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, 2004

[ ]   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                  (I.R.S. Employer
   of incorporation or organization               Identification No.)

               1181 GRIER DRIVE, SUITE B, LAS VEGAS, NEVADA 89119
               (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 is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. ?

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

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

Indicated by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

State issuer's revenues for its most recent fiscal year:  $3,619,493

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: $1,339,838.88 AS OF MARCH 28, 2006

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 280,837,972 AS OF MARCH 28, 2006

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


<PAGE>

                                     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.

         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.

         In August 2005, we purchased 51% of Laser Designs International, LLC a
California limited liability company (LDI). LDI is the owner of a patent for sub
surfacing laser decorative imaging, and also has exclusive rights to the license
for the color technology. We believe owning controlling interest in the patented
process used in sub surface laser etching, will secure our rights to the process
in the future.

         On December 29, 2005, we entered into an Asset Purchase Agreement with
U.C. Laser, Ltd. of Israel (DBA Crystal Impressions), to be effective January 1,
2006, in which we agreed to purchase all of U.C. Laser's assets used in
conjunction with the marketing, manufacturing and distribution of its decorative
sub surface laser art products. The assets acquired include U.C. Laser's
subsidiaries, Crystal Impressions and CIC Laser Technologies of Shanghai, China,
as well as U.C. Laser's worldwide exclusive license for its innovative sub
surface laser color technology. Our management believes that the merger of these
two significant competitors in the industry, formerly operating and competing
separately as Crystalix and Crystal Impressions, will result in our being
positioned to become a more dominant company in the subsurface glass engraving
industry worldwide.

         In consideration for the purchased assets, we will assume the
liabilities arising from or related to the purchased assets, which liabilities
are roughly $3,000,000, and issue a number of our shares of Class B Preferred
Stock as will collectively have voting rights equal to 45% of all voting rights
of all our capital stock outstanding immediately after the closing, determined
on a fully diluted basis. The shares to be issued to U.C. Laser will be
convertible into a total number of shares of our common stock as would,
immediately after such conversion, represent 45% of all shares of our capital
stock then outstanding on a fully diluted basis. Twenty percent of the shares to
be issued to U.C. Laser will be placed into escrow to satisfy any obligations of
U.C. Laser to indemnify us


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<PAGE>

for losses arising from (1) a material breach by U.C. Laser of any
representation, warranty, covenant, restriction, or agreement made in the Asset
Purchase Agreement or (2) fraud or an intentional misstatement by U.C. Laser.
The escrow period shall terminate 90 days after the closing of the transaction.

         We have agreed that our board of directors, upon the completion of this
transaction, shall consist of five members, two of whom shall be Marshall D.
Butler and Zvi Dinstein.  As of the date of this report, this transaction has
not closed.

         In addition, we are changing our name to Seaena, Inc. and implementing
a 1-for-35 reverse stock split effective March 31, 2006.

OUR PRODUCTS

         Our principal products are two-dimensional Photo Crystals (TM),
three-dimensional customized engraved products for the corporate and retail
market place, as well as the laser subsurface engraving equipment. We, through
our wholly-owned subsidiary, Lazer-Tek Designs, are one of only two entities
licensed under the patent governing subsurface decorative laser marking in
crystal, glass, and other clear materials to produce and sell these products in
the U.S. corporate market and retail market. Further, we are the only company
that has the right to sell machinery and sublicense independent operators

         The engraving process using the laser system machinery that we sell
involves the use of a high tech laser subsurface etching process that uses a
laser image scanner, and a laser that is 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 image, or a hard copy photograph into a
two-dimensional digitally formatted image that will be engraved into the center
of the crystal block by the laser. The scanner processes the three-dimensional
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 and software generally complete
the conversion process in 15 to 30 seconds. The glass block 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.

         Our production engraving process where we produce quantities of the
same image or product involves the use of a laser subsurface etching system that
uses CAD files produced by graphic artists that replicates the artwork of the
desired image to be etched. That file is then configured together by a computer,
using our proprietary software and a Windows operating system. The proprietary
software then converts the CAD file into a machine-readable format to be
processed by the laser into either the three-dimensional image or
two-dimensional image and plots the points where the laser will be directed to
engrave the image in the glass. The glass block is then precisely positioned
onto the laser table 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 additional text or other materials are to be
added with the images.

         The image can be engraved into glass blocks of different sizes and
shapes. The suggested retail price of the engraved glass ranges from $10.99 to
$400 and higher depending on the size of the glass block and number of images to
be engraved, with a typical glass block retailing for $75 to $150. Engraved
glass pieces for corporate customers carry suggested retail prices from $19 to
as much as several thousands of dollars. We also offer a variety of accessories
and bases on which to display the engraved glass blocks.

LASER EQUIPMENT

         Our laser systems consist of components purchased from outside vendors.
We then configure these components with our proprietary software and make
necessary adjustments to laser, mirrors, and electrical and computerized
components as required. When the laser system is properly configured, we enclose
the components with a customized casing and perform quality control tests on the
system prior to release.



                                       3
<PAGE>

INTELLECTUAL PROPERTY

         PATENTS; LICENSES; ROYALTY AGREEMENTS. Our laser engraving system is
derived in large part from patents held by others. LDI had exclusive license
rights to a family of patents that 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
purchased the actual patents in February 2003, as opposed to having had only the
exclusive rights to those patents previously. 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.

         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. ("Norwood"), based in
Austin, Texas. That license granted certain exclusive rights for manufacture of
corporate giftware in North and South America. Norwood 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.
Lazer-Tek paid a royalty of 17% of net sales for annual sales of up to $500,000
and 20% of net sales for annual sales of $500,000 or more. This obligation was
contracted to continue until April 27, 2010.

         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 were 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. We paid LDI $25,000 for the license and were
obligated to pay LDI a royalty of 10% of the net sales for decorative products
sold to all market segments except the flat glass and architectural glass market
segments. For those sales, the royalty rate was 3% of net sales. The obligation
to pay royalties was to continue until April 27, 2010 or termination of the
license agreement. By letter dated January 1, 2002, LDI agreed that our royalty
obligations would be no higher than $3.00 per block, recognizing that our
business included facial marking and three-dimensional imaging improvements that
were outside of the patents licensed to us.

         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 United
States for a royalty of $3.00 per image. 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. All applications for a permitted reseller license must be approved by
Norwood. We are required to pay Norwood royalty payments based on a percentage
of 10% of net sales in the United States in the retail market and corporate
market segments on a quarterly basis.

         In addition to the patents described above, we have the exclusive
worldwide rights to other proprietary technology. Rainer Eissing, our former
officer and director, 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.

         During 2005, we negotiated with LDI to purchase its 51% of LDI and its
patents. The patents are an integral part of our business and will continue to
be so through the duration of the patents, which is August 15, 2011.



                                       4
<PAGE>

         Lazer-Tek has an interest in US Patent No. 6,087,617 - computer
graphics system for generating an image reproducible inside optically
transparent material. Lazer-Tek has full rights to and possession of the patent,
which is co-owned with Igor Troitski. The patent expires May 7, 2016.

         With the acquisition of U.C. Laser, we also received the exclusive
license for the innovative sub surface laser color technology.

         TRADEMARK AND TRADE NAME. Lazer-Tek has the following federally
registered trademarks, which are effective for ten years from the date of
registration: o For "LTD" - No. 2,021,941 registered December 10, 1996 o For
"Collegiate Crystal" - No. 2,504,803 registered November 6, 2001
o        For "Photocrystals" - No. 2,787,498 registered November 25, 2003

PRODUCT LINES

         There are numerous applications for our engraving system. We are
currently focusing on the following product lines:
            o    two-dimensional portraits (Photo Crystals (TM)) ;
            o    corporate/award items;
            o    sub-surface color images
            o    giftware;
            o    three-dimensional facial images;
            o    two-dimensional images;
            o    licensed images and logos;
            o    tabletop items; and
            o    gallery pieces.

DISTRIBUTION

         We sell our products to:
            o    corporate distributors;
            o    to mass marketing organizations, such as QVC;
            o    through retail kiosks owned by us and by our independent
                 distributors;
            o    through college catalogs and bookstores;
            o    through photo distributors and retail outlets; and
            o    through art galleries.

         PHOTO INDUSTRY. As of December 2005, we are producing our
two-dimensional portrait products for a national portrait studio in over 1200 of
its stores. Entering 2006, we are in negotiations with other national portrait
studios as the two-dimensional portrait demand continues to grow at a rapid
pace. The digital camera has changed the photo finishing market. Since fewer
photos are being printed, it is necessary for the photo finishers to offer
ancillary products to make up for lost revenue. We are focused on building
strategic relationships in this industry and will aggressively continue to seek
market share. We believe our unique software platform allows companies to merge
seamlessly photography and image data via the Internet, thus providing
photographers of any size the ability to offer our product with little or no
additional overhead. All that is needed to put an image inside crystal is an
original photo, or a digital camera memory card. The proprietary software then
changes the image so that the lasers can etch the replica image.

         CORPORATE SALES. With the acquisition of Lazer-Tek and the presence of
Crystalix USA at the promotional product industry trade shows, corporate
application of our laser engraved products for awards, gifts and presentation
has been growing steadily at 15-20% quarterly.

         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



                                       5
<PAGE>

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, 2005, the
following kiosks were in operation by our independent distributors:

        ------------------------------------------------------------------------
        DATE OPENED           LOCATION
        ------------------------------------------------------------------------
        March 2002            DFS Galleria - Honolulu, Hawaii
        ------------------------------------------------------------------------
        May 2002              First Street Station - Rehoboth Beach, Delaware
        ------------------------------------------------------------------------
        May 2002              Mall of America - Bloomington, Minnesota
        ------------------------------------------------------------------------
        June 2002             Desert Passage, Aladdin - Las Vegas, Nevada
        ------------------------------------------------------------------------
        November 2002         Disney Arribas - Orlando, Florida
        ------------------------------------------------------------------------
        December 2002         Beach Towers - Atlantis Paradise Island Resort,
                              Nassau, Bahamas
        ------------------------------------------------------------------------
        April 2003            Village Shops - Gatlinburg, Tennessee
        ------------------------------------------------------------------------
        January  2005         Tropicana Hotel/Casino, Atlantic City, NJ
        ------------------------------------------------------------------------

         INDEPENDENT DISTRIBUTORS. Through our software license, we grant our
independent distributors a non-exclusive right to operate our laser engraving
system during a specified term and any extensions thereof in an identified
exclusive territory. We also make available to our independent distributors
glass blanks, light bases, collection images, and related products from a
pre-approved vendor or us to assure quality.

         Historically, we paid royalties for many of our independent
distributors that were not current with Norwood's licensing requirements, as a
result of their neglecting to submit their quarterly royalty payments for the
patent sub-license. These royalties were due for their sub-license of the patent
on their laser-imaged optic glass sales. Our agreement with Norwood and
subsequent right to grant sub-licenses to our distributors required us to submit
royalties on all US independent distributor kiosk sales or to take action
against them. During 2005 we re-negotiated licensing agreements to bring all
independent distributors into compliance or terminated our agreements with them.
All independent distributors were asked to sign a new contract and comply with
the royalty payments. All of the independent distributors listed above have
signed the new agreements and several distributors chose to cease operations and
signed a termination agreement. A few of the affiliates elected to not sign the
new contract or did not respond to our correspondence. It is anticipated that if
we fail to renegotiate to the satisfaction of certain independent contractors,
mediation or litigation may become necessary.

         COLLEGE CATALOGS AND BOOKSTORES. We manufacture certain licensed
articles under the line name of "Collegiate Crystal". The line consists of laser
reproductions of collegiate logos, mascots, buildings, and landmarks inside of
high-quality glass cubes pursuant to orders from our collegiate distributor,
Jardine Associates. We plan to expand this line during 2006.

