      broker-dealer for a period of six months, and required Mr. Nunez to provide
      an
      accounting and to disgorge any profits made as a result of the sales. To date,
      Mr. Nunez has not paid the $55,000 civil penalty.




23




***Code
      of Ethics***





Our
      board
      of directors has adopted a code of ethics that our principal financial officer,
      principal accounting officer or controller and any person who may perform
      similar functions are subject to. Currently Elie Saltoun, our Chief Executive
      Officer, President and Treasurer, Jeffrey G. Nunez, our Secretary, **** Omar
      Malheiro Silva Araújo, the Chief Executive Officer and President of ATN, and
      Manuel da Costa Fraguas, the General Manager of ATN, are our and ATN’s only
      officers and directors, therefore, they are the only persons subject to the
      Code
      of Ethics. If we retain additional officers in the future to act as our
      principal financial officer, principal accounting officer, controller or persons
      serving similar functions, they would become subject to the Code of Ethics.
      The
      Code of Ethics does not indicate the consequences of a breach of the code.
      If
      there is a breach, our board of directors would review the facts and
      circumstances surrounding the breach and take action that it deems appropriate,
      which action may include dismissal of the employee who breached the code.
      Currently, since Messrs Saltoun and Nunez serve as directors and are also our
      officers, they are largely responsible for reviewing their own conduct under
      the
      Code of Ethics and determining what action to take in the event of their own
      breach of the Code of Ethics.




***Compliance
      with Section 16(a) of the Securities Exchange Act***





Section
      16(a) of the Exchange Act required our executive officers and directors, and
      person who beneficially own more than ten percent of our equity securities,
      to
      file reports of ownership and changes in ownership with the Securities and
      Exchange Commission. Officers, directors and greater than ten percent
      shareholders are required by SEC regulation to furnish us with copies of all
      Section 16(a) forms they file. Based on our review of the copies of such forms
      received by us, we believe that during the year ended December 31, 2007, Elie
      Saltoun and Jeffrey Nunez each failed to make the required filings under Section
      16(a). These officers have indicated that they intend to make the required
      filings promptly after the filing of this Form 10-KSB.





***Board
      Composition and Committees***




Our
      Board
      of Directors is composed of 2 members, Mr. Saltoun and Mr. Nunez. Directors
      are
      elected until their successors are duly elected and qualified.





We
      currently do not have standing audit, nominating or compensation committees.
      Currently, our entire Board of Directors is responsible for the functions that
      would otherwise be handled by these committees. We intend, however, to establish
      an audit committee, a nominating committee and a compensation committee of
      the
      Board of Directors. We envision that the audit committee will be primarily
      responsible for reviewing the services performed by our independent auditors,
      evaluating our accounting policies and our system of internal controls. The
      nominating committee would be responsible for nomination of new director
      candidates and will be responsible for implementing our corporate governance
      policies and procedures. The compensation committee will be primarily
      responsible for reviewing and approving our salary and benefits policies
      (including stock options) and other compensation of our executive
      officers.





Our
      Board
      of Directors has not made a determination as to whether any member of our board
      is an audit committee financial expert. Upon the establishment of an audit
      committee, the board will determine whether any of the directors qualify as
      an
      audit committee financial expert.





**Item
      10. EXECUTIVE COMPENSATION.**





The
      following table sets forth information concerning all cash and non-cash
      compensation awarded to, earned by or paid to our Chief Executive Officer,
      for
      services during the last three fiscal years in all capacities to us, our
      subsidiaries and predecessors. No executive officer received compensation of
      $100,000 or more in any of the last three fiscal years.





**Summary
      Compensation Table**





**Name and**
              **Principal**
              **Position**
            
            **Year**
            
            **Salary**
              **($)**
            
            **Bonus**
              **($)**
            
            **Stock**
              **Awards ($)**
            
            **Option**
              **Awards ($)**
            
            **Non-**
              **Equity**
              **Incentive Plan**
              **Compensation**
              **Earnings ($)**
            
            **Non-**
              **qualified**
              **Deferred**
              **Compensation**
              **Earnings ($)**
            
            **All Other**
              **Compensation**
              **($)**
            
            **Total**
              **($)**Elie
                Saltoun
              CEO
            
            
            2007
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0Jeffrey
                Nunez
              Secretary
            
            
            2007
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0




24




***Outstanding
      Equity Awards at Fiscal Year End***




None
      of
      our executive officers received any equity awards, including, options,
      restricted stock or other equity incentives, during the fiscal year ended
      December 31, 2007.




***Additional
      Narrative Disclosures***




All
      of
      our employees, including our executive officers, are employed at will and none
      of our employees has entered into an employment agreement with us. We do not
      have any bonus, deferred compensation or retirement plan.





***Director
      Compensation***




We
      have
      no standard arrangements in place to compensate our directors for their service
      as directors or as members of any committee of directors. In the future, if
      we
      retain non-employee directors, we may decide to compensate them for their
      service to us as directors and members of committees




**Item
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS.**




The
      following table sets forth information regarding beneficial ownership of our
      common stock as of January 1, 2008 (i) by each person who is known by us to
      beneficially own more than five percent of our common stock; (ii) by each of
      our
      officers and directors; and (iii) by all of our officers and directors as a
      group:





Title of Class
            
            Name & Address of
              Beneficial Owner
            
            Office, If Any
            
            Amount & Nature of
              Beneficial
              Ownership1
            
            Percent of
              Class2Common
                Stock$0.001
                par value
            
