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

FORM 10-KSB

x  
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
  OF 1934

For the fiscal year ended **December 31, 2003.**

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

Commission file number __________

AUCXIS CORP. 
  (Name of small business issuer in its charter)

|Nevada                                   | n/a                
|---------------------------------------- | -------------------
|(State or other jurisdiction of          | (I.R.S. Employer   
|incorporation or organization)           | Identification No.)
|                                         |                    
|Suite 500-666 Burrard Street             | V6C 3P6            
|Vancouver, British Columbia CANADA       |                    
|(Address of principal executive offices) | (Zip Code)         

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

Issuer's telephone number, including area code:604-639-3109

Securities registered under Section 12(b) of the Exchange Act:
  Common Stock, $.001 par value

Check whether the issuer (1) filed all reports required to be
  filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
  for such shorter period that the registrant was required to file such reports),
  and (2) has been subject to such filing requirements for the past 90 days. Yes
  x    No
  ** ̈******

Check if there is no disclosure of delinquent filers in response
  to Item 405 of Regulation S-B contained in this form, and no disclosure will
  be contained, to the best of registrant's knowledge, in definitive proxy or
  information statements incorporated by reference in Part III of this Form 10-KSB
  or any amendment to this Form 10-KSB. ** ̈******

Issuers revenues for the fiscal year ended December 31,
  2003 were $Nil. The aggregate market value as at April 14, 2004 of the common
  stock of the issuer, its only class of voting stock, held by non-affiliates
  was approximately U.S.$200,000 calculated on the basis of the price of the last
  trade of the issuer's common stock, as reported on April 13, 2004.Such
  market value excludes shares owned by all executive officers and directors (but
  includes shares owned by their spouses); this should not be construed as indicating
  that all such persons are affiliates.

The number of shares outstanding of the issuer's common stock
  as at April 14, 2004 was**66,409,415.**

DOCUMENTS INCORPORATED BY REFERENCE

Transitional Small Business Disclosure Format Yes ** ̈******
    No x

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CAUTIONARY STATEMENT

Cautionary Statement for purposes of the "Safe Harbor''
  Provisions of the Private securities Litigation Reform Act of 1995:Certain
  statements in this report, including, without limitation, statements contained
  under the captions "Item 1. Description of Business" and "Item 6. Plan of Operation,"
  and such other statements, except historical facts, regarding the Companys
  financial position, business strategy and plans of management for future operations
  are "forward looking statements" within the meaning within the meaning of Section
  27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
  Exchange Act of 1934, as amended. These statements, which include, but are not
  limited to, words such as ``expect,'' believe, anticipate,'' estimate,
  plan, project, strategy and ``intend'' are
  based on management's beliefs and assumptions, and on information currently
  available to management and involve certain known and unknown risks, uncertainties
  and other factors which may cause these statements to be materially different
  from any future results, performance or achievements expressed or implied by
  these forward-looking statements. Such factors include, among others, the Company's
  ability to finance its operations and the ability to obtain such financing,
  uncertainties relating to the integration of acquired businesses and operations,
  the Company's ability to successfully implement its business plan; potential
  fluctuations in financial results, dependence on product development, rapid
  technological and market change, failure to complete the manufacture of products
  on schedule and on budget, uncertainties relating to business and economic conditions
  in markets in which the Company operates or which relate to customer plans and
  commitments; dependence on intellectual property rights; the competitive environment
  in which the Company operates and such other risks as detailed from time to
  time in the Company's periodic reports filed with the United States Securities
  and Exchange Commission and other regulatory authorities.

PARTI

Item 1.Description of Business

General

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).
  Both of these companies are inactive that have not conducted any active business
  from inception to date that the current management is aware of.

The Company also owns 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 is working with our Belgium counsel and the trustee to maximize
  the proceeds to be received

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for ATS. 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.

The company has temporarily suspended development of e-business
  services for the perishable commodity marketplace pending further review of
  the opportunities in this area.

Business overview

Aucxis Corp. is currently inactive at the parent company level
  and is currently not in control of the operations of its subsidiary, ATS as
  a result of the April 11, 2003 bankruptcy. Aucxis continues to negotiate with
  the former owners of ATS (Schelfhout) with regard to various claims
  made by Schelfhout, the outcome of which will ultimately determine the portion
  of the proceeds that the Company will receive from the sale of ATS.

Aucxis has engaged an Ontario technology company to review
  the i3 Collateral Management Utility (CMU) to determine its commercial
  viability both in its current form and with additional development. i3 Collateral
  Management Utilityis a set of Java applications that together manage
  the entire credit process. The system includes a method for distributing credit
  (payment guarantees, credit insurance, etc.) in the form of 'tokens' on behalf
  of buyers, at speeds up to near real time (approximately sub 150mSec), from
  a central source (or sources) to an unlimited number of sellers. It also contains
  a real-time credit reservation mechanism that links to a firm guarantee of payment
  (or to credit insurance, etc.), providing a medium to enable the user to set
  parameters for credit risk.

The i3 Collateral Management Utilityis made up of
  a number of inter-dependent modules, each of which receive, process and transmit
  Rendezvous messages. The Financial Services Module is used to process
  credit operations (request, adjustment or cancellation). The rendezvous message
  that this module received has data about the kind of credit operation that has
  to be executed. The Credit Token Management modules create, distribute,
  close and retire credit tokens or discreet units of credit that
  can be allocated to various vendors. The Credit Request Module is used
  to send a credit request to appropriate module that will process it and forward
  it to the appropriate financial institution. The Credit Receipt Query Module
  and Credit Receipt Tracking Module are used to list all credit receipts
  for particular organization from database, so that updated reports and accounting
  functions can be executed. The Credit Reservation Adjustment Moduleis used to send a credit cancellation or credit adjustment request to appropriate
  module that will process it. The Add Bank Guarantee moduleis used to
  add new bank guarantees into database or to modify the old one. The List
  Bank Guarantee Modulequeries the database to enable users to generated
  updated reports relating to bank guarantees. Together these modules perform
  the operations of obtaining, distributing and tracking credit through the entire
  credit cycle.

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With the acquisition of i-Three, Inc. in December 2000, Aucxis
  acquired the following products, which will also be reviewed in the coming year
  for commercial viability.

Aggregation Engine - The i-Three
  Aggregation Engine is a web-based enterprise technology for delivering aggregated
  information components on a single web page.

LDAP Adapter for TIBCO - i-Threes
  LDAP Adapter is a software application that creates the integration medium to
  join a TIBCOs broadcast messaging bus (TIB)  a proprietary infrastructure
  middleware technology that transmits messages in real time  and a Lightweight
  Directory Access Protocol (LDAP) Server.

Custom Adapters for TIBCO - While
  TIBCO offers a number of adapters for standard technologies (oracle, SAP, Power
  Builder for example), many legacy systems (systems already deployed within an
  organization) are unable to interact with TIBCO products because no adapters
  exist to perform translation. i-Threes custom adapters are software applications
  that creates the integration medium to join a TIB and other technologies.

I3 Development Sandbox - I3 Development
  Sandbox is a Java programmers tool to streamline and facilitate the development
  process.

http Adapter for TIBCO - The i-Three
  http Adapter is a software product that provides a bidirectional bridge between
  web servers and TIB messaging environments, specifically by taking http requests
  and translating them into TIBCO-readable (Rendezvous) messages.

https Adapter for TIBCO - Like the
  http Adapter, the https Adapter provides a bi-directional bridge between web
  servers and TIB messaging environments.

Oracle Database Adapter (dbAdapter)
  for TIBCO - dbAdapter for Oracle software is a bidirectional gateway between
  Oracle JDBC driver and the TIB/Rendezvous messaging system. dbAdapter for Oracle
  takes advantage of the scalability (the capacity of applications to be replicated
  without affecting performance levers) of TIB/Rendezvous environment and the
  JDBC platform independence, providing fault tolerant and highly efficient control
  of the database.

i3 Rv Scheduler - The RV Scheduler
  is a tool for Java developers to streamline the process of sending and receiving
  TIBCO Rendezvous messages.

Aucxis will be seeking North American opportunities for these
  products as well as the CMU, that may have worldwide appeal. Following a thorough
  review of the technologies, decisions will be made to partner with other companies,
  develop internally or abandon.

Competition

The Computer Software market is highly competitive and there
  are many players who are in a better position than Aucxis both financially and
  from a human resource standpoint. There is no guarantee that any of the Aucxis
  products will be commercially viable and be able to compete in the current marketplace.

For ATS, the electronic auction market is highly competitive,
  is changing rapidly, and is significantly affected by new product and service
  introductions. Companies are increasing the demand for industry specific solutions
  to meet their needs in providing products and services to customers and trading
  partners. Barriers to entry into this market are relatively low, and we expect
  that competition will intensify in the future. The market environment in which
  we operate is extremely dynamic and is characterized by constantly evolving
  standards and new market entrants.

