UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)
[X]     ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
        For the fiscal year ended December 31, 2003

[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934
        For the transition period from _______________ to _____________

                         Commission file number: 0-29781

                       CRYSTALIX GROUP INTERNATIONAL, INC.
                 (Name of small business issuer in its charter)

               Nevada                            65-0142472
   (State or other jurisdiction of     (I.R.S. Employer Identification No.)
   incorporation or organization)

       5275 SOUTH ARVILLE STREET, SUITE B-116, LAS VEGAS, NEVADA      89118
          (Address of principal executive offices)                 (Zip Code)

                   Issuer's telephone number: (702) 740-4616

      Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, $0.001 par value
                                (Title of class)

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 no  disclosure  of  delinquent  filers  in  response  to  Item  405 of
Regulation S-B is 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.

State issuer's revenues for its most recent fiscal year:  $6,364,505

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified date within the past 60 days: $11,112,829 AS OF APRIL 1, 2004

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 34,113,192 AS OF APRIL 1, 2004

Transitional Small Business Disclosure Format (Check one):  Yes     ; No  X
                                                               ----     -----

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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

BUSINESS DEVELOPMENT

         We were originally incorporated in the state of Florida on August 22,
1989 under the name First Zurich Investments, Inc. On November 15, 1996, the
name of the company was changed to Terra International Pharmaceuticals, Inc. On
August 11, 1999, we acquired Veltre Enterprises, Inc. dba Unique Images. Unique
Images designed and manufactured Hollywood and sports memorabilia for
memorabilia galleries, as well as provided custom picture framing services. On
September 7, 1999, we changed our name to americabilia.com, Inc. and on
September 14, 1999, we conducted a recapitalization through the merger of
americabilia.com Nevada with and into Worldwide Collectibles, Inc., a Nevada
corporation and a wholly owned subsidiary we formed for the purpose of the
merger. We issued a total of 6,115,000 shares of our common stock to the former
stockholders of americabilia.com Nevada. In January 2001, we merged Unique
Images into Worldwide Collectibles. As americabilia.com, Inc., we engaged in
direct Internet merchandising of American-themed collectibles, gifts and
memorabilia. On June 25, 2002, we announced our plans to cease business
operations.

         On October 4, 2002, we acquired all of the outstanding common stock of
Crystalix USA Group, Inc. in exchange for 23,300,000 shares of our common stock
and an exclusive technology license from Crystalix Technology, Inc. in exchange
for 7,000,000 shares of our Class A preferred stock. We changed our name to
Crystalix Group International, Inc. on November 22, 2002 and changed our
domicile to Nevada on November 26, 2002. Due to the number of shares issued to
acquire Crystalix USA, Crystalix USA was thereby deemed to be the acquiror and
surviving company for accounting purposes.

         On December 23, 2002, we acquired all of the outstanding common stock
of Lazer-Tek Designs, Inc. and Lazer-Tek Designs, Ltd. (collectively
"Lazer-Tek") in exchange for 1,250,000 shares of our common stock valued at
$1,125,000 and an acquisition consulting fee obligation of $400,000. In
addition, we loaned $1,000,000 to Lazer- Tek to repay existing debt, which is
carried as an intercompany receivable from Lazer-Tek and eliminated in the
financial statement consolidation. We also entered into a promissory note for
$852,680. Lazer-Tek was acquired for several strategic marketing and operation
reasons. With a wide base of corporate awards and gift clients to collegiate
giftware and traditional advertising specialty groups, and with a collection of
valuable engineered art pieces, Lazer-Tek was poised for market penetration with
the added collectibles provided by Crystalix USA. Additionally, our management
realized that with our advanced software and laser technologies, we could
improve both production time and quality at Lazer-Tek, thereby enhancing the
overall operations of Lazer-Tek.

         On December 15, 2002, we executed an agreement to acquire 50% of the
ownership interest of Vitro Laser GmbH, a German corporation ("Vitro"), for
consideration consisting of cash and the right to acquire shares of our common
stock. Vitro manufactures laser-etching equipment used in the glassware
industry. No formal agreements were consummated. During 2003, we had advanced
$500,000 to Vitro and have written this amount off during the year ended
December 31, 2003 to other expense due to the uncertainty about successfully
completing this acquisition. We sued Vitro and the subsequently settled the
litigation. See "Item 3. Legal Proceedings."

OUR PRODUCTS

         As a result of our acquisition of Crystalix USA, a Nevada company
incorporated on November 9, 2001, and subsequently Lazer-Tek, we are a leading
manufacturer, distributor, and marketer of laser subsurface engraved optical
quality glass products. Our principal product is a personalized
three-dimensional engraved crystal that features the facial image of one or more
persons or other three-dimensional images. As of December 31, 2003, we had 32
kiosks owned by our marketing partners and one corporate-owned kiosk in retail
shopping malls, resorts, promenades, casinos, and theme parks where our crystals
are engraved and sold. Through Lazer-Tek, we also sell to corporate accounts and
other specialty groups.

         Our engraving process involves the use of a high-resolution digital
camera, a laser image scanner, and one laser that are configured together by a
standard desktop personal computer, using our proprietary software and a Windows
operating system. The laser image scanner converts images from the digital
camera, a customer's digital


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image, or a hard copy photograph into a three-dimensional or two-dimensional
digitally formatted image that will be engraved into the center of the crystal
by the laser. The scanner processes the image from several angles to create a
three-dimensional or two-dimensional digital model of the image and plots the
points where the laser will be directed to engrave the image in the glass. The
scanner generally completes the conversion process in 15 to 30 seconds. The
optic glass is then placed into the laser chamber for engraving. The engraving
process generally takes a few minutes or less, depending on the number of images
to be engraved, the degree of detail in the images, and whether titles, names,
or other materials are to be added with the images.

         The image can be engraved into optic glass of different sizes and
shapes. The retail price of the engraved crystals ranges from $59 to $400,
depending on the size of the crystal and number of images to be engraved, with a
typical crystal retailing for $100 to $150. Crystals for corporate customers
retail for $80 to as much as several thousands of dollars. We also offer a
variety of bases on which to display the engraved crystals.

PRODUCT LINES

         There are numerous applications for our engraving system. We are
currently focusing on the following product lines:

   o     corporate/award items;
   o     giftware;
   o     three-dimensional facial images;
   o     two-dimensional images;
   o     licensed images and logos; and
   o     tabletop items.

DISTRIBUTION

         We sell our products
   o     directly to corporate customers;
   o     to mass marketing organizations;
   o     through retail kiosks owned by us and by our marketing partners;
   o     through college catalogs and bookstores; and
   o     through photo shops.

         CORPORATE SALES. With the public visibility of the kiosks, the
acquisition of Lazer-Tek, and the presence of Crystalix USA at the industry
trade shows, corporate application of our laser engraved products for awards,
gifts and presentation has been widely accepted.

         INFINITY BUYING CLUBS. We have been aggressively pursuing mass
marketing organizations such as NASCAR, the National Basketball Association,
Major League Baseball, and the Kentucky Derby, and have sold products to these
organizations or teams within these organizations. With wholesale and retail
ability available in these venues, we will explore large sales opportunities for
our entire market lines.

         RETAIL KIOSKS. The kiosks typically occupy no more than 120 square feet
and can be operated by only one or two employees. As of December 31, 2003, the
following kiosks were in operation by our marketing partners:


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DATE OPENED                   LOCATION
--------------------------------------------------------------------------------
March 2002                    DFS Galleria - Honolulu, Hawaii
--------------------------------------------------------------------------------
May 2002                      Park Meadows Mall - Parker, Colorado
--------------------------------------------------------------------------------
May 2002                      First Street Station - Rehoboth Beach, Delaware
--------------------------------------------------------------------------------
May 2002                      Mall of America - Bloomington, Minnesota
--------------------------------------------------------------------------------
June 2002                     Tysons Galleria - McLean, Virginia
--------------------------------------------------------------------------------
June 2002                     Desert Passage, Aladdin - Las Vegas, Nevada
--------------------------------------------------------------------------------
August 2002                   Tacoma Mall - Tacoma, Washington
--------------------------------------------------------------------------------
September 2002                Dubai International Airport - Dubai,
                              United Arab Emirates
--------------------------------------------------------------------------------
October 2002                  Flat Irons Crossing Mall - Broomfield, Colorado
--------------------------------------------------------------------------------
November 2002                 Fisherman's Wharf - Monterey, California
--------------------------------------------------------------------------------
November 2002                 740 Fifth Avenue - La Jolla, California
--------------------------------------------------------------------------------
November 2002                 3rd Street Promenade - Santa Monica, California
--------------------------------------------------------------------------------
November 2002                 Eaton Center, Edmonton Mall
                              Edmonton, Alberta, Canada
--------------------------------------------------------------------------------
November 2002                 Disney World  Orlando, Florida
--------------------------------------------------------------------------------
November 2002                 622 Royal Street - New Orleans, Louisiana
--------------------------------------------------------------------------------
November 2002                 Eden Prairie Mall - Eden Prairie, Minnesota
--------------------------------------------------------------------------------
November 2002                 Garden State Plaza - Paramus, New Jersey
--------------------------------------------------------------------------------
December 2002                 Stratosphere Shops - Las Vegas, Nevada
--------------------------------------------------------------------------------
December 2002                 Port of Nassau, Bay Street
                              Atlantis Paradise Island Resort, Nassau, Bahamas
--------------------------------------------------------------------------------
January 2003                  Deira City Centre  Dubai, United Arab Emirates
--------------------------------------------------------------------------------
February 2003                 Harrah's Carnival Court - Las Vegas, Nevada
--------------------------------------------------------------------------------
February 2003                 Prudential Center Marketplace
                              Boston, Massachusetts
--------------------------------------------------------------------------------
March 2003                    Bluewater Shopping Mall - Kent, United Kingdom
--------------------------------------------------------------------------------
April 2003                    Chicago - Gurnee, Illinois
--------------------------------------------------------------------------------
April 2003                    Harrahs - Laughlin, Nevada
--------------------------------------------------------------------------------
April 2003                    Riverside Casino - Laughlin, Nevada
--------------------------------------------------------------------------------
April 2003                    Village Shops  Gatlinburg, Tennessee
--------------------------------------------------------------------------------
April 2003                    Arden Fair Mall - Sacramento, California
--------------------------------------------------------------------------------
June 2003                     Westfield Shoppingtown - La Jolla, California
--------------------------------------------------------------------------------
October 2003                  Sandton Shopping Mall - Johannesburg, South Africa
--------------------------------------------------------------------------------
November 2003                 Square Shopping Centre - Tallaght, Dublin, Ireland
--------------------------------------------------------------------------------
December 2003                 ABC Mall - Lebanon, Beirut
--------------------------------------------------------------------------------

         MARKETING PARTNERS. Each marketing partner has entered into a master
equipment lease and software license with us, the term of which ranges from
three to five years. The marketing partner can extend the term if the marketing
partner is in good standing under the lease and license and has sold at least
200 units of crystal per month during the last two years of the lease. The cost
of the lease is generally between $200,000 and $250,000, payable in two
installments, a deposit of 50% on the signing of the lease and the balance upon
opening of the location. After the first 12 months of the lease term, the
marketing partner must pay us a maintenance fee of $1,000 per month to maintain
the laser engraving system.

         The software license grants the marketing partner a non-exclusive right
to operate our laser engraving system during the term of the equipment lease and
any extensions thereof in an identified exclusive territory. The marketing
partner must pay a percentage of gross revenues on each use of the software and
engraving system.

         Our marketing partners are also required to purchase glass blanks,
light bases, collection images, and related products from us exclusively.

         We have recently initiated a second phase of our marketing partner
program. For a reduced fee of $69,500, a satellite partner can purchase a
satellite laser system from us, consisting of a three-dimensional
scanner/camera, computer workstation, sales booth, and display counter. Instead
of producing the crystals at the location, a satellite


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<PAGE>

partner would scan a customer's facial image, e-mail the image and order
information to us, and we would produce the actual crystal product. The
satellite partner would pay us a software licensing fee of 10% of gross sales
and a facial image production fee of 30% of the retail cost of the finished
product. In addition, a satellite partner would purchase corporate awards and
logos, wedding, and giftware items from Lazer-Tek at wholesale prices for resale
to the public.

         COLLEGE CATALOGS AND BOOKSTORES. Lazer-Tek manufactures certain
licensed articles such as collegiate logos and mascots placed in high-quality
crystal cubes and keychains pursuant to orders from Jardine Associates.

         PHOTO SHOPS. The technologies of Crystalix USA with 2-D photo are a
natural-born product for the existing photo industry. Once a photographer has
accomplished his normal business with a client, a photographer can offer the
image to be engraved inside a glass piece. The photographer can send us the
order and image by e-mail or regular mail and earn a sales commission.

         INTERNATIONAL OPERATIONS. We formed a wholly owned subsidiary in
Ireland on October 24, 2002, Crystalix Imaging Limited, doing business as
Crystalix Europe, to replicate our operational activities to the rest of the
world from a European base. Since its incorporation, the European subsidiary has
been operating corporate units in Ireland and has entered into major contracts
with companies from the United Kingdom, South Africa, Singapore, and Turkey.
Effective December 1, 2003, the European subsidiary registered a branch office
in Berlin, Germany, to handle equipment production, and research and development
and effective January 1, 2004, it leased a warehouse in Wales, United Kingdom,
to supply raw materials to European subsidiaries and to house the production of
pre-made, logo crystals and facial images.

SUPPLIERS

         The equipment components for our laser engraving system are available
from several suppliers. Currently, we use a Minolta high-resolution digital
camera and laser image scanner, a laser that uses neodymium: yttrium aluminum
garnet (Nd:YAG) as the material used for light emission, and an "off the shelf"
desktop personal computer. We do not have any long-term contracts with our
equipment suppliers.

         We currently rely primarily on one supplier in China for our optic
glass, which is lead-free and arsenic-free. We believe that there are only a
limited number of suppliers of optic glass that can meet our needs. We have
identified and used other suppliers in the United States, Europe, and China. The
optic glass that we use has the following characteristics:

   o     High transmittance and refraction of light throughout the visible and
         near infrared spectra;
   o     Extremely low bubble and inclusion content;
   o     Good scratch resistance;
   o     Requires no special handling and has stable chemical properties;
   o     Capable of being precision-engraved using available laser technology
         with minimal rates of breakage or cracking; and
   o     Environmentally acceptable due to absence of lead and arsenic.

INTELLECTUAL PROPERTY

         PATENTS; LICENSES; ROYALTY AGREEMENTS. Our laser engraving system is
derived in large part from patents held by others. Laser Design International,
LLC ("LDI") had exclusive license rights to a family of patents which govern
subsurface decorative laser marking in crystal, glass, and other clear
materials. These patents were first filed in 1991 and have been issued in the US
and almost every part of the world. LDI recently purchased the patents in
February 2003. In addition, LDI has another US patent, which improves on the
original claims and more specifically applies them to the use of the process for
manufacture of decorative crystal and glass giftware. These patents cover both
the process of manufacturing laser-etched crystal giftware, as well as the
manufacturing machine and finished giftware products themselves.


                                       5
<PAGE>

         In 1995, LDI issued a license for these patent rights and the
underlying technology to Janesville Group, Ltd. of Janesville, Wisconsin, which
is now a part of Norwood Promotional Products, Inc., based in Austin, Texas
("Norwood"). That license granted certain exclusive rights for manufacture of
corporate giftware in North and South America. Norwood Promotional Products,
Inc. markets 20 product lines with over 6,000 products through promotional
product distributors, and is believed to be the world's largest supplier of
promotional products.

         In February 1999, LDI and the Janesville Group, Ltd. granted Lazer-Tek
a non-exclusive license for the manufacture and sale of decorative products for
the specialty advertising, premium, and retail markets in the US, Canada,
Mexico, the United Kingdom, Central America, South America, and the Caribbean.

         In October 2001, LDI granted Crystalix USA a non-exclusive
non-transferable license to use this technology for the manufacture and sale of
decorative products in the giftware market segments, the wearable jewelry and
gemstone material market segments, and the flat glass and architectural glass
market segments. LDI also granted us a non-exclusive non-transferable license to
manufacture, use, sell and lease laser subsurface engraving machines to LDI
subsurface engraving licensees. These licenses granted by LDI are subject to the
limitation that our activities cannot conflict with the exclusive rights granted
to the Janesville Group unless the Janesville Group expressly agrees in writing
to allow the activity.

         Effective October 1, 2003, we entered into an amended and restated
patent license agreement with LDI and Norwood, which superseded the February
1999 and October 2001 agreements described above. We now have a non-exclusive,
non-transferable, royalty-bearing sub-license from LDI to make, use, offer for
sale, and sell decorative products using the technology other than in the US.
Norwood granted us a non-exclusive, non- transferable (other than reseller
licenses to permitted resellers), revocable and royalty-bearing sub-license for
the United States in the retail market segment. Norwood also granted Lazer-Tek a
non-exclusive, non-transferable (other than reseller licenses to permitted
resellers), revocable and royalty-bearing sub-license for the United States in
the corporate market segment. Norwood is to approve all applications for a
permitted reseller license. We are required to pay LDI and Norwood royalty
payments based on a percentage of net sales on a quarterly basis

         In addition to the patents described above, we have the exclusive
worldwide rights to other proprietary technology. Rainer Eissing, our chief
executive officer, has developed certain facial marking and three-dimensional
imaging improvements that are outside of the engraving patents licensed by us.
We obtained the rights to Mr. Eissing's technology by issuing Crystalix
Technology 7,000,000 shares of our Class A preferred stock.

         Lazer-Tek has an interest in US Patent No. 6,087,617 - computer
graphics system for generating an image reproducible inside optically
transparent material.

         TRADEMARK AND TRADE NAME. On February 14, 2003, we applied for federal
trademark registration of Crystalix and the diamond logo (serial number
76/489692). As of the date of this report, such registration has not been
obtained. We hold Nevada trademarks on the Crystalix name.

         Lazer-Tek has the following federally registered trademarks:

   o     For "LTD" -  No. 2,021,941 registered December 10, 1996
   o     For "Collegiate Crystal"  No. 2,504,803 registered November 6, 2001

COMPETITION

         We compete generally with many other manufacturers and retailers in the
giftware industry and specifically with those who offer personalized and
engraved products. With regard to manufacturers of laser subsurface engraved
optic glass items, we are aware of other competitors in the United States, but
only a few that comply with the patents described above.