            Omar
                Malheiro Silva Araújo
              177
                Av. Rio Branco, 7thFloor
              Rio
                de Janeiro, Brazil
              20040-007
            
            President,
                Chief Executive Officer and director of ATN
            
            1,400,000
            
            16.56
            %Common
                Stock$0.001
                par value
            
            Manuel
                da Costa Fraguas
              177
                Av. Rio Branco, 7thFloor
              Rio
                de Janeiro, Brazil
              20040-007
            
            General
                Manager and director of ATN
            
            600,000
            
            7.10
            %Common
                Stock$0.001
                par value
            
            Keyano
                Invest Inc.
              C/o
                VP Bank attention Mr. Diego Piccoli
              Bleicherweg
                50 CH 8039
              Zurich
                Switzerland
            
            
            
            5,818,750
            3
            68.81
            %Common
                Stock$0.001
                par value
            
            Elie
                Saltoun
              4500
                Steiner Ranch Blvd.
              Suite
                1708
              Austin,
                Texas 78732
            
            President,
                CEO, Treasurer and Director
            
            5,818,750
            3
            68.81
            %Common
                Stock$0.001
                par value
            
            Jeffrey
                Nunez
              4500
                Steiner Ranch Blvd.
              Suite
                1708
              Austin,
                Texas 78732
            
            Secretary
                and Director
            
            250,000
            
            2.96
            %Common
                Stock$0.001
                par value
            
            All
                officers and directors as a group (2 persons named above)
            
            
            
            6,068,751
            
            71.77
            %




25




Beneficial
      Ownership is determined in accordance with Rule 13d-3 of the Securities and
      Exchange Commission and generally includes voting or investment power with
      respect to securities. Each of the beneficial owners listed above has direct
      ownership of and sole voting power and investment power with respect to the
      shares of our common stock.  For each Beneficial Owner above, any options
      exercisable within 60 days have been included in the denominator.




Based
      on
      8,456,250 shares of our Common Stock outstanding as of April 1, 2008.




Our
      president, CEO, Treasurer and director, Elie Saltoun, owns fifty percent of
      Keyano Invest Inc. Accordingly, Mr. Saltoun and Keyano are deemed to be
      affiliates. Mr. Saltoun is deemed to be the beneficial owner of any securities
      owned by Keyano, and vice versa. Therefore, the 5,818,750 shares of our common
      stock owned by Keyano include the 500,000 shares of common stock held by Mr.
      Saltoun. Conversely, the 5,818,750 shares of our common stock owned by Mr.
      Saltoun include the 5,318,750 shares held by Keyano.




***Changes
      in Control***




We
      do not
      currently have any arrangements which if consummated may result in a change
      of
      control of our Company. ****




**ITEM
      12. CERTAIN RELATIONSHIPS AND TRANSACTIONS AND DIRECTOR
      INDEPENDENCE**




***Certain
      Relationships and Transactions with Related Persons***





On
      November 22, 2005, we entered into a Debt Conversion Agreement with Keyano,
      the
      holder of our convertible promissory note having a principal amount plus accrued
      interest of $1,063,750. Under the Debt Conversion Agreement, we converted
      Keyano’s note and any accrued interest into our common stock at a rate of $0.20
      per share. 5,318,750 shares of our common stock were delivered to Keyano and
      the
      note was cancelled. Keyano is an affiliate of our director and current Chief
      Executive Officer, President and Treasurer, Elie Saltoun, who is the owner
      of a
      50% interest in Keyano.




On
      February 27, 2006, we consummated the transactions contemplated by a share
      exchange agreement among us, ATN, Omar Malheiro Silva Araújo and Manuel da Costa
      Fraguas, both directors and officers of ATN. Pursuant to the share exchange
      agreement, we acquired 80% of the outstanding capital stock of ATN in exchange
      for 2,000,000 shares of our common stock, in the aggregate. As a result of
      this
      transaction, Messrs. Araújo and Fraguas became the owners of 23.72% of our
      outstanding capital stock.




***Director
      Independence***




The
      Board
      of Directors is currently composed of 2 members, Mr. Saltoun and Mr. Nunez.
      None
      of our directors are “independent” directors, as that term is defined under the
      Nasdaq listing standards.





**Item
      13. EXHIBITS.**





The
      following exhibits are filed with this report. As to any shareholder of record
      requesting a copy of this report, we will furnish any exhibit indicated in
      the
      list below as filed with this report upon payment to us of our expenses in
      furnishing the information.





ExhibitNumber
            
            Description31.1
            
            Certification
                of Principal Executive Officer and Principal Financial Officer filed
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.32.1
            
            Certification
                of Principal Executive Officer and Principal Financial Officer furnished
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.




26




**Item
      14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.**





***Audit
      Fees***





The
      aggregate fees billed for each of the fiscal year ended December 31, 2007 and
      2006 for professional services rendered by the principal accountant for the
      audit of the registrant’s annual financial statements and review of the
      financial statements included in the registrant’s Form 10-KSB or services that
      are normally provided by the accountant in connection with statutory and
      regulatory filings or engagements for those fiscal years were $44,800 and
      $36,660, respectively.





***Audit
      Related Fees***





The
      aggregate fees billed in the fiscal year ended December 31, 2007 and 2006 for
      assurance and related services by the principal accountant that are reasonably
      related to the performance of the audit or review of the registrant’s financial
      statements and are not reported under the paragraph captioned “Audit Fees” above
      are $26,400 and $25,613, respectively.





***Tax
      Fees***





The
      aggregate fees billed in the fiscal years ended December 31, 2007 and 2006
      for
      professional services rendered by the principal accountant for tax compliance,
      tax advice and tax planning were $0 and $0, respectively.




