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**UNITED STATES
  SECURITIES 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 September 30, 2004

 ̈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. Yes...X...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......No....X....

As of November 22, 2004 there were 66,409,415 shares of the Registrant's common stock, par value $0.001 per share outstanding. (This includes 3,636,364 mandatory redeemable shares of common stock).

Transitional Small Business Disclosure Format (check one);
  Yes......No....X....

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|                                                                                                     | AUCXISCORP.                                                                                                                   |  
|---------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | -
|                                                                                                     | FORM 10-QSB                                                                                                                   |  
|                                                                                                     | INDEX                                                                                                                         |  
|                                                                                                     |                                                                                                                              
|                                                                                                     | Page                                                                                                                         
|                                                                                                     |                                                                                                                              
|PART I. FINANCIAL INFORMATION                                                                        | 3                                                                                                                            
|                                                                                                     |                                                                                                                              
|Item 1. Financial Statements                                                                         | 3                                                                                                                            
|                                                                                                     |                                                                                                                               |  
|                                                                                                     | Consolidated Balance Sheets at September
      30, 2004 (Unaudited) and December 31, 2003 (Audited)                           | 5
|                                                                                                     |                                                                                                                               |  
|                                                                                                     | Consolidated Statements of Operations (Unaudited)
      for the three and nine month period ended September 30, 2004 and 2003 | 6
|                                                                                                     |                                                                                                                               |  
|                                                                                                     | Consolidated Statements of Cash Flows (Unaudited)
      for the nine month period ended September 30, 2004 and 2003           | 7
|                                                                                                     |                                                                                                                               |  
|                                                                                                     | Notes to Consolidated Financial Statements                                                                                    | 8
|                                                                                                     |                                                                                                                              
|Item 2. Managements' Discussion
      and Analysis of Financial Condition and Results of  Operations | 15                                                                                                                           
|                                                                                                     |                                                                                                                               |  
|Item 3. Controls and Procedures                                                                      | 18                                                                                                                           
|                                                                                                     |                                                                                                                               |  
|PART II. OTHER INFORMATION                                                                           | 18                                                                                                                           
|                                                                                                     |                                                                                                                               |  
|Item 1. Legal Proceedings                                                                            | 18                                                                                                                           
|                                                                                                     |                                                                                                                               |  
|Item 5: Other Information                                                                            | 18                                                                                                                           
|                                                                                                     |                                                                                                                               |  
|Item 6. Exhibits and Reports
      on Form 8-K                                                       | 18                                                                                                                           
|                                                                                                     |                                                                                                                               |  
|Signatures                                                                                           | 18                                                                                                                           

2

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ITEM 1. Financial Statements
  Aucxis Corp.
  (formerly e-Auction Global Trading Inc.)
  (a Nevada Corporation)
  Consolidated Financial Statements
  (Unaudited)
  September 30, 2004
  (expressed in U.S. dollars)

3

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AUCXIS CORP. 
  (a Nevada Corporation)CONSOLIDATED FINANCIAL STATEMENTS
  (Unaudited) SEPTEMBER 30, 2004
  (in U.S. dollars)