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The primary competition for ATS currently comes from traditional
  auction suppliers of hardware and software services.

Government Regulation; Government Approval

The Company is not currently subject to direct regulation
  by any government agency, other than regulations applicable to businesses generally.
  There are currently few laws or regulations directly applicable to access to,
  or commerce on, the Internet. However, due to the increasing popularity of and
  use of the Internet, it is possible that a number of laws and regulations may
  be adopted with respect to issues such as the protection of databases, user
  privacy, pricing and characteristics and quality of products and services. The
  adoption of laws or regulations in the future may decrease the growth of the
  Internet, which in turn could decrease the demand for the Company's services
  and products and increase the Company's costs of doing business or otherwise
  have an adverse effect on the Company's business, operating results and financial
  condition. Moreover, the applicability to the Internet of existing laws governing
  issues such as property ownership, libel and personal privacy is uncertain and
  could expose us to substantial liability, for which the Company might not be
  indemnified.

Research and Development Costs

There were no research and development expenditures in the
  current year or in 2002 In years prior to 2002, the Company had incurred significant
  research and development costs in the former subsidiary of Kwatrobox relating
  primarily to the development of PBS Verdeel Pro, a proprietary software application.
  The reason for the decline in spending in this area is because of the temporary
  suspension of software development activity pending a review of IP. All research
  and development costs have been expensed by the Company as incurred.

Costs and Effects of Compliance With Environmental Laws

The Company is not involved in a business that involves the
  use of materials in a manufacturing stage where such materials are likely to
  result in the violation of any existing environmental rules and/or regulations.
  Further, while the Company does own real property it is unlikely that its own
  ownership would lead to liability as a landowner. Therefore, the Company does
  not anticipate that there will be any costs associated with the compliance of
  environmental laws and regulations.

Intellectual Property

Other than the patent regarding "method and system for real
  time credit reservation and distribution" that was filed with the United States
  Patent and Trademark Office, we have neither any registered patents nor trademarks.

Employees and contractors

As of April 14, 2004 ATS had forty (40) full time employees
  and Aucxis Corp had one (1) contracted officer. None of our employees is represented
  by a labor union or are covered by a collective bargaining agreement. We consider
  our labor and employee relations to be good. Access to qualified labour in Europe
  is much better in light of the decline in demand post 2000.

Item 2.Description
  of Properties.

The Company has offices located at Suite 500, 666 Burrard
  Street, Vancouver, BC, Canada V6C 3P6 and ATS has an office at Bormte 204/A,
  Stekene, Belgium 9190. Our office lease obligation in Vancouver are renewed
  on an annual basis at the end of May.

ATS real property was divested prior to our acquisition.
  As part of the acquisition, however, ATS shall be entitled to remain on the
  premises where it currently conducts its business operations for a twelve (12)
  month period ending January 7, 2001 rent free and thereafter, for an additional
  term of 10 years, at a rate

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of 2,400 BEF per square meter for office space, 1,800 BEF
  per square meter for the work room and 1,200 per square meter for the warehouse.

Our Company does not own any real property other than the
  building contributed by us to our subsidiary, SDL Invest N.V., which ownership
  interest is subject to an option to purchase granted to such subsidiarys
  minority shareholders.

We have not entered into any agreements to acquire any properties.

Item 3.Legal Proceedings.

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. Management believes that the claim brought
  against Aucxis NV (Belgium) and itself, is without merit and has been vigorously
  defending both itself and Aucxis NV (Belgium).

In addition, Schelfhout sought to enforce the mandatory redemption
  feature related to the second and third tranches of shares (the 12 and 18 month
  shares) totalling 909,090 to be released under the terms of the purchase agreement
  on the basis that these shares were not free trading at the time of release
  as contemplated in the agreement. This action to recover $1,500,000 from the
  Company is currently pending, and has now been increased to $3,250,000, representing
  the 12, 18, 24 and 36 month shares. Failing recovery of the $3,250,000 in cash,
  the former owners claim that they are entitled to a reverse swap of a 32.5%
  stake in ATS.

All written pleadings on both matters have been submitted
  and the Belgium arbitration tribunal has heard arguments on November 28, 2003.
  An arbitral award would normally have been expected by April 15, 2004, however,
  a dispute initiated by Schelfhout, with respect to the responsibility for additional
  arbitration fees due as a result of increasing Schelfhouts claim from
  $1,500,000 to $3,250,000 has delayed the award. Management has been working
  closely with Belgium counsel to provide evidence to the tribunal that the shares
  have always been free trading in accordance with the terms of the agreement.
  Management believes that should the arbitration continue Schelfhouts $3,250,000
  claim will not be successful as there is ample public information available
  indicating the free tradability of the shares.

On March 17, 2003, the former owners of the Companys
  subsidiary, ATS, obtained a restraining order against the Company, effectively
  securing the remaining 92.5% of the ATS shares to satisfy any ultimate judgement
  which might be awarded to the former owners of ATS as a result of their claims
  in respect of the arbitration. These attachments lapsed automatically as a consequence
  of the Aucxis NV bankruptcy filed on April 11, 2003.

On March 26, 2002, Mr. Schelfhout resigned as the managing
  director of ATS, as a consequence of which ATS brought a civil law action before
  the Commercial Court of Dendermonde (Belgium) on May 17, 2002, aiming at establishing
  that such resignation has caused the management contract under which Mr Schelfhout
  performed his management duties to be terminated, entitling ATS to cease all
  payments of management fees and to demand damages. On February 10, 2003 the
  Belgium Courts dismissed the ATS claim. ATS has made provision for $176,136
  in fiscal 2002. The case is being appealed.

On May 14, 2002 Aucxis NV (Belgium) brought an action against
  the former owners of ATS before the Court of Dendermonde (Belgium) relating
  to certain irregularities in the deletion of a non-compete clause from ATS
  articles of association. On February 14, 2003 the claim was dismissed by the
  courts and an appeal was filed on March 25, 2003. As a consequence of the Aucxis
  NV bankruptcy filed on April 11, 2003, these proceedings have been stayed to
  allow the trustee in bankruptcy to make a decision regarding continuation.

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Except as described above, 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.Item 4.          Submission
  of Matters to a Vote of Security Holders.

No matters were submitted to the vote of the holders of the
  Company's securities during the year ended December 31, 2003.

Part II

Item 5.          Market
  for the Common Equity and Related Stockholder Matters.Market Price of the Company's Common Stock

Our common stock is currently quoted on the Pink sheets Bulletin
  Board under the symbol "AUCX".For the year ended December 31, 2002

|                                                                                                                                                        | Year Ending December 31, 2002 |            |  |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------- | ---------- |  | --------- | 
|                                                                                                                                                        |                               | Price High |  | Price Low | 
|                                                                                                                                                        | First Quarter                 | 0.09       |  | 0.03      | 
|                                                                                                                                                        | Second Quarter                | 0.03       |  | 0.03      | 
|                                                                                                                                                        | Third Quarter                 | 0.01       |  | 0.01      | 
|                                                                                                                                                        | Fourth Quarter                | 0.003      |  | 0.003     | 
|                                                                                                                                                        |                               |            |  |           | 
|For the year ended December 31, 2003
      The following table sets forth the closing prices for the common stock
        during the periods indicated.

| | Year Ending December 31, 2003 |            |  |           | 
| | ----------------------------- | ---------- |  | --------- | 
| |                               | Price High |  | Price Low | 
| | First Quarter                 | 0.003      |  | 0.003     | 
| | Second Quarter                | 0.003      |  | 0.003     | 
| | Third Quarter                 | 0.003      |  | 0.003     | 
| | Fourth Quarter                | 0.003      |  | 0.003     | 
| |                               |            |  |           | 
| | Year Ending December 31, 2004 |            |  |           | 
| |                               | Price High |  | Price Low | 
| | First Quarter                 | 0.003      |  | 0.003     | 
| | Second Quarter                | 0.003      |  | 0.003     | 

As of April 14, 2004 we had 66,406,415 shares of common stock
  outstanding held by approximately 258 record holders. The Company estimates
  that approximately 750 beneficial holders hold its common stock.

Dividend Policy

We have never declared or paid a cash dividend on our common
  stock. It is our present policy to retain earnings, if any, to finance the development
  and growth of our business. Accordingly, we do not

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anticipate that cash dividends will be paid until our earnings
  and financial condition justify such dividends, and there can be no assurance
  that we can achieve such earnings.

Recent Sales of Unregistered Securities.

There were no sales of unregistered securities in the past
  12 months.