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<PAGE>

         There are numerous companies that offer laser subsurface engraved glass
products for sale to the public. However, many only offer decorative glass
pieces that are already engraved, as opposed to offering custom-engraved
products.

         We believe that we are the leading "branded" manufacturer and retailer
of laser subsurface engraved optic glass in the US gift industry, due to the
breadth of our product lines and methods of distribution.

        We believe that we compete on the basis of

           o   Image quality, definition and accuracy;
           o   Crystal quality;
           o   Crystal selection;
           o   Production times;
           o   Retail location and accessibility;
           o   Creativity with respect to the art image and glass shape; and
           o   Price.

RESEARCH AND DEVELOPMENT

         During the fiscal years ended December 31, 2003 and 2002, we spent
$397,067 and $416,684, respectively, on research and development activities.

GOVERNMENT REGULATION AND COMPLIANCE WITH ENVIRONMENTAL LAWS

         Our marketing partners and we are subject to the type of government
regulation typically associated with the operation of retail locations. These
regulations pertain to the safe operation of the retail space, wages and working
conditions for employees, and the proper collection of various taxes. We do not
believe that compliance with these regulations presents any unusual hardship or
cost.

         Compliance with environmental laws generally does not affect our
business.

EMPLOYEES

         As of February 29, 2004, we employed a total of 29 persons, of which 27
were full-time. None of our employees is covered by a collective bargaining
agreement.


ITEM 2. DESCRIPTION OF PROPERTY.

         Our principal offices are located at 5275 South Arville Street, Suite
B-116, Las Vegas, Nevada 89118. We lease approximately 6,733 square feet under a
lease that expires May 31, 2004.


ITEM 3. LEGAL PROCEEDINGS.

         We are not a party to any pending legal proceedings, other than routine
litigation deemed incidental to our business, except for the following:

         CONCORD INDUSTRIES INC. In January 2003, Concord Industries Inc.
("Concord") filed an action for declaratory relief in the federal court for the
State of Connecticut against Laser Design International and us, LLC ("LDI").
Concord seeks a judgment invalidating the patent issued to LDI and/or declaring
that Concord is not infringing on LDI's patent. LDI is the holder, in part, of
laser technology patent rights related to laser engraving. We have licensed the
use of this technology from LDI. In November 2003, Concord and we reached a
settlement agreement whereby Concord has agreed to dismiss us from the suit. LDI
and Concord are still in litigation. We anticipate that LDI will be successful
in its defense of its patent rights. The patents that are the subject of the
suit


                                       7
<PAGE>

pertain to subsurface decorative laser marking in crystal, glass, and other
clear materials, which is the technology used in our business.

         VITRO LASER GROUP USA. On February 12, 2003, Vitro Laser Group USA,
Inc. ("Vitro") and Kenneth Morrison filed an original petition and application
for injunctive relief in the District Court of Dallas County, Texas, against
Vitro Laser GmbH ("Vitro GmbH") and us. The plaintiffs allege that Vitro GmbH
and we wrongfully took two laser systems and, thus, sought a temporary and
permanent injunction enjoining, prohibiting, and restraining Vitro GmbH and us
from interfering with plaintiffs' rights in the laser systems and in their
business facilities and operations. The parties subsequently resolved the issue
of the injunctive relief, pending a final judicial determination, by written
agreements dated February 27, 2003 and March 5, 2003, i.e., by Rule 11
agreements.

         In addition, the plaintiffs seek from us: actual and exemplary damages
for conversion of the equipment; actual damages, statutory damages of $2,000,
and attorneys' fees for theft of the laser systems; actual damages for unjust
enrichment; and actual and exemplary damages for tortious interference with
plaintiffs' contract with Vitro GmbH. With respect to Vitro GmbH, the plaintiffs
seek: actual and exemplary damages for fraud; actual damages for negligent
misrepresentation; actual damages and attorneys' fees for breach of contract;
and actual damages for breach of fiduciary duty.

         At the commencement of the suit, Vitro GmbH alleged that it was not
properly served and that it was not amenable to suit or service in the United
States since it is a German company. However, Vitro GmbH subsequently consented
to the court's jurisdiction and filed an answer and cross-claims against the
plaintiffs. We filed an answer and a special appearance asserting that we are
not subject to the jurisdiction of the Texas court; however, the trial court
found that we waived our special appearance in the lawsuit to contest the
court's jurisdiction over it, by entering into the Rule 11 agreements with
plaintiffs. However, the appellate court reversed the trial court and remanded
the case to the lower court to determine whether it has personal jurisdiction
over us. The plaintiffs have indicated that they may appeal the appellate
court's ruling to the Texas Supreme Court. If we are unsuccessful in our
jurisdictional challenge, we intend to assert that we took possession of the
equipment at the request of Vitro GmbH, with Vitro GmbH asserting ownership over
the equipment due to plaintiffs' failure to pay for the equipment and that we
did not interfere between plaintiffs and Vitro GmbH. Management plans to
vigorously defend this matter and since this matter is in its preliminary
stages, no amounts have been accrued in the accompanying consolidated financial
statements, as such amounts are not estimable.

         BERLINER ZISSER WALTER & McDONALD, P.C. On March 4, 2003, Berliner
Zisser Walter & McDonald, P.C., filed a complaint against us in the District
Court for the City and County of Denver, Colorado. The complaint asserts that
the plaintiff law firm is owed $141,701 for legal services. We have asserted
various defenses to the claim. The case was tried to the court in March 2004. On
March 19, 2004, judgment was entered against us in the amount of $108,972, plus
interest and costs. We accrued the amount of the judgment as a liability during
2003.

         KEVIN RYAN, ET AL. On March 31, 2003, we filed a complaint against
Kevin Ryan, Lena Walther, Douglas Lee, Lazer-Tek Designs, Inc., and Lazer-Tek
Designs, Ltd. in the District Court for Clark County, Nevada. The complaint
alleged misrepresentations and breach of the Common Stock Purchase Agreement
that we entered into to purchase Lazer-Tek. We requested a reduction of the
purchase price and of the amount due to Kevin Ryan, as well as general and
special damages in excess of $10,000, punitive damages, attorneys' fees, and
costs. On April 23, 2003, Kevin Ryan and Douglas Lee filed an answer denying the
allegations of the complaint. In addition, Kevin Ryan counterclaimed for payment
of the promissory note in the principal amount of $852,680, issuance of 568,750
shares of our common stock, and an order for writ of possession of the
collateral securing his note. On May 12, 2003, the court issued a Writ of
Possession to Kevin Ryan, allowing him to take possession of the collateral
securing his note on June 2, 2003. The collateral consists of all our assets.
The default interest rate is 18% per annum. We have agreed to dismiss our
complaint with prejudice. The Writ of Possession is to remain in effect, but the
parties have agreed to postpone all deadlines and trial dates. Mr. Ryan has
allowed us to continue operations and has provided additional financing. See
"Item 6. Management's Discussion and Analysis or Plan of Operation," "Item 11.
Security Ownership of Certain Beneficial Owners and Management," and "Item 12.
Certain Relationships and Related Transactions."

         ARMIN VAN DAMME, et al. On June 30, 2003, John S. Woodward, our
president and we, filed a complaint against Armin Van Damme (a former officer
and


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<PAGE>


director of the Company), Othmar Van Dam (a former officer and director of the
Company), Jim Carrasco, Carlos Ravelo, Brian Shedd (a former employee), 3DLI,
Inc., and Vitro Laser, Inc. in the District Court for Clark County, Nevada. The
complaint alleged tortious interference with contractual relations, tortious
interference with prospective economic advantage, conversion, and conspiracy on
the part of all of the named defendants. In addition, the complaint alleged
breach of fiduciary duty by Armin Van Damme and Othmar Van Dam as to the
Company. Mr. Woodward and we requested damages in excess of $10,000, attorneys'
fees and costs, as well as injunctive relief. On July 24, 2003, we obtained an
order for a preliminary injunction, which (1) enjoined Brian Shedd from
activities that would compete against us; (2) enjoined Othmar Van Dam from
soliciting our existing affiliates and/or customers; (3) enjoined Armin Van
Damme from transferring or encumbering his residence; (4) mandated Armin Van
Damme and Othmar Van Dam to remove us from being financially obligated on the
lease of the vehicles they are using; (5) mandated Armin Van Damme and Othmar
Van Dam to provide proof of current registration and insurance on such vehicles;
(6) mandated Armin Van Damme to provide us with access to conduct an audit and
inventory at four retail locations that had been purchased by Mr. Van Damme; (7)
mandated Armin Van Damme to return all our corporate, software and art files to
us; (8) enjoined the defendants from communicating on our letterhead; (9)
mandated us to remove Armin Van Damme and Othmar Van Dam from our Web site; (10)
mandated Armin Van Damme and 3DLI, Inc. to issue checks to us for amounts
diverted from the Company; (11) enjoined the defendants from encumbering,
tampering, hindering, converting, or transferring any of our assets; and (12)
enjoined all parties from disparaging any other party in the action. The
defendants filed an answer and counterclaim, suing us and all of our officers in
their individual capacity. In October 2003, the parties entered into a
settlement agreement, which provides, among other things, for the following:

    o    the dismissal of this suit with prejudice;
    o    Armin Van Damme keeping the four retail locations in the Mandalay Bay
         Group hotels;
    o    Othmar Van Dam being able to pursue conducting business on the
         Starboard Cruise Line;
    o    the relinquishment by Armin Van Damme and Othmar Van Dam of all
         ownership interest in the Company;
    o    the Company retaining an infrared laser machine delivered by Vitro; and
    o    Vitro retaining the $500,000 payment from the Company.

         The settlement agreement was made effective as of November 14, 2003. No
gain or loss was recognized on the transfer of the retail locations from us to
Mr. Van Damme.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

        None.









                                       9
<PAGE>

                                    PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

MARKET INFORMATION

         Our common stock has been trading on the over-the-counter bulletin
board ("OTCBB") since March 2000. The common stock traded under the symbol
"ABIL" from March 2000 to December 9, 2002. Since December 9, 2002, it has
traded under the symbol "CYXG." The following table sets forth the range of high
and low bid quotations for each fiscal quarter for the last two fiscal years.
These quotations reflect inter-dealer prices without retail mark-up, mark-down,
or commissions and may not necessarily represent actual transactions.

FISCAL QUARTER ENDING           HIGH BID            LOW BID

March 31, 2002................. $   0.37            $   0.17
June 30, 2002.................  $   0.24            $   0.004
September 30, 2002............  $   0.06            $   0.02
December 31, 2002.............  $   1.50            $   0.02

March 31, 2003................  $   0.97            $   0.55
June 30, 2003.................  $   0.91            $   0.21
September 30, 2003............  $   0.91            $   0.10
December 31, 2003.............  $   0.92            $   0.38

         On April 1, 2004, the closing bid price for the common stock on the OTC
Bulletin Board was $0.66.

HOLDERS

         As of March 30, 2004 there were 514 record holders of our common stock.

DIVIDENDS

         Since our inception, no cash dividends have been declared on our common
stock.

SALES OF UNREGISTERED SECURITIES

         During the quarter ended December 31, 2003, we issued a total of
250,000 shares of our common stock to three persons in consideration for
consulting services valued at $175,000. We relied upon the exemption from
registration contained in Section 4(2) of the Securities Act of 1933. All of
these persons were deemed to be sophisticated with regard to an investment in
our stock due to their prior investment experience and specific knowledge about
us and our operations. No underwriters were used.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

OVERVIEW

         Effective October 4, 2002, an arrangement was completed between the
company, then known as Americabilia.com, Inc. and Crystalix USA Group, Inc., a
Nevada corporation, whereby the shareholders of Crystalix USA exchanged all of
their common shares for 23,300,000 shares of Americabilia common stock. At the
same time, we issued 7,000,000 shares of Americabilia Class A preferred stock to
acquire a technology license from Crystalix Technology, Inc.

         Immediately following the acquisition, the former shareholders of
Crystalix USA held approximately 77.6% of Americabilia's total issued and
outstanding common shares. Crystalix USA was thereby deemed to be the acquiror
and surviving company for accounting purposes. Accordingly, the transaction has
been accounted for as a

                                       10

<PAGE>


reverse acquisition using the purchase method whereby the assets and liabilities
of Americabilia have been recorded at their fair market values and operating
results have been included in the company's financial statements from the
effective date of purchase. The net assets of Crystalix USA are included in the
balance sheet at their historical book values and its results of operations have
been presented for the comparative prior period.

         On December 23, 2002, we acquired Lazer-Tek for 1,250,000 shares of our
common stock valued at $1,125,000 and an acquisition consulting fee obligation
of $400,000. This acquisition has been accounted for using the purchase method.
The purchase price was allocated to the assets purchased and liabilities assumed
based upon their estimated fair values as determined by management, upon
reliance on an independent valuation report, on the date of acquisition, which
approximated $2.7 million. The excess of fair value of the acquired net assets
over the cost has been allocated as a pro rata reduction of all the acquired
assets, excluding financial assets, assets to be disposed of by sale, deferred
tax assets, pension or other post-retirement benefit plans, and any other
current assets.

GOING CONCERN

         The accompanying consolidated financial statements have been prepared
in conformity with accounting principles generally accepted in the United States
of America, which contemplate continuation of the company as a going concern. We
incurred a net loss for the year ended December 31, 2003 of $7,433,341 and at
December 31, 2003, had an accumulated deficit of $7,742,984 and a working
capital deficit of $6,311,497. In addition, we are in default on the payment of
certain loan payable obligations. We are also involved in various lawsuits and
effective June 2, 2003, a senior creditor has been granted a Writ of Possession
allowing him to take possession of the collateral (all company assets) securing
his note. These consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty. These consolidated
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, or amounts and
classification of liabilities that might be necessary should we be unable to
continue as a going concern.

         We plan to take the following steps that we believe will be sufficient
to provide us with the ability to continue in existence. We are negotiating with
certain loan holders to extend the repayment terms of certain loans and we are
also seeking additional capital through the issuance of equity instruments. We
have changed our senior management and believe that the new management team will
be able to achieve profitable operations, but there can be no assurance that we
will be able to raise sufficient capital and generate positive cash flows from
operations sufficient to sustain operations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         Our discussion and analysis of our financial condition and results of
operations are based upon our condensed consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States of America. The preparation of these consolidated financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosures
of contingent assets and liabilities. On an ongoing basis, we evaluate our
estimates, including those related to impairment of long-lived assets, any
potential losses from pending litigation and deferred tax asset or liability. We
base our estimates on historical experience and on various other assumptions
that we believe to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions; however,
we believe that our estimates, including those for the above-described items,
are reasonable.

         LEASE REVENUE. We enter into licensing agreements to lease our laser
equipment and our licensed laser inscription technology to individuals and
businesses who open retail establishments to sell laser inscribed crystal
blocks. The terms of these licensing agreements are typically for five years.
The lease payments are generally paid in one or two installments upon signing
the agreement and we recognize lease revenue ratably over the term of the
contract.

         PRODUCT SALES. Revenue from the sale of laser inscribed products is
recognized when title to the products is transferred to the customer, which is
point of sale at retail locations or customer acceptance for custom-designed
crystals, and only when no further contingencies or material performance
obligations are warranted. Revenue from

                                       11
<PAGE>

the sale of glass cube products is recognized when title to the products is
transferred to the customer-lessee, which is upon shipment, and only when no
further contingencies or material performance obligations are warranted.

         ROYALTY REVENUE. We recognize royalty revenue from licensing our
technology only when earned with no further contingences or material performance
obligations are warranted.

         DEFERRED REVENUE. Deferred revenue represents amounts received as
non-refundable payments upon the signing of the contract and delivery of the
LaserMark II equipment, for which revenue will be recognized over the term of
the license/lease period. Deposits received from potential customers/lessees,
who have not yet received the LaserMark II equipment, are accounted as
refundable customer-lessee deposits on the balance sheet.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2003 COMPARED TO DECEMBER 31, 2002.

         Our net revenues are derived from product sales, lease revenue, and
royalty revenue. We generate product sales through the sale of engraved glass
products to customers in our retail kiosks, to corporate customers, and through
the sale of glass blanks, display bases, and related products to our marketing
partners. We receive lease revenues and royalty revenues from our marketing
partners under the terms of master equipment leases and software licenses they
have executed with us. Our revenue for the year ended December 31, 2003
increased by $1,699,650 or 36.4% from $4,664,855 for the year ended December 31,
2002 to $6,364,505 for the year ended December 31, 2003. The increase is
principally due to the increase in the number of our marketing affiliate
locations that were in operation during the full year ended December 31, 2003
versus only part of the year in 2002.

         The cost of revenue with regard to product consists of the cost of the
glass blanks, bases, and other items that we purchase from our suppliers. The
lease cost of revenue consists primarily of the amortization of property, plan
and equipment, including the direct personnel costs and direct product costs
associated with the assembly of our leased equipment. Royalty cost of revenue
consists of the royalty payments we make to Laser Design International. Our cost
of revenue for the year ended December 31, 2003 increased by $1,494,695 or 63.4%
from $2,358,012 for the year ended December 31, 2002 to $3,852,707 for the year
ended December 31, 2003. The increase is principally due to the increase in
revenue. Our gross margin for the year ended December 31, 2003 was 40% compared
to 50% for the year ended December 31, 2002. The decrease in gross margin is
principally a result of the sales of the four company-owned locations to a
former officer of the company, which historically produced high gross margins.

         Research and development for the year ended December 31, 2003 decreased
by $19,617 or 4.7% from $416,684 for the year ended December 31, 2002 to
$397,067 for the year ended December 31, 2003. The decrease is principally due
to a decrease in product development due to lack of funds to finance such
activities.

         Payroll and related benefits for the year ended December 31, 2003
increased by $1,363,645 or 117.4% from $1,161,673 for the year ended December
31, 2002 to $2,525,318 for the year ended December 31, 2003. The significant
increase is due to the growth of our company, including the increase in payroll
as a result of the acquisition of Laser-Tek, and the need to hire additional
personnel. As we continue to expand our operations, we expect this expense to
increase as our revenues increase.

