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, 2002

                                  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)

                            9202 South Toledo Avenue
                              Tulsa, Oklahoma 74137
          (Address of principal executive offices, including zip code)

                                 (918) 491-7557
                    (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 date within the past 60 days. $1,763,340 as of April 14, 2003

     State the number of shares  outstanding of each of the issuer's  classes of
common equity,  as of the latest  practicable date: As of April 14, 2003, we had
32,060,729 shares of common stock, $0.001 par value, outstanding.



                                       1
<PAGE>


     FORWARD LOOKING STATEMENTS

     This Report contains  forward-looking  statements within the meaning of The
Private  Securities  Litigation  Reform Act of 1995 that  address,  among  other
things,  our retractable safety needle devices are in the development stage, our
pursuit of potential collaborative  arrangements;  our need to obtain additional
financing;  factors  affecting the availability of capital;  plans regarding the
raising of capital.  These  statements  may be found  under "Item 1-  Business,"
"Item  1- Risk  Factors,"  and  "Item 7- Plan of  Operation"  as well as in this
Report  generally.  We typically  identify  forward-looking  statements  in this
Report  using  words like  "believe,"  "anticipate,"  "will,"  "expect,"  "may,"
"could," "intend," or similar statements. There are important factors that could
cause actual  results to differ  materially  from those  expressed or implied by
such  forward-looking  statements,  primarily  our  ability to raise  additional
capital to continue operating. Readers are cautioned not to place undue reliance
on these forward-looking statements, which reflect management's analysis only as
of the date  hereof.  We  undertake  no  obligation  to  publicly  revise  these
forward-looking  statements to reflect events or circumstances  that arise after
the date hereof.


                                     PART I

ITEM 1.  BUSINESS

     We are a  development-stage  company  that is  principally  engaged  in the
design and development  retractable safety needle devices intended to reduce the
risk of accidental needle stick injuries among health care workers. We presently
do not have any products for sale. We have designed a retractable safety syringe
and a retractable safety blood drawing device for which U.S. patent applications
have been filed.  We plan to bring these  products to market either by licensing
them  to  established  medical  device  manufacturers  and/or  marketers,  or by
entering into joint development or similar  collaboration  arrangements.  We are
presently  seeking such  collaborative  arrangements.  If we are  successful  in
entering into a collaboration arrangement,  we do not know how much time it will
take before our products can be sold in the United  States,  our primary  target
market,  or elsewhere in the world.  Our  potential  collaborative  partners may
require  a  significant  amount  of  time to  build  production  molds,  develop
manufacturing processes and to obtain specialized equipment, if any is required.
Our  products  will also  require  FDA  approval  before they can be sold in the
United States, a process that is time-consuming  and costly with no guarantee of
approval.  Our business is subject to numerous risks and uncertainties  that are
more fully described in "RISK FACTORS."

The Problem of Accidental Needlestick Injuries
     There is an increasing awareness of the risk of infection from needlesticks
and the need  for  safer  medical  devices  to  reduce  the  risk of  accidental
needlesticks.  The Centers for Disease  Control and Prevention  (CDC)  estimated
that each year  between  600,000 to 800,000  needlestick  injuries  occur  among
health  care  workers.  Accidental  needlesticks  may  result  in the  spread of
infectious  diseases such as hepatitis B and C, HIV, and tuberculosis.  In March
2000, CDC estimated that, depending on the type of device used and the procedure
involved,  62% to 88% of  needlestick  injuries could be prevented by the use of
safer medical devices.

Our Retractable Safety Needle Devices
     Our  retractable  safety  devices  are  designed  to be similar to standard
non-safety  devices in appearance,  size, and performance.  We believe that this
similarity  is important as it increases  the chances that our products  may be
accepted by health care professionals.

     Retractable Safety Syringe
     ---------------------------
     We have designed a retractable safety syringe.  After an injection has been
given,  the user  applies  pressure on the  plunger,  which causes the needle to
automatically and fully retract into the body of the syringe. The safety syringe
is designed to accommodate  any standard sized needle.  The vacuum is created at
the time of use.

     Retractable Safety Blood Drawing Device
     ---------------------------------------

     We have designed a retractable safety blood drawing device. After blood has
been taken,  a special  vacuum tube is attached to the needle,  which causes the
needle to  automatically  and fully  retract into the tube.  The needle seals in
place rendering it harmless and inoperable.




                                       2
<PAGE>



2. Distribution Method of Products and Services

     Neither our  retractable  safety syringe nor our  retractable  safety blood
drawing  device are  presently  available  for sale for sale. We do not have any
manufacturing or distribution capacity and we have not determined the commercial
arrangements under which we would be willing to engage a potential  manufacturer
or collaborative partner.

3. Status of Publicly Announced Products or Services

     Our products are in the development stage. They require FDA approval before
they can be sold in the United States. We plan to bring these products to market
either by licensing them to  established  medical  device  manufacturers,  or by
entering into joint development or similar  collaboration  arrangements.  We are
presently  seeking such  collaborative  arrangements.  If we are  successful  in
entering into a collaboration arrangement,  we do not know how much time it will
take before our products can be sold in the United  States,  our primary  target
market,  or elsewhere in the world.  Our  potential  collaborative  partners may
require a significant amount of time to develop  manufacturing  processes and/or
to obtain  specialized  equipment,  if any is required.  Our products  will also
require FDA  approval  before they can be sold in the United  States,  a process
that is  time-consuming  and costly with no guarantee  of approval.  We have not
submitted an FDA application for the retractable safety devices we own.

     During  2002,  the  Company  was  pursuing  FDA  approval,   via  a  510(k)
application  filed in  December,  2001,  for a safety  syringe we licensed  from
Wayland  Rippstein.  In  December  2002,  the  FDA  informed  us that  they  had
reclassified  the  Rippstein  syringe as a Class III  device,  which  requires a
Pre-Market Approval (PMA) application to obtain U.S. marketing  approval.  A PMA
application   is  more  extensive  and  requires  more  testing  than  a  510(k)
application.  The  Company  does not plan to  submit a PMA  application  for the
Rippstein syringe.

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

     The  safety  medical  device  market is  highly  competitive.  The  leading
manufacturers and marketers of safety medical devices are Becton-Dickinson, Tyco
International,  Inc. (Kendall  Healthcare  Products Company),  B. Braun,  Terumo
Medical Corporation of Japan, Medi-Hut,  Inc. and Johnson & Johnson.  Developers
of safety medical devices which we compete against for license and collaborative
arrangements with medical device and pharmaceutical companies include Med-Design
Corporation, New Medical Technologies,  Retractable Technologies,  Inc., Univec,
Inc.  and  Specialized  Health  Products  International.  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. See "RISK FACTORS."

     Traditionally,   competition   regarding  non-safety  medical  devices  was
primarily  based upon price with little  differentiation  between  products.  We
expect our  products to compete  against  both safety  products  and  non-safety
products  based  upon  safety and ease of use and  disposal.  Most of the safety
medical devices we will compete with are priced  substantially above the cost of
non-safety  products.  Market  demand for safety  devices is being driven by the
estimated  costs  associated  with  accidental  needlesticks  and by  government
mandates.

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

     We  do  not  manufacture  any  products,   so  we  have  no  raw  materials
requirements.  The  materials  used to make the our  retractable  safety  needle
devices 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 our retractable safety needle devices in a cost-effective  manner.
See "RISK FACTORS."

6. Dependence on One or Few Major Customers

     We anticipate that our safety needle devices 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.




                                       3
<PAGE>

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

     Patent Applications

     A U.S.  patent  application  was filed on  November  1, 2002 for  Company's
retractable  safety syringe On October 10, 2001, a U.S. patent  application was
filed for the Company's  retractable  safety blood drawing  device.  There is no
assurance that either U.S. patent will be issued.  The Company has not yet filed
any applications for foreign patent protection. See "RISK FACTORS."

     Rippstein Syringe Patent

     On February 27, 2001, a U.S.  patent  covering the safety syringe  licensed
from 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.  Mr.
Rippstein owns the patent to his safety syringe.

     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. The Rippstein License 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 April 16, 2005 (the 4th  anniversary  after both a working
prototype  syringe was developed and a U.S.  patent was issued.) Such  royalties
continue for the life of the last to expire patent.

     Employment Agreements

     On August 8, 2001, we entered into amended  written  employment  agreements
with our officer and director  and our  employees.  The material  terms of their
respective  employment agreements are discussed in Note 5 "Other Commitments and
Contingencies" of the Financial Statements.  The Company is presently in default
under the terms of the  employment  agreements.  There is no assurance  that the
individuals  subject  to such  agreements  will  continue  to serve the  Company
without being paid. See "RISK FACTORS."

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.  The Company's  safety needle devices are
considered  to be  medical  devices,  are  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 the Company or its  collaborative  partners  cannot  establish  that the
Company's safety needle devices are substantially equivalent to legally marketed
predicate devices, pre-market approval of the device through submission of a PMA
application  must be  obtained.  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.



                                       4
<PAGE>

     The  Medical  Device  User  Fee and  Modernization  Act,  enacted  in 2002,
authorizes the FDA to assess and collect user fees for Section 510(k)  premarket
notifications and premarket  approval  applications filed on or after October 1,
2002.  Fees for fiscal year 2003 range from $2,187 for Section 510(k)  premarket
notifications  to $154,000 for PMAs,  although fee  reductions are available for
companies qualifying as small businesses.

     After  approval  by the  FDA,  the  Company  or its  collaborative  partner
(depending  on who is  manufacturing  and  marketing)  would also be required to
comply with FDA post-market reporting requirements,  including the submission of
reports on certain adverse events and malfunctions,  and requirements  governing
the promotion of medical devices. In addition,  modifications to our devices may
require the filing of new 510(k) submissions or pre-market approval supplements,
and we will  need to  comply  with  FDA  regulations  governing  medical  device
manufacturing  practices.  The FDA  requires  medical  device  manufacturers  to
register  as such  and  subjects  them to  periodic  FDA  inspections  of  their
manufacturing  facilities.  The FDA requires that medical  device  manufacturers
produce devices in accordance  with the FDA's current Quality System  Regulation
(QSR),  which governs the methods,  facilities and controls used for the design,
manufacture, testing, packaging, labeling and storage of medical devices.