Item 6.Managements
  Discussion and Analysis of Financial Condition and Results ofOperations

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 2 in the Notes to the Consolidated
  Financial Statements in Item 7 of the Annual Report on Form 10-KSB as at December
  31, 2003. Note that our preparation of this Annual Report on Form 10-KSB and
  the 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.

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.

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In December 2002, the FASB issued SFAS No. 148, Accounting
  for Stock-Based Compensation  Transition and Disclosure, which amends
  SFAS No. 123 to provide alternative methods of transition for a voluntary change
  to the fair market value based method of accounting for stock-based employee
  compensation. In addition, SFAS No. 148 expands the disclosure requirements
  of SFAS No. 123 to require more prominent disclosures in both the annual and
  interim financial statements about the method of accounting for stock-based
  employee compensation and the effect of the method used on reported results.
  The transition provisions of SFAS No. 148 are effective for fiscal years ended
  after December 15, 2002. The disclosure provisions of SFAS No. 148 are effective
  for financial statements for interim periods beginning after December 15, 2002.
  The Company has adopted the disclosure provisions effective January 1, 2003.
  In June 2002, FASB issued SFAS No. 146 Accounting for Costs Associated
  with Exit or Disposal Activities. The provisions of this statement are
  effective for exit or disposal activities that are initiated after December
  31, 2002, with early application encouraged. This statement addresses financial
  accounting and reporting for costs associated with exit or disposal activities
  and nullifies Emerging Issues Task Force (EITF) issue No. 94-3,
  Liability Recognition for Certain Employee Termination Benefits and Other
  Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).
  This statement requires that a liability for a cost associated with an exit
  or disposal activity be recognized when the liability is incurred. The Company
  adopted SFAS No. 146 on January 1, 2003. The effect of adoption of this standard
  on the Companys results of operations and financial position was not material.

FASB has also issued SFAS No. 145 and 147 but they will not
  have any relationship to the operations of the Company, therefore, a description
  of each and their respective impact on the Companys operations have not
  been disclosed.

The year ended December 31, 2003

Management continues to manage costs while simultaneously
  exploring various strategic options for the Company. Management will be reviewing
  the Collateral Management Utility (CMU) technology for commercial viability.
  It is expected that this review will lead to discussions with interested parties
  for the development or sale of the CMU, depending on the outcome of any financings
  or the sale of ATS. The auction process for the sale of ATS was expected to
  begin in December 2003 following the arbitration hearings, however this process
  has been delayed by Schelfhout due to a dispute with the Belgium arbitration
  tribunal over increased fees. Unfortunately the ongoing legal maneuvering by
  Schelfhout continues to hinder the ability of Aucxis to sell ATS and use proceeds
  to settle debts and to develop new business opportunities. If a favourable settlement
  cannot be reached with Schelfhout within a reasonable time, Aucxis will consider
  returning to arbitration. Management believes that should the arbitration continue
  Schelfhouts $3,250,000 claim will not be successful as there is ample
  public information available indicating the free tradability of the shares.

Aucxis Trading Solutions (ATS) continued to make
  profit on increased revenue. ATS maintained its position as the major provider
  of electronic auction systems for the perishable agricultural industry. The
  subsidiary of Aucxis NV, Auction Trading Services Nederland BV (ATS Holland)
  established in cooperation with Flora Holland and Verenigde Bloemenveilingen
  Aalsmeer, continues to do well.

ATS continues to capture new business and strives to be the
  premier supplier of electronic trading systems to perishable agriculture and
  fish trading world-wide.

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Results Of Operations

Comparison of Year ended December 31, 2003 to Year ended
  December 31, 2002

Revenues.

Effective April 11, 2003, the Company has 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 for the year has been reported
  on a non-consolidated basis as nil compared to $4,717,887 in the prior year.

Operating Expenses.

Selling, general and administrative expense for the year ended
  December 31, 2003 was $264,353 as compared to $3,596,907 for the year ended
  December 31, 2002. Depreciation and amortization expense for the year was $6,894
  compared to $349,311 last year. Total operating costs for the year ended December
  31, 2003 were $261724 compared with $4,272,718 for the year ended December 31,
  2002. The reason for the sharp decline in expenses is because the company ceased
  consolidating the operations of ATS as a result of the April 11, 2003 bankruptcy
  of Aucxis NV. There were no Research and development costs incurred in the current
  year.

Net Loss/Earnings.

The company had a loss of $704,593 for the year ended December
  31, 2003 compared to a loss of $1,225,962 for the year ended December 31, 2003.
  In the current year a gain of $542,295 was recognized from the cancellation
  of 454,545 mandatory Redeemable shares. During the quarter ended March 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. This gain was offset by a $1,007,000 write down of the investment in
  Aucxis NV for accounting purposes due to the surrounding litigation of Aucxis
  NV. Included in net income is $10,296 representing the Aucxis share of income
  in equity investment to March 31, 2003

Plan of Operation.

Our plan of operation for the coming year for Aucxis Corp
  involves the following

|1 | Finalize the divestiture of ATS
      Completion of the negotiation with Schelfhout and the
        auction of ATS to obtain maximum proceeds for the Company.                                                                                                                                                                                                                                                                              
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2 | Settlements of outstanding liabilities
      The ongoing legal maneuvering by Schelfhout continues
        to hinder the ability of Aucxis to settle its debts. As such the company
        will seek alternative funding and continue negotiations for settlements
        with regard to trade payables and the amount owed to the former Kwatrobox
        shareholders.                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|3 | CMU evaluation
      Management has engaged an Ontario technology company
        to review the Collateral Management Utility (CMU) to determine if it justifies
        additional research and development. It is expected that this review will
        lead to discussions with interested parties for the development or sale
        of the CMU, depending on the outcome of any financings or business unit
        sale initiatives.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4 | Other strategic options and opportunities
      Management will continue to pursue other strategic options
        and opportunities for the Company including a review of the I-three products
        for sale or development.                                                                                                                                                                                                            

10

---

Liquidity and Capital Resources

Currently Aucxis has limited cash resources and will be relying
  on support from shareholders in the coming year to continue to settle the outstanding
  claims against the company by Schelfhout so that a fair portion of the proceeds
  from the sale of ATS will be distributed to Aucxis.

Working capital for the year ended December 31, 2003 resulted
  in a deficit of $1,659,529 compared to a deficit of $1,243,921 for the year
  ended December 31, 2002.

Risks and Uncertainties

Our business plan is dependent upon opportunities that we
  identify. The Company has only a limited operating history upon which an evaluation
  of the Company and its prospects can be based. The Companys prospects
  must be considered in light of the risks, expenses and difficulties frequently
  encountered by companies seeking to develop a business. There can be no assurance
  that the Company will successfully address these challenges.

The Company has incurred losses from operations in its last
  six fiscal years and as at December 31, 2003, had an accumulated deficit in
  shareholders' equity of $25.16 million.

The Company also considers from time to time opportunities
  to engage in joint ventures or other business collaborations with third parties
  to address particular market segments. Such acquisitions, investments, joint
  ventures or other business initiatives may involve significant commitments of
  financial and other resources of the Company. There can be no assurance that
  any such activity will be successful in generating revenue, income or other
  returns to the Company, or that financial or other resource committed to such
  activities will not be lost.

Item 7.Financial
  Statements.

| | (i)   | Report of Independent Accountants                                                                                                                             
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                               
| | (ii)  | Consolidated Balance Sheet as of December
        31, 2003.                                                                                                   
| |       |                                                                                                                                                               
| | (iii) | Consolidated Statement of Operations
        Deficit and Accumulated Comprehensive Income for the years ended December
        31, 2003 and December 31, 2002.
| |       |                                                                                                                                                               
| | (iv)  | Consolidated Statement of Cash Flows
        for the years ended December 31, 2003 and December 31, 2002.                                                     
| |       |                                                                                                                                                               
| | (v)   | Consolidated Statement of Stockholders'
        Equity for the years ended December 31, 2003 and December 31, 2002.                                           
| |       |                                                                                                                                                               
| | (vi)  | Notes to Consolidated Financial Statements.                                                                                                                   

11

---

Aucxis Corp.

|                                                | Index | 
|----------------------------------------------- | ----- | 
|                                                |       | 
|Independent Auditors Report                    | F-1   | 
|                                                |       | 
|Consolidated Balance Sheets                     | F-2   | 
|                                                |       | 
|Consolidated Statements of Operations           | F-3   | 
|                                                |       | 
|Consolidated Statements of Cash Flows           | F-4   | 
|                                                |       | 
|Consolidated Statement of Stockholders Deficit | F-5   | 
|                                                |       | 
|Notes to the Consolidated Financial Statements  | F-6   | 