         General and administrative expenses for the year ended December 31,
2003 increased by $4,176,712 or 413.1% from $1,011,142 for the year ended
December 31, 2002 to $5,187,854 for the year ended December 31, 2003. The
increase in general and administrative expenses is principally due to the
increase in overhead required to sustain our growing operations, increased
professional fees as a result the outstanding litigation and consulting fees.
Included in the amount for 2003 is $1,345,000, which is the valuation for
2,590,000 shares of our common stock issued for consulting services rendered. We
expect general and administrative expenses to increase as we continue to
increase both corporate sales and the expansion of retail locations, and proceed
with our plans for an offering of our stock and the listing of our common stock
on Nasdaq or a stock exchange.

         Impairment expense for the year ended December 31, 2003 increased by
$399,113 from $nil for the year ended December 31, 2002 to $399,113 for the year
ended December 31, 2003. The increase in impairment expense


                                       12

<PAGE>

is due to the write down of certain property and equipment of $243,893 and our
customer list and relationships of $155,220. There were no such impairments for
the year ended December 31, 2002.

         During the year ended December 31, 2003, we wrote off our investment in
Vitro Laser Gmbh of $500,000. We had originally paid Vitro an advance of
$500,000 that was to be applied to the purchase price of that company. In
accordance with the legal settlement on November 14, 2003, we allowed Vitro to
retain the advance.

         Interest expense, net for the year ended December 31, 2003 increased by
$894,023 or 6,184.9% from $14,455 for the year ended December 31, 2002 to
$908,478 for the year ended December 31, 2003. The increase is due to the
increase in loans payable and shares of stock issued for financing costs. Of the
interest expense amount, $528,000 was included for the 660,000 shares of our
common stock issued as consideration to the lender for extending the repayment
terms of a loan to us of $1,500,000.

LIQUIDITY AND CAPITAL RESOURCES

         At December 31, 2003, we had a working capital deficit of $6,311,497,
as compared to a surplus of $511,575 at December 31, 2002. We had cash and cash
equivalents of $58,881 at December 31, 2003 as compared to cash and cash
equivalents of $641,325 at December 31, 2002.

         During the year ended December 31, 2003, our financing activities
provided cash of $2,275,376, while our operating and investing activities used
cash of $1,166,873 and $1,690,947, respectively.

         During the year ended December 31, 2003, we used $1,309,947 for the
purchase of property and equipment, which consisted principally of equipment for
laser engraving systems and expansion of our network of kiosk locations. We also
used $300,000 for an advance to Vitro Laser.

         During the year ended December 31, 2003, we obtained $748,000 from the
sale of common stock, which consisted of $488,000 collected from stock sold in
2002 and $260,000 for the issuance of 1,120,000 additional shares in 2003. We
also received proceeds from a note payable to related party of $1,010,000 and
advances from a related party under a revolving line of credit of $823,675.

         We have other current debt incurred in connection with the Lazer-Tek
acquisition in the principal amount of $1,252,680, consisting of $852,680 owed
to Kevin Ryan, a former creditor of Lazer-Tek, which was due April 1, 2003, and
$400,000 owed to Kevin Ryan in quarterly payments beginning April 1, 2003 for
consulting fees. Neither of these payments has been made and we are currently in
default on these two obligations. As disclosed in "Item 3. Legal Proceedings,"
Mr. Ryan has obtained a Writ of Possession entitling him to all of our assets as
of June 2, 2003. We have agreed to dismiss our complaint against Mr. Ryan with
prejudice. The Writ of Possession is to remain in effect, but the parties have
agreed to postpone all deadlines and trial dates.

PLAN OF OPERATION

         We believe that we have positioned Crystalix to become a leader in the
sub-surfaced glass etching industry.  Our management has developed a 2004
roll-out plan of the following:

   o     new corporate owned and operated locations in the United States and
         Europe
   o     new marketing partners in the United States and Europe
   o     agreements with strong infinity groups (i.e. NASCAR, NBA, MLB)
   o     completion of an office and production facility
   o     further development and enhancement of our equipment and software

         On October 21, 2003 we executed documents for a bridge loan of $2.5
million that was to be due in 6 months. This loan never funded and is not
expected to fund in the future. Therefore, we are pursuing other avenues to
raise debt or equity capital.


                                       13

<PAGE>

         Through December 31, 2003, Kevin Ryan had advanced a total of $823,675
to us under a revolving line of credit agreement dated December 1, 2003.
Interest on the outstanding balance accrues at 10% per annum and is payable
monthly. On December 1, 2003, we entered into a Secured Promissory Note with
Kevin Ryan in the amount of $1,010,000. Interest will accrue on the note at 10%
per annum and is payable monthly. All principal and unpaid accrued interest
under the Secured Promissory Note is due and payable no later than December 1,
2004.

         We are currently in negotiations with other investors in an effort to
obtain long-term debt financing, and we are also seeking investors to purchase
shares of our common stock in a private placement.

         Since we operate in the gift industry, our business is seasonal, with
the first and second quarters being significantly slower than the third and
fourth quarters. We are trying to develop more corporate sales, to offset the
effects of this seasonality. For the year ended December 31, 2003, the revenues
generated were less than anticipated due to the prevailing general economic
conditions and the fact that management's efforts were diverted from expansion
of the business to resolving litigation matters.

FORWARD-LOOKING STATEMENTS

         Certain statements in this Annual Report on Form 10-KSB, as well as
statements made by the company in periodic press releases, oral statements made
by the company's officials to analysts and shareholders in the course of
presentations about the company, constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties, and
other factors that may cause the actual results, performance or achievements of
the company to be materially different from any future results, performance or
achievements expressed or implied by the forward looking statements. Such
factors include, among other things, (1) risks pertaining to implementation of
our proposed expansion of our distribution network; (2) competitive pressures in
the giftware industry; (3) disputes or claims regarding the company's
proprietary rights to its software and intellectual property; (4) acceptance of
our products by corporate customers; (5) costs of desirable retail locations;
(6) availability of suitable optic glass; (7) general economic and business
conditions; (8) ability to successfully integrate acquired operations; and (9)
other factors over which we have little or no control.


ITEM 7. FINANCIAL STATEMENTS.

         See pages beginning with page F-1.


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

         On September 9, 2002, we dismissed Deloitte & Touche LLP ("Deloitte")
as our independent public accountants. Our board of directors participated in
and approved the decision to dismiss Deloitte.

         The reports of Deloitte on our financial statements for the two fiscal
years ended December 31, 2001 and 2000 did not contain an adverse opinion or a
disclaimer of opinion, nor were such reports qualified or modified as to
uncertainty, audit scope, or accounting principles, except that the report for
the year ended December 31, 2001 included a paragraph on the uncertainty of our
company to continue as a going concern as follows:

         "The accompanying 2001 consolidated financial statements have
         been prepared assuming that the Registrant will continue as a
         going concern. As described in Note 1 to the consolidated
         financial statements, the Registrant's recurring losses from
         operations, negative working capital, and stockholders'
         deficit raise substantial doubt about its ability to continue
         as a going concern. Management's plans concerning these
         matters are also described in Note 1. The financial
         statements do not include any adjustments that might result
         from the outcome of this uncertainty."

         During the preceding two fiscal years and through September 9, 2002,
there were no disagreements between us and Deloitte on any matter of accounting
principles or practices, financial statement disclosure, or audit


                                       14


<PAGE>

scope or procedure, which, if not resolved to Deloitte's satisfaction would have
caused Deloitte to make reference to the subject matter of the disagreements in
connection with Deloitte's report on our financial statements.

         During the preceding two fiscal years and through September 9, 2002,
there were no reportable events required to be disclosed pursuant to Item
304(a)(1)(v).

         Pursuant to Item 304(a)(3), on September 12, 2002, Deloitte furnished
us with a letter addressed to the Securities and Exchange Commission stating it
agreed with the statements made by us in response to Item 304(a). A copy of that
letter was filed as an exhibit to our report on Form 8-K, filed September 13,
2002.

         On September 9, 2002, we engaged Stonefield Josephson, Inc. as our
independent accountants for the fiscal year ending December 31, 2002. This
change in accountants was recommended by our executive management and approved
by our board of directors.


ITEM 8A.   CONTROLS AND PROCEDURES.

         As required by SEC rules, we have evaluated the effectiveness of the
design and operation of our disclosure controls and procedures at the end of the
period covered by this report. This evaluation was carried out under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer. Based on this
evaluation, these officers have concluded that the design and operation of our
disclosure controls and procedures are effective. There were no changes in our
internal control over financial reporting or in other factors that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

         Disclosure controls and procedures are our controls and other
procedures that are designed to ensure that information required to be disclosed
by us in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
SEC's rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by us in the reports that we file under the Exchange Act is
accumulated and communicated to our management, including principal executive
officer and principal financial officer, as appropriate, to allow timely
decisions regarding required disclosure.






                                       15
<PAGE>


                                    PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

DIRECTORS AND EXECUTIVE OFFICERS

         Our executive officers and directors are:

   NAME                   AGE      POSITION

   Rainer Eissing          45      Chairman of the Board of Directors and
                                   Chief Technology Officer

   John S. Woodward        50      President and Director

   Oswaldus Van Dam        45      Director of Technical Operations,
                                   Corporate Secretary,Interim Chief
                                   Financial Officer and Director

   Marc Janssens           47      Director

   Patty Hill              44      Controller

         Our shareholders elect our directors annually and our board of
directors appoints our officers annually. Vacancies in our board are filled by
the board itself. Set forth below are brief descriptions of the recent
employment and business experience of our executive officers and directors.

RAINER EISSING, CHAIRMAN OF THE BOARD OF DIRECTORS AND CHIEF TECHNOLOGY OFFICER

         Mr. Eissing has been our chairman of the board of directors and chief
executive officer since October 2002. He is the developer of the 3-D software
and the laser unit used by Crystalix. Mr. Eissing founded Crystalix USA in 2001
and Crystalix GmbH Berlin in 1997 and has served as the chief executive officer
of both companies since their inception. Mr. Eissing was a founder of EWS Rainer
Eissing, a German laser development company that has provided consulting
services to electronic manufacturers since 1994. Mr. Eissing is the holder of
four patents, including two German patents involving our technology. Mr. Eissing
has not served for any directorships in any other reporting companies.

JOHN S. WOODWARD, PRESIDENT AND DIRECTOR

         Mr. Woodward became a director in February 2003 and our president in
April 2003. Mr. Woodward is a semi-retired estate planning attorney, and has
been licensed in California since 1980. He joined Crystalix USA in the spring of
2002 as a partner in one of the company-owned locations at the Forum Shops at
Caesars Palace in Las Vegas, Nevada. Mr. Woodward received a degree in
psychology from the University of Southern California and his law degree from
Southwestern School of Law. He participates on boards of many foundations and
charitable organizations and consults to a limited number of clients.

OSWALDUS ("EDGAR") VAN DAM, DIRECTOR OF TECHNICAL OPERATIONS, CORPORATE
SECRETARY, INTERIM CHIEF FINANCIAL OFFICER AND DIRECTOR

         Mr. Van Dam has been a director since February 2003. He is the brother
of Armin Van Damme and Othmar Van Dam. See "Item 12. Certain Relationships and
Related Transactions." He served as the director of technical operations of
Crystalix USA from July 2002 and now serves in that capacity for us. In 1989,
Mr. Van Dam founded Van Dam European, an automobile dealership located in San
Francisco, California. He served as its general manager until joining Crystalix
USA in 2002. Mr. Van Dam has not served as a director for any other reporting
companies.



                                       16

<PAGE>


MARC JANSSENS, DIRECTOR

         Mr. Janssens has been a director since October 2002. He also served as
our secretary and treasurer from October 2002 to March 2003 and our president
from March 2003 to April 2003. Mr. Janssens has served as the secretary and
treasurer of Crystalix USA since its inception in November 2001. From 1995 to
2001, Mr. Janssens served as the director of marketing and sales for Spartacus
Management Company, Inc., an advertising and promotional company in Chatsworth,
California, that manufactured promotional logo recognition products. In 1990,
Mr. Janssens founded Benchmarc Communications, Chatsworth, California, and
served as its president to 1995. Benchmarc Communications provided organization
services for US conventions and international incentive travel. From 1986 to
1990, Mr. Janssens was a sales and marketing officer for United States
Lines-International Container Transport. From 1982 to 1986, Mr. Janssens served
as an account executive for McCann-Erickson Advertising Group in Brussels, Paris
and Amsterdam, where he was responsible for advertising accounts such as BMW,
Benelux, Tupperware Europe, Van Heusen Fashions, Opel Automotive, and Proctor
and Gamble. Mr. Janssens received a bachelor's degree in marketing and
advertising sciences from the Stedelijk Instituut in Brussels, Belgium and
graduated from Antwerp Atheneum, Belgium (a three-year course), having studied
business English and business German. Mr. Janssens has not served as a director
for any other reporting companies.

PATTY HILL, CONTROLLER

         Ms. Hill has been the controller of Lazer-Tek since October 2002 and
became our controller in December 2002. From November 2000 to April 2002, she
was the controller for 1st National Processing, Inc., a credit card processing
company in Las Vegas, Nevada, where she was responsible for development,
implementation, and management of internal accounting for that company. Ms. Hill
was a divisional controller for Smartcertify, Inc., a multinational software
corporation in Clearwater, Florida, from January 1997 to September 2000. From
July 1994 to November 1996, she was the assistant business manager for
Citicaster, Inc./WTSP-TV in St. Petersburg, Florida. From May 1986 to May 1994,
she worked for companies in St. Paul, Minnesota, as an accounting
manager/supervisor. Ms. Hill received a bachelor of science degree as an
accounting major from the University of Minnesota School of Management.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

         From October 2002 to February 2003, Armin Van Damme was our president
and a director and his brother, Othmar Van Dam, was our executive vice president
and a director. Both men resigned, believing that certain legal proceedings in
their backgrounds might impair our ability to proceed with a proposed listing of
our common stock on Nasdaq or a stock exchange.

         On January 27, 1995, both men agreed to plead guilty to conspiracy to
commit offenses against the United States under 18 U.S.C. 371. They were
sentenced to 15 months imprisonment and three years of supervised release, which
was served and the probation completed in September 1999. They were also ordered
to make restitution of $468,931, which is still being paid.

CODE OF ETHICS

         We have not yet adopted a code of ethics that applies to our principal
executive officers, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, since we have been focusing
our efforts on obtaining financing for the company. We expect to adopt a code by
the end of the current fiscal year.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934 requires our
officers, directors, and persons who beneficially own more than 10% of our
common stock to file reports of securities ownership and changes in such
ownership with the Securities and Exchange Commission ("SEC"). Officers,
directors and greater than 10% beneficial owners are also required by rules
promulgated by the SEC to furnish us with copies of all Section 16(a) forms they
file.


                                       17

<PAGE>

         Based solely upon a review of the copies of such forms furnished to us,
or written representations that no Form 5 filings were required, we believe that
during the fiscal year ended December 31, 2003, there was compliance with all
Section 16(a) filing requirements applicable to our officers, directors and
greater than 10% beneficial owners except for Form 3 and Form 4 reports for John
S. Woodward due March 7, 2003 and April 1, 2003, which were filed on February
24, 2004.


ITEM 10.   EXECUTIVE COMPENSATION.

         The following table sets forth information the remuneration of our
chief executive officers and our four most highly compensated executive officers
who earned in excess of $100,000 per annum during any part of our last three
fiscal years:

<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE
--------------------------------------------------------------------------------------------------------------------------

                                                                              LONG TERM COMPENSATION
                                  ANNUAL COMPENSATION
                                                                               AWARDS              PAYOUTS
                                                           OTHER       RESTRICTED   SECURITIES
    NAME AND                                               ANNUAL        STOCK      UNDERLYING      LTIP      ALL OTHER
    PRINCIPAL        FISCAL                               COMPENSA-     AWARD(S)     OPTIONS/      PAYOUTS    COMPENSA-
    POSITION          YEAR    SALARY ($)      BONUS ($)    TION ($)        ($)       SARS (#)        ($)       TION($)
--------------------------------------------------------------------------------------------------------------------------
<S>                   <C>     <C>              <C>          <C>          <C>        <C>            <C>        <C>
     John S.          2003    170,000 (2)<F2>  -0-          -0-          -0-          -0-          -0-          -0-
    Woodward,
  President (1)<F1>
--------------------------------------------------------------------------------------------------------------------------
 Rainer Eissing,      2003      189,450        -0-          -0-          -0-          -0-          -0-        -0-(3)<F3>
 Chief Technol-       2002      226,000        -0-          -0-          -0-        800,000        -0-        -0-(3)<F3>
 ogy Officer
 (4)(5)<F4><F5>
--------------------------------------------------------------------------------------------------------------------------
Armin Van Damme,      2003      78,170         -0-          -0-          -0-          -0-          -0-        232,700
President             2002      218,584        -0-          -0-          -0-        800,000        -0-        -0-(3)<F3>
(5)(6)<F5><F6>
--------------------------------------------------------------------------------------------------------------------------
 Othmar Van Dam,      2003      95,637         -0-          -0-          -0-          -0-          -0-        205,482
 Executive Vice       2002      199,885        -0-          -0-          -0-        800,000        -0-        -0-(3)<F3>
President (5)(6)<F5><F6>
--------------------------------------------------------------------------------------------------------------------------
 Gary R. Moore,       2002        -0-          -0-          -0-          -0-          -0-          -0-          -0-
  President (7)<F7>   2001        -0-          -0-          -0-          -0-          -0-          -0-          -0-
--------------------------------------------------------------------------------------------------------------------------

----------------
<FN>
(1)<F1>  Mr. Woodward became our president in April 2003.
(2)<F2>  We issued Mr. Woodward 340,000 shares of common stock valued at
         $170,000 for his services.
(3)<F3>  Does not include the value of a car furnished by us for use by Rainer
         Eissing, Armin Van Damme, and Othmar Van Dam.
(4)<F4>  Includes amounts paid to Mr. Eissing through his company. See Item 12.
         Certain Relationships and Related Transactions.
(5)<F5>  Such officers commenced their employment with us on October 4, 2002.
         The compensation shown includes that paid by Crystalix USA Group in
         2002.
(6)<F6>  Such officers resigned in February 2003.
(7)<F7>  Mr. Moore was the President from September 1999 to October 2002.
</FN>
</TABLE>

         Stock options granted to Armin Van Damme and Othmar Van Dam were
relinquished in 2003. Stock options granted to Rainer Eissing were cancelled in
2004. There were no stock options granted in 2003 and no options are outstanding
at December 31, 2003.