         INTERNATIONAL OPERATIONS. Crystalix USA formed a wholly owned
subsidiary on October 24, 2002, Crystalix Imaging Limited, doing business as
Crystalix Europe, and in 2003 we had opened a laser manufacturing facility in
Berlin. On June 1, 2005 we closed the Dublin office because of low sales
results. In October 2005, we entered into an agreement with Rainer Eissing, one
of our former officers and directors, whereby we agreed to exchange our Berlin
operation for the cancellation of 962,100 shares of Class A Preferred stock and
7,621,000 shares of common stock that were owned by Mr. Eissing. In exchange for
the stock, Mr. Eissing received the assets in the Berlin facility and the
contracts of all non U.S. Independent Kiosk owners, excluding the Bahamas. Our
management believed that the cost of the European divisions were too high to
justify continuing operations based on performance levels.

REVENUE COMPONENTS

         We have two major components of revenue:

   o     product revenue, which includes both the sale of glass product and
         laser system machinery;
   o     royalty revenues.


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<PAGE>


         In 2005 the product sales were split 80/20 between glass and laser
machinery respectively. We expect the machinery to become a much more
significant portion of revenue as we continue discussions with independent
distributors interested in multiple machine purchases. Total glass product sales
will also increase dramatically as we double our existing customer base and
sales staff with the merger of Crystalix and Crystal Impressions. We anticipate
a large growth in the two-dimensional market during 2006 and have targeted and
begun discussions with several major retailers.

         Lease revenues were formerly a major revenue component. However, we no
longer lease the equipment to independent distributors but rather sell the
equipment to them. Most of the leases were terminated with the new agreements
signed by the independent distributors or are in default by those not in good
standing. We do not expect lease revenue to be a material portion of revenues
for 2006.

         Royalty revenues should begin to grow as we expand our independent
distributor base within the U.S. and other patent protected countries.

SUPPLIERS

         We have secured suppliers in China for our glass blocks, which are
lead-free and arsenic-free. We believe that there are a limited number of
suppliers of glass that can meet our needs. We have identified two potential
suppliers in the United States, several potential European suppliers, and two
other Chinese suppliers. The 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   Requires no special handling and has stable chemical properties;
   o   Capable of being precision-engraved using available laser technology; and
   o   Environmentally acceptable due to absence of lead and arsenic.

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. Many of our competitors
have not obtained licenses to use the patent rights and many are currently in
mediation with the patent owner regarding alleged infringements. As described
above, we, through our wholly-owned subsidiary, Lazer-Tek Designs, are one of
only two entities licensed under the patent governing subsurface decorative
laser marking in crystal, glass, and other clear materials to produce and sell
these products in the U.S. corporate market. Further, we are the only licensed
company that sells its owns laser subsurface engraving equipment and that has
the right to sublicense purchasers of this equipment.

         There are several 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 compete favorably, due to the breadth of our
product lines, our experienced graphic design artists and our 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/turnaround times;
            o   Retail location and accessibility;
            o   Creativity with respect to the art image and glass shape; and
            o   Production capacity.


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<PAGE>


RESEARCH AND DEVELOPMENT

         During the fiscal years ended December 31, 2005 and 2004, we did not
spend any amounts on research and development activities.

GOVERNMENT REGULATION AND COMPLIANCE WITH ENVIRONMENTAL LAWS

         Our independent distributors 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 December 31, 2005, we employed a total of 31 persons, of which 25
were full-time. None of our employees is covered by a collective bargaining
agreement.

RISK FACTORS

         Due to the nature of our business and the present stage of development
of our business, the following risk factors apply to our operations:

DUE TO OUR OPERATING LOSSES, ACCUMULATED DEFICIT, AND WORKING CAPITAL
DEFICIENCY, THE REPORT OF OUR AUDITOR CONTAINS A PARAGRAPH EXPRESSING
SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.

         To date, we have not had profitable operations. We expect to continue
to incur additional losses for the current year. We generated a net loss of
$5,691,026 for the year ended December 31, 2005, used cash for operating
activities of $676,290 for the year ended December 31, 2005, and at December 31,
2005, had an accumulated deficit of $21,736,588. These conditions raise
substantial doubt about our ability to continue as a going concern. In order to
become profitable and sustain profitability, we will need to generate
significant revenues to offset our cost of revenues and general and
administrative expenses. We may never be able to achieve or sustain our revenue
or profit goals.

WE HAVE A WORKING CAPITAL DEFICIENCY AND INSUFFICIENT CASH.

         At December 31, 2005, we had cash of $59,844 and a working capital
deficiency of $1,165,314. Accordingly, we are dependent upon external financing
such as an offering of debt and/or equity securities or borrowing to continue
operations. Without giving effect to the liabilities we will be assuming upon
the acquisition of U.C. Laser, we estimate that we will require external
financing of at least $500,000 during the second quarter of 2006 to purchase raw
materials and pay operating expenses. If we can obtain this funding, we believe
we will be able to increase our revenues sufficiently to sustain and grow our
operations for the remainder of the fiscal year. If we cannot obtain at least
$500,000 within the next month, our cash needs will grow beyond our ability to
sustain operations.

OUR CURRENT GROWTH STRATEGY IS DEPENDENT UPON OUR ABILITY TO GROW THE
TWO-DIMENSIONAL PHOTO MARKET AND TO SELL TO CORPORATE ACCOUNTS.

         Our growth is dependent on the development of the two-dimensional
portrait photo industry. To be successful, we must continue to contract with
national studio chains to carry our two-dimensional portrait products. We must
also be able to grow our production facility to meet increased demand.

         Our growth is also dependent upon increasing sales to corporate
accounts. To be successful in this effort, we must be able to compete with other
products in the image promotion industry.



                                       8
<PAGE>

         Our growth is also dependent upon our ability to obtain larger
independent distributors throughout the United States and in selected locations
around the world to purchase multiple laser machinery units for retail
operations. To be successful, we need to be able to identify suitable partners,
provide them with adequate training, and manage competently the infrastructure
to support their efforts.

SINCE WE OPERATE IN THE GIFTWARE INDUSTRY, WE ARE AFFECTED BY ECONOMIC
CONDITIONS AND CONSUMER TRENDS.

         Since we manufacture and market items that would be considered
giftware, our success will depend upon a number of factors relating to consumer
spending, including future economic conditions affecting disposable consumer
income, such as employment, business conditions, interest rates, and taxation.
If existing economic conditions deteriorate, consumer spending may decline,
thereby adversely affecting our business and results of operations.

         We must be able to anticipate and respond to changing merchandise
trends and consumer demands in a timely manner. If we should miscalculate
consumers' purchasing habits and tastes, we will not be able to compete against
other gift products.

WE FACE COMPETITION FROM EXISTING AND POTENTIAL COMPETITORS.

         We face competition in the glass subsurface engraving industry, as well
as competition from others offering business opportunities. To compete, we may
be forced to offer lower prices and narrow our marketing focus, resulting in
reduced revenues, if any. Additionally, we need to continue to pursue
enforcement of the United States patent for the subsurface laser engraving
process against the majority of our competition, which does not have license to
use the patented process.

OUR SUCCESS AND ABILITY TO COMPETE DEPENDS UPON OUR ABILITY TO SECURE AND
PROTECT OUR PROPRIETARY TECHNOLOGY.

         Our success depends on our ability to protect our proprietary
technology. In the event that a third party misappropriates or infringes on our
intellectual property, our business could be seriously harmed. Third parties may
independently discover or invent competing technologies or reverse engineer our
software. We expect that if we should successfully market franchises and
licenses to use our software, competitors may attempt to duplicate our
technology. Even if we were to obtain copyright protection on the software, we
would still have to enforce our rights against those who might attempt to
infringe on our intellectual property. Such enforcement efforts are likely to be
expensive and time-consuming.

THE LOSS OF OUR OFFICERS AND DIRECTORS OR OUR FAILURE TO ATTRACT AND RETAIN
ADDITIONAL PERSONNEL COULD ADVERSELY AFFECT OUR BUSINESS.

         Our success depends largely upon the efforts, abilities, and
decision-making of our executive officers and directors. Although we believe
that we maintain a core group sufficient for us to effectively conduct our
operations, the loss of any of our key personnel could, to varying degrees, have
an adverse effect on our operations and system development. We do not currently
maintain "key-man" life insurance on any of our executives or directors, and
there is no contract in place assuring their services for any length of time.
The loss of any one of them would have a material adverse affect on us. There
can be no assurance that the services of any member of our management will
remain available to us for any period of time, or that we will be able to enter
into employment contracts with any of our management, or that any of our plans
to reduce dependency upon key personnel will be successfully implemented.

         The knowledge and expertise of our officers and directors are critical
to our operations. There is no guarantee that we will be able to retain our
current officers and directors, or be able to hire suitable replacements in the
event that some or all of our current management leave our company. In the event
that we should lose key members of our staff, or if we are unable to find
suitable replacements, we may not be able to maintain our business and might
have to cease operations, in which case an investment in our stock could be
lost.




                                       9
<PAGE>

DUE TO THE LIMITED PUBLIC MARKET FOR OUR COMMON STOCK, INVESTORS MAY EXPERIENCE
A DECLINE IN THE SHARE PRICE OR HAVE DIFFICULTY IN SELLING THEIR SHARES.

         While our common stock trades on the OTC Bulletin Board, the market has
been limited and volatile at times. For example, only 346,936 shares were traded
during the month of February 2005. We cannot make any assurances that the public
market for our common stock will continue to develop. If an active market for
our common stock does not develop, the liquidity of an investment in our common
stock may be limited, and the price of our common stock may decline below what
was paid for it.

A LIMITED NUMBER OF STOCKHOLDERS WILL COLLECTIVELY CONTINUE TO OWN A MAJORITY OF
OUR COMMON STOCK AND MAY ACT, OR PREVENT CERTAIN TYPES OF CORPORATE ACTIONS, TO
THE DETRIMENT OF OTHER STOCKHOLDERS.

         As of March 28, 2006, our directors and officers own more than 71% of
our outstanding common stock. Accordingly, these stockholders may, if they act
together, exercise significant influence over all matters requiring stockholder
approval, including the election of a majority of the directors and the
determination of significant corporate actions. This concentration could also
have the effect of delaying or preventing a change in control that could
otherwise be beneficial to our stockholders.

OUR COMMON STOCK IS SUBJECT TO PENNY STOCK REGULATION THAT MAY AFFECT THE
LIQUIDITY FOR OUR COMMON STOCK.

         Our common stock is subject to regulations of the Securities and
Exchange Commission relating to the market for penny stocks. These regulations
generally require that a disclosure schedule explaining the penny stock market
and the risks associated therewith be delivered to purchasers of penny stocks
and impose various sales practice requirements on broker-dealers who sell penny
stocks to persons other than established customers and accredited investors. The
regulations applicable to penny stocks may severely affect the market liquidity
for our common stock and could limit the ability to sell our securities in the
secondary market.

FUTURE EQUITY TRANSACTIONS, INCLUDING EXERCISE OF OPTIONS OR WARRANTS, COULD
RESULT IN DILUTION.

         From time to time, we sell restricted stock, warrants, and convertible
debt to investors in private placements. Because the stock is restricted, the
stock is sold at a greater discount to market prices compared to a public stock
offering, and the exercise price of the warrants sometimes is at or even lower
than market prices. These transactions cause dilution to existing stockholders.
Also, from time to time, options are issued to officers, directors, or
employees, with exercise prices equal to market. Exercise of in-the-money
options and warrants will result in dilution to existing stockholders. The
amount of dilution will depend on the spread between the market and exercise
price, and the number of shares involved.

TRADING IN OUR COMMON STOCK ON THE OTC BULLETIN BOARD MAY BE LIMITED THEREBY
MAKING IT MORE DIFFICULT FOR INVESTORS TO RESELL THEIR SHARES OF OUR COMMON
STOCK.

