----

----

**UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549**___________________**FORM 10-Q**___________________

**ý                                QUARTERLY REPORT PURSUANTTO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

  

For the quarterly period endedMarch 31, 2011

  

OR

  

** ̈                                TRANSITION REPORTPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

For the transition period from   to

   

Commissionfile number: 0-15476

  

**ZAXISINTERNATIONAL INC.**(Exact Name Of RegistrantAs Specified In Its Charter)
| Delaware                                            | 68-0080601                              |
|-----------------------------------------------------|-----------------------------------------|
| (State of Incorporation)                            | (I.R.S. Employer    Identification No.) |
|                                                |                                    |
| 6399    Wilshire Blvd., Suite 1019, Los Angeles, CA | 90048                                   |
| (Address of Principal    Executive Offices)         | (ZIP Code)                              |

Registrant'sTelephone Number, Including Area Code: (323) 951-0575

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or forsuch shorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days. Yes x No  ̈Indicate by check mark whether the registrant is a shell company (asdefined in Rule 12b-2 of the Exchange Act). Yes x No  ̈

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer (asdefined in Rule 12b-2 of the Exchange Act) or a smallerreporting company.
| Large accelerated    filer  ̈ | Accelerated filer  ̈  | Non-Accelerated    filer  ̈  | Smaller reporting    company x |
|----------------------------------|-------------------------------|--------------------------------------|------------------------------------|

On March 31, 2011,the Registrant had 1,695,126 shares of common stock outstanding.

----

----

----

----

 

**TABLE OF CONTENTS**
| Item                                  |                          | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Page |
|---------------------------------------|--------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------|
| **PART I - FINANCIAL    INFORMATION** |
|                                  |
| ITEM 1.                               |      |    FINANCIAL    STATEMENTS.
    3  
ITEM 2.
    
   MANAGEMENT'S    DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.
    8   ITEM 3.   QUANTITATIVE    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK9
ITEM 4.
    
   CONTROLS AND    PROCEDURES.
    9     
**PART II - OTHER    INFORMATION**
  
ITEM 1.
    
   LEGAL    PROCEEDINGS.
    10  ITEM 1A.   RISK FACTORS10
ITEM 2.
    
   UNREGISTERED SALES OF    EQUITY SECURITIES AND USE OF PROCEEDS
    10   
ITEM 3.
    
   DEFAULT    UPON SENIOR SECURITIES.
    10   
ITEM 4.
    
   SUBMISSION    OF MATERS TO A VOTE OF SECURITY HOLDERS.
    10   
ITEM 5.
    
   OTHER INFORMATION.
    10   ITEM 6.   EXHIBITS.10
 
****
**PART I - FINANCIAL INFORMATION**

ITEM1. FINANCIAL STATEMENTS****Back to Table ofContents
    Balance Sheets -    March 31, 2011 (Unaudited) and December 31, 2010 (audited)3    Statements    of Operations - Three Months Ended March 31, 2011 and 2010 (Unaudited)4    Statements    of Cash Flows - Three Months Ended March 31, 2011 and 2010 (Unaudited)5Notes    to Financial Statements6
 
