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**UNITED STATESSECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549

FORM 10-QSB

x Quarterly
  Report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended **June 30, 2005**

 ̈ Transition
  report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934

0-9040 
  Commission file number

Aucxis Corp.
  (Exact name of small business issuer as specified in its charter)

**Nevada** 
  (State or other jurisdiction)

**Pending** 
  (IRS Employer of incorporation or organization Identification No.)

**Suite 500 - 666 Burrard Street, Vancouver, BC V6C
  3P6 Canada.** 
  (Address of principal executive offices)

**604-639-3109** 
  (Issuer's telephone number)

__________________________________________________________________
  
  (Former Name, Address and Former Fiscal Year, if Changed Since Last Report)

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. Yesx No ̈

Check whether the registrant filed all documents and reports
  required to be filed by Section 12, 13 or 15(d) of
  the Exchange Act after the distribution of securities under a plan confirmed
  by court. Yes ̈ Nox

As of August 17, 2005 there were 62,773,051 shares of the Registrant's
  common stock, par value $0.001 per 
  share outstanding.

Transitional Small Business Disclosure Format (check one);
  Yes ̈ Nox

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AUCXISCORP.

FORM 10-QSB

INDEX

|                                                                                                    | Page                                                                                                     
|--------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------
|                                                                                                    |                                                                                                          
|PART I. FINANCIAL INFORMATION                                                                       |                                                                                                          
|                                                                                                    |                                                                                                          
|Item 1. Financial Statements                                                                        | 3                                                                                                        
|                                                                                                    |                                                                                                          
|                                                                                                    | Consolidated Balance Sheets at June 30,
      2005 (Unaudited) and December 31, 2004 (Audited)           
|                                                                                                    |                                                                                                          
|                                                                                                    | Consolidated Statements of Operations
      (Unaudited) for the three months ended June 30, 2005 and 2004
|                                                                                                    |                                                                                                          
|                                                                                                    | Consolidated Statements of Cash Flows
      (Unaudited) for the three months ended June 30, 2005 and 2004
|                                                                                                    |                                                                                                          
|                                                                                                    | Notes to Consolidated Financial Statements                                                               
|                                                                                                    |                                                                                                          
|Item 2. Managements’ Discussion
      and Analysis of Financial Condition and Results of Operations | 4                                                                                                        
|                                                                                                    |                                                                                                          
|Item 3. Controls and Procedures                                                                     |                                                                                                          
|                                                                                                    |                                                                                                          
|PART II. OTHER INFORMATION                                                                          | 7                                                                                                        
|                                                                                                    |                                                                                                          
|Item 4. Legal Proceedings                                                                           | 7                                                                                                        
|                                                                                                    |                                                                                                          
|Item 5: Subsequent Events                                                                           | 7                                                                                                        
|                                                                                                    |                                                                                                          
|Item 6. Exhibits and Reports
      on Form 8-K                                                      | 7                                                                                                        
|                                                                                                    |                                                                                                          
|Signatures                                                                                          | 7                                                                                                        

2

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**ITEM 1. Financial Statements**

Aucxis Corp. 
  (a Nevada Corporation)

Consolidated Financial Statements 
  (Unaudited) 
  June 30, 2005 
  (expressed in U.S. dollars)

3

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AUCXIS CORP.

CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2005

(Unaudited)

---

|AUCXIS
        CORP.
      CONSOLIDATED BALANCE SHEETS
      (Expressed in U.S. dollars)
|----------------------------------------------------------------------------------------

