SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
LEXON, INC.
(Exact name of registrant as specified in its charter)
Oklahoma 0-26915 73-1533326
(State of incorporation) (SEC File Number) (IRS Employer ID No.)
8908 South Yale, Suite 409
Tulsa, Oklahoma 74137-3545
(918) 492-4125
(Address of Principal Executive Offices and Zip Code)
1,687,500 Shares of Common Stock
Issued Pursuant to the Lexon Option Plan
and 22,222 Shares of Common Stock
Issued as Compensation for Services
(Full title of the Plan)
Frederick K. Slicker, Esquire
Attorney at Law
8908 South Yale, Suite 410
Tulsa, Oklahoma 74137-3545
(918) 496-9020
(Name and address of Agent for Service)
(Telephone number, including area code, of Agent for Service)
Calculation of Registration Fee
- --------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of securities Amount to be Price per Offering Registration
to be registered registered Share Price Fee (5)
- --------------------------------------------------------------------------------
Common Stock, $0.001
par value per share 1,687,500 (1) $1.5518 (3) $2,618,594 $691.31
Common Stock, $0.001
par value per share 22,222 (2) $1.9175 (4) $42,611 $11.25
--------- ----------- --------
Totals 1,709,722 $2,082,423 $702.56
--------- ----------- --------
(1) Consists of the aggregate number of shares which may be sold upon the
exercise of options granted under the Lexon Option Plan.
(2) Consists of shares of common stock issued in lieu of cash compensation for
services rendered.
(3) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(h) under the Securities Act of 1933, as amended.
Pursuant to Rule 457(h), this estimate is based upon the price at which the
options may be exercised.
(4) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(h) under the Securities Act of 1933, as amended.
Pursuant to Rule 457(h), this estimate is based upon the average of the
high and low prices of the Registrant's common stock, $0.001 par value per
share, on February 25, 2000 (a date within five business days prior to the
date of this Registration Statement) as reported on the OTC Bulletin Board.
(5) Fees are calculated by multiplying the aggregate offering amount by
.000264, pursuant to Section 6(b) of the Securities Act.
<PAGE>
PART I.
ITEM 1. PLAN INFORMATION
Pursuant to Rule 428(b)(1) under the Securities Act of 1933, as
amended, the documents containing the information specified in Part I of this
Registration Statement on Form S-8 will be sent or given to participants in the
Lexon Option Plan (the "Plan").
This document and the documents incorporated by reference in this
Registration Statement pursuant to Item 3 of Form S-8 (Part II hereof), taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act of 1933, as amended.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN INFORMATION
Upon the written or oral request by a participant in the Plan listed in
Item 1 of this Part I, the Company will provide any of the documents
incorporated by reference in Item 3 of Part II of this Registration Statement
(which documents are incorporated by reference into this Section 10(a)
prospectus), any documents required to be delivered to participants pursuant to
Rule 428(b) and other additional information about such plans. All of such
documents and information will be available without charge. Any and all such
requests should be directed to the Company at 8908 S. Yale Ave. Suite 409,
Tulsa, Oklahoma 74137, telephone number (918) 492-4125, attention Gifford Mabie,
President.
EXPLANATORY NOTE
This Registration Statement includes two parts. The documents
constituting the prospectus under Part I of this Registration Statement (the
"Plan Prospectus") will be sent or given to participants in the Stock Option
Plan as specified by Rule 428(b)(1) under the Securities Act. The Plan
Prospectus has been omitted from this Registration Statement as permitted by
Part I of Form S-8. The second prospectus (the "Resale Prospectus") may be used
in connection with reoffers and resales of shares of Lexon common stock issued
pursuant to the exercise of options granted under the Plan. The Resale
Prospectus is filed as part of this Registration Statement as required by Form
S-8.
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REOFFER PROSPECTUS
1,709,722 Shares
LEXON, Inc.
Common Stock
OTC Bulletin Board Trading Symbol: LXXN
This prospectus relates to the resale of up to 1,709,722 shares of
common stock of Lexon, Inc. by shareholders of the Company, some of whom may be
"affiliates" (as that term is defined in Rule 405 of the General Rules and
Regulations under the Securities Act of 1933, as amended). These selling
shareholders are offering shares of our common stock which may be issued to them
upon the exercise of options granted under the Lexon Option Plan or which have
been issued as compensation for services.
The selling shareholders may sell up to 1,709,722 shares of common
stock from time to time. These selling shareholders may sell their shares
-On the OTC Bulletin Board
-To a broker-dealer, including a market maker, who purchases the shares
for its own account
-In private transactions or by gift
The selling shareholders may also pledge their shares from time to
time, and the lender may sell the shares upon foreclosure.