     There is a  different  set of  regulatory  requirements  in  place  for the
European  Union (EU).  In the EU the company  putting a medical  device onto the
market must comply with the requirements of the Medical Devices  Directive (MDD)
and affix the CE mark to the  product to attest to such  compliance.  To achieve
this,  the medical  devices in question must meet the  "essential  requirements"
defined  under the MDD  relating  to safety and  performance,  and the  relevant
company must successfully undergo a verification of its regulatory compliance by
a third party standards  certification  provider,  known as "Notified Body." The
nature  of the  assessment  will  depend  on the  regulatory  class of  products
concerned, which in turn determines the precise form of testing to be undertaken
by the Notified Body.

     The  requirements of the MDD must be complied with by the  "manufacturer of
the  device,"  which  is  defined  as the  party  responsible  for  the  design,
manufacture,  packaging and labeling of the device before it is placed on the EU
market, regardless of whether these operations are carried out by this entity or
on its behalf.

     Accordingly,  where medical devices are marketed by our potential licensees
or  collaborative  partners under their names,  compliance  with the MDD will be
their  responsibility.  In the event that we decide to manufacture devices to be
distributed  in the EU market under our name,  all  compliance  responsibilities
will be borne by us.

9. Effect of Existing or Probable Governmental Regulation

     Regulatory actions at the federal and state level promote the use of safety
needles  to  reduce  the  risk of  accidental  needlesticks.  On  July 1,  1999,
California,  through  its state  Occupational  Safety and Health  Administration
(OSHA) program,  began requiring the use of safety needles. Other states such as
Texas, Tennessee, Maryland and New Jersey have passed similar legislation.

     On November 6, 2000,  President  Clinton signed the Needlestick  Safety and
Prevention Act amending  OSHA's  Bloodborne  Pathogens  Standard to require that
employers  implement the use of safer medical  devices in their  facilities.  To
implement the statutory  mandates in the Needlestick  Safety and Prevention Act,
OSHA has  issued a number  of  further  revisions  to its  Bloodborne  Pathogens
Standard.  The revised  standard  became  effective on April 18,  2001.  The new
standard   provisions  impose  several  needle  device  safety  requirements  on
employers, including:


     -    evaluation and  implementation  of safer needle devices as part of the
          re-evaluation of appropriate engineering controls during an employer's
          annual review of its exposure control plan;
     -    documentation   of  the  involvement  of   non-managerial,   frontline
          employees in choosing safer needle devices; and
     -    establishment  and  maintenance  of a sharps  injury log for recording
          injuries from contaminated sharps.



                                       5
<PAGE>

     On November 27, 2001, OSHA issued a compliance  directive (CPL 2-2.69) that
advises OSHA's regional offices on the proper  interpretation and enforcement of
the revised Bloodborne Pathogens Standard  provisions.  The compliance directive
confirms that the  consideration  of safer needle devices in annually  reviewing
and updating the exposure  control plan is a critical  element of the Bloodborne
Pathogens  Standard.  The  compliance  directive also stresses that the standard
requires  employers to use engineering  controls (e.g., safer needle devices) if
such controls will remove or eliminate the hazards to employees.  As a result of
these  regulatory  actions,  we  anticipate  that the demand for safety  medical
devices  such as  those we have  designed  will  continue  to  increase  for the
foreseeable future.

10. Estimate of the Amount Spent on Research and Development

     Our research  and  development  efforts in the past have focused  primarily
upon the design and development of safety needle retraction  technologies and in
certain instances, the molds or equipment necessary to make and assemble limited
quantities  of the safety  devices.  R&D expenses  were $286,509 and $776,451 in
2002 and 2001, respectively.  During 2002 and 2001,  respectively,  $149,500 and
$422,450  related to the value of common  stock or options  granted  pursuant to
design services or licensing  agreements.  Our research and development  efforts
going  forward will focus  primarily  upon  modifying  and improving our current
safety  needle  devices  in  response  to  input  from  potential  collaborative
partners. The Company's present retractable safety devices have been designed by
Genesis  Design  Group,  a third  party  design  firm.  Because we rely on third
parties for R&D activities,  we have less direct control over those  activities.
See "RISK FACTORS".

11. Costs and effects of environmental compliance

     The Company has not spent any sums on environmental compliance and does not
expect to be  required  to spend  any sums on  environmental  compliance  in the
future, unless the Company chooses to become a manufacturer of its own products,
which  is  not  likely.   Should  the  Company  be  successful  in  establishing
collaborative  arrangements with an established manufacturer,  all environmental
costs would be borne by the manufacturer.

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

     We have five  employees,  including our 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.  Although these other  business  activities
are different from our business,  there could 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. See "RISK FACTORS."

     Effective  August 8,  2001,  we entered  into  written  amended  employment
agreements  with our  employees.  The  Company  is in  default  pursuant  to the
agreements.  There is no assurance that these individuals will continue to serve
the Company without getting paid. See "RISK FACTORS."


                                  RISK FACTORS

Because We Have No Products for Sale, We Do Not Generate Revenue And Do Not Have
Other Resources To Fund Operations;  These Conditions  Raise  Substantial  Doubt
About Our Ability To Continue As A Going Concern

     Because  the  Company's  retractable  safety  needle  devices  are  in  the
development  stage,  the  Company  has no  revenue,  earnings or cash flow to be
self-sustaining.  The Company does not  anticipate  sales until such time as its
products are proven to be  commercially  viable and are approved for sale in the
United  States by the FDA. It could be several more years before the Company can
expect to have sales. The Company's independent accountants have stated in their
opinion to the audited  financial  statements  for the period ended December 31,
2002 that "the Company is a development stage company with insufficient revenues
to fund  development and operating  expenses.  The Company also has insufficient
cash to fund obligations as they become due. These conditions raise  substantial
doubt about its ability to continue as a going  concern."  Our failure to obtain
the funding  necessary to  commercialize  our retractable  safety needle devices
will have a material adverse effect on our business, financial condition, and on
the price of our common stock.


We Require  Substantial  Additional  Capital To  Commercialize  Our  Retractable
Safety Needle Devices.  We May Have Difficulty  Raising Capital When We Need It,
Or At All. Raising Such Capital May Dilute Stockholder Value

     Our business  currently  does not  generate any sales from our  retractable
safety  needle  devices and we do not  anticipate  product sales during 2003 and
until such time as the Company has entered into a collaborative  arrangement and
the  Company's  products  have  received  FDA  approval,   which  could  take  a
significant  amount of time.  The Company  must  complete  additional  financing
initiatives  in 2003  to  generate  the  liquidity  necessary  to  continue  its
operations.

     Due to the current economic  conditions and the risks and  uncertainties of
the  Company's  business,  the  Company  may not be able  to  secure  additional
financing  on terms it  deems  acceptable,  if at all.  If the  Company  obtains
additional  funds  by  selling  any of its  equity  securities,  the  percentage
ownership  of our  stockholders  will be reduced,  stockholders  may  experience
substantial dilution,  or the equity securities may have rights,  preferences or
privileges  senior to the common stock.  If adequate  funds are not available to
the Company on satisfactory terms, the Company may be required to limit or cease
its  operations,   or  otherwise  modify  its  business  strategy,  which  could
materially harm its future business prospects.

Our  Retractable  Safety  Needle  Devices  Require  FDA  Approval.  There  Is No
Assurance That Such Approval Will Be Applied For Or Obtained.

     Our  retractable  safety syringe and our  retractable  safety blood drawing
device will require FDA approval  before they can be sold in the United  States,
our primary  target market.  The FDA approval  process can take years and can be
quite  expensive.  There is no  assurance  that the Company  will have the funds
necessary  to apply for FDA  approval.  Even if the  Company  is  successful  in
establishing  a  collaborative  arrangement  with a partner that has  sufficient
resources to apply for FDA approval, and there is no assurance that FDA approval
will be obtained. If FDA approval is not obtained,  then the Company will not be
able to sell its  products  in the United  States,  which  could have a material
adverse effect on the Company's future business prospects.

The Company, Its Officer and Certain Employees Are Defendants In A Civil Action
Brought By The SEC.  The Cost Of Defending This Action, Including The Diversion
Of Time And Resources, Could Have A Material Adverse Effect On The Company.

        The SEC has alleged in a civil action a variety of claims against the
Company, its officer and certain employees.  Although the Company believes that
the SEC's claims are without merit and intends to vigorously defend against the
claims, there is no assurance that the Company will have the financial and other
resources necessary to do so.  In addition, the Company has indemnification
agreements with its officer and certain employees that requires the Company
to reimburse them for their attorney's fees and to indemnify them for certain
judgements against them in their capacity as an officer or employee of the
Company.  There is no assurance that the Company will have the financial
resources necessary to do so.  The cost of defending this action, including the
diversion of time and resources, could have a material adverse effect on the
Company.

If We Are Unable To Protect Our Retractable  Safety Needle Devices,  Or To Avoid
Infringing On the Rights of Others, Our Ability To Compete Will Be Impaired.

     We have two United  States  patent  applications  pending  relating  to our
retractable safety needle devices.  These patent  applications may not result in
patents  being  issued to us.  Even if a patent is  issued,  the  patent may not
afford  protection  against  competitors with similar  technology.  Furthermore,
others  may  independently   develop  similar   technologies  or  duplicate  our
technology.

                                       7
<PAGE>

     Our commercial  success depends in part on our avoiding the infringement of
patents and proprietary rights of other parties and developing and maintaining a
proprietary position with regard to our own technologies and products. We cannot
predict with  certainty  whether we will be able to enforce our patents.  We may
lose  part or all of our  patents  as a result  of  challenges  by  competitors.
Patents that may be issued,  or  publications  or other  actions could block our
ability to obtain  patents or to operate as we would  like.  Others may  develop
similar  technologies or duplicate  technologies that we have developed or claim
that we are infringing their patents.