         Our common stock trades on the OTC Bulletin Board. The OTC Bulletin
Board is not an exchange and, because trading of securities on the OTC Bulletin
Board is often more sporadic than the trading of securities listed on an
exchange or NASDAQ, investors may have difficulty reselling any of their shares
of our common stock.


ITEM 2.  DESCRIPTION OF PROPERTY.

         Our principal offices and production facilities are located at 1181
Grier Drive, Suite B, Las Vegas, Nevada 89119. We lease approximately 16,000
square feet. We moved to a larger facility in June 2005 with reduced cost per
square foot and are currently inquiring regarding the availability of more
warehouse space in our current location.



                                       10

<PAGE>

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:

         On February 12, 2003, Vitro Laser Group USA, Inc. 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") and us. The
plaintiffs allege that Vitro and we wrongfully took two laser systems. We picked
the laser systems up at the request of the owner of the lasers, Vitro, and
returned them to their possession. Neither our subsidiaries nor we used these
lasers in our operations. The plaintiffs seek a temporary and permanent
injunction enjoining, prohibiting, and restraining Vitro and us from interfering
with plaintiffs' rights in the laser systems and in their business facilities
and operations. In addition, the plaintiffs seek from us exemplary damages for
conversion of the equipment, 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. With respect to Vitro, the plaintiffs seek 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.
Vitro asserts that it was not properly served and that it is not amenable to
suit or service in the United States since it is a German company. We filed a
special appearance in the lawsuit to contest the court's jurisdiction over it.
The court found that the court had jurisdiction over us and we appealed that
ruling. On March 19, 2005, the plaintiffs agreed to release and discharge all
claims against for a payment of $5,000.

         In January 2005, Crystal Clear LLC filed a complaint, alleging that it
was fraudulently induced to become a marketing affiliate of ours and breach of
contract. The plaintiff seeks a judgment declaring that it was fraudulently
induced to enter into the master equipment lease and software license agreement
in October 2002, a rescission of the agreement, unspecified damages, interest,
and costs. This action has been held in abeyance while negotiations are taking
place to settle the matter. We settled this matter in May 2005 pursuant to the
terms of a confidential agreement.


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

         None.


                                       11
<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, 2004..........................    $   0.76         $   0.39
         June 30, 2004...........................    $   0.67         $   0.15
         September 30, 2004......................    $   0.28         $   0.07
         December 31, 2004.......................    $   0.24         $   0.09

         March 31, 2005..........................    $   0.12         $   0.07
         June 30, 2005...........................    $   0.07         $   0.03
         September 30, 2005......................    $   0.05         $   0.01
         December 31, 2005.......................    $   0.07         $   0.01

         On March 28, 2006, the closing bid price for the common stock on the
OTC Bulletin Board was $0.04.

HOLDERS

         As of February 17, 2006 there were 495 record holders of our common
stock.

DIVIDENDS

         We have not paid any dividends on any of our shares. We have no present
intention of paying dividends on any of our shares, as we anticipate that all
available funds will be invested to finance the growth of our business.


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

GENERAL

         The following discussion and analysis should be read in conjunction
with our consolidated financial statements and related footnotes for the year
ended December 31, 2005 included elsewhere in this Form 10-KSB. The discussion
of results, causes and trends should not be construed to imply any conclusion
that such results or trends will necessarily continue in the future.

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


                                       12
<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 $3.2 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.

         On August 17, 2005, we purchased a 51% interest in LDI for $708,000.
The payment terms were $75,000 deposit paid prior to August 17, 2005, $250,000
at closing, and $76,600 on each of the following dates: December 31, 2005, April
30, 2006, August 31, 2006, December 31, 2006, and April 8, 2007. In addition, we
paid $150,000 to Norwood Operating Company, LLC in connection with this purchase
agreement. A portion of the purchase price was funded by the convertible note
from the UAJC 2005 Irrevocable Trust. The acquisition was accounted for using
the purchase method of accounting. The purchase price of $858,000 was allocated
to the fair value of the assets and liabilities, which result in the recording
of a patent of $848,961. LDI is the owner of a patent for sub surfacing laser
decorative imaging, and also has exclusive rights to the license for the color
technology.

         On December 29, 2005, we entered into an Asset Purchase Agreement with
U.C. Laser, Ltd. of Israel (DBA Crystal Impressions), to be effective January 1,
2006, in which we agreed to purchase all of U.C. Laser's assets used in
conjunction with the marketing, manufacturing and distribution of its decorative
sub surface laser art products. The assets acquired include U.C. Laser's
subsidiaries, Crystal Impressions and CIC Laser Technologies of Shanghai, China,
as well as U.C. Laser's worldwide exclusive license for its innovative sub
surface laser color technology. Our management believes that the merger of these
two significant competitors in the industry, formerly operating and competing
separately as Crystalix and Crystal Impressions, will result in our being
positioned to become a more dominant company in the subsurface glass engraving
industry worldwide.

         In consideration for the purchased assets, we will assume the
liabilities arising from or related to the purchased assets, which liabilities
are roughly $3,000,000, and issue a number of our shares of Class B Preferred
Stock as will collectively have voting rights equal to 45% of all voting rights
of all our capital stock outstanding immediately after the closing, determined
on a fully diluted basis. The shares to be issued to U.C. Laser will be
convertible into a total number of shares of our common stock as would,
immediately after such conversion, represent 45% of all shares of our capital
stock then outstanding on a fully diluted basis. Twenty percent of the shares to
be issued to U.C. Laser will be placed into escrow to satisfy any obligations of
U.C. Laser to indemnify us for losses arising from (1) a material breach by U.C.
Laser of any representation, warranty, covenant, restriction, or agreement made
in the Asset Purchase Agreement or (2) fraud or an intentional misstatement by
U.C. Laser. The escrow period shall terminate 90 days after the closing of the
transaction.

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 us as a going concern. We incurred
a net loss for the year ended December 31, 2005 of $5,691,026, used cash for
operating activities of $676,290 for the year ended December 31, 2005, and at
December 31, 2005 had an accumulated deficit of $21,736,588 and a working
capital deficit of $1,165,314. These conditions raise substantial doubt as to
our 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 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.

         We plan to take the following steps that we believe will be sufficient
to provide us with the ability to continue in existence. We have recently
exchanged $12,098,036 of convertible debentures and accrued interest for


                                       13
<PAGE>

200,000,000 shares of our common stock, which has reduced our liabilities by
approximately 85%. Also, on August 17, 2005, we purchased a 51% interest in LDI,
which is the owner of a patent for sub surfacing laser decorative imaging, and
also has exclusive rights to the license for the color technology. In addition,
on December 29, 2005, we entered into an Asset Purchase Agreement with U.C.
Laser, Ltd. of Israel (DBA Crystal Impressions) to be effective January 1, 2006.
We have agreed to purchase all of U.C. Laser's assets used in conjunction with
the marketing, manufacturing, and distribution of its decorative sub surface
laser art products. The assets acquired include U.C. Laser's subsidiaries,
Crystal Impressions and CIC Laser Technologies of Shanghai, China, as well as
U.C. Laser's worldwide exclusive license for its innovative sub surface laser
color technology. As of the date of this report, this transaction has not
closed. Our management believes that the merger of our company with U.C. Laser
will enable us to continue as a going concern. While incorporating the strengths
and expertise of both Crystalix and Crystal Impressions and newly created
economies of scale, we believe that the 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. Our discussion in "Plan of Operation" below
details additional sales strategies to sustain operations.

         During the year ended December 31, 2005, we have again significantly
reduced our overhead expenses and were able to expand our manufacturing
facilities and equipment. We have eliminated non-critical personnel and
expenditures, reduced travel and renegotiated leases, debt and prices while
building a strong team of qualified and dedicated personnel. We believe we can
grow revenues during the next twelve months without a significant increase to
overhead. Sales for first quarter of 2006 are above projections and we are
expecting one of our best quarters ever in a historically slow quarter. We have
partnered with a former competitor in the two-dimensional photo market, and have
taken over his accounts and are now producing and billing for another large
national chain. We also are receiving new laser production equipment as a result
of our merger with U.C. Laser as we expand the production plant in Las Vegas to
keep up with the growing demand. Another result of our merger is a production
plant in Shanghai, China, which will allow us to produce larger run orders,
standard pieces, and jobs with adequate lead time for greatly reduced costs. We
have been in negotiations with several parties interested in the purchase of
multiple machines and territories and will continue to pursue machine sales in
this manner, looking for strong retail partners who can successfully operate in
the retail marketplace. We also believe the impending patent litigation against
the remaining alleged infringers will increase our revenues as violators either
(1) settle and obtain legal license and pay royalties, thereby preventing them
from using unfair pricing advantages, or (2) leave the industry altogether and
reduce competition.

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 previously entered into licensing agreements to lease
our laser equipment and our licensed laser inscription technology to individuals
and businesses that open retail establishments to sell laser inscribed glass
products. The terms of these licensing agreements are typically for five years.
The lease payments were generally paid in one or two installments upon signing
the agreement and we recognize lease revenue ratably over the term of the
contract.

         MACHINE SALES. Laser equipment is no longer leased, but rather sold
outright to our independent distributors/retailers, most frequently in three
installment payments as follows: 40% upon order, 40% prior to delivery, and 20%
upon completion of installation of equipment at the retail location. We retain
ownership of the




                                       14

<PAGE>

proprietary software and license use of the software to the distributor/retailer
for a monthly fee, which is normally $500.

         PRODUCT SALES. Revenue from the sale of sub surface laser products
(glass or equipment) 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 products, and only when no further contingencies or material
performance obligations are warranted. Revenue from the sale of glass cube
products is recognized when title to the products is transferred to the
distributor/retailer, 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
laser system unit, for which revenue will be recognized over the term of the
license period. Deposits received from potential customers, who have not yet
received the laser system units, are accounted as refundable customer deposits
on the balance sheet.

         STOCK-BASED TRANSACTIONS. Shares of our common stock issued for
services, compensation or financing costs is valued at the market value of our
common stock at the date of issuance.

         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," we evaluate 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.

RESULTS OF OPERATIONS

         Our net revenues are derived from product sales, lease revenue, and
royalty revenue.

         PRODUCT SALES. We generate product sales through the sale of engraved
glass products to corporate customers, through portrait studios, and through the
sale of glass blanks, display bases, and related products to our independent
distributors. Our product sales revenue for the year ended December 31, 2005
decreased by $663,982 or 19.5% from $3,398,384 for the year ended December 31,
2004 to $2,734,402 for the year ended December 31, 2005. The decrease was
principally due to lower glass sales to our licensees as during 2005 all of our
licensees either agreed to cancel their contracts or had their contracts
cancelled for noncompliance.

         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. Our
cost of revenue for product sales also decreased by $417,067 or 25.4% from
$1,642,855 for the year ended December 31, 2004 to $1,225,788 for the year ended
December 31, 2005. The decrease was due to the decrease in product sales. Cost
of sales as a percentage of sales decreased from 48.3% for the year ended
December 31, 2004 to 44.8% for the year ended December 31, 2005. The decrease
was due to a shift in selling higher margin products, such as our corporate
gift/promotional lines, resulting in an increase in our gross margin.

         LEASE REVENUE. We receive lease revenues from our independent
distributors under the terms of master equipment leases they have executed with
us. Our lease revenue for the year ended December 31, 2005 decreased by $316,024
or 28.1% from $1,124,537 for the year ended December 31, 2004 to $808,513 for
the year ended December 31, 2005. The reduction in our lease revenue was due to
the cancellation of contracts with our licensees,


                                       15
<PAGE>

either at their request or by us. The requests for cancellation were granted
based on the financial condition of thelicensees and their inability to continue
to run a viable business enterprise. During the year ended December 31, 2005,
all the licensees' contracts were cancelled.