On February 17, 2000, the closing price of our common stock, as
reported on the OTC Bulletin Board, was $1.312 per share
We will not receive any proceeds from the sales of the shares by
selling shareholders, but we will receive funds from the exercise of stock
options for such shares, which funds will be used by the Company for working
capital. We paid the cost of the preparation of this prospectus and of
registration, which is estimated at $750. All brokerage commission, discounts
and other expenses incurred by individual selling shareholders will be borne by
such selling shareholders.
--------------------------------
Investing in shares of our common stock involves a high degree of risk.
You should purchase the shares only if you can afford to lose your entire
investment. See "Risk Factors," which begins on page 4.
--------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined whether
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is February 28, 2000
3
<PAGE>
TABLE OF CONTENTS
The Company....................................................5
Risk Factors...................................................5
Use of Proceeds...............................................11
Selling Shareholders..........................................11
Plan of Distribution..........................................12
Available Information.........................................14
Incorporation of Certain Documents by Reference...............14
Legal Matters.................................................15
Experts.......................................................15
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THE COMPANY
Lexon, Inc., an Oklahoma corporation ("Company"), is a development
stage corporation organized in December, 1997. Lexon owns an exclusive worldwide
license to the Ebaf Assay, a blood test that allows for early, non-invasive
screening for colon cancer and certain types of ovarian and testicular cancers.
The Ebaf Assay is presently being developed for commercial use and is the only
known blood test to screen for colon cancer. The Ebaf Assay requires approval by
the FDA before it can be sold in the United States. Lexon also owns through its
wholly-owned subsidiary, Cancer Diagnostics, Inc., the exclusive worldwide
license to the Telomerase Assay, a blood test to screen for lung cancer. The
Telomerase Assay is presently being developed for commercial use and is the only
known blood test to screen for lung cancer. The Telomerase Assay requires
approval by the FDA before it can be sold in the United States. The description
of the business of the Company and other information regarding the Company
contained in its Form 10-SB filed August 3, 1999, as amended, is incorporated by
reference.
RISK FACTORS
You should carefully consider each of the risks and uncertainties
described below and all the other information contained in this prospectus
before deciding to invest in shares of our common stock. The trading price of
our common stock could decline if any of the following risks and uncertainties
develop into actual events, and you may lose all or part of the money you paid
to buy our common stock.
This prospectus also contains forward-looking statements that involve
risks and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including the risks faced by use described below and elsewhere in this
prospectus. We assume no obligation to update any forward-looking statements or
reason why actual results mights differ.
WE HAVE A LIMITED OPERATING HISTORY
We have only been operating since December 1997. Accordingly, we have a
limited operating history upon which an evaluation of our performance and
prospects can be based. We face all of the risks common to companies in their
early stage of development, including:
-Under capitalization
-Cash Shortages
-An Unproven Business Model
-A Product in the Development Stage
-Lack of revenue, cashflow, and earnings to be self-sustaining
Our failure to successfully address any of the risks described above
will have a material adverse effect on our business, financial condition and on
the price of our common stock.
WE HAVE A HISTORY OF LOSSES AND EXPECT FUTURE LOSSES
We have had annual losses since our inception in December, 1997. We
expect to continue to incur losses until we finish the development of our
products, obtain FDA approval for our products, and sell enough products at
prices high enough to generate a profit. As of December 31, 1999, we had
accumulated a deficit of approximately $3.4 million. There is no assurance that
we will be able to develop a commercially viable product, to obtain FDA approval
for our products, or to generate net revenue from the sale of our products, or
to achieve or maintain profitable operations.
5
<PAGE>
OUR PRODUCTS ARE STILL IN DEVELOPMENT
We have no products for sale at this time. The Ebaf Assay and the
Telomerase Assay are still in the research and development stage. Neither
product has yet been submitted to or received approval from the FDA. FDA
approval is required before we can sell the products in the U.S. There is no
assurance that the products will be commercially viable or that the FDA will
approve the products for sale in the U.S.
While we have been advised that there is a correlation between the ebaf
protein and colon cancer, and between telomerase and lung cancer, we have not
independently verified the accuracy of these statements. No assurance is given
that the presence of ebaf is an accurate predictor of cancer or that telomerase
is an accurate predictor of lung cancer.
IF WE CANNOT GENERATE ADEQUATE, PROFITABLE SALES OF OUR PRODUCT, WE WILL NOT BE
SUCCESSFUL
In order to succeed as a company, we must develop a commercially viable
product and sell adequate quantities at a high enough price to generate a
profit. We may not accomplish these objectives.