     We may become involved in litigation or interference  proceedings  declared
by the U.S. Patent and Trademark  Office,  or oppositions or other  intellectual
property  proceedings  outside of the United States.  If any of our  competitors
have filed patent applications or obtained patents that claim inventions that we
also  claim,  we may  have  to  participate  in an  interference  proceeding  to
determine  who has the right to a patent  for  these  inventions  in the  United
States. If a litigation or interference  proceeding is initiated, we may have to
spend significant amounts of time and money to defend our intellectual  property
rights  or to  defend  against  infringement  claims of  others.  Litigation  or
interference  proceedings  could divert our management's  time and effort.  Even
unsuccessful  claims against us could result in significant legal fees and other
expenses,  diversion of management  time and disruption in our business.  Any of
these  events  could  harm our  ability  to  compete  and  adversely  affect our
business.

     An adverse ruling arising out of any  intellectual  property  dispute could
invalidate or diminish our  intellectual  property  position.  An adverse ruling
could also subject us to  significant  liability  for  damages,  prevent us from
using processes or products, or require us to license intellectual property from
third parties.  Costs  associated  with licensing  arrangements  entered into to
resolve  litigation or an  interference  proceeding may be substantial and could
include ongoing  royalties.  We may not be able to obtain any necessary licenses
on satisfactory terms.

     In addition, we rely on trade secrets to protect technology.  We attempt to
protect our  proprietary  technology  by  requiring  certain  parties to execute
non-disclosure and non-competition  agreements.  However, these agreements could
be breached,  and our remedies for breach may be  inadequate.  In addition,  our
trade  secrets may  otherwise  become known or  independently  discovered by our
competitors.  If we lose any of our trade  secrets,  our business and ability to
compete could be harmed.

Our Limited Operating History Makes Evaluating Our Stock More Difficult

     We have only been operating  since August 1996.  Accordingly,  you can only
evaluate our business based on a limited operating history. Since inception,  we
have  engaged  primarily  in research  and  development,  technology  licensing,
seeking grants, and raising capital. This limited history may not be adequate to
enable you to fully assess our ability to develop our  technologies and proposed
products  and to achieve  market  acceptance  of our  proposed  products  and to
respond to competition.

We Have A History Of Losses And Expect Future Losses

     We have had annual  losses  since our  inception.  We expect to continue to
incur losses until we can sell enough products at prices high enough to generate
a profit. As of December 31, 2002, we had accumulated a deficit of approximately
$9.8 million. There is no assurance that our safety syringe will be commercially
viable. There is no assurance that we will generate revenue from the sale of the
safety syringe or that we will achieve or maintain profitable operations.

Our Retractable Safety Needle Devices May Prove Too Expensive to Manufacture and
Market Successfully

     Market  acceptance  of our  products  will  depend  in large  part upon our
ability to demonstrate the  operational and safety  advantages of our product as
well as the cost  effectiveness  of our product  compared to both  standard  and
other safety needle products.  If we are unable to produce a safety syringe at a
cost that is competitive with standard syringes or other safety needle products,
we will not be able to sell our  product.  This could  have a  material  adverse
effect on our operations.

                                       8
<PAGE>

Intense Competition Could Harm Our Ability to Compete Successfully.

     The safety medical device industry is highly competitive.  Our products may
compete in the United  States and abroad with the safety  products  and standard
products  manufactured  and  distributed by companies such as Becton  Dickinson,
Tyco International, Inc. (Kendall Healthcare Products Company), B. Braun, Terumo
Medical Corporation of Japan, Med-Hut, Inc. and Johnson & Johnson. Developers of
safety medical devices against which we compete include  Med-Design  Corp.,  New
Medical  Technologies,   Retractable   Technologies,   Inc.,  Univec,  Inc.  and
Specialized  Health  Products  International,  Inc. Many of our  competitors are
substantially larger and better financed than we are and have more experience in
developing  medical  devices  than  we  do.  These  competitors  may  use  their
substantial resources to improve their current products or to develop additional
products that may compete more effectively with our products,  or may render our
products  obsolete.  In addition,  new  competitors  may develop  products  that
compete  with  our  products,   or  new   technologies   may  arise  that  could
significantly  affect the demand for our products.  Even if we are successful in
bringing our products to market,  there is no assurance that we can successfully
compete.  We cannot predict the  development of future  competitive  products or
companies.  We will be materially adversely affected if we are unable to compete
successfully.

Because  We  Depend  On A  Single  Technology,  We Are  Vulnerable  to  Superior
Competing  Products Or New Technologies  That Could Make Our Retractable  Safety
Needle Devices Obsolete

     Because  we have a narrow  focus on a  particular  product  and  technology
(retractable  safety needle  devices),  we are vulnerable to the  development of
superior  competing  products and to changes in technology which could eliminate
or reduce the need for our products.  If a superior  technology is created,  the
demand  for our  product  could  greatly  diminish.  This could have a material
adverse effect on our business.

If We Cannot Generate  Adequate,  Profitable Sales Of Our Planned  Products,  We
Will Not Be Successful

     In order to succeed  as a  company,  we must  develop  commercially  viable
products  and sell  adequate  quantities  at a high  enough  price to generate a
profit. We may not accomplish these  objectives.  A number of factors may affect
future sales of our product. These factors include:

     -    Whether we successfully  contract the manufacture and marketing of the
          syringe to third parties or develop such capabilities ourselves;
     -    Whether we will be successful in obtaining FDA approval in the future;
     -    Whether  the  cost  of our  product  is  competitive  in  the  medical
          marketplace; and
     -    Whether  physicians,  patients and clinicians  accept our product as a
          viable, safe alternative to the standard medical syringe.

Because We Have No Manufacturing, Marketing or Distribution Capabilities, We May
Not Be Able To Make, Market And Distribute Our Retractable Safety Needle Devices

     Our success  depends,  in part, on our ability to market and distribute our
product  effectively.  We have no experience in the sale or marketing of medical
products. We have no manufacturing,  marketing or distribution capabilities.  In
the event that we obtain FDA approval for our retractable safety needle devices,
we may  require  the  assistance  of  one or  more  experienced  medical  device
companies to market and  distribute  it  effectively.  Although we are presently
seeking an alliance with an experienced medical device company, we may be unable
to find a  collaborative  partner,  enter into an alliance on favorable terms or
enter into an alliance that will be successful.  Any  participant to an alliance
might, at its discretion, limit the amount and timing of resources it devotes to
manufacturing and/ormarketing our product. Any marketing participant or licensee
may terminate its agreement  with us and abandon our product at any time for any
reason without  significant  payment. If we do not enter into an alliance with a
medical  device  company to market and  distribute  our  product,  we may not be
successful  in  entering  into   alternative   arrangements,   whether  engaging
independent distributors or recruiting, training and retaining a marketing staff
and sales force of our own.

                                       9
<PAGE>

Our Retractable Safety Needle Devices, If Successfully Commercialized,  Could Be
Exposed To Significant  Product  Liability  Claims Which Could Be Time Consuming
And Costly To Defend,  Divert  Management  Attention  and  Adversely  Impact Our
Ability To Obtain and Maintain  Insurance  Coverage,  Which Could Jeopardize Our
License.

     The testing,  manufacture,  marketing  and sale of our  retractable  safety
needle devices will involve an inherent risk that product  liability claims will
be asserted  against us. We currently  have a general  liability  policy with an
annual aggregate limit of $2 million with a $1 million limit per occurrence.  We
currently do not have insurance which relates to product  liability,  but intend
to seek and obtain  insurance to cover product  liability  prior to our products
being  marketed.  Even if we obtain such insurance,  it may prove  inadequate to
cover  claims  and/or  litigation  costs.  The  costs and  availability  of such
insurance are unknown.  Product  liability claims or other claims related to our
planned  product,  regardless  of  their  outcome,  could  require  us to  spend
significant  time  and  money in  litigation  or to pay  significant  settlement
amounts or  judgments.  Any  successful  product  liability  or other  claim may
prevent  us  from  obtaining  adequate  liability  insurance  in the  future  on
commercially  desirable or  reasonable  terms.  In addition,  product  liability
coverage  may cease to be available in  sufficient  amounts or at an  acceptable
cost.  Any inability to obtain  sufficient  insurance  coverage at an acceptable
cost or otherwise to protect against  potential  product  liability claims could
prevent or inhibit  the  commercialization  of our  planned  product.  A product
liability  claim could also  significantly  harm our reputation and delay market
acceptance of our safety syringe.

Stringent,  Ongoing  Government  Regulation and Inspection Of Our Safety Syringe
Could Lead To Delays In Manufacture, Marketing and Sales

     The FDA continues to review  products even after they receive FDA approval.
If and when the FDA approves our safety  syringe,  its manufacture and marketing
will be subject to ongoing  regulation,  including  compliance with current Good
Manufacturing  Practices,  adverse reporting  requirements and the FDA's general
prohibitions  against promoting  products for unapproved or "off-label" uses. We
are also subject to inspection and market surveillance by the FDA for compliance
with these and other requirements. Any enforcement action resulting from failure
to comply with these  requirements could affect the manufacture and marketing of
our safety  syringe.  In addition,  the FDA can  withdraw a previously  approved
product  from  the  market  at  any  time,  upon  receipt  of  newly  discovered
information.

We Must  Obtain  Regulatory  Approvals  In Foreign  Jurisdictions  To Market Our
Products Abroad

     We will be subject to a variety of regulations  governing  clinical  trials
and sales of our products outside the United States. Whether or not FDA approval
has been  obtained,  we must  secure  approval  of a product  by the  comparable
non-U.S.  regulatory  authorities  prior to the commencement of marketing of the
product in a foreign  country.  The process of obtaining these approvals will be
time consuming and costly.  The approval  process varies from country to country
and the time  needed  to secure  additional  approvals  may be longer  than that
required for FDA  approval.  These  applications  may require the  completion of
pre-clinical  and clinical  studies and  disclosure of  information  relating to
manufacturing and controls. Unanticipated changes in existing regulations or the
adoption of new  regulations  could affect the  manufacture and marketing of our
products.