COMPENSATION OF DIRECTORS

         Directors do not receive compensation but are reimbursed for their
expenses for each meeting of the board that they attend.

STOCK OPTION PLANS

         We do not have any stock option plans at this time, but plan to adopt a
plan for our employees in the near future.


                                       18
<PAGE>

ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The following table provides certain information as to our officers and
directors individually and as a group, and the holders of more than 5% of our
common stock, as of December 31, 2003. Except as otherwise indicated, the
persons named in the table have sole voting and investing power with respect to
all shares of stock owned by them.


<TABLE>
<CAPTION>
                                        AMOUNT OF BENEFICIAL OWNERSHIP

                                                                          TOTAL ASSUMING
    NAME AND ADDRESS OF                                 CLASS A           CONVERSION OF
    BENEFICIAL OWNER (1)<F1>    COMMON STOCK        PREFERRED STOCK      PREFERRED STOCK         PERCENT OF CLASS (2)<F2>

<S>                            <C>                   <C>                  <C>                            <C>
Kevin Ryan                     14,617,000 (3)<F3>    3,920,000 (3)<F3>    53,817,000 (3)<F3>             73.4%
3950 E. Patrick Lane Suite
101
Las Vegas, NY 89120

Rainer Eissing                   8,621,000             2,590,000            34,521,000                   47.1%

Marc Janssens                    2,796,000              840,000             11,196,000                   15.3%

Oswaldus Van Dam                 1,631,000              490,000             6,531,000                    8.9%

John S. Woodward                 1,000,000                 0                1,000,000                    1.4%

Patty Hill                           0                     0                    0                         --

All officers and directors       14,048,000            3,920,000            53,248,000                   72.6%
as a group (5 persons)
-------------------
<FN>
(1)<F1>  To our knowledge, except as set forth in the footnotes to this table
         and subject to applicable community property laws, each person named in
         the table has sole voting and investment power with respect to the
         shares set forth opposite such person's name. Except as otherwise
         indicated, the address of each person beneficially owning more than 5%
         of our common stock is c/o Crystalix Group International, Inc., 5275
         South Arville, Suite B-116, Las Vegas, Nevada 89118.

(2)<F2>  Percentages are based on 34,113,192 shares of common stock outstanding
         and 3,920,000 shares of Class A preferred stock outstanding, for a
         fully diluted total of 73,313,192 shares outstanding.

(3)<F3>  Includes shares owned by Rainer Eissing, John W. Woodward, Marc
         Janssens, and Oswaldus Van Dam, since they have granted Ryan Capital
         Management, Inc. an irrevocable proxy to vote their shares. Ryan
         Capital Management, Inc. is owned and controlled by Kevin Ryan. The
         proxy expires upon the later of (i) December 1, 2004, or (ii) 90 days
         after repayment in full of all amounts owed by us to the bridge lender,
         Kevin Ryan (or assignee), and John S. Woodward (or assignee).
</FN>
</TABLE>

         Rainer Eissing and Kevin Ryan may be deemed to be the "parents" of our
company within the meaning of the rules and regulations of the Securities and
Exchange Commission.



                                       19
<PAGE>


EQUITY COMPENSATION PLANS

         As of December 31, 2003, our equity compensation plans were as follows:

--------------------------------------------------------------------------------
                  NUMBER OF SECURITIES
                    TO BE ISSUED UPON      WEIGHTED AVERAGE        NUMBER OF
                       EXERCISE OF             EXERCISE            SECURITIES
                  OUTSTANDING OPTIONS,   PRICE OF OUTSTANDING      REMAINING
PLAN                  WARRANTS AND        OPTIONS, WARRANTS      AVAILABLE FOR
CATEGORY                RIGHTS               AND RIGHTS         FUTURE ISSUANCE.
--------------------------------------------------------------------------------
Equity                   None                    N/A                  None
compensation plans
approved by
security holders
--------------------------------------------------------------------------------
Equity                   None                    N/A                  None
compensation plans
not approved by
security holders
--------------------------------------------------------------------------------
Total                    None                                         None
--------------------------------------------------------------------------------

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Other than as disclosed below, none of our present directors, officers
or principal shareholders, nor any family member of the foregoing, nor, to the
best of our information and belief, any of our former directors, senior officers
or principal shareholders, nor any family member of such former directors,
officers or principal shareholders, has or had any material interest, direct or
indirect, in any transaction, or in any proposed transaction which has
materially affected or will materially affect us.

         HANK CARTWRIGHT. We owed Hank Cartwright, our former chairman of the
board and president, approximately $308,000 at September 30, 2002. Mr.
Cartwright forgave this debt as part of the acquisition of Crystalix USA.

         RAINER EISSING. During the years ended December 31, 2003 and 2002,
purchases of equipment from Entwicklungen Werbetechnik Software, a company
wholly-owned by Rainer Eissing, amounted to approximately $19,046 and
$2,160,000, respectively. Included in accounts payable and accrued expenses at
December 31, 2003 and 2002 are approximately $0 and $115,000 due to EWS,
respectively. This related party vendor does not have any formal agreement.
Management believes that these transactions are negotiated at arm's length.
During the year ended December 31, 2003 and 2002, purchases of technology
consulting services from EWS amounted to approximately $0 and $191,000,
respectively. In 2003, Mr. Eissing was paid $189,450 through his company,
Innovative Motions. We have included these amounts in the Summary Compensation
Table in "Item 10. Executive Compensation."

         JOHN S. WOODWARD. On December 20, 2002, we borrowed $1,500,000 from
John S. Woodward. At the time of the loan, Mr. Woodward was not an officer or
director of our company. He became a director in February 2003. The note accrues
interest at the annual rate of 7-1/8% but may increase in order to maintain a 4%
margin above Mr. Woodward's borrowing rate. We are currently paying interest at
the rate of 13.5% per annum. Interest is payable on the first day of each month,
beginning January 1, 2003. The note was originally due June 30, 2003 and is
secured by all of the assets and our ownership interest in Lazer-Tek Designs,
Ltd. Mr. Woodward agreed to extend his note to January 20, 2004 in exchange for
guaranteed interest. We issued a total of 1,000,000 shares of our common stock
to Mr. Woodward, 660,000 of which were for the extension of the repayment terms
and 340,000 of which were for his services. As of the date of this report, this
note is in default.

         ARMIN VAN DAMME. In April 2003, we entered into an agreement with Armin
Van Damme, a former officer and director and founder of Crystalix USA Group, to
transfer the four company-owned retail locations in Las Vegas for the surrender
of all of his Class A preferred stock and common stock remaining after permitted
transfers of the common stock. As a result of this transaction, we have canceled
5,126,000 shares of common stock and


                                       20
<PAGE>

1,540,000 shares of Class A preferred stock owned by Mr. Van Damme and removed
the net book value of the assets related to the four company-owned retail
location in the amount of $237,826. In addition, Mr. Van Damme resigned as an
employee of the company and agreed to assume liability of the lease of his
automobile, which had been leased by the company, and liability of the lease of
office space at 5720 South Arville, Suite 114, Las Vegas, Nevada. The transfer
was effective as of April 28, 2003. No gain or loss was recognized from this
related party transaction. Mr. Van Damme was to pay us a license fee of 5% of
gross sales generated from the transferred locations and agreed to purchase all
supplies and equipment needed for the operation of the locations from us at its
cost plus 10%. The agreement provided for termination by us upon 30 days' prior
written notice in the event of Mr. Van Damme's failure to make payments or
submit reports on a timely basis.

         As a result of the settlement agreement described in "Item 3. Legal
Proceedings" above, this agreement was declared null and void. Under the terms
of the settlement, Mr. Van Damme is to keep the locations and the equipment at
the locations. However, it is contemplated that he will replace the equipment
and arrange for his own licensing of the proprietary technology within six
months. While our equipment is in his possession, he is to pay a flat licensing
and royalty fee of $500 per month per laser. Armin Van Damme is the brother of
Oswaldus Van Dam, one of our current officers and directors.

         OTHMAR VAN DAM. In April 2003, we entered into an employment agreement
with Othmar Van Dam, a former officer and director and founder of Crystalix USA
Group. He is the brother of Oswaldus Van Dam, one of our current officers and
directors. Mr. Van Dam was to serve as our head of Marketing and Development of
Affiliate Sales Locations for a three-year term beginning April 1, 2003 at a
base salary of $120,000. In addition, Mr. Van Dam was to receive a performance
bonus equal to 5% of the gross revenues generated by the Company through its
affiliate locations. In consideration for the employment agreement, Mr. Van Dam
surrendered all of his Class A preferred stock and agreed to reduce his
ownership of common stock to 4.9%. Upon Mr. Van Dam's resignation, his
employment was terminated in May 2003.

         As a result of the settlement agreement described in "Item 3. Legal
Proceedings" above, Othmar Van Dam relinquished all of his stock in the company.

         KEVIN RYAN. In connection with the Lazer-Tek acquisition, we owe Kevin
Ryan, a former creditor of Lazer-Tek, the principal amount of $1,252,680,
consisting of $852,680, which was due April 1, 2003, and $400,000 owed to Kevin
Ryan in quarterly payments beginning April 1, 2003 for consulting fees. Neither
of these obligations has been paid and we are currently in default on these two
obligations. As disclosed in "Item 3. Legal Proceedings," Mr. Ryan has obtained
a Writ of Possession entitling him to all of our assets as of June 2, 2003. We
have agreed to dismiss our complaint against Mr. Ryan with prejudice. The Writ
of Possession is to remain in effect, but the parties have agreed to postpone
all deadlines and trial dates. Mr. Ryan has allowed us to continue operations
and has provided additional financing as described below and in "Item 6.
Management's Discussion and Analysis or Plan of Operation" and "Item 11.
Security Ownership of Certain Beneficial Owners and Management."

         We entered into a consulting agreement with McCary & Rood dated May 28,
2003 under which Kevin Ryan provides advice to the President and CEO of the
company pertaining to all matters including acquisitions, management, marketing,
financial controls and other financial matters; settlement of disputes with
creditors and former officers and directors; relations with affiliates; and
other matters as may be requested by us. The agreement continues until the
earlier of (a) the date on which Kevin Ryan accepts a position as an officer of
the company, or (b) May 27, 2006. Mr. Ryan may terminate this agreement on 14
days notice to us. In the event of any material breach of this agreement by
either party, the other party may cancel this agreement by giving 30 days prior
written notice thereof. If the breach is cured prior to the expiration of the
30-day period, the agreement will not terminate. As compensation for the
satisfactory performance by Mr. Ryan under the agreement, we have agreed to pay
a fee of $20,000 per month that Mr. Ryan performs as determined by us.

         In addition to the two obligations described above, through December
31, 2003, Kevin Ryan had advanced a total of $823,675 to us under a revolving
line of credit agreement dated December 1, 2003. Interest on the outstanding
balance accrues at 10% per annum and is payable monthly. On December 1, 2003, we
entered into a Secured Promissory Note with Kevin Ryan in the amount of
$1,010,000. Interest will accrue on the note at 10% per annum and is payable
monthly. All principal and unpaid accrued interest under the Secured Promissory
Note is due and payable no later than December 1, 2004.


                                       21
<PAGE>


         In December 2003, Rainer Eissing, Marc Janssens, and Oswaldus Van Dam
agreed to transfer a portion of their common stock and Class A preferred stock
to Kevin Ryan, John S. Woodward, and other individuals in consideration of the
continuing financial support and involvement of Messrs. Ryan and Woodward and
these other individuals. The bridge lender with whom we had been negotiating in
October 2003 required Mr. Ryan to agree to subordinate his security interest in
our assets as a condition to the bridge loan. As of the date of this report the
shares of Messrs. Eissing, Janssens, and Van Dam have not been reallocated.

         In addition, Rainer Eissing, John S. Woodward, Marc Janssens, and
Oswaldus Van Dam granted Ryan Capital Management, Inc. an irrevocable proxy to
vote their shares. Ryan Capital Management, Inc. is owned and controlled by
Kevin Ryan. The proxy expires upon the later of (i) December 1, 2004, or (ii) 90
days after repayment in full of all amounts owed by us to the bridge lender,
Kevin Ryan (or assignee), and John S. Woodward (or assignee).

         CONFLICTS OF INTEREST. In accordance with the laws applicable to us,
our directors are required to act honestly and in good faith with a view to our
best interests. In the event that a conflict of interest arises at a meeting of
the board of directors, a director who has such a conflict will disclose the
nature and extent of his interest to the meeting and abstain from voting for or
against the approval of the matter in which he has a conflict.


ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K.

(a)     Exhibits to this Form 10-KSB:

--------------------------------------------------------------------------------
    REGULATION                          EXHIBIT
    S-B NUMBER
--------------------------------------------------------------------------------
       2.1          Stock Purchase Agreement, dated October 4, 2002, between
                    Americabilia.com, Inc. and Crystalix USA Group, Inc. (1)
--------------------------------------------------------------------------------
       2.2          Plan and Agreement of Merger dated November 12, 2002 between
                    Crystalix Group International, Inc., a Florida corporation,
                    and Crystalix Group International, Inc., a Nevada
                    corporation (2)
--------------------------------------------------------------------------------
       2.3          Common Stock Purchase Agreement, dated December 23, 2002,
                    among Crystalix Group International, Inc., Lazer-Tek
                    Designs, Inc., Lazer-Tek Designs, Ltd. and Lena Walther (3)
--------------------------------------------------------------------------------
       3.1          Articles of Incorporation of Crystalix Group International,
                    Inc. (4)
--------------------------------------------------------------------------------
       3.2          Bylaws of Americabilia.com, Inc. (5)
--------------------------------------------------------------------------------
       10.1         Form of Master Equipment Lease and Software License
                    Agreement (4)
--------------------------------------------------------------------------------
       10.2         Patent Sub-License Agreement, dated January 1, 2002, between
                    Laser Design International, LLC and Crystalix USA Group (4)
--------------------------------------------------------------------------------
       10.3         Patent Sub-License Agreement, dated February 17, 1999,
                    between Janesville Group Limited and Lazer-Tek Designs,
                    Ltd. (4)
--------------------------------------------------------------------------------
       10.4         Sub-Lease Agreement, dated December 13, 2001, among Arville
                    & Russell, LLC, Western Window & Door Company and Crystalix
                    USA Group, and amendment thereto (4)
--------------------------------------------------------------------------------
       10.5         Lease Agreement, dated April 5, 2001 between South Tech
                    Hacienda, LLC and Lazer-Tek Designs, Ltd. (4)
--------------------------------------------------------------------------------
       10.6         Promissory note to John S. Woodward dated December 20, 2002
                    (4)
--------------------------------------------------------------------------------


                                       22
<PAGE>



--------------------------------------------------------------------------------
    REGULATION                          EXHIBIT
    S-B NUMBER
--------------------------------------------------------------------------------
       10.7         Promissory note to Kevin Ryan dated December 23, 2002 (4)
--------------------------------------------------------------------------------
       10.8         Bridge Loan Agreement dated October 21, 2003 (6)
--------------------------------------------------------------------------------
       10.9         Revolving Credit Agreement dated as of December 1, 2003 with
                    Kevin Ryan
--------------------------------------------------------------------------------
      10.10         Secured Promissory Note dated December 1, 2003 to Kevin Ryan
--------------------------------------------------------------------------------
      10.11         Consulting Agreement made as of May 28, 2003 with McCary &
                    Rood
--------------------------------------------------------------------------------
      10.12         Irrevocable Proxy Coupled with an Interest granted to Ryan
                    Capital Management, Inc. dated November 26, 2003
--------------------------------------------------------------------------------
       21.1         Subsidiaries of Crystalix Group International, Inc. (4)
--------------------------------------------------------------------------------
       31.1         Rule 13a-14(a) Certification of Chief Executive Officer
--------------------------------------------------------------------------------
       31.2         Rule 13a-14(a) Certification of Chief Financial Officer
--------------------------------------------------------------------------------
       32.1         Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
                    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of
                    Chief Executive Officer
--------------------------------------------------------------------------------
       32.2         Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
                    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of
                    Chief Financial Officer
--------------------------------------------------------------------------------

------------------
(1)     Incorporated by reference to the exhibits to the registrant's current
        report on Form 8-K, filed October 9, 2002.
(2)     Incorporated by reference to the exhibits to the registrant's current
        report on Form 8-K, filed December 4, 2002.
(3)     Incorporated by reference to the exhibits to the registrant's current
        report on Form 8-K, filed December 30, 2002.
(4)     Incorporated by reference to the exhibits to the registrant's annual
        report on Form 10-KSB for the fiscal year ended December 31, 2002.
(5)     Incorporated by reference to the exhibits to the registrant's
        registration statement on Form 10-SB, filed March 3, 2000.
(6)     Incorporated by reference to the exhibits to the registrant's quarterly
        report on Form 10-QSB for the quarter ended September 30, 2003.

(b)  Reports on Form 8-K

None


ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

         For the fiscal years ended December 31, 2003 and 2002, our principal
accountant is expected to bill approximately $125,000 and billed $102,515,
respectively, for the audit of our annual financial statements and review of
financial statements included in our Form 10-QSB filings.


                                       23

<PAGE>

AUDIT-RELATED FEES

         There were no fees billed for services reasonably related to the
performance of the audit or review of our financial statements outside of those
fees disclosed above under "Audit Fees" for fiscal years 2003 and 2002.

TAX FEES

         For the fiscal years ended December 31, 2003 and 2002, our principal
accountant is expected to bill approximately $35,000 and billed $17,500,
respectively, for tax compliance, tax advice, and tax planning services.

ALL OTHER FEES

         There were no fees billed for services by our principal accountant,
other than those disclosed above.

PRE-APPROVAL POLICIES AND PROCEDURES

         Prior to engaging our accountants to perform a particular service, our
board of directors obtains an estimate for the service to be performed. The
audit committee in accordance with procedures for the company approved all of
the services described above.














                                       24

<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                               CRYSTALIX GROUP INTERNATIONAL, INC.