|                                                     |   | June 30,    |   |   | December 31, |  
|---------------------------------------------------- | - | ----------- | - | - | ------------ | -
|                                                     |   | 2005        |   |   | 2004         |  
|                                                     |   | (unaudited) |   |   | (audited)    |  
|                                                     |   |             |   |   |              |  
|ASSETS                                               |   |             |   |   |              |  
|                                                     |   |             |   |   |              |  
|CURRENT ASSETS                                       |   |             |   |   |              |  
|Cash and cash equivalents                            | $ | 244,525     |   | $ | 402          |  
|Amounts receivable                                   |   | 2,945       |   |   | 1,304        |  
|Total Assets                                         | $ | 247,470     |   | $ | 1,706        |  
|                                                     |   |             |   |   |              |  
|LIABILITIES                                          |   |             |   |   |              |  
|                                                     |   |             |   |   |              |  
|CURRENT LIABILITIES                                  |   |             |   |   |              |  
|Accounts payable (Note 3)                            | $ | 206,374     |   | $ | 780,849      |  
|Accrued liabilities                                  |   | 54,245      |   |   | 64,886       |  
|Due to unrelated parties                             |   | 552,339     |   |   | 624,412      |  
|Convertible debt (Note 4)                            |   | -           |   |   | 471,525      |  
|Total Current Liabilities                            |   | 812,958     |   |   | 1,941,672    |  
|Mandatory Redeemable Shares of Common Stock (Note 5) |   | -           |   |   | 4,215,914    |  
|Total Liabilities                                    |   | 812,958     |   |   | 6,157,586    |  
|                                                     |   |             |   |   |              |  
|STOCKHOLDERS’ DEFICIT                                |   |             |   |   |              |  
|                                                     |   |             |   |   |              |  
|Common stock, $0.001 par value; 250,000,000 shares   |   |             |   |   |              |  
|authorized, 62,773,051 issued
      and outstanding  |   | 62,773      |   |   | 62,773       |  
|Additional paid-in capital                           |   | 18,736,200  |   |   | 18,736,200   |  
|Accumulated other comprehensive income               |   | 587,771     |   |   | 494,631      |  
|Deficit                                              |   | (19,952,232 | ) |   | (25,449,484  | )
|                                                     |   |             |   |   |              |  
|Total Stockholders’ Deficit                          |   | (565,488    | ) |   | (6,155,880   | )
|                                                     |   |             |   |   |              |  
|Total Liabilities and Stockholders’ Deficit          | $ | 247,470     |   | $ | 1,706        |  

(The accompanying notes are an integral part of these consolidated
  financial statements)

F-2

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|AUCXIS
        CORP.
      CONSOLIDATED STATEMENTS OF OPERATIONS, DEFICIT AND COMPREHENSIVE
        INCOME (LOSS)
      (Expressed in U.S. dollars)
      (unaudited)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                          |   | Three months |   |   | Three months |   |   | Six months |   |   | Six months |  
|----------------------------------------- | - | ------------ | - | - | ------------ | - | - | ---------- | - | - | ---------- | -
|                                          |   | ended        |   |   | ended        |   |   | ended      |   |   | ended      |  
|                                          |   | June 30,     |   |   | June 30,     |   |   | June 30,   |   |   | June 30,   |  
|                                          |   | 2005         |   |   | 2004         |   |   | 2005       |   |   | 2004       |  
|                                          |   |              |   |   |              |   |   |            |   |   |            |  
|Revenue                                   | $ | -            |   | $ | -            |   | $ | -          |   | $ | -          |  
|                                          |   |              |   |   |              |   |   |            |   |   |            |  
|Operating Expenses                        |   |              |   |   |              |   |   |            |   |   |            |  
|General and administrative (Note 3)       |   | 17,799       |   |   | 44,768       |   |   | 49,925     |   |   | 81,834     |  
|Depreciation                              |   | -            |   |   | 1,191        |   |   | -          |   |   | 3,591      |  
|                                          |   |              |   |   |              |   |   |            |   |   |            |  
|Total operating expenses                  |   | 17,799       |   |   | 45,959       |   |   | 49,925     |   |   | 85,425     |  
|                                          |   |              |   |   |              |   |   |            |   |   |            |  
|Operating loss                            |   | (17,799      | ) |   | (45,959      | ) |   | (49,925    | ) |   | (85,425    | )
|                                          |   |              |   |   |              |   |   |            |   |   |            |  
|Other income (expense)                    |   |              |   |   |              |   |   |            |   |   |            |  
|Legal settlement (Note 6)                 |   | -            |   |   | -            |   |   | (616,898   | ) |   | -          |  
|Gain on recovery of advances (Note 7)     |   | -            |   |   | -            |   |   | 1,888,571  |   |   | -          |  
|Gain on debt write-offs                   |   | 59,590       |   |   | -            |   |   | 59,588     |   |   | -          |  
|Gain on cancellation of mandatory         |   |              |   |   |              |   |   |            |   |   |            |  
|redeemable shares (Note
      5)          |   | 4,215,914    |   |   | -            |   |   | 4,215,914  |   |   | -          |  
|                                          |   |              |   |   |              |   |   |            |   |   |            |  
|Net income (loss) for the period          |   | 4,257,705    |   |   | (45,959      | ) |   | 5,497,252  |   |   | (85,425    | )
|Foreign currency translation adjustments  |   | 17,860       |   |   | 22,158       |   |   | 93,140     |   |   | 139,584    |  
|                                          |   |              |   |   |              |   |   |            |   |   |            |  
|Comprehensive income (loss)               | $ | 4,275,565    |   | $ | (23,801      | ) | $ | 5,590,392  |   | $ | 54,159     |  
|                                          |   |              |   |   |              |   |   |            |   |   |            |  
|                                          |   |              |   |   |              |   |   |            |   |   |            |  
|Basic and diluted income (loss) per share | $ | 0.06         |   | $ | (0.01        | ) | $ | 0.08       |   | $ | (0.01      | )
|                                          |   |              |   |   |              |   |   |            |   |   |            |  
|                                          |   |              |   |   |              |   |   |            |   |   |            |  
|Weighted average shares outstanding       |   | 62,773,051   |   |   | 62,773,051   |   |   | 62,773,051 |   |   | 62,773,051 |  