         The lease cost of revenue consists primarily of the amortization of
property, plant, and equipment, including the direct personnel costs and direct
product costs associated with the assembly of the leased equipment. Our cost of
lease revenue also decreased by $49,119 or 11.8% from $415,809 for the year
ended December 31, 2004 to $366,690 for the year ended December 31, 2005 due to
a decrease in lease revenue. Our gross margin decreased from 63.0% for the year
ended December 31, 2004 to 54.6% for the year ended December 31, 2005 due to
costs associated with the terminated licensees.

         ROYALTY REVENUE. We receive royalty revenues from our independent
distributors under the terms of master equipment leases and software license
agreements they have executed with us. Our royalty revenue for the year ended
December 31, 2005 decreased by $29,175 or 27.6% from $105,753 for the year ended
December 31, 2004 to $76,578 for the year ended December 31, 2005. The reduction
in our royalty revenue was due to the cancellation of licensee contracts and a
reduction of sales subject to royalties generated by our independent
distributors.

         Royalty cost of revenue consists of the royalty payments we make to
Norwood Promotional Products (Janesville) for the use of license rights on the
patent protecting the laser imaging process in the U.S. Our cost of royalty
revenue decreased by $44,130 or 72.2% from $61,116 for year ended December 31,
2004 to $16,986 for the year ended December 31, 2005. The decrease was
principally due to the cancellation of licensee contracts and a reduction of
sales subject to royalties.

         GROSS PROFIT. As a result of the decrease in total revenue of
$1,009,181 and a decrease in total cost of revenue of $510,316, our gross profit
decreased $498,865. As a percentage of revenue, gross profit was 55.5% for the
year ended December 31, 2005, as compared to 54.2% for the year ended December
31, 2004.

         OPERATING EXPENSES. Payroll and related benefits for the year ended
December 31, 2005 decreased by $488,380 or 25.2% from $1,934,620 for the year
ended December 31, 2004 to $1,446,240 for the year ended December 31, 2005. The
decrease was a result of a reduction in personnel due to corporate downsizing.

         General and administrative expenses for the year ended December 31,
2005 decreased by $1,865,380 or 42.6% from $4,376,563 for the year ended
December 31, 2004 to $2,511,183 for the year ended December 31, 2005. The
decrease was principally due to a reduction in accounting and audit related
fees, and legal fees and a charge to earnings of $462,775 during the three
months ended December 31, 2004 as a result of a reallocation of Series A
preferred stock among members of senior management.

         Impairment expense for the year ended December 31, 2004 was $212,215,
which was comprised of a write down of capitalized software costs of $176,052
and website development costs of $36,163. These were no such write-downs in
2005.

       OTHER INCOME AND EXPENSES. During the year ended December 31, 2005, we
recognized other income of $302,571 related to the cancellation of certain
licensee agreements. Throughout 2005 all of our licensees and we mutually agreed
to cancel the existing contracts. Under the terms of the agreements, the
licensees were released from their obligation under the agreement and in return,
the licensees took ownership of the laser equipment. We removed the laser
equipment and deferred income from our books and recognized a gain of $302,571.
Also during the year ended December 31, 2005, we settled a dispute with one of
our licensees.

LIQUIDITY AND CAPITAL RESOURCES

         At December 31, 2005, we had a working capital deficit of $1,165,314,
as compared to $4,262,946 at December 31, 2004. We had cash and cash equivalents
of $59,844 at December 31, 2005 as compared to $270,024 at December 31, 2004.
The decrease in the working capital deficit is principally due to the conversion
of $12,098,036 of convertible debentures and accrued interest for 200,000,000
shares of our common stock.


                                       16
<PAGE>

         Our current cash on hand plus cash expected to be generated from
operations will not be sufficient to sustain our current operations and service
our outstanding debt for the next twelve months. Without giving effect to the
assumption of liabilities upon the acquisition of U.C. Laser, we will need to
issue debt or equity securities of at least $500,000 in the short-term in order
to sustain operations until such time that we can generate positive cash flow
from our operations. If we can obtain financing to meet these short-term needs,
then we should be able to generate a positive cash flow in the long-term from
the sales generated from the machinery that would be manufactured using funds
received from the financing. We are in the process of exploring various ways to
address the U.C. Laser debt, such as restructuring the debt and/or borrowing
from a different lender.

         During the year ended December 31 2005, our financing activities
provided cash of $1,011,500, while our operating and investing activities used
cash of $676,290 and $545,390, respectively. The cash used in operating
activities was principally a result of the net loss we incurred.

OFF-BALANCE SHEET ARRANGEMENTS

         We do not have any off-balance sheet arrangements.

PLAN OF OPERATION

         We believe that we have positioned Crystalix to become the leader in
the sub-surfaced glass etching industry, with our proposed acquisition of U.C.
Laser (DBA Crystal Impressions). Our management has developed a plan of
operation for 2006. In our Las Vegas corporate headquarters, we have put into
place officers and department heads bringing various areas of expertise to
design and implement our plan of operation.

         Our sales push began in 2006 again at the Promotional Product Industry
Convention, where our goal to increase sales in the corporate and promotional
lines seems to be succeeding based on the new orders and inquires we are
receiving. The two-dimensional portrait line is growing rapidly as we have just
added another major national chain and are in discussions with others. The
demand for new products in the photo processing industry is stronger than we had
originally anticipated and should prove to provide us with incredible growth
opportunity.

         We have secured direct glass suppliers in China, which should help
reduce glass and component costs. We have acquired a production facility in
China through our U.C. Laser acquisition. Given this, with the addition of the
Crystal Impressions machinery and technology and the experience of our laser
operators, we expect to decrease not only our over head as a percentage of sales
but also expect to reduce our job costs in 2006 and increase our production
efficiencies helping again to achieve a lower cost. Negotiations are in progress
with major component and equipment suppliers for the retail laser equipment we
sell to independent retailers for quantity discounts we know will qualify for to
once again help lower our costs. Accordingly, we expect our gross margins in
both the glass and machine segments to increase in addition to the anticipated
increases in product sales.

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." All
statements other than statements of historical facts included or incorporated by
reference in this report, including, without limitation, statements regarding
our future financial position, business strategy, budgets, projected costs and
plans and objectives of management for future operations, are forward-looking
statements. In addition, forward-looking statements generally can be identified
by the use of forward-looking terminology such as "may," "will," "expect,"
"intend," "project," "estimate," "anticipate," "believe," or "continue" or the
negative thereof or variations thereon or similar terminology. Although we
believe that the expectations reflected in such forward-looking statements are
reasonable, we cannot give any assurance that such expectations will prove to
have been correct. Important factors that could cause actual results to differ
materially from our expectations ("Cautionary Statements") include, but are not
limited to, (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 and laser equipment components; (7) general economic and


                                       17

<PAGE>

business conditions; (8) ability to successfully integrate acquired operations;
and (9) other factors over which we have little or no control. All subsequent
written and oral forward-looking statements attributable to us, or persons
acting on our behalf, are expressly qualified in their entirety by the
cautionary statements. We assume no duty to update or revise our forward-looking
statements based on changes in internal estimates or expectations or otherwise.


ITEM 7.  FINANCIAL STATEMENTS.

         See pages beginning with page F-1.


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

         Effective March 7, 2006, De Joya & Company, the independent registered
public accounting firm that was previously engaged as the principal accountant
to audit our financial statements resigned. We were notified that De Joya &
Company decided to withdraw from the Public Company Accounting Oversight Board
and will no longer be performing public company audits. Effective March 7, 2006,
we engaged De Joya Griffith & Company, LLC to serve as our independent
registered public accountants to audit our financial statements for the fiscal
year ending December 31, 2005. Our board of directors approved both actions.

         De Joya & Company audited our financial statements for the fiscal year
ended December 31, 2004. The audit report on these financial statements was
modified as to uncertainty that the company would continue as a going concern.
Other than this modification, the report neither contained an adverse opinion or
a disclaimer of opinion, nor was qualified or modified as to uncertainty, audit
scope, or accounting principles.

         During the two most recent fiscal years and the subsequent interim
period through March 7, 2006, there were no disagreements with De Joya & Company
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which, if not resolved to the
satisfaction of De Joya & Company, would have caused it to make reference to the
subject matter of the disagreement in connection with its report.

         There were no other "reportable events" as that term is described in
Item 304(a)(1)(iv) of Regulation S-B that occurred during the two most recent
fiscal years and the subsequent interim period ending March 7, 2006.

         During our two most recent fiscal years and through March 7, 2006, the
date prior to the engagement of De Joya Griffith & Company, LLC, neither we nor
anyone on our behalf consulted De Joya Griffith & Company, LLC regarding the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
our consolidated financial statements.


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



                                       18
<PAGE>

to our management, including principal executive officer and principal financial
officer, as appropriate, to allow timely decisions regarding required
disclosure.


ITEM 8B. OTHER INFORMATION.

         None.


















                                       19
<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, directors, and key employees are:

         NAME                    AGE     POSITION

         Kevin T. Ryan            55     Chief Executive Officer and Director

         Doug Lee                 41     President

         Robert McDermott         60     Executive Vice President, Treasurer,
                                         Chief Financial Officer and Director

         Patty Hill               47     Corporate Secretary, Vice President
                                         Finance and Administration and
                                         Controller

         John S. Woodward         53     Director

         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.

KEVIN T. RYAN, CHIEF EXECUTIVE OFFICER AND DIRECTOR

         Mr. Ryan was the president of Lazer-Tek Designs from February 2002
until its acquisition by us in December 2002. He became our president and chief
executive officer and a director in July 2004 and then resigned as president in
January 2005. Since January 1998, he has served as president of Ryan Capital
Management and Charan Industries, Inc., Westbury, New York. Charan Industries,
Inc. is currently involved in construction and redevelopment, product line
development for coin-operated games and the food and beverage industry, and
special situations in hotel and marina operations. From 1992 to 1996, Mr. Ryan
was the president of Bowling Corporation of America, a subsidiary of Charan.
During that period, Charan's bowling, leisure, and gaming activities accounted
for 80% of Charan's corporate sales and had 4,000 full and part-time employees.
In 1996, Bowling Corporation of America was sold to AMF, Inc. Mr. Ryan also
serves as president of McCary & Rood, an international trading company, since
January 1999.

DOUG LEE, PRESIDENT

         In January 2005, Mr. Lee was elected as president to succeed Mr. Ryan.
Immediately prior to his election, he was our executive vice president and
director of operations. Mr. Lee joined us in December 2002, when we acquired
Lazer-Tek Designs. Mr. Lee served as executive vice president for Lazer-Tek
Designs from November 1999 to the acquisition date, where he managed operations
and directed marketing and sales. In the 1990's, he founded TD Sports, which
organized training camps sponsored by corporations in the Midwest. He is a
frequent motivational speaker and has extensive experience in the media. Since
1988, he has co-hosted a National Football League radio show, as well as served
as color commentator for several professional and collegiate sporting events.
Mr. Lee also served as an advisor during the National Basketball Association
collective bargaining agreement in the mid 1990's. He has been the co-owner of
Springboard Agency, a web and marketing company based in Dallas, Texas, since
June 2004. Mr. Lee was involved in professional basketball from 1988 to 2000 as
a player and consultant. He played in the National Basketball Association and
several teams in Europe, as well as Israel and Japan. He has served on several
boards including Fellowship of Christian Athletes of Nevada from 2001 to 2002,
and is currently serving a second 4-year term on the advisory council for Purdue
University. Mr. Lee attended


                                       20
<PAGE>

Texas A&M University and Purdue University where he received a BS in RHI
Business with "Big Ten" Academic Honors.