Date:   April 15, 2004         By:  /s/ JOHN S. WOODWARD
                                  ----------------------------------------------
                                      John S. Woodward, President

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

    SIGNATURE                           TITLE                         DATE


/s/ JOHN S. WOODWARD       President and Director (Principal      April 15, 2004
------------------------   executive Officer
John S. Woodward






/s/ RAINER EISSING         Chairman of the Board of Directors     April 15, 2004
------------------------   and Chief Technology Officer
Rainer Eissing






/s/ OSWALDUS VAN DAM       Secretary, Interim Chief Financial     April 15, 2004
------------------------   Officer and Director (Principal
Oswaldus Van Dam           Financial Officer)




/s/ PATTY HILL             Controller                             April 15, 2004
-------------------------
Patty Hill



/s/ MARC JANSSENS          Director                               April 15, 2004
-------------------------
Marc Janssens




                                       25


<PAGE>

              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2003 AND 2002









                                    CONTENTS

                                                                            PAGE

INDEPENDENT AUDITORS' REPORT:
     Report on Audited Consolidated Financial Statements                    F-2

FINANCIAL STATEMENTS:
     Consolidated Balance Sheet as of December 31, 2003                     F-3
     Consolidated Statements of Operations for the years ended
          December 31, 2003 and 2002                                        F-4
     Consolidated Statements of Comprehensive Loss for the years
          ended December 31, 2003 and 2002                                  F-5
     Consolidated Statement of Stockholders' Deficit for the years
          ended December 31, 2003 and 2002                                  F-6
     Consolidated Statements of Cash Flows for the years ended
          December 31, 2003 and 2002                                        F-7
     Notes to Consolidated Financial Statements                       F-8 - F-27










                                      F-1


<PAGE>


                          INDEPENDENT AUDITORS' REPORT

To The Board of Directors and Stockholders of
Crystalix Group International, Inc.
Las Vegas, Nevada

We have audited the accompanying  consolidated  balance sheet of Crystalix Group
International,  Inc. and  Subsidiaries  as of December 31, 2003, and the related
consolidated statements of operations, comprehensive loss, stockholders' deficit
and  cash  flows  for  the  years  ended  December  31,  2003  and  2002.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  consolidated  financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall  consolidated  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
Crystalix Group  International,  Inc. and  Subsidiaries as of December 31, 2003,
and the  consolidated  results  of its  operations  and cash flows for the years
ended  December 31, 2003 and 2002,  in  conformity  with  accounting  principles
generally accepted in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going  concern.  As discussed in Note 1, the
Company  has  incurred a net loss of  $7,433,341,  used cash for  operations  of
$1,166,873  in  the  year  ended  December  31,  2003,  is a  party  to  various
litigation,  has a  stockholders'  deficit of $3,382,628 as of December 31, 2003
and has a working capital  deficit of $6,311,497 as of December 31, 2003.  These
conditions raise  substantial doubt about the Company's ability to continue as a
going concern.  Management's plans in regard to these matters are also described
in Note 1. The consolidated  financial statements do not include any adjustments
that might result from the outcome of this uncertainty.



/s/ Stonefield Josephson, Inc.

CERTIFIED PUBLIC ACCOUNTANTS

Santa Monica, California
February 27, 2004











                                      F-2


<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>

                                                                                     DECEMBER
                                                                                     31, 2003
                                                                                  -------------
<S>                                                                               <C>
                                     ASSETS

CURRENT ASSETS
   Cash and cash equivalents                                                      $     58,881
   Accounts receivable, net of allowance of $260,000                                   504,053
   Inventory                                                                           656,263
   Other current assets                                                                 24,114
                                                                                  -------------
TOTAL CURRENT ASSETS                                                                 1,243,311
                                                                                  -------------

PROPERTY AND EQUIPMENT, net (including equipment
   acquired from related party of $2,300,000 in 2002)                                2,367,112

INTANGIBLE ASSETS
   Licenses and related costs, net of accumulated amortization of $297,580           1,592,321
   Capitalized software costs, net of accumulated amortization of $101,608             224,882
   Website development costs, net of accumulated amortization of $45,843               104,490
   Customer lists and relationships, net of accumulated amortization of $61,305         90,000
   Artwork library, net of accumulated amortization of $298,665                        597,330
   Tradename and trademark, net of accumulated amortization of $3,144                   12,575
                                                                                  -------------
                                                                                     2,621,598
                                                                                  -------------

OTHER ASSETS                                                                            10,273
                                                                                  -------------

TOTAL ASSETS                                                                      $  6,242,294
                                                                                  =============

                     LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
   Accounts payable and accrued expenses                                          $  1,761,094
   Customer deposits                                                                    80,688
   Revolving line of credit - related party                                            823,675
   Notes payable - related parties                                                   3,609,932
   Current portion of notes payable                                                     20,448
   Current portion of deferred revenue                                               1,258,971
                                                                                  -------------
TOTAL CURRENT LIABILITIES                                                            7,554,808
                                                                                  -------------

NOTES PAYABLE, less current portion                                                     68,651

DEFERRED REVENUE, less current portion                                               2,001,463

                                                                                  -------------
TOTAL LIABILITIES                                                                    9,624,922
                                                                                  -------------
COMMITMENTS AND CONTINGENCIES (Note 13)                                                    -
                                                                                  -------------
STOCKHOLDERS' DEFICIT
   Preferred stock - Class A, $0.001 par value; 10,000,000 shares
      authorized; 3,920,000 Class A shares issued and outstanding                        3,920
   Common stock; $0.001 par value; 300,000,000 shares
      authorized; 34,113,192 shares issued and outstanding                              34,113
   Additional paid-in capital                                                        4,364,634
   Other comprehensive loss - foreign currency translation                             (42,311)
   Accumulated deficit                                                              (7,742,984)

                                                                                  -------------
TOTAL STOCKHOLDERS' DEFICIT                                                         (3,382,628)
                                                                                  -------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                       $  6,242,294
                                                                                  =============

</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       F-3
<PAGE>

              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                                   YEAR ENDED
                                                                       ------------------------------------
                                                                           DECEMBER           DECEMBER
                                                                           31, 2003           31, 2002
                                                                       ----------------   -----------------
<S>                                                                    <C>                <C>
REVENUE
    Product sales                                                      $     4,233,846    $      3,428,835
    Lease revenue                                                            1,739,538             714,492
    Royalty revenue                                                            391,121             521,528
                                                                       ----------------   -----------------
TOTAL REVENUE                                                                6,364,505           4,664,855
                                                                       ----------------   -----------------

COST OF REVENUE
    Product sales                                                            2,719,153           1,837,598
    Lease revenue                                                              730,490             409,166
    Royalty revenue                                                            403,064             111,248
                                                                       ----------------   -----------------
TOTAL COST OF REVENUE                                                        3,852,707           2,358,012
                                                                       ----------------   -----------------

                                                                       ----------------   -----------------
GROSS PROFIT                                                                 2,511,798           2,306,843
                                                                       ----------------   -----------------

OPERATING EXPENSES
    Research and development                                                   397,067             416,684
    Payroll and related benefits                                             2,525,318           1,161,673
    General and administrative                                               5,187,854           1,011,142
    Impairment expense                                                         399,113                 -
                                                                       ----------------   -----------------
TOTAL OPERATING EXPENSES                                                     8,509,352           2,589,499
                                                                       ----------------   -----------------

LOSS FROM OPERATIONS                                                        (5,997,554)           (282,656)
                                                                       ----------------   -----------------

OTHER INCOME (EXPENSES):
    Interest income                                                                -                 2,790
    Write off of advances to Vitro Laser GmbH (See Note 13)                   (500,000)                -
    Other expense, net                                                         (27,309)                -
    Interest expense                                                          (908,478)            (14,455)
                                                                       ----------------   -----------------
TOTAL OTHER INCOME (EXPENSE)                                                (1,435,787)            (11,665)
                                                                       ----------------   -----------------

LOSS BEFORE PROVISION FOR INCOME TAXES                                      (7,433,341)           (294,321)

PROVISION FOR INCOME TAXES
    Current                                                                    550,000            (550,000)
    Deferred                                                                  (550,000)            550,000
                                                                       ----------------   -----------------

NET LOSS                                                              $     (7,433,341)   $       (294,321)
                                                                       ================   =================

NET LOSS PER SHARE - BASIC AND DILUTED                                $          (0.19)   $          (0.01)
                                                                       ================   =================

WEIGHTED AVERAGE COMMON EQUIVALENT
    SHARES OUSTANDING - BASIC AND DILUTED                                   39,340,124          26,255,422
                                                                       ================   =================

</TABLE>


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

                                       F-4
<PAGE>

              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES

                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS



NET LOSS                                       $   (7,433,341)    $    (294,321)

FOREIGN CURRENCY TRANSLATION ADJUSTMENT               (41,416)             (895)
                                               ---------------    --------------

COMPREHENSIVE LOSS                             $   (7,474,757)    $    (295,216)
                                               ===============    ==============












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

                                       F-5

<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                       PREFERRED STOCK                                  ADDITIONAL       OTHER
                                                           CLASS A                COMMON STOCK            PAID-IN    COMPREHENSIVE
                                                     SHARES       AMOUNT        SHARES       AMOUNT       CAPITAL        LOSS
                                                  ----------------------------------------------------------------------------------
<S>                                                <C>          <C>          <C>           <C>          <C>           <C>

BALANCE, DECEMBER 31, 2001                         7,000,000    $   7,000     23,300,000   $  23,300    $   (30,200)  $       -

Shares issued for public shell merger transaction                              6,669,192       6,669         (1,669)
Sale of shares through private placement offering                              8,776,000       8,776      1,579,224
Shares issued for acquisition of LazerTek Designs                              1,250,000       1,250      1,123,750
Foreign currency translation adjustment                                                                                     (895)
Net loss

                                                  ------------------------   -------------------------  -------------------------
BALANCE, DECEMBER 31, 2002                         7,000,000        7,000     39,995,192      39,995      2,671,105         (895)

Sale of shares through private placement offering                              1,120,000       1,120        258,880
Shares issued for financing costs                                                660,000         660        527,340
Shares issued for services                                                     2,590,000       2,590      1,342,410
Exchange of shares with former officers for
   Company assets (at cost carryover basis)       (3,080,000)      (3,080)   (10,252,000)    (10,252)      (435,101)
Foreign currency translation adjustment                                                                                  (41,416)
Net loss

                                                  ------------------------   ------------------------   -------------------------
BALANCE, DECEMBER 31, 2003                         3,920,000    $   3,920     34,113,192   $  34,113    $ 4,364,634   $  (42,311)
                                                  ========================   ========================   =========================


<CAPTION>

                                                    ACCUMULATED
                                                      DEFICIT          TOTAL
                                                  -------------------------------
<S>                                                 <C>            <C>

BALANCE, DECEMBER 31, 2001                          $   (15,322)   $     (15,222)

Shares issued for public shell merger transaction                          5,000
Sale of shares through private placement offering                      1,588,000
Shares issued for acquisition of LazerTek Designs                      1,125,000
Foreign currency translation adjustment                                     (895)
Net loss                                               (294,321)        (294,321)

                                                    -----------------------------
BALANCE, DECEMBER 31, 2002                             (309,643)       2,407,562

Sale of shares through private placement offering                        260,000
Shares issued for financing costs                                        528,000
Shares issued for services                                             1,345,000
Exchange of shares with former officers for
   Company assets (at cost carryover basis)                             (448,433)
Foreign currency translation adjustment                                  (41,416)
Net loss                                             (7,433,341)      (7,433,341)

                                                    -----------------------------
BALANCE, DECEMBER 31, 2003                          $(7,742,984)   $  (3,382,628)
                                                    =============================


</TABLE>

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

                                       F-6
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                YEAR ENDED
                                                                     ------------------------------
                                                                        DECEMBER        DECEMBER
                                                                        31, 2003        31, 2002
                                                                     --------------   -------------
<S>                                                                  <C>              <C>
CASH FLOW FROM OPERATING ACTIVITIES:
  Net loss                                                           $  (7,433,341)   $   (294,321)
  Adjustment to reconcile net loss to net cash
    provided by (used in) operating activities
       Depreciation and amortization                                     1,296,786         180,640
       Provision for doubtful accounts                                     156,819         103,181
       Common stock issued for financing costs                             528,000             -
       Common stock issued for services                                  1,345,000             -
       Foreign currency translation adjustment                             (41,416)           (895)
       Loss on disposal of fixed assets                                    243,893             -
       Write off of deferred offering costs                                212,797             -
       Write off of advances to Vitro Laser, Gmbh                          500,000             -
       Write down of customer lists                                        155,220             -
  Changes in operating assets and liabilities:
  (Increase) decrease in:
    Accounts receivable                                                    234,266        (803,584)
    Inventory                                                              508,696        (597,724)
    Other current assets                                                   166,622        (172,348)
    Deposits                                                               (10,273)          1,540
  Increase (decrease) in:
    Accounts payable and accrued expenses                                  991,733        (633,170)
    Customer deposits                                                     (290,276)        335,989
    Deferred revenue                                                       268,601       2,992,333
                                                                     --------------   -------------
Net cash provided by (used in) operating activities                     (1,166,873)      1,111,641
                                                                     --------------   -------------

CASH FLOW FROM INVESTING ACTIVITIES:
  Advances to acquire Vitro Laser, Gmbh                                   (300,000)       (200,000)
  Payments to acquire property and equipment                            (1,390,947)     (2,416,104)
  Net cash acquired from business combination                                  -            18,418
  Payments to acquire intangible assets                                        -          (339,845)
                                                                     --------------   -------------
Net cash used in investing activities                                   (1,690,947)     (2,937,531)
                                                                     --------------   -------------

CASH FLOW FROM FINANCING ACTIVITIES:
  Net advances under revolving line of credit - related party              823,675         (34,850)
  Payments on notes payable                                                (16,754)        (55,129)
  Proceeds from notes payable - related parties                          1,010,000       1,500,000
  Payments on notes payable - related parties                             (152,748)            -
  Payments for deferred offering costs                                    (136,797)        (76,000)
  Proceeds from sale on common stock, including stock
    subscription receivable                                                748,000       1,105,100
                                                                     --------------   -------------
Net cash provided by financing activities                                2,275,376       2,439,121
                                                                     --------------   -------------
NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                                        (582,444)        613,231

CASH AND CASH EQUIVALENTS, Beginning of year                               641,325          28,094
                                                                     --------------   -------------

CASH AND CASH EQUIVALENTS, End of year                               $      58,881    $    641,325
                                                                     ==============   =============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Interest Paid                                                      $       4,023    $      5,195
                                                                     ==============   =============
  Income taxes paid                                                  $         -      $        -
                                                                     ==============   =============

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
  FINANCING ACTIVITIES
  Exchange of net assets to acquire common and Series A
    preferred stock from former officer (see Notes 10, 12 and 13)    $     448,433    $        -
                                                                     ==============   =============
  Purchase of property and equipment for note payable                $         -      $    222,757
                                                                     ==============   =============

</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       F-7
<PAGE>


              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

         ORGANIZATION

         Crystalix Group International,  Inc. (formerly Americabilia.com,  Inc.)
         was  incorporated  under the laws of the State of Florida on August 22,
         1989 as a C-Corporation.  Pursuant to a Stock Purchase  Agreement dated
         October  4,  2002  between  Crystalix  USA  Group,  Inc.  ("CUSA")  and
         Americabilia.com,  Inc.  ("ABIL"),  and a Technology  License Agreement
         between  Crystalix  USA Group,  Inc.  and  Crystalix  Technology,  Inc.
         ("CTI"),  also dated October 4, 2002, the former  shareholders  of CUSA
         and CTI acquired 23,300,000 newly issued shares of common stock of ABIL
         and  7,000,000  shares of ABIL's  Class A preferred  stock with 10 to 1
         limited voting and conversion  rights only. At the date of consummation
         of  these  transactions,   these  shareholders  effectively  controlled
         approximately  77.6% of the issued and outstanding common stock of ABIL
         and  93.7%  of the  voting  control  and  ownership  of  ABIL  assuming
         conversion of the Class A preferred  shares.  Since the shareholders of
         CUSA obtained  control of ABIL,  according to FASB  Statement No. 141 -
         "BUSINESS  COMBINATIONS,"  this  acquisition  has  been  treated  as  a
         recapitalization  for  accounting  purposes,  in a  manner  similar  to
         reverse acquisition accounting. In accounting for this transaction:

            o     CUSA  is deemed to be the purchaser and surviving  company for
                  accounting purposes.  Accordingly, its net assets are included
                  in the  balance  sheet at their historical book values and the
                  results of operations  of  CUSA  have  been  presented for the
                  comparative prior period;

            o     Control  of the  net assets and  business of ABIL was acquired
                  effective October 4, 2002. This transaction has been accounted
                  for as a purchase of the  assets  and  liabilities  of ABIL by
                  CUSA.  The historical cost of the net assets acquired was $0.

         Effective  November  22,  2002,  the ABIL changed its name to Crystalix
         Group  International,  Inc.  On  November  26,  2002,  ABIL merged with
         Crystalix Group International,  Inc., a Nevada corporation, in a merger
         solely for the purpose of redomicile.

         BASIS OF PRESENTATION

         The accompanying  consolidated  financial statements have been prepared
         in conformity  with  accounting  principles  generally  accepted in the
         United States of America, which contemplate continuation of the Company
         as a going concern.  The Company incurred a net loss for the year ended
         December 31, 2003 of $7,433,341,  used cash for operating activities of
         $1,166,873  for the year ended  December  31, 2003 and at December  31,
         2003,  had an accumulated  deficit of $7,742,984 and a working  capital
         deficit of  $6,311,497.  In addition,  the Company is in default on the
         payment  of  certain  note  payable  obligations.  The  Company is also
         involved in various  lawsuits and effective June 2, 2003, Kevin Ryan, a
         senior creditor,  has been granted a Writ of Possession allowing him to
         take  possession of the collateral  (all Company  assets)  securing his
         note (see Note 13). In addition,  Mr. Ryan has an irrevocable  proxy to
         vote the shares of certain controlling officers and stockholders, which
         allow  him  to  vote  approximately  70% of the  Company's  issued  and
         outstanding shares.  These conditions raise substantial doubt as to the
         Company's  ability to continue as a going concern.  These  consolidated
         financial  statements do not include any adjustments  that might result
         from the  outcome of this  uncertainty.  These  consolidated  financial
         statements   do  not   include   any   adjustments   relating   to  the
         recoverability and


                                       F-8
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



         classification of recorded asset amounts, or amounts and classification
         of liabilities  that might be necessary should the Company be unable to
         continue as a going concern.