                                       10
<PAGE>

Healthcare Reform and Controls On Healthcare Spending May Limit The Price We Can
Charge For Our Safety syringe And The Amount We Can Sell

     The federal government and private insurers have considered ways to change,
and have changed,  the manner in which  healthcare  services are provided in the
United States. Potential approaches and changes in recent years include controls
on  healthcare  spending and the  creation of large  purchasing  groups.  In the
future,  it is possible that the  government  may institute  price  controls and
limits on Medicare and Medicaid spending. These controls and limits might affect
the  payments  we collect  from  sales of our  product.  Assuming  we succeed in
bringing our product to market, uncertainties regarding future healthcare reform
and  private  practices  could  impact our  ability to sell our product in large
quantities at profitable pricing.

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

Uncertainty  Of Third-Party  Reimbursement  Could Affect Our Ability To Sell Our
Safety Syringe At A Profit

     Sales of medical products largely depend on the  reimbursement of patients'
medical  expenses  by  governmental   healthcare  programs  and  private  health
insurers. There is no guarantee that governmental healthcare programs or private
health  insurers  will  cover the cost of our  product  or permit us to sell our
product at a high enough price to generate a profit.

Because  We Rely On  Third  Parties  for  Research  and  Development  Activities
Necessary to Commercialize  Our Product,  We Have Less Direct Control Over Those
Activities. This Could Have A Materially Adverse Effect On Our Future Prospects.

     We do  not  maintain  our  own  laboratory  and we do not  employ  our  own
researchers.  We have  contracted  with  third  parties  in the past to  conduct
research and  development  activities  and we expect to continue to do so in the
future.  Because  we rely on third  parties  for our  research  and  development
activities, we have less direct control over those activities and can not assure
you that the research will be done properly or in a timely  manner,  or that the
results will be reproducible.  Our inability to conduct research and development
may delay or impair our ability to commercialize  our retractable  safety needle
technology. The cost and time to establish or locate an alternative research and
development  facility to develop our technology could have a materially  adverse
effect on our future prospects.

We Are Dependent Upon The Services Of Our Product Designers And Our Employees.
The Loss Of Their Services And Our Inability To Find Suitable Replacements Could
Have A Material Adverse Effect On The Company.

     Our  retractable  safety needle devices were designed by the Genesis Design
Group of Simi  Valley,  California  and Dr.  Thomas  Coughlin,  Jr, our  medical
advisor.  The loss of the services of Genesis Design Group and Dr.  Coughlin and
the inability to retain  acceptable  substitutes  could have a material  adverse
effect on our future  prospects.  Maxxon is also  dependent upon the services of
its officer and employees. The loss of their services or the inability to retain
such  experienced  personnel could have a material adverse effect on our ability
to  continue  operating.  The  Company  is in  default  pursuant  to  employment
agreements.  There is no assurance  that these  employees will continue to serve
the Company without being paid.

                                       11
<PAGE>
Limited Experience Of Management And Potential Conflicts Of Interest

     The sole  officer  and  significant  employees  of Maxxon  have had limited
experience in the medical device industry. In addition, the sole officer and key
employees  are  associated  with other  firms  involved  in a range of  business
activities.  Consequently, there are potential conflicts of interest in terms of
the amount of time each can devote to the Company. Management estimates that not
more than 50% of their time will be devoted to Maxxon's activities.

Our Stock Price Is Volatile And Your Investment In Our Securities  Could Decline
In Value, Resulting In Substantial Losses To You

     The market price of our common  stock,  which is traded on the OTC National
Quotation  Bureau  "Pink  Sheets"  under the symbol  "MXON",  has been,  and may
continue  to be,  highly  volatile.  Factors  such as  announcements  of product
development  progress,  financings,  technological  innovations or new products,
either  by us or by  our  competitors  or  third  parties,  as  well  as  market
conditions within the medical devices industry may have a significant  impact on
the market price of our common stock. In general,  medical device stocks tend to
be volatile even during periods of relative market stability because of the high
rates of failure and substantial  funding  requirements  associated with medical
device companies.  Market conditions and conditions of the medical device sector
could also negatively impact the price of our common stock.

Your Ownership Interest May Be Diluted And The Value Of The Shares Of Our Common
Stock May Decline By The Exercise Of Stock  Options And Warrants We Have Granted
Or May Grant In The Future.

     As of April 14, 2003, the Company had outstanding options to purchase up to
11,050,000 shares of common stock at exercise prices ranging from $0.05 to $0.50
per share and  outstanding  warrants to purchase up to  approximately  9,049,000
shares of common stock at exercise prices ranging from $0.25 to $0.50 per share.
To the extent outstanding  warrants and options to purchase our common stock are
exercised,  your ownership interest may be diluted.  If the warrants and options
are exercised and sold into the market, they could cause the market price of our
common stock to decline.

                                       10
<PAGE>

Our Stock Is Considered To Be A "Penny Stock"

     The  Penny  Stock  Act of  1990  requires  specific  disclosure  to be made
available in connection with trades in the stock of companies  defined as "penny
stocks".  The Securities and Exchange  Commission (SEC) has adopted  regulations
that generally  define a penny stock to be any equity security that has a market
price of less  than  $5.00 per  share,  subject  to  certain  exceptions.  If an
exception is  unavailable,  the regulations  require the delivery,  prior to any
transaction  involving a penny stock,  of a disclosure  schedule  explaining the
penny  stock  market and the risk  associated  therewith  as well as the written
consent of the  purchaser  of such  security  prior to engaging in a penny stock
transaction.  The  regulations  on penny  stock  may limit  the  ability  of the
purchasers  of  our  securities  to  sell  their  securities  in  the  secondary
marketplace.

We Do Not Expect To Pay Dividends

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

ITEM 2. DESCRIPTION OF PROPERTY

     Our lease  approximately  4,200  square feet of office  space at 9202 South
Toledo Avenue, Tulsa, Oklahoma,  74137 pursuant to a lease that expires December
31, 2003. The lease obligates us to pay $6,300 per month for the office space.

ITEM 3. LEGAL PROCEEDINGS

     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  against
the claims.

     On December 31, 2002, the Securities and Exchange  Commission filed a civil
complaint in the Northern  District Court of Oklahoma  against  Maxxon;  Gifford
Mabie,  the  Company's  CEO and Director;  Dr.  Thomas  Coughlin,  the Company's
medical advisor;  and Rhonda Vincent, the Company's financial reporting manager.
The  complaint  alleges  that from 1997 to 1999,  Maxxon and Mabie made false or
misleading   statements   regarding  the  Kaufhold  syringe,  a  safety  syringe
technology  that the  Company  licensed  in 1997  and  abandoned  in  1999.  The
complaint  also alleges that Maxxon,  Mabie,  Coughlin and Vincent made false or
misleading statements, or failed to disclose information,  concerning the status
of the Company's  application for FDA approval of the Rippstein  Syringe,  filed
December  10,  2001.  At issue is whether the Company was  obligated to disclose
earlier the receipt of a letter from the FDA requesting more information,  which
the Company  deemed to be a routine part of the FDA  approval  process and not a
separate,  disclosable  event.  The  Company,  Mr.  Mabie and Dr.  Coughlin  are
preparing to file a Motion for Summary  Judgment  against the SEC.  Ms.  Vincent
presently  has pending  before the Court a Motion to Dismiss all claims  against
her.  The  Company  and the  individual  defendants  vehemently  deny the  SEC's
allegations and plan to vigorously defend against the bogus claims.  There is no
assurance,  however,  that the  Company  or the  individual  defendants  will be
successful in defending against the claims. See "RISK FACTORS."

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None

                                       12
<PAGE>
                                     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, 2002          $0.32         $0.13
                  September 30, 2002         $0.37         $0.21
                  June 30, 2002              $0.69         $0.34
                  March 31, 2002             $0.99         $0.44
                  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

     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 April 14, 2003, we estimate that 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.

     (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
     ---------------------------------------
          2003 Transactions
          -----------------
          During  January 2003,  the Company  granted  options to purchase up to
     8,000,000  shares of restricted  common stock at an exercise price of $0.05
     per share on or before December 31, 2012 to certain employees.  The Company
     relied upon 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

          2002 Transactions
          -----------------
          During July 2002, the Company issued to a consultant 967,742 shares of
     its restricted common stock pursuant to a cashless exercise provision.  The
     Company relied upon 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

          During  July  2002,  the  Company  issued   1,039,080  shares  of  its
     restricted  common stock to an accredited  investor  pursuant to a cashless
     exercise  provision  in their 2001 stock  purchase  agreement.  The Company
     relied upon 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

          During  August,  the Company  issued  500,000 shares of its restricted
     common  stock to Genesis  Design  Group for its  services in the  prototype
     design of the Company's retractable safety devices. The stock was valued at
     $0.299 per shares  which was the closing  price for the stock on the day of
     the agreement.  The Company recorded  consulting  expense of $149,500.  The
     Company relied upon 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

          During October 2002,  the Company sold  1,150,000  Units of its common
     stock to two  accredited  investors  for a total of $115,000 in cash.  Each
     Unit  consisted of one share of restricted  common stock and one warrant to
     purchase  an  additional  share of  common  stock at $0.25  per share on or
     before   December  31,  2007.  The  Company  relied  upon  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

          During the quarter ended  September 30, 2002, the Company sold 475,000
     shares of its restricted  common stock to 5 accredited and 1 non-accredited
     investors  for a  total  of  $47,500  in  cash.  The  Company  relied  upon
     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

                                       13
<PAGE>

          During  the  quarter  ended  September  30,  2002,  the  Company  sold
     2,000,000 Units of its common stock to 2 accredited  investors for $200,000
     in cash.  Each  Unit  consisted  of one share of  restricted  stock and one
     warrant to purchase an additional share of restricted common stock at $0.25
     per  share  on or  before  December  31,  2007.  The  Company  relied  upon
     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

          2001 Transactions
          -----------------
          On January 3, 2001,  we issued an  employee,  50,000  shares of common
     stock to repay her for $7,500 in accounting  expenses she paid on behalf of
     Maxxon.  The closing price of our common stock on the date of repayment was
     $0.15 per share.  The shares were  issued  pursuant  to an  exemption  from
     registration  under  Sections 3(11) and 4(2) of the Securities Act of 1933,
     as amended, and any and all other available exemptions.