Even if we succeed in developing a commercially viable product, a
number of factors may affect future sales of our product. These factors include:
-Whether we are successful in obtaining FDA approval;
-Whether physicians, patients and clinicians accept our product as a
viable screening method for colon cancer; and
-Whether reimbursement for the cost of our product is available
WE MUST RAISE ADDITIONAL FUNDS TO COMMENCE AND COMPLETE THE FDA APPROVAL PROCESS
We require substantial additional working capital to begin collecting
data, to commence and complete clinical trials, and to market our potential
products. There is no assurance that the additional capital required will be
available to Lexon on acceptable terms when needed, if at all. Any additional
capital may involve substantial dilution to the interests of Lexon's then
existing shareholders.
WE MUST APPLY FOR AND RECEIVE FDA APPROVAL, WE CANNOT SELL OUR PRODUCT IN THE
UNITED STATES
We will not be able to market our potential products in the United
States until we apply for and receive FDA approval. We have not yet applied for
FDA approval related to our potential products, because they are still in the
research and development phase. Obtaining FDA approval generally takes years and
consumes substantial capital resources with no assurance of ultimate success. We
cannot apply for FDA approval until we have successfully collected sufficient
data from a pre-clinical trial. Several factors may prevent successful
completion of this pre-clinical trial, including an inability to enroll the
required number of patients and insufficient demonstration that our potential
products are safe and effective. Even if we are successful in collecting
sufficient data in the pre-clinical trial, we are not certain that we will be
able to obtain FDA approval.
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<PAGE>
STRINGENT, ONGOING GOVERNMENT REGULATION AND INSPECTION OF OUR POTENTIAL
PRODUCTS COULD LEAD TO DELAYS IN THEIR MANUFACTURE, MARKETING AND SALE
The FDA continues to review products even after they receive FDA
approval. If and when the FDA approves our potential product, 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 potential products. In addition, the FDA could
withdraw a previously approved product from the market upon receipt of newly
discovered information.
WE MUST OBTAIN REGULATORY APPROVALS IN FOREIGN JURSIDICTIONS 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 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
preclinical 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.
WE MAY NOT BE ABLE TO MARKET AND DISTRIBUTE OUR PRODUCTS
Our success depends, in part, on our ability to market and distribute
our products 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 potential
products, we may require the assistance of one or more experienced
pharmaceutical companies to market and distribute our potential products
effectively. If we seek an alliance with an experienced pharmaceutical company,
we may be unable to find a collaborative participant, 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 marketing our products. Any marketing participant or
licensee may terminate its agreement with us and abandon our products at any
time for any reason without significant payment. If we do not enter into an
alliance with a pharmaceutical company to market and distribute our products, 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.
INTENSE COMPETITION COULD HARM OUR FINANCIAL PERFORMANCE
The biotechnology and pharmaceutical industries are highly competitive.
There are a number of companies, universities and research organizations
actively engaged in research and development of products that may be similar to
the Ebaf Assay or the Telomerase Assay. Our competitors may 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.
7
<PAGE>
WE DO NOT OWN THE PATENTS AND WILL NOT OWN ANY IMPROVEMENTS
The U.S. patent covering the Ebaf Assay was published on June 29, 1999
and is owned by the University of South Florida ("USF"). Improvements to the
patent will be owned by USF and some will be owned by North Shore. A U.S. patent
application covering the Telomerase Assay was filed February 16, 1998 and is
owned by the University of Maryland, Baltimore ("UM"). There is no assurance
that a patent will be issued. If a patent is issued, all improvements will be
owned by UM.
THERE MAY BE COMPETING PRODUCTS IN THE FUTURE
There is no assurance that competing products will not be developed or
that improvements to the patents will be available to Lexon under its existing
licenses. The filing, prosecution and maintenance of all patent rights are
within the sole discretion of the patent owners. Lexon has the right to request
that the patent owners seek, obtain and maintain such patent and other
protection to the extent that they are lawfully entitled to do so, at Lexon's
sole expense. There is no assurance that the patent owners will seek, obtain or
maintain such patent and other protection to which they are lawfully entitled.
Further, there is no assurance that Lexon will have sufficient working capital
to fund the patent owners' efforts in those activities, if requested.
OUR LACK OF FOREIGN PATENT PROTECTION COULD ADVERSELY AFFECT OUR ABILITY TO
COMPETE
The U.S. patent covering the Ebaf Assay does not extend to foreign
countries, and the Company does not presently have any foreign patent protection
for its productS.
NIH HAS CERTAIN STATUTORY RIGHTS TO OUR PRODUCTS
The initial research and development related to the ebaf screening
process was funded by a grant from the National Institutes of Health ("NIH").
The NIH has also granted $1.1 million to the University of Maryland to study
telomerase in lung cancer patients. The NIH retains certain statutory rights to
use any invention that results from its funding without having to pay license
fees and royalties. In addition, the NIH is protected from lawsuits and
infringement claims. There is no assurance that the interests of the NIH will
not materially adversely affect Lexon or its business.