F-i

---



| | Independent Auditors Report
      To the Board of Directors and Stockholders of 
        Aucxis Corp. 
        (a Nevada Corporation)
      We have audited the accompanying consolidated balance
        sheets of Aucxis Corp. as of December 31, 2003 and 2002 and the related
        consolidated statements of operations and comprehensive loss, stockholders
        deficit and cash flows for each of the two years then ended. These financial
        statements are the responsibility of the Companys management. Our
        responsibility is to express an opinion on these financial statements
        based on our audits.
      We conducted our audits in accordance with auditing
        standards generally accepted in the United States. Those standards require
        that we plan and perform the audit to obtain reasonable assurance about
        whether the financial statements are free of material misstatement. An
        audit includes examining, on a test basis, evidence supporting the amounts
        and disclosures in the financial statements. An audit also includes assessing
        the accounting principles used and significant estimates by management,
        as well as evaluating the overall financial statement presentation. We
        believe that our audits provide a reasonable basis for our opinion.
      In our opinion, the consolidated financial statements
        referred to above present fairly, in all material respects, the consolidated
        financial position of Aucxis Corp. as of December 31, 2003 and 2002, and
        the consolidated results of its operations and its cash flows for each
        of the two years then ended in conformity with accounting principles generally
        accepted in the United States.
      The accompanying consolidated financial statements have
        been prepared assuming the Company will continue as a going concern. As
        discussed in Note 1 to the financial statements, the Company has a working
        capital deficiency of $1,659,529 and has accumulated losses since inception
        of $25,160,359. These factors raise substantial doubt about the Companys
        ability to continue as a going concern. Managements plans in regard
        to these matters are also discussed in Note 1. These financial statements
        do not include any adjustments which might result from the outcome of
        this uncertainty.
      Chartered Accountants
      Vancouver, Canada
      April 9, 2004
      F-1 | 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 

---

|AUCXIS
      CORP. CONSOLIDATED BALANCE SHEET 
      (expressed in U.S. dollars)
|--------------------------------------------------------------------------------

|DECEMBER
      31                                                            |   | 2003        |   |   | 2002        |  
|---------------------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                                             |   |             |   |   |             |  
|ASSETS                                                                       |   |             |   |   |             |  
|                                                                             |   |             |   |   |             |  
|CURRENT ASSETS                                                               |   |             |   |   |             |  
|Cash and equivalents                                                         | $ | 19,724      |   | $ | 617,811     |  
|Accounts receivable, net of allowance for doubtful accounts
      of $12,840 |   | 16,646      |   |   | 1,135,903   |  
|Inventory (Note 3)                                                           |   | -           |   |   | 1,394,028   |  
|Prepaid expenses                                                             |   | -           |   |   | 51,218      |  
|Total Current Assets                                                         |   | 36,370      |   |   | 3,198,960   |  
|Property and equipment (Note 4)                                              |   | 18,900      |   |   | 297,624     |  
|Investments (Note 5)                                                         |   | 1,000       |   |   | 160,070     |  
|Acquired core technology (Note 6)                                            |   | -           |   |   | 299,584     |  
|Total Assets                                                                 | $ | 56,270      |   | $ | 3,956,238   |  
|                                                                             |   |             |   |   |             |  
|LIABILITIES                                                                  |   |             |   |   |             |  
|                                                                             |   |             |   |   |             |  
|CURRENT LIABILITIES                                                          |   |             |   |   |             |  
|Accounts payable (Note 7)                                                    | $ | 525,650     |   | $ | 896,398     |  
|Accrued liabilities                                                          |   | 62,235      |   |   | 696,220     |  
|Due to former Kwatrobox shareholders (Note 7)                                |   | 574,834     |   |   | 356,274     |  
|Deferred revenue                                                             |   | -           |   |   | 2,000,082   |  
|Current portion of long-term debt (Note 8)                                   |   | 533,180     |   |   | 488,666     |  
|Deferred taxes                                                               |   | -           |   |   | 5,241       |  
|Total Current Liabilities                                                    |   | 1,695,899   |   |   | 4,442,881   |  
|Long-term debt                                                               |   | -           |   |   | 105,859     |  
|Non-controlling interest                                                     |   | -           |   |   | 2,400       |  
|Total Liabilities                                                            |   | 1,695,899   |   |   | 4,551,140   |  
|Mandatory Redeemable Shares of Common Stock (Note 11)                        |   | 4,215,914   |   |   | 4,818,181   |  
|                                                                             |   | 5,911,813   |   |   | 9,369,321   |  
|                                                                             |   |             |   |   |             |  
|Commitments and contingencies (Notes 1 and 14)                               |   |             |   |   |             |  
|                                                                             |   |             |   |   |             |  
|STOCKHOLDERS 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                                       |   | 505,843     |   |   | 243,710     |  
|Deficit                                                                      |   | (25,160,359 | ) |   | (24,455,766 | )
|Total Stockholders Deficit                                                  |   | (5,855,543  | ) |   | (5,413,083  | )
|Total Liabilities and Stockholders Deficit                                  | $ | 56,270      |   | $ | 3,956,238   |  

F-2

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

---

|AUCXIS
      CORP. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
      LOSS
      (expressed in U.S. dollars)
|-----------------------------------------------------------------------------------------------------------------------

|YEAR
      ENDED DECEMBER 31                                  |   | 2003       |   |   | 2002       |  
|------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                              |   |            |   |   |            |  
|Revenue                                                       | $ | -          |   | $ | 4,717,887  |  
|Cost of goods sold                                            |   | -          |   |   | (1,754,616 | )
|                                                              |   |            |   |   |            |  
|                                                              |   | -          |   |   | 2,963,271  |  
|                                                              |   |            |   |   |            |  
|Selling, general and administrative expense                   |   | 264,353    |   |   | 3,596,907  |  
|Depreciation and amortization expense                         |   | 6,894      |   |   | 349,311    |  
|(Gain) loss on disposal of assets                             |   | (9,523     | ) |   | 326,500    |  
|                                                              |   |            |   |   |            |  
|Total operating expenses                                      |   | 261,724    |   |   | 4,272,718  |  
|                                                              |   |            |   |   |            |  
|Operating loss                                                |   | (261,724   | ) |   | (1,309,447 | )
|                                                              |   |            |   |   |            |  
|Share of income of equity investment                          |   | 10,296     |   |   | 38,641     |  
|Miscellaneous revenue                                         |   | 11,540     |   |   | 84,000     |  
|Non-controlling interest                                      |   | -          |   |   | (2,400     | )
|Write down of investments (Note 5)                            |   | (1,007,000 | ) |   | -          |  
|Gain on cancellation of mandatory redeemable shares           |   | 542,295    |   |   | -          |  
|                                                              |   |            |   |   |            |  
|Loss before income taxes                                      |   | (704,593   | ) |   | (1,189,206 | )
|                                                              |   |            |   |   |            |  
|Provision for income taxes                                    |   | -          |   |   | (36,756    | )
|                                                              |   |            |   |   |            |  
|Net loss                                                      |   | (704,593   | ) |   | (1,225,962 | )
|                                                              |   |            |   |   |            |  
|Other comprehensive income                                    |   |            |   |   |            |  
|Foreign
      currency translation adjustments                |   | 262,133    |   |   | 93,810     |  
|                                                              |   |            |   |   |            |  
|Comprehensive loss                                            | $ | (442,460   | ) | $ | (1,132,152 | )
|                                                              |   |            |   |   |            |  
|Basic and diluted loss per share                              |   | (0.01      | ) |   | (0.02      | )
|                                                              |   |            |   |   |            |  
|Shares used in computing basic and diluted earnings per share |   | 62,773,051 |   |   | 62,738,926 |  