          On January 3, 2001,  as  partial  consideration  under the  employment
     agreements  dated  January 3,  2001,  we sold to our  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,  we
     received a promissory note due January 3, 2008 at 8% interest per year. The
     shares  were  issued  pursuant  to an  exemption  from  registration  under
     Sections 3(11) and 4(2) of the Securities Act of 1933, as amended,  and any
     and all other available exemptions.

          On  January  4,  2001,  we sold to  Genesis  Design  Group and its two
     principals,  50,000  shares of common  stock at $0.10 per share,  which was
     based upon the quoted  market  price of $0.15 per share less a 33% discount
     as the resale of the shares was restricted.  The Company received $5,000 in
     cash.  The shares were issued  pursuant to an exemption  from  registration
     under Section 4(2) of the Securities  Act of 1933, as amended,  and any and
     all other available exemptions.

          On February 21, 2001, we entered into an agreement with 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 and in lieu
     of paying cash, we issued them 100,000 shares of our common stock at $ 0.25
     per share,  the quoted  market price of our common stock on the date of the
     agreement. As additional  consideration under the development agreement, we
     agreed to issue  them an option to  purchase  150,000  shares of our common
     stock at $0.25 per share,  exercisable in whole or in part,  until December
     31, 2002, if Genesis was able to deliver to us assembled syringes that were
     fully  functional  within  12  weeks  from  the  date  the  order  with the
     manufacturer is placed.  Because the performance  criteria was not met, the
     obligation to issue the option ended and no compensation cost was recorded.
     The shares were issued  pursuant to an exemption  from  registration  under
     Section 4(2) of the  Securities  Act of 1933,  as amended,  and any and all
     other available exemptions.

          From January 1, 2001 to May 31, 2001, we sold 4,458,000 Units at $0.25
     per Unit to 39 accredited  investors and 29 non-accredited  investors.  The
     quoted market price on the date the offering began was $0.15 per share. The
     Units were issued pursuant to exemptions from  registration  under Sections
     3(11), 4(2), 4(6) and Regulation D, Rule 506 of the Securities Act of 1933,
     as amended, and any and all other available exemptions. Each Unit consisted
     of one  share  of  common  stock  and one  common  stock  purchase  warrant
     exercisable   at  $0.50  per  share  on  or  before   December   31,  2005.
     Approximately  800,000  Units,  or $200,000,  of this  offering was sold to
     accredited  investors  by  RichMark  Capital  Corporation  ("RichMark"),  a
     licensed broker dealer.  In connection with the sales by RichMark,  we paid
     them  $33,000 in  commissions,  fees and  expenses.  The  remainder  of the
     offering was sold by the Company to investors  with whom the Company had an
     existing relationship.

          On May 10, 2001, we 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  assignment  of certain  rights by Mr.  Carter and Mr.
     Keltner (see "Patents,  Trademarks,  Licenses,  Royalty Agreements or Labor
     Contracts").  The price per Unit 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.  The  Units  were  issued  pursuant  to
     exemptions  from  registration   under  Sections  3(11),   4(2),  4(6)  and
     Regulation D, Rule 506 of the Securities  Act of 1933, as amended,  and any
     and all other  available  exemptions.  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.

                                       14
<PAGE>

          On May 18,  2001,  the  Company  sold  17,000  Units to an  accredited
     investor  for $0.60 per Unit.  Each Unit  consisted  of one share of common
     stock and one warrant to purchase an  additional  share of common  stock at
     $1.20 per share on or before  December  31, 2005.  The  purchase  price was
     equal to the quoted  market  price of our  common  stock on the date of the
     transaction.   The  Units  were  issued   pursuant  to  an  exemption  from
     registration under Sections 4(2) and 4(6) of the Securities Act of 1933, as
     amended, and any and all other available exemptions.

          On July 18, 2001, we 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. The shares were issued pursuant to exemptions
     from  registration  under Sections  4(2),  Sections 4(6), and Regulation D,
     Rule 506 of the Securities  Act of 1933, as amended,  and any and all other
     available exemptions.

          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.
     For details about  compensation cost recorded in connection with the option
     grant,  see Note 7 of the  Financial  Statements.  The options were granted
     pursuant to exemptions from registration  under Section 4(2) and Regulation
     D, Rule 506 of the  Securities  Act of 1933,  as  amended,  and any and all
     other available exemptions.

          On September 18, 2001,  we issued a total of 350,000  shares of common
     stock to Stuart  Daley  and Marty  Smith of  Genesis  Design  Group for the
     successful design of the 3cc safety syringe and for the completed design of
     the safety blood extractor. The shares were valued at $0.78 each, which was
     the quoted market price of the stock on the day the shares were issued. The
     shares were issued pursuant to exemptions from  registration  under Section
     4(2) of the  Securities  Act of 1933,  as  amended,  and any and all  other
     available exemptions.

          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.

          Transactions during 2000

          On July 3, 2000, we issued  122,348  shares of our common stock to our
     sole  officer  and  director  to repay him for loans  made to us. The total
     amount  repaid to Mr.  Mabie was  $61,174,  which  consisted  of $60,863 in
     principal and $311in  accrued  interest.  On July 3, 2000, we issued 16,428
     shares of our common  stock to an employee to repay her for a loan she made
     to us. The total  amount  repaid was $8,214,  which  consisted of $8,000 in
     principal and $214 in interest.  The shares issued were valued at $0.50 per
     share,  the quoted  market price of our common  stock on July 3, 2000.  The
     shares were sold pursuant to an exemption from registration  under Sections
     3(11) and 4(2) of the Act, and any and all other available exemptions.

          From July to September 2000, we sold a total of 724,000 Units at $0.25
     per Unit,  or  $181,000  in cash,  to five  accredited  investors  who were
     existing  shareholders  of the Maxxon.  Each Unit consisted on one share of
     common stock and one common stock purchase warrant exercisable at $1.00 per
     share on or before June 30,  2005.  None of the  investors  were  officers,
     directors or employees.  The Units were sold  pursuant to  exemptions  from
     registration  under Sections 4(2),  4(6), and Regulation D, Rule 506 of the
     Securities  Act of  1933,  as  amended,  and any and  all  other  available
     exemptions.  In April, 2001, 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. These  adjustments were done pursuant to exemptions
     from registration  under Sections 4(2), 4(6), and Regulation D, Rule 506 of
     the  Securities  Act of 1933, as amended,  and any and all other  available
     exemptions.

                                      15
<PAGE>

ITEM 6. PLAN OF OPERATION

1. Plan of Operation for the Next Twelve Months

          The  Company is unable to pay present  obligations  as they become due
     and its has no cash  resources from which to draw. The Company will need to
     complete  additional  financing  initiatives  during 2003 to  generate  the
     liquidity  necessary to continue its  operations.  Due to current  economic
     conditions and the Company's risks and uncertainties, there is no assurance
     that the Company will be able to raise any additional capital on acceptable
     terms,  if at all.  The  Company  does not have any  investment  banking or
     advisory  agreements in place. If the Company can generate  sufficient cash
     to continue  operating,  its activities during 2003 will focus primarily on
     seeking collaborative arrangements for the manufacture and marketing of its
     products and on defending itself against the SEC.

          (i) Cash Requirements

          To continue operating,  the Company requires approximately $12,500 per
     month to meet its minimum monthly  expenses,  which include audit and legal
     fees related solely to ongoing  regulatory  compliance,  employee insurance
     expenses,  accounting  assistance  and  office  expenses.  To  further  its
     business  objective  of seeking  collaborative  partners,  the  Company may
     require  an  additional  $12,500-  $25,000  per month for  travel,  product
     related  design,  patent and legal fees.  In  addition,  the  Company  will
     require  funds to  defend  itself  in the SEC civil  action,  however,  the
     Company can not estimate how much will be required at this time. The amount
     will  depend  upon the  outcome  of various  motions  to dismiss  which are
     pending before the court.

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

          None.

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

          None.

          (iv) Expected Significant Changes in the Number of Employees

          None.

ITEM 7.  FINANCIAL STATEMENTS

     See Part F/S

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUTNING  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 62 is Chairman, CEO and a Director of Maxxon and
     has served in such capacity since May 20, 1997.

     (b) Other Directorships.

          Gifford Mabie is the sole officer and a director of Lexon, Inc.

     (c) Family Relationships

          None.

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

          None.

                                       16
<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION

<TABLE>
<CAPTION>

                                                 SUMMARY COMPENSATION TABLE

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

                                                                    Long Term Compensation
                                                             --------------------------- ---------
                                 Annual Compensation                   Awards            Payouts
                          ---------------------------------- --------------------------- ---------
                                                   Other
    Name and                                       Annual    Restricted    Securities              All
   Principal                                       Compen-satStock         Underlying    LTIP      Other
    Position       Year     Salary       Bonus                 Awards     Options/SARs   Payouts   Compen-sation
----------------- ------- ------------ ----------- --------- ----------- --------------- --------- ----------
Gifford M.
Mabie, CEO         2002   $100,000(1)     $-0-       $-0-       $-0-          -0-          $-0-      $-0-
                   2001      $100,000

</TABLE>


(1) Accrued but not paid.

<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)  Options were granted to Mr. Mabie during 1998 at an exercise price of $0.50
     per share,  the closing price of the Company's  common stock on the date of
     grant.  The  options  expire  ten  years  from the  date of grant  and were
     exercisable at December 31, 2000.

(2)  The closing  price of our common  stock at December  31, 2002 was $0.07 per
     share,  which  was less than the  $0.50  per  share  exercise  price of Mr.
     Mabie's options.

                                       17
<PAGE>

ITEM 11.  SECURITY OWNERSHIP FO 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 April 14, 2003 and ownership consists of sole voting and
investment power.