4

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|AUCXIS CORP.                                         |   |               |   |   |              |  
|---------------------------------------------------- | - | ------------- | - | - | ------------ | -
|CONSOLIDATED BALANCE SHEETS                          |   |               |   |   |              |  
|(Expressed in U.S. dollars)                          |   |               |   |   |              |  
|                                                     |   | September 30, |   |   | December 31, |  
|                                                     |   | 2004          |   |   | 2003         |  
|                                                     |   | (Unaudited)   |   |   | (Audited)    |  
|                                                     |   |               |   |   |              |  
|ASSETS                                               |   |               |   |   |              |  
|CURRENT ASSETS                                       |   |               |   |   |              |  
|Cash and equivalents                                 | $ | 868           |   | $ | 19,724       |  
|Accounts receivable, net of allowance for doubtful   |   |               |   |   |              |  
|accounts of $Nil and $12,840, respectively           |   | 7,798         |   |   | 16,646       |  
|Total Current Assets                                 |   | 8,666         |   |   | 36,370       |  
|Property and equipment                               |   | 14,177        |   |   | 18,900       |  
|Investments (Note 4)                                 |   | 1,000         |   |   | 1,000        |  
|Total Assets                                         | $ | 23,843        |   | $ | 56,270       |  
|                                                     |   |               |   |   |              |  
|LIABILITIES                                          |   |               |   |   |              |  
|CURRENT LIABILITIES                                  |   |               |   |   |              |  
|Accounts payable                                     | $ | 604,178       |   | $ | 525,650      |  
|Accrued liabilities                                  |   | 53,300        |   |   | 62,235       |  
|Due to former Kwatrobox shareholders                 |   | 569,235       |   |   | 574,834      |  
|Current portion of long-term debt (Note 7)           |   | 499,522       |   |   | 533,180      |  
|Total Current Liabilities                            |   | 1,726,235     |   |   | 1,695,899    |  
|Mandatory Redeemable Shares of Common Stock (Note 8) |   | 4,215,914     |   |   | 4,215,914    |  
|                                                     |   | 5,942,149     |   |   | 5,911,813    |  
|Commitments and Contingencies (Note 10)              |   |               |   |   |              |  
|                                                     |   |               |   |   |              |  
|STOCKHOLDERS' EQUITY (DEFICIT)                       |   |               |   |   |              |  
|Common stock                                         |   |               |   |   |              |  
|Authorized: 250,000,000 shares, $0.001 par value     |   |               |   |   |              |  
|Issued and outstanding: 62,773,051 shares            |   | 62,773        |   |   | 62,773       |  
|Additional paid-in capital                           |   | 18,736,200    |   |   | 18,736,200   |  
|Accumulated other comprehensive income               |   | 566,837       |   |   | 505,843      |  
|Deficit                                              |   | (25,284,116   | ) |   | (25,160,359  | )
|Total Stockholders' Equity (Deficit)                 |   | (5,918,306    | ) |   | (5,855,543   | )
|Total Liabilities and Stockholders' Equity (Deficit) | $ | 23,843        |   | $ | 56,270       |  




(The Accompanying Notes are an Integral Part of These Financial
  Statements)

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|AUCXIS CORP.                                                       |   |               |   |   |               |   |   |               |   |   |               |  
|------------------------------------------------------------------ | - | ------------- | - | - | ------------- | - | - | ------------- | - | - | ------------- | -
|CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
      LOSS |   |               |   |   |               |   |   |               |   |   |               |  
|(Expressed in U.S. dollars)                                        |   |               |   |   |               |   |   |               |   |   |               |  
|(unaudited)                                                        |   |               |   |   |               |   |   |               |   |   |               |  
|                                                                   |   | Three months  |   |   | Three months  |   |   | Nine months   |   |   | Nine months   |  
|                                                                   |   | ended         |   |   | ended         |   |   | ended         |   |   | ended         |  
|                                                                   |   | September 30, |   |   | September 30, |   |   | September 30, |   |   | September 30, |  
|                                                                   |   | 2004          |   |   | 2003          |   |   | 2004          |   |   | 2003          |  
|Revenue                                                            | $ | -             |   | $ | -             |   | $ | -             |   | $ | 1,226,880     |  
|Cost of goods sold                                                 |   | -             |   |   | -             |   |   | -             |   |   | (307,800      | )
|                                                                   |   | -             |   |   | -             |   |   | -             |   |   | 919,080       |  
|Selling, general and administrative expense                        |   | 36,931        |   |   | 47,651        |   |   | 118,765       |   |   | 1,110,767     |  
|Depreciation and amortization expense                              |   | 1,401         |   |   | 2,328         |   |   | 4,992         |   |   | 67,024        |  
|Recovery of inventory                                              |   | -             |   |   | -             |   |   | -             |   |   | (14,040       | )
|Loss (gain) on disposal of assets                                  |   | -             |   |   | -             |   |   | -             |   |   | (20,746       | )
|                                                                   |   |               |   |   |               |   |   |               |   |   |               |  
|Total operating expenses                                           |   | 38,332        |   |   | 49,979        |   |   | 123,757       |   |   | 1,143,005     |  
|                                                                   |   |               |   |   |               |   |   |               |   |   |               |  
|Operating loss                                                     |   | (38,332       | ) |   | (49,979       | ) |   | (123,757      | ) |   | (223,925      | )
|                                                                   |   |               |   |   |               |   |   |               |   |   |               |  
|Share of income of equity investment                               |   | -             |   |   | -             |   |   | -             |   |   | 32,170        |  
|Miscellaneous revenue                                              |   | -             |   |   | 914           |   |   | -             |   |   | 4,969         |  
|Gain on cancellation of mandatory                                  |   |               |   |   |               |   |   |               |   |   |               |  
|redeemable shares                                                  |   | -             |   |   | -             |   |   | -             |   |   | 542,295       |  
|                                                                   |   |               |   |   |               |   |   |               |   |   |               |  
|Income (loss) before income taxes                                  |   | (38,332       | ) |   | (49,065       | ) |   | (123,757      | ) |   | 355,509       |  
|                                                                   |   |               |   |   |               |   |   |               |   |   |               |  
|Provision for income taxes                                         |   | -             |   |   | -             |   |   | -             |   |   | -             |  
|                                                                   |   |               |   |   |               |   |   |               |   |   |               |  
|Net income (loss) for the period                                   |   | (38,332       | ) |   | (49,065       | ) |   | (123,757      | ) |   | 355,509       |  
|                                                                   |   |               |   |   |               |   |   |               |   |   |               |  
|Other comprehensive income (loss)                                  |   |               |   |   |               |   |   |               |   |   |               |  
|Foreign currency translation adjustments                           |   | (78,590       | ) |   | (7,083        | ) |   | 60,994        |   |   | 351,751       |  
|                                                                   |   |               |   |   |               |   |   |               |   |   |               |  
|Comprehensive income (loss)                                        | $ | (116,922      | ) | $ | (56,148       | ) | $ | (62,763       | ) | $ | 707,260       |  
|                                                                   |   |               |   |   |               |   |   |               |   |   |               |  
|Basic and diluted income (loss) per share                          | $ | -             |   | $ | -             |   | $ | -             |   | $ | 0.01          |  
|                                                                   |   |               |   |   |               |   |   |               |   |   |               |  
|Weighted average shares used in computing                          |   |               |   |   |               |   |   |               |   |   |               |  
|basic and diluted earnings per share                               |   | 62,773,051    |   |   | 62,773,051    |   |   | 62,773,051    |   |   | 62,773,051    |  




