UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-KSB


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

                      For the year ended December 31, 2001

                                  MAXXON, INC.
             (Exact name of registrant as specified in its charter)


            Nevada                       0-28629                73-1526138
           --------                      -------                ----------
(State or other jurisdiction of     (SEC File Number)        (I.R.S. Employer
incorporation or organization)                            Identification Number)

                        8908 South Yale Avenue, Suite 409
                              Tulsa, Oklahoma 74137
          (Address of principal executive offices, including zip code)

                                 (918) 492-1257
              (Registrant's telephone number, including area code)

                                 (918) 492-2560
              (Registrant's facsimile number, including area code)


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

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

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. YES

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

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

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified price within the past 60 days. $10,092,914 as of March 28, 2002

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of March 31, 2002, we had
24,088,440 shares of common stock, $0.001 par value, outstanding.



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<PAGE>


         Certain Forward-Looking Information.

Certain statements included in this report, which are not historical facts are
forward-looking statements, including the information provided with respect to
future business opportunities, expected financing sources and related matters.
These forward-looking statements are based on current expectations, estimates,
assumptions and beliefs of management. Words such as "expects," "anticipates,"
"intends," believes," "estimates" and similar expressions are intended to
identify such forward-looking statements. Since this information is based on
current expectations that involve risks and uncertainties, actual results could
differ materially from those expressed in the forward-looking statements.

                                     Part I

Item 1.  Description of Business

         (a)  Business Development.

         1. Form and Year of Organization. We are a Nevada corporation organized
on August 16, 1996 under the name Cerro Mining Corporation. On May 9, 1997, we
entered into a Merger Agreement with Maxxon, Inc., a privately-held Oklahoma
corporation that owned the rights to a proprietary disposable safety syringe
that retracts the needle into the barrel of the syringe after use ("Maxxon-OK").
After receiving approval from a majority of our shareholders and Maxxon-OK's
shareholders, we issued 7,578,000 shares of our common stock for 100% of the
issued and outstanding common stock of Maxxon-OK and changed our name from Cerro
Mining Corporation to Maxxon, Inc. Maxxon-OK ceased to exist by reason of the
Merger. The Merger was effective May 20, 1997.

         Present Business Objective. Our present business objective is to
develop and market a commercially viable hypodermic syringe that reduces the
risk of accidental needlestick injuries. These injuries pose a serious risk of
transmitting fatal or chronic diseases to healthcare workers. On December 10,
2001, we filed a 510(k) application with the FDA for the Maxxon Safety Syringe.
We plan to continue pursuit of FDA approval for the Maxxon Safety Syringe and to
develop a prototype of the Maxxon blood extraction device (See "Principal
Products and Services of Maxxon and Their Markets").

         2.  Bankruptcy or Receivership.  Maxxon has never been in bankruptcy
 or receivership.

         3.  Mergers, Reclassifications and Purchases of Assets.

         On November 18, 1999, we purchased from Mr. Wayland Rippstein and his
associates, Lynn Carter and Ken Keltner, the exclusive worldwide license to
develop, manufacture and market Mr. Rippstein's disposable safety syringe that
automatically retracts the needle into the barrel of the syringe immediately
after an injection has been given. A copy of the Rippstein License is
incorporated herein by reference. On February 27, 2001, the patent covering Mr.
Rippstein's syringe design was published by the U.S. Patent and Trademark
Office. Details regarding our License Agreement with Mr. Rippstein are discussed
in Item 7. "Patents, Trademarks, Licenses, Royalty Agreements or Labor
Contracts."

         (b)  Business of Issuer

         1.  Principal Products and Services of Maxxon and Their Markets

         Principal Product

         Maxxon has no product or service for sale at this time. It is
anticipated that the Safety Syringe will be marketed when FDA approval is
secured and manufacturing and marketing alliances have been secured.

         The Maxxon Safety Syringe is designed to be a disposable retractable
syringe that uses a proprietary, patented technology whereby a vacuum causes the
needle to retract into the barrel of the syringe after an injection is given.
The Safety Syringe is designed to be a cost-effective alternative to
traditionally constructed disposable syringes and is


                                       2
<PAGE>

intended  to avoid the danger of  accidental  needle  puncture  associated  with
traditional disposable syringes. With a traditional disposable syringe, a needle
contaminated   with  a  patient's   blood   remains  a  danger  to  health  care
professionals  handling  the needle  until it is  permanently  disposed  of in a
proper  biohazard  containment  unit. We believe the Maxxon Safety  Syringe,  as
designed, will not present a "needle stick" hazard to health professionals after
use, because the contaminated needle is retracted into the barrel of the syringe
after use.

         Market for Our Product
         The world-wide market for disposable syringes is estimated to be in
excess of 12 billion units annually. There are over 2,400 needle sticks per day
in the United States alone, according to the San Francisco Chronicle, and
approximately 76% of accidental needle sticks could be prevented by an effective
safety syringe, according to the Centers for Disease Control. Every clinic,
hospital, doctor's office, laboratory, public health department, medical
research facility, medical school and retail purchaser of syringes for diabetes
and other home uses is a potential customer for the Maxxon Safety Syringe, if
and when it is approved by the FDA and available commercially.


         2.   Distribution Method of Products and Services

         We have not yet determined how the Safety Syringe will be distributed.
We do not presently have any manufacturing or distribution capacity. We have not
determined the commercial arrangements under which we would be willing to engage
a manufacturer or a corporate marketing partner.

         3.   Status of Publicly Announced Products or Services

         On December 10, 2001, we submitted an application for approval of our
safety syringe to the FDA.

         4.   Competitive Business Conditions, Competitive Position and Methods
 of Competition

         Competition in the medical products and services industry is intense.
The three leading manufacturers of hypodermic syringes are Becton-Dickinson
"B-D", with approximately 71% of the market; Sherwood, with approximately 22% of
the market; and Terumo, with approximately 7% of the market. Our competitors
have substantially greater assets, technical staffs, established market shares,
and greater financial and operating resources than we do. There is no assurance
that we can successfully compete.

         There is no known cost-competitive safety syringe available in the
market today. Although there are other safety syringes commercially available,
the cost of these alternative safety syringes makes them impractical as
alternatives to traditional disposable syringes. Unless our safety syringe can
be manufactured and sold at wholesale at a price competitive with current
disposable syringes, our safety syringe will not be able to compete effectively
in the marketplace. Although we believe that our safety syringe can be
manufactured to be cost competitive, there is no assurance that we will be
successful in doing so.

         5.   Sources of Raw Materials and the Names of Principal Suppliers

         We do not presently manufacture any products, so we have no raw
materials requirements. The materials used to make the Maxxon Safety Syringe are
commercially available from a number of suppliers. The manufacturing process is
highly technical and demanding with very low fault tolerances. There is no
assurance that we will be able to engage a company capable of manufacturing the
safety syringe in a cost-effective manner.

         6.   Dependence on One or Few Major Customers

         We anticipate that our safety syringe will be marketed to the entire
field of medical professionals. We do not anticipate being dependent on any
particular customer. We do not know if any one customer will account for more
than 1% of our safety syringe sales.


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<PAGE>


         7.   Patents, Trademarks, Licenses, Royalty Agreements or Labor
 Contracts

     Patents.  On February 27, 2001, the U.S. patent covering the safety syringe
designed by Mr. Rippstein was published. On January 13, 2001, an application was
filed for international  patent  protection,  pursuant to the Patent Cooperation
Treaty.  There is no assurance that any international  patents will issue. There
is no assurance that the patent does not infringe on the rights of others.

         The Rippstein License. On November 18, 1999, Maxxon entered into an
Exclusive License Agreement with Wayland J. Rippstein, Jr. and associates (the
"Rippstein License"), whereby Maxxon acquired the exclusive worldwide license to
manufacture and market a new proprietary safety syringe that retracts the needle
into the barrel of the syringe after use. In connection with the Rippstein
License, the Company paid $10,000 for patent costs and agreed to pay $200,000 if
all of the following events happen on or before September 30, 2001; (1) a U.S.
patent is issued, (2) a fully functional and working prototype of the syringe is
completed, and (3) FDA approval to sell the syringe in the U.S is obtained.
However, if FDA approval is not received by September 30, 2001, but the Company
has begun selling syringes in places that do not require FDA approval, then the
Company will pay the $200,000 out of the first net profits from the sale of
those syringes. As of September 30, 2001, FDA approval to sell the syringes had
not been received nor had sales commenced in places that do not require FDA
approval. Therefore, Maxxon was relieved of its obligation to pay the $200,000
pursuant to the Exclusive License Agreement.

         The Rippstein License also provides for Maxxon to pay royalties of 4%
of gross sales of syringes and minimum annual royalties ranging from $10,000 to
$20,000 beginning on the 4th anniversary after both a working prototype syringe
is developed and a U.S. patent is issued. Such royalties continue for the life
of the last to expire patent. Maxxon also granted Mr. Rippstein and his two
associates options to purchase a total of 1,600,000 shares of common stock of
Maxxon at $0.50 per share, which was the quoted price of Maxxon's common stock
on the day the Rippstein License was signed. The options expire October 31, 2009
and are subject to certain vesting conditions. Details regarding the accounting
treatment of the options granted, their subsequent transfer and details
regarding the vesting conditions are described in Note 7, "Stock Options" of the
Notes to Financial Statements.

         Technical Consulting Agreement with Wayland Rippstein. On November 18,
1999, Maxxon entered into a Technical Consulting Agreement with Mr. Rippstein
whereby Maxxon engaged him on a non-exclusive basis to provide technical
assistance and consulting services to achieve startup of production of the new
Maxxon Safety Syringe. Maxxon paid Mr. Rippstein $12,500 upon execution of the
Agreement and agreed to pay him an additional $37,500 upon the occurrence of
various milestones in the development of the syringe as follows: (1) $12,500
upon the manufacture of the first fully operational working syringe prototype
and (2) $25,000 upon production of syringes from the steel molds. On March 1,
2001, subsequent to year end, Maxxon paid Mr. Rippstein $12,500 because the
first operational working syringe prototype had been produced.