F-3

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

---

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

|YEAR
      ENDED DECEMBER 31                              |   | 2003      |   |   | 2002       |  
|--------------------------------------------------------- | - | --------- | - | - | ---------- | -
|                                                          |   |           |   |   |            |  
|OPERATING ACTIVITIES                                      |   |           |   |   |            |  
|Net loss for the year                                     | $ | (704,593  | ) | $ | (1,225,962 | )
|Adjustments to reconcile net loss to cash                 |   |           |   |   |            |  
|Interest                                                  |   | -         |   |   | 30,864     |  
|Depreciation
      and amortization                       |   | 6,894     |   |   | 349,311    |  
|Foreign
      exchange                                    |   | -         |   |   | 22,223     |  
|Non-controlling
      interest                            |   | -         |   |   | 2,400      |  
|Share
      of (income) loss of equity investment         |   | (10,296   | ) |   | (38,641    | )
|Gain
      on cancellation of mandatory redeemable shares |   | (542,295  | ) |   | -          |  
|Write
      down of investment                            |   | 1,007,000 |   |   | -          |  
|(Gain)
      loss on disposal of assets                   |   | (9,523    | ) |   | 242,500    |  
|Net change in operating assets and liabilities            |   |           |   |   |            |  
|Accounts
      receivable                                 |   | 19,790    |   |   | 94,445     |  
|Inventory                                                 |   | -         |   |   | (989,718   | )
|Prepaid
      expense                                     |   | 15,973    |   |   | 62,310     |  
|Accounts
      payable and accrued liabilities            |   | 197,246   |   |   | 133,725    |  
|Deferred
      items                                      |   | -         |   |   | 1,282,195  |  
|CASH USED IN OPERATING ACTIVITIES                         |   | (19,804   | ) |   | (34,348    | )
|                                                          |   |           |   |   |            |  
|FINANCING ACTIVITIES                                      |   |           |   |   |            |  
|Long-term debt net of repayment                           |   | -         |   |   | 308,963    |  
|CASH PROVIDED BY FINANCING ACTIVITIES                     |   | -         |   |   | 308,963    |  
|                                                          |   |           |   |   |            |  
|INVESTING ACTIVITIES                                      |   |           |   |   |            |  
|Purchase of property and equipment (net of proceeds)      |   | -         |   |   | (68,997    | )
|Change in subsidiary net assets                           |   | (557,249  | ) |   | -          |  
|Purchase of investment                                    |   | -         |   |   | (5,657     | )
|Proceeds of disposal of investment                        |   | -         |   |   | 84,000     |  
|CASH PROVIDED BY INVESTING ACTIVITIES                     |   | (557,249  | ) |   | 9,346      |  
|                                                          |   |           |   |   |            |  
|EFFECT OF EXCHANGE RATE CHANGES ON CASH                   |   | (21,034   | ) |   | 23,800     |  
|                                                          |   |           |   |   |            |  
|CHANGE IN CASH AND CASH EQUIVALENTS                       |   | (598,087  | ) |   | 307,761    |  
|                                                          |   |           |   |   |            |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR              |   | 617,811   |   |   | 310,050    |  
|                                                          |   |           |   |   |            |  
|CASH AND CASH EQUIVALENTS, END OF YEAR                    | $ | 19,724    |   | $ | 617,811    |  
|                                                          |   |           |   |   |            |  
|Supplemental cash flow information:                       |   |           |   |   |            |  
|                                                          |   |           |   |   |            |  
|Interest paid                                             | $ | 15,120    |   | $ | 86,495     |  
|Taxes paid                                                |   | -         |   |   | 36,756     |  

F-4

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

---

|AUCXIS
      CORP. CONSOLIDATED STATEMENT OF STOCKHOLDERS DEFICIT
      
      (expressed in U.S. dollars)
|-----------------------------------------------------------------------------------------------------------
|YEAR
      ENDED DECEMBER 31, 2003                                                                         



|                                  |              |         |               | Accumulated |             |               |                  |  
|--------------------------------- | ------------ | ------- | ------------- | ----------- | ----------- | ------------- | ---------------- | -
|                                  |              |         | Additional    | Other       |             |               | Total            |  
|                                  | Common Stock | Paid in | Comprehensive | Accumulated |             | Stockholders |                 
|                                  | Shares       | Amount  | Capital       | Income      | Deficit     |               | Equity (Deficit) |  
|                                  | #            | $       | $             | $           | $           |               | $                |  
|                                  |              |         |               |             |             |               |                  |  
|Balance  December 31, 2001       | 62,773,051   | 62,773  | 18,736,200    | 149,900     | (23,229,804 | )             | (4,280,931       | )
|                                  |              |         |               |             |             |               |                  |  
|Foreign currency translation      | -            | -       | -             | 93,810      | -           |               | 93,810           |  
|                                  |              |         |               |             |             |               |                  |  
|Net loss for
      the year       | -            | -       | -             | -           | (1,225,962  | )             | (1,225,962       | )
|                                  |              |         |               |             |             |               |                  |  
|Balance - December 31, 2002       | 62,773,051   | 62,773  | 18,736,200    | 243,710     | (24,455,766 | )             | (5,413,083       | )
|                                  |              |         |               |             |             |               |                  |  
|Foreign currency translation      | -            | -       | -             | 262,133     | -           |               | 262,133          |  
|                                  |              |         |               |             |             |               |                  |  
|Net loss for
      the year       | -            | -       | -             | -           | (704,593    | )             | (704,593         | )
|                                  |              |         |               |             |             |               |                  |  
|Balance - December
      31, 2003 | 62,773,051   | 62,773  | 18,736,200    | 505,843     | (25,160,359 | )             | (5,855,543       | )

F-5

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

---

|AUCXIS
      CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (expressed in U.S. dollars)
|---------------------------------------------------------------------------------------------------
|YEAR
      ENDED DECEMBER 31, 2003 AND 2002                                                        

|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 December 31, 2003, the Company has a working capital
        deficiency of $1,659,529 (2002 - $1,243,921), and has accumulated losses
        of $25,160,359 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 re-organize the
        Company. It is not possible at this time to predict with any assurance
        the success of these initiatives.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | SUMMARY OF SIGNIFICANT
        ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

F-6

---

|AUCXIS
      CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (expressed in U.S. dollars)
|---------------------------------------------------------------------------------------------------
|YEAR
      ENDED DECEMBER 31, 2003 AND 2002                                                        

|**2.** | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (continued)
|------ | ------------------------------------------------------------
|       |                                                             
|       | e)                                                          
|       |                                                             
|       | f)                                                          
|       |                                                             
|       | g)                                                          
|       |                                                             
|       | h)                                                          
|       |                                                             
|       | i)                                                          
|       |                                                             
|       | j)                                                          
|       |                                                             
|       | k)                                                          

F-7

---

|AUCXIS
      CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (expressed in U.S. dollars)
|---------------------------------------------------------------------------------------------------
|YEAR
      ENDED DECEMBER 31, 2003 AND 2002                                                        

|**2.** | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (continued)
|------ | ------------------------------------------------------------
|       |                                                             
|       | l)                                                          

| |  |                                                                           | 2003     |   | 2002       |  
| |  | ------------------------------------------------------------------------- | -------- | - | ---------- | -
| |  |                                                                           | $        |   | $          |  
| |  | Net loss  as reported                                                    | (704,593 | ) | (1,225,962 | )
| |  | Add:                                                                      |          |   |            |  
| |  | Stock-based compensation expense included
      in net loss  as reported | -        |   | -          |  
| |  | Deduct:                                                                   |          |   |            |  
| |  | Stock-based compensation expense determined
      under fair value method | (107,640 | ) | (107,635   | )
| |  | Net loss  pro forma                                                      | (812,233 | ) | (1,333,597 | )
| |  | Net loss per share (basic and diluted)  as reported                      | 0.01     |   | (0.02      | )
| |  | Net loss per share (basic and diluted)  pro forma                        | (0.01    | ) | (0.02      | )

| |    | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | m) | Financial instruments
      The Companys financial instruments consist of cash
        and cash equivalents, investment, accounts receivable, accounts payable
        and accrued liabilities, due to related parties, and current portion of
        long-term debt. The fair values of these financial instruments approximate
        their carrying values due to their short-term nature and normal trade
        terms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | n) | Inventory
      Inventory is stated at the lower of cost or net realizable
        value with cost being determined using the weighted average cost method.
        Obsolete or defective inventories are reduced to net realizable value.
        The work-in-progress inventory represents direct costs, including raw
        materials, labour and an allocation of overhead.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | o) | Recent Accounting Pronouncements
      In 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.