(The Accompanying Notes are an Integral Part of These Financial
  Statements)

---

|AUCXIS CORP.                                              |   |          |   |   |          |  
|--------------------------------------------------------- | - | -------- | - | - | -------- | -
|CONSOLIDATED STATEMENTS OF CASH FLOWS                     |   |          |   |   |          |  
|(Expressed in U.S. dollars)                               |   |          |   |   |          |  
|(unaudited)                                               |   |          |   |   |          |  
|NINE MONTHS ENDED SEPTEMBER 30                            |   | 2004**** |   |   | 2003**** |  
|                                                          |   |          |   |   |          |  
|OPERATING ACTIVITIES                                      |   |          |   |   |          |  
|Net income (loss) for the period                          | $ | (123,757 | ) | $ | 355,509  |  
|Adjustments to reconcile net income (loss)
      to cash  |   |          |   |   |          |  
|Depreciation and amortization                             |   | 4,723    |   |   | 67,024   |  
|Gain on cancellation of mandatory redeemable
      shares |   | -        |   |   | (542,295 | )
|Share of income of equity investment                      |   | -        |   |   | (32,170  | )
|Gain on disposal of assets                                |   | -        |   |   | (20,746  | )
|Net change in operating assets and liabilities            |   |          |   |   |          |  
|Accounts receivable                                       |   | 8,848    |   |   | (4,124   | )
|Prepaid expenses                                          |   | -        |   |   | 15,315   |  
|Accounts payable and accrued
      liabilities            |   | 51,959   |   |   | 156,463  |  
|CASH USED IN OPERATING ACTIVITIES                         |   | (58,227  | ) |   | (5,024   | )
|                                                          |   |          |   |   |          |  
|INVESTING ACTIVITIES                                      |   |          |   |   |          |  
|Change in subsidiary net assets                           |   | -        |   |   | (861,574 | )
|CASH USED IN INVESTING ACTIVITIES                         |   | -        |   |   | (861,574 | )
|EFFECT OF EXCHANGE RATE CHANGES ON CASH                   |   | 39,371   |   |   | 267,389  |  
|DECREASE IN CASH AND CASH EQUIVALENTS                     |   | (18,856  | ) |   | (599,209 | )
|CASH AND CASH EQUIVALENTS BEGINNING
      OF PERIOD       |   | 19,724   |   |   | 617,811  |  
|CASH AND CASH EQUIVALENTS END OF PERIOD                   | $ | 868      |   | $ | 18,602   |  
|Supplemental cash flow information:                       |   |          |   |   |          |  
|Interest paid                                             | $ | 18,972   |   | $ | 15,120   |  
|Income taxes paid                                         | $ | -        |   | $ | -        |  