**Zaxis International Inc.**Balance SheetsBack to Table of Contents  **December    31, 2010****March 31, 2011**(Audited)
ASSETSCurrent    assets:      Cash$0$0         Total current assets00                 **Total Assets**$0$0  
LIABILITIES    AND STOCKHOLDERS' DEFICIENCY  Current liabilities:   Accounts payable$2,500$-   Accrued interest    expenses6,3005,250   Advances from and    accruals due to related party98,999103,599         Total current liabilities107,799108,849          Non-current liabilities owed to related party, convertible note35,00035,000           Total liabilities142,799143,849  Stockholders' deficiency:   Preferred stock,    $0.0001 par value; 10,000,000 shares authorized; none issued   Common stock,    $0.0001 par value; 100,000,000 shares authorized;         1,695,126 issued and outstanding at March 31, 2011 and        1,495,126 issued and outstanding at December 31, 2010169149   Additional paid in    capital121,246107,266   Accumulated    deficit(264,214)(251,264)     Total    Stockholders' Deficiency(142,799)(143,849)          **Total Liabilities and Stockholders' Deficiency**$0$0     See    notes to unaudited interim financial statements**Zaxis    International Inc.**Statements of OperationsBack to Table of Contents  **Three Months****Three Months****Ended****Ended****March 31, 2011****March 31, 2010**(Unaudited)(Unaudited)  Revenue$0$0Costs and expenses:   General and administrative11,90011,500Costs and expenses11,90011,500     Interest expenses1,0501,050  **     **Net income (loss)$(12,950)$(12,550)  Earnings (loss) per share, basic$(0.01)$(0.01)  Weighted average number of    shares outstanding1,515,1261,373,126  See notes to    unaudited interim financial statements**Zaxis    International Inc.**Statement of Cash FlowsBack to Table of Contents
        **Three Months****Three Months****Ended****Ended****March 31, 2011****March 31, 2010**  (Unaudited)(Unaudited)Cash flows from operating activities:Net loss$(12,950)$(12,550)Expenses paid by issuance of common stock00Non-cash contribution expense from related party9,0009,000Expenses paid by related party00Adjustments to reconcile net loss to cash used    in operating activities:   (Increase) decrease in current    assets00   Increase (decrease) in accounts    payable and accrued liabilities3,9503,550     Cash    flows used by operating activities00  Cash flows from investing    activities:         Cash    used in investing activities00   Cash flows from financing activities:   Advances from related parties00     Cash    generated by financing activities00       Change in cash00Cash - beginning of period00Cash - end of period$0$0  See notes to    unaudited interim financial statements**ZAXIS INTERNATIONAL INC.Notes to Unaudited InterimFinancial StatementsMarch 31, 2011 Backto Table of Contents**1. Basis of Presentation**
The consolidated financial statements include the accounts of ZaxisInternational, Inc., a Delaware corporation.

The Financial Statements presented herein have been prepared by us inaccordance with the accounting policies described in our December 31, 2010 Annual Reporton Form 10-K and should be read in conjunction with the Notes to Consolidated FinancialStatements which appear in that report.

The preparation of these financial statements in conformity withaccounting principles generally accepted in the United States requires us to makeestimates and judgments that affect the reported amounts of assets, liabilities, revenuesand expenses, and related disclosure of contingent assets and liabilities. On an on goingbasis, we evaluate our estimates, including those related intangible assets, income taxes,insurance obligations and contingencies and litigation. We base our estimates onhistorical experience and on various other assumptions that are believed to be reasonableunder the circumstances, the results of which form the basis for making judgments aboutthe carrying values of assets and liabilities that are not readily apparent from otherresources. Actual results may differ from these estimates under different assumptions orconditions.

In the opinion of management, the information furnished in this Form10-Q reflects all adjustments necessary for a fair statement of the financial position andresults of operations and cash flows as of and for the three month periods ended March 31,2011 and 2010. All such adjustments are of a normal recurring nature. The FinancialStatements have been prepared in accordance with the instructions to Form 10-Q andtherefore do not include some information and notes necessary to conform with annualreporting requirements
***“Fresh Start” Accounting:** We adopted "fresh-start" accounting as ofNovember 7, 2002 in accordance with procedures specified by AICPA Statement of Position("SOP") No. 90-7, "Financial Reporting by Entities in Reorganization underthe Bankruptcy Code.
In accordance with SOP No. 90-7, the reorganized value of the Companywas allocated to the Company's assets based on procedures specified by SFAS No. 141,"Business Combinations". Each liability existing at the plan sale date, otherthan deferred taxes, was stated at the present value of the amounts to be paid atappropriate market rates. It was determined that the Company's reorganization valuecomputed immediately before November 6, 2002 was $0. We adopted "fresh-start"accounting because holders of existing voting shares immediately before filing andconfirmation of the sale received less than 50% of the voting shares of the emergingentity and its reorganization value is less than its post-petition liabilities and allowedclaims. 
**2. Earnings/Loss Per Share**
Basic earnings per share is computed by dividing income available tocommon shareholders (the numerator) by the weighted-average number of common sharesoutstanding (the denominator) for the period. Diluted earnings per share assume that anydilutive convertible securities outstanding were converted, with related preferred stockdividend requirements and outstanding common shares adjusted accordingly. It also assumesthat outstanding common shares were increased by shares issuable upon exercise of thosestock options for which market price exceeds the exercise price, less shares which couldhave been purchased by us with the related proceeds. In periods of losses, diluted lossper share is computed on the same basis as basic loss per share as the inclusion of anyother potential shares outstanding would be anti-dilutive.
**3. New Accounting Standards**
In December 2007, the Financial Accounting Standards Board issued FASB StatementNo. 141 (Revised 2007), Business Combinations (“SFAS 141R”). SFAS 141Rprovides additional guidance on improving the relevance, representational faithfulness,and comparability of the financial information that a reporting entity provides in itsfinancial reports about a business combination and its effects. This Statementapplies prospectively to business combinations for which the acquisition date is on orafter the beginning of the first annual reporting period beginning on or afterDecember 15, 2008. 