F-8

---

|AUCXIS
      CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (expressed in U.S. dollars)
|---------------------------------------------------------------------------------------------------
|YEAR
      ENDED DECEMBER 31, 2003 AND 2002                                                        

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (continued)
|-- | ------------------------------------------------------------
|   |                                                             
|   | o)                                                          
|   |                                                             
|   | p)                                                          
|   |                                                             
|3. | INVENTORY
      Inventory consists of the following:        

| |                  |   | 2003 |  |   | 2002      | 
| | ---------------- | - | ---- |  | - | --------- | 
| | Raw materials    | $ | -    |  | $ | 272,550   | 
| | Work-in-progress |   | -    |  |   | 981,072   | 
| | Finished goods   |   | -    |  |   | 140,406   | 
| |                  | $ | -    |  | $ | 1,394,028 | 

F-9

---

|AUCXIS
      CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (expressed in U.S. dollars)
|---------------------------------------------------------------------------------------------------
|YEAR
      ENDED DECEMBER 31, 2003 AND 2002                                                        

|4. | PROPERTY AND EQUIPMENT
|-- | ----------------------

|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |        |  |   |              |  |   | 2003         |  |   | 2002         | 
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------ |  | - | ------------ |  | - | ------------ |  | - | ------------ | 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |        |  |   | Accumulated  |  |   | Net Carrying |  |   | Net Carrying | 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Cost   |  |   | Depreciation |  |   | Value        |  |   | Value        | 
|       | Furniture and fixtures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | $ | 72,102 |  | $ | 53,202       |  | $ | 18,900       |  | $ | 77,420       | 
|       | Tools and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | -      |  |   | -            |  |   | -            |  |   | 23,702       | 
|       | Vehicles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | -      |  |   | -            |  |   | -            |  |   | 196,502      | 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $ | 72,102 |  | $ | 53,202       |  | $ | 18,900       |  | $ | 297,624      | 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|**5.** | 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 $10,432,000. 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. Management of the Company is
        working with the trustee to maximize the proceeds received for ATS and
        to ensure there is little disruption to employees and normal business
        operations of ATS. The various claims and counterclaims made against Aucxis
        NV are described in Note 14. 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 significant
        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 by $1,007,000 to $1,000 and carrying it under the equity
        method as of December 31, 2003. (See also Note 14).
      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.
      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       |  |   | As at        | 
| | -------------------------------- | - | ----------- |  | - | ------------ | 
| |                                  |   | March 31,   |  |   | December 31, | 
| |                                  |   | 2003        |  |   | 2002         | 
| |                                  |   | (unaudited) |  |   |              | 
| |                                  |   |             |  |   |              | 
| | Current assets                   | $ | 3,143,712   |  | $ | 2,729,274    | 
| | Noncurrent assets                | $ | 527,714     |  | $ | 505,188      | 
| | Current liabilities              | $ | 3,055,624   |  | $ | 2,633,896    | 
| | Noncurrent liabilities           | $ | 36,608      |  | $ | 105,859      | 
| | Minority interests               | $ | 59,972      |  | $ | 2,400        | 
| | Revenue                          | $ | 1,226,880   |  | $ | 4,717,887    | 
| | Cost of goods sold               | $ | 307,800     |  | $ | 1,754,616    | 
| | Net income (loss) for the period | $ | 10,296      |  | $ | 32,043       | 

F-10

---

|AUCXIS
      CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (expressed in U.S. dollars)
|---------------------------------------------------------------------------------------------------
|YEAR
      ENDED DECEMBER 31, 2003 AND 2002                                                        

|6. | ACQUIRED CORE TECHNOLOGY
|-- | ------------------------

|       |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                    |   | 2003 |   |          | 2002 | 
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------- | - | ---- | - | -------- | ---- | 
|       | Cost                                                                                                                                                                                                                                                                                                                            | $                                                                                                                                  | - |      | $ | 748,969  |     
|       | Accumulated amortization                                                                                                                                                                                                                                                                                                        |                                                                                                                                    | - |      |   | (449,385 | )   
|       |                                                                                                                                                                                                                                                                                                                                 | $                                                                                                                                  | - |      | $ | 299,584  |     
|       |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                    |   |      |   |          |      | 
|       | During the current year, the carrying
        amount of $299,584 was charged to operations as part of the write down
        of $1,007,000 described in Note 5 due to impairment by Aucxis Corp NV.
        As described in Note 5, Aucxis Corp. NV has not been consolidated with
        the Company as of December 31, 2003.
|       |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                   
|**7.** | RELATED PARTY TRANSACTIONS AND BALANCES
      The amount due to former Kwatrobox shareholders relates
        to the acquisition of Kwatrobox from these former shareholders and the
        balance is non-interest bearing.                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                   
|       | a)                                                                                                                                                                                                                                                                                                                              | Included in the accounts payable is $8,883 (2002 - $24,874)
      due to a director and a firm in which the director is a partner.
|       |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                   
|       | b)                                                                                                                                                                                                                                                                                                                              | Included in accounts payable is $113,353 (2002 - $44,825)
      due to a company controlled by a director.                        
|       |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                   
|       | c)                                                                                                                                                                                                                                                                                                                              | The Company incurred the following amounts to related parties:                                                                    

|   |                |       |                                                                         |   | 2003   |  |   | 2002   | 
|-- | -------------- | ----- | ----------------------------------------------------------------------- | - | ------ |  | - | ------ | 
|   |                |       |                                                                         |   |        |  |   |        | 
|   |                | (i)   | Consulting fees to a company controlled by an officer                   | $ | 95,033 |  | $ | 84,659 | 
|   |                |       |                                                                         |   |        |  |   |        | 
|   |                | (ii)  | Professional fees paid to a firm in which a director
      is a partner | $ | 17,467 |  | $ | 47,140 | 
|   |                |       |                                                                         |   |        |  |   |        | 
|   |                | (iii) | Management fees to directors and former directors                       | $ | 7,337  |  | $ | 70,866 | 
|   |                |       |                                                                         |   |        |  |   |        | 
|   |                | (iv)  | Rent paid to SDL Invest N.V. (Belgium)                                  | $ | -      |  | $ | 83,878 | 
|   |                |      
|8. | LONG-TERM DEBT

|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2003     |   |   | 2002     |  
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -------- | - | - | -------- | -
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |          |   |   |          |  
|       | Convertible bridge loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | $ | 533,180  |   | $ | 405,865  |  
|       | Vehicle and other loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | -        |   |   | 188,660  |  
|       | Less: Current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | (533,180 | ) |   | (488,666 | )
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |          |   |   |          |  
|       | Long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | $ | -        |   | $ | 105,859  |  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |          |   |   |          |  
|       | 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 Company and lenders placed the loan in escrow. 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.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|**9.** | INCOME TAXES
      The Company has adopted the provisions of Financial
        Accounting Standards Board Statement No. 109 (SFAS 109), Accounting for
        Income Taxes. Pursuant to SFAS 109, the Company is required to compute
        tax asset benefits for net operating losses carried forward. The potential
        tax benefit of net operating losses has not been recognized in the financial
        statements because the Company cannot be assured that it is more likely
        than not that it will utilize the net operating losses carried forward
        in future years. The Company has U.S. and European tax losses of approximately
        $19,200,000 to offset future years taxable income. These losses expire
        between fiscal 2014 and fiscal 2016.                           

F-11

---

|AUCXIS
      CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (expressed in U.S. dollars)
|---------------------------------------------------------------------------------------------------
|YEAR
      ENDED DECEMBER 31, 2003 AND 2002                                                        

|**9.** | INCOME TAXES (continued)
      The components of the net deferred tax asset, the statutory
        tax rate, the effective tax rate and the amount of the valuation allowance
        are outlined below:
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|    |                                                       |   | 2003       |   |   | 2002       |  
|--- | ----------------------------------------------------- | - | ---------- | - | - | ---------- | -
|    |                                                       |   |            |   |   |            |  
|    | Net combined U.S. and European operating
      losses | $ | 19,200,000 |   | $ | 19,000,000 |  
|    | Statutory combined U.S. and European tax rate         |   | 35%        |   |   | 35%        |  
|    | Effective tax rate                                    |   | -          |   |   | -          |  
|    | Deferred tax asset                                    |   | 6,720,000  |   |   | 6,650,000  |  
|    | Valuation allowance                                   |   | (6,720,000 | ) |   | (6,650,000 | )
|    | Net deferred tax asset                                | $ | -          |   | $ | -          |  
|    |                                                       |   |            |   |   |            |  
|10. | STOCK OPTIONS                                        

| |                                                                                                                   | Options for        |   | Weighted         | 
| | ----------------------------------------------------------------------------------------------------------------- | ------------------ | - | ---------------- | 
| |                                                                                                                   | shares of          |   | average exercise | 
| |                                                                                                                   | common
      stock |   | share            | 
| | Balance December 31, 2002                                                                                         | 3,054,500          |   | $   0.34         | 
| | Granted                                                                                                           | -                  |   | -                | 
| | Exercised                                                                                                         | -                  |   | -                | 
| | Cancelled/Expired                                                                                                 | (2,436,500         | ) | 0.34             | 
| | Balance December 31, 2003                                                                                         | 618,000            |   | $   0.35         | 
| |                                                                                                                   |                    |   |                  | 
| | Additional information about the Companys stock options
      outstanding as at December 31, 2003 is as follows:

| |  |          |  |                         |  | Weighted average       |  |                         | 
| |  | -------- |  | ----------------------- |  | ---------------------- |  | ----------------------- | 
| |  | Exercise |  | Number outstanding at   |  | Remaining              |  | Number exercisable at   | 
| |  | price    |  | December
      31, 2003 |  | contractual
      life |  | December
      31, 2003 | 
| |  |          |  |                         |  |                        |  |                         | 
| |  | $0.35    |  | 618,000                 |  | 7.0                    |  | 618,000                 | 

|**11.** | 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.
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-12