(The accompanying notes are an integral part of these consolidated
  financial statements)

F-3

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|AUCXIS
        CORP.
      CONSOLIDATED STATEMENTS OF CASH FLOWS
      (Expressed in U.S. dollars)
      (unaudited)
|--------------------------------------------------------------------------------------------------------------------

|                                                                                 |   | Six Months Ended |  
|-------------------------------------------------------------------------------- | - | ---------------- | -
|                                                                                 |   | June 30, 2005    |  
|                                                                                 |   |                  |  
|OPERATING ACTIVITIES                                                             |   |                  |  
|Net income (loss) for the period                                                 | $ | 5,497,252        |  
|Adjustments to reconcile net loss to net cash used in operating
      activities |   |                  |  
|Depreciation                                                                     |   | -                |  
|Gain on cancellation of
      mandatory redeemable shares                        |   | (4,215,914       | )
|Changes in operating assets and liabilities                                      |   |                  |  
|Amounts receivable                                                               | $ | (1,641           | )
|Accounts payable and accrued
      liabilities                                   |   | (585,116         | )
|                                                                                 |   |                  |  
|CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                  |   | 694,581          |  
|                                                                                 |   |                  |  
|CASH USED IN INVESTING ACTIVITIES                                                |   | -                |  
|                                                                                 |   |                  |  
|FINANCING ACTIVITIES                                                             |   |                  |  
|Repayment of convertible debt                                                    |   | (471,525         | )
|                                                                                 |   |                  |  
|CASH USED IN FINANCING ACTIVITIES                                                |   | (471,525         | )
|                                                                                 |   |                  |  
|EFFECT OF EXCHANGE RATE CHANGES ON CASH AND                                      |   |                  |  
|CASH EQUIVALENTS                                                                 |   | 21,067           |  
|                                                                                 |   |                  |  
|CHANGE IN CASH AND CASH EQUIVALENTS                                              |   | 244,123          |  
|                                                                                 |   |                  |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                   |   | 402              |  
|                                                                                 |   |                  |  
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                         | $ | 244,525          |  
|                                                                                 |   |                  |  
|Non-cash investing and financing activities                                      |   | -                |  
|                                                                                 |   |                  |  
|Supplemental disclosures                                                         |   |                  |  
|Interest paid                                                                    |   | 96,525           |  
|Income taxes paid                                                                |   | -                |  

(The accompanying notes are an integral part of these consolidated
  financial statements)