***All
      Other Fees***





The
      aggregate fees billed in the fiscal years ended December 31, 2007 and 2006
      for
      products and services provided by the principal accountant, other than the
      services reported above under other captions of this Item 14 are $0 and $0,
      respectively.





***Pre-Approval
      Policies and Procedures***





Our
      board
      of directors adopted resolutions in accordance with the Sarbanes-Oxley Act
      of
      2002 requiring pre-approval of all auditing services and all audit related,
      tax
      or other services not prohibited under Section 10A(g) of the Securities Exchange
      Act of 1934, as amended to be performed for us by our independent auditors,
      subject to the *de
      minimus* exception described in Section 10A(i)(1)(B) of the Exchange Act. These
      resolutions authorized our independent auditor to perform audit services
      required in connection with the annual audit relating to the fiscal year ended
      December 31, 2007 and the quarterly reviews for the subsequent fiscal quarters
      of 2007 through the review for the quarter ended September 30, 2008 at which
      time additional pre-approvals for any additional services to be performed by
      our
      auditor would be sought from the Board. Our board of directors also appointed
      and authorized Elie Saltoun to grant pre-approvals of other audit,
      audit-related, tax and other services requiring board approval to be performed
      for us by our independent auditor, provided that the designee, following any
      such pre-approvals, thereafter reports the pre-approvals of such services at
      the
      next following regular meeting of the Board.





The
      percentage of audit-related, tax and other services that were approved by the
      board of directors is 100%.




27




SIGNATURES





In
      accordance with section 13 or 15(d) of the Securities Exchange Act of 1934,
      the
      Registrant caused this Report on Form 10-KSB to be signed on its behalf by
      the
      undersigned, thereto duly authorized individual.





Date: April
      14, 2008





LEXICON
                UNITED INCORPORATEDBy:
            /*s/
                Elie Saltoun*Elie
                SaltounChief
                Executive Officer,President
                and Treasurer




28




LEXICON
      UNITED INCORPORATED AND SUBSIDIARY





FINANCIAL
      STATEMENTS





FOR
      THE
      TWO YEARS ENDED


DECEMBER
      31, 2007 AND 2006










Table
      of
      Contents





Report
                of Independent Registered Public Accounting Firm
            
            
            F
                1Consolidated
                Balance Sheets
            
            
            F
                2Consolidated
                Statements of Operations
            
            
            F
                3Consolidated
                Statements of Cash Flows
            
            
            F
                5Consolidated
                Statements of Stockholders’ Equity (Deficit)
            
            
            F
                4Notes
                to Financial Statements
            
            
            F
                7









MEYLER
      & COMPANY, LLC


CERTIFIED
      PUBLIC ACCOUNTANTS


ONE
      ARIN
      PARK


1715
      HIGHWAY 35


MIDDLETOWN,
      NJ 07748





Report
      of
      Independent Registered Public Accounting Firm





To
      the
      Board of Directors


Lexicon
      United Incorporated


Austin,
      TX





We
      have
      audited the accompanying consolidated balance sheets of Lexicon United
      Incorporated and Subsidiary as of December 31, 2007 and 2006 and the related
      consolidated statements of operations, stockholders’ equity, and cash flows for
      each of the two years in the period ended December 31, 2007. These consolidated
      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 audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The Company is not required to
      have, nor were we engaged to perform, an audit of its internal control over
      financial reporting. Our audit included consideration of internal control over
      financial reporting as a basis for designing audit procedures that are
      appropriate in the circumstances but not for the purpose of expressing an
      opinion on the effectiveness of the Company’s internal control over financial
      reporting. Accordingly, we express no such opinion. An audit includes examining,
      on a test basis, evidence supporting the amounts and disclosures in the
      financial statements, assessing the accounting principles used and significant
      estimates made by management, as well as evaluating the overall financial
      statement presentation. We believe that our audit provides a reasonable basis
      for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of the Company
      as
      of December 31, 2007 and 2006 and the consolidated results of its operations
      and
      its cash flows for each of the two years in the period ended December 31, 2007
      in conformity with U.S. generally accepted accounting principles.





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. As discussed in Note A to the
      consolidated financial statements, the Company incurred net losses of $135,182
      and $1,264,576 for the years ended December 31, 2007 and 2006, respectively,
      and
      has an accumulated deficit of $2,025,245 and negative working capital of
      $2,579,733 at December 31, 2007. These conditions raise substantial doubt about
      its ability to continue as a going concern. Management’s plans regarding those
      matters are also described in Note A. The financial statements do not include
      any adjustments that might result from the outcome of this uncertainty.





*/s/
                Meyler & Company, LLC*




Middletown,
      NJ


April
      14,
      2008





F
          1





**LEXICON
      UNITED INCORPORATED AND SUBSIDIARY**


**CONSOLIDATED
      BALANCE SHEETS**





**December
                31****2007**
            
            **2006****CURRENT
                ASSETS**Cash
                and cash equivalents
            
            $
            467,195
            
            $
            896,531Accounts
                receivable
            
            
            288,588
            
            
            198,236Other
                receivables
            
            
            205,013
            
            
            95,929Prepaid
                expenses
            
            
            3,145
            
            
            2,187Total
                current assets
            
            
            963,941
            
            
            1,192,883**FIXED
                ASSETS**Building,
                equipment, and leasehold improvements, net of accumulated depreciation
                of
                $471,766 and $273,845 in 2007 and 2006, respectively
            