ROBERT MCDERMOTT, EXECUTIVE VICE PRESIDENT, TREASURER, CHIEF FINANCIAL OFFICER
AND DIRECTOR

         Mr. McDermott has been our executive vice president, treasurer, chief
financial officer and a director since July 2004. Since 1998, he has served as a
vice president of Ryan Capital Management and has acted as financial advisor for
numerous business ventures. From 1977 until 2005 Mr. McDermott was the chief
financial officer and a director of Charan Industries, Inc. Charan Industries
owned and operated over 100 locations in the United States, which included
recreation businesses, shopping centers, apartment buildings, and office
buildings. In addition, Charan Industries, Inc. was involved in manufacturing
joint ventures in China. From 1971 to 1977 Mr. McDermott served as domestic and
international subsidiary controller for a division of Nabisco Inc., a Fortune
100 Company. From 1968 to 1971, he was a senior accountant for Price Waterhouse
& Co. Mr. McDermott is a Certified Public Accountant and is a director of a
number of privately held companies.

PATTY HILL, CORPORATE SECRETARY, VICE PRESIDENT FINANCE AND ADMINISTRATION AND
CONTROLLER

         Ms. Hill has been the controller of Lazer-Tek since October 2002 and
became our controller in December 2002. She became our corporate secretary and
vice president finance and administration in July 2004. 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 the controller for Forefront, 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, in management accounting.
Ms. Hill received a bachelor of science degree as an accounting major from the
University of Minnesota School of Management.

JOHN S. WOODWARD, DIRECTOR

         Mr. Woodward became a director in February 2003 and served as our
president from April 2003 to July 2004. 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.

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.

AUDIT COMMITTEE

         The entire board of directors acts as our audit committee. We do not
have an audit committee financial expert serving on our audit committee at this
time. We propose to expand our board of directors in the near future to include
a financial expert.

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.



                                       21
<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, 2005, there was compliance with all
Section 16(a) filing requirements applicable to our officers, directors and
greater than 10% beneficial owners except as follows:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
REPORTING PERSON                                    DATE REPORT DUE                       DATE REPORT FILED
--------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                                    <C>
Patty Hill                                             12/14/05                               02/22/06
--------------------------------------------------------------------------------------------------------------------
Patty Hill                                             12/19/05                               02/22/06
--------------------------------------------------------------------------------------------------------------------
Doug Lee                                               12/14/05                               02/22/06
--------------------------------------------------------------------------------------------------------------------
Doug Lee                                               12/19/05                               02/22/06
--------------------------------------------------------------------------------------------------------------------
Robert McDermott                                       12/14/05                               02/23/06
--------------------------------------------------------------------------------------------------------------------
Robert McDermott                                       12/19/05                               02/23/06
--------------------------------------------------------------------------------------------------------------------
Kevin Ryan                                             12/13/05                               03/02/06
--------------------------------------------------------------------------------------------------------------------
Kevin Ryan                                             12/14/05                               03/02/06
--------------------------------------------------------------------------------------------------------------------
John S. Woodward                                       12/01/05                               02/21/06
--------------------------------------------------------------------------------------------------------------------
John S. Woodward                                       12/14/05                               02/21/06
--------------------------------------------------------------------------------------------------------------------
</TABLE>


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 served as executive officers at the end of December 31, 2005 and earned in
excess of $100,000 per annum during any part of our last three fiscal years:

<TABLE>

                           SUMMARY COMPENSATION TABLE

<CAPTION>
----------------------------------------------------------------------------------------------------------------------

                                                                          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>

----------------------------------------------------------------------------------------------------------------------
Kevin T. Ryan       2005        -0-          -0-         -0-          -0-           -0-          -0-          -0-
  (1)<F1>           2004        -0-          -0-         -0-          -0-           -0-          -0-          -0-
----------------------------------------------------------------------------------------------------------------------
  Doug Lee (2)<F2>  2005      150,000        -0-         -0-          -0-           -0-          -0-          -0-
----------------------------------------------------------------------------------------------------------------------
     John S.        2005        -0-          -0-         -0-          -0-           -0-          -0-          -0-
    Woodward,       2004        -0-          -0-         -0-          -0-           -0-          -0-          -0-
  President (3)<F3> 2003    170,000 (4)<F4>  -0-         -0-          -0-           -0-          -0-          -0-
----------------------------------------------------------------------------------------------------------------------
 Rainer Eissing,    2005      60,000         -0-         -0-          -0-           -0-          -0-          -0-
      Chief         2004      246,450        -0-         -0-          -0-           -0-          -0-          -0-
   Technol-ogy      2003      189,450        -0-         -0-          -0-           -0-          -0-        -0-(6)<F6>
   Officer (5)<F5>
----------------------------------------------------------------------------------------------------------------------
------------------
<FN>
(1)<F1>  Mr. Ryan became our chief executive officer in July 2004 and served as
         president from July 2004 to January 2005.
(2)<F2>  Mr. Lee became our president in January 2005.
(3)<F3>  Mr. Woodward was our president from April 2003 to July 2004.
(4)<F4>  We issued Mr. Woodward 340,000 shares of common stock valued at
         $170,000 for his services.
(5)<F5>  Includes amounts paid to Mr. Eissing through his company. See "Certain
         Relationships and Related Transactions."
(6)<F6>  Does not include the value of a car furnished by us for use by Rainer
         Eissing.
</FN>
</TABLE>

         There were no stock options granted in 2005 and no options are
outstanding at December 31, 2005.

COMPENSATION OF DIRECTORS

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


                                       22

<PAGE>


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.


ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
           RELATED STOCKHOLDER MATTERS.

         The following table sets forth certain information, as of February 17,
2006, concerning shares of our common stock, the only class of our securities
that are issued and outstanding, held by (1) each stockholder known by us to own
beneficially more than five percent of the common stock, (2) each of our
directors, (3) each of our executive officers, and (4) all of our directors and
executive officers as a group:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                               AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER (1)<F1>                   BENEFICIAL OWNERSHIP          PERCENT OF CLASS (2)<F2>
--------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>                                 <C>
Kevin T. Ryan                                                      137,542,000                        49.0%
3950 E. Patrick Lane, Suite 101
Las Vegas, NV 89120
--------------------------------------------------------------------------------------------------------------------
Urban Casavant                                                    47,000,000 (3)<F3>                  16.7%
136 Arbor Way
Henderson, NV  89074
--------------------------------------------------------------------------------------------------------------------
John S. Woodward                                                    43,000,000                        15.3%
1181 Grier Drive, Suite B-116
Las Vegas, NV 89119
--------------------------------------------------------------------------------------------------------------------
Doug E. Lee                                                         15,300,000                         5.4%
--------------------------------------------------------------------------------------------------------------------
Patty Hill                                                          2,500,000                          0.9%
--------------------------------------------------------------------------------------------------------------------
Robert McDermott                                                    2,000,000                          0.7%
--------------------------------------------------------------------------------------------------------------------
Officers and directors as a group (5 persons)                      200,342,000                        71.3%
--------------------------------------------------------------------------------------------------------------------
-------------------
<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.

(2)<F2>  This table is based on 280,837,972 shares of Common Stock outstanding
         as of February 17, 2006. If a person listed on this table has the right
         to obtain additional shares of Common Stock within sixty (60) days from
         February 17, 2006, the additional shares are deemed to be outstanding
         for the purpose of computing the percentage of class owned by such
         person, but are not deemed to be outstanding for the purpose of
         computing the percentage of any other person.

(3)<F3>  Includes shares held of record by CMKEXTREME, Inc. and UAJC 2005
         Irrevocable Trust.
</FN>
</TABLE>


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

EQUITY COMPENSATION PLANS

         As of December 31, 2005, our equity compensation plans were as follows:

                                       23
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                 NUMBER OF SECURITIES TO BE    WEIGHTED AVERAGE EXERCISE
                                  ISSUED UPON EXERCISE OF        PRICE OF OUTSTANDING         NUMBER OF SECURITIES
                                   OUTSTANDING OPTIONS,          OPTIONS, WARRANTS AND       REMAINING AVAILABLE FOR
        PLAN CATEGORY               WARRANTS AND RIGHTS                 RIGHTS                   FUTURE ISSUANCE
-------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                           <C>                         <C>
Equity compensation plans                  None                          N/A                         None
approved by security holders
-------------------------------------------------------------------------------------------------------------------

Equity compensation plans not              None                          N/A                         None
approved by security holders
-------------------------------------------------------------------------------------------------------------------

Total                                      None                                                      None
-------------------------------------------------------------------------------------------------------------------
</TABLE>

CHANGES IN CONTROL

         As of December 29, 2005, we entered into an Asset Purchase Agreement
with U.C. Laser Ltd., in which we agreed to purchase all of the assets of U.C.
Laser used in connection with the manufacturing, distribution and marketing of
its decorative images and products. The assets to be acquired include U.C.
Laser's subsidiaries, U.C. Laser, Inc. and CIC Laser Technologies Ltd., as well
as U.C. Laser's worldwide, exclusive license to use the colored glass technology
owned by Laser Glass Ltd.

         In consideration for the purchased assets, we will assume the
liabilities arising from or related to the purchased assets and issue a number
of our shares of Class B Preferred Stock as will collectively have voting rights
equal to 45% of all voting rights of all our capital stock outstanding
immediately after the closing, determined on a fully diluted basis. The shares
to be issued to U.C. Laser will be convertible into a total number of shares of
common stock as would, immediately after such conversion, represent 45% of all
shares of our capital stock then outstanding on a fully diluted basis. Twenty
percent of the shares to be issued to U.C. Laser will be placed into escrow to
satisfy any obligations of U.C. Laser to indemnify us for losses arising from
(1) a material breach by U.C. Laser of any representation, warranty, covenant,
restriction, or agreement made in the Asset Purchase Agreement or (2) fraud or
an intentional misstatement by U.C. Laser. The escrow period shall terminate 90
days after the closing of the transaction.

         We have agreed that our board of directors, upon the completion of this
transaction, shall consist of five members, two of whom shall be Marshall D.
Butler and Zvi Dinstein.


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.

         RAINER EISSING. As of October 5, 2005, we entered into a Transfer of
Assets Agreement with Innovative Motions, which is a company owned by Rainer
Eissing, who was an officer, director and principal shareholder of the company
at the time. Under the terms of the agreement, we transferred our Berlin
Division of Crystalix Imaging, Ltd., a subsidiary of the company, to Innovative
Motions in consideration for shares of Mr. Eissing's common stock and preferred
stock. Mr. Eissing owned beneficially 8,621,000 shares of common stock (22.9% of
the outstanding common shares) and 962,100 shares of preferred stock (24.5% of
the outstanding preferred shares). Innovative Motions, or a designee, will
retain 1,000,000 shares of common stock.


                                       24
<PAGE>

         Mr. Eissing resigned as an officer and director of the company. We had
planned to curtail European operations, as such operations had not been
profitable. Mr. Eissing expressed an interest in acquiring the Berlin Division,
thereby resulting in the agreement.

         During the years ended December 31, 2005, 2004 and 2003, purchases of
equipment from Entwicklungen Werbetechnik Software, a company wholly-owned by
Rainer Eissing, amounted to approximately $0, $0 and $19,046, respectively. This
related party vendor does not have any formal agreement. Management believes
that these transactions are negotiated at arm's length. In 2003, Mr. Eissing was
paid $189,450 through his company, Innovative Motions and was paid $246,450 in
2004 and $-0- in 2005. We have included these amounts in the Summary
Compensation Table in "Executive Compensation" above.

         MARC JANSSENS. As of November 13, 2005, we received the executed
Transfer of Assets Agreement with Marc Janssens, who was a director and
principal shareholder at the time. Under the terms of the agreement, we
transferred one refurbished laser-engraving machine to Mr. Janssens, in
consideration for shares of Mr. Janssens' common stock and preferred stock. Mr.
Janssens owned beneficially 2,796,000 shares of common stock (7.5% of the
outstanding common shares) and 110,000 shares of preferred stock (2.8% of the
outstanding preferred shares). Mr. Janssens resigned as a director.

         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 accrued
interest at the annual rate of 7-1/8% but provided for an increase in order to
maintain a 4% margin above Mr. Woodward's borrowing rate. Interest was payable
on the first day of each month, beginning January 1, 2003. The note was
originally due June 30, 2003 and 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.