F-4

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|AUCXIS
        CORP.
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (Expressed in U.S. dollars)
      THREE MONTHS ENDED JUNE 30, 2005 (unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------

|1. | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | These unaudited interim consolidated financial
        statements of Aucxis Corp. have been prepared by the Company in accordance
        with the instructions to Form 10-QSB, and accordingly, they do not include
        all of the information and footnotes required by accounting principles
        generally accepted in the United States for complete financial statements.
        In the opinion of management, all adjustments (consisting of items of
        a normal recurring nature) considered necessary for a fair presentation
        have been included. Operating results for the six months ended June 30,
        2005 are not necessarily indicative of the results that may be expected
        for the year ending December 31, 2005. These consolidated financial statements
        should be read in conjunction with the audited consolidated financial
        statements and notes thereto included in the Company’s Annual Report
        on Form 10-KSB for the year ended December 31, 2004. The year-end balance
        sheet was derived from the audited consolidated financial statements but
        does not include all disclosures required by generally accepted accounting
        principles.
|  
|   | The preparation of financial statements
        in conformity with accounting principles generally accepted in the United
        States requires management to make estimates and assumptions that affect
        the amounts reported in the financial statements and accompanying notes.
        The actual results experienced by the Company may differ from management’s
        estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   | These consolidated financial statements
        include the accounts of the Company and its wholly owned subsidiaries.
        All intercompany transactions and balances have been eliminated in consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

F-5

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|AUCXIS
        CORP.
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (Expressed in U.S. dollars)
      THREE MONTHS ENDED JUNE 30, 2005 (unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|3. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|4. | CONVERTIBLE DEBT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | On April 16, 2002, the Company and three
        lenders, ABN Capital (Belgium) NV, Bodin Saphir Pension Scheme, and J.J.
        Mennillo, entered into a Convertible Bridge Loan Agreement for $125,000
        each, representing an aggregate loan by the lenders to the Company of
        $375,000. The loan bears interest at a rate of 12.5% per annum, which
        accrues until the loan is repaid or converted to shares. Subject to certain
        terms and conditions of this agreement, each of the lenders is entitled
        to convert only such amounts as have been drawn down from its respective
        part of the principal of the loan into shares at $0.01 per share.
        Interest has been capitalized to the loan balances. The entire loan was
        drawn down and was due to be repaid or converted on December 31, 2002.
        Since the repayment date has passed, the loan been classified as a current
        liability.
|  
|   | On January 11, 2005 the entire balance
        was repaid to the lenders from the funds received from Aucxis NV Corp.
        (see Note 7).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-6