8
<PAGE>
WE ARE DEPENDENT UPON THE SERVICES OF THE RESEARCHERS AND OUR EMPLOYEES
The Ebaf Assay is being developed at North Shore University Hospital in
Manhasset, New York under the direction of Dr. Tabibzedah, co-discoverer of the
ebaf screening process. The Telomerase Assay is being developed at the
University of Maryland, Baltimore under the direction of Dr. Edward Highsmith,
discoverer of the telomerase screening process. The loss of the services of Dr.
Tabibzedah or Dr. Highsmith and the inability to retain an acceptable substitute
could have a material adverse effect on Lexon.
Lexon is also dependent upon the services of its sole officer and key
employees, who each provide services without cash compensation. The loss of the
services of these key personnel or the inability to retain such experienced
personnel could have a material adverse effect on Lexon.
CONCENTRATION OF STOCK OWNERSHIP
Our sole officer and director and our key employees own approximately
30% of the outstanding common stock. In addition, the sole officer and director
and our key employees have options to purchase up to 1,687,500 shares of common
stock at prices ranging from $1.20 to $1.5625 per share. Accordingly, they
exercise substantial influence over our business and the election of members to
the board of directors.
LIMITED EXPERIENCE OF MANAGEMENT AND POTENTIAL CONFLICTS OF INTEREST
The sole officer and key employees of Lexon have had limited experience
in the pharmaceutical 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 their acting as
officers and directors of Lexon. Management estimates that not more than 50% of
their time will be devoted to Lexon's activities
HEALTH CARE REFORM AND CONTROLS ON HEALTH CARE SPENDING MAY LIMIT THE PRICE WE
CAN CHARGE FOR OUR POTENTIAL PRODUCT AND THE AMOUNT WE CAN SELL
The federal government and private insurers have considered ways to
change, and have changed, the manner in which health care services are provided
in the United States. Potential approaches and changes in recent years include
controls on health care 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 health care
reform and private practices could impact our ability to sell our product in
large quantities at profitable pricing.
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UNCERTAINTY OF THIRD-PARTY REIMBURSEMENT COULD AFFECT OUR ABILITY TO SELL OUR
PRODUCTS AT A PROFIT
Sales of medical products largely depend on the reimbursement of
patients' medical expenses by governmental health care programs and private
health insurers. There is no guarantee that governmental health care 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.
OUR STOCK PRICE IS VOLATILE
Our common stock is traded on the OTC Bulletin Board under the symbol
"LXXN." The price at which our common stock is traded is volatile and may
continue to fluctuate substantially due to factors such as:
-Our anticipated operating results
-Variations between our actual results and the expectations of
investors
-Announcements by us or others and developments affecting our business
-Investor perceptions of our company and comparable public companies
In particular, the stock market has from time to time experienced
significant price and volume fluctuations affecting the common stocks of
companies in the pharmaceutical industry, like us. These fluctuations may result
in a material decline in the price of our common stock.
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 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.
DILUTION
To the extent outstanding warrants and options to purchase our common
stock are exercised or additional equity securities are issued at a price below
the price of a share in this offering, you may experience dilution. At December
31, 1999, the Company had 3,207,500 options outstanding, of which 2,537,500 were
exercisable at prices ranging from $1.20 to $1.5625 per share.
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USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares sold by
Selling Shareholders. We will only receive proceeds if a selling shareholder
exercises options underlying shares of our common stock being offered with this
prospectus prior to the sale of those shares. If we receive any proceeds from
the exercise of options, it will be added to our working capital. We have agreed
to bear certain expenses in connection with the registration of the shares of
common stock being offered and sold by the Selling Shareholders.
SELLING SHAREHOLDERS
The following table and discussion sets forth certain information with
respect to the selling shareholders:
<TABLE>
<CAPTION>
Beneficial
Ownership Shares
Of Shares of Available Percent
Common Stock For Sale Shares Owned Owned
Position with Prior to In the After the After the
Selling Shareholder the Company Offering(1) Offering(2) Offering(3) Offering
- ------------------- -------------- ------------ ------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Gifford Mabie.............Sole Officer 750,000(4) 250,000 500,000 6.80%
and Director
Rhonda Vincent............Employee 614,300(5) 250,000 364,300 4.96%
Frederick K. Slicker......Employee 681,000(6) 300,000 381,000 5.15%
Thomas Coughlin...........Employee 937,500(7) 637,500 300,000 3.88%
Vicki Pippin..............Employee 550,000(8) 250,000 300,000 3.09%
Mark Lindsay..............None 22,222(9) 22,222 0 n/a
------------ ------------ ------------
Total 3,555,022 1,709,722 1,845,300
<FN>
(1) Includes shares of common stock issuable upon the exercise of options that
are currently exercisable or will become exercisable within 60 days of
February 24, 2000. All options granted to the selling stockholders are
currently exercisable. For each selling shareholder, his or her percentage
of shares owned after the offering was based on 7,102,735 shares issued and
outstanding as of February 24, 2000 plus the shares which each selling
shareholder has the right to acquire within 60 days of February 28, 2000.