         The Company plans to take the following  steps that it believes will be
         sufficient  to provide  the  Company  with the  ability to  continue in
         existence.  The Company is  negotiating  with  certain  loan holders to
         extend the  repayment  terms of certain  loans and the  Company is also
         seeking additional capital through the issuance of equity  instruments.
         The Company has changed its senior management and believes that the new
         management  team will be able to  achieve  profitable  operations,  but
         there  can be no  assurance  that  the  Company  will be able to  raise
         sufficient  capital and generate  positive  cash flows from  operations
         sufficient to sustain operations.

         PRINCIPLES OF CONSOLIDATION

         The accompanying consolidated financial statements include the accounts
         of  Crystalix  Group  International,  Inc.  and its wholly  owned legal
         subsidiaries,  Crystalix USA Group,  Inc.,  Crystalix  Imaging  Limited
         (incorporated on October 24, 2002 in Ireland d.b.a.  Crystalix Europe),
         Lazer-Tek  Designs,  Inc. and Lazer-Tek  Designs Ltd  (collectively the
         "Company").  The accompanying  consolidated  financial  statements have
         been  prepared  in  accordance  with  accounting  principles  generally
         accepted in the United  States of America.  All material  inter-company
         accounts and transactions have been eliminated in consolidation.

         LINES OF BUSINESS

         The Company  assembles and leases its LaserMark II equipment,  together
         with its licensed laser  inscription  technology,  to  individuals  and
         privately held businesses throughout the United States.

         Lazer-Tek designs, manufactures and sells laser inscribed gift crystals
         to privately  held  businesses and corporate  customers  throughout the
         United States.

         STOCK BASED COMPENSATION

         SFAS No. 123,  "Accounting for Stock-Based  Compensation,"  establishes
         and encourages the use of the fair value based method of accounting for
         stock-based compensation  arrangements under which compensation cost is
         determined using the fair value of stock-based  compensation determined
         as of the date of grant and is recognized over the periods in which the
         related services are rendered.  The statement also permits companies to
         elect to continue using the current  intrinsic value accounting  method
         specified  in  Accounting  Principles  Board  ("APB")  Opinion  No. 25,
         "Accounting  for Stock Issued to Employees," to account for stock-based
         compensation.  The Company has elected to use the intrinsic value based
         method and has  disclosed  the pro forma effect of using the fair value
         based method to account for its stock-based  compensation.  The Company
         uses the fair value method for options granted to non-employees. If the
         Company had elected to recognize  compensation  expense  based upon the
         fair  value at the grant date for awards  under the Stock  Option  Plan
         consistent  with  the  methodology  prescribed  by SFAS  No.  123,  the
         Company's net loss and loss per share would be reduced to the pro forma
         amounts indicated below for the year ended December 31, 2003 and 2002:


                                       F-9
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


                                                         2003           2002
                                                    -------------   ------------
         Net loss
           As reported                              $ (7,433,341)   $  (294,321)
           Compensation recognized under APB 25                -              -
           Compensation recognized under SFAS 123              -       (240,000)
                                                    -------------   ------------
                      Pro forma                     $ (7,433,341)   $  (534,321)
                                                    =============   ============

         Basic and diluted loss per common share:
           As reported                              $      (0.19)   $     (0.01)
           Pro forma                                $      (0.19)   $     (0.02)

         The fair value for these  options  was  estimated  at the date of grant
         using  a   Black-Scholes   option  pricing  model  with  the  following
         weighted-average assumptions for 2002: risk-free interest rate of 5.5%;
         dividend yields of 0%; volatility  factors of the expected market price
         of the Company's  common stock of 340%; and a weighted average expected
         life of the option of 4.7 years.

         USE OF ESTIMATES

         The preparation of consolidated financial statements in conformity with
         accounting  principles  generally  accepted  in the  United  States  of
         America  requires  management to make  estimates and  assumptions  that
         affect the reported  amounts of assets and  liabilities and disclosures
         of contingent  assets and  liabilities at the date of the  consolidated
         financial  statements and the reported  amounts of revenue and expenses
         during the reporting periods. As of December 31, 2003, the Company used
         estimates in determining  the  realization of its accounts  receivable,
         inventory,  its intangible  assets,  accrued  expenses and the value of
         common stock issued to consultants  for services.  Actual results could
         differ from these estimates.

         FAIR VALUE OF FINANCIAL INSTRUMENTS

         For certain of the Company's  financial  instruments,  including  cash,
         accounts receivable,  inventory, other current assets, accounts payable
         and accrued  expenses,  and customer  deposits,  the  carrying  amounts
         approximate fair value due to their short maturities. The amounts shown
         for notes and loans payable also approximate fair value because current
         interest  rates and terms  offered to the Company for similar  debt are
         substantially the same.

         CASH AND CASH EQUIVALENTS

         For purposes of the statements of cash flows,  the Company defines cash
         equivalents  as all highly  liquid debt  instruments  purchased  with a
         maturity of three months or less, plus all certificates of deposit.

         CONCENTRATION OF CREDIT RISK

         Financial  instruments,   which  potentially  subject  the  Company  to
         concentrations   of  credit   risk,   consist  of  cash  and   accounts
         receivables.  The Company  places its cash with high quality  financial
         institutions and at times may exceed the FDIC $100,000 insurance limit.
         The Company  extends  credit based on an evaluation  of the  customer's
         financial condition,  generally without collateral.  Exposure to losses
         on receivables is principally  dependent on each  customer's

                                       F-10
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



         financial  condition.  The Company  monitors  its  exposure  for credit
         losses and maintains allowances for anticipated losses, as required.

         INVENTORY

         Inventory,  consisting  primarily  of solid  blank glass  cubes,  laser
         inscribed gift crystals and related  accessories  and electronic  parts
         and accessories, are valued at the lower of cost (first-in,  first-out)
         or market.

         PROPERTY AND EQUIPMENT

         Property  and   equipment   consisting  of   improvements,   machinery,
         equipment,  computers, furniture and fixtures are recorded at cost, and
         are  depreciated  using the  straight-line  method over their estimated
         useful lives.  Expenditures  for maintenance and repairs are charged to
         earnings  as  incurred;   additions,   renewals  and   betterments  are
         capitalized.  When  property  and  equipment  are retired or  otherwise
         disposed of, the related cost and accumulated  depreciation are removed
         from  the  respective  accounts,  and any gain or loss is  included  in
         operations. A summary of the estimated useful lives is as follows:

                     DESCRIPTION                         USEFUL LIFE

              Machinery and equipment                     5-7 years
              Vehicles                                      5 years
              Furniture and fixtures                        5 years
              Computers and software                      3-5 years


         IMPAIRMENT OF LONG-LIVED ASSETS

         In  October  2001,  the FASB  issued  SFAS  No.  144,  "Accounting  for
         Impairment of Disposal of Long-Lived Assets", which supersedes SFAS No.
         121,  "Accounting  for the  Impairment  of  Long-Lived  Assets  and for
         Long-Lived  Assets to Be Disposed Of", and the accounting and reporting
         provision   of  APB   Opinion   No.   30,"Reporting   the   Results  of
         Operations-Reporting  the  Effects  of  Disposal  of  a  Segment  of  a
         Business, and Extraordinary,  Unusual and Infrequently Occurring Events
         and  Transactions",  for the disposal of a segment of a business.  This
         statement also amends ARB No. 51, "Consolidated  Financial Statements",
         to eliminate the exception to consolidation  for a subsidiary for which
         control is likely to be impaired. SFAS No. 144 requires that long-lived
         assets  to be  disposed  of by sale,  including  those of  discontinued
         operations,  be measured at the lower of carrying  amount or fair value
         less cost to sell,  whether  reported in  continuing  operations  or in
         discontinued  operations.  SFAS  No.  144  broadens  the  reporting  of
         discontinued  operations  to include all  components  of an entity with
         operations  that can be  distinguished  from the rest of the entity and
         that will be eliminated from the ongoing  operations of the entity in a
         disposal  transaction.  SFAS No. 144 also establishes a "primary-asset"
         approach to determine  the cash flow  estimation  period for a group of
         assets and  liabilities  that  represents  the unit of accounting for a
         long-lived  asset to be held and used.  This statement is effective for
         fiscal years beginning after December 15, 2001. The Company's  adoption
         did not have a material impact to the Company's  financial  position or
         results of operations.


                                       F-11
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


         INTANGIBLE ASSETS

         Intangible  assets consist of product and laser  licenses,  capitalized
         software  costs,  website  development  costs,  artwork and copyrights,
         trademarks,  trade names,  customer  lists and  relationships  and were
         mostly acquired with the purchase of Laser-Tek. In accordance with SFAS
         No. 142, "Goodwill and Other Intangible  Assets," the Company evaluates
         intangible assets and other long-lived assets for impairment,  at least
         on an annual  basis and  whenever  events or changes  in  circumstances
         indicate  that  the  carrying  value  may not be  recoverable  from its
         estimated future cash flows.  Recoverability  of intangible  assets and
         other  long-lived  assets is measured by comparing their net book value
         to the related  projected  undiscounted  cash flows from these  assets,
         considering  a number of  factors  including  past  operating  results,
         budgets,  economic  projections,  market trends and product development
         cycles.  If the  net  book  value  of the  asset  exceeds  the  related
         undiscounted cash flows, the asset is considered impaired, and a second
         test  is   performed  to  measure  the  amount  of   impairment   loss.
         Amortization  is  computed  using  the  straight-line  method  over the
         estimated useful life of the assets (3-10 years) as follows:

                                                             USEFUL LIFE
               Licenses and related costs                      10 years
               Artwork library                                  3 years
               Customer lists and relationships                 5 years
               Capitalized software                             3 years
               Website development costs                        3 years
               Trade name and trademark                         5 years

         For the year  ended  December  31,  2003,  the  Company  recognized  an
         impairment   loss  on  customer   lists  by  $155,220  (See  Note  14).
         Amortization  expense  amounted  to  $689,745  and $7,300 for the years
         ended December 31, 2003 and 2002,  respectively.  Amortization  expense
         for the years ended  December 31, 2004,  2005,  2006,  2007 and 2008 is
         estimated to be $686,663,  $651,097,  $197,215,  $185,724 and $182,580,
         respectively.

         WEBSITE DEVELOPMENT COSTS

         The Company  accounts for the costs of computer  software  developed or
         obtained  for  internal  use in  accordance  with EITF 00-2 -  "WEBSITE
         COSTS" and  Statement of Position  98-1,  "ACCOUNTING  FOR THE COSTS OF
         COMPUTER SOFTWARE  DEVELOPED OR OBTAINED FOR INTERNAL USE." The Company
         capitalizes   costs  of   materials,   consultants,   and  payroll  and
         payroll-related costs for employees incurred in developing internal-use
         computer  software.  Amortization  is computed using the  straight-line
         method over the  estimated  useful  life of the asset (3 years).  Costs
         incurred during the preliminary project and post-implementation  stages
         are charged to research and development expense.

         CAPITALIZED SOFTWARE COSTS

         The Company  capitalizes  costs incurred for the production of computer
         software that generates the  functionality  within its laser  equipment
         units.  Capitalized costs include direct labor and related overhead for
         software  produced by the  Company  and the cost of software  purchased
         from third  parties.  All costs in the  software  development  process,
         which are  classified  as research  and  development,  are  expensed as
         incurred until technological feasibility has been established ("beta").
         Once  technological  feasibility has been  established,  such costs are
         capitalized  until the  software  has  completed  beta  testing  and is
         available for mass-marketing.  Amortization, a cost of


                                       F-12
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


         revenue,  will be provided  on a  product-by-product  basis,  using the
         straight-line  method, not to exceed three years,  commencing the month
         after the date of product release.  Quarterly,  the Company reviews and
         expenses  the  unamortized  cost of any  feature  identified  as  being
         impaired.   The  Company  also  reviews  recoverability  of  the  total
         unamortized  cost of all features and software  products in relation to
         estimated  service and  relevant  cash flows from  revenues  and,  when
         necessary,  makes an appropriate  adjustment to net  realizable  value.
         Amortization  is  computed  using  the  straight-line  method  over the
         estimated useful life of the asset (3 years).

         REVENUE RECOGNITION

         LEASE REVENUE
         The  Company  enters  into  licensing  agreements  to lease  its  laser
         equipment  and  its  licensed   laser   inscription   technology   with
         individuals and businesses who open retail establishments to sell laser
         inscribed crystal blocks.  The terms of these licensing  agreements are
         typically  for five years.  The lease  payments  are paid in one or two
         installments,  generally  upfront,  and the  Company  recognizes  lease
         revenue ratably over the term of the contract.

         PRODUCT SALES
         Revenue from the sale of laser  inscribed  products are recognized when
         title  to  the  products  are  transferred  to the  customer  (customer
         acceptance  for  custom  designed  crystals)  and only when no  further
         contingencies or material  performance  obligations are warranted,  and
         thereby have earned the right to receive and retain reasonably  assured
         payments for products sold and delivered.

         Revenue from the sale of glass cube products is  recognized  when title
         to the products are transferred to the customer-lessee  (upon shipment)
         and  only  when  no  further   contingencies  or  material  performance
         obligations are warranted, and thereby have earned the right to receive
         and retain reasonably assured payments for products sold and delivered.

         ROYALTY REVENUE
         The  Company  also  recognizes   royalty  revenue  from  licensing  its
         technology,  only when earned with no further contingencies or material
         performance  obligations  are  warranted,  and thereby  have earned the
         right to receive and retain reasonably  assured payments.  During 2003,
         the Company changed its estimation of computing and recognizing royalty
         revenues to only upon collection.


         DEFERRED REVENUE
         Deferred revenue represent amounts received as non-refundable  payments
         upon the  signing  of the  licensing  agreements  and  delivery  of the
         LaserMark II equipment,  for which,  revenue is  recognizable  over the
         term of the  agreement  (See Lease  Revenue).  Deposits  received  from
         potential customers/lessees, who have not yet received the LaserMark II
         equipment or products,  are  accounted  as  refundable  customer-lessee
         deposits.


         ADVERTISING AND MARKETING COSTS

         The Company  expenses  advertising  and  marketing  costs as  incurred.
         Advertising and marketing expense for the years ended December 31, 2003
         and 2002 amounted to $125,507 and $36,810, respectively.


                                       F-13
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


         INCOME TAXES

         The Company  accounts for income taxes in accordance with SFAS No. 109,
         "Accounting  for Income  Taxes."  Deferred  taxes are  provided  on the
         liability  method  whereby  deferred  tax  assets  are  recognized  for
         deductible  temporary  differences,  and deferred tax  liabilities  are
         recognized for taxable temporary differences. Temporary differences are
         the differences  between the reported amounts of assets and liabilities
         and their tax bases.  Deferred  tax assets are  reduced by a  valuation
         allowance  when, in the opinion of  management,  it is more likely than
         not  that  some  portion  or all of the  deferred  tax  assets  will be
         realized.  Deferred  tax assets and  liabilities  are  adjusted for the
         effects of changes in tax laws and rates on the date of enactment.

         EARNINGS (LOSS) PER SHARE

         The Company  reports  earnings (loss) per share in accordance with SFAS
         No. 128,  "Earnings  per  Share."  Basic  earnings  (loss) per share is
         computed by dividing income (loss) available to common  shareholders by
         the  weighted  average  number  of  common  shares  available.  Diluted
         earnings (loss) per share is computed  similar to basic earnings (loss)
         per share  except  that the  denominator  is  increased  to include the
         number of additional  common shares that would have been outstanding if
         the  potential  common  shares had been  issued  and if the  additional
         common shares were dilutive.  Diluted earnings (loss) per share has not
         been presented since the effect of the assumed  exercise of options and
         warrants to purchase common shares would have an anti-dilutive  effect.
         There were 0 and 3,000,000 common equivalent shares for the years ended
         December 31, 2003 and 2002, respectively.

         SEGMENT INFORMATION

         The Company follows the provisions of SFAS No. 131,  "Disclosures about
         Segments of an Enterprise and Related  Information."  SFAS 131 requires
         public companies to report financial and descriptive  information about
         their  reportable  operating  segments.   The  Company  identifies  its
         operating  segments  based  on  how  management   internally  evaluates
         separate financial information (if available),  business activities and
         management  responsibility.  The  management  believes it operates in a
         single  business  segment.  During the year ended  December  31,  2003,
         Crystalix Europe had net sales of $327,050,  operating loss of $313,148
         and net loss of $316,564.  During the period since inception on October
         24,  2002 to  December  31,  2002,  Crystalix  Europe  had net sales of
         $50,200, operating loss of $32,300 and net loss of $32,500.

         COMPREHENSIVE LOSS

         SFAS No. 130, "Reporting Comprehensive Loss," establishes standards for
         the reporting and display of comprehensive income and its components in
         the  financial  statements.  For the year ended  December  31, 2003 and
         2002, the foreign currency translation  adjustment has been included in
         the consolidated  statement of stockholders' deficit showing the change
         in comprehensive loss.

         RESEARCH AND DEVELOPMENT

         Research and development costs are expensed as incurred.


                                       F-14
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



         RECLASSIFICATION

         Certain  reclassifications  have  been  made to the  2002  balances  to
         conform to the 2003 presentation.

         RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         During April 2003,  the FASB issued SFAS 149 - "Amendment  of Statement
         133 on Derivative  Instruments and Hedging  Activities",  effective for
         contracts  entered into or modified after September 30, 2003, except as
         stated below and for hedging  relationships  designated after September
         30, 2003. In addition,  except as stated below,  all provisions of this
         Statement were applied prospectively.  The provisions of this Statement
         that relate to Statement 133 Implementation  Issues that were effective
         for fiscal  quarters that began prior to June 15, 2003, were applied in
         accordance  with  their   respective   effective  dates.  In  addition,
         paragraphs 7(a) and 23(a),  which relate to forward  purchases or sales
         of when-issued  securities or other  securities  that do not yet exist,
         should be applied to both existing  contracts and new contracts entered
         into after September 30, 2003. The Company does not participate in such
         transactions and accordingly,  the adoption of FASB 149 did not have an
         impact on the Company's consolidated financial statements.