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|AUCXIS
        CORP.
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (Expressed in U.S. dollars)
      THREE MONTHS ENDED JUNE 30, 2005 (unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | MANDATORY REDEEMABLE SHARES OF COMMON STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | On January 10, 2000, the Company completed and closed
        the purchase of 100% of the issued and outstanding shares of ATS. The
        Company acquired the shares of ATS in exchange for 3,636,364 shares of
        common stock and cash of $4,000,000. The shares of common stock were
        valued at $3,636,364, based on their estimated fair value at January
        10, 2000. Fair value was determined based on the cash price paid for stock
        in a contemporaneous private placement, the put feature related to the
        shares issued to acquire ATS and the market price of the Company’s
        stock around the acquisition date. The Company accreted $938,000 and
        $243,817 to the mandatory redeemable shares of common stock during
        the years ended December 31, 2000 and 2001, respectively. The accretions
        were recorded under a straight-line assumption based on a two-year amortization.                                                                  
|  
|   | The terms of the purchase agreement also provided
        the vendors with a put feature, which allowed the vendors to sell the
        shares back to the Company at $1.65 per share at the time of release
        if they were not freely tradable. Since the 3,636,364 shares issued to
        the vendors were subject to a put feature, which is beyond the Company’s
        direct control, they were classified as mandatory redeemable shares of
        common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | Under the terms of the purchase agreement, the vendors
        agreed not to sell or transfer any of their shares except on the basis
        of a time-release formula which presumes that the shares will be freely
        tradable at the time of release for sale or transfer. Under the time release
        formula, 454,545 shares were to be released on each of the 6, 12, 18 and
        24 month anniversary dates of the closing and 606,061 shares are to be
        released on each of the 36, 48 and 60 month anniversary dates of the closing.
        The first 454,545 shares were not free trading on July 10, 2000, the first
        anniversary date of the acquisition and during 2002 the vendors sought
        to exercise their right to retract 909,090 shares, representing the first
        two tranches under the time release agreement, on the basis that they
        were not free trading on their respective release dates.                                                          
|  
|   | During the year ended December 31, 2003, the Company
        finalized the disposition of a 7.5% interest in ATS pursuant to a court
        order allowing the former owners of ATS (“Schelfhout”) to
        reacquire a 7.5% interest in exchange for the transfer for cancellation
        of the first tranche of 454,545 shares. Accordingly, the Company reduced
        the mandatory redeemable shares of common stock by $602,267 (454,545
        shares), increased its non- controlling interest by $59,972, representing
        the carrying amount of the portion of ATS disposed of and recognized a
        gain on cancellation of mandatory redeemable common shares for the balance
        of $542,295.                                                                                                                                                                                                                                                                                                
|  
|   | During the three months ended June 30, 2005, the
        mandatory redeemable shares were returned to treasury as part of the settlement
        with Schelfout and the Company has recorded a gain on cancellation of
        mandatory redeemable shares of common stock of $4,215,914.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|6. | LEGAL SETTLEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | Terms of the settlement with Schelfhout included
        a one-time cash payment of $538,015 (EUR 409,230) and payment of Schelfhout’s
        50% share of the $78,883 (EUR 60,000) CEPINA deposit. CEPINA was the
        arbitration panel that was engaged in the prior year to assist in settling
        the legal disputes between the Company and the former owners of ATS. In
        return for the settlement proceeds, Schelfhout agreed to drop all claims
        against the Company and to return 3,636,364 shares of the Company’s
        common stock held in certificates in the names of the former owners of
        ATS. Once the fee dispute is resolved, CEPINA will return any excess funds
        to the Company being the Company’s 50% share of the CEPINA deposit.
        However, since management is unable to determine the amount, if any, that
        will be returned, the Company has expensed its 50% portion of the deposit
        as part of the legal settlement expense amount.
|  
|7. | GAIN ON RECOVERY OF ADVANCES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   | In January 2005, the Company recovered a portion
        of the $9,250,000 in advances that it had made to its former subsidiary,
        Aucxis Corp. NV, to purchase ATS. The Company had written off the entire
        amount in previous years. From the proceeds that Aucxis Corp. NV received
        from the sale of its subsidiary, ATS, the Company was able to recover
        $1,888,571.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

F-7

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Item 2.      Management's Discussion
  and Analysis of Financial Condition and Results of Operations

When used herein, the words “may”, “will”,
  “expect”, “anticipate”, “continue”, “estimate”,
  “project”, “intend”, “plan” and similar
  expressions are intended to identify forward-looking statements within the meaning
  of Section 21E of the Securities Exchange Act of 1934, as amended, regarding
  events, conditions and financial trends that may affect the Company's future
  plans of operations, business strategy, operating results and financial position.
  All statements, other than statements of historical facts, included or incorporated
  by reference in this Form 10-QSB which address activities, events or developments
  which the Company expects or anticipates will or may occur in the future, including
  such things as future capital expenditures (including the amount and nature
  thereof), business strategy, expansion and growth of the Company’s business
  and operations, and other such matters are forward-looking statements. These
  statements are based on certain assumptions and analyses made by the Company
  in light of its experience and its perception of historical trends, current
  conditions and expected future developments as well as other factors it believes
  are appropriate in the circumstances. Such statements are not guarantees of
  future performance and are subject to risks and significant uncertainties and
  that actual results may differ materially from those included within the forward-looking
  statements as a result of various factors. The occurrence of any unanticipated
  events may cause actual results to differ from those expressed or implied by
  the forward-looking statements contained herein. You are cautioned not to place
  undue reliance on these statements, which speak only as of the date of this
  report.