(2) Assumes all common shares issuable upon the exercise of options granted
under the Lexon Option Plan are sold pursuant to this offering. Selling
shareholders, however, may choose to exercise only a portion or none of
their options and may not sell any or all of the common shares issued upon
exercise of the options. There are currently no agreements, arrangements or
understandings with respect to the exercise of any options or the sale of
any of the shares received upon such exercise.
(3) The number of shares of common stock owned by each person after the
offering assumes that such person exercises all of his or her options and
sells all of his or her shares.
(4) Includes 250,000 shares of common stock issuable upon the exercise of
options.
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(5) Includes 250,000 shares of common stock issuable upon the exercise of
options. Ms. Vincent is a former officer and director of the Company. She
ceased to be an officer and director on July 15, 1999.
(6) Includes 300,000 shares of common stock issuable upon the exercise of
options and 196,000 shares owned by Mr. Slicker's spouse. Mr. Slicker is a
former officer of the Company. He ceased to be an officer on July 15, 1999.
(7) Includes 637,500 shares of common stock issuable upon the exercise of
options.
(8) Includes 250,000 shares of common stock issuable upon the exercise of
options.
(9) Represents shares of common stock issued to Mr. Lindsay in lieu of cash
compensation for his services related to developing an internet website for
the Company. His agreement is attached as Exhibit 99.2. The shares were
issued at $1.125 per share, the fair market value per share on the date
issued. The shares were purchased directly from Lexon in reliance upon the
exemption from registration provided by Rule 701 and not in or through open
market mechanisms.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
We are registering the securities on behalf of the selling
shareholders. All costs, expenses and fees in connection with the registration
of the Securities offered hereby will be paid by us. We estimate such costs,
expenses and fees to be $750. Brokerage commissions and similar selling
expenses, if any, attributable to the sale of Securities will be paid by the
selling shareholders.
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The selling shareholders may sell up to 1,709,722 shares of common
stock from time to time. These selling shareholders may sell their shares
-On the OTC Bulletin Board
-To a broker-dealer, including a market maker, who purchases the shares
for its own account
-In private transactions or by gift
The selling shareholders may also pledge their shares from time to
time, and the lender may sell the shares upon foreclosure.
The selling shareholders are offering shares of our common stock which
may be issued to them upon the exercise of options granted under the Lexon
Option Plan or which have been issued as compensation for services rendered not
in connection with a capital fund raising transaction or to make or maintain a
market for Lexon's common stock.
The decision to sell any securities is within the discretion of the
selling shareholder. Each selling shareholder is free to offer and sell his or
her Securities at times, in a manner and at prices as he or she determines.
There is no assurance that any of the selling shareholders will sell any or all
of the shares of common stock offered by them hereunder.
The selling shareholders may sell the shares at a negotiated price or
at the market price or both. They may sell their shares directly to the
purchasers or they may use brokers. If they use a broker, the selling
shareholder may pay a brokerage fee or commission or they may sell the shares to
the broker at a discount from the market price. The purchasers of the shares may
also pay a brokerage fee or other charge. The compensation to a particular
broker-dealer may exceed customary commissions. We do not know of any
arrangements by any of the selling shareholders for the sale of any of their
shares.
The selling shareholders and broker-dealers, if any, acting in
connection with sales by the selling shareholders may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any commission received by them and any profit on the resale by them of the
securities may be deemed to be underwriting discounts and commissions under the
Securities Act.
We have advised the selling shareholders that the anti-manipulative
rules under the Exchange Act, which are set forth in Regulation M, may apply to
their sales in the market. We have furnished the selling shareholders with a
copy of regulation M, and we have informed them that they should deliver a copy
of this prospectus when they sell any shares.
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AVAILABLE INFORMATION
We file annual, quarterly and periodic reports, proxy statements and
other information with the Securities and Exchange Commission using the
Commission's EDGAR system. You can find Lexon's SEC filings on the SEC's web
site, www.sec.gov.
We furnish our shareholders with annual reports containing audited
financial statements and with such other periodic reports as we, from time to
time, deem appropriate or as may be required by law. We use the calendar year as
our fiscal year.
You should rely only on the information contained in this Prospectus
and the information we have referred you to. We have not authorized any person
to provide you with any information that is different.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information that we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information we file later with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we will make with
the SEC under Section 13(a), 13(c), 14 or 15 of the Securities Exchange Act of
1934
1. Our Form 10-SB, filed August 3, 1999 and amended October 25, 1999,
December 13, 1999 and January 4, 2000.