In December 2007, the Financial Accounting Standards Board issued FASB StatementNo. 160,*Noncontrolling Interests in Consolidated Financial Statements—anamendment of ARB No. 51* (“SFAS 160”). SFAS 160 amends ARB No. 51to establish accounting and reporting standards for the noncontrolling interest in asubsidiary and for the deconsolidation of a subsidiary. This Statement is effectivefor fiscal years and interim periods within those fiscal years, beginning on or afterDecember 15, 2008. The Company is currently evaluating the impact of adopting SFAS160 on our financial statements.

In May 2008, the FASB issued SFAS No. 162, “*The Hierarchy of Generally AcceptedAccounting Principles.*” SFAS 162 identifies the sources of accounting principlesand the framework for selecting the principles used in the preparation of financialstatements of nongovernmental entities that are presented in conformity with generallyaccepted accounting principles (GAAP) in the United States. SFAS 162 is effective 60 daysfollowing the SEC’s approval of the Public Company Accounting Oversight Boardamendments to AU Section 411, *The Meaning of Present Fairly in Conformity WithGenerally Accepted Accounting Principles*. Our Company is currently evaluating theimpact of SFAS 162 on its financial statements but does not expect it to have a materialeffect.

Management does not anticipate that the adoption of these standards will have amaterial impact on the financial statements.

**4. Related PartyTransactions not Disclosed Elsewhere**
*Due Related Parties:*Amountsdue related parties consist of corporate expenses paid by the principal shareholder, cashadvances made to the company as well as the fair value of services provided without costand the use of office space provided without cost. Such items totaled $98,999 at March 31, 2011. We expensed thefair value of services by an accrual of $9,000 for the three-month period ended March31, 2011.
**5. GoingConcern
The Company's financial statements have been prepared on a goingconcern basis, which contemplates the realization of assets and settlement of liabilitiesand commitments in the normal course of business for the foreseeable future. Since adopting"fresh-start" accounting as of November 7, 2002, theCompany has accumulated losses aggregating to $264,214 and hasinsufficient working capital to meet operating needs for the next twelve months as of March 31, 2011, all ofwhich raise substantial doubt about the Company's ability to continue as a going concern.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONBack to Table of Contents

Some of the statements contained in this quarterlyreport of Zaxis International Inc., Delaware corporation (hereinafter referred to as"we", "us", "our", "Company" and the"Registrant") discuss future expectations, contain projections of our plan ofoperation or financial condition or state other forward-looking information.Forward-looking statements give our current expectations or forecasts of future events.You can identify these statements by the fact that they do not relate strictly tohistorical or current facts. They use of words such as "anticipate,""estimate," "expect," "project," "intend,""plan," "believe," and other words and terms of similar meaning inconnection with any discussion of future operating or financial performance. From time totime, we also may provide forward-looking statements in other materials we release to thepublic.