Overview

Aucxis Corp. (“Aucxis” or the “Company”)
  was originally incorporated in Nevada on January 8, 1998 under the name Kazari
  International, Inc. (Kazari). On February 26, 1999, Kazari and e-Auction Global
  Trading Inc. (Barbados) entered into a share exchange agreement pursuant to
  which agreement Kazari purchased e-Auction (Barbados) shares on a one for one
  basis. Kazari had no viable business activities at the time of the share exchange
  agreement. On June 10, 1999, Kazari amended its name to e-Auction Global Trading
  Inc. During fiscal year 2000, Aucxis acquired Schelfhout Computer Systemen N.V.,
  Kwatrobox B.V., and I-Three, Inc. On June 12, 2001 the Company amended its charter
  to change its name to Aucxis Corp. Aucxis had a wholly owned subsidiary, e-Auction
  (Barbados), which in turn had one wholly owned subsidiary, Aucxis Corp. (Canada).
  Both of these companies are inactive that have not conducted any active business
  from inception to date that the current management is aware of.

The Company also owns directly but no longer controls Aucxis
  Corp. (Belgium) (“Aucxis NV”). On April 11, 2003 Aucxis NV, voluntarily
  filed for bankruptcy. A trustee in bankruptcy had been entrusted with Aucxis
  NV’s management and the realization of its assets for the benefit of its
  creditors. Accordingly, the Company ceased consolidating the operations of Aucxis
  NV effective April 11, 2003.

On May 28, 2004, the company reached a settlement with the
  former owners of the Company’s subsidiary, ATS, with regard to all disputes
  and claims alleged against the company by the former owners of ATS. The former
  owners of ATS agreed to withdraw all claims against the Company in exchange
  for a portion of the proceeds received by Aucxis upon the eventual sale of ATS
  and a withdrawal by Aucxis of any claims against the former owners. The Commercial
  Court of Dendermonde granted its approval of the settlement on June 23, 2004.

On October 29, 2004, the Company announced that it had received
  confirmation from its Belgium counsel that the bankruptcy trustee had finalized
  the sale of its 92.5% ownership in Aucxis Trading Solutions, N.V. (“ATS”)
  (formerly Schelfhout Computer Systemen N.V.), a Belgium company. The sale was
  finalized late in 2004 and the Aucxis proceeds were received in January 2005.
  The closing of the Bankruptcy proceedings, scheduled for August 11, 2005, include
  the winding up of Aucxis NV.

During the quarter ended June 30, 2005, Management took steps
  toward settling with outstanding unsecured creditors. It has been successful
  to date in settling claims with many of the creditors. Without favourable settlements
  with its creditors, the Company will be unable to solicit financing and move
  forward to becoming self-sustaining.

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Aucxis Corp. currently has no business operations aside from
  maintaining its listing while actively seeking new business opportunities.

Highlights of the Quarter

Revenues

Effective April 11, 2003, the Company had voluntarily relinquished
  control of Aucxis NV to a bankruptcy trustee and, accordingly, had deconsolidated
  the subsidiary and ceased consolidating the operations of ATS. As a result,
  with no other active operation, there has been no revenue to report for the
  current quarter or for the same quarter last year.

Expenses

Selling, general and administrative expenses for the quarter
  ended June 30, 2005 were $17,799 compared to $44,768 for the same quarter
  in 2004. Lower expenses were largely a result of reduced consulting fees (2005:
  $12,056 vs. 2004: $24,280) payable to Q4 Financial Group, a company
  controlled by an officer. Also, interest expense was significantly lower this
  quarter over 2004 (nil vs. $7,026) as the loans were fully repaid in January
  2005 and no interest has been accrued since the quarter ended June 30, 2004
  when the settlement was reached with Schelfout.

Other expenses incurred this quarter were rent ($2,085)
  and director fees ($2,009). Accounting and audit fees of $4,340 were
  offset by a reversal of accrued legal lees in the amount of $4,411.