---

|AUCXIS
      CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (expressed in U.S. dollars)
|---------------------------------------------------------------------------------------------------
|YEAR
      ENDED DECEMBER 31, 2003 AND 2002                                                        

|11. | 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.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|12. | SEGMENTED INFORMATION
      The Company operated in one operating segment, this
        being the installation of auction clocks and cooling systems in Belgium.
        Resources are allocated based on revenue and overall profitability by
        the Companys chief operating decision maker as defined by SFAS No.
        131 Disclosures about Segments of an Enterprise and Related Information.
        The Company has disclosed financial information of its deconsolidated
        subsidiary in Note 5.                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|13. | INCOME AND LOSS PER SHARE
      The following table represents the calculation of basic
        and diluted net income (loss) per common share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

| |                                                       |   | Year Ended   |   |   | Year Ended   |  
| | ----------------------------------------------------- | - | ------------ | - | - | ------------ | -
| |                                                       |   | December 31, |   |   | December 31, |  
| |                                                       |   | 2003         |   |   | 2002         |  
| |                                                       |   |              |   |   |              |  
| | Net loss                                              | $ | (704,593     | ) | $ | (1,225,962   | )
| |                                                       |   |              |   |   |              |  
| | Weighted-average shares used in computing basic net   |   |              |   |   |              |  
| | loss per share                                        |   | 62,773,051   |   |   | 62,738,926   |  
| | Dilutive effect of common share equivalents           |   | -            |   |   | -            |  
| |                                                       |   |              |   |   |              |  
| | Weighted-average shares used in computing diluted net |   |              |   |   |              |  
| | loss per share                                        |   | 62,773,051   |   |   | 62,738,926   |  
| |                                                       |   |              |   |   |              |  
| | Basic net loss per share                              | $ | (0.01        | ) | $ | (0.02        | )
| |                                                       |   |              |   |   |              |  
| | Diluted net loss per share                            | $ | (0.01        | ) | $ | (0.02        | )

|        | For the year ended December
        31, 2003, 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|**14.** | 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. Management of the Company is working diligently with the trustee
        to maximize the proceeds received for ATS and to ensure there is little
        disruption to employees and normal business operations. 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

F-13

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|AUCXIS
      CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (expressed in U.S. dollars)
|---------------------------------------------------------------------------------------------------
|YEAR
      ENDED DECEMBER 31, 2003 AND 2002                                                        

|**14.** | COMMITMENTS AND CONTINGENCIES
        (continued)
      Litigation(continued)
|------- | -----------------------------------------------------------------------------
|        |                                                                              
|        | a)                                                                           
|        |                                                                              
|        | b)                                                                           
|        |                                                                              
|        | c)                                                                           
|        |                                                                              
|        | d)                                                                           

F-14

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Item 8.          Changes
  in and Disagreements with Accountants on Accounting and Financial
  Disclosure

None

Item 8a.Controls
  and Procedures

We maintain disclosure controls and procedures that are designed
  to ensure that information required to be disclosed in our Securities Exchange
  Act of 1934 reports are recorded, processed, summarized and reported within
  the time periods specified in the SEC's rules and forms, and that such information
  is accumulated and communicated to our management, including our chief executive
  officer and chief financial officer, as appropriate, to allow timely decisions
  regarding required disclosure. Within 90 days prior to the date of this report,
  our management carried out an evaluation, under the supervision and with the
  participation of our management, including our chief executive officer and chief
  financial officer, of the effectiveness of the design and operation of our disclosure
  controls and procedures pursuant to Exchange Act Rule 15d-14. Based upon the
  foregoing, our chief executive officer and chief financial officer concluded
  that our disclosure controls and procedures are effective in connection with
  the filing of this Annual Report on Form 10-KSB for the year ended December
  31, 2003.

PART III

Item 9.          
  Directors, Executive Officers, Promoters and Control Persons; Compliance
  with Section 16(a) of the Exchange Act

Executive Officers and Directors

The following table sets forth the executive officers and
  directors of the Company, which officers are elected annually by the Board of
  Directors and hold office at the discretion of the Board.

| | NAME           | AGE | POSITION                       
| | -------------- | --- | -------------------------------
| |                |     |                                
| | Gary Jessop    | 41  | Chairman of the Board, Director
| | Dennis Petke   | 40  | Chief Financial Officer        
| | Lewis Reinders | 66  | Director                       

Summary Background of Executive Officers and Directors

Gary Jessop, Chairman. 
  Gary Jessop has been the Chairman of the board of directors since May 31, 2001.
  Gary Jessop is a partner with the Ottawa office of Blake, Cassels & Graydon
  LLP. He works primarily in the corporate/securities law group with his practice
  concentration involving general corporate/securities transactions, including
  acquisitions, private placements and prospectus offerings, both domestic and
  cross-border. Mr. Jessop provides ongoing general corporate advice to a number
  of high-technology companies. Mr. Jessop also regularly advises corporate boards
  and is corporate secretary to a number of companies. Mr. Jessop is a member
  of the Canadian Bar Association - Business Law and Media and Communications
  Law sections, the County of Carleton Law Association, and the Ottawa Association
  of Communications Lawyers. He was admitted to the Ontario bar in 1992 and has
  been a partner at Blake, Cassels & Graydon LLP since 1997. Mr. Jessop has
  a B.Comm from Carleton University (1985) and an LL.B. from the University of
  Ottawa (1990).

Dennis Petke, Chief Financial Officer and Corporate Secretary. Dennis Petke has served as Chief Financial Officer of the Company since
  August 21, 2001. Dennis Petke is currently a director of Crux Industries.
  Mr. Petke is qualified as a Chartered Accountant in Canada and is a member of
  the Institute of Chartered Accountants of B.C (1995). Mr. Petke provides contract
  and consulting services to public and private companies including quarterly
  reporting and corporate secretary services. His expertise is in the areas of
  operations analysis, systems design and

12

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implementation, corporate finance and corporate administration.
  Throughout his professional career, Mr. Petke has been involved with various
  financings including private placements, preferred shares issues and debt financings.
  Mr. Petke specialized in the audit of public companies while completing his
  articles.

Lewis Reinders, Director. 
  Mr. Reinders has been a director of the Company since May 31, 2001. Mr. Reinders
  is a registered professional engineer in the Province of British Columbia. At
  present, Mr. Reinders is the chairman of the official committee representing
  the equity holders of Sanga International Inc. He is the president of Lewis
  and Associates Engineering Ltd. providing national and international consulting
  services. He is also a board member of several private companies in the care-home
  and real estate industry. Between 1980 and 1997, Mr. Reinders was a partner
  and member of the board of directors of associated engineering, an engineering
  company with offices throughout Canada and overseas. Between 1990 and 1997,
  Mr. Reinders was the vice president-international of Associated Engineering
  International Ltd., responsible for raising capital for and managing international
  projects.

The Company has no other employees. There are no family relationships
  between the directors and the executive officers of the Company. No director
  or executive officer of the Company has been involved in any legal proceedings
  during the past five years. Currently, upon being appointed to the Board of
  Directors, a director of the Company receives options to purchase up to 50,000
  shares of the Company's common stock under the Company's 1999 Stock Option Plan.
  In addition, the Company compensates each of its directors Cdn $5,000 per annum
  and Cdn $500 for each meeting held for which such director attends.

Compliance with Section 16(a) of the Securities Exchange
  Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires
  the Company's executive officers and directors, and persons who beneficially
  own more than 10% of the Company's common stock (Reporting Person),
  to file with the Securities and Exchange Commission, on a timely basis, the
  initiation of their status as a Reporting Person and any changes with respect
  to their beneficial ownership of the Company's common stock. Such persons are
  required to furnish the Company with copies of all Section 16(a) forms they
  file. Based solely on its review of such forms received by it, the Company believes
  all filing requirements applicable to its directors, executive officers and
  beneficial owners of 10% or more of the common stock were complied with during
  fiscal 2003.

Item 10.          Executive
  Compensation.

Summary of Cash and Certain Other Compensation

The following table sets forth certain information for the
  two (2) years ended December 31, 2003 and December 31, 2002 regarding the compensation
  of the Company's Named Executive Officers:

|SUMMARY COMPENSATION TABLE                   
|---------------------------------------------
|Name and Principal Position                  
|Awards                                       
|Salary (US$)                                 
|Dennis Petke, Chief Financial Officer (1)    
|Neil Murphy,
      Chief Operating Officer(2)

13

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| | (1) | Dennis Petke was named Chief Financial
        Officer and Corporate Secretary August 21, 2001. Mr. Petke is compensated
        under contract through Q4 Financial Group Inc., a company controlled by
        Mr. Petke, at a rate of $6,875 per month.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                           
| | (2) | Neil Murphy was named Chief Operating
        Officer August 21, 2001. Mr. Murphy was compensated under contract at
        $9,375 per month. Mr. Murphy resigned effective July 1, 2002.                                                                 

STOCK OPTION GRANTS IN LAST FISCAL YEAR

No stock options were granted in the year ended December 31,
  2003.