(The Accompanying Notes are an Integral Part of These Financial
  Statements)

---

|AUCXIS CORP.                                  
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. dollars)                   
|SIX MONTHS ENDED SEPTEMBER 30**,
      2004** 

|1. | NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company was incorporated in Nevada, USA on January
        8, 1998 under the name Kazari International, Inc. and changed its name
        to e-Auction Global Trading Inc. on June 10, 1999. The Company changed
        its name to Aucxis Corp. on June 12, 2001. The Company's business is the
        development of e-business services for the perishable commodity marketplace
        primarily in Europe, the installation and maintenance of auction clock
        and cooling systems for traditional auction halls, and the development
        of software for auctions. The Company has suspended development of e-business
        services for the perishable commodity marketplace pending further review
        of the business opportunities in this area. Refer to Note 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | These financial statements have been prepared on
        a going concern basis, which implies the Company will continue to realize
        its assets and discharge its liabilities in the normal course of business.
        The Company has not generated significant revenues since inception 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 September 30, 2004, the Company has a working capital
        deficiency of $1,717,569 (December 31, 2003 - $1,659,529), and has accumulated
        losses of $25,284,116 since inception. These 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 reorganize the Company.
        It is not possible at this time to predict with any assurance the success
        of these initiatives.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2. | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company's and its wholly-owned subsidiaries are as follows                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| | 100 | % |  | Aucxis Corp. NV (Belgium)                | 100 | % |  | I-Three Inc. (Canada)
| | --- | - |  | ---------------------------------------- | --- | - |  | ---------------------
| | 100 | % |  | e-Auction Global Trading Inc. (Barbados) | 100 | % |  | Aucxis Corp. (Canada)

| | Aucxis Corp. NV (Belgium) has investments in the following companies,
      which are accounted for by the equity method:
| | -------------------------------------------------------------------------------------------------------------------------

| | 92.5 | % |  | Aucxis Trading Solutions NV             
| | ---- | - |  | ----------------------------------------
| | 30.0 | % |  | Aucxis Trading Services Netherlands B.V.
| | 40.0 | % |  | SDL Invest NV (Belgium)                 

|   | All intercompany transactions and balances have
      been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Aucxis Corp. NV owns a 92.5%
        interest in Aucxis Trading Solutions NV ("ATS"), a Belgium company. ATS
        is engaged in the installation and maintenance of auction clock and cooling
        systems for traditional auction halls and the development of software
        for auctions, including Internet-based auction systems. On April 11, 2003,
        Aucxis Corp. NV voluntarily filed for bankruptcy. As the Company has relinquished
        control of Aucxis Corp. NV to a trustee in bankruptcy, its operating results
        have not been included in the consolidated results of operations since
        the bankruptcy filing (see Note 4). With the exception of ATS, none of
        the Company's subsidiaries or other investments have significant assets,
        liabilities, cash flows or operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | These consolidated financial
        statements include the accounts of the Company and its wholly owned subsidiaries
        other than Aucxis Corp. NV (Belgium) as described above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|3. | SUMMARY OF SIGNIFICANT
        ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

8

---

|AUCXIS CORP.                                  
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. dollars)                   
|SIX MONTHS ENDED SEPTEMBER 30, 2004           

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (continued)
|-- | ------------------------------------------------------------
|   |                                                             
|   | (b)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   | (c)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             
|   | (d)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   | (e)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   | (f)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   | (g)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   | (h)                                                         
|   |                                                             
|   |                                                             

9

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|AUCXIS CORP.                                  
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. dollars)                   
|SIX MONTHS ENDED SEPTEMBER 30, 2004           