         On July 21, 2004, we issued a convertible promissory note to Mr.
Woodward in the amount of $1,824,000, which represents principal due on a
previously issued note payable in the amount of $1,343,722 plus accrued interest
in the amount of $480,279. This note bore interest at 10% per annum and called
for monthly interest payments from August 1, 2004 to December 1, 2004. Beginning
on January 1, 2005, this note required monthly principal payments of $50,405
plus accrued interest with any unpaid principal and interest due on July 1,
2007. The monthly principal and interest payments could be paid with shares of
our common stock at the option of the holder. The conversion price was the
lesser of the average closing price of our common stock five business days
immediately prior to the conversion notice or $0.08. We agreed to register the
shares issuable upon conversion of this note.

         On November 29, 2005, we entered into a Stock Exchange for Principle
Debt and Forgiveness of Interest Agreement with John S. Woodward, in which Mr.
Woodward agreed to forgive all accrued interest on his promissory note and to
accept 34,000,000 shares of common stock as full and complete payment of the
note described in the preceding paragraph. As of September 30, 2005, the
outstanding principal balance of this note was $1,824,000 and accrued interest
was $218,255. Mr. Woodward has been a director of the company at all times
pertinent to this promissory note.

         KEVIN RYAN. In connection with the Lazer-Tek acquisition, we owed 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 was paid. Mr. Ryan obtained a Writ of Possession entitling
him to all of our assets as of June 2, 2003.

         We entered into a consulting agreement with McCary & Rood dated May 28,
2003 under which Kevin Ryan provided 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. As compensation for the satisfactory
performance by Mr. Ryan under the agreement, we agreed to pay a fee of $20,000
per month that Mr. Ryan performed as determined by us. This agreement was
terminated effective July 31, 2004.


                                       25
<PAGE>

         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 accrued at 10% per annum and was payable monthly. On December 1, 2003,
we entered into a Secured Promissory Note with Kevin Ryan in the amount of
$1,010,000. Interest accrued on the note at 10% per annum and was payable
monthly. All principal and unpaid accrued interest under the Secured Promissory
Note is due and payable no later than December 1, 2004.

         In December 2003, Rainer Eissing, Marc Janssens, and Oswaldus Van Dam
agreed to transfer a portion of their 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 shares of Messrs. Eissing, Janssens, and Van Dam were
reallocated as of July 21, 2004.

         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).

         On July 21, 2004, we issued a convertible promissory note to Mr. Ryan
in the amount of $5,396,764, which represented (a) principal due on two
previously issued notes payable in the amounts of $852,680 and $1,010,000, (b)
principal due under a revolving credit agreement in the amount of $1,766,500,
(c) principal due under an additional note payable in the amount of $1,500,000
and (d) accrued interest on the above mention obligations in the amount of
$267,584. This note bore interest at 10% per annum and called for monthly
principal payments from August 1, 2004 to December 1, 2004 of $45,000. On the
last day of the month beginning on August 31, 2004 through November 30, 2004,
the accrued interest was to be added to the principal amount. Beginning on
January 1, 2005, this note required monthly principal payments of $174,584 with
any unpaid principal and interest due on July 1, 2007. The monthly principal and
interest payments could be paid with shares of our common stock at the option of
the holder. The conversion price was the lesser of the average closing price of
our common stock five business days immediately prior to the conversion notice
or $0.08. In addition, we granted to Mr. Ryan a warrant to purchase 1,875,000
shares of our common stock. The exercise price was $0.08. We agreed to register
the shares issuable upon conversion of this note and exercise of the warrant.

         On July 21, 2004, we issued a promissory note to Ryan Capital
Management, Inc., a company controlled by Kevin Ryan, in the amount of $452,137,
which represented principal due on a previously issued note payable in the
amount of $400,000 plus accrued interest in the amount of $52,137. This note
bore interest at 10% per annum and called for monthly interest payments from
August 1, 2004 to December 1, 2004. Beginning on January 1, 2005, this note
required monthly principal payments of $37,902 plus accrued interest with any
unpaid principal and interest due on December 1, 2005.

         On August 1, 2004, we issued a promissory note to McCary & Rood, a
company controlled by Kevin Ryan, in the amount of $280,000, which represented
past due consulting fees under a consulting agreement dated May 28, 2003. This
note called for monthly payments beginning August 1, 2004 of $30,000 with any
unpaid principal due on May 1, 2005.

         On August 1, 2004, we issued a promissory note to McCary & Rood in the
amount of $214,037, which represented past due reimbursable expenses under a
consulting agreement dated May 28, 2003. This note called for monthly payments
beginning August 1, 2004 of $30,000 with any unpaid principal due on March 1,
2005.

         As of December 9, 2005, we entered into a Stock Exchange for Principle
Debt and Forgiveness of Interest Agreement with Kevin T. Ryan, in which Mr. Ryan
agreed to forgive all accrued interest on the promissory notes owed to him, Ryan
Capital and McCary & Rood, and to accept 119,000,000 shares of common stock as
full and complete payment of these notes.

         DOUGLAS LEE. Doug Lee became our president in January 2005. During the
year ended December 31, 2005, we purchased $1357.39 from the Springboard Agency,
a web design and software support company in Dallas,


                                       26
<PAGE>

Texas. Mr. Lee is a 50% owner and Chief Operations Officer of the Springboard
Agency. We purchased $nil from Springboard for the year ended December 31, 2004.

         FUTURE TRANSACTIONS. All future affiliated transactions will be made or
entered into on terms that are no less favorable to us than those that can be
obtained from any unaffiliated third party. A majority of the independent,
disinterested members of our board of directors will approve future affiliated
transactions. We believe that of the transactions described above have been on
terms as favorable to us as could have been obtained from unaffiliated third
parties as a result of arm's length negotiations.

         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.

--------------------------------------------------------------------------------
    REGULATION
    S-B NUMBER                          EXHIBIT
--------------------------------------------------------------------------------
       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)
--------------------------------------------------------------------------------
       2.4          Asset Purchase Agreement by and between U.C. Laser Ltd. and
                    Crystalix Group International, Inc. dated as of December 29,
                    2005
--------------------------------------------------------------------------------
       3.1          Articles of Incorporation of Crystalix Group International,
                    Inc. (5)
--------------------------------------------------------------------------------
       3.2          Bylaws of Americabilia.com, Inc. (6)
--------------------------------------------------------------------------------
       10.1         Form of Master Equipment Lease and Software License
                    Agreement (5)
--------------------------------------------------------------------------------
       10.2         Patent Sub-License Agreement, dated January 1, 2002, between
                    Laser Design International, LLC and Crystalix USA Group (5)
--------------------------------------------------------------------------------
       10.3         Patent Sub-License Agreement, dated February 17, 1999,
                    between Janesville Group Limited and Lazer-Tek Designs, Ltd.
                    (5)
--------------------------------------------------------------------------------
       10.4         Settlement Agreement and Release between Crystalix Group
                    International, Inc. and John S. Woodward dated July 21, 2004
                    (7)
--------------------------------------------------------------------------------
       10.5         Amended and Restated Convertible Promissory Note to John S.
                    Woodward dated July 21, 2004 (7)
--------------------------------------------------------------------------------
       10.6         Settlement Agreement and Release among Crystalix Group
                    International, Inc. Kevin T Ryan, Ryan Capital Management,
                    Inc. and McCary & Rood dated July 21, 2004.  (7)
--------------------------------------------------------------------------------
       10.7         Amended and Restated Convertible Promissory Note to Kevin T.
                    Ryan dated July 21, 2004 (7)
--------------------------------------------------------------------------------
       10.8         Promissory Note to Ryan Capital Management, Inc. dated July
                    21, 2004 (7)
--------------------------------------------------------------------------------


                                       27
<PAGE>

--------------------------------------------------------------------------------
    REGULATION
    S-B NUMBER                          EXHIBIT
--------------------------------------------------------------------------------
       10.9         Promissory Note for $280,000 to McCary & Rood dated August
                    1, 2004  (7)
--------------------------------------------------------------------------------
      10.10         Promissory Note for $214,037 to McCary & Rood dated August
                    1, 2004 (7)
--------------------------------------------------------------------------------
      10.11         Amended and Restated Warrant to Purchase Common Stock of
                    Crystalix Group International, Inc. issued to Kevin T. Ryan
                    (8)
--------------------------------------------------------------------------------
      10.12         Registration Rights Agreement (7)
--------------------------------------------------------------------------------
      10.13         Amended and Restated Warrant to Purchase Common Stock issued
                    to CMKXTREME.COM (8)
--------------------------------------------------------------------------------
      10.14         Amended and Restated Convertible Promissory Note to
                    CMKXTREME, Inc. dated April 11, 2005 (9)
--------------------------------------------------------------------------------
      10.15         Convertible Promissory Note to UAJC 2005 Irrevocable Trust
                    dated April 11, 2005 (9)
--------------------------------------------------------------------------------
      10.16         Registration Rights Agreement with UAJC 2005 Irrevocable
                    Trust dated April 11, 2005 (9)
--------------------------------------------------------------------------------
      10.17         Security Agreement with UAJC 2005 Irrevocable Trust dated
                    April 11, 2005 (9)
--------------------------------------------------------------------------------
      10.18         Security Agreement with CMKXTREME, Inc. dated April 11, 2005
                    (9)
--------------------------------------------------------------------------------
      10.19         Subordination Agreement between CMKXTREME, Inc. and John S.
                    Woodward dated April 11, 2005 (9)
--------------------------------------------------------------------------------
      10.20         Subordination Agreement between UAJC 2005 Irrevocable Trust,
                    CMKXTREME, Inc., Kevin T. Ryan and John S. Woodward dated
                    April 11, 2005 (9)
--------------------------------------------------------------------------------
      10.21         Intercreditor Agreement between Kevin T. Ryan and CMKXTREME,
                    Inc. dated April 11, 2005 (9)
--------------------------------------------------------------------------------
      10.22         Amendment to Registration Rights Agreement between the
                    Company and CMKXTREME, Inc. dated April 11, 2005 (9)
--------------------------------------------------------------------------------
      10.23         Membership Interest Purchase Agreement dated as of April 8,
                    2005, between Crystalix Group International, Inc., Laser
                    Design International, LLC, and members of Laser Design
                    International, LLC (10)
--------------------------------------------------------------------------------
      10.24         Transfer of Assets Agreement Between Crystalix Group
                    International and Innovative Motions (11)
--------------------------------------------------------------------------------
      10.25         Transfer of Assets Agreement Between Crystalix Group
                    International and Marc Janssens (12)
--------------------------------------------------------------------------------
      10.26         Stock Exchange for Principle Debt and Forgiveness of
                    Interest Agreement with CMKXTREME and UAJC 2005 Irrevocable
                    Trust dated November 26, 2005 (13)
--------------------------------------------------------------------------------
      10.27         Stock Exchange for Principle Debt and Forgiveness of
                    Interest Agreement with John S. Woodward dated November 29,
                    2005 (13)
--------------------------------------------------------------------------------
      10.28         Stock Exchange for Principle Debt and Forgiveness of
                    Interest Agreement with Kevin T. Ryan dated December 9, 2005
                    (14)
--------------------------------------------------------------------------------
       16.1         Letter from De Joya & Company (14)
--------------------------------------------------------------------------------


                                       28
<PAGE>
--------------------------------------------------------------------------------
    REGULATION
    S-B NUMBER                          EXHIBIT
--------------------------------------------------------------------------------
       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 current
         report on Form 8-K, filed January 5, 2006.
(5)      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/A for the quarter ended June 30, 2004, filed
         September 23, 2004.
(7)      Incorporated by reference to the exhibits to the registrant's annual
         report on Form 10-KSB for the year ended December 31, 2004, filed April
         15, 2005.
(8)      Incorporated by reference to the exhibits to the registrant's current
         report on Form 8-K, filed May 5, 2005.
(9)      Incorporated by reference to the exhibits to the registrant's current
         report on Form 8-K, filed August 23, 2005. Confidential treatment was
         requested as to certain portions, which portions are omitted and filed
         separately with the Securities and Exchange Commission.
(10)     Incorporated by reference to the exhibits to the registrant's current
         report on Form 8-K, filed October 11, 2005.
(11)     Incorporated by reference to the exhibits to the registrant's current
         report on Form 8-K, filed November 17, 2005.
(12)     Incorporated by reference to the exhibits to the registrant's current
         report on Form 8-K, filed December 1, 2005.
(13)     Incorporated by reference to the exhibits to the registrant's current
         report on Form 8-K, filed December 14, 2005.
(14)     Incorporated by reference to the exhibits to the registrant's current
         report on Form 8-K, filed March 10, 2006.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

         On March 7, 2006, De Joya & Company resigned as our independent public
accountants as a result of its withdrawal from the Public Company Accounting
Oversight Board. De Joya & Company had audited our financial statements for the
fiscal year ended December 31, 2004. On March 7, 2006, we engaged De Joya
Griffith & Company, LLC to serve as our independent public accountants for the
fiscal year ending December 31, 2005.