            
            740,525
            
            
            581,633**OTHER
                ASSETS**Customer
                Lists, net of amortization of $102,744 and $51,372 in 2007 and 2006,
                respectively
            
            
            410,989
            
            
            462,361Tradenames,
                net of amortization of $44,034 and $22,017 in 2007 and 2006,
                respectively
            
            
            176,137
            
            
            198,154Goodwill
            
            
            853,141
            
            
            853,141Total
                other assets
            
            
            1,440,267
            
            
            1,513,656**TOTAL
                ASSETS**
            
            $
            3,144,733
            
            $
            3,288,172**CURRENT
                LIABILITIES**Loans
                payable to banks
            
            $
            491,474
            
            $
            408,302Current
                portion of long term debt
            
            
            270,603
            
            
            76,254Bank
                Overdrafts
            
            
            378,514
            
            
            212,750Accounts
                Payable
            
            
            176,022
            
            
            191,528Loans
                payable to officer
            
            
            52,504
            
            
            -Accrued
                Expenses
            
            
            466,959
            
            
            235,496Accrued
                Municipal Service Taxes
            
            
            159,841
            
            
            625,963Accrued
                Payroll and related taxes
            
            
            1,366,938
            
            
            1,175,317Accrued
                Employee Benefits
            
            
            180,819
            
            
            150,222Total
                Current Liabilities
            
            
            3,543,674
            
            
            3,075,832**LONG
                TERM LIABILITIES**Long
                term debt
            
            
            352,998
            
            
            329,712Total
                Long Term Liabilities
            
            
            352,998
            
            
            329,712**TOTAL
                LIABILITIES**
            
            
            3,896,672
            
            
            3,405,544**STOCKHOLDERS'
                EQUITY (DEFICIT)**Preferred
                stock $0.001 par value, 10,000,000 shares authorized, none issued
                and
                outstanding
            
            
            -
            
            
            -Common
                stock $0.001 par value, 40,000,000 shares authorized, 8,456,250 issued
                and
                outstanding at December 31, 2007 and 2006 respectively
            
            
            8,456
            
            
            8,456Paid
                in capital
            
            
            1,903,194
            
            
            1,903,194Accumulated
                deficit
            
            
            (2,025,245
            )
            
            (1,890,063
            )Accumulated
                other comprehensive loss
            
            
            (638,344
            )
            
            (138,959
            )Total
                Stockholders' Deficit
            
            
            (751,939
            )
            
            (117,372
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS' DEFICIT**
            
            $
            3,144,733
            
            $
            3,288,172





See
      accompanying notes to financial statements.




F
          2




**LEXICON
      UNITED INCORPORATED AND SUBSIDIARY**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**





**For the year ended December 31****2007**
            
            **2006****REVENUE**Service
                revenue
            
            $
            2,825,927
            
            $
            2,512,205**COST
                OF SERVICES**
            
            
            1,945,827
            
            
            1,901,898**GROSS
                PROFIT**
            
            
            880,100
            
            
            610,307**COSTS
                AND EXPENSES**Selling,
                general and administrative (including reversal of $934,001 Municipal
                Service and related taxes in 2007)
            
            
            491,036
            
            
            1,447,267Loss
                on disposal of fixed assets
            
            
            -
            
            
            203,065Depreciation
            
            
            129,707
            
            
            86,673Amortization
            
            
            73,389
            
            
            73,389Interest
                expense
            
            
            360,263
            
            
            108,893Total
                costs and expenses
            
            
            1,054,395
            
            
            1,919,287**OPERATING
                LOSS**
            
            
            (174,295
            )
            
            (1,308,980
            )**OTHER
                INCOME**Interest
                income and other
            
            
            39,113
            
            
            44,404Total
                Other Income
            
            
            39,113
            
            
            44,404**NET
                LOSS**
            
            $
            (135,182
            )
            $
            (1,264,576
            )**NET
                LOSS PER COMMON SHARE**
            
            $
            (0.02
            )
            $
            (0.16
            )**WEIGHTED
                AVERAGE COMMON SHARES OUTSTANDING**
            
            
            8,456,250
            
            
            8,143,921




See
      accompanying notes to financial statements.




F
          3




**LEXICON
      UNITED INCORPORATED AND SUBSIDIARY**


**CONSOLIDATED
      STATEMENT OF STOCKHOLDERS' EQUITY**


**For
      the Years Ended December 31, 2007 and 2006**





AccumulatedCommon
                Stock
            
            Paid
                in
            
            Accumulated
            
            OtherShares
            
            Amount
            
            Capital
            
            Deficit
            
            Comprehensive Loss
            
            TotalBalance,
                December 31, 2005
            
            
            6,456,250
            
            $
            6,456
            
            $
            1,505,194
            
            $
            (625,487
            )
            $
            -
            
            $
            886,163Issuance
                of common stock for purchase of ATN Capital E Participacoes
                Ltda
            
            
            2,000,000
            
            
            2,000
            
            
            398,000
            
            
            
            
            
            
            
            
            400,000Net
                loss for the year ended December 31, 2006
            
            
            
            
            
            
            
            
            
            
            
            (1,264,576
            )
            
            
            
            
            (1,264,576
            )Other
                comprehensive loss
            
            
            
            
            
            
            
            
            
            
            
            -
            
            
            (138,959
            )
            
            (138,959
            )Balance,
                December 31, 2006
            
            
            8,456,250
            
            
            8,456
            
            
            1,903,194
            
            
            (1,890,063
            )
            
            (138,959
            )
            
            (117,372
            )Net
                loss for the year ended December 31, 2007
            
            
            
            
            
            
            
            
            
            
            
            (135,182
            )
            
            
            
            
            (135,182
            )Other
                comprehensive loss
            
            
            
            
            
            
            
            
            
            
            
            -
            
            
            (499,385
            )
            
            (499,385
            )Balance,
                December 31, 2007
            
            
            8,456,250
            
            $
            8,456
            
            $
            1,903,194
            
            $
            (2,025,245
            )
            $
            (638,344
            )
            $
            (751,939
            )




See
      accompanying notes to financial statements.