Stock Option Plans

The Company maintains a stock option plan designated as the
  1999 Stock Option Plan (the "1999 Plan"). The 1999 Plan reserves 9,000,000 shares
  of the Companys Common Stock for issuance, upon the exercise of options
  designated as either (i) incentive stock options ("ISOs") under the Internal
  Revenue Code of 1986, as amended (the "Code") or (ii) non-qualified options.
  Nonqualified options may be granted to consultants, directors (whether or not
  they are employees), employees or officers of the Company. In certain circumstances,
  the exercise of stock options may have an adverse effect on the market price
  of the Company's Common Stock.

The purpose of the 1999 Plan is to encourage stock ownership
  by certain directors, officers and employees of the Company and certain other
  people instrumental to the success of the Company and give them a greater personal
  interest in the success of the Company. The 1999 Plan is administered by the
  Board of Directors and/or the Compensation Committee. The Board or the Compensation
  Committee, as applicable, within the limitations of the 1999 Plan, determines
  the persons to whom options will be granted, the number of shares to be covered
  by each option, whether the options granted are intended to be ISOs, the duration
  and rate of exercise of each option, the option purchase price per share and
  the manner of exercise, the time, manner and form of payment upon exercise of
  an option, and whether restrictions such as repurchase rights by the Company
  are to be imposed on shares subject to options. ISOs granted under the 1999
  Plan may not be granted at a price less than the fair market value (110% of
  fair market value in the case of ISOs granted to persons holding 10% or more
  of the voting stock of the Company) of the Common Stock on the date of grant.
  Options granted under the 1999 Plan will expire not more than ten years from
  the date of grant (five years in the case of ISOs granted to persons holding
  10% or more of the voting stock of the Company). Except as otherwise provided
  in the individual option agreement granting such options, any options granted
  under the 1999 Plan are not transferable during the optionee's lifetime but
  are transferable at death by will or by the laws of descent and distribution.

Employment Agreements

There are currently no employment agreements in effect with
  the Companys executive officers.

14

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Item 11.          Security
  Ownership of Certain Beneficial Owners and Management.

The following table sets forth certain information regarding
  beneficial ownership of the shares of our common stock as of the date of April
  14, 2004 by (i) each person who is known by management to own beneficially more
  than five percent (5%) of our Company's issued and outstanding shares of common
  stock, (ii) our Chief Operating Officer and each of our Company's other most
  highly compensated executive officers whose compensation on an annualized basis
  (salary and bonus) for services rendered in all capacities to the Company during
  the year ended December 31, 2003 exceeded US $100,000 (collectively, the Named
  Executive Officers), and (iii) each of our Company's directors.

|                                                                         |  |                      |  | Percentage of | 
|------------------------------------------------------------------------ |  | -------------------- |  | ------------- | 
|Name and Address of Beneficial Owner                                     |  | Number of Shares (1) |  | Class         | 
|J. Andrews, in Trust for the Shareholders of Sanga International Inc.(2) |  | 16,500,000           |  | 24.9%         | 
|c/o Pachulski, Stong, Ziehl, Yang & Jones P.C.                           |  |                      |  |               | 
|10100 Santa Monica Blvd., Suite 1100, Los Angeles, CA 90067              |  |                      |  |               | 
|                                                                         |  |                      |  |               | 
|ABN AMRO Capital Investments (Belgie) N.V.                               |  | 4,072,639            |  | 6.1%          | 
|Regentlaan 53, 1000 Brussels, Belgium                                    |  |                      |  |               | 
|                                                                         |  |                      |  |               | 
|Gary Jessop, Chairman                                                    |  | 100,000 (3)          |  | *             | 
|C/o Suite 500  666 Burrard Street, Vancouver, BC V6C 3P6                |  |                      |  |               | 
|                                                                         |  |                      |  |               | 
|Lewis Reinders, Director                                                 |  | 100,000 (3)          |  | *             | 
|C/o Suite 500  666 Burrard Street, Vancouver, BC V6C 3P6                |  |                      |  |               | 
|                                                                         |  |                      |  |               | 
|Dennis Petke, CFO                                                        |  | 112,000 (3)(4)       |  | *             | 
|C/o Suite 500  666 Burrard Street, Vancouver, BC V6C 3P6                |  |                      |  |               | 
|                                                                         |  |                      |  |               | 
|All executive officers and directors as a group (3 persons)              |  | 312,000 (3)(4)       |  | *             | 

|*  | represents less than 5%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|1) | The number and percentage of shares beneficially
        owned is determined in accordance with Rule 13d-3 under the Securities
        Exchange Act of 1934, as amended (the Exchange Act), and the
        information is not necessarily indicative of beneficial ownership for
        any other purpose. Under such rule, beneficial ownership includes any
        share as to which 33 the individual or entity has voting power or investment
        power. Unless otherwise indicated, each person or entity has sole voting
        and investment power with respect to shares shown as beneficially owned.
        A person is deemed to be the beneficial owner of securities that can be
        acquired by such person within 60 days, whether pursuant to the exercise
        of options, conversion of securities or otherwise.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2) | The shares are beneficially owned by Sanga International
        Inc., which is currently undergoing a restructuring pursuant to Chapter
        11 of United States Bankruptcy laws. Sanga does not have any controlling
        shareholder. The sole officer of Sanga is John Andrews and its directors
        are John Andrews, Mitch Stein and Masood Jabor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|3) | Includes options earned, but not yet granted, enabling
        the holder to purchase up to 100,000 shares, pricedat an exercise
        price of $0.35 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|4) | Includes 12,000 shares held directly.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Item 12.          Certain
  Relationships and Related Transactions.

The Company has an ongoing agreement with Blake, Cassels &
  Graydon LLP for the provision of legal services to the Company. Mr. Gary Jessop,
  Chairman of the Company, is a partner with Blake, Cassels & Graydon LLP.

15

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The Company has an ongoing agreement with Q4 Financial Group
  Inc.(Q4 Financial) for the provision of accounting services including
  the provision of an accounting and administration office in Vancouver, BC, Canada.
  Dennis Petke, Chief Financial Officer, controls Q4 Financial and receives his
  compensation as Chief Financial Officer through this company.

Management believes that the terms and conditions of the foregoing
  transactions were no less favorable to the Company than terms attainable from
  unaffiliated third parties.

Item 13.          Exhibits
  and Reports on Form 8-K.

(a) Exhibits

|Number | (a) Description                                                                                                                       
|------ | --------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                       
|21.1   | List of subsidiaries                                                                                                                  
|       |                                                                                                                                       
|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

None

Item 14.          Principal
  accounting fees and services

(1)     Audit fees

The principal accountant for our audit of annual financial
  statements and review of financial statements included in our Form 10-KSBs or
  services that are normally provided by the accountant in connection with statutory
  and regulatory filings or engagements for those fiscal years was:

|                   |   | 2003   |  |   | 2002   | 
|------------------ | - | ------ |  | - | ------ | 
|                   |   |        |  |   |        | 
|Audit Fees         | $ | 20,000 |  | $ | 40,000 | 
|Audit Related Fees | $ | Nil    |  | $ | Nil    | 
|Tax Fees           | $ | Nil    |  | $ | Nil    | 
|All Other Fees     | $ | Nil    |  | $ | Nil    | 
|                   | $ | 20,000 |  | $ | 40,000 | 

16

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
  Securities Exchange Act of 1934, the Company has duly caused this Report to
  be signed on its behalf by the undersigned, thereunto duly authorized.

|                      | Aucxis Corp. (formerly e-Auction Global Trading Inc.)
|--------------------- | -----------------------------------------------------
|                      |                                                      
|                      |                                                      
|Dated: April 14, 2003 |                                                      
|                      | By:                                                  
|                      |                                                      

In accordance with the Exchange
  Act, this report has been signed by the following persons in the capacities
  and on the dates indicated:

|Signature          |  | Title                   | Date          
|------------------ |  | ----------------------- | --------------
|                   |  |                         |               
|                   |  |                         |               
|/s/ Dennis Petke   |  | Chief Financial Officer | April 14, 2003
|Dennis Petke       |  |                         |               
|                   |  |                         |               
|/s/ Gary Jessop    |  | Director                | April 14, 2003
|Gary Jessop        |  |                         |               
|                   |  |                         |               
|/s/ Lewis Reinders |  | Director                | April 14, 2003
|Lewis Reinders     |  |                         |               

31

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