2. Our Quarterly Report on Form 10-QSB for the quarter ended September
30, 1999, as amended.
3. Our Current Report on Form 8-K, regarding our purchase of Cancer
Diagnostics, Inc. on January 28, 2000, filed February 11, 2000.
This prospectus is part of a registration statement we filed with the
SEC. You should rely only on the information incorporated by reference or
provided in this prospectus and the registration statement. We have authorized
no one to provide you with different information. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of the statement.
If we file any document with the SEC that contains information which is
different from the information contained in this prospectus, you may rely only
on the most recent information which we have filed with the Commission.
We will provide a copy of the documents referred to above without
charge if you request the information from us. You should contact Mr. Gifford
Mabie, President, Lexon, Inc., 8908 S. Yale Ave. #409, Tulsa, Oklahoma 74137,
telephone (918) 492-4125, if you wish to receive any of such material.
14
<PAGE>
LEGAL MATTERS
The legality of the shares offered hereby has been passed upon by
Frederick K. Slicker , Esq., 8908 S. Yale Ave. Suite 410, Tulsa, OK 74137.
EXPERTS
Our financial statements incorporated in this registration statement by
reference to our Form 10-SB for the year ended December 31, 1998 have been
audited by Tullius Taylor Sartain & Sartain LLP, independent auditors. Their
report, which expressed an unqualified opinion, is incorporated herein in
reliance upon such report and on the authority of that firm as experts in
accounting and auditing.
PART II
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Registrant with the Commission are
incorporated herein by reference:
(a) the Company's Form 10-SB filed August 3, 1999, as amended, under
the Securities Exchange Act of 1934.
(b) the Company's Form 10-QSB for the quarter ended September 30, 1999,
as amended.
(c) Our Current Report on Form 8-K, regarding our purchase of Cancer
Diagnostics, Inc. on January 28, 2000, filed February 11, 2000
All documents subsequently filed by Lexon pursuant to Sections 13(a),
13(c), 14 and 15 of the Securities Exchange Act of 1934 prior to the filing of
any post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this registration statement from the
date of filing of such documents.
Item 4. Description of Securities.
Incorporated herein by reference to our Form 10-SB, filed August 3,
1999, as amended.
15
<PAGE>
Item 5. Interests of Named Experts and Counsel.
Frederick K. Slicker is acting as special counsel to Lexon in
connection with the filing of this Registration Statement. Mr. Slicker and his
wife owned 381,000 shares of Common Stock at December 31, 1999, which were
purchased by Mr. Slicker as a founder of Lexon, and he holds options to purchase
300,000 additional shares of Common Stock, which are being registered hereby.
Mr. Slicker acts as legal counsel to Lexon on various matters for which he has
not received any cash compensation, but his out of pocket expenses have been
reimbursed. The interest of Mr. Slicker is not contingent or subject to any
conditions.
Item 6. Indemnification of Directors and Officers.
Incorporated herein by reference to our Form 10-SB, filed October 25,
1999, as amended.
Item 7. Exemption from Registration.
The transactions covered by this Registration Statement were not
registered under the Securities Act of 1933 as amended in reliance upon the
exemptions from such registration pursuant to Section 4(2), Regulation D and
Rule 701.
Item 8. Exhibits.
Exhibit
No. Description of Exhibit
------- ----------------------
5.0 Opinion of Frederick K. Slicker
23.1 Consent of Frederick K. Slicker (contained in Exhibit 5.0)
23.2 Consent of Tullius Taylor Sartain & Sartain LLP
99.1 Lexon Option Plan, incorporated herein by reference to
Form 10-SB, filed August 3, 1999, as amended.
99.2 Agreement with Mark Lindsay dated February 16, 2000
16
<PAGE>
Item 9. Undertakings.
The registrant hereby covenants and undertakes, pursuant to SEC Rule
512, to:
(a) Rule 415 offering.
(I) File, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement; and
(II) Include any prospectus required by Section 10 (a) (3)
of the Securities Act of 1933; and
(III) Reflect in the prospectus any facts or events arising
after the effective date which individually or in the
aggregate represent a fundamental change in the
information set forth in the registration statement;
and
(IV) Include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement; and
(V) That for purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registrations
statement relating to the securities offered therein,
and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof; and
(VI) Remove from registration by means of a post-effective
amendment any of the securities being registered
which remain unsold which remain unsold at the
termination of the offering; and
(VII) Not applicable since the registrant is not a foreign
issuer.
17
<PAGE>
(b) Rule 512 (b)
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13 (a) or section 15 (d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15 (d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Rule 512 (h).