<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........................    Officer and Director       778,700 (3)            2.41%
      9202 S. Toledo Ave.
      Tulsa, OK  74137

      John Green..............................    Beneficial Owner         2,400,000 (4)            7.22%
      1620 Twiford Pl.
      Charlotte, NC  28207

      Clarence Williams, Jr. .................    Beneficial Owner         2,400,000 (4)            7.22%
      5701 E. Independence
      Charlotte, NC  28212

      Morgan-Phillips, Inc....................    Beneficial Owner         2,000,000 (5)            5.87%
      8030 S. Memorial Dr.
      Tulsa, OK  74133

      Charles Wickham.........................    Beneficial Owner         1,800,000 (6)            5.61%
      2206 Beverly Dr.
      Charlotte, NC  28207

      Sole Officer and Director and Beneficial Owners
      as a Group (3 persons).........................................      9,378,700               25.51%

</TABLE>

(1)  Includes  shares of common stock  issuable  upon the exercise of options or
     warrants that are currently  exercisable or will become  exercisable within
     60 days of April 14, 2003.

(2)  For each shareholder listed above, his or her percentage of outstanding
     common stock was based on 32,060,279 shares issued and outstanding as of
     April 14, 2003, plus the shares which each shareholder has the right to
     acquire within 60 days of April 14, 2003.

(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 200,000  shares of common  stock at an
     exercise  price of $0.50  per  share on or  before  December  31,  2005 and
     warrants to purchase up to 1,000,000  shares of common stock at an exercise
     price of $0.25 per share on or before December 31, 2007.

(5)  Consists of options to purchase up to a total of 2,000,000 shares of common
     stock in 500,000 share increments at exercise prices ranging from $0.10 per
     share to $0.40 per share.

(6)  Includes 250,000 shares of common stock owned by Mr. Wickham's spouse.

Common Stock Options and Warrants Outstanding

     At April 14, 2003,  the Company had  outstanding  options to purchase up to
11,050,000 shares of common stock at exercise prices ranging from $0.05 to $0.50
per share and  outstanding  warrants to purchase up to  approximately  9,049,000
shares of common stock at exercise prices ranging from $0.25 to $0.50 per share.
See Part F/S "Notes to Financial Statements".

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     See Note 8 "Related Party Transactions" to the Financial Statements.

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 2002.

                                       18
<PAGE>

ITEM 14. CONTROLS AND PROCEDURES

        Within the 90 days prior to the date of this report, the Company's Chief
Executive Officer and principal financial officer carried out an evaluation of
the effectiveness of the design and operation of the Company's disclosure
controls and procedures pursuant to Exchange Act Rules 13a-14. Based on that
evaluation, the Chief Executive Officer and principal financial officer
concluded that the Company's disclosure controls and procedures are effective in
timely alerting them to material information related to the Company that is
required to be included in the Company's periodic SEC filings. Subsequent to the
date of this evaluation, there have been no changes in the Company's internal
controls or in other factors that could significantly affect these controls, and
no discoveries of any significant deficiencies or material weaknesses in such
controls that would require the Company to take corrective action.




                                       19
<PAGE>


                                    Part F/S

<TABLE>
<CAPTION>


                          INDEX TO FINANCIAL STATEMENTS

<S>                                                                                                      <C>

Audited Financial Statements

Independent Auditors' Report.......................................................................      F-1

Balance Sheet At December 31, 2001.................................................................      F-2

Statements Of Operations From Inception (August 16, 1996) Through December 31, 2001
And For The Years Ended December 31, 2001 and 2000................................................       F-3

Statements Of Cash Flows From Inception (August 16, 1996) Through December 31, 2001
And For The Years Ended December 31, 2001 and 2000.................................................      F-4

Statements Of Shareholders' Equity From Inception (August 16, 1996) Through
December 31, 2001..................................................................................      F-5

Notes To Financial Statements From Inception (August 16, 1996) Through
December 31, 2001, And For The Years Ended December 31, 2001 and 2000..............................      F-6

</TABLE>




                                       20
<PAGE>



<TABLE>
<CAPTION>


Index to and Description of Exhibits

<S>        <C>

EX
No.        Description of Exhibit
----       --------------------------------------------------------------------------------------------------------
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       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)

10.5       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)

10.6       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)

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

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

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

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

99.1       Certification of Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)*

*Filed herewith
</TABLE>



                                       21
<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 15, 2003



                                       22
<PAGE>

      CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

I, Gifford M. Mabie, Chief Executive Officer and Chief Financial Officer of
Maxxon, Inc. certify that:

1.   I have reviewed this annual report on Form 10-KSB of Maxxon, Inc.;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the years presented in this annual report;

4.   I am responsible for establishing and maintaining  disclosure  controls and
     procedures  (as  defined in Exchange  Act Rules  13a-14 and 15d-14) for the
     registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to me by others within those
          entities,  particularly during the year in which this annual report is
          being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report my conclusions about the effectiveness
          of the disclosure controls and procedures based on my evaluation as of
          the Evaluation Date;

5.   I have disclosed,  based on my most recent evaluation,  to the registrant's
     auditors and the audit  committee of  registrant's  board of directors  (or
     persons performing the equivalent functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   I  have  indicated  in  this  annaul  report  whether  or  not  there  were
     significant  changes in internal  controls or in other  factors  that could
     significantly  affect internal  controls  subsequent to the date of my most
     recent  evaluation,   including  any  corrective  actions  with  regard  to
     significant deficiencies and material weaknesses.





Date: April 15, 2003


                                              /s/ Gifford M. Mabie
                                              -----------------------
                                              Gifford M. Mabie
                                              CEO and CFO


                                       23

<PAGE>

Independent Auditor's 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, 2002 and 2001, and the related
statements of operations, shareholders' equity, and cash flows for the years
ended December 31, 2002 and 2001 and for the period from December 16, 1996
(inception) to December 31, 2002. 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,
2002 and 2001, and the results of its operations and its cash flows for the
years ended December 31, 2002 and 2001 and for the period from December 16, 1996
(inception) to December 31, 2002 in conformity with generally accepted
accounting principles.




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


April 15, 2003



                                      F-1
<PAGE>


                                  Maxxon, Inc.
                          (A Development Stage Company)

                                  Balance Sheet
                                December 31, 2002



                   ASSETS
Current assets
Cash                                                             $ 33,721
Employee Advances                                                  18,000
Rent receivable- related parties                                   32,518
Notes receivable- related parties                                 147,343
                                                               -----------
   Total current assets                                           231,582
                                                               -----------
Property and Equipment, net of depreciation                        23,749
                                                               -----------
Other assets
Patent Development                                                 10,000
Less amortization                                                  (2,015)
                                                               -----------
      Total Patent Development                                      7,985
                                                               -----------
TOTAL ASSETS                                                    $ 263,316
                                                               ===========

         LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities                         $ 14,672
Accrued Salaries                                                  393,333
Related Party Payables                                              3,125
                                                               -----------
   Total current liabilities                                      411,130
                                                               -----------
Total liabilities                                                 411,130
                                                               -----------
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;
   30,920,260 shares issued and outstanding                        30,920
Common stock purchased by employees                              (444,697)
Paid in capital                                                10,429,855
Unamortized portion of compensation cost
   for options granted to non-employees and
   common stock issued for services                              (288,959)
Deficit accumulated during the development stage               (9,874,933)
                                                               -----------
   Total shareholders' equity                                    (147,814)
                                                               -----------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY                  $ 263,316
                                                               ===========


   The accompanying notes are an integral part of the financial statements



                                       F-2
<PAGE>


<TABLE>
<CAPTION>


                                  Maxxon, Inc.
                          (A Development Stage Company)

                            Statements of Operations
         From Inception (August 16, 1996) Through December 31, 2002 and
                 For The Years Ended December 31, 2002 and 2001


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


                                           From inception
                                              (August 16,                 For The Year Ended
                                            1996) through      ----------------------------------------
                                        December 31, 2002      December 31, 2002      December 31, 2001
                                        -----------------      -----------------      -----------------

Revenue
Investment Income                               $ 170,753                    $ -              $ 170,753
Other Income                                        3,807                      -                  3,807
                                        -----------------      -----------------      -----------------
Total Revenue                                     174,560                      -                174,560
                                        -----------------      -----------------      -----------------
Expenses
Research and development                        1,536,582                286,509                776,451
General and administrative                      8,441,418              1,633,125              1,588,343
                                        -----------------      -----------------      -----------------
   Total operating expenses                     9,978,000              1,919,634              2,364,794
                                        -----------------      -----------------      -----------------
Operating loss                                 (9,803,440)            (1,919,634)            (2,190,234)

Interest income                                    17,276                      -                  1,722

Interest expense                                   30,903                     39                  1,286

Loss on disposal of assets                          2,006                  2,006                      -

Depreciation and amortization                      55,860                 11,997                  9,287
                                        -----------------      -----------------      -----------------
Net loss from operations                     $ (9,874,933)          $ (1,933,676)          $ (2,199,085)
                                        =================      =================      =================

Weighted average shares
outstanding                                    18,013,892             26,871,732             21,667,726
                                        -----------------      -----------------      -----------------
Net loss per share (Note 1)                       $ (0.55)               $ (0.07)               $ (0.10)
                                        -----------------      -----------------      -----------------


</TABLE>


The accompanying notes are an integral part of the financial statements



                                       F-3
<PAGE>

<TABLE>
<CAPTION>
                                  Maxxon, Inc.
                          (A Development Stage Company)

                            Statements of Cash Flows
           From Inception (August 16, 1996) Through December 31, 2002