OrganizationalHistory and General Background of the Registrant

Zaxis was incorporated inOhio in 1989. On August 25, 1995, Zaxis merged with a subsidiary of The InFerGene Company("InFerGene") and InFerGene changed its name to Zaxis International Inc.InFerGene was incorporated in California in 1984 and subsequently changed its domicile toDelaware in 1985.

The Company was a biotechnology holding company thatoperated its business through a wholly owned subsidiary. The Company was a manufacturerand distributor of products that were used in a molecular separation process known aselectrophoresis, a procedure used in more than 55,000 research, industrial and clinicallaboratories worldwide. The more common applications of this procedure includeprotein-based separations such as the HDL and LDL components and sub-components ofcholesterol, the identification of various genes and gene products (e.g. DNA, RNA, etc.)and the separation and identification of proteins in drug discovery applications(Proteomics). A variety of techniques, formats, materials, compounds, equipment anddevices are employed in electrophoresis and Zaxis provided products to meet these needs.The primary focus of the Company's former research and development efforts as well as itsformer sales and marketing efforts were targeted toward the consumables segment of thismarket. The Company's core products were the pre-cast gels and reagents used in theseelectrophoresis procedures.

The Company was not able to generate sufficient revenuesto support its operating expenses during fiscal year 2002. In addition, the Company wasnot able to raise additional capital to fund its negative cash flow from operationsthrough borrowings or equity financing to support its business plan. As a result, theCompany ceased operations during the fourth quarter in 2002 and filed for bankruptcy.On October 13, 2004, the Companyemerged from bankruptcy.

As aresult of the Bankruptcy Court order, Ivo Heiden was appointed to the board of directorsof the Registrant. Mr. Heiden was subsequently appointed as sole officers of theRegistrant ("Management").

Plan of Operation

TheRegistrant has no present operations. Management determined to direct its efforts andlimited resources to pursue and effect a business combination.

    *Currenttrends*

Management believes that asa result of the relative uncertainty in the United States equity markets over the past fewyears, many privately-held companies have been closed off from the public market andtraditional IPO's. During the past few years, many privately-held or public companiesattempted to divest non-core assets and divisions and valuations of these assets anddivisions have decreased significantly. Therefore, Management believes that there aresubstantial business opportunities to effect attractive acquisitions. As a public entitywith its shares of common stock registered under the Exchange Act and publicly trading,Management believes to be well positioned to identify target acquisitions and to effect abusiness combination in order to take advantage of these current trends.

    *Effecting a business combination*

Prospective investors in theCompany's common stock will invest in the Company without an opportunity to evaluate thespecific merits or risks of any one or more business combinations. A business combinationmay involve the acquisition of, or merger with, a company which needs to raise substantialadditional capital by means of being a publicly trading company, while avoiding what itmay deem to be adverse consequences of undertaking a public offering itself. These includetime delays, significant expense, loss of voting control and compliance with variousFederal and state securities laws. A business combination may involve a company which maybe financially unstable or in its early stages of development or growth.

*    TheRegistrant has not identified a target business or target industry*

The Company's effort inidentifying a prospective target business will not be limited to a particular industry andthe Company may ultimately acquire a business in any industry Management deemsappropriate. To date, the Company has not selected any target business on which toconcentrate our search for a business combination. While the Company intends to focus ontarget businesses in the United States, it is not limited to those entities and mayconsummate a business combination with a target business outside of the United States.Accordingly, there is no basis for investors in the Company's common stock to evaluate thepossible merits or risks of the target business or the particular industry in which we mayultimately operate. To the extent we effect a business combination with a financiallyunstable company or an entity in its early stage of development or growth, includingentities without established records of sales or earnings, we may be affected by numerousrisks inherent in the business and operations of financially unstable and early stage orpotential emerging growth companies. In addition, to the extent that we effect a businesscombination with an entity in an industry characterized by a high level of risk, we may beaffected by the currently unascertainable risks of that industry. An extremely high levelof risk frequently characterizes many industries which experience rapid growth. Inaddition, although the Company's Management will endeavor to evaluate the risks inherentin a particular industry or target business, we cannot assure you that we will properlyascertain or assess all significant risk factors.