         Employment Agreements. On January 3, 2001, we entered into written
employment agreements with Gifford Mabie, our sole officer and director, and
Rhonda Vincent, Thomas Coughlin and Vicki Pippin, our employees. These
agreements were amended on August 8, 2001 with no substantive changes. The
material terms of their respective employment agreements are the same, except
that Mr. Mabie's employment agreement states he will not compete with us for
one-year after he resigns voluntarily or is terminated for cause. If Mr. Mabie
is terminated without cause or if he resigns because a change of control has
occurred, then the non-compete clause of his employment agreement will not be
applicable. The employment agreements are incorporated herein by reference.

         The term of each employment agreement is for one year, ending January
3, 2002 with an automatic and continuous renewal for consecutive two year
periods. Each agreement can be ended either by us or by the employee upon 30
days' written notice. Each agreement provides for an annual salary of at least
$100,000 with an annual salary increase equal to no less than the percentage
increase in the Consumer Price Index during the previous calendar year. Each
employee's salary will be accrued by the Company and paid in whole or in part as
cash is available. If an employee resigns or is terminated for any reason, his
or her accrued and unpaid salary plus severance pay ranging from three (3)
months to twenty-four (24) months, depending on the circumstances of his or her
departure, will be due and payable within 30 days of his or her resignation or
termination. Under each employment agreement, we provide certain fringe
benefits, including, but not limited to, participation in pension plans,
profit-sharing plans, employee stock ownership plans, stock appreciation rights,
hospitalization and health


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<PAGE>

 insurance, disability and life insurance, paid
vacation and sick leave. We will reimburse each employee for any reasonable and
necessary business expenses, including travel and entertainment expenses that
are necessary to carry out his or her duties. Each employee has the right to
participate in other businesses as long as those businesses do not compete with
us and so long as the employee devotes the necessary working time, as determined
in his or her sole discretion, to our business activities. We will indemnify
each employee for all legal expenses and liabilities incurred with any
proceeding involving the employee by reason of his or her being an officer,
director, employee or agent of the Company. We will pay reasonable attorney fees
and expenses as incurred in the event that, in the employee's sole judgment, he
or she needs to retain counsel or otherwise expend personal funds for his or her
defense. If there is a change in control, each employee has the right to resign.
A change in control is defined as a change in the majority of Directors within
any twelve month period without 2/3 approval of the shares outstanding and
entitled to vote, or a merger where less than 50 percent of the outstanding
common stock survives and a majority of the Board of Directors remains, or the
sale of substantially all of our assets, or if any other person or group
acquires more than 50 percent of the voting capital.

         Agreements with Marty Smith and Stuart Daley of Genesis Design Group.
On February 22, 2001, the Company entered into an agreement with Marty Smith and
Stuart Daley of Genesis Design Group to pay a finders fee to them if their
efforts result in bringing a financial partner to invest in or acquire Maxxon.
If such a transaction occurs as a result of their efforts, the Company agreed to
pay them 100,000 shares of Maxxon common stock and one-half of one percent of
the total amount of the transaction. A copy of the agreement is incorporated
herein by reference.

         On September 18, 2001, the Company agreed to issue 75,000 shares each
to Marty Smith and Stuart Daley of Genesis Design Group for the 3cc safety
syringe should the Company decide to proceed with single cavity molds and a
working molded 3cc syringe is produced.

         8.   Need for Governmental Approval

         Pursuant to the Federal Food, Drug and Cosmetic Act, the FDA regulates
the research, design, testing, manufacture, safety, labeling, storage,
record-keeping, advertising and promotion, distribution, and production of
medical devices in the United States. Maxxon's Safety Syringe is considered a
medical device, is subject to FDA regulation, and must receive FDA approval
prior to sale in the United States.

         Medical devices are classified into one of three classes, depending on
the controls deemed by FDA to be necessary to reasonably ensure their safety and
effectiveness. Class I devices are subject to general controls (e.g. labeling,
pre-market notification and adherence to Quality System regulations, which have
replaced Good Manufacturing Practice regulations.) These devices are subject to
the lowest level of regulatory control. Class II devices are subject to general
controls and to special controls (e.g. performance standards, post-market
surveillance, patient registries, and FDA guidelines). Generally, Class III
devices are those which must receive pre-market approval by the FDA to ensure
their safety and effectiveness, and require clinical testing and FDA approval
prior to marketing and distribution. Class III devices are the most rigorously
regulated.

         Generally, before a new device can be introduced into the market in the
United States, the manufacturer must obtain FDA clearance through a 510(k)
pre-market notification or approval of a premarket approval ("PMA") application.
If a medical device manufacturer can establish that a device is "substantially
equivalent" to a legally marketed Class I, Class II device, or a Class III
device for which FDA has not called for PMAs, the manufacturer may seek
clearance from FDA to market the device by filing a 510(k) pre-market
notification. The 510(k) pre-market notification will need to be supported by
appropriate data establishing the claim of substantial equivalence to the
satisfaction of the FDA.

         If Maxxon cannot establish that its safety syringe is substantially
equivalent to a legally marketed predicate device, Maxxon must seek pre-market
approval of the proposed device through submission of a PMA application. A PMA
application must be supported by valid scientific evidence, including
pre-clinical and clinical trial data, as well as extensive literature to
demonstrate a reasonable assurance of the safety and effectiveness of the
device. The PMA represents the most rigorous form of FDA regulatory approval.
Management believes that it will be able to establish that the Safety Syringe is
substantially equivalent to FDA approved syringes.


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<PAGE>

         The Maxxon Safety Syringe is a single-handed, vacuum operated safety
syringe. FDA currently regulates piston syringes as Class II devices, subject to
special controls embodied in published standards relating to syringes and
require 510(k) clearance.

         We do not plan to package needles with our safety syringe. Our safety
syringe is designed to work with most standard needles. We will have to submit
performance of data to the FDA for all needle sizes and gauges intended to be
used with our safety syringe.

         Our safety syringe meets the definition of a medical device and is
subject to FDA 510(k) pre-market notification clearance before it can be
commercialized in the United States. No such approval is required in foreign
jurisdiction, though such foreign jurisdiction may have its own requesting
equipment which must to met before the safety syringe can be sold there. Maxxon
cannot begin to gather the data necessary for submission of the application
until an effective working prototype syringe is produced in sufficient
quantities to gather such data.

         9.   Effect of Existing or Probable Governmental Regulation

         The safety syringe field is relatively new, and it is quite possible
that new regulations could be proposed and adopted which could restrict
marketing our Safety Syringe. We are not aware of any such pending or proposed
regulations, however, there is no assurance that they will not be imposed.

         10.  Estimate of the Amount Spent on Research and Development

         During the past two years (from December 17, 1999 to December 30, 2001)
we have incurred approximately $956,906 on research and development costs. These
costs include (1) $42,259 in cash for patent costs for the Rippstein syringe,
(2) $27,000 in cash for consulting fees and expenses of Mr. Rippstein, (3)
$214,528 for compensation cost recorded when a portions of the stock options
granted to Mr. Rippstein and his associates became exercisable, and (4) $375,469
in cash and $297,650 in stock paid to Genesis Design Group for development fees
and expenses related to the Rippstein syringe. Of the $375,469 in cash paid to
Genesis, $143,615 was for the molds to be produced by Newell Manufacturing.

         11.  Costs and effects of environmental compliance

         Maxxon has incurred no costs associated with environmental compliance
and does not expect to be required to spend any sums on environmental compliance
in the future.

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

         We have no full time employees. We have five employees, including our
sole officer and director, who provide services to us on a part-time basis. Our
employees are each engaged in other business activities and devote such time as
he or she feels is reasonably necessary to carry out our business. Our employees
are employed by the same four other companies. Although these other companies
are engaged in business activities that are different from our business, there
may exist potential conflicts in the amount of time each person devotes to our
business. Consequently, developing our business may require a greater period of
time than if our employees were employed by us on a full time basis.

         On January 3, 2001, we entered into written employment agreements with
Gifford Mabie, Dr. Thomas Coughlin, Rhonda Vincent and Vicki Pippin. For details
about the employment agreements, see Item 7. Patents, Trademarks, Licenses,
Royalty Agreements or Labor Contracts.


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<PAGE>


         (c)  Reports to Security Holders

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

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

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

Item 2.  Description of Property

         Our executive office is located at 8908 South Yale Avenue, Suite 409,
Tulsa, Oklahoma, 74137. We lease our 2,700 square feet office space from
Oklahoma National Bank. Our office is shared with other companies owned in part
by our sole officer and director and our employees. The lease expires May 31,
2002. Our portion of the present $2,061 monthly lease payment is $412 per month.

         We do not anticipate leasing or purchasing manufacturing facilities to
produce the safety syringe. We plan to contract manufacturing of the syringe to
a third party with facilities of their own.

Item 3.  Legal Proceedings.

         On October 31, 2001, Morgan-Phillips, Inc. ("MPI") filed suit against
the Company for breach of contract. The petition alleges that MPI performed
investor relations services during 1998, 1999, 2000 and 2001 for which it was
not paid. The petition seeks payment of approximately $850,000 plus damages and
attorney fees from the Company and MPI has indicated verbally that such payment
should be in the form of Maxxon common stock. While the Company recognizes that
Morgan Phillips performed investor relations services for the years 1998, 1999,
2000 and 2001, the Company denies many of the allegations set forth in the
petition. On January 3, 2002, the district court of Tulsa County, State of
Oklahoma approved a confidential settlement of the lawsuit.

On January 25, 2002, the Company, along with other plaintiffs, filed suit
against the Company's former corporate counsel. The petition charges that former
counsel took various actions, which were against the interests of the
plaintiffs, committed a breach of fiduciary duty, and committed a breach of his
duty to exercise reasonable care, skill and diligence on behalf of the
Plaintiffs, which constitutes negligence. The Company is seeking actual punitive
and compensatory damages in excess of $10,000.00 each. On March 25, 2002, the
defendant filed a counterclaim against the Company and the other plaintiffs
alleging, among other things, breach of contract, conversion and breach of
fiduciary duty. Defendant is seeking actual, exemplary and punitive damages in
excess of $10,000 each plus cost of litigation. The Company believes that
defendant's claims are without merit and intends to vigorously defend itself.