         During May 2003,  the FASB  issued SFAS 150 -  "Accounting  for Certain
         Financial  Instruments  with  Characteristics  of both  Liabilities and
         Equity",  effective for financial  instruments entered into or modified
         after May 31, 2003,  and otherwise is effective for public  entities at
         the  beginning of the first  interim  period  beginning  after June 15,
         2003. This Statement 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
         freestanding  financial  instrument  that  is  within  its  scope  as a
         liability  (or  an  asset  in  some   circumstances).   Many  of  those
         instruments  were  previously   classified  as  equity.   Some  of  the
         provisions of this Statement are consistent with the current definition
         of liabilities in FASB Concepts  Statement No. 6, Elements of Financial
         Statements.  The  Company  has  adopted  FASB 150 which did not have an
         impact on the Company's consolidated financial statements.

         In January 2003, the FASB issued  Interpretation No. 46, "Consolidation
         of Variable Interest Entities."  Interpretation 46 changes the criteria
         by which  one  company  includes  another  entity  in its  consolidated
         financial  statements.  Previously,  the criteria were based on control
         through voting interest. Interpretation 46 requires a variable interest
         entity to be  consolidated by a company if that company is subject to a
         majority  of the  risk of loss  from  the  variable  interest  entity's
         activities  or entitled to receive a majority of the entity's  residual
         returns or both. A company that consolidates a variable interest entity
         is called the primary  beneficiary  of that entity.  The  consolidation
         requirements  of   Interpretation  46  apply  immediately  to  variable
         interest  entities  created after January 31, 2003.  The  consolidation
         requirements  apply to  other  entities  in the  first  fiscal  year or
         interim  period  beginning  after  December  15,  2003.  Certain of the
         disclosure  requirements apply in all financial statements issued after
         January 31, 2003,  regardless of when the variable  interest entity was
         established.  In December  2003,  the FASB  concluded to revise certain
         elements  of FIN 46,  which  will be  issued  shortly.  The  FASB  also
         modified  the  effective  date of FIN 46.  For all  entities  that were
         previously  considered  special  purpose  entities,  FIN 46  should  be
         applied in periods ending after December 15, 2003. Otherwise, FIN 46 is
         to be applied for registrants  who file under  Regulation SX in periods
         ending  after  March  15,  2004,  and for  registrants  who file  under
         Regulation  SB, in periods  ending after December 15, 2004. The



                                       F-15
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


         Company does not expect the  adoption to have a material  impact on the
         Company's consolidated financial position or results of operations.

         In January 2003, the FASB issued  Interpretation No. 46, "Consolidation
         of  Variable  Interest   Entities"  (an  interpretation  of  Accounting
         Research  Bulletin (ARB) No. 51,  Consolidated  Financial  Statements).
         Interpretation  46 addresses  consolidation by business  enterprises of
         entities to which the usual  condition  of  consolidation  described in
         ARB-51 does not apply. The Interpretation changes the criteria by which
         one  company  includes  another  entity in its  consolidated  financial
         statements.  The general  requirement  to  consolidate  under ARB-51 is
         based  on the  presumption  that an  enterprise's  financial  statement
         should  include  all of the  entities  in  which  it has a  controlling
         financial interest (i.e., majority voting interest).  Interpretation 46
         requires a variable  interest  entity to be  consolidated  by a company
         that does not have a majority voting  interest,  but  nevertheless,  is
         subject to a majority  of the risk of loss from the  variable  interest
         entity's  activities  or entitled to receive a majority of the entity's
         residual  returns  or both.  A company  that  consolidates  a  variable
         interest entity is called the primary beneficiary of that entity.

         In December 2003, the FASB concluded to revise certain  elements of FIN
         46,  primarily  to clarify the  required  accounting  for  interests in
         variable interest entities. FIN-46R replaces FIN-46, that was issued in
         January 2003.  FIN-46R exempts certain  entities from its  requirements
         and provides for special  effective  dates for entities that have fully
         or  partially  applied  FIN-46 as of  December  24,  2003.  In  certain
         situations, entities have the option of applying or continuing to apply
         FIN-46 for a short period of time before applying FIN-46R.  In general,
         for all  entities  that  were  previously  considered  special  purpose
         entities,  FIN 46 should be  applied  for  registrants  who file  under
         Regulation  SX  in  periods  ending  after  March  31,  2004,  and  for
         registrants  who file  under  Regulation  SB, in periods  ending  after
         December 15,  2004.  The Company does not expect the adoption to have a
         material  impact on the  Company's  financial  position  or  results of
         operations.

         In December 2003,  the FASB issued a revised SFAS No. 132,  "Employers'
         Disclosures  about Pensions and Other  Postretirement  Benefits"  which
         replaces  the  previously  issued  Statement.   The  revised  Statement
         increases the existing  disclosures  for defined  benefit pension plans
         and other defined benefit  postretirement  plans.  However, it does not
         change the  measurement or recognition of those plans as required under
         SFAS No.  87,  "Employers'  Accounting  for  Pensions,"  SFAS  No.  88,
         "Employers'  Accounting for  Settlements  and  Curtailments  of Defined
         Benefit Pension Plans and for Termination  Benefits," and SFAS No. 106,
         "Employers'   Accounting   for   Postretirement   Benefits  Other  Than
         Pensions."  Specifically,  the revised Statement  requires companies to
         provide  additional  disclosures  about  pension plan  assets,  benefit
         obligations,  cash flows,  and benefit costs of defined benefit pension
         plans and other defined benefit  postretirement  plans. Also, companies
         are required to provide a breakdown of plan assets by category, such as
         debt, equity and real estate,  and to provide certain expected rates of
         return and target  allocation  percentages for these asset  categories.
         The Company has implemented this  pronouncement  and has concluded that
         the  adoption  has no  material  impact to the  consolidated  financial
         statements.

                                       F-16
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


NOTE 2 - ACQUISITIONS

         On December 23, 2002, Crystalix Group International, Inc. acquired 100%
         of  the  outstanding  common  stock  of  Lazer-Tek  Designs,  Inc.  and
         Lazer-Tek Designs, Ltd., in exchange for 1,250,000 shares of its common
         stock valued at $1,125,000 (See Note 10) and an acquisition  consulting
         fee  obligation  of $400,000  (See Note 8), for an  aggregate  purchase
         price of $1,525,000. In addition,  Crystalix Group International,  Inc.
         loaned  $1,000,000 to Lazer-Tek to repay existing debt, all of which is
         eliminated in consolidation.

         This  acquisition  was  accounted  for  using  the  purchase  method of
         accounting under FASB 141 - "BUSINESS  COMBINATIONS,"  and accordingly,
         the  purchase   price  was  allocated  to  the  assets   purchased  and
         liabilities   assumed  based  upon  their   estimated  fair  values  as
         determined by  management,  upon reliance on an  independent  valuation
         report,  on the date of acquisition,  which  approximated a net of $3.2
         million.  The excess of fair value of acquired net assets over the cost
         of $1.7 million has been  allocated as a pro rata  reduction of all the
         acquired assets (excluding  financial assets,  assets to be disposed of
         by sale, deferred tax asset, pension or other  post-retirement  benefit
         plans and any other current assets).

         The operating  results of the acquisition are included in the Company's
         consolidated results of operations from December 23, 2002.

NOTE 3 - INVENTORY

         Inventory at December 31, 2003, consist of the following:

            Glass blocks, pre-made images and related products     $     349,165
            Electronic parts and accessories                             307,098
                                                                   -------------
                                                                   $     656,263
                                                                   =============

NOTE 4 - PROPERTY AND EQUIPMENT

         Property and equipment at December 31, 2003, consist of the following:

            Equipment under operating leases as lessor             $   1,981,450
            Computers and equipment                                      640,716
            Vehicles                                                     132,820
            Furniture and fixtures                                       113,835
            Leasehold improvements                                        32,188
                                                                    ------------
                                                                       2,901,009
            Less accumulated depreciation and amortization               533,897
                                                                    ------------
                                                                    $  2,367,112
                                                                    ============

         Depreciation expense for the years ended December 31, 2003 and 2002 was
         $607,041 and $173,340, respectively. During the year ended December 31,
         2003,  the Company  recognized a loss on disposal of certain  assets of
         $243,893 (see Note 14).


                                       F-17
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

         Accounts payable and accrued expenses at December 31, 2003,  consist of
         the following:

            Accounts payable - trade (including $140,000 to a
              related party)                                        $    567,085
            Royalties payable                                            327,516
            Accrued interest                                             331,761
            Accrued legal                                                369,653
            Other accrued expenses                                       165,079
                                                                    ------------
                                                                    $  1,761,094
                                                                    ============

NOTE 6 - DEFERRED REVENUE

         Deferred revenue represent amounts received as non-refundable  payments
         upon the  signing  of the  licensing  agreements  and  delivery  of the
         LaserMark  II  equipment,   for  which,   the  lease  revenue  will  be
         recognizable over the term of the agreement.

         The  following  table  summarizes  the annual  estimated  revenue to be
         recognized from deferred revenue, as of December 31, 2003:

               Year ending December 31,
                   2004                                 $     1,258,971
                   2005                                         797,804
                   2006                                         686,723
                   2007                                         463,440
                   2008                                          53,496
                                                        ----------------
                                                              3,260,434
               Less current portion                          (1,258,971)
                                                        ----------------
               Long-term portion                        $     2,001,463
                                                        ================

NOTE 7 - REVOLVING LINE OF CREDIT - RELATED PARTY

         On  December  1, 2003,  the Company  entered  into a 1-year,  revolving
         credit  agreement  with Mr. Kevin Ryan that provides for the Company to
         borrow,  from time to time,  up to  $1,000,000  (Note 1).  Interest  is
         accrued at 10% of the outstanding  balance and is payable  monthly.  At
         December  31,  2003,  the  Company  had  borrowed  $823,675  under this
         revolving line of credit. (See also Note 15)


                                       F-18
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


NOTE 8 - NOTES PAYABLE - RELATED PARTIES

         Notes  payable - related  parties at December 31, 2003  consists of the
         following:

<TABLE>
<CAPTION>
<S>                                                                                    <C>
               Note payable, related party, secured by all capital stock
                 of Lazer-Tek, with unpaid principal due by January 20,
                 2004, interest due monthly at 13.5% per annum. The
                 amount was not paid and is currently  in default.                     $     1,347,252

               Notes payable, former creditor of Lazer-Tek, secured by
                 assets of Crystalix, unpaid principal and interest was due by
                 April 1, 2003 with interest at 10% per annum (default interest
                 rate of 18% per annum).  This amount was not paid and
                 is currently in default (see Note 13)                                         852,680

               Note payable, related party, unsecured, payable in four quarterly
                 payments starting on April 1, 2003 of $100,000 each with no interest.
                 This note arose from the acquisition of Lazer-Tek.  This amount
                 was not paid and is currently in default                                      400,000

               Note payable, related party, secured by the assets of the Company,
                 interest accrues at 10% per annum; principal and accrued interest
                 due on December 1, 2004                                                     1,010,000
                                                                                       ----------------

                                                                                             3,609,932
               Less current portion                                                         (3,609,932)
                                                                                       ----------------
               Long-term portion                                                       $             -
                                                                                       ================
</TABLE>

         Interest  expense,  under all  obligations,  amounted to  $908,478  and
         $14,236 for the years ended December 31, 2003 and 2002, respectively.

NOTE 9 - NOTE PAYABLE

         Notes payable bear interest at a rate of 11% per annum,  secured by two
         automobiles  and payable in aggregate  monthly  installments  of $2,050
         (principal and interest) by September 2007.

         The following  table  summarizes the aggregate  maturities of the notes
         payable as of December 31, 2003:

               Year ending December 31,
                   2004                                 $        20,448
                   2005                                          22,650
                   2006                                          25,091
                   2007                                          20,910
                                                        ----------------
                                                                 89,099
               Less current portion                             (20,448)
                                                        ----------------
               Long-term portion                        $        68,651
                                                        ================


                                       F-19
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


NOTE 10 - STOCKHOLDERS' DEFICIT

         STOCK ISSUED FOR ACQUISITION OF CRYSTALIX USA GROUP, INC.

         Pursuant to a Stock  Purchase  Agreement  dated October 4, 2002 between
         Crystalix USA Group, Inc. and Americabilia.com,  Inc., and a Technology
         License  Agreement  between  Crystalix  USA Group,  Inc. and  Crystalix
         Technology,  Inc., also dated October 4, 2002, the former  shareholders
         of CUSA and CTI acquired 23,300,000 newly issued shares of common stock
         of ABIL and 7,000,000  shares of ABIL's Class A preferred stock with 10
         to 1 limited voting and conversion rights.  These preferred shares only
         have  voting  and  conversion  rights in the event of sale or change in
         control  of  the  Company.   At  the  date  of  consummation  of  these
         transactions,  these shareholders  effectively controlled approximately
         77.6% of the issued and  outstanding  common stock of ABIL and 93.7% of
         the voting  control and  ownership of ABIL  assuming  conversion of the
         Class A  preferred  shares.  Since the  shareholders  of CUSA  obtained
         control  of ABIL,  according  to FASB  Statement  No.  141 -  "BUSINESS
         COMBINATIONS,"  this acquisition has been treated as a recapitalization
         for accounting  purposes,  in a manner  similar to reverse  acquisition
         accounting.  As  such,  the  23,300,000  common  shares  and  7,000,000
         preferred shares have been presented on the  accompanying  Consolidated
         Statement of Stockholders' Equity as if the issuance had occurred as of
         the  beginning  of the earliest  period  presented.  In  addition,  the
         previously issued and outstanding  6,669,192 common shares of ABIL have
         been presented as an acquisition issuance as of the date of the reverse
         acquisition.

         COMMON STOCK ISSUED IN PRIVATE PLACEMENTS

         On October 9, 2002, the Board of Directors of the Company  approved and
         initiated  a  private   placement   offering  (the   "October   Private
         Placement") of 8,600,000 of the Company's  Rule 144  restricted  common
         stock  at an  average  offering  price of $0.17  per  share,  on a best
         efforts basis.  The Private  Placement was exempt from the registration
         provisions of the  Securities  and Exchange  Commission Act of 1933 and
         Rule 506 of Regulation D. The Company sold 8,600,000  common shares for
         net proceeds of $1,500,000, of which, $400,000 was collected in January
         2003.

         On November  26, 2002,  the Board of Directors of the Company  approved
         and initiated another private placement offering (the "November Private
         Placement")  of the Company's  Rule 144  restricted  common stock at an
         average offering price of $0.50 per share, on a best efforts basis. The
         Private  Placement was exempt from the  registration  provisions of the
         Securities  and  Exchange  Commission  Act  of  1933  and  Rule  506 of
         Regulation D. As of December 31, 2002,  the Company sold 176,000 shares
         for proceeds of $88,000, all of which was collected in January 2003. In
         January 2003, the Company sold an additional  120,000 common shares for
         proceeds of $60,000.  Also in March 2003,  the Company  sold  1,000,000
         shares for proceeds of  $200,000.  The Company did not incur or pay any
         offering costs.

         COMMON STOCK ISSUED FOR  ACQUISITION  OF  LAZER-TEK  DESIGNS,  INC. AND
         LAZER-TEK DESIGNS, LTD

         On December  23,  2002,  the  Company  issued  1,250,000  shares of the
         Company's  common  stock to  acquire  Lazer-Tek,  valued  at a total of
         $1,125,000  using the Company's  trading price as of December 23, 2002.
         Pursuant to the agreement,  these shares had registration  rights until
         April 30,  2003.  The Company  has no  obligation  beyond a  reasonable
         effort to have these shares registered.



                                       F-20
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


         COMMON STOCK ISSUED FOR SERVICES AND FINANCING COSTS

         During the first quarter of 2003,  the Company issued 660,000 shares of
         its common stock,  as  consideration  to the holder of the $1.5 million
         loan payable for extending the repayment  terms. The shares were valued
         at their  fair  market  value of  $528,000  and  included  in  interest
         expense.  The Company also issued  2,340,000 shares of its common stock
         for  services  rendered  that  were  valued at a fair  market  value of
         $1,170,000.

         During the fourth quarter of 2003, the Company issued 250,000 shares of
         its common stock to three consultants.  The shares were valued at their
         fair market value of $175,000 which was  determined  using the value of
         the Company's stock at the date the consulting agreements were signed.


         SHARES OF COMMON AND PREFERRED STOCK EXCHANGED FOR CERTAIN ASSETS

         During the second quarter of 2003, in accordance with an agreement with
         a former officer, the Company canceled 5,126,000 shares of common stock
         and  1,540,000  shares  of Class A  preferred  stock  owned by a former
         officer of the Company in exchange  for the  Company  transferring  the
         ownership to four retail store locations in Las Vegas, Nevada that were
         previously  owned by the  Company(See  Note 12) Since this  transaction
         occurred with a related party, the cost carryover basis of $237,826 was
         used and no gain or loss was recognized from this transaction.

         During the fourth quarter of 2003, in accordance with an agreement with
         a former officer, the Company canceled 5,126,000 shares of common stock
         and  1,540,000  shares  of Class A  preferred  stock  owned by a former
         officer of the Company in exchange  for the  Company  transferring  the
         ownership of certain laser  equipment  located on cruise ships that was
         previously  owned by the Company (See Note 12). Since this  transaction
         occurred with a related party, the cost carryover basis of $210,607 was
         used and no gain or loss was recognized from this transaction.

         STOCK OPTION PLAN

         The Company  does not have a formal stock  option  plan,  however,  the
         Board of  Directors  and the  management  may grant  options to acquire
         common  stock of the  Company  ("Options").  Options  may be  issued to
         directors, executives, key employees and consultants providing valuable
         services to the Company.  The Board of Directors and management  select
         recipients  to whom options are granted,  and  determine  the number of
         shares  to be  granted.  Options  granted  are  exercisable  at a price
         determined  by the Board of  Directors  and  management  at the time of
         grant,  but in no event  less  than fair  market  value.  During  2002,
         3,000,000  options  had been  granted  to  certain  key  employees  and
         management at an exercise price of $0.25 per share underlying the stock
         option  when the  trading  price as of the date of grant  was $0.16 per
         share.



                                       F-21
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


         The following is table summarizes the options outstanding:

                                                 WEIGHTED-
                                                   STOCK           AVERAGE
                                                  OPTION          EXERCISE
                                                   PLAN             PRICE

             Balance, December 31, 2001                   -       $     -
                Granted                           3,000,000       $   0.25
                                                 -----------

             Balance, December 31, 2002           3,000,000       $   0.25
                Canceled                         (3,000,000)      $   0.25
                                                 -----------

             Balance, December 31, 2003                   -       $     -
                                                 ===========
             Exercisable, December 31, 2003               -       $     -
                                                 ===========

         In  connection  with the  exchange  of common and  preferred  stock for
         certain  assets of the Company and the  resignation  of certain  former
         officers of the Company (See Notes 10, 12 and 13), 1,600,000 options to
         purchase shares of the Company's  common stock for $0.25 per share were
         canceled.  Also,  in 2003,  the remaining  1,400,000  options were also
         canceled.