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (continued)
|-- | ------------------------------------------------------------
|   |                                                             
|   | (i)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   | (j)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             

| |                                                            |   | Three Months Ended |   | Nine Months Ended |  
| | ---------------------------------------------------------- | - | ------------------ | - | ----------------- | -
| |                                                            |   | September 30       |   | September 30      |  
| |                                                            |   | 2004               |   | 2003              |  
| | Net income (loss) - as reported                            | $ | (38,332            | ) | (49,065           | )
| | Add: Stock-based compensation expense                      |   |                    |   |                   |  
| | included in net loss
      - as reported                   |   |                   |   |                  |  
| | Deduct: Stock-based compensation                           |   |                    |   |                   |  
| | expense determined under
      fair value                  |   |                    |   |                   |  
| | method                                                     |   |                   |   |                  |  
| |                                                            |   |                    |   |                   |  
| | Net income (loss) - pro forma                              | $ | (38,332            | ) | (49,065           | )
| |                                                            |   |                    |   |                   |  
| |                                                            |   |                    |   |                   |  
| | Net income (loss) per share (basic
      and diluted) - as |   |                    |   |                   |  
| | reported                                                   |   |                   |   |                  |  
| | Net income (loss) per share (basic and diluted)
      -    |   |                    |   |                   |  
| | pro forma                                                  |   |                   |   |                  |  

| |     | During the prior year period, the fair value of the
        stock options granted was estimated using the Black-Scholes option pricing
        model with the following weighted-average assumptions: risk free interest
        rate of 5.77%, expected volatility of 30%, an expected option life of
        three years and no expected dividends                                                                                                                                                                                                 
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (k) | Interim financial statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | These interim unaudited financial statements have
        been prepared on the same basis as the annual financial statements and
        in the opinion of management, reflect all adjustments, which include only
        normal recurring adjustments, necessary to present fairly the Company's
        financial position, results of operations and cash flows for the period
        shown. The results of operations for such periods are not necessarily
        indicative of the results expected for a full year or for any future period.

10

---

|AUCXIS CORP.                                  
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. dollars)                   
|SIX MONTHS ENDED SEPTEMBER 30, 2004           

|3. | SUMMARY OF SIGNIFICANT
        ACCOUNTING POLICIES (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (l)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4. | SUMMARIZED FINANCIAL
        INFORMATION OF DECONSOLIDATED SUBSIDIARY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company has a 100% interest
        in Aucxis Corp. NV, a Belgium company ("wholly-owned subsidiary), which
        in turn has a 92.5% interest in Aucxis Trading Solutions NV ("ATS"). The
        Company also has advances receivable from Aucxis NV of $10,324,000. On
        April 11, 2003, Aucxis Corp. NV, voluntarily filed for bankruptcy. A trustee
        in bankruptcy has been entrusted with Aucxis Corp. NV's management and
        the realization of its assets for the benefit of its creditors and its
        shareholders. Court proceedings for the final verification of claims and
        counterclaims took place on June 5, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The proceeds from liquidating
        Aucxis NV's 92.5% interest in ATS, are expected to be used to settle the
        various claims once the allocation of damages, if any, has been agreed
        to by all interested parties. Although the Company believes that it will
        recover a portion of its advances, the final allocation of the proceeds
        may be subject to further litigation and/or additional claims. The Company's
        management is unable to estimate, within the constraints of timeliness
        or cost, the amount that the Company will ultimately recover. Accordingly,
        the Company ceased consolidating the operations of Aucxis Corp. NV effective
        April 11, 2003 and the Company has provided for the impairment of this
        investment by writing it down to $1,000 and carrying it under the equity
        method as of December 31, 2003. The Company will recognize any recovery
        of this investment when the claims and counter claims are settled by the
        receiver and/or the Belgian courts and in such amounts as are recovered
        under the settlement. (See also Note 11).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Summarized consolidated
        financial information of Aucxis Corp. NV as at and for the quarter ended
        March 31, 2003 immediately prior to filing for bankruptcy and deconsolidation
        by the Company was as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| |                                  |   | As at     | 
| | -------------------------------- | - | --------- | 
| |                                  |   | March 31, | 
| |                                  |   | 2003      | 
| | Current assets                   | $ | 3,143,712 | 
| | Noncurrent assets                | $ | 527,714   | 
| | Current liabilities              | $ | 3,055,624 | 
| | Noncurrent liabilities           | $ | 36,608    | 
| | Minority interests               | $ | 59,972    | 
| | Revenue                          | $ | 1,226,880 | 
| | Cost of goods sold               | $ | 307,800   | 
| | Net income (loss) for the period | $ | 10,296    | 