F
          4




**LEXICON
      UNITED INCORPORATED AND SUBSIDIARY**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**





**For the year ended December 31,****2007**
            
            **2006****CASH
                FLOWS FROM OPERATING ACTIVITES**Net
                loss
            
            $
            (135,182
            )
            $
            (1,264,576
            )Noncash
                items included in net lossDepreciation
                and amortization
            
            
            129,707
            
            
            86,673Amortization
                of intangibles
            
            
            73,389
            
            
            73,389Disposal
                of fixed assets, net
            
            
            
            
            
            175,757Provision
                for municipal and related taxes
            
            
            (934,001
            )
            
            -Decrease
                (increase) in assets:Accounts
                receivable
            
            
            (49,315
            )
            
            215Other
                receivables
            
            
            (91,192
            )
            
            (21,487
            )Prepaid
                expenses
            
            
            1,461
            
            
            10,643Increase
                (decrease) in liabilities:Accounts
                payable
            
            
            (54,639
            )
            
            108,059Accrued
                expenses
            
            
            192,614
            
            
            (50,371
            )Accrued
                municipal service taxes
            
            
            134,408
            
            
            154,800Accrued
                payroll and related taxes
            
            
            131,817
            
            
            477,083Accrued
                employee benefits
            
            
            19,866
            
            
            47,651**NET
                CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES**
            
            
            (581,067
            )
            
            (202,164
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES**Purchase
                of fixed assets
            
            
            (52,936
            )
            
            (199,888
            )Cash
                received in acquisition
            
            
            -
            
            
            45,729**NET
                CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES**
            
            
            (52,936
            )
            
            (154,159
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES**Loan
                from related party
            
            
            52,504
            
            
            (55,467
            )Bank
                Overdrafts
            
            
            165,764
            
            
            212,750Proceeds
                from new loans
            
            
            415,246
            
            
            312,682Repayment
                of loans
            
            
            (454,417
            )
            
            (18,961
            )**NET
                CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES**
            
            
            179,097
            
            
            451,004**EFFECT
                OF EXCHANGE RATE OF CASH**
            
            
            25,570
            
            
            (138,959
            )**NET
                DECREASE IN CASH**
            
            
            (429,336
            )
            
            (44,278
            )**CASH**,
                beginning of year
            
            
            896,531
            
            
            940,809**CASH**,
                end of year
            
            $
            467,195
            
            $
            896,531





See
      accompanying notes to financial statements.


F
          5


**LEXICON
                  UNITED INCORPORATED AND SUBSIDIARY****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS (continued)****For the year ended December 31,****2007**
              
              **2006**SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW INFORMATIONInterest
                  paid
              
              $
              360,263
              
              $
              108,893Non
                  cash itemsPurchase
                  of furniture and equipment
              
              $
              225,595
              
              $
              150,556Purchase
                  of office facility
              
              
              
              
              
              176,489Assets
                  acquired and liabilities assumed in acquisition of
                  subsidiaryCash
              
              
              
              
              
              45,728Clients
              
              
              
              
              
              198,451Accounts
                  receivable
              
              
              
              
              
              1,215,985Equipment
              
              
              
              
              
              539,651Accumulated
                  depreciation
              
              
              
              
              
              (224,802
              )Taxes
                  recoverable
              
              
              
              
              
              66,218Prepaid
                  expenses
              
              
              
              
              
              12,830Other
                  assets
              
              
              
              
              
              8,224Customer
                  lists
              
              
              
              
              
              513,733Tradenames
              
              
              
              
              
              220,171Goodwill
              
              
              
              
              
              853,141Agreements
                  payable
              
              
              
              
              
              1,272,396Accounts
                  payable
              
              
              
              
              
              83,469Accrued
                  expenses
              
              
              
              
              
              149,839Loans
                  payable
              
              
              
              
              
              193,780Taxes
                  payable
              
              
              
              
              
              1,349,847Issuance
                  of common stock
              
              
              
              
              
              400,000
  F
            6





LEXICON
      UNITED INCORPORATED AND SUBSIDIARY





NOTES
      TO
      FINANCIAL STATEMENTS


DECEMBER
      31, 2007





NOTE
      A –
NATURE OF BUSINESS AND GOING CONCERN





Organization





Lexicon
      United Incorporated and Subsidiary was incorporated on July 17, 2001 under
      the
      laws of the State of Delaware and had been a blank check company until February
      27, 2006, when it acquired ATN Capital E Participacoes, Ltda., a Brazilian
      Company (“ATN”). ATN was incorporated in April 1997 and is in the business of
      managing and servicing accounts receivable for large financial institutions.
      The
      Company’s focus is on the recovery of delinquent accounts (generally, accounts
      that are 60 days or more past due). The Company generates revenues from the
      recovery of the delinquent accounts receivable on a fee basis.