    *Sourcesof target businesses*

The Registrant anticipatesthat target business candidates will be brought to our attention from various unaffiliatedsources, including securities broker-dealers, investment bankers, venture capitalists,bankers and other members of the financial community, who may present solicited orunsolicited proposals. Our Management may also bring to our attention target businesscandidates. While we do not presently anticipate engaging the services of professionalfirms that specialize in business acquisitions on any formal basis, we may engage thesefirms in the future, in which event we may pay a finder's fee or other compensation. In noevent, however, will we pay Management any finder's fee or other compensation for servicesrendered to us prior to or in connection with the consummation of a business combination.

    *Selectionof a target business and structuring of a business combination*

Management owns 82% of theissued and outstanding shares and will have broad flexibility in identifying and selectinga prospective target business. In evaluating a prospective target business, our Managementwill consider, among other factors, the following:

Ÿ financial condition and results of operation ofthe target company;Ÿ growth potential;Ÿ experience and skillof management and availability of additional personnel;Ÿ capital requirements;Ÿ competitive position;Ÿ stage of developmentof the products, processes or services;Ÿ degree of current orpotential market acceptance of the products, processes or services;Ÿ proprietary featuresand degree of intellectual property or other protection of the products, processes orservices;Ÿ regulatory environmentof the industry; andŸ costs associated witheffecting the business combination.

These criteria are notintended to be exhaustive. Any evaluation relating to the merits of a particular businesscombination will be based, to the extent relevant, on the above factors as well as otherconsiderations deemed relevant by our Management in effecting a business combinationconsistent with our business objective. In evaluating a prospective target business, wewill conduct a due diligence review which will encompass, among other things, meetingswith incumbent management and inspection of facilities, as well as review of financial andother information which will be made available to us.

We will endeavor tostructure a business combination so as to achieve the most favorable tax treatment to us,the target business and both companies' stockholders. We cannot assure you, however, thatthe Internal Revenue Service or appropriate state tax authority will agree with our taxtreatment of the business combination. 

The time and costs requiredto select and evaluate a target business and to structure and complete the businesscombination cannot presently be ascertained with any degree of certainty. Any costsincurred with respect to the identification and evaluation of a prospective targetbusiness with which a business combination is not ultimately completed will result in aloss to us.

    *Probablelack of business diversification*

We may seek to effectbusiness combinations with more than one target business, it is probable that we will havethe ability to effect only a single business combination. Accordingly, the prospects forour success may be entirely dependent upon the future performance of a single business.Unlike other entities which may have the resources to complete several businesscombinations of entities operating in multiple industries or multiple areas of a singleindustry, it is probable that we will not have the resources to diversify our operationsor benefit from the possible spreading of risks or offsetting of losses. By consummating abusiness combination with only a single entity, our lack of diversification may:

Ÿ subject us to numerous economic, competitive and regulatory developments, any orall of which may have a substantial adverse impact upon the particular industry in whichwe may operate subsequent to a business combination, andŸ result in ourdependency upon the development or market acceptance of a single or limited number ofproducts, processes or services.

   *Limitedability to evaluate the target business' management*

Although we intend toclosely scrutinize the management of a prospective target business when evaluating thedesirability of effecting a business combination, we cannot assure you that our assessmentof the target business' management will prove to be correct. In addition, we cannot assureyou that the future management will have the necessary skills, qualifications or abilitiesto manage a public company intending to embark on a program of business development.Furthermore, the future role of our director, if any, in the target business cannotpresently be stated with any certainty. While it is possible that our director will remainassociated in some capacity with us following a business combination, it is unlikely thathe will devote his full efforts to our affairs subsequent to a business combination.Moreover, we cannot assure you that our director will have significant experience orknowledge relating to the operations of the particular target business. 

Following a businesscombination, we may seek to recruit additional managers to supplement the incumbentmanagement of the target business. We cannot assure you that we will have the ability torecruit additional managers, or that additional managers will have the requisite skills,knowledge or experience necessary to enhance the incumbent management.