11

---

|AUCXIS CORP.                                  
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. dollars)                   
|SIX MONTHS ENDED SEPTEMBER 30, 2004           

|5. | RELATED PARTY TRANSACTIONS
|-- | --------------------------
|   |                           
|   | (a)                       

| |   | September 30, |  |   | September 30, | 
| | - | ------------- |  | - | ------------- | 
| |   | 2004          |  |   | 2003          | 
| |   |               |  |   |               | 
| | $ | 71,780        |  | $ | 69,970        | 

|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Due to directors and officers:                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Included in accounts payable is $503 (2003 - $17,467)
        due to a firm in which a director is a partner.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Included in accounts payable is $182,878 (2003-$93,870)
        due to a company controlled by an officer.   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                              
|6. | DUE TO FORMER KWATROBOX
        SHAREHOLDERS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                              
|   | The amount due to former
        Kwatrobox shareholders relates to the acquisition of Kwatrobox from its
        former shareholders ("vendors") and the balance is non-interest bearing.
        The company has been in discussions with legal counsel of the Kwatrobox
        shareholders and is reviewing certain representations made by the vendors
        immediately prior to the acquisition of Kwatrobox.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                              
|7. | 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 $.01 per share. Interest
        has been capitalized to the loan balances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                              
|   | The entire loan has been
        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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                              
|8. | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

12

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|AUCXIS CORP.                                  
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. dollars)                   
|SIX MONTHS ENDED SEPTEMBER 30, 2004           

|8. | MANDATORY REDEEMABLE SHARES OF COMMON STOCK (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 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 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|9. | INCOME AND LOSS PER SHARE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The following table represents the calculation of basic and diluted net
      income (loss) per common share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| |                                             |   | For Three Months Ended |   |   | For Nine Months Ended |  
| | ------------------------------------------- | - | ---------------------- | - | - | --------------------- | -
| |                                             |   | September 30           |   |   | September 30          |  
| |                                             |   | 2004                   |   |   | 2003                  |  
| |                                             |   |                        |   |   |                       |  
| | Net Income (loss)                           | $ | (38,332                | ) | $ | (49,065               | )
| | Weighted -average shares used in computing  |   |                        |   |   |                       |  
| | basic net income (loss) per share           |   | 62,773,051             |   |   | 62,773,051            |  
| | Dilutive effect of common share equivalents |   |                       |   |   |                      |  
| | Weighted-average shares used in computing   |   |                        |   |   |                       |  
| | diluted net income (loss) per share         |   | 62,773,051             |   |   | 62,773,051            |  
| | Basic net income (loss) per share           |   |                       |   |   |                      |  
| | Diluted net income (loss) per share         |   |                       |   |   |                      |  

|    | For the nine months ended September 30, 2004, potential
        common shares in the form of stock options to purchase 618,000 shares
        of common stock were anti-dilutive and therefore not included in the computation
        of diluted earnings per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10. | COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company' wholly owned subsidiary, Aucxis Corp.
        NV, filed for voluntary bankruptcy on April 11, 2003 (see Note 5). A trustee
        in bankruptcy has been entrusted with Aucxis Corp. NV's management and
        the realization of its assets for the benefit of its creditors. Court
        proceedings for the final verification of claims took place on June 5,
        2003. It is at least reasonably possible that a material change in the
        net realizable value of the investment in the wholly owned subsidiary
        will occur in the near term, however the amount of the change cannot be
        reasonably estimated at this time. The amount of this change, may materially
        affect the value of the investment. The effect of any increase or decrease
        in net realizable value and the amount actually realized will be recognized
        when it occurs.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Litigation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| | a) | On April 16, 2002, the former owners ("Schelfhout"),
        of the Company's subsidiary ATS filed a request for arbitration against
        Aucxis NV (Belgium) and the Company alleging that the Company and Aucxis
        NV (Belgium) deliberately committed a number of misrepresentations both
        prior to and subsequent to the closing of the ATS share purchase agreement.
        They have alleged damages of up to $1,190,309 for which they seek to be
        compensated by Aucxis NV (Belgium) and the Company.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

---

|AUCXIS CORP.                                  
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. dollars)                   
|SIX MONTHS ENDED SEPTEMBER 30, 2004           

|10. | COMMITMENTS AND CONTINGENCIES (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Litigation(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|11. | SUBSEQUENT EVENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | On October 25, 2004, Aucxis
        received confirmation from its Belgium counsel that the sale of ATS had
        been finalized. Through the auction process, the trustee finalized the
        sale of ATS for proceeds of just over $2 million U.S. Of the gross proceeds
        received, the net amount available to Aucxis Corp. is not determinable
        due to various secured creditor claims and foreign exchange variances.
        The main secured creditor claims include repayment of bridge loans with
        accrued interest, the Schelfhout litigation settlement payment and Belgium
        legal fees. There also was a provision made to be applied toward any final
        charges from CEPINA, the Belgium arbitration tribunal utilized during
        the Schelfhout litigation process.