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

         None


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                                     Part II

Item 5.  Market Price of and Dividends on the Registrant's Common Equity

         (a)  Market Information

         Our common stock is traded over the counter under the trading symbol
"MXON". The high and low prices for our common stock during the calendar
quarters ended were:

      Quarter ended                High           Low
      -------------                ----           ---
      December 31, 2001            $1.10          $0.57
      September 30, 2001           $1.48          $0.77
      June 30, 2001                $1.18          $0.61
      March 31, 2001               $1.50          $0.15
      December 31, 2000            $0.38          $0.13
      September 30, 2000           $0.50          $0.15
      June 30, 2000                $0.63          $0.24
      March 31, 2000               $0.85          $0.24

         Quotations on the National Quotation Bureau Pink Sheets reflect bid and
ask quotations, may reflect inter-dealer prices, without retail markup,
mark-down or commission, and may not represent actual transactions

         (b)  Holders

         As of December 31, 2001, there were approximately 400 holders of record
of our common stock. This figure does not take into account those shareholders
whose certificates are held in the name of broker-dealers or other nominees. We
estimate there are approximately 3,000 owners who hold their shares in brokerage
accounts.

         (c)  Dividends

         We have not declared any dividends in the past, and we do not plan to
declare dividends in the future.

         Recent Sales of Unregistered Securities

         On November 19, 2001, we sold a total of 600,000 Units to 2 accredited
investors, one of which was an existing shareholder of the Company, for $150,000
in cash. Each Unit consisted of one share of common stock at $0.25 per share and
one warrant to purchase an additional share of common stock on or before
December 31, 2005. The warrant is exercisable at $0.50 per share. The Units were
issued pursuant to exemptions from registration under Sections 3(11) and 4(2) of
the Securities Act of 1933, as amended, and any and all other available
exemptions.

Item 6. Plan of Operation

         1.  Plan of Operation for the Next Twelve Months

         On December 10, 2001, we filed a 510(k) application with the FDA. We
plan to continue pursuit of FDA approval and to continue development of the
Maxxon blood extraction device.

         We are presently seeking strategic alliances to provide us with
manufacturing, marketing and distribution capabilities. We have no such
alliances or agreements at this time. There is no assurance that we will be
successful in finding strategic partners.

                                       8

<PAGE>


         (i)  Cash Requirements

         Liquidity and Capital Resources. We believe that our cash resources are
not sufficient for the next twelve months, and we will have to obtain additional
financing, through the sale of additional securities, which may dilute existing
shareholders, depending upon actual costs related to our FDA application. There
is not assurance that additional financing will be available to us on acceptable
terms, if at all.

         (ii)  Product Development and Research Plan for the Next Twelve Months

         Genesis Design Group, our product development consultants, is
supervising the production of the molds and the testing of the blood extraction
device, the development of the large-scale prototype production runs, and the
design of an automated production and assembly process.

         (iii)  Expected Purchase or Sale of Plant and Significant Equipment.

         None.

         (iv)  Expected Significant Changes in the Number of Employees

         We do not expect a significant change in the number of employees in the
near future. We plan to begin searching for a Chief Executive Officer once
production of the safety syringe commences, which we expect to occur during
2002. We also plan to seek independent outside directors to serve on the Board
of Directors.

Item 7.  Financial Statements

         See Part F/S

Item 8.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

         None

                                    PART III

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

(a)      Identify of Directors and Executive Officers

     Gifford M. Mabie, age 61 is Chairman,  CEO and a Director of Maxxon and has
served in such  capacity  since May 20, 1997.  From 1982 to 1994,  Mr. Mabie was
Senior  Vice  President  of CIS  Technologies,  Inc.  (NASD:  CISI),  a  leading
healthcare  information  company that was purchased by National Data Corporation
(NYSE:  NDC) in 1996. Mr. Mabie was  instrumental in raising over $40 Million in
capital that funded acquisitions and new product development.  As a result, that
company's revenues grew from $105,000 in 1987 to over $40 Million in 1995. Prior
to CIS, Mr. Mabie was with Honeywell Information Systems, Inc. and was Corporate
Controller  with W.B.  Dunavant and Company,  one of the world's  largest cotton
brokers.  He holds  degrees in  accounting  and  economics  from  Memphis  State
University and served for eight years in the U.S. Navy.

     Other  Directorships.  Gifford  Mabie is the sole officer and a director of
Lexon, Inc.,  (OTCBB:  LXXN), which is developing cancer screening test kits for
colon cancer and certain types of ovarian and testicular cancers.


                                       9
<PAGE>


         (b)  Key Employees and Technical Consultants

         The following persons are key employees or technical consultants, but
none of them is an officer or director:

     Thomas R. Coughlin,  Jr., M.D., age 53 is Medical  Advisor for the Company.
For 25 years  prior to  joining  Lexon in  January,  1999,  Dr.  Coughlin  was a
cardiovascular   surgeon.  From  1992  to  1995,  he  was  Medical  Director  of
Cardiovascular  Surgical Services at Alexandria  Hospital in Alexandria Virginia
and  from  1991  to  1995,  was  Assistant  Clinical  Professor,   Thoracic  and
Cardiovascular  Surgery  at  George  Washington  University  Medical  Center  in
Washington,  D.C. He has received numerous professional honors and has published
25 research  papers.  He is a graduate of the University of Rochester  School of
Medicine and Dentistry,  Rochester, New York (M.D.) and of Seton Hall University
(B.S.).

         Rhonda R. Vincent, age 37, is Financial Reporting Manager for Maxxon.
From incorporation until July 16, 1999, when she resigned as an officer and
director of the Company, Ms. Vincent was Vice President, Secretary and
Treasurer. From 1994 to 1997, Ms. Vincent was Vice President, Secretary,
Treasurer and Director of Corporate Vision, Inc., a multimedia software
development company. For five years prior thereto, Ms. Vincent held various
accounting and investor relations positions with CIS Technologies, Inc., a
leading healthcare information processing company that was purchased by National
Data Corporation in 1996. She began her career as an audit associate with the
public accounting firm of Coopers & Lybrand. Ms. Vincent is a Certified Public
Accountant and holds a Bachelor of Science degree in accounting from Oral
Roberts University.

         Vicki Pippin, age 42 is Administrative Manager for Maxxon. She has had
more than 20 years of executive administration experience for various public
companies in the aerospace and healthcare software industries, including
McDonnell Douglas, Burtek Industries and CIS Technologies, Inc.

         Wayland J. Rippstein, Jr., age 68 is a technical consultant to Maxxon.
He retired in 1983 from NASA as the Head of the Toxicology Laboratory where he
worked extensively with syringes, vacuums and other issues on the leading edge
of technology for more than 20 years. Since his retirement, Mr. Rippstein has
been a consultant to various businesses. He has testified extensively as an
expert witness in litigation involving the toxicological chemical effects of
fires, explosions and other catastrophic events. Mr. Rippstein also owned and
operated a chemical manufacturing firm for more than 7 years, selling primarily
agricultural chemicals. He holds a patent for an agricultural chemistry product.
He is a graduate from the University of Texas with a Bachelors and Masters
Degree in Chemistry.

         (c)  Family Relationships

         None.

         (d)  Involvement in Legal Proceedings of Officers, Directors, and
              Control Persons

         None.



                                       10

<PAGE>


Item 10.  Executive Compensation

<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE

                                                                    Long Term Compensation
                                                             -------------------------------------
                                                             --------------------------- ---------
                                 Annual Compensation                   Awards            Payouts
                          ---------------------------------- --------------------------- ---------
                          ------------ ----------- --------- ----------- --------------- ---------
 <S>               <C>      <C>         <C>        <C>        <C>          <C>            <C>       <C>

                                                   Other
    Name and                                       Annual    Restricted   Securities               All
   Principal                                       Compen-   Stock        Underlying     LTIP      Other
    Position       Year     Salary       Bonus     sation    Awards       Options/SARs   Payouts   Compensation
----------------- ------- ------------ ----------- --------- ----------- --------------- --------- ------------
----------------- ------- ------------ ----------- --------- ----------- --------------- --------- ------------
Gifford M.
Mabie, CEO         2001   $100,000        $-0-       $-0-       $-0-          -0-          $-0-       $-0-
                   2000   $100,000(1)
</TABLE>

(1) Estimated value of Mr. Mabie's services.  Treated as a capital  contribution
for accounting purposes.
<TABLE>
<CAPTION>


                           Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values

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

                                                             Number of Securities   Value of
                                                             Underlying             Unexercised
                                                             Unexercised            In-the-Money
                                                             Options/SARs at        Options/SARs at
                           Shares                            FY-End                 FY-End
                           Acquired on                       Exercisable/           Exercisable/
 Name                      Exercise         Value Realized   Unexercisable          Unexercisable
 ------------------------- ---------------- ---------------- ---------------------- -------------------
 ------------------------- ---------------- ---------------- ---------------------- -------------------

 Gifford M. Mabie, CEO     N/A              N/A              300,000(1)             None (2)

</TABLE>

(1) All options granted to Mr. Mabie were exercisable at December 31, 2000. (2)
The closing price of our common stock at March 28, 2002 was $0.44 per share,
which was less than the $0.50 per share exercise price of Mr. Mabie's options.

         During 1998, Mr. Mabie was granted an option to purchase 300,000 shares
of common stock at $0.50 per share. The exercise price was equal to the closing
price of the Company's common stock on the date of grant. The options expire ten
years from the date of grant.


                                       11
<PAGE>


Item 11.  Security Ownership of Certain Beneficial Owners and Management

         The following shareholders are known to us to own more than 5% of the
outstanding common stock of the Company. Except as otherwise indicated, all
information is as of March 28, 2002 and ownership consists of sole voting and
investment power.


<PAGE>

<TABLE>
<CAPTION>

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

                                                                         Beneficial         Percentage of
                                                  Relationship to        Ownership          Outstanding
      Name and Address                            Company                Common Stock(1)    Common Stock (2)
      ------------------------------------------- ---------------------- ------------------ --------------------

      Gifford M. Mabie........................    Sole Officer and           1,150,000 (3)                4.77%
      8908 S. Yale Ave. #409                      Director
      Tulsa, OK  74137

      Petroxx Resources, Inc..................    Beneficial Owner           1,264,666 (4)                5.25%
      11048 S. Jamestown
      Tulsa, OK  74137

      Rhonda R. Vincent.......................    Employee and               1,370,300 (3)                5.69%
      8908 S. Yale Ave. #409                      Beneficial Owner
      Tulsa, OK  74137

      Sole Officer and Director and Beneficial Owners
      as a Group (3 persons).........................................        3,888,466                   15.71%

</TABLE>

(1)  Includes shares of common stock issuable upon the exercise of options that
     are currently exercisable or will become exercisable within 60 days of
     March 28, 2002.