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel in the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question where such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication os such issue.
18
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereundo
duly authorized , in the City of Tulsa, State of Oklahoma, on February 28, 2000.
Lexon, Inc.
By /s/ Gifford Mabie
-------------------------------------
Gifford Mabie
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following person in the capacities
and on the date indicated:
Director Date
-------- ----
/s/ Gifford Mabie February 28, 2000
----------------------------
Gifford Mabie, Director
19
LEXON, INC.
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is entered into effective the
16th day of February, 2000 by and between Mark Lindsay ("Consultant") and Lexon,
Inc. ("Company").
WHEREAS, Consultant is an independent contractor; and
WHEREAS, the Company desires to engage Consultant and Consultant
desires to provide specified general business consulting services not in
connection with fund raising activities to the Company on and subject to the
terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt,
adequacy and sufficiency are acknowledged, the parties agree as follows:
1. Engagement. The Company engages Consultant and Consultant accepts
the engagement from the Company to perform internet website development and
maintenance for the Company upon the terms and conditions of this Agreement.
2. Scope of Engagement. Consultant agrees to devote his good faith
diligent efforts for the Company to develop and maintain an internet website for
the Company and such other duties and tasks as shall be assigned to Consultant
from time to time by the Company. Consultant shall report directly to and work
under the direct supervision of Gifford Mabie, the Company's President.
Consultant shall perform such other duties as the President may assign to it
from time to time.
3. Term of Engagement. This Agreement shall remain in effect for one
year from the effective date, unless terminated for cause by prior written
notice.
4. Compensation. Consultant shall be paid the following compensation:
(a) Fee. $25,000, payable in 22,222 shares of common stock of
the Company issued at the fair market value of $1.125 per share.
(b) No Expense Reimbursement. The fee shall cover all out of
pocket business expenses incurred in accordance herewith, unless the Company
shall approve other expenses on a case by case basis. All expense reimbursements
approved by the Company shall be supported by appropriate receipts. The Company
shall be entitled to deduct from any payments all federal, state and local
income, FICA and other required tax withholdings. Consultant agrees to be solely
responsible for all expenses incurred (unless approved for reimbursement by the
Company in advance) and all taxes applicable to compensation received pursuant
to this Agreement.
(c) No Employee Benefit. Consultant agrees that Consultant shall
have no participation in any employee benefit programs now in effect or
hereafter established by the Company, and Consultant shall not be entitled to
participate in health, accident, and life insurance programs, vacation benefits,
and pension, profit sharing or other employee benefits.
<PAGE>
5. Termination. This Agreement may be terminated for cause by prior
notice given by either party.
6. Independent Contractor. Consultant is an independent contractor and
not an employee, partner, joint venturer or other representative of the Company.
Consultant is not under the direct or indirect control of the Company. All
references in the Agreement to "Consultant" includes the Consultant and
Consultant's directors, officers, employees and affiliates.
7. Miscellaneous.
(a) Notices. Any notice, request, demand or other communication
required to be made or which may be given to either party hereto shall be
delivered by certified U.S. mail, postage prepaid, to that party's attention at
the address set forth below or at such other address as shall be changed from
time to time by giving notice hereunder.
(b) Entire Agreement. This document constitutes the complete and
entire employment agreement between the parties hereto with reference to the
subject matters hereof. No statement or agreement, oral or written, made prior
to or at the signing hereof, and no prior course of dealing or practice by
either party shall vary or modify the written terms hereof.
(c) Headings. The headings and captions contained in this
Agreement are for ease and convenience of reference only and shall not be deemed
for any purpose to affect the substantive meaning of the rights and duties of
the parties hereto in any way.
(d) Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
(e) Counterparts. This Agreement may be executed in multiple
counterparts, each of which has the same text and each of which shall be deemed
an original for all purposes, but together they constitute one single and the
same agreement.
(f) Amendments. This Agreement may be amended only by a written
document signed by the parties and stating that the document is intended to
amend this Agreement.
(g) Applicable Law. This Agreement shall be governed by and
construed in accordance with Oklahoma law.
(h) Resolution of Disputes. The parties agree to resolve all
disputes arising under or in connection with this Agreement by final and binding
arbitration, which either party may initiate 60 days after the parties have
failed to reach a mutually acceptable agreement after negotiating in good faith
to do so. The arbitration shall be conducted in accordance with the Commercial
Rules of Arbitration of the American Arbitration Association, held in Tulsa, OK.
(i) Additional Documents. The parties hereto shall enter into
and execute such additional agreements, understandings, documents or instruments
as may be necessary to implement the intent of this Agreement.