Going
      Concern





As
      indicated in the accompanying financial statements, the Company has an
      accumulated deficit of $2,025,245 and has negative working capital of $2,579,733
      at December 31, 2007. Management’s plans include raising adequate capital
      through the equity markets to fund future operations and generating of revenue
      through its business. Failure to raise adequate capital and generate adequate
      sales revenues could result in the Company having to curtail or cease
      operations. Additionally, even if the Company does raise sufficient capital
      to
      support its operating expenses and generate adequate revenues, there can be
      no
      assurances that the revenue will be sufficient to enable it to develop business
      to a level where it will generate profits and cash flows from operations. These
      matters raise substantial doubt about the Company’s ability to continue as a
      going concern. However, the accompanying financial statements have been prepared
      on a going concern basis, which contemplates the realization of assets and
      satisfaction of liabilities in the normal course of business. These financial
      statements do not include any adjustments relating to the recovery of the
      recorded assets or the classification of the liabilities that might be necessary
      should the Company be unable to continue as a going concern.





NOTE
      B –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Use
      of
      Estimates





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





Cash
      and Cash Equivalents





The
      Company considers all highly-liquid investments with a maturity of three months
      or less as cash equivalents. There were cash equivalents of $64,260 and $78,518
      in 2007 and 2006, respectively.





Equipment
      and Depreciation





Equipment
      is stated at cost and is depreciated using the straight line method over the
      estimated useful lives of the respective assets. Routine maintenance, repairs
      and replacement costs are expensed as incurred and improvements that extend
      the
      useful life of the assets are capitalized.




F
          7


LEXICON
      UNITED INCORPORATED AND SUBSIDIARY





NOTES
      TO
      FINANCIAL STATEMENTS


DECEMBER
      31, 2007





Equipment
      and Depreciation (Continued)





When
      equipment is sold or otherwise disposed of, the cost and related accumulated
      depreciation are eliminated from the accounts and any resulting gain or loss
      is
      recognized in operations.




Revenue
      Recognition





The
      Company derives its revenue primarily from collection of distressed debt by
      entering into non binding agreements with financial institutions to collect
      their delinquent debt. Once an agreement is reached with the debtor of the
      financial institution based upon established parameters, an installment
      agreement is established. The Company is then entitled to a commission on the
      agreed settlement. The Company earns and records the pro rata commission for
      each installment, when the installment payments are received from the
      debtors.





Consolidated
      Financial Statements





The
      consolidated financial statements include the Company and its 80% owned
      subsidiary, ATN. All significant intercompany transactions and balances have
      been eliminated in consolidation. Certain amounts in the 2006 Financial
      Statements have been reclassified to conform to the presentation used in the
      2007 Financial Statements.





Intangible
      Assets





Intangible
      assets of customer lists and trade names are amortized over a ten year life.
      The
      amortization recorded is $146,778 and $73,389 at December 31, 2007 and 2006
      respectively.





Fair
      Values of Financial Instruments





The
      Company uses financial instruments in the normal course of business. The
      carrying values of cash equivalents, accounts receivable, accounts payable,
      accrued expenses and other current liabilities approximate their fair value
      due
      to the short-term maturities of these assets and liabilities.





Income
      Taxes





The
      Company accounts for income taxes using the liability method, which requires
      the
      determination of deferred tax assets and liabilities based on the differences
      between the financial and tax bases of assets and liabilities using enacted
      tax
      rates in effect for the year in which differences are expected to reverse.
      Deferred tax assets are adjusted by a valuation allowance, if, based on the
      weight of available evidence, it is more likely than not that some portion
      or
      all of the deferred tax assets will not be realized.





Income
      tax provisions require the use of management judgments, which are subject to
      challenge by various taxing authorities. Significant estimates used in
      accounting for income taxes relate to determination of taxable income and the
      determination of differences between book and tax bases.





Net
      Loss Per Common Share





The
      Company computes per share amounts in accordance with Statement of Financial
      Accounting standards (“SFAS”) No. 128, “Earnings per Share.” SFAS per share
      (“EPS”) requires presentation of basic and diluted EPS. Basic EPS is computed by
      dividing the income (loss) available to




F
          8




LEXICON
      UNITED INCORPORATED AND SUBSIDIARY





NOTES
      TO
      FINANCIAL STATEMENTS


DECEMBER
      31, 2007





Net
      Loss Per Common Share (Continued)





Common
      Stockholders by the weighted-average number of common shares outstanding for
      the
      period. Diluted EPS is based on the weighted-average number of shares of common
      stock and common stock equivalents outstanding during the periods, however,
      no
      potential common shares are included in the computation of any diluted per
      share
      amounts when a loss from continuing operations exists.





Foreign
      Currency Translation





The
      Company considers the Brazilian currency (Reais) to be its functional currency.
      Assets and liabilities were translated into U.S. dollars at the period end
      exchange rates. The equity accounts were translated at historical rates.
      Statement of Operations amounts were translated using the average rate during
      the year. Gains and losses resulting from translating foreign currency financial
      statements are accumulated in other comprehensive income (loss), a separate
      component of stockholder’s deficit.





NOTE
      C –
RECENT ACCOUNTING PRONOUNCEMENTS





In
      December 2007, the FASB issued SFAS No. 141R, Business Combinations. This
      standard establishes principles and requirements for how an acquirer recognizes
      and measures in its financial statements the identifiable assets acquired,
      the
      liabilities assumed, any non-controlling interest in the acquire and the
      goodwill acquired. This statement also establishes disclosure requirements
      which
      will enable users to evaluate the nature and financial effects of the business
      combination. SFAS No. 141R is effective for financial statements issued for
      fiscal years beginning after December 15, 2008. We have not yet determined
      the
      impact, if any, from adoption of this new accounting pronouncement on our
      financial statements.