Depreciation and amortization expense for the three months
  ended June 30, 2005 was nil, compared to $1,191 for the same period last
  year. This was due to the write off of property and equipment in the fourth
  quarter of the prior year.

Net Income (Loss)

Net income for the three months ended June 30, 2005 was $4,257,705
  compared to a loss of ($45,959) for the three months ended June 30, 2004.
  The significant increase in net income in the most recent quarter was due to
  the gain on cancellation of mandatory redeemable shares. As part of the Company’s
  settlement with Schelfhout, 3,636,364 of the Company’s shares were retuned
  to treasury, resulting in a gain of $4,215,914. This transaction also affected
  the income per share figure, resulting in an income per share of $0.06 compared
  to a loss per share of ($0.01) for the same period last year.

Liquidity and Capital Resources

The Company has not generated revenues since being inactive
  and has never paid any dividends and is unlikely to pay dividends or generate
  earnings in the immediate or foreseeable future. The continuation of the Company
  as a going concern is dependent upon the continued financial support from its
  shareholders, the ability of the Company to obtain necessary equity financing
  to continue operations and the attainment of profitable operations. As at June
  30, 2005, the Company had a working capital deficiency of $565,488 (December
  31, 2004 - $1,939,966) and has accumulated losses of $19,952,232 since
  inception. The corresponding financial statements do not include any adjustments
  to the recoverability and classification of recorded asset amounts and classification
  of liabilities that might be necessary should the Company be unable to continue
  as a going concern. These factors raise substantial doubt regarding the Company’s
  ability to continue as a going concern. Management is considering various revenue
  and cost management alternatives and is examining a variety of options to re-organize
  the Company. It is not possible at this time to predict with any assurance the
  success of these initiatives.

Critical Accounting Policies

We have identified the policies below as critical to our business
  operations and the understanding of our results of operations. The impact and
  any associated risks related to these policies on our business operations is
  normally discussed throughout Management’s Discussion and Analysis of
  Financial Condition and Results of Operations where such policies affect our
  reported and expected financial results. For a detailed discussion on the application
  of the Company’s other accounting policies, see Note 2 in the Notes to
  the Consolidated Financial Statements as at December 31, 2004.

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Use of estimates. The preparation of financial statements
  in conformity with accounting principles generally accepted in the United States
  requires us to make estimates and assumptions that affect the reported amount
  of assets and liabilities, disclosure of contingent assets and liabilities at
  the date of our financial statements, and the reported amounts of revenue and
  expenses during the reporting period. There can be no assurance that actual
  results will not differ from those estimates.

Foreign currency translation. The Company’s function
  currency is the Canadian dollar. SFAS No. 52 “Foreign Currency Translation”
  requires the use of the current rate method to translate the Company’s
  financial statements into U.S. dollars. Under the current rate method, all assets
  and liabilities are translated at the period-end rate, while equity accounts
  are translated at the historical rate. Revenue and expenses are translated at
  the weighted average rate for the period. Translation gains/losses is reported
  as a component of accumulated other comprehensive income. Foreign currency transaction
  gains/losses are included in the determination of net income.

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board
  (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 123R, “Share
  Based Payment”. SFAS 123R is a revision of SFAS No. 123 “Accounting
  for Stock-Based Compensation”, and supersedes APB Opinion No. 25, “Accounting
  for Stock Issued to Employees” and its related implementation guidance.
  SFAS 123R establishes standards for the accounting for transactions in which
  an entity exchanges its equity instruments for goods or services. It also addresses
  transactions in which an entity incurs liabilities in exchange for goods or
  services that are based on the fair value of the entity’s equity instruments
  or that may be settled by the issuance of those equity instruments. SFAS 123R
  focuses primarily on accounting for transactions in which an entity obtains
  employee services in share-based payment transactions. SFAS 123R does not change
  the accounting guidance for share-based payment transactions with parties other
  than employees provided in SFAS 123 as originally issued and Emerging Issues
  Task Force Issue No. 96-18, “Accounting for Equity Instruments That Are
  Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
  Goods or Services”. SFAS 123R does not address the accounting for employee
  share ownership plans, which are subject to AICPA Statement of Position 93-6,
  “Employers’ Accounting for Employee Stock Ownership Plans”.
  SFAS 123R requires a public entity to measure the cost of employee services
  received in exchange for an award of equity instruments based on the grant-date
  fair value of the award (with limited exceptions). That cost will be recognized
  over the period during which an employee is required to provide service in exchange
  for the award – the requisite service period (usually the vesting period).
  SFAS 123R requires that the compensation cost relating to share-based payment
  transactions be recognized in financial statements. That cost will be measured
  based on the fair value of the equity or liability instruments issued. The scope
  of SFAS 123R includes a wide range of share-based compensation arrangements
  including share options, restricted share plans, performance-based awards, share
  appreciation rights, and employee share purchase plans. Public entities that
  file as small business issuers will be required to apply SFAS 123R in the first
  interim or annual reporting period that begins after December 15, 2005. The
  adoption of this standard is not expected to have a material effect on the Company’s
  results of operations or financial position.