-2-
<PAGE>
(j) Cumulative Remedies. The remedies of the parties as set
forth herein are cumulative and may be exercised individually or together with
one or all other remedies, and are not exclusive but instead are in addition to
all other rights and remedies available to the parties at law or in equity.
(k) Severability. If any provision of this Agreement or the
application thereof to any person or circumstances shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
(l) Waiver. The failure of a party to enforce any provision of
this Agreement shall not constitute a waiver of such party's right to thereafter
enforce such provision or to enforce any other provision at any time.
IN WITNESS WHEREOF, the parties hereto have duly caused this
Agreement to be executed effective this 16th day of February, 2000.
Lexon, Inc.
/s/ MARK LINDSAY By: /s/ GIFFORD MABIE
- ------------------------------ -------------------------------
Mark Lindsay, Individually Gifford Mabie, President
-3-
February 28, 2000
Board of Directors
Lexon, Inc.
8908 South Yale, Suite 409
Tulsa, Oklahoma 74137-3545
Gentlemen:
This opinion is being rendered to you in connection with the filing by
Lexon, Inc. ("Company") of its Registration Statement on Form S-8 ("Registration
Statement"). I have acted as special counsel for the Company in connection with
the preparation and filing of the Registration Statement. I consent to the
inclusion of this opinion as Exhibit 5 in the Registration Statement and to the
references therein to me.
I have examined Certificate of Incorporation and Bylaws and various
related actions of the Board of Directors of the Company along with the
consulting agreements that are included in the Form S-8, or copies certified or
otherwise identified to my satisfaction of such documents and records of the
Company and of such statutes, court decisions, proceedings and other documents
as I have considered necessary or appropriate in the circumstances to render the
following opinion. I have relied upon the accuracy of factual information
provided to me by the Company and upon the accuracy of the representations and
undertakings set forth in the Registration Statement. Specifically, among other
facts certified to me, the Company has assured me that the fair market value
equal for the shares covered by the Registration Statement equal to at least the
par value thereof was in fact paid by the listed consultants for bona fide
services rendered in the past by the persons named in the Registration Statement
not in connection with a capital fund-raising transactions.
In rendering this opinion, I have assumed:
(i) That each natural person signing any document reviewed by me
had the legal capacity to do so, both at the time of execution
and as of the date hereof, and each person signing any
document reviewed by me in a representative capacity had
authority to sign in such capacity, both at the time of
execution and as of the date hereof;
(ii) The genuineness of the signatures appearing on all documents;
(iii) The authenticity of all documents submitted to me as originals;
<PAGE>
(iv) The conformity to authentic original documents of all
documents submitted to me as certified, conformed, or copies;
and
(v) The correctness, completeness and accuracy of all facts set
forth in all certificates attached to this opinion.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions, and assumptions set forth herein, I am of the
opinion that:
1. The Company has duly authorized the taking of all actions
necessary to issue the shares covered by the Registration
Statement.
2. The Company has duly authorized the filing of the Registration
Statement with all requisite corporate action on its part.
3. The shares covered by the Registration Statement have been
duly authorized, were validly issued and are fully paid and
non-assessable.
I express no opinion with respect to (i) the enforcability of
the indemnification provisions set forth in the Company charter, bylaws and
individual agreements to the extent they purport to relate to liabilities
resulting from or based upon negligence or any violation of federal or state
securities or blue sky laws; (ii) the right of any person or entity to institute
or maintain any action in any court or upon matters respecting the jurisdiction
of any court; (iii) the validity of the exercise of discretion contrary to
applicable laws, rules and regulations; or (iv) any other matter not expressly
set forth herein. I am a member of the Bar of the State of Oklahoma. The
opinions above are limited to the laws of the United States of America and the
laws of the State of Oklahoma.
This Opinion is governed by, and shall be interpreted in accordance
with the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations, all as
more particularly described in the Accord, and this Opinion should be read in
conjunction therewith. I express no opinion as to any matter other than as
expressly set forth above, and no opinion not expressly and specifically
expressed on any matter may be inferred from this opinion. This opinion is given
as of the date hereof, and I undertake no, and hereby disclaim any, obligation
to advise you of any change thereafter set forth herein. This opinion is for
your sole use and benefit, and no other person may be furnished a copy of this
opinion or may relay on our opinion without my prior written consent.
Very truly yours,
/s/ FREDERICK K. SLICKER
---------------------------
Frederick K. Slicker
Counsel to Lexon, Inc.
We consent to the incorporation of our report dated December 6, 1999,
on the financial statements of Lexon, Inc. (the "Company") at December 31, 1998,
included in the Company's Registration Statement on Form 10-SB (Amendment No.
2), into the Company's Registration Statement on Form S-8.
TULLIUS TAYLOR SARTAIN & SARTAIN LLP
Tulsa, Oklahoma
February 28, 2000