In
      December 2007, the FASB also issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements”. SFAS 160 requires all entities to report
      noncontrolling (i.e., minority) interests in subsidiaries as equity in the
      Consolidated Financial Statements and to account for transactions between an
      entity and noncontrolling owners as equity transactions if the parent retains
      its controlling financial interest in the subsidiary. SFAS 160 also requires
      expanded disclosure that distinguishes between the interests of the controlling
      owners and the interests of the noncontrolling owners of a subsidiary. SFAS
      is
      effective for the Corporation’s financial statements for the year beginning on
      January 1, 2009 and earlier adoption is not permitted. The Company has not
      yet
      determined the impact from adoption of this new pronouncement on our financial
      statements.





In
      February 2007, the FASB issued SFAS No. 159, *The
      Fair Value Option for Financial Assets and Financial Liabilities* (“SFAS 159”).
      SFAS 159 allows entities to measure at fair value many financial
      instruments and certain other assets and liabilities that are not otherwise
      required to be measured at fair value. SFAS 159 is effective for fiscal
      years beginning after November 15, 2007. We have not determined what
      impact, if any, that adoption will have on our results of operations, cash
      flows
      or financial position.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which
      defines fair value, establishes a framework for measuring fair value under
      other
      accounting pronouncements that permit or require fair value measurements,
      changes the methods used to measure fair value and expands disclosures about
      fair value measurements. In particular, disclosures are required to provide
      information on the extent to which fair value is used to measure assets and
      liabilities; the inputs used to develop measurements; and the effect of certain
      of the measurements on earnings (or changes in net assets). SFAS No. 157 is
      effective for fiscal years beginning after November 15, 2007 and interim periods
      within those fiscal years. Early adoption, as of the beginning of an entity’s
      fiscal year, is also permitted, provided interim financial statements have
      not
      yet been issued. The Company expects to adopt the provisions of SFAS No. 157
      beginning in the first quarter of 2008. The Company is currently evaluating
      the
      potential impact, if any, that the adoption of SFAS No. 157 will have on its
      condensed consolidated financial statements.




F
          9




LEXICON
      UNITED INCORPORATED AND SUBSIDIARY





NOTES
      TO
      FINANCIAL STATEMENTS


DECEMBER
      31, 2007





NOTE
      C –
RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)





In
      June 2006, the Financial Accounting Standards Board (“FASB”) issued
      Interpretation 48, “Accounting for Income Tax Uncertainties” (“FIN 48”). FIN 48
      defines the threshold for recognizing the benefits of tax return positions
      in
      the financial statements as “more-likely-than-not” to be sustained by the taxing
      authority. The recently issued literature also provides guidance on the
      derecognition, measurement and classification of income tax uncertainties,
      along
      with any related interest and penalties. FIN 48 also includes guidance
      concerning accounting for income tax uncertainties in interim periods and
      increases the level of disclosures associated with any recorded income tax
      uncertainties. FIN 48 is effective for fiscal years beginning after
      December 15, 2006. The Company adopted the provisions of FIN 48 beginning
      in the first quarter of 2007 with no material impact.




NOTE
      D –
CONCENTRATION OF CREDIT RISK





Cash
      and
      cash equivalents consist of money market funds held at a single financial
      institution.




NOTE
      E –
FIXED ASSETS




Fixed
      Assets are comprised of the following at December 31,




2007
            
            2006Building
            
            $
            255,140
            
            $
            210,477Office
                furniture and equipment
            
            
            794,758
            
            
            561,896Vehicles
            
            
            62,084
            
            
            -Leasehold
                improvements
            
            
            100,309
            
            
            83,1041,212,291
            
            
            855,477Less
                accumulated depreciation
            
            
            471,766
            
            
            273,844$
            740,525
            
            $
            581,633




NOTE
      F –
LOANS PAYABLE TO BANKS





The
      Company has several loans with various Brazilian banks and financial
      institutions. The loans are secured by personal guarantees of the Company’s
      principal shareholders and bear interest at rates ranging from 9.6% to
      46.8%. ****** The
      balance of the loans at December 31, 2007 and 2006 was $491,474 and
      $408,302.





NOTE
      G –
LONG TERM DEBT





On
      April
      17, 2006, the Company closed on a Real Estate transaction to purchase the
      8 th floor of
      an executive office building for ATN Capital e Participacoes, Ltda.’s executive
      offices. The purchase price of approximately $176,489 was funded with a 20%
      down
      payment payable over four months and an 8 year adjustable rate mortgage
      currently at 13.29%. At December 31, 2007 and 2006, the balance of the loan
      is
      $177,835 and $176,489 respectively.





F
          10




LEXICON
      UNITED INCORPORATED AND SUBSIDIARY





NOTES
      TO
      FINANCIAL STATEMENTS


DECEMBER
      31, 2007





NOTE
      G –
LONG TERM DEBT (CONTINUED)





In
      August
      2006, the Company purchased new computer equipment from DELL Brazio. The
      equipment valued at approximately $38,395 is being financed over a three year
      period at 14.4% per year. At December 31, 2007 and 2006, the balance of the
      loan
      is $26,838 and $38,395 respectively.





In
      September 2006, the Company purchased new furniture. The furniture valued at
      approximately $112,161 is financed over a five year period at 5.69% per year
      plus the inflation index. The loan is payable in 48 monthly installments
      commencing October 8, 2007. The loan is secured by the furniture. At December
      31, 2007 and 2006, the balance of the loan is $126,920 and $112,161
      respectively.