                                       29
<PAGE>

AUDIT FEES

         De Joya Griffith & Company, LLC is expected to bill approximately
$95,000 for the audit of our 2005 annual financial statements. For the fiscal
years ended December 31, 2005 and 2004, De Joya & Company billed $15,000 and
$95,500, respectively, for the audit of our annual financial statements and
review of our Form 10-QSB filings.

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 2005 and 2004.

TAX FEES

         There were no fees billed for tax compliance, tax advice, and tax
planning services for the fiscal years ended December 31, 2005 and 2004.

ALL OTHER FEES

         There were no fees billed for other services for the fiscal years ended
December 31, 2005 and 2004.

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
board in accordance with procedures for the company approved all of the services
described above.

                                       30
<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:   March 30, 2006                 By: /s/ KEVIN T. RYAN
                                          -------------------------------------
                                          Kevin T. Ryan, Chief Executive Officer

         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.

<TABLE>
<CAPTION>
SIGNATURE                                TITLE                                          DATE
<S>                                      <C>                                            <C>

                                         Chief Executive Officer and Director
/S/ KEVIN T. RYAN                        (Principal Executive Officer)                  March 30, 2006
------------------------------------
Kevin T. Ryan
                                         Executive Vice President, Treasurer, Chief
                                         Financial Officer, and Director (Principal
/S/ ROBERT MCDERMOTT                     Financial Officer)                             March 30, 2006
------------------------------------
Robert McDermott
                                         Corporate Secretary, Vice President Finance
                                         and Administration and Controller (Principal
/S/ PATTY HILL                           Accounting Officer)                            March 30, 2006
-------------------------------------
Patty Hill


                                         Director
------------------------------------

John S. Woodward

</TABLE>

                                       31
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2005 AND 2004









                                    CONTENTS

                                                                            PAGE


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                      F-1


CONSOLIDATED FINANCIAL STATEMENTS:

   Consolidated Balance Sheet as of December 31, 2005                        F-2

   Consolidated Statements of Operations for the years
      ended December 31, 2005 and 2004                                       F-3

   Consolidated Statements of Comprehensive Loss for the years
      ended December 31, 2005 and 2004                                       F-4

   Consolidated Statement of Stockholders' Deficit for the years
      ended December 31, 2005 and 2004                                       F-5

   Consolidated Statements of Cash Flows for the years ended
      December 31, 2005 and 2004                                             F-6

   Notes to Consolidated Financial Statements                                F-7



<PAGE>





             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



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, 2005, and the related
consolidated  statements  of  operations,   comprehensive  loss,   stockholders'
deficit,  and cash flows for the years ended  December 31, 2005 and 2004.  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  standards  of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Crystalix Group  International,  Inc. and  Subsidiaries as of December 31, 2005,
and the  consolidated  results of their  operations and cash flows for the years
ended  December 31, 2005 and 2004,  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  $5,691,026,  used cash for  operations  of
$676,290 for the year ended  December 31, 2005,  has an  accumulated  deficit of
$21,736,588  as of  December  31,  2005 and has a  working  capital  deficit  of
$1,165,314 as of December 31, 2005.  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/ DeJoya Griffith & Company, LLC

CERTIFIED PUBLIC ACCOUNTANTS

Henderson, Nevada
February 20, 2006


                                      F-1A

<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



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, 2004, and the related
consolidated statements of operations, comprehensive loss, stockholders' deficit
and cash flows for the year then ended. 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
audit.

We  conducted  our audit in  accordance  with  standards  of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audit provides 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, 2004,
and the  consolidated  results of their  operations  and cash flows for the year
then ended, 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  $8,302,578,  used cash for  operations  of
$3,936,800 for the year ended  December 31, 2004, has an accumulated  deficit of
$16,045,562  as of  December  31,  2004 and has a  working  capital  deficit  of
$4,262,946 as of December 31, 2004.  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/ DeJoya & Company
CERTIFIED PUBLIC ACCOUNTANTS

Henderson, Nevada
March 18, 2005



                                      F-1B

<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                      DECEMBER
                                                                                      31, 2005
                                                                                   ---------------
<S>                                                                                <C>
                                     ASSETS

CURRENT ASSETS
    Cash and cash equivalents                                                      $       59,844
    Accounts receivable, net of allowance of $26,000                                      140,833
    Inventory                                                                             641,011
    Other current assets                                                                  184,400
                                                                                   ---------------
TOTAL CURRENT ASSETS                                                                    1,026,088
                                                                                   ---------------

PROPERTY AND EQUIPMENT, net                                                               449,427
                                                                                   ---------------

INTANGIBLE ASSETS
    Licenses and related costs, net of accumulated amortization of $737,840             1,152,061
    Customer lists and relationships, net of accumulated amortization of $67,500           45,000
    Patent, net of accumulated amortization of $53,060                                    795,901
                                                                                   ---------------
                                                                                        1,992,962
                                                                                   ---------------

OTHER ASSETS                                                                               16,843

                                                                                   ---------------
TOTAL ASSETS                                                                       $    3,485,320
                                                                                   ===============

                LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable and accrued expenses ($8,343 to related party)                $    1,698,410
    Customer deposits                                                                     111,492
    Note payable - related party                                                          381,500

                                                                                   ---------------
TOTAL CURRENT LIABILITIES                                                               2,191,402
                                                                                   ---------------

COMMITMENTS AND CONTINGENCIES                                                                 -

STOCKHOLDERS' EQUITY
    Preferred stock - Class A, $0.001 par value; 10,000,000 shares
      authorized; 0 Class A shares issued and outstanding                                     -

    Common stock; $0.001 par value; 300,000,000 shares
      authorized; 280,707,192 shares issued and outstanding                               280,707
    Additional paid-in capital                                                         22,749,799
    Accumulated deficit                                                               (21,736,588)
                                                                                   ---------------
TOTAL STOCKHOLDERS' EQUITY                                                              1,293,918
                                                                                   ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                         $    3,485,320
                                                                                   ===============
</TABLE>

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

                                       F-2
<PAGE>

              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                        YEARS ENDED
                                                             --------------------------------
                                                                December         December
                                                                31, 2005         31, 2004
                                                             --------------   ---------------
<S>                                                          <C>              <C>
REVENUE
    Product sales                                            $   2,734,402    $    3,398,384
    Lease revenue                                                  808,513         1,124,537
    Royalty revenue                                                 76,578           105,753
                                                             --------------   ---------------
TOTAL REVENUE                                                    3,619,493         4,628,674
                                                             --------------   ---------------
COST OF REVENUE
    Product sales                                                1,225,788         1,642,855
    Lease revenue                                                  366,690           415,809
    Royalty revenue                                                 16,986            61,116
                                                             --------------   ---------------
TOTAL COST OF REVENUE                                            1,609,464         2,119,780

                                                             --------------   ---------------
GROSS PROFIT                                                     2,010,029         2,508,894
                                                             --------------   ---------------
OPERATING EXPENSES
    Payroll and related benefits                                 1,446,240         1,934,620
    General and administrative                                   2,511,183         4,376,563
    Impairment expense                                                 -             212,215
                                                             --------------   ---------------
TOTAL OPERATING EXPENSES                                         3,957,423         6,523,398
                                                             --------------   ---------------

LOSS FROM OPERATIONS                                            (1,947,394)       (4,014,504)
                                                             --------------   ---------------
OTHER INCOME (EXPENSES):
    Gain on cancelation of contracts with licensees                302,571               -
    Settlement with licensee                                      (250,000)              -
    Amortization of debt discounts                              (2,756,696)         (460,816)
    Interest expense and financing                                (988,704)       (3,849,758)
    Other                                                          (50,803)           22,500

                                                             --------------   ---------------
TOTAL OTHER INCOME (EXPENSE)                                    (3,743,632)       (4,288,074)
                                                             --------------   ---------------

LOSS BEFORE PROVISION FOR INCOME TAXES                          (5,691,026)       (8,302,578)

PROVISION FOR INCOME TAXES                                             -                 -
                                                             --------------   ---------------

NET LOSS                                                     $  (5,691,026)   $   (8,302,578)
                                                             ==============   ===============

NET LOSS PER SHARE - BASIC AND DILUTED                       $       (0.10)   $        (0.23)
                                                             ==============   ===============

WEIGHTED AVERAGE COMMON EQUIVALENT
    SHARES OUTSTANDING - BASIC AND DILUTED                      54,366,359        35,441,222
                                                             ==============   ===============
</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 COMPREHENSIVE LOSS


                                                     YEARS ENDED
                                            --------------------------------
                                               December          December
                                               31, 2005          31, 2004
                                            --------------    --------------

NET LOSS                                    $  (5,691,026)    $  (8,302,578)

FOREIGN CURRENCY TRANSLATION ADJUSTMENT           114,490           (72,179)
                                            --------------    ---------------

COMPREHENSIVE LOSS                          $  (5,576,536)    $  (8,374,757)
                                            ==============    ==============
















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

                                       F-4
<PAGE>

              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES

            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


<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, 2003                    3,920,000   $   3,920      34,113,192   $   34,113    $  4,364,634    $   (42,311)

Shares issued for financing costs                                         3,019,000        3,019         320,014
Value of Class A Preferred Stock
  re-allocated to investors and senior
  management                                                                                           2,833,253
Value of beneficial conversion feature and
  value of warrants issued in connection
  with convertible notes payable                                                                       3,187,512
Foreign currency translation adjustment                                                                                 (72,179)
Net loss

                                             -----------------------    -------------------------   -----------------------------
BALANCE, DECEMBER 31, 2004                    3,920,000       3,920      37,132,192       37,132      10,705,413       (114,490)


Shares issued for converstion of debt
  and accrued interest                                                  200,000,000      200,000      11,898,036
Shares issued to consultants for services                                 1,800,000        1,800          43,200
Shares issued to employees for services                                  21,150,000       21,150         401,850
Shares surrendered in exchange for
  Crystalix Europe subsidiary                  (962,100)       (962)     (5,058,000)      (5,058)       (305,975)
Shares surrendered in exchange for
  equipment                                    (110,000)       (110)     (2,796,000)      (2,796)          2,906
Conversion of Series A preferred stock
  to common stock                            (2,847,900)     (2,848)     28,479,000       28,479         (25,631)
Value of beneficial conversion feature in
  connection with convertible note payable                                                                30,000
Foreign currency translation adjustment
                                                                                                                        114,490
Net loss

                                             -----------------------    -------------------------   -----------------------------
BALANCE, DECEMBER 31, 2005                           -    $     -       280,707,192   $  280,707    $ 22,749,799    $       -
                                             =======================    =========================   =============================