14

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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 currently has a wholly owned subsidiary, e-Auction
  (Barbados), which in turn has one wholly owned subsidiary, Aucxis Corp. (Canada).
  The Company also owns Aucxis Corp. (Belgium) ("Aucxis NV"), directly, which
  in turn has a 92.5% ownership in Aucxis Trading Solutions, N.V. ("ATS") (formerly
  Schelfhout Computer Systemen N.V.), a Belgium company. Aucxis Trading Solutions
  N.V. in turn has a 33.3. % interest in Auction Trading Services Nederland BV
  ("ATS Holland") formed in partnership with two of the largest flower auctions.

On April 11, 2003 Aucxis NV, voluntarily filed for bankruptcy.
  A trustee in bankruptcy has been entrusted with Aucxis NV's management and the
  realization of its assets for the benefit of its creditors. Court proceedings
  for the final verification of claims took place on June 5, 2003. Management
  of the Company has been working with the trustee to maximize the proceeds received
  for ATS and to ensure minimum disruption to employees and normal business operations.
  Accordingly, the Company ceased consolidating the operations of Aucxis NV effective
  April 11, 2003.

ATS (formerly Schelfhout) is a solutions provider for perishable
  commodity (fish, flower, fruits and vegetables) auction houses. Over the past
  17 years ATS has developed trading systems for numerous selling organizations
  all over the world. ATS delivers the tools to bring together supply and demand
  under optimum conditions and thus create a better market situation. ATS has
  focused on two market sectors: (i) the computerization of auctions and (ii)
  automation for the preservation of perishable products. As an ancillary to the
  auction system, a modular graphic display panel was developed by ATS in 1992
  and added to the product range. ATS is engaged in the installation and maintenance
  of auction clock and cooling systems for traditional auction halls and the development
  of software for auctions, including Internet-based auction systems.

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 to be received by Aucxis upon the eventual sale
  of ATS and a withdrawal by Aucxis of any claims

15

---

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 ATS. The net proceeds from the sale are estimated at up to $200,000
  US. The sale of ATS was conducted via a bidding process and, according to the
  bankruptcy trustee, has received subsequent court approval. (See "Other Information"
  for more details of the transaction).

Certain claims against the company remain outstanding along
  with significant amounts payable to various vendors. Management will be working
  to resolve those claims in the coming months.

Summary of Quarterly Results

Effective April 11, 2003, the Company had voluntarily relinquished
  control of Aucxis NV to a trustee in bankruptcy and, accordingly, has deconsolidated
  the subsidiary and ceased consolidating the operations of ATS, the 92.5% owned
  subsidiary of Aucxis NV. As a result, revenue and cost of sales for the three
  months ended September 30, 2004 and the same three-month period in 2003 were
  nil.

Selling, general and administrative expense for the quarter
  ended September 30, 2004 was $36,931 as compared to $47,651 for the corresponding
  three-month period in 2003. The expenses were higher in the prior year due to
  higher accounting and legal fees and higher interest expenses. Depreciation
  and amortization expense for the quarter was $1,401 compared to $2,328 in the
  prior year period. Net total operating expenses for the three months ended September
  30, 2004 were $38,332 compared to $49,979 in the corresponding three-month period
  in the prior year.

A loss of $38,332 was recorded for the three months ended
  September 30, 2004 compared to a loss of $49,065 for the corresponding prior
  year period, due to the decrease in selling, general and administrative expenses
  in the most recent quarter.

Liquidity and Capital Resources

As at September 30, 2004, the Company had a cash balance of
  $868 compared to $19,724 at December 31, 2003. This is a result of payments
  made earlier in the year for auditor's fees and travel expenses. Future cash
  flows for the Company will be derived from recovery of outstanding receivables,
  the sale of redundant assets, the success of future external financing initiatives
  and proceeds from the sale of ATS.