In
      August
      2006, the Company borrowed a working capital loan from Banco Bradesco. The
      loan
      was valued at approximately $93,100 and payable in 24 monthly installments
      commencing September 17, 2006. In June, 2007, the Company refinanced the loan.
      The refinanced loan is valued at approximately $114,000 and is payable in 24
      monthly installments plus interest of 2.6% per month, commencing July, 2007.
      The
      loan is personally guaranteed by ATN’s directors. At December 31, 2007 and 2006
      the balance is $80,939 and $78,921 respectively.





During
      the year ended December 31, 2007, the Company purchased new computer equipment
      from DELL Brazio. The equipment valued at approximately $189.500 is financed
      over a three year period plus interest at rates ranging from 12% to 12.84%
      per
      year. The loan is secured by the computer equipment. The balance of the loan
      at
      December 31, 2007 is $78,835





In
      June,
      2007, the Company borrowed two working capital loans from Caixa Economica
      Federal. The loans are valued at approximately $113,000 and are payable in
      24
      monthly installments plus interest of 2.73% per month, commencing July, 2007.
      The loans are personally guaranteed by ATN’s directors. At December 31, 2007,
      the balance is $91,052.





In
      September, 2007, the Company borrowed $51,000 from Santander. The loan is
      payable in 16 monthly installments plus interest of 3.9% per month, commencing
      October, 2007. The loan is personally guaranteed by ATN’s directors. At December
      31, 2007, the balance is $41,182.





An
      analysis of the current and long-term portion at December 31, is as
      follows:





2007
            
            2006Total
                loans outstanding
            
            $
            623,601
            
            $
            405,966Less:
                current portion
            
            
            270,603
            
            
            76,254Long-term
                portion
            
            $
            352,998
            
            $
            329,712





F
          11




LEXICON
      UNITED INCORPORATED AND SUBSIDIARY





NOTES
      TO
      FINANCIAL STATEMENTS


DECEMBER
      31, 2007





NOTE
      G –
LONG TERM DEBT (CONTINUED)





At
      December 31, 2007, maturities of long term debt are as follows:





2009
            
            $
            164,4272010
            
            
            61,5662011
            
            
            50,7902012
            
            
            25,4052013
                and thereafter
            
            
            50,810Total
            
            $
            352,998





NOTE
      H –
ACCRUED MUNICIPAL SERVICE AND PAYROLL TAXES





The
      Company is responsible to the Brazilian taxing authorities for a municipal
      service tax at the rate of 5% based upon salaries by location. During 2007,
      the
      Company successfully negotiated with Brazilian authorities to favorably settle
      previously recorded taxes approximating $730,000. In addition, the Company
      further evaluated related payroll tax and related accruals and reduced amounts
      previously recorded by approximately $200,000. These savings are reflected
      in
      the 2007 financial statements as a reduction in selling, general and
      administrative expenses. Accruals for such Municipal tax and related accruals
      at
      December 31, 2006 and 2007 are $1,801,280 and $1,526,779
      respectively.





NOTE
      I -
      INCOME TAXES





The
      Company accounts for income taxes in accordance with SFAS No 109, *Accounting
      for Income Taxes* .
      Under
      this method, the Company recognizes a deferred tax liability or asset for
      temporary differences between the tax basis of an asset or liability and the
      related amount reported on the financial statements.





The
      principal types of differences, which are measured at current tax rates, are
      net
      operating loss carryforwards. At December 31, 2007, these differences resulted
      in a deferred tax asset of $875,000. SFAS No. 109 requires the establishment
      of
      a valuation allowance to reflect the likelihood of realization of deferred
      tax
      assets. Since realization is not assured, the Company has recorded a valuation
      allowance for the entire deferred tax asset, and the accompanying financial
      statements do not reflect any net asset for deferred taxes at December 31,
      2007.





The
      Company has a US net operating carry forward loss of approximately $493,000
      which expires commencing in 2028 and a $2,325,000 carryforward loss in Brazil
      with an unlimited carryforward period.





NOTE
      J –
RENT EXPENSE





The
      Company currently is leasing one floor of its office facilities from the
      President of the Brazilian subsidiary. The lease commenced on May 26, 2006
      and
      is renewable annually. The annual rent is $27,500 per year. Rent expense for
      the
      year ended December 31, 2007 was $36,162.





F
          12




LEXICON
      UNITED INCORPORATED AND SUBSIDIARY





NOTES
      TO
      FINANCIAL STATEMENTS


DECEMBER
      31, 2007





NOTE
      K-
      REVENUE CONCENTRATIONS





For
      the
      year ended December 31, 2007, revenues from four major customers exceeded 10%
      individually and represented 58.23% of total revenues. During 2006, five major
      customers exceeded 10% individually and represented 68.25% of total
      revenues.





NOTE
      L –
SUBSEQUENT EVENTS





In
                February 2008, Keyano Invest Inc., a related party, loaned the Company
                $1,000,000 for working capital purposes on terms and conditions to
                be
                determined on an arms-length basis between the
                parties.





In
                February 2008, the Company formed Engepet Energy Enterprises, Inc.,
                a
                Delaware corporation (“Engepet”) and advanced $50,000 to this company.
                Engepet intends to conduct operations in the oil services industry,
                however, it has had no operations to date. The ultimate ownership
                of
                Engepet has yet to be determined





F
          13




INDEX
      TO
      EXHIBITS




ExhibitNumber
            
            Description31.1
            
            Certification
                of Principal Executive Officer and Principal Financial Officer filed
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.32.1
            
            Certification
                of Principal Executive Officer and Principal Financial Officer furnished
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.




29