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

                                                                From Inception
                                                                   (August 16,               For The Year Ended
                                                                 1996) through      ----------------------------------------
                                                             December 31, 2002       December 31, 2002     December 31, 2001
                                                             ------------------     ------------------    ------------------
Operating activities
Net loss                                                          $ (9,874,933)          $ (1,933,676)         $ (2,199,085)
Plus non-cash charges to earnings:
Depreciation and amortization                                           47,866                 11,996                 9,966
Common stock issued for services                                     1,478,807                324,500               297,650
Expenses paid by third parties                                          57,134                      -                 7,500
Contribution of services by officer and employees                      799,154                      -                     -
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                                              1,486,618                759,795               438,946
Write-off of organizational costs                                        3,196                      -                     -
Write-off of zero value investments                                    785,418                      -                     -
Write-off of leasehold improvements and computer equipment               2,006                  2,006
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            (197,861)                22,453              (159,227)
   (Increase) decrease in prepaid expenses                                   -                                        2,255
   (Increase) decrease in other receivables                           (176,577)                     -                     -
   Increase (decrease) in accounts payable and accrued liabilities     463,972                326,971                49,606
                                                             ------------------     ------------------    ------------------
      Total operating activities                                    (3,904,985)              (485,955)           (1,427,589)
                                                             ------------------     ------------------    ------------------
Investing activities
Purchase of equipment                                                  (67,042)                (2,301)              (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                                      (339,039)                (2,301)              (30,022)
                                                             ------------------     ------------------    ------------------
Financing activities
Loans from shareholders                                                 13,907                      -                     -
Repayment of loans from shareholders                                   (11,369)                     -                (6,369)
Repayments of Promissory Notes                                         102,803                102,803
Sale of common stock for cash:
   To third-party investors (prior to merger)                          574,477                      -                     -
   To third-party investors                                          2,935,345                362,500             1,604,700
   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                                     4,277,745                465,303             1,512,756
                                                             ------------------     ------------------    ------------------

Change in cash                                                          33,721                (22,953)               55,145
Cash at beginning of period                                                  -                 56,674                 1,529
                                                             ------------------     ------------------    ------------------
Cash at end of period                                                 $ 33,721               $ 33,721              $ 56,674
                                                             ==================     ==================    ==================

Supplemental disclosure of cash flow information:
   Cash paid for interest and taxes during the period                   27,903                      -                     -
                                                             ------------------     ------------------    ------------------

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
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

                                       F-4
<PAGE>
<TABLE>
<CAPTION>
                                  Maxxon, Inc.
                          (A Development Stage Company)

                Statements of Shareholders' Equity From inception
                  (August 16, 1996) through December 31, 2002

<S>                                                     <C>          <C>         <C>         <C>           <C>            <C>
                                                                                                 Deficit
                                                                                             Accumulated
                                                                                              during the
                                                             Common Stock           Paid-In  Development   Subscription
                                                           Shares      Amount       Capital        Stage     Receivable        Total
                                                       ----------    --------  ------------  -----------   ------------   ----------

Balance at Inception (August 16, 1996)                          -           -            -             -             -           -

Cerro Mining/Maxxon-OK Merger:
 Cerro Mining                                             531,000         531         (231)                                     300
 Maxxon-OK:
   Shares issued to founders                            7,000,000       7,000                                                 7,000
   Shares sold for cash
   to third-party investors                               578,000         578      573,899                                  574,477
Ives Transactions:
   Investment in Ives Health Company                      311,240         311      310,951                                  311,261
   Investment in The Health Club                           35,000          35       34,965                                   35,000
   Conversion of Ives Debt                                 18,513          19       26,981                                   27,000
Issuance of Common Stock for:
   Cash from third-party investors                        218,569         219      353,501                                  353,720
   Cash from related party
   Promissory Notes                                        64,500          65      128,935                                  129,000
   Subscriptions Receivable                                52,757          53       69,747                     (69,800)           -
   Services Rendered                                       90,499          90      173,337                                  173,427
   Debentures Converted                                   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                                 44,827          45       54,955                                   55,000
   Cash from third-party investor                          50,000          50       90,950                                   91,000
   Options exercised by third-parties for cash            545,867         546      359,354                                  359,900
   Options exercised by third-parties for services         24,133          24       18,076                                   18,100
   Services Rendered by third-parties                     988,007         988      573,560                                  574,549
   Debentures Converted by third parties                  548,574         549      274,451                                  275,000
   Settlement with related party                          350,000         350                                                   350
Certificates canceled:                                    (91,572)        (92)     (40,173)                                 (40,265)
Value of Services Contributed by Officer
   and Employees                                                                   114,154                                  114,154
Compensation Cost for Stock Options Granted
   to Non-Employees                                                                918,187                                  918,187
Cancellation of Subscriptions Receivable
   from related party                                                                                           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                         390,693         390      342,034                                  342,424
Less: Issue Costs                                                                  (16,743)                                 (16,743)
   Options exercised by third-parties for cash            300,000         300      149,700                                  150,000
   Services Rendered by third-parties                     164,069         164      166,579                                  166,743
Value of Services Contributed by Officer
   and Employees                                                                   280,000                                  280,000
Compensation Cost for Stock Options Granted
   to Non-Employees                                                                 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                         862,776         863      249,525                                  250,388
   Less: Issue Costs
Value of Services Contributed by Officer
   and Employees                                                                   405,000                                  405,000
Net Income (Loss) at December 31, 2000                                                        (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                       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 amortizeed                                   (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    8,700,933    (7,941,257)     (547,500)     236,264

Issuance of Common Stock for:
   Cash from third-party investor                       3,625,000       3,625      358,875                                  362,500
Exercise of Options                                     2,006,822       2,007       (2,007)                                       0
Payment towards promissory note balances                                                                       102,803      102,803
Amortized Compensation Cost of stock
issued  and options granted for services                                           759,795                                  759,795
Compensation Cost of stock issued  and
options granted for services                            1,200,000       1,200      323,300                                  324,500
Net Income (Loss) at December 31, 2002                                                        (1,933,676)                (1,933,676)
                                                       ----------    --------  ------------  -----------   ------------   ----------
Balance at December 31, 2002                           30,920,280    $ 30,920  $ 10,140,896  $(9,874,933    $ (444,697)   $(147,814)
                                                       ==========    ========  ============  ===========   ============   ==========
</TABLE>

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

                                       F-5
<PAGE>

                                  Maxxon, Inc.
                          (A Development Stage Company)

                          Notes to Financial Statements
                                December 31, 2002


Note 1 - Summary of Significant Accounting Policies

Organization and Nature of Operations
     Maxxon, Inc. ("Maxxon" or "the Company") is principally engaged in the
design and development of retractable safety needle devices intended to reduce
the risk of accidental needle stick injuries among health care workers.  Its
devices are in the development stage.

     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 various
safety needle devices.

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 these services was estimated by management and recorded as an expense
with an offsetting entry to paid in capital. As a result, 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.

     On August 8, 2001,  the Company  entered  into amended  written  employment
agreements with its officer and director and certain employees. These agreements
designate  specific  salaries  and  require  that  the  salaries  be  paid in 24
semi-monthly  installments.  As of December 31, 2002,  the Company owed $393,333
pursuant to the employment agreements,  of which $360,000 was accrued during the
year ended  December 31, 2002,  and $33,333 was accrued  during the three months
ended December 31, 2001. The Company has breached the employment  agreements and
there is no assurance that the officer and employees  subject to such agreements
will  continue  to serve the  Company  without  being  paid.  See Note 5, "Other
Commitments and Contingencies."

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 basis of assets and
liabilities at enacted tax rates in effect in the years in which the differences
are expected to reverse.




                                       F-6
<PAGE>

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 year ended
December 31, 2002 and 2001, the Company operated in a single business segment
engaged in developing selected healthcare products.

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, 2002 and 2001
weighted average shares of 26,871,732 and 21,667,726 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.

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.

     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 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.

Intangible Assets
     Intangible assets are stated at cost. The intangible asset of $10,000 at
December 31, 2002 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.



                                       F-7
<PAGE>



     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No.  4,  44,  and  64,  amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections".  SFAS No. 145  rescinds  SFAS No. 4, which  required all gains and
losses from extinguishment of debt to be aggregated and, if material, classified
as an extraordinary  item. As a result,  the criteria in APB Opinion No. 30 will
now be used to classify those gains and losses.  SFAS No. 64 amended SFAS No. 4,
and is no longer  necessary  because SFAS No. 4 has been rescinded.  SFAS No. 44
was issued to establish accounting requirements for the effects of transition to
the provisions of the Motor Carrier Act of 1980. Because the transition has been
completed,  SFAS No. 44 is no longer necessary.  SFAS No. 145 amends SFAS No. 13
to require that certain lease  modifications  that have economic effects similar
to  sale-leaseback   transactions  be  accounted  for  in  the  same  manner  as
sale-leaseback  transactions.  SFAS No. 145 also makes technical  corrections to
other  existing  pronouncements.  The  provisions  of SFAS No. 145 are generally
applicable for fiscal years  beginning or  transactions  occurring after May 15,
2002.  The Company  does not expect a material  impact from the adoption of SFAS
No. 145 on its financial statements.

     In June 2002, the FASB voted in favor of issuing SFAS No. 146, "Accounting
for Exit or Disposal Activities". SFAS No. 146 addresses significant issues
regarding the recognition, measurement, and reporting of costs that are
associated with exit and disposal activities, including restructuring activities
that are currently accounted for pursuant to the guidance that the Emerging
Issues Task Force ("EITF") has set forth in EITF Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)". The scope of
SFAS No. 146 also includes (1) costs related to terminating a contract that is
not a capital lease and (2) termination benefits that employees who are
involuntarily terminated receive under the terms of a one-time benefit
arrangement that is not an ongoing benefit arrangement or an individual
deferred-compensation contract. The Company will be required to adopt SFAS No,
146 for exit or disposal activities initiated after December 31, 2002. The
Company does not expect a material impact from the adoption of SFAS No. 146 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.

     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. A working prototype of the syringe was completed
on April 16, 2001 and a U.S. Patent was published on February 27, 2001. Maxxon
also granted Mr. Rippstein options to purchase up to 800,000 shares of Maxxon
common stock exercisable at $0.50 per share, subject to vesting conditions. See
Note 7. "Stock Options."