Liquidity and Capital Resources

We will use our limited personnel andfinancial resources in connection with seeking new business opportunities, includingseeking an acquisition or merger with an operating company. It may be expected thatentering into a new business opportunity or business combination will involve the issuanceof a substantial number of restricted shares of common stock. If such additionalrestricted shares of common stock are issued, our shareholders will experience a dilutionin their ownership interest in the Registrant. If a substantial number of restrictedshares are issued in connection with a business combination, a change in control may beexpected to occur. 

On March 31, 2011, we had no assets andhad total liabilities consisting mainly of advances from and accruals due to relatedparties in the amount of $42,799.

Inconnection with our plan to seek new business opportunities and/or effecting a businesscombination, we may determine to seek to raise funds from the sale of restricted stock ordebt securities.We have no agreements to issue any debt or equity securities and cannotpredict whether equity or debt financing will become available at terms acceptable to us,if at all.

Thereare no limitations in our articles of incorporation on our ability to borrow funds orraise funds through the issuance of restricted common stock to effect a businesscombination. Our limited resources may make it difficult to do borrow funds or raisecapital. Our inability to borrow funds or raise funds through the issuance of restrictedcommon stock required to effect or facilitate a business combination may have a materialadverse effect on our financial condition and future prospects, including the ability tocomplete a business combination. To the extent that debt financing ultimately proves to beavailable, any borrowing will subject us to various risks traditionally associated withindebtedness, including the risks of interest rate fluctuations and insufficiency of cashflow to pay principal and interest, including debt of an acquired business. 

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKBack to Table of Contents

We have not enteredinto, and do not expect to enter into, financial instruments for trading or hedgingpurposes.

ITEM 4.CONTROLS AND PROCEDURES****Back to Table of Contents

*Evaluation of disclosure controls andprocedures.* As of March 31, 2011, the Company's chief executive officer and chieffinancial officer conducted an evaluation regarding the effectiveness of the Company'sdisclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) underthe  Exchange Act. Based upon the evaluation of these controls and procedures, ourchief executive officer and chief financial officer concluded that our disclosure controlsand procedures were effective as of the end of the period covered by this report.

*Changes in internal controls.*During the quarterly period covered by this report, no changes occurred in our internalcontrol over financial reporting that materially affected, or is reasonably likely tomaterially affect, our internal control over financial reporting.

**PART II - OTHER INFORMATION**

ITEM 1. LEGALPROCEEDINGS****  Back to Table of Contents

None.

ITEM 1A.RISK FACTORS  Back to Table of Contents

In addition to the otherinformation set forth in this report, you should carefully consider the factors discussedin Part I, “Item 1. Description of Business, subheading Risk Factors” inour Annual Report on Form 10-K for the year ended December 31, 2010, which couldmaterially affect our business, financial condition or future results. The risks describedin our Annual Report on Form 10-K are not the only risks facing our company.Additional risks and uncertainties not currently known to us or that we currently deem tobe immaterial also may materially adversely affect our business, financial conditionand/or operating results. 

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSBack to Table of Contents

None.

ITEM3. DEFAULTS UPON SENIOR SECURITIES****Back to Table of Contents

None.

ITEM4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSBack to Table of Contents

None.

ITEM5. OTHER INFORMATION****Back to Table of Contents

None.

ITEM6. EXHIBITS****Back to Table of Contents

(a) The following documentsare filed as exhibits to this report on Form 10-Q or incorporated by reference herein. Anydocument incorporated by reference is identified by a parenthetical reference to the SECfiling that included such document.

Exhibit    No.Description31Certification of CEO/CFO    pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the    Sarbanes-Oxley Act of 2002.32Certification of CEO/CFO    pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the    Sarbanes-Oxley Act of 2002.
SIGNATURES

Pursuant to therequirements of the Securities Exchange Act of 1934, this report has been signed below bythe following persons on behalf of the registrant and in the capacities and on the dateindicated.

/s/ Ivo HeidenIvo Heiden   *President, CFO and Chairman**   Dated: May 13, 2011****** |