(2)  For each shareholder listed above, his or her percentage of outstanding
     common stock was based on 24,088,457 shares issued and outstanding as of
     March 28, 2002, plus the shares which each shareholder has the right to
     acquire within 60 days of March 28, 2002.

(3)  Includes options to purchase 300,000 shares of common stock exercisable at
     $0.50 per share. These options expire January 30, 2008.

(4)  Includes warrants to purchase up to 632,333 shares of common stock at $0.50
     per share exercisable on or before May 10, 2004.

Common Stock Options and Warrants Outstanding

         At March 31, 2002, the Company had outstanding options to purchase up
to 1,000,000 shares of common stock at an exercise price of $0.50 and
outstanding warrants to purchase up to 2,050,000 shares of common stock at
exercise prices ranging from $0.25 to $0.50 per share. See Part F/S "Notes to
Financial Statements".


                                       12

<PAGE>


Item 12.  Certain Relationships and Related Transactions

         During the past two years (from December 17, 1999 to December 31,
2001), there were the following related party transactions in excess of $60,000:

         On January 3, 2001, Gifford Mabie, our sole officer and director, and
Thomas Coughlin, Rhonda Vincent and Vicki Pippin, our significant employees,
each purchased 850,000 shares of common stock at $0.15 per share, which was the
closing price of our common stock on the date of the transaction. Each person
gave the Company an unsecured promissory note in the amount of $127,500. The
notes are due February 23, 2008 and accrue interest at a rate of 8% per year.

         During 2001, Maxxon loaned $232,017 to related parties, of which
$116,000 was repaid.

Item 13. Exhibits and Reports on Form 8-K

Exhibits:
         See  "Index to and Description of Exhibits"

Reports on Form 8-K:
         The Company had no Form 8-K filings during the fourth quarter of 2001.



                                       13
<PAGE>


Part F/S
<TABLE>
<CAPTION>


                          INDEX TO FINANCIAL STATEMENTS
 <S>                                                                                                     <C>

Audited Financial Statements

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

Balance Sheet At December 31, 2001.................................................................      16

Statements Of Operations From Inception (August 16, 1996) Through December 31, 2001
And For The Years Ended December 31, 2001 and 2000................................................       17

Statements Of Cash Flows From Inception (August 16, 1996) Through December 31, 2001
And For The Years Ended December 31, 2001 and 2000.................................................      18

Statements Of Shareholders' Equity From Inception (August 16, 1996) Through
December 31, 2001..................................................................................      19

Notes To Financial Statements From Inception (August 16, 1996) Through
December 31, 2001, And For The Years Ended December 31, 2001 and 2000..............................      20



</TABLE>

                                       14
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

  To the Shareholders of
  Maxxon, Inc.
  Tulsa, Oklahoma

     We  have  audited  the  accompanying  balance  sheet  of  Maxxon,  Inc.  (a
development  stage  company) for the years ended December 31, 2001 and 2000, and
the related statements of operations,  shareholders'  equity, and cash flows for
the years ended  December 31, 2001 and 2000 and for the period from December 16,
1996  (inception)  to December  31, 2001.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

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

     In our opinion,  the financial statements referred to above present fairly,
in all material respects,  the financial position of Maxxon, Inc. as of December
31, 2001 and 2000,  and the results of its operations and its cash flows for the
years ended December 31, 2001 and 2000 and for the period from December 16, 1996
(inception)  to  December  31,  2001  in  conformity  with  generally   accepted
accounting principles.




Sutton  Robinson Freeman & Co., P. C.
Certified Public Accountants

April 1, 2002




                                       15
<PAGE>

                                  Maxxon, Inc.
                          (A Development Stage Company)

                                  Balance Sheet
                                December 31, 2001




                                                                 December 31,
                   ASSETS                                                2001
                                                                 ------------
Current assets
Cash                                                                 $ 56,674
Employee Advances                                                      16,584
Rent receivable- related parties (Note 5)                              41,170
Notes receivable- related parties (Note 3)                            162,560
                                                                 ------------
   Total current assets                                               276,988
                                                                 ------------

Property and Equipment, net of depreciation (Note 3)                   34,862
                                                                 ------------

Other assets
Patent Development                                                     10,000
Less amortization (Note 3)                                              1,426
                                                                 ------------
      Total Patent Development                                          8,574
                                                                 ------------
TOTAL ASSETS                                                        $ 320,424
                                                                 ============

         LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities                             $ 84,160
Accrued Interest Payable                                                    -
                                                                 ------------
   Total current liabilities                                           84,160
                                                                 ------------
Total liabilities                                                      84,160
                                                                 ------------

Shareholders' Deficiency
Preferred stock, $0.001 par value,
   5,000,000 shares authorized;
   no shares issued and outstanding                                         -
Common stock, $0.001 par value,
   75,000,000 shares authorized;
   24,088,440 shares issued and outstanding                            24,088
Common stock purchased by employees                                  (547,500)
Paid in capital                                                     9,749,687
Unamortized portion of compensation cost for options granted
   to non-employees and common stock issued for services           (1,048,754)
Deficit accumulated during the development stage                   (7,941,257)
                                                                 ------------
   Total shareholders' equity                                         236,264
                                                                 ------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY                      $ 320,424
                                                                 ============


   The accompanying notes are an integral part of the financial statements


                                       16
<PAGE>

<TABLE>
<CAPTION>

                                  Maxxon, Inc.
                          (A Development Stage Company)

                            Statements of Operations
           From Inception (August 16, 1996) Through December 31, 2001
               and For The Years Ended December 31, 2001 and 2000


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

                                        From inception
                                           (August 16,       Year Ended
                                         1996) through      December 31,      December 31,
                                     December 31, 2001              2001              2000
                                     -----------------      ------------      ------------
Revenue
Investment Income                            $ 170,753         $ 170,753               $ -
Other Income                                     3,807             3,807                 -
                                     -----------------      ------------      ------------
                                               174,560           174,560                 -
                                     -----------------      ------------      ------------

Expenses
Research and development                       687,345           325,999            61,749
General and administrative                   7,371,021         2,038,795         1,258,445
                                     -----------------      ------------      ------------
   Total operating expenses                  8,058,366         2,364,794         1,320,194
                                     -----------------      ------------      ------------
Operating loss                              (7,883,806)       (2,190,234)       (1,320,194)
                                     -----------------      ------------      ------------

Interest income                                 17,276             1,722                 -

Interest expense                                30,864             1,286            18,892

Depreciation and amortization                   43,863             9,287             8,773
                                     -----------------      ------------      ------------
Net loss from operations                  $ (7,941,257)     $ (2,199,085)     $ (1,347,859)

Weighted average shares
outstanding                                 15,152,517        21,667,726        12,660,494
                                     -----------------      ------------      ------------
Net loss per share (Note 1)                    $ (0.52)          $ (0.10)          $ (0.11)
                                     =================      ============      ============


</TABLE>


The accompanying notes are an integral part of the financial statements


                                       17
<PAGE>


<TABLE>
<CAPTION>

                                  Maxxon, Inc.
                          (A Development Stage Company)

                            Statements of Cash Flows
           From Inception (August 16, 1996) Through December 31, 2001
               and For The Years Ended December 31, 2001 and 2000

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


                                                   From Inception
                                                      (August 16,
                                                    1996) through      Year Ended       Year Ended
                                                     December 31,    December 31,     December 31,
                                                             2001            2001             2000
Operating activities
Net loss                                             $ (7,941,257)   $ (2,199,085)    $ (1,347,859)
Plus non-cash charges to earnings:
Depreciation and amortization                              35,870           9,966            7,532
Common stock issued for services                        1,154,307         297,650                -
Expenses paid by third parties                             57,134           7,500                -
Contribution of services by officer and employees         799,154               -          405,000
Services by officer and employees paid for
     with non-cash consideration                           87,500               -                -
Amortization of compensation cost for options
    granted to non-employees and common stock
    issued for services                                   726,823         438,946                -
Write-off of organizational costs                           3,196               -            3,195
Write-off of zero value investments                       785,418               -          640,418
Compensation costs for stock options and warrants
granted to non-employees                                1,132,715         124,800                -
Change in working capital accounts:
   (Increase) decrease in receivables
     from related parties                                (220,314)       (159,227)         (29,200)
   (Increase) decrease in prepaid expenses                      -           2,255           23,450
   (Increase) decrease in other receivables              (176,577)              -                -
   Increase (decrease) in accounts payable
     and accrued liabilities                               37,001          49,606           17,520
      Total operating activities                       (3,419,030)     (1,427,589)        (279,944)

Investing activities
Purchase of equipment                                     (64,741)        (30,022)               -
Investment in syringe patent development                  (10,000)              -                -
Investment in Ives Health Company                        (251,997)              -                -
Investment in The Health Club                             (10,000)              -                -
      Total investing activities                         (336,738)        (30,022)               -

Financing activities
Loans from shareholders                                    13,907               -           19,369
Repayment of loans from shareholders                      (11,369)         (6,369)          (5,000)
Sale of common stock for cash:
   To third-party investors (prior to merger)             574,477               -                -
   To third-party investors                             2,572,845       1,604,700          181,000
   From exercise of stock options by third-parties        509,900               -                -
   Less:  Issue Costs                                    (102,318)        (85,575)               -
Convertible debentures issued for cash                    355,000               -                -
Payment of exclusive license note payable                (100,000)              -                -
      Total financing activities                        3,812,442       1,512,756          195,369

Change in cash                                             56,674          55,145          (84,575)
Cash at beginning of period                                     -           1,529           86,104

Cash at end of period                                    $ 56,674        $ 56,674          $ 1,529

Supplemental disclosure of cash flow information:
   Cash paid for interest and taxes during the period      10,687               -           17,216

Non-cash financing and investing activities:
Common stock issued to founders                             7,000               -                -
Common stock issued in connection with merger
with Cerro Mining Corporation                                 300               -                -
Common stock issued in Ives merger                        346,262               -                -
Common stock subscriptions                                 69,800               -                -
Capitalized compensation cost for options granted       1,487,700       1,487,700
Common stock issued in exchange for promissory note       676,500         547,500                -
Common stock issued for payment of debt                    76,888           7,500           69,388
Common stock issued for convertible debentures            190,660               -                -
Common stock issued for services                          471,663         297,650                -
Common stock issued to pay Ives debt                       27,000               -                -