Management continues to keep costs at a consistent level as
  it works its way through the process of collecting and distributing the proceeds
  of the ATS sale and maintaining the public listing. Management is currently
  in negotiations with different groups who may be interested in assisting the
  Company with raising money and with projects ranging from the wireless industry
  to the resource sector. Management will likely not be able to secure financing
  and/or viable projects until all outstanding payables and claims have been resolved.

Management will be seeking the cooperation of all existing
  unsecured creditors by proposing a settlement of all outstanding payables.

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
  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 these and
  other accounting policies, see Note 3 in the Notes to the Consolidated Financial
  Statements as at September 30, 2004. Note that our preparation of this Quarterly
  Report on Form 10-QSB 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.

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Recent Accounting Pronouncements

December 2003, the United States Securities and Exchange Commission
  issued Staff Accounting Bulletin No. 104, "Revenue Recognition" (SAB 104), which
  supersedes SAB 101, "Revenue Recognition in Financial Statements." The primary
  purpose of SAB 104 is to rescind accounting guidance contained in SAB 101 related
  to multiple element revenue arrangements, which was superseded as a result of
  the issuance of EITF 00-21, "Accounting for Revenue Arrangements with Multiple
  Deliverables." While the wording of SAB 104 has changed to reflect the issuance
  of EITF 00-21, the revenue recognition principles of SAB 101 remain largely
  unchanged by the issuance of SAB 104. The adoption of SAB 104 did not have a
  material impact on the Company's financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for
  Certain Financial Instruments with Characteristics of both Liabilities and Equity".
  SFAS No. 150 establishes standards for how an issuer classifies and measures
  certain financial instruments with characteristics of both liabilities and equity.
  It requires that an issuer classify a financial instrument that is within its
  scope as a liability (or an asset in some circumstances).

The requirements of SFAS No. 150 apply to issuers' classification
  and measurement of freestanding financial instruments, including those that
  comprise more than one option or forward contract. SFAS No. 150 does not apply
  to features that are embedded in a financial instrument that is not a derivative
  in its entirety. SFAS No. 150 is effective for financial instruments entered
  into or modified after May 31, 2003, and otherwise is effective at the beginning
  of the first interim period beginning after June 15, 2003, except for mandatory
  redeemable financial instruments of nonpublic entities. It is to be implemented
  by reporting the cumulative effect of a change in an accounting principle for
  financial instruments created before the issuance date of SFAS No. 150 and still
  existing at the beginning of the interim period of adoption. Restatement is
  not permitted. The adoption of this standard did not have a material effect
  on the Company's results of operations or financial position.

|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 September 30,
  2004. 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 1. | Legal Proceedings
|------- | -----------------

Management does not have knowledge of any material litigation
  pending, threatened or contemplated, or unsatisfied judgments against the Company
  or its affiliates, or any proceedings in which the Company or its affiliates
  is a party. Similarly, management is without knowledge as to any legal actions
  pending or threatened or judgments entered against the Company's executive officers
  and directors in their capacity as such, other than to the extent such individuals
  are named in the above actions.

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|Item 5. | Other Information
|------- | -----------------

Subsequent to the quarter end, the Company announced on October
  29, 2004 that it had received confirmation from its Belgium counsel that the
  bankruptcy trustee of Aucxis NV had confirmed the sale of ATS. Through the auction
  process, the sale of ATS should generate over $2 million US, according to the
  trustee. Of the gross proceeds received, the net amount is not yet known due
  to various secured creditor claims and foreign exchange variances, but is estimated
  to be up to $200,000 US. The main secured creditor claims include repayment
  of bridge loans with accrued interest, the Schelfhout litigation settlement
  payment, and Belgium legal fees. There also was a provision made to apply proceeds
  toward any final charges from CEPINA, the Belgium arbitration tribunal utilized
  during the Schelfhout litigation process.

|Item 6. |                                                | Exhibits And Reports On Form 8-K                                                                                                  
|------- | ---------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------
|        |                                                |                                                                                                                                   
|        | (a)                                            | Exhibits.                                                                                                                         
|        |                                                |                                                                                                                                   
|        | 31                                             | Certification pursuant to Section
      302 of the Sarbanes-Oxley Act of 2002                                                     
|        |                                                |                                                                                                                                   
|        | 32                                             | 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.

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**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.

|                        | Aucxis Corp. (Registrant)
|----------------------- | -------------------------
|                        |                          
|Date: November 22, 2004 | By:                      
|                        |                          
|                        |                          
|                        |                          

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