Note 3 - Property and Equipment, Net

     As of December 31, 2002, property and equipment, net of depreciation,
consisted of the following amounts:


                                                   Useful Life      Amount
                                                   ------------ ---------------
Computer equipment                                   5 Years       $32,322.98
     Less: Accumulated Depreciation                                 (8,853.38)
                                                                ---------------
                                                                   $23,469.60
                                                                ---------------
Furniture and fixtures                               5 Years        17,625.73
     Less: Accumulated Depreciation                                (17,345.95)
                                                                ---------------
                                                                      $279.78
                                                                ---------------
Total property and equipment, net of depreciation                  $23,749.38
                                                                ===============



                                       F-8
<PAGE>

Note 4 - Income Taxes

     The deferred tax assets and liabilities from Inception (August 16, 1996) to
December 31, 2002 and at December 31, 2002 and 2001 are as follows:

<TABLE>
<CAPTION>

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

                                          From Inception
                                    (August 16, 1996) to
                                       December, 31 2002     December 31, 2002     December 31, 2001
                                    ---------------------  -------------------   -------------------

Net operating loss carryforward             $(1,941,045)           $ (482,753)           $ (659,726)
Less:  Valuation allowance                    1,941,045               482,753               659,726
                                    ---------------------  -------------------   -------------------

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


     As of December 31, 2002, the Company had a net operating loss carry-forward
of approximately $5,337,400.which will begin to expire in 2012. Deferred taxes
reflect a combined federal and state tax rate of approximately 30%.


Note 5 - Other 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  in April of 2005.  See Note 2  "Exclusive
License Agreement."

Patent Applications
     A U.S.  patent  application  was filed on  November  1, 2002 for  Company's
retractable safety syringe.  On November 20, 2001, a U.S. patent application was
filed for the Company's  retractable  safety blood drawing  device.  There is no
assurance that either U.S. patent will be issued.  The Company has not yet filed
any applications for foreign patent  protection.  The lack of patent  protection
could  allow  competitors  to copy and  sell  products  based on our  technology
without paying us a royalty.

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, or any pending patent application, does not infringe
on the rights of others.

Payments Due Pursuant to Amended Employment Agreements
     As of December 31, 2002, the Company owed its officer and its employees a
total of $393,333 pursuant to the amended employment agreements described below.
There is no assurance that the Company's officer and its employees will continue
to serve without being paid. The loss of the services of the Company's officer
and its employees could have a material adverse affect on the Company's
continued operations.

Amended Employment Agreements.
     On August 8, 2001, the Company entered into written amended employment
agreements with Gifford Mabie, our sole officer and director, and Rhonda
Vincent, Thomas Coughlin and Vicki Pippin, our employees. The material terms of
these agreements are substantially the same, except that Mr. Mabie's 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 amended
employment agreements are incorporated herein by reference to Exhibits 10.22 to
10.25 of the Company's Form 10-QSB filed August 21, 2001.




                                       F-9
<PAGE>

     On January 4, 2002, the employment agreements automatically renewed for a
period of two years. Each agreement can be ended either by Maxxon 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, the Company is obligated to pay 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.

     The Company reimburses 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 Maxxon and so long as the employee devotes the necessary working
time, as determined in his or her sole discretion, to Maxxon's business
activities. Maxxon is obligated to 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, including paying 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.

Note 6 - Common Stock and Paid-In Capital

     During May 2002, the Company recorded the issuance of 700,000 shares of its
common stock pursuant to a confidential settlement agreement with the Company's
former investor relations firm.

     During July 2002, a consultant exercised 1,000,000 options at $0.01 per
share. Pursuant to their original agreement signed on July 18, 2001, the
consultant used the cashless exercise provision contained therein and returned
32,258 shares of Maxxon, Inc. common stock back to the Company as payment
thereby leaving the consultant with 967,742 shares of common stock. The 32,258
shares were calculated using the closing price of the stock on the date of
exercise.

     During July 2002, shareholders exercised 1,333,333 warrants. These warrants
were included in 1,333,333 units purchased during 2001 that contained one share
and one warrant exercisable at $0.32 per share. The agreements contained a
cashless exercise provision and as such, the shareholders opted to utilize it.
Upon the exercise of the warrants, the shareholders returned 294,253 shares of
Maxxon, Inc. common stock to the Company thereby leaving the shareholders with
1,039,080 shares of common stock. The 294,253 shares were calculated using the
closing price of the stock on the date of exercise.

     During August, the Company issued 500,000 shares of its common stock to
Genesis Design Group for its consulting services in the prototype design of the
Maxxon Safety Syringe. The stock was valued at $0.299 per shares which was the
closing price for the stock on the day of the agreement. The Company recorded
consulting expense of $149,500.

     During October 2002, the Company sold 1,150,000 units of its common stock
to two accredited investors for a total of $115,000 in cash. Each unit consisted
of on share of common stock and one warrant exercisable at $0.25. The selling
price of $0.10 was based on the market price on the date of the agreements
reduced by 56% based on the restrictive nature of the stock. The Board
determined such a discount to be reasonable in light of Maxxon's thinly traded
market and restrictions regarding resale of the shares.



                                       F-10
<PAGE>

     During the quarter ended September 30, 2002, the Company sold 475,000
shares of its common stock to 5 accredited and 1 non-accredited investors at
$0.10 per share. The market price on the date of the agreements was reduced by
56% based on the restrictive nature of the stock. The Board determined such a
discount to be reasonable in light of Maxxon's thinly-traded market and
restrictions regarding resale of the shares. The amount received by the Company
through these transactions totaled $47,500.

     During the quarter ended September 30, 2002, the Company sold 2,000,000
units of its common stock with each unit consisting of one share of stock and
one warrant exercisable at $0.25 to 2 accredited investors. Each unit was sold
for $0.10 which was equal to a 56% reduction from the market price of the stock
on date of the transaction. The Board determined such a discount to be
reasonable in light of Maxxon's thinly-traded market and restrictions regarding
resale of the shares. As a result of the transactions, the Company received
$200,000.


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, 2002, there were no options granted, exercised or
forfeited pursuant to the Plan.

     For the year ended December 31, 2002, there were no options granted to
Non-Employees. The Non-Employee stock options outstanding as of December 31,
2002 consist of 800,000 options that were granted to Mr. Rippstein in November
of 1998 at an exercise price of $0.50 per share. Of the 800,000 Non-Employee
stock options outstanding at December 31, 2002, approximately 480,000 were
exercisable. During July, 2002, as consideration for additional services
rendered, the Company extended until July 18, 2003 the exercise date for 250,000
options granted to a consultant during 2001at an exercise price of $0.25 per
share.

     Approximately 320,000 of Mr. Rippstein's 800,000 options are still subject
to the following vesting conditions: (1) 160,000 of the options become
exercisable when the first syringe is produced from the hard production molds
and is ready for full scale production; and (2) 160,000 of the options become
exercisable when FDA approval is obtained. In any event, all unvested options
become exercisable if Maxxon sells the Rippstein Syringe Technology or if the
Company is acquired by another company.

     The following table summarizes information about the stock options
outstanding at December 31, 2002:


<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 12/31/02          Life       Price       at 12/31/02       Price
 ------------------        -----------  ------------   ----------      -----------    --------
 Employees:
       $0.50                 1,000,000     5.13 Years     $0.50          1,000,000       $0.50

 Non-Employees:
       $0.25                   250,000      .55 Years     $0.25            250,000       $0.25
       $0.50                   800,000     6.84 Years     $0.28            480,000       $0.50
                           -----------                                 -----------
                             1,050,000                                     730,000
                           -----------                                 -----------

</TABLE>



                                       F-11
<PAGE>

Note 8 - Related Party Transactions

     Maxxon leases approximately 4,200 square feet of commercial office space
pursuant to a lease that expires December 31, 2003. The monthly lease payment
for the office space is $6,300. The office space is shared with other companies
in which Maxxon's officer and director and its employees may be officers,
directors, employees or shareholders. In addition to office space, Maxxon shares
staff and other administrative expenses with these other companies. From time to
time, Maxxon and the other companies may borrow from and/or make cash advances
to each other for the payment of rent and administrative expenses. As of
December 31, 2002, Maxxon's receivables from the other companies for rent and
administrative expenses was $32,518 and $147,343, respectively, and Maxxon's
payable to the other companies was $3,125.

     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.


Note 9 - Uncertainties

     The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. The Company is in the early stages of
development and has not established sources of revenues sufficient to fund the
development of business and pay operating expenses, resulting in a cumulative
net loss of $9,874,933 for the period from inception (August 16, 1996) to
December 31, 2002, and a net loss of $1,933,676 and $2,199,085, for the years
ended December 31, 2002 and 2001, respectively. The ability of the Company to
continue as a going concern during the next year depends on the successful
completion of the Company's capital raising efforts to fund the development of
its planned products. The financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.

Note 10- Litigation

     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 against
the claims.

     On December 31, 2002, the Securities and Exchange Commission filed a civil
complaint in the Northern District Court of Oklahoma against Maxxon; Gifford
Mabie, the Company's CEO and Director; Dr. Thomas Coughlin, the Company's
medical advisor; and Rhonda Vincent, the Company's financial reporting manager.
The complaint alleges that from 1997 to 1999, Maxxon and Mabie made false or
misleading statements regarding the Kaufhold syringe, a safety syringe
technology that the Company licensed in 1997 and abandoned in 1999. The
complaint also alleges that Maxxon, Mabie, Coughlin and Vincent made false or
misleading statements, or failed to disclose information, concerning the status
of the Company's application for FDA approval of the Rippstein Syringe, filed
December 10, 2001. At issue is whether the Company was obligated to disclose
earlier the receipt of a letter from the FDA requesting more information, which
the Company deemed to be a routine part of the FDA approval process and not a
separate, disclosable event. The Company, Mr. Mabie and Dr. Coughlin are
preparing to file a Motion for Summary Judgment against the SEC. Ms. Vincent
presently has pending before the Court a Motion to Dismiss all claims against
her. The Company and the individual defendants vehemently deny the SEC's
allegations and plan to vigorously defend against the bogus claims.

Note 11- Subsequent Events

     The Company issued  1,140,000  shares and granted options to purchase up to
500,000  shares each at an exercise price of $0.10,  $0.20,  $0.30 and $0.40 per
share  pursuant  to a  confidential  settlement  approved  by the  Tulsa  County
District  Court in  connection  with the  litigation  against the Company by its
former investor relations firm..

     The  Company  granted  options to purchase  up to  8,000,000  shares of its
common  stock at an  exercise  price of $0.05  per  share to  certain  employees
pursuant to the Company's stock option plan.




                                       F-12

<PAGE>