NOTE 11 - INCOME TAXES

         Deferred  income  taxes  reflect  the  net  tax  effects  of  temporary
         differences  between the carrying amounts of assets and liabilities for
         financial  statement  purposes  and the  amounts  used for  income  tax
         purposes.   Significant   components  of  the  Company's  deferred  tax
         liabilities and assets as of December 31, 2003 are as follows:

            Deferred tax assets:
               Net operating loss                               $     1,680,000
               Deferred revenue                                       1,100,000
               Stock issued for services and financing costs            577,000
               Advances to Crystalix Europe                             136,000
               Allowance for doubtful accounts                           68,000
                                                                ----------------
                                                                      3,561,000
            Deferred tax liabilities:
               Step-up of basis of intangible assets                   (779,000)
               Depreciation of property and equipment                  (508,000)
               Other basis differences for assets acquired             (251,000)
                                                                ----------------
                                                                     (1,538,000)
                                                                ----------------
               Net deferred tax asset                                 2,023,000
               Less valuation allowance                              (2.023,000)
                                                                ----------------

                                                                $            --
                                                                ================

         At December  31,  2003,  the Company  had  federal net  operating  loss
         ("NOL") carryforwards of approximately $5,100,000.  Federal NOLs could,
         if unused, begin to expire in 2018.


                                       F-22
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


         The valuation allowance increased by $1,272,000 during 2003.

         The  reconciliation  of the  effective  income tax rate to the  federal
         statutory  rate for the years  ended  December  31, 2003 and 2002 is as
         follows:

                                                          2003            2002
                                                        --------        --------
               Federal income tax rate                   (34.0%)         (34.0%)
               State tax, net of federal benefit           --              --
               Loss for which no federal benefit was
                   received                               34.0%           34.0%
                                                        --------        --------
               Effective income tax rate                   0.0%            0.0%
                                                        ========        ========

         Utilization of the net operating loss and tax credit  carryforwards  is
         subject  to  significant  limitations  imposed by the change in control
         under I.R.C. 382,  limiting its annual  utilization to the value of the
         Company at the date of change in  control  times the  federal  discount
         rate.

NOTE 12 - RELATED PARTY TRANSACTIONS

         During the year ended December 31, 2003 and 2002 purchases of equipment
         from a related  party  vendor  amounted  to  approximately  $8,300  and
         $2,160,000,  respectively.  Included  in  accounts  payable and accrued
         expenses at December 31,  2003,  is  approximately  $17,403 due to this
         related  party  vendor.  This related party vendor is wholly owned by a
         minority (non-controlling) shareholder of the Company and does not have
         any formal agreement.  Management  believes that these transactions are
         negotiated at arms length.

         During  the  year  ended  December  31,  2003  and  2002  purchases  of
         technology  consulting  services  from the same  related  party  vendor
         amounted to approximately $189,450 and $191,000, respectively.

         On May 28, 2003, the Company  entered into a consulting  agreement with
         McCary & Rood, a company  controlled  by Mr. Kevin Ryan,  that provides
         for a monthly  consulting fee of $20,000.  The agreement expires on the
         earlier  of May 27,  2006 or on the date on which  Mr.  Ryan  accepts a
         position as an officer of the Company.

         In April 2003,  the Company  entered into an  agreement  with Armin Van
         Damme,  a former  officer and  director  and founder of  Crystalix  USA
         Group, to transfer the four Company-owned retail locations in Las Vegas
         for the  surrender  of all of his Class A  preferred  stock and  common
         stock  remaining  after  permitted  transfers of the common stock. As a
         result of this transaction,  the Company has canceled  5,126,000 shares
         of common stock and 1,540,000  shares of Class A preferred  stock owned
         by Mr. Van Damme and removed  the net book value of the assets  related
         to the four  Company-owned  retail locations in the amount of $237,826.
         In addition,  Mr. Van Damme  resigned as an employee of the Company and
         agreed to assume  liability  of the lease of his  automobile  which had
         been leased by the Company,  and liability of the lease of office space
         at 5720 South Arville,  Suite 114, Las Vegas,  Nevada. The transfer was
         effective as of April 28,  2003.  No gain or loss was  recognized  from
         this related party transaction.  Mr. Van Damme was to pay the Company a
         license  fee  of 5% of  gross  sales  generated  from  the  transferred
         locations and agreed to purchase all supplies and equipment  needed for
         the operation of the  locations  from the Company at its cost plus 10%.
         The  agreement  provided for  termination  by the Company


                                       F-23
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


         upon 30 days'  prior  written  notice in the event of Mr.  Van  Damme's
         failure to make payments or submit reports on a timely basis.

         As a result of the  settlement  agreement  described  in Note 13,  this
         agreement  was  declared  null  and  void.   Under  the  terms  of  the
         settlement, Mr. Van Damme is to keep the locations and the equipment at
         the locations.  However,  it is  contemplated  that he will replace the
         equipment  and  arrange  for  his  own  licensing  of  the  proprietary
         technology within six months.  While the Company's  equipment is in his
         possession,  he is to pay a flat  licensing and royalty fee of $500 per
         month per laser.

         In April 2003,  the Company  entered into an  agreement  with Other Van
         Dam, a former  officer and director and founder of Crystalix USA Group,
         to transfer  ownership  of certain  laser  equipment  aboard the cruise
         ships owned by the  Starboard  Cruise line for the  surrender of all of
         his Class A preferred stock and common stock (See Note 13). As a result
         of this  transaction,  the Company canceled  5,126,000 shares of common
         stock and 1,540,000  shares of Class A preferred stock owned by Mr. Van
         Dam and used the net book value of the laser equipment in the amount of
         $210,607 as the cost basis for the stock redemption.

         See Notes 7 & 8 for additional related party transactions.

NOTE 13 - COMMITMENTS AND CONTINGENCIES

         CONTRACTS

         Acquisition  Target - On  December  15,  2002,  the  Company  signed an
         agreement to acquire 50% of the ownership  interest of Vitro Laser GmbH
         ("Vitro"), a German Corporation,  for consideration  consisting of cash
         and the right to acquire  shares of the  Company's  common  stock.  The
         Company  advanced  $500,000  to Vitro  through  March  31,  2003 and in
         accordance  with a legal  settlement on November 14, 2003,  the Company
         allowed Vitro to retain the advance.  After new  management  terminated
         the process of acquiring  Vitro in June 2003, the $500,000  advance was
         expensed during the same period. (See Note 14)

         Royalty Agreement - Effective October 1, 2003, the Company entered into
         an amended and  restated  patent  license  agreement  with Laser Design
         International,  LLC  ("LDI")  and Norwood  Promotional  Products,  Inc.
         ("Norwood"),  which  superseded  the  February  1999 and  October  2001
         agreements.  The  Company  now has a  non-exclusive,  non-transferable,
         royalty-bearing  sub-license from LDI to make, use, offer for sale, and
         sell decorative  products using the technology other than in the United
         States.  Norwood granted the Company a non-exclusive,  non-transferable
         (other than reseller  licenses to permitted  resellers),  revocable and
         royalty-bearing  sub-license for the United States in the retail market
         segment.    Norwood   also   granted    Lazer-Tek   a    non-exclusive,
         non-transferable (other than reseller licenses to permitted resellers),
         revocable and royalty-bearing  sub-license for the United States in the
         corporate market segment.  Norwood is to approve all applications for a
         permitted  reseller  license.  The  Company is  required to pay LDI and
         Norwood  royalty  payments  based  on a  percentage  of net  sales on a
         quarterly basis. The royalty  agreement expires on the earlier of April
         27, 2010, a material  breach of  contract,  or mutual  recession of all
         parties.


                                       F-24
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


         LEASES

         The following is a schedule by years of future minimum rental  payments
         required under operating leases that have non-cancelable lease terms in
         excess of one year as of December 31, 2003:

              Year ending December 31,
                      2004                         $          10,259
                      2005                                    10,259
                      2006                                    10,259
                                                   -----------------
                                                   $          30,777
                                                   =================

         Rent expense  amounted to $545,597 and  $1,005,000  for the years ended
         December 31, 2003 and 2002

         LITIGATION

         The Company may be named as a defendant in legal  actions  arising from
         its normal  operations,  and from time-to-time is presented with claims
         for damages  arising out of its actions.  The management of the Company
         anticipates  that any damages or  expenses  it may incur in  connection
         with these  actions,  individually  and  collectively,  will not have a
         material  adverse  effect on the Company.  As of December 31, 2003, the
         Company was not a named party to any pending legal  proceedings,  other
         than routine  litigation deemed incidental to our business,  except for
         the following:

         CONCORD  INDUSTRIES  INC. -- In January 2003,  Concord  Industries Inc.
         ("Concord") filed an action for declaratory relief in the federal court
         for the State of Connecticut against Laser Design International and us,
         LLC ("LDI"). Concord seeks a judgment invalidating the patent issued to
         LDI and/or  declaring  that Concord is not  infringing on LDI's patent.
         LDI is the holder,  in part, of laser technology  patent rights related
         to laser  engraving.  We have licensed the use of this  technology from
         LDI. In November  2003,  Concord and we reached a settlement  agreement
         whereby Concord has agreed to dismiss us from the suit. LDI and Concord
         are still in litigation.  We anticipate  that LDI will be successful in
         its defense of its patent  rights.  The patents that are the subject of
         the suit pertain to  subsurface  decorative  laser  marking in crystal,
         glass, and other clear  materials,  which is the technology used in our
         business.

         VITRO LASER GROUP USA -- On February 12,  2003,  Vitro Laser Group USA,
         Inc.  ("Vitro")  and Kenneth  Morrison  filed an original  petition and
         application  for  injunctive  relief  in the  District  Court of Dallas
         County,  Texas,  against  Vitro Laser GmbH  ("Vitro  GmbH") and us. The
         plaintiffs  allege  that  Vitro GmbH and we  wrongfully  took two laser
         systems  and,  thus,  sought  a  temporary  and  permanent   injunction
         enjoining,   prohibiting,  and  restraining  Vitro  GmbH  and  us  from
         interfering with  plaintiffs'  rights in the laser systems and in their
         business facilities and operations.  The parties subsequently  resolved
         the  issue  of  the  injunctive   relief,   pending  a  final  judicial
         determination,  by written agreements dated February 27, 2003 and March
         5, 2003, I.E., by Rule 11 agreements.

         In addition,  the plaintiffs seek from us: actual and exemplary damages
         for conversion of the equipment;  actual damages,  statutory damages of
         $2,000,  and  attorneys'  fees for theft of the laser  systems;  actual
         damages for unjust  enrichment;  and actual and  exemplary  damages for
         tortious  interference with plaintiffs'  contract with Vitro GmbH. With
         respect to Vitro  GmbH,  the


                                       F-25
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


         plaintiffs seek: actual and exemplary damages for fraud; actual damages
         for negligent misrepresentation; actual damages and attorneys' fees for
         breach of contract; and actual damages for breach of fiduciary duty.

         At the  commencement  of the suit,  Vitro GmbH  alleged that it was not
         properly  served and that it was not amenable to suit or service in the
         United  States  since  it is a  German  company.  However,  Vitro  GmbH
         subsequently  consented to the court's jurisdiction and filed an answer
         and  cross-claims  against  the  plaintiffs.  We filed an answer  and a
         special   appearance   asserting   that  we  are  not  subject  to  the
         jurisdiction of the Texas court; however, the trial court found that we
         waived our  special  appearance  in the  lawsuit to contest the court's
         jurisdiction  over it, by  entering  into the Rule 11  agreements  with
         plaintiffs.  However,  the appellate court reversed the trial court and
         remanded  the case to the  lower  court  to  determine  whether  it has
         personal  jurisdiction over us.

         The  plaintiffs  have  indicated  that they may  appeal  the  appellate
         court's ruling to the Texas Supreme Court.  If we are  unsuccessful  in
         our  jurisdictional  challenge,  we  intend  to  assert  that  we  took
         possession  of the  equipment at the request of Vitro GmbH,  with Vitro
         GmbH asserting  ownership over the equipment due to plaintiffs' failure
         to pay  for  the  equipment  and  that  we did  not  interfere  between
         plaintiffs and Vitro GmbH.  Management plans to vigorously  defend this
         matter and since this matter is in its preliminary  stages,  no amounts
         have  been   accrued  in  the   accompanying   consolidated   financial
         statements, as such amounts are not estimable.

         BERLINER ZISSER WALTER & MCDONALD,  P.C. -- On March 4, 2003,  Berliner
         Zisser  Walter & McDonald,  P.C.,  filed a complaint  against us in the
         District  Court  for the City  and  County  of  Denver,  Colorado.  The
         complaint  asserts  that the  plaintiff  law firm is owed  $141,701 for
         legal services.  We have asserted  various  defenses to the claim.  The
         case was tried to the court in March 2004. On March 19, 2004,  judgment
         was entered  against us in the amount of  $108,972,  plus  interest and
         costs.  This  judgment  has been  recorded  in accrued  expenses in the
         accompanying consolidated balance sheet.

         KEVIN RYAN, ET AL. -- On March 31, 2003,  we filed a complaint  against
         Kevin Ryan, Lena Walther,  Douglas Lee,  Lazer-Tek  Designs,  Inc., and
         Lazer-Tek Designs, Ltd. in the District Court for Clark County, Nevada.
         The complaint alleged misrepresentations and breach of the Common Stock
         Purchase  Agreement  that we entered  into to  purchase  Lazer-Tek.  We
         requested a reduction  of the  purchase  price and of the amount due to
         Kevin  Ryan,  as well as  general  and  special  damages  in  excess of
         $10,000,  punitive  damages,  attorneys'  fees, and costs. On April 23,
         2003,   Kevin  Ryan  and  Douglas  Lee  filed  an  answer  denying  the
         allegations of the complaint.  In addition,  Kevin Ryan  counterclaimed
         for payment of the promissory note in the principal amount of $852,680,
         issuance of 568,750  shares of our common stock,  and an order for writ
         of possession of the collateral securing his note. On May 12, 2003, the
         court issued a Writ of Possession  to Kevin Ryan,  allowing him to take
         possession  of the  collateral  securing his note on June 2, 2003.  The
         collateral consists of all our assets. The default interest rate is 18%
         per annum. We have agreed to dismiss our complaint with prejudice.  The
         Writ of Possession is to remain in effect,  but the parties have agreed
         to postpone all deadlines and trial dates.

         ARMIN VAN  DAMME,  ET AL.-- On June 30,  2003,  John S.  Woodward,  our
         president  and we, filed a complaint  against Armin Van Damme (a former
         officer and director of the Company),  Othmar Van Dam (a former officer
         and director of the Company), Jim Carrasco,  Carlos Ravelo, Brian Shedd
         (a former employee),  3DLI, Inc., and Vitro Laser, Inc. in the District
         Court  for  Clark  County,   Nevada.  The  complaint  alleged  tortious
         interference  with contractual  relations,  tortious  interference with
         prospective economic advantage,  conversion, and conspiracy on the part
         of all


                                       F-26
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


         of the named defendants.  In addition,  the complaint alleged breach of
         fiduciary duty by Armin Van Damme and Othmar Van Dam as to the Company.
         Mr. Woodward and we requested damages in excess of $10,000,  attorneys'
         fees and costs,  as well as  injunctive  relief.  On July 24, 2003,  we
         obtained  an order for a  preliminary  injunction,  which (1)  enjoined
         Brian Shedd from activities that would compete against us; (2) enjoined
         Othmar  Van  Dam  from  soliciting  our  existing   affiliates   and/or
         customers;   (3)  enjoined  Armin  Van  Damme  from   transferring   or
         encumbering his residence;  (4) mandated Armin Van Damme and Othmar Van
         Dam to remove us from being  financially  obligated on the lease of the
         vehicles  they are using;  (5) mandated  Armin Van Damme and Othmar Van
         Dam to provide  proof of current  registration  and  insurance  on such
         vehicles;  (6)  mandated  Armin Van Damme to provide us with  access to
         conduct an audit and inventory at four retail  locations  that had been
         purchased by Mr. Van Damme;  (7) mandated Armin Van Damme to return all
         our  corporate,  software  and  art  files  to  us;  (8)  enjoined  the
         defendants from  communicating  on our  letterhead;  (9) mandated us to
         remove  Armin  Van  Damme and  Othmar  Van Dam from our Web site;  (10)
         mandated  Armin  Van Damme and  3DLI,  Inc.  to issue  checks to us for
         amounts  diverted from the Company;  (11) enjoined the defendants  from
         encumbering,  tampering, hindering,  converting, or transferring any of
         our assets;  and (12) enjoined all parties from  disparaging  any other
         party in the action.  The defendants filed an answer and  counterclaim,
         suing us and all of our  officers  in  their  individual  capacity.  In
         October 2003, the parties  entered into a settlement  agreement,  which
         provides, among other things, for the following:

             o    the dismissal of this suit with prejudice;
             o    Armin  Van  Damme  keeping  the  four  retail locations in the
                  Mandalay Bay Group hotels (See Note 12);
             o    Othmar Van Dam being able to pursue conducting business on the
                  Starboard Cruise Line;
             o    the relinquishment  by  Armin Van Damme  and Othmar Van Dam of
                  all ownership interest in the Company;
             o    the Company retaining an  infrared laser  machine delivered by
                  Vitro; and
             o    Vitro retaining the $500,000 payment from the Company.

         The settlement agreement was made effective as of November 14, 2003.

NOTE 14 - IMPAIRMENT  EXPENSE

         For the year ended December 31, 2003,  impairment  expense consisted of
         the following:

            Impairment of property and equipment (See Note 4)     $      243,893
            Impairment of value of customer lists (See Note 1)           155,220
                                                                  --------------
                                                                  $      399,113
                                                                  ==============

NOTE 15 - SUBSEQUENT EVENTS

         Subsequent  to  December  31,  2003,  the Company  received  additional
         advances under its revolving line of credit of $551,500. (See Note 7)




                                       F-27