</TABLE>


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



                                       18

<PAGE>


                                  Maxxon, Inc.
                           A Development Stage Company

                       Statements of Stockholders' Equity From inception
          (December 16, 1996) through December 31, 2000
               and for the years ended December 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                                                Accumulated
                                                                      Common Stock               during the
                                                 Note       Price     -------------    Paid-In  Development  Subscription
                                            Reference   per Share     Shares Amount    Capital        Stage    Receivable     Total
                                            ---------   ---------     ------ ------    -------  -----------  ------------ ----------

<S>                                         <C>         <C>        <C>       <C>      <C>       <C>           <C>          <C>
Balance at Inception (December 16, 1996)                      -           -      -          -        -                            -

Cerro Mining/Maxxon-OK Merger:
   Cerro Mining                                           $0.001     531,000    531       (231)                                 300
   Maxxon-OK:
       Shares issued to founders                 9        $0.001   7,000,000  7,000                                           7,000
       Shares sold for cash to third-party       9    0.90-$1.00     578,000    578    573,899                              574,477
Ives Transactions:
     Investment in Ives Health Company           4         $1.57     311,240    311    310,951                              311,261
     Investment in The Health Club               4          1.57      35,000     35     34,965                               35,000
     Conversion of Ives Debt                     4          1.46      18,513     19     26,981                               27,000
Issuance of Common Stock for:
     Cash from third-party investors            12         $1.62     218,569    219    353,501                              353,720
     Cash from related party                 12,15
     Promissory Notes                         3,12         $2.00      64,500     65    128,935                              129,000
     Subscriptions Receivable                12,15    1.22-$1.49      52,757     53     69,747                (69,800)            -
     Services Rendered                          12    1.38-$3.42      90,499     90    173,337                              173,427
     Debentures Converted                       14         $0.73     102,673    103     74,897                               75,000
Net Income (Loss) at December 31, 1997                                                            (795,375)                (795,375)
                                            ---------   --------- ---------- ------  ---------  -----------   ----------- ----------
Balance at December 31, 1997                                       9,002,751  9,003  1,746,982    (795,375)   (69,800)      890,809

Issuance of Common Stock for:
     Conversion of Ives Debt                     4    1.22-$1.28      44,827     45     54,955                               55,000
     Cash from third-party investor             12          1.82      50,000     50     90,950                               91,000
     Options exercised by
        third-parties for cash               12,13    0.50-$0.75     545,867    546    359,354                              359,900
     Options exercised by third-parties
         for services                        12,13         $0.75      24,133     24     18,076                               18,100
     Services Rendered by third-parties         12    0.46-$1.43     988,007    988    573,560                              574,549
     Debentures Converted by third parties      14         $0.50     548,574    549    274,451                              275,000
     Settlement with related party              15                   350,000    350                                             350
Certificates canceled:                          12                   (91,572)   (92)   (40,173)                             (40,265)
Value of Services Contributed by Officer
      and Employees                              1                                     114,154                              114,154
Compensation Cost for Stock Options Granted
      to Non-Employees                          13                                     918,187                              918,187
Cancellation of Subscriptions Receivable
      from related party                     12,15                                                              69,800       69,800
Net Income (Loss) at December 31, 1998                                                            (2,584,383)            (2,584,383)
                                            ---------   --------- ---------- ------  ---------  -----------   ----------- ----------
Balance at December 31, 1998                                      11,462,587 11,463  4,110,497    (3,379,758)        0       742,202

Issuance of Common Stock for:
     Cash from third-party investor             12    $0.70-$1.19    390,693    390    342,034                              342,424
Less: Issue Costs                                                                       (16,743)                            (16,743)
     Options exercised by
        third-parties for cash               12,13          $0.50    300,000    300    149,700                              150,000
     Services Rendered by third-parties         12    $1.00-$1.19    164,069    164    166,579                              166,743
Value of Services Contributed by Officer
      and Employees                              1                                     280,000                              280,000
Compensation Cost for Stock
 Options Granted to Non-Employees               13                                      89,728                               89,728
Net Income (Loss) at December 31, 1999                                                            (1,014,555)            (1,014,555)
                                            ---------   --------- ---------- ------  ---------  -----------   ----------- ----------
Balance at December 31, 1999                                      12,317,349 12,317  5,121,795    (4,394,313)        0       739,799

Issuance of Common Stock for:
     Cash from third-party investor             12    $0.25-$0.50    862,776    863    249,525                              250,388
Less: Issue Costs                                                                                                                 0
     Options exercised by
       third-parties for cash                                                                                                     0
     Services Rendered by third-parties                                                                                           0
Value of Services Contributed by Officer
      and Employees                              1                                     405,000                              405,000
Net Income (Loss) at December 31, 1999                                                            (1,347,859)            (1,347,859)
                                            ---------   --------- ---------- ------  ---------  -----------   ----------- ----------
Balance at December 31, 2000                                      13,180,125 13,180  5,776,320    (5,742,172)        0        47,328

Issuance of Common Stock for:
     Cash from third-party investor             12                 6,558,333  6,558  1,598,142                            1,604,700
     Purchased by Employees                                        3,650,000  3,650    543,850                 (547,500)          0
     Issued for Repayment of Debt                                     50,000     50      7,450                                7,500
     Less: Issue Costs                                                                 (85,575)                             (85,575)
     Services Rendered by third-parties                              450,000    450    422,000                              422,450
Compensation Cost of stock issued and
     options granted for services                                    200,000    200  1,487,500                            1,487,700
Compensation Cost of stock issued and
     options granted for services to be amortized                                   (1,048,754)                          (1,048,754)
Net Income (Loss) at December 31, 2001                                                            (2,199,085)            (2,199,085)
                                            ---------   --------- ---------- ------  ---------  -----------   ----------- ----------

Balance at December 31, 2001                                      24,088,458 24,088  8,880,933    (7,941,257)  (547,500)    236,264
                                            =========   ========= ========== ======  =========  ===========   =========== ==========

</TABLE>

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


                                       19

<PAGE>

                                  Maxxon, Inc.
                          (A Development Stage Company)

                          Notes to Financial Statements
                                December 31, 2001


Note 1 - Summary of Significant Accounting Policies

Organization and Nature of Operations
Maxxon, Inc. ("Maxxon" or "the Company") owns the exclusive license to develop,
manufacture and market a patented disposable safety syringe that retracts the
needle into the barrel of the syringe after an injection has been given. The
patent was published by the U.S. Patent and Trademark Office on February 27,
2001. The safety syringe requires FDA approval before it can be sold in the
United States. The Company submitted its application for FDA approval on
December 10, 2001

The Company was incorporated in the state of Nevada on August 16, 1996 as Cerro
Mining Corporation ("Cerro"). On May 31, 1997, Cerro issued 7,578,000 shares of
its common stock for all of the issued and outstanding common stock of Maxxon,
Inc., a privately-held Oklahoma corporation ("Maxxon-OK"). Maxxon-OK ceased to
exist as a result of the transaction and Cerro changed its name to Maxxon, Inc.

Development Stage Company
Since its inception in 1996, the Company has been considered a development stage
enterprise for financial reporting purposes as significant efforts have been
devoted to raising capital and to research and development of a safety syringe.

Cash and Cash Equivalents
The Company considers highly liquid investments (those readily convertible to
cash) purchased with original maturity dates of three months or less to be cash
equivalents.

Compensation of Officers and Employees
Prior to January 1, 2001, the Company's sole officer and director and its other
employees served without pay or other non-equity compensation. The fair value of
their services was recorded as a capital contribution. For the year ended
December 31, 2000 and for the period from inception to December 31, 2000, the
Company recorded $405,000 and 799,154, respectively, as a capital contribution
by its sole officer and director and its other employees in accordance with the
Company's policy. On January 3, 2001, the Company entered into written
employment agreements with Maxxon's sole officer and director, and certain
employees. These agreements designate specific salaries for those individuals
and require that the salaries be paid in 24 semi-monthly installments. As such,
the Company has changed its method of accounting for the value of officers'
salaries by accruing a liability for the value of their services instead of
recording them as a capital contribution. For the year ended December 31, 2001,
the Company had recorded salaries of $400,000 and had $33,333 of this amount
remaining as an accrued liability.

Stock-based Compensation

The Company accounts for stock-based compensation  arrangements for employees in
accordance with Accounting  Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees",  and complies with the disclosure  provisions of
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation".   Under  APB  No.  25,  compensation  expense  is  based  on  the
difference,  if any,  on the  date of  grant,  between  the  fair  value  of the
Company's  stock and the exercise  price.  The Company  accounts for stock-based
compensation arrangements for non-employees in accordance with the provisions of
SFAS No. 123 and the Emerging Issues Task Force Consensus in Issue No. 96-18.

Income Taxes
The Company uses the liability method of accounting for income taxes as set
forth in Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes." Under the liability method, deferred taxes are determined based
on the differences between the financial statement and tax bases of assets and
liabilities at enacted tax rates in effect in the years in which the differences
are expected to reverse.

Segment Information
Effective January 1, 1998, the Company adopted the provisions of SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information". The
Company identifies its operating segments based on business activities,
management responsibility and geographical location. During the years ended
December 31, 2001 and 2000, the Company operated in a single business segment
engaged in developing selected healthcare products.


                                       20
<PAGE>

Earnings (Loss) per Share
The Company computes net income per share in accordance with SFAS No. 128,
"Earnings per Share" and SEC Staff Accounting Bulletin No. 98 ("SAB 98"). Under
the provision of SFAS No. 128 and SAB 98 basic net income (loss) per share is
calculated by dividing net income (loss) available to common stockholders for
the period by the weighted average shares of common stock of the Company
outstanding during the period. Diluted net income per share is computed by
dividing the net income for the period by the weighted average number of common
and common equivalent shares outstanding during the period. The calculation of
fully diluted income (loss) per share of common stock assumes the dilutive
effect of stock options outstanding. During a loss period, the assumed exercise
of outstanding stock options has an anti-dilutive effect. Therefore, the
outstanding stock options were not included in the December 31, 2001 and 2000
weighted average shares of 21,667,726 and 12,660,494 used respectively in the
calculations of loss per share.

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

Reclassifications
Certain reclassifications have been made to the prior year financial statements
to conform to the current period presentation.

Intangible Assets
Intangible assets are stated at cost. The intangible asset of $10,000 at
December 31, 2001 is for patent costs related to the Rippstein syringe.
Amortization of these patent costs is for a period of 17 years, which is the
life of a U.S. Patent.