In December 2004, FASB issued SFAS No. 153, “Exchanges
  of Nonmonetary Assets - An Amendment of APB Opinion No. 29”. The guidance
  in APB Opinion No. 29, “Accounting for Nonmonetary Transactions”,
  is based on the principle that exchanges of nonmonetary assets should be measured
  based on the fair value of the assets exchanged. The guidance in that Opinion,
  however, included certain exceptions to that principle. SFAS No. 153 amends
  Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar
  productive assets and replaces it with a general exception for exchanges of
  nonmonetary assets that do not have commercial substance. A nonmonetary exchange
  has commercial substance if the future cash flows of the entity are expected
  to change significantly as a result of the exchange. The provisions of SFAS
  No. 153 are effective for nonmonetary asset exchanges occurring in fiscal periods
  beginning after June 15, 2005. Early application is permitted and companies
  must apply the standard prospectively. The adoption of this standard is not
  expected to have a material effect on the Company’s results of operations
  or financial position.

The FASB has also issued SFAS No. 152, but it will not have
  any relationship to the operations of the Company. Therefore, a description
  and its impact on the Company’s operations and financial position have
  not been disclosed.

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In March 2005, the SEC staff issued Staff Accounting Bulletin
  No. 107 ("SAB 107") to give guidance on the implementation of SFAS No. 123R.
  The Company will consider SAB 107 during the implementation of SFAS No. 123R.

Item 3.      Controls and Procedures

The Company’s principal executive and financial officers
  have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e)
  and 15d-15(e) under the Securities Exchange Act of 1934) as of June 30, 2005.
  They have determined that such disclosure controls and procedures are effective
  to ensure that information required to be disclosed in our filings under the
  Securities Exchange Act of 1934 with respect to the Company is recorded, processed,
  summarized and reported within the time periods specified in the Securities
  and Exchange Commission’s rules and forms and is accumulated and communicated
  to our management, including the Company’s principal executive officer
  and principal financial officer, as appropriate, to allow timely decisions regarding
  required disclosures.

The Company has made no significant changes in its internal
  controls over financial reporting during the most recent fiscal quarter covered
  by this Report that materially affected or are reasonably likely to materially
  affect our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 4.      Legal Proceedings

There were no new legal proceedings during the quarter ended
  June 30, 2005.

Item 5.      Subsequent Events

There were no subsequent events to report.

Item 6.      Exhibits and Reports
  On Form 8-K

| | (a)  | Exhibits.                                                                                                                         
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                   
| | 31.1 | Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                     
| |      |                                                                                                                                   
| | 32.1 | Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002
| |      |                                                                                                                                   
| | (b)  | Reports on Form 8-K - The Company has no
      reports on Form 8K to file.                                                        

**SIGNATURES**

In accordance with the requirements of the Securities Exchange
  Act of 1934, as amended, the Company has caused this report to be signed on
  its behalf by the undersigned thereunto duly authorized.

|Date: August 17, 2005 | Aucxis Corp.
|--------------------- | ------------
|                      | (Registrant)
|                      |             
|                      | By:         
|                      |             
|                      |             

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