New Accounting Standards
The Company adopted Statement of Financial Accounting Standard ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities" during 1999.
Currently, the Company does not engage in hedging activities or transactions
involving derivatives.

In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No.
141, "Business Combinations," which supersedes Accounting Principles Board
("APB") Opinion No. 16, "Business Combinations," and SFAS No. 38, "Accounting
for Pre-acquisition Contingencies of Purchased Enterprises." The provisions of
the Statement apply to all business combinations initiated after June 30, 2001.
SFAS No. 141 requires that all business combinations be accounted for by the
purchase method of accounting. This method requires the accounts of an acquired
institution to be included with the acquirer's accounts as of the date of
acquisition with any excess of purchase price over the fair value of the net
assets acquired to be capitalized as goodwill. The Statement also requires that
the assets of an acquired institution be recognized as assets apart from
goodwill if they meet specific criteria presented in the Statement. The
Statement ends the use of the pooling-of-interests method of accounting for
business combinations, which required the restatement of all prior period
information for the accounts of the acquired institution. The Company will
account for all mergers and acquisitions initiated after June 30, 2001, using
the purchase method.

In June 2001,  the FASB  issued  SFAS No. 142,  "Goodwill  And Other  Intangible
Assets", and SFAS No. 143, "Accounting For Asset Retirement  Obligations".  SFAS
No. 142  supercedes  APB  Opinion No. 17,  "Intangible  Assets",  and  primarily
addresses   accounting  for  goodwill  and  intangible   assets   subsequent  to
acquisition.  Under SFAS No. 142, goodwill and separately  identified intangible
assets with indefinite  lives will no longer be amortized but reviewed  annually
(or more frequently if impairment  indicators arise) for impairment.  Separately
identified  intangible  assets not deemed to have indefinite lives will continue
to be amortized  over their useful  lives.  SFAS No. 142 applies to all goodwill
and intangible  assets acquired after June 30, 2001. For goodwill and intangible
assets acquired prior to July 1, 2001, the Company is required to adopt SFAS No.
142 effective January 1, 2002. The Company is currently evaluating the impact of
SFAS No. 142 on its financial statements.

SFAS No. 143 requires that entities record as a liability obligations associated
with the retirement of a tangible  long-lived  asset when such  obligations  are
incurred,  and  capitalize  the cost by  increasing  the carrying  amount of the
related  long-lived  asset.  SFAS No. 143 will be  effective  for  fiscal  years
beginning after June 15, 2002, however,  earlier application is encouraged.  The
Company,  which will  adopt  SFAS No. 143 on January 1, 2002,  does not expect a
material impact from the adoption of SFAS No. 143 on its financial statements.

In August 2001, the FASB issued SFAS No. 144,  "Accounting For The Impairment Or
Disposal Of Long-Lived Assets". SFAS No. 144 supercedes SFAS No. 121, Accounting
For The Impairment Of Long-Lived Assets And For Long-Lived Assets To Be Disposed


                                       21
<PAGE>

Of, and APB Opinion No. 30, "Reporting The Results Of Operations - Reporting The
Effects Of Disposal Of A Segment Of A Business,  And Extraordinary,  Unusual And
Infrequently  Occurring  Events And  Transactions".  SFAS No. 144 establishes an
accounting  model based on SFAS No. 121 for long-lived  assets to be disposed of
by sale,  previously  accounted for under APB Opinion No. 30. This  Statement is
effective for fiscal years beginning after December 15, 2001. The Company, which
will adopt SFAS No.  144 on January 1, 2002,  does not expect a material  impact
from the adoption of SFAS No. 144 on its financial statements.

Note 2 - Exclusive License

On November 18, 1999, Maxxon entered into an Exclusive License Agreement with
Wayland J. Rippstein, Jr. and associates (the "Rippstein License"), whereby
Maxxon acquired the exclusive worldwide license to manufacture and market a new
proprietary safety syringe that retracts the needle into the barrel of the
syringe after use. In connection with the Rippstein License, the Company paid
$10,000 for patent costs and agreed to pay $200,000 if all of the following
events happen on or before September 30, 2001; (1) a U.S. patent is issued, (2)
a fully functional and working prototype of the syringe is completed, and (3)
FDA approval to sell the syringe in the U.S is obtained. However, in connection
with the agreement, if FDA approval was not received by September 30, 2001, but
the Company had begun selling syringes in places that did not require FDA
approval, then the Company would pay the $200,000 out of the first net profits
from the sale of those syringes. As of September 30, 2001, FDA approval to sell
the syringes had not been received nor had sells commenced in places that do not
require FDA approval. Therefore, Maxxon was relieved of its obligation to pay
the $200,000 pursuant to the Exclusive License Agreement. The Company filed its
application for approval of the safety syringe with the FDA on December 10,
2001.

The Rippstein License also provides for Maxxon to pay royalties of 4% of gross
sales of syringes and minimum annual royalties ranging from $10,000 to $20,000
beginning on the 4th anniversary after both a working prototype syringe is
developed and a U.S. patent is issued. Such royalties continue for the life of
the last to expire patent. Maxxon also granted Mr. Rippstein and his two
associates options to purchase a total of 1,600,000 shares of common stock of
Maxxon at $0.50 per share, which was the closing price of Maxxon's common stock
on the day the Rippstein License was signed. The options expire October 31, 2009
and are subject to certain vesting conditions. Details regarding the accounting
treatment of the options granted, the subsequent transfer of the associates'
options, and details regarding the vesting conditions are described in Note 7,
"Stock Options."

Note 3 - Long-lived Assets

Property, plant and equipment , including significant improvements, are stated
at cost. Expenditures for maintenance and repairs are charged to operating
expenses as incurred. When properties are retired or otherwise disposed of, the
cost of the asset and the related accumulated depreciation are removed from the
accounts with the resulting gain or loss being reflected in results of
operations.

 Computer equipment                      5 Years        $35,464.47
      Less: Accumulated Depreciation                     (5,858.94)
                                                     ---------------
                                                        $29,605.53
                                                     ---------------

 Furniture and fixtures                  5 Years         17,625.73
      Less: Accumulated Depreciation                    (13,820.81)
                                                     ---------------
                                                         $3,804.92
                                                     ---------------

 Leasehold improvements                  5 Years         11,650.82
      Less: Accumulated Depreciation                    (10,198.80)
                                                     ---------------
                                                         $1,452.02
                                                     ---------------

 Total Long-lived Assets                                $34,862.47
                                                     ===============

Goodwill arising from business acquisitions is amortized over its useful life,
which is generally 40 years, on a straight-line basis. Intangible assets include
patents and trademarks, which are valued at acquisition through independent


                                       22
<PAGE>

appraisals. Debt issuance costs are being amortized over the terms of the
various agreements. Patents and trademarks are being amortized on a
straight-line basis over periods varying from 7 to 40 years (see Note 1).

Management assesses the recoverability of property and equipment, goodwill,
trademarks and other intangible assets whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable from its future undiscounted cash flows. If it is determined that an
impairment has occurred, an impairment loss is recognized for the amount by
which the carrying amount of the asset exceeds its estimated fair value.

Note 4 - Income Taxes

The deferred tax assets and liabilities from Inception (August 16, 1996) to
December 31, 2001 and at December 31, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>

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

                                            From Inception
                                               (August 16,
                                                  1996) to
                                              December 31,  December 31, 2001  December 31, 2001
                                                      2001
                                          ----------------- ------------------ ------------------

     Net operating loss carryforward          $(1,458,292)        $ (318,747)        $ (314,358)
     Less:  Valuation allowance                 1,458,292            318,747            314,358
                                          ----------------- ------------------ ------------------

              Net Deferred Tax Benefit            $     --           $     --           $     --
</TABLE>


As of December 31, 2001, the Company had a net operating loss carry-forward of
approximately $3,728,000.which will begin to expire in 2012. Deferred taxes
reflect a combined federal and state tax rate of approximately 30%.

Note 5 - Commitments and Contingencies

Future Royalty Obligations Under Exclusive License Agreement
In connection with the Rippstein License, the Company agreed to pay royalties of
4% of gross sales of syringes and minimum annual royalties ranging from $10,000
to $20,000 beginning on the 4th anniversary of the date when both a working
prototype syringe is developed and a U.S. patent is issued. The date when both
events occurred was March 1, 2001.

Future Payment Obligations Under Technical Consulting Agreement
On November 18, 1999, Maxxon entered into a Technical Consulting Agreement with
Mr. Rippstein whereby Maxxon engaged him on a non-exclusive basis to provide
technical assistance and consulting services to achieve startup of production of
the new Maxxon Safety Syringe. Maxxon paid Mr. Rippstein $12,500 upon execution
of the Agreement and agreed to pay him an additional $37,500 upon the occurrence
of various milestones in the development of the syringe as follows: (1) $12,500
upon the manufacture of the first fully operational working syringe prototype
and (2) $25,000 upon production of syringes from the steel molds. On March 1,
2001, Maxxon paid Mr. Rippstein $12,500 because the first operational working
syringe prototype had been produced.

Patents
On February 27, 2001, the U.S. patent covering the safety syringe designed by
Mr. Rippstein was published. On January 13, 2001, an application was filed for
international patent protection, pursuant to the Patent Cooperation Treaty.
There is no assurance that any international patents will issue. There is no
assurance that the patent does not infringe on the rights of others.


                                       23
<PAGE>


Leases
Maxxon leases approximately 2,000 of commercial office space from Oklahoma
National Bank under the terms of a five-year lease which expires May 31, 2002.
The remaining minimum annual lease payments under the lease are scheduled as
follows:

        For the Periods Ended
             December 31               Amount

                 2002                 $10,305

The office space is shared with other companies in which Maxxon's sole officer
and director and its employees may be officers, directors, employees or
shareholders. The value of the minimum lease payments is allocated among the
companies and is recorded as a receivable to Maxxon on a quarterly basis. At
December 31, 2001 and 2000, the rent due from the other companies, in total, was
$41,170 and $19,200, respectively.

Amended Employment Agreements.
On January 3, 2001, we entered into written employment agreements with Gifford
Mabie, our sole officer and director, and Rhonda Vincent, Thomas Coughlin and
Vicki Pippin, our employees. These agreements were amended on August 8, 2001
with no substantive changes. The material terms of their respective employment
agreements are the same, except that Mr. Mabie's employment agreement states he
will not compete with the Company for one-year after he resigns voluntarily or
is terminated for cause. If Mr. Mabie is terminated without cause or if he
resigns because a change of control has occurred, then the non-compete clause of
his employment agreement will not be applicable.

The term of each employment agreement is for one year, ending January 3, 2002
with an automatic and continuous renewal for consecutive two year periods. Each
agreement can be ended either by us or by the employee upon 30 days' written
notice. Each agreement provides for an annual salary of at least $100,000 with
an annual salary increase equal to no less than the percentage increase in the
Consumer Price Index during the previous calendar year. Each employee's salary
is accrued by the Company and paid in whole or in part as cash is available. If
an employee resigns or is terminated for any reason, his or her accrued and
unpaid salary plus severance pay ranging from three (3) months to twenty-four
(24) months, depending on the circumstances of his or her departure, will be due
and payable within 30 days of his or her resignation or termination. Under each
employment agreement, we provide certain fringe benefits, including, but not
limited to, participation in pension plans, profit-sharing plans, employee stock
ownership plans, stock appreciation rights, hospitalization and health
insurance, disability and life insurance, paid vacation and sick leave. We will
reimburse each employee for any reasonable and necessary business expenses,
including travel and entertainment expenses that are necessary to carry out his
or her duties. Each employee has the right to participate in other businesses as
long as those businesses do not compete directly with us and so long as the
employee devotes the necessary working time, as determined in his or her sole
discretion, to our business activities. We will indemnify each employee for all
legal expenses and liabilities incurred with any proceeding involving the
employee by reason of his or her being an officer, director, employee or agent
of the Company. We will pay reasonable attorney fees and expenses as incurred in
the event that, in the employee's sole judgment, he or she needs to retain
counsel or otherwise expend personal funds for his or her defense. If there is a
change in control, each employee has the right to resign. A change in control is
defined as a change in the majority of Directors within any twelve month period
without 2/3 approval of the shares outstanding and entitled to vote, or a merger
where less than 50 percent of the outstanding common stock survives and a
majority of the Board of Directors remains, or the sale of substantially all of
our assets, or if any other person or group acquires more than 50 percent of the
voting capital.

Agreements with Marty Smith and Stuart Daley of Genesis Design Group. On
February 22, 2001, the Company entered into an agreement with Marty Smith and
Stuart Daley of Genesis Design Group to pay a finders fee to them if their
efforts result in bringing a financial partner to invest in or acquire Maxxon.
If such a transaction occurs as a result of their efforts, the Company agreed to
pay them 100,000 shares of Maxxon common stock and one-half of one percent of
the total amount of the transaction.

On September 18, 2001, the Company agreed to issue 75,000 shares each to Marty
Smith and Stuart Daley of Genesis Design Group for the 3cc safety syringe should
the Company decide to proceed with single cavity molds and a working molded
syringe is produced.


                                       24
<PAGE>


Note 6 - Common Stock and Paid-In Capital

Common Stock Transactions for the year ended December 31, 2001

On January 3, 2001, the Company sold to its employees a total of 3,650,000
shares of common stock at $0.15 per share, the closing price of our common stock
on the date of the transaction. From each employee, the Company received a
promissory note due January 3, 2008 at 8% interest per year.

On January 3, 2001, the Company issued Rhonda Vincent, an employee, 50,000
shares of common stock to repay her for $7,500 in expenses she paid on behalf of
Maxxon. The closing price of the Company's common stock on the date of repayment
was $0.15 per share.

On January 4, 2001, the Company sold 50,000 shares of its common stock at $0.10
per share to Genesis Design Group and received $5,000 in cash.

During January 2001, the Company began a private offering of Units. Each Unit
consisted of one share of common stock at $0.25 per share and one warrant to
purchase an additional share of common stock at $0.50 per share on or before
December 31, 2005. The Company sold 4,558,000 Units and received $1,139,500 in
cash. The offering closed in April 2001. In connection with Units sold by
RichMark Capital, a register broker dealer, the Company paid $33,000 in
commissions.

On February 21, 2001, the Company issued a total of 100,000 shares of its common
stock to Mary Smith and Stuart Daley of Genesis Design Group for their
assistance in supervising the production of the molds and the testing of the
syringes. The contract was valued at $25,000 using the closing price of out
common stock on the date of the agreement, which was $0.25 per share.

On May 10, 2001, the Company sold 1,333,333 Units at $0.225 per Unit to Petroxx
Resources, Inc., an Oklahoma corporation not affiliated with us. In connection
with the transaction, the options previously granted to Mr. Carter and Mr.
Keltner pursuant to the Rippstein License, which options were subsequently
assigned by them to Petroxx, were cancelled (see Note 7). The Unit price was
based upon a quoted market price of $0.36 per share, less a 35% discount because
the common stock and warrants were restricted under Rule 144. Each Unit
consisted of one share of common stock and one warrant to purchase an additional
share of common stock at $0.36 per share on or before May 10, 2004.

On May 18, 2001, the Company sold 17,000 shares of its common stock and 17,000
warrants to an accredited investor at $0.60 per share, the quoted market price
of the Company's common stock on the date of the transaction, for $10,200 in
cash. The warrants expire December 31, 2005 and are exercisable at $1.20 per
share.

On July 18, 2001, the Company issued 200,000 shares of common stock valued at
$1.07 per share, the quoted market price of our common stock on the date of the
transaction, to a consultant as payment for financial advisory and business
consulting services.

On July 18, 2001, the Board granted options to certain consultants to purchase
up to 1,250,000 shares of common stock at exercise prices ranging from $0.01 per
share to $0.25 per share. The Company recorded $1,273,700 in compensation cost.
For details about how we determined compensation cost, see Note 7. The Company
is amortizing the cost over the life of the agreements, which is one year. The
options expire July 18, 2002.

On September 18, 2001, the Company issued 100,000 shares of common stock each to
Stuart Daley and Marty Smith of Genesis Design Group for the successful design
of the 3cc safety syringe and 75,000 shares of common stock each for the
completed design of the safety blood extractor. These 350,000 shares were valued
at $.779 each which was the closing price of the stock on the day the shares
were issued.

During November 2001, the Company issued sold 600,000 Unites to two accredited
investors for $150,000 in cash. Each Unit consisted of one share of common stock
at $0.25 per share and one warrant to purchase an additional share of common
stock for $0.50 per share on or before December 31, 2005.


                                       25
<PAGE>


Common Stock Transactions for the year ended December 31, 2000

During 2000, the Company sold 724,000 Units to five existing investors at a
price of $0.25 per Unit for $181,000 in cash. Each Unit consisted of one share
of common stock and one warrant to purchase an additional share of stock for
$1.00 per share on or before June 30, 2005. Subsequent to year end, the Company
adjusted the exercise price of the purchase warrant to $0.50 per share and
extended the exercise term to December 31, 2005 so that the terms of the
warrants were consistent with those sold during 2001.

On July 1, 2000, the Company issued 138,776 shares of its common stock at $0.50
per share, which was the closing price of the Company's common stock on the date
of issue, to Gifford Mabie, our sole officer and director, and Vicki Pippin, an
employee, as repayment for $69,388 in loans they had made to the Company.

Note 7 - Stock Options

The Company's Incentive Stock Option Plan has 9,000,000 shares reserved for
issuance. Under the Plan, employees have been granted options to purchase up to
1,000,000 shares of common stock on or before January 2008 at an exercise price
of $0.50 per share. These employee options were granted during 1998. For the
year ended December 31, 2001, there were no options granted, exercised or
forfeited.


                                                     Weighted Average
                                                       Exercise Price
                                        Shares
                                   ------------    -------------------
Incentive Stock Option Plan:
  Employee Options Outstanding,
  At December 31, 2000               1,000,000                $  0.50
         Granted                            --                     --
         Exercised                          --                     --
         Forfeited                          --                     --
                                   ------------    -------------------
  Outstanding, December 31, 2001     1,000,000                $  0.50
                                   ------------    -------------------
  Exercisable, December 31, 2001     1,000,000                $  0.50
                                   ------------    -------------------


The following table shows non-employee stock option activity for the year ended
December 31, 2001:


                                       26
<PAGE>


on-Employee Stock Options:
                                                       Weighted Average
                                                         Exercise Price
                                          Shares
                                    -------------    -------------------

 Outstanding, December 31, 2000        1,600,000                $  0.50
        Granted                        1,250,000                $  0.06
        Exercised                             --                     --
        Forfeited                        (800,000)              $  0.50
                                    -------------    -------------------
 Outstanding, December 31, 2001        2,050,000                $  0.23
                                    -------------    -------------------

 Exercisable at December 31, 2000        640,000                $  0.50
        Vested upon grant              1,250,000                $  0.06
        Vested upon events               320,000                $  0.50
        Cancelled                        (480,000)              $  0.50
                                    ------------- -- -------------------
 Exercisable, December 31, 2001        1,730,000                $  0.18
                                    -------------    -------------------

On July 18, 2001, the Board granted options to certain consultants to purchase
up to 1,250,000 shares of common stock at exercise prices ranging from $0.01 per
share to $0.25 per share. The options expire July 18, 2002. The Company recorded
$1,273,700 as compensation cost related to the options granted using the


<PAGE>

Black-Scholes options pricing model with the following assumptions: exercises
price ranging from $0.01 to $0.25 per share; stock price on July 18, 2001 of
$1.07 per share; risk-free interest rate of 6.0%; expected dividend yield of
0.0; expected life of one (1) year; and estimated volatility of 126%. The
Company plans to amortize the cost over the life of the agreements, which is one
year.

On November 18, 1999, the Board granted to Mr. Rippstein and his associates, Mr.
Carter and Mr.  Keltner,  options to  purchase  a total of  1,600,000  shares of
common  stock of  Maxxon at an  exercise  price of $0.50  per  share,  which was
greater  than  the  quoted  market  price  of our  common  stock  on the day the
Rippstein  License was signed.  Of the 1,600,000  options granted,  800,000 were
granted to Mr.  Rippstein,  and 400,000 were granted each to Mr.  Carter and Mr.
Keltner.  Subsequently, Mr. Carter and Mr. Keltner assigned various interests to
their options to Petroxx Resources, Inc., an Oklahoma corporation not affiliated
with Maxxon. In May, 2001, the Company entered into a settlement  agreement with
Petroxx in which the options assigned to them by Mr. Carter and Mr. Keltner were
cancelled (see Note 6). Of the options cancelled, 480,000 were exercisable. As a
result,  the only options  outstanding  pursuant to the Rippstein  License as of
December 31, 2001 were the 800,000 options that were granted to Mr. Rippstein.

The options granted pursuant to the. Rippstein License expire October 31, 2009
and become exercisable in stages upon the occurrence of the following events:
(1) 1/5 of the options were exercisable upon signing of the license on November
18, 1999; (2) 1/5 of the options were exercisable on December 13, 2000 when a
fully working safety syringe was produced (3) 1/5 of the options were
exercisable on February 27, 2001, when a U.S. Patent covering the Rippstein
Syringe was issued; (4) 1/5 of the options become exercisable when the first
syringe is produced from the hard production molds and is ready for full scale
production; and (5) 1/5 of the options become exercisable when FDA approval is
obtained. In any event, all of the options become exercisable, even if the
events described in items (1) through (5) do not occur beforehand, if Maxxon
sells the Rippstein Syringe Technology or if the Company is acquired by another
company.

As of December 31, 2001, 480,000 of Mr. Rippstein's 800,000 options were
exercisable. During the year ended December 31, 2001, an additional 160,000 of
his options became exercisable when the patent was issued for the syringe. At
the same time, 160,000 options to Mr. Keltner and Mr. Carter became exercisable,
but were subsequently cancelled pursuant to the Petroxx agreement. The Company
recognized compensation cost for all 320,000 options. Compensation cost was
based on an estimated fair value of $0.39 per share, or $124,800. The estimated
fair value was calculated using the Black-Scholes option pricing model with the
following assumptions: exercise price of $0.50 per share; stock price on
February 27, 2001 of $0.39 per share; risk-free interest rate of 4.0%; expected
dividend yield of 0.0; expected life of 8.68 years; and estimated volatility of
140%.

The following table summarizes information about stock options outstanding at
December 31, 2001:


<TABLE>
<CAPTION>

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

                                    Options Outstanding                    Options Exercisable
                        --------------------------------------------    ---------------------------
                                           Weighted
                                            Average         Weighted                      Weighted
                               Number     Remaining          Average          Number       Average
Range                     Outstanding   Contractual         Exercise     Exercisable      Exercise
of Exercise Prices        at 12/31/01          Life            Price     at 12/31/01         Price


Employees:
      $0.50                 1,000,000     6.13 Years          $0.50        1,000,000         $0.50
Non-Employees:
      $0.01                 1,000,000     0.55 Years          $0.01        1,000,000         $0.01
      $0.50                   250,000     0.55 Years          $0.25          250,000         $0.25
      $0.50                   800,000     7.84 Years          $0.28          480,000         $0.50


</TABLE>

Note 8 - Related Party Transactions

The Company's officer and director and its employees may also be officers,
directors, employees or consultants of other companies. The Company shares
staff, office space and other administrative expenses with these other companies
and from time to time borrows from and makes cash advances to the other
companies. These transactions could result in the operating results or financial
position of the Company being significantly different from that if the Company
were autonomous. As of December 31, 2001, the Company was due $162,560 from
these other companies.

                                       27
<PAGE>

Note 9 - Subsequent Events

On October 31, 2001, Morgan-Phillips, Inc. ("MPI") filed suit against the
Company for breach of contract. The petition alleged that MPI performed investor
relations services during 1998, 1999, 2000 and 2001 for which it was not paid.
The petition sought payment of approximately $850,000 plus damages and attorney
fees from the Company and MPI indicated verbally that such payment should be in
the form of Maxxon common stock. While the Company recognized that Morgan
Phillips performed investor relations services for the years 1998, 1999, 2000
and 2001, the Company denied many of the allegations set forth in the petition.
On January 3, 2002, the district court of Tulsa County, State of Oklahoma
approved a confidential settlement of a lawsuit.

On January 25, 2002, the Company, along with other plaintiffs, filed suit
against the Company's former corporate counsel. The petition charges that former
counsel took various actions, which were against the interests of the
plaintiffs, committed a beach of fiduciary duty, and committed a breach of his
duty to exercise reasonable care, skill and diligence on behalf of the
Plaintiffs, which constitutes negligence. The Company is seeking actual punitive
and compensatory damages in excess of $10,000.00 each. On March 25, 2002, the
defendant filed a counterclaim against the Company and the other plaintiffs
alleging, among other things, breach of contract, conversion and breach of
fiduciary duty. Defendant is seeking actual, exemplary and punitive damages in
excess of $10,000 each plus cost of litigation. The Company believes that
defendant's claims are without merit and intends to vigorously defend itself.




                                       28
<PAGE>

<TABLE>
<CAPTION>



Index to and Description of Exhibits

EX
No.                                             Description of Exhibit
<S>         <C>


2.1        Amended Articles of Incorporation (filed as Exhibit 2.1 to our Amended Form 10-SB filed August
           15, 2001)

2.2        Bylaws (filed as Exhibit 2.2 to our Amended Form 10-SB filed August 15, 2001)

4.1        Form of Common Stock Certificate (filed as Exhibit 3.1 to our Form 10-SB filed December 23, 1999

10.1       1998 Incentive Stock Option Plan (filed as Exhibit 6.1 to our Form 10-SB filed December 23, 1999

10.2       Form of Incentive Stock Option Agreement (filed as Exhibit 6.2 to our Form 10-SB filed December
           23, 1999)

10.3       Form of Officer/Director Indemnification Agreement (filed as Exhibit 6.3 to our Form 10-SB filed
           December 23, 1999)

10.4       Development Agreement among Maxxon, Texas Applied Biotechnology Services, Inc. and Hartzell
           Manufacturing, dated June 9, 1998 (filed as Exhibit 6.4 to our Form 10-SB filed December 23,
           1999)

10.5       Exclusive License Agreement between Harry Kaufhold and Maxxon dated April 30, 1997 (filed as
           Exhibit 6.5 to our Form 10-SB filed December 23, 1999)

10.6       Agreement and Plan of Merger between Cerro Mining Corporation and Maxxon, Inc. dated May 9, 1997
           (filed as Exhibit 6.6 to our Form 10-SB filed December 23, 1999)

10.7       Agreement and Plan of Exchange between Maxxon, Inc. and Ives Health Company, as amended (filed
           as Exhibit 6.7 to our Form 10-SB filed December 23, 1999)

10.8       Rescission Agreement dated December 31, 1997 among Keith Ives, Ives Health Company, Inc. Gifford
           Mabie and Maxxon, Inc. (filed as Exhibit 6.8 to our Form 10-SB filed December 23, 1999)

10.9       Exclusive License Agreement between Wayland Rippstein, Ken Keltner,
           Lynn Carter and Maxxon dated November 18, 1999 (filed as Exhibit 6.9
           to our Form 10-SB filed December 23, 1999)

10.10      Technical Consulting Agreement between Wayland Rippstein and Maxxon
           dated November 18, 1999 (filed as Exhibit 6.10 to our Form 10-SB
           filed December 23, 1999)

10.11      Form of Stock Option Agreement between Rippstein, Keltner and Carter
           and Maxxon dated November 18, 1999 (filed as Exhibit 6.11 to our Form
           10-SB filed December 23, 1999)


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<PAGE>



EX
No.                                             Description of Exhibit

10.13      Broker-Dealer Selling Agreement between RichMark Capital Corporation
           and Maxxon dated December 18, 2000 (filed as Exhibit 10.12 to our
           Form 10-KSB filed April 16, 2001)

10.14      Employment Agreement between Gifford M. Mabie and Maxxon dated January 3, 2001 (filed as Exhibit
           10.13 to our Form 10-KSB filed April 16, 2001)

10.15      Employment Agreement between Dr. Thomas Coughlin and Maxxon dated January 3, 2001 (filed as
           Exhibit 10.14 to our Form 10-KSB filed April 16, 2001)

10.16      Employment Agreement between Rhonda Vincent and Maxxon dated January 3, 2001 (filed as Exhibit
           10.15 to our Form 10-KSB filed April 16, 2001)

10.17      Employment Agreement between Vicki Pippin and Maxxon dated January 3, 2001 (filed as Exhibit
           10.16 to our Form 10-KSB filed April 16, 2001)

10.18      Development Agreement between Stuart Daley and Marty Smith of Genesis
           Design Group and Maxxon dated February 21, 2001 (filed as Exhibit
           10.17 to our Form 10-KSB filed April 16, 2001)

10.19      Consulting Agreement between Stuart Daley and Marty Smith of Genesis
           Design Group and Maxxon dated February 22, 2001 (filed as Exhibit
           10.18 to our Form 10-KSB filed April 16, 2001)

10.20      Settlement Agreement between Petroxx Resources, Inc. and Maxxon submitted pursuant to Rule 406.

10.21      Consulting Agreement between Dean Guise and Maxxon dated July 18, 2001 (filed as Exhibit 6.21 to
           our Amended Form 10-SB filed August 15, 2001)

10.22      Consulting Agreement between Mansfield Garrett and Maxxon dated July 18, 2001 (filed as Exhibit
           6.22 to our Amended Form 10-SB filed August 15, 2001)

10.23      Consulting Agreement between Broadway Financial and Maxxon dated July 18, 2001 (filed as Exhibit
           6.23 to our Amended Form 10-SB filed August 15, 2001)

10.24      Amended Employment Agreement between Maxxon and Gifford Mabie (filed as Exhibit 10.22 to our
           Form 10-QSB filed August 21, 2001)

10.25      Amended Employment Agreement between Maxxon and Dr. Thomas Coughlin (filed as Exhibit 10.23 to
           our Form 10-QSB filed August 21, 2001)

10.26      Amended Employment Agreement between Maxxon and Rhonda Vincent (filed as Exhibit 10.24 to our
           Form 10-QSB filed August 21, 2001)

10.27      Amended Employment Agreement between Maxxon and Vicki Pippin (filed as Exhibit 10.25 to our Form
           10-QSB filed August 21, 2001)

23.0*      Consent from Sutton, Robinson, Freeman and Associates, P.C.

</TABLE>

* Included as an exhibit with this Form 10-KSB filing.


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<PAGE>



                                   SIGNATURES

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



                            MAXXON, INC.


                            /s/ GIFFORD M. MABIE
                            -------------------------------------------------
                            By:  Gifford M. Mabie, Sole Officer and Director

April 1, 2002


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