<CAPTION>
                                               ACCUMULATED
                                                 DEFICIT        TOTAL
                                            ------------------------------
<S>                                         <C>             <C>
BALANCE, DECEMBER 31, 2003                  $  (7,742,984)  $ (3,382,628)

Shares issued for financing costs                                323,033
Value of Class A Preferred Stock
  re-allocated to investors and senior
  management                                                   2,833,253
Value of beneficial conversion feature and
  value of warrants issued in connection
  with convertible notes payable                               3,187,512
Foreign currency translation adjustment                          (72,179)
Net loss                                       (8,302,578)    (8,302,578)

                                            -----------------------------
BALANCE, DECEMBER 31, 2004                    (16,045,562)    (5,413,587)


Shares issued for converstion of debt
  and accrued interest                                        12,098,036
Shares issued to consultants for services                         45,000
Shares issued to employees for services                          423,000
Shares surrendered in exchange for
  Crystalix Europe subsidiary                                   (311,995)
Shares surrendered in exchange for
  equipment                                                          -
Conversion of Series A preferred stock
  to common stock                                                    -
Value of beneficial conversion feature in
  connection with convertible note payable                        30,000
Foreign currency translation adjustment
                                                                 114,490
Net loss                                       (5,691,026)    (5,691,026)

                                            -----------------------------
BALANCE, DECEMBER 31, 2005                  $ (21,736,588)  $  1,293,918
                                            =============================
</TABLE>

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

                                       F-5
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                               YEARS ENDED
                                                                   ----------------------------------
                                                                        DECEMBER          December
                                                                       31, 2005           31, 2004
                                                                   ----------------  ----------------
<S>                                                                <C>               <C>
CASH FLOW FROM OPERATING ACTIVITIES:
  Net loss                                                         $    (5,691,026)  $    (8,302,578)
  Adjustment to reconcile net loss to net cash
  used in operating activities
     Depreciation and amortization                                       1,013,117         1,101,181
     Provision for doubtful accounts                                      (308,000)           74,000
     Common stock and reallocation of Series A preferred                       -           2,747,011
     stock issued for financing costs
     Common stock and reallocation of Series A preferred                       -             409,275
     stock issued for services
     Common stock issued for services                                      468,000               -
     Amortization of debt discounts                                      2,756,696           460,816
     Exchange gain                                                         114,490           (72,774)
     Gain loss on disposal of fixed assets                                     -              (1,973)
     Gain on cancelation of contracts with licensees                      (302,571)              -
     Write down of intangible assets                                           -             212,215
  Changes in operating assets and liabilities:
  (Increase) decrease in:
     Accounts receivable                                                   559,108           (54,580)
     Inventory                                                             (40,850)         (316,990)
     Other current assets                                                   40,345          (203,646)
     Deposits                                                                2,523             4,269
  Increase (decrease) in:
    Accounts payable and accrued expenses                                1,327,492         1,060,768
    Customer deposits                                                       88,071           (57,267)
    Deferred revenue                                                      (703,685)         (996,527)
                                                                   ----------------  ----------------
Net cash used in operating activities                                     (676,290)       (3,936,800)
                                                                   ----------------  ----------------
CASH FLOW FROM INVESTING ACTIVITIES:
  Payment to repurchase laser                                                  -             (39,006)
  Payment for acquisition of subsidiary                                   (475,000)              -
  Cash paid with disposition of Crystalix Europe                           (19,887)              -
  Payments to acquire property and equipment                               (50,503)         (159,341)
                                                                   ----------------  ----------------
Net cash used in investing activities                                     (545,390)         (198,347)
                                                                   ----------------  ----------------
CASH FLOW FROM FINANCING ACTIVITIES:
  Net advances from related party                                              -           2,452,825
  Proceeds from issuance of notes payable                                  540,000         2,000,000
  Proceeds from issuance of notes payable - related parties                471,500               -
  Payments on notes payable                                                    -              (3,600)
  Payments on notes payable - related parties                                  -            (103,530)
                                                                   ----------------  ----------------
Net cash provided by financing activities                                1,011,500         4,345,695
                                                                   ----------------  ----------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS                   -                 595
                                                                   ----------------  ----------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      (210,180)          211,143

CASH AND CASH EQUIVALENTS, Beginning of year                               270,024            58,881
                                                                   ----------------  ----------------
CASH AND CASH EQUIVALENTS, End of year                             $        59,844   $       270,024
                                                                   ================  ================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Interest Paid                                                    $           -     $           -
                                                                   ================  ================
  Income taxes paid                                                $           -     $           -
                                                                   ================  ================
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
  FINANCING ACTIVITIES
  Conversion of debt and accrued interst into common stock        $    12,098,036    $           -
                                                                   ================  ================
  Discounts on convertible notes payable                          $        30,000    $     3,187,512
                                                                   ================  ================
  Payments on notes payable from sale of vehicles                 $            -     $        85,499
                                                                   ================  ================

</TABLE>

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

                                       F-6

<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


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.  The  statement  of  stockholder's
                  deficit  is that of CUSA  with an  increase  in the  number of
                  shares  outstanding  of 6,669,192  that  represents the shares
                  retained by the ABIL stockholders;

            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
                  $5,000.

         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.

         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.  The Company incurred a net loss for the year ended
         December 31, 2005 of $5,691,026,  used cash for operating activities of
         $676,290 for the year ended December 31, 2005 and at December 31, 2005,
         had an accumulated deficit of $21,736,588 and a working capital deficit
         of  $1,165,314.  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


                                      F-7

<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


         recoverability and 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  has  recently   exchanged   $12,098,036   of
         convertible  debentures and accrued interest for 200,000,000  shares of
         the Company's common stock which has reduced the Company's  liabilities
         by approximately 85%. Also, on August 17, 2005, the Company purchased a
         51% interest in Laser Design  International,  LLC, a California limited
         liability  company  ("LDI").  LDI is the  owner  of a  patent  for  sub
         surfacing laser  decorative  imaging,  and also has exclusive rights to
         the license for the color technology.  In addition,  on January 9, 2006
         the Company agreed to an Asset Purchase Agreement with U.C. Laser, Ltd.
         of Israel (DBA Crystal Impressions).  The Company purchased all of U.C.
         Laser's  assets used in conjunction  with the marketing,  manufacturing
         and distribution of its decorative sub surface laser art products.  The
         assets acquired include U.C. Laser's subsidiaries,  Crystal Impressions
         and CIC Laser Technologies of Shanghai,  China, as well as U.C. Laser's
         worldwide  exclusive license for its innovative sub surface laser color
         technology.  Management believes that the merger of these two companies
         formerly  operating and  competing  separately as Crystalix and Crystal
         Impressions,   will  enable  the   Company  to   increase   operational
         efficiencies and take advantage of economies of scale which will enable
         the Company to continue as a going concern.

         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
         (d.b.a.  Crystalix  Europe - up to the date of  disposition  October 5,
         2005),  Lazer-Tek  Designs,  Inc.,  Lazer-Tek  Designs Ltd. and its 51%
         owned  subsidiary,  Laser Design  International,  LLC (from the date of
         acquisition  August  17,  2005)   (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 sells laser  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


                                      F-8
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


         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.  For the years ended  December  31, 2005 and
         2004,  there were no options granted to employees of the Company and as
         of December 31, 2005, there were no options outstanding.

         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, 2005, the Company used
         estimates in determining  the  realization of its accounts  receivable,
         inventory,  its intangible  assets,  accrued  expenses and the value of
         equity  common stock and warrant  instruments  issued for  compensation
         expense and  financing  costs.  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  financial
         condition.  The Company  monitors its  exposure  for credit  losses and
         maintains  allowances for anticipated losses, as required.  The Company
         is currently in negotiations  with existing  distributors over disputes
         regarding  amount owed to the Company for purchases of crystal  blocks.
         Most of these


                                      F-9
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


         amounts in dispute  arose prior to the Company's  new  management  team
         taking over the operations of the Company.  Since most of these amounts
         are 1 to 2 years old, the Company has deemed them uncollectible and has
         established  an  allowance  for  uncollectible  accounts.  The  Company
         regularly reviews its accounts  receivable  balances for collectibility
         and  establishes an allowance for  uncollectible  accounts.  During the
         years ended December 31, 2005 and 2004, the Company  recognized $25,209
         and $74,000, respectively, in bad debt expense.

         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 or 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


                                      F-10

<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


         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.  The Company's
         adoption  effective  January 1, 2002 did not have a material  impact to
         the Company's financial position or results of operations.

         INTANGIBLE ASSETS

         Intangible  assets consist of product and laser  licenses,  capitalized
         software  costs,  website  development  costs,  artwork and copyrights,
         patents,  trademarks, trade names, customer lists and relationships and
         were mostly  acquired  with the purchase of  Laser-Tek,  as well as the
         acquisition  of LDI. 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
            Trade name and trademark                           5 years
            Patent                                             6 years

         For the years ended December 31, 2005 and 2004, the Company  recognized
         an  impairment   loss  on   intangible   assets  of  $0  and  $212,215,
         respectively,   which  is  included  in   impairment   expense  in  the
         accompanying consolidated statement of operations. Amortization expense
         amounted to $602,953 and $662,430 for the years ended December 31, 2005
         and 2004,  respectively.  Amortization  expense is as  follows  for the
         years ended December 31:

                        2006                           $       328,574
                        2007                                   328,574
                        2008                                   306,074
                        2009                                   306,074
                        2010                                   306,074
                        Thereafter                             417,592
                                                       ---------------

                                                       $     1,992,962
                                                       ===============

                                      F-11
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


         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 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. Shipping and handling charges
         are included in gross revenue,  with the related costs included in cost
         of revenue.



                                      F-12
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


         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.

         DEFERRED REVENUE
         Deferred revenue represent amounts received as non-refundable  payments
         upon the signing of the licensing  agreements and delivery of the laser
         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 laser  equipment or
         products, are accounted as refundable customer-lessee deposits.

         COSTS OF REVENUE

         Cost of revenue  includes  raw  materials,  component  parts,  shipping
         supplies,  freight  cost and  customs,  direct  labor,  and an overhead
         allocation based on manufacturing  facility use.  Shipping and handling
         costs are not a significant portion of the cost of revenue.

         During  the  years  ended  December  31,  2005 and  2004,  the  Company
         purchased  products from one vendor that represented  approximately 38%
         and 42% of total cost of revenue.

         ADVERTISING AND MARKETING COSTS

         The Company  expenses  advertising  and  marketing  costs as  incurred.
         Advertising and marketing expense for the years ended December 31, 2005
         and 2004 amounted to $3,632 and $32,001, respectively.

         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.


                                      F-13
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


         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.
         The  following  potential  common  shares have been  excluded  from the
         computation  of diluted net loss per share for the years ended December
         31, 2005 and 2004 because the effect would have been anti-dilutive:

                                                              2005        2004
                                                           ---------   ---------

              Warrants issued with convertible debentures          -   4,375,000

         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 years ended December 31, 2005 and
         2004,  Crystalix  Europe  had  net  sales  of  $286,467  and  $990,612,
         operating  loss of $251,849  and  $484,904 and net loss of $255,332 and
         $494,702, respectively.  Crystalix Europe was disposed of on October 5,
         2005.

         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 years ended  December 31, 2005 and
         2004, the foreign currency translation  adjustment has been included in
         the consolidated  statement of stockholders'  equity (deficit)  showing
         the change in comprehensive loss.

         RESEARCH AND DEVELOPMENT

         Research and development costs are expensed as incurred.

         RECLASSIFICATION

         Certain  reclassifications  have  been  made to the  2004  balances  to
         conform to the 2005 presentation.


                                      F-14
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


         RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In  December  2004,  the  FASB  issued  SFAS  No.123   (revised  2004),
         "Share-Based  Payment"  ("SFAS  123(R)").   SFAS  123(R)  will  provide
         investors  and other users of financial  statements  with more complete
         and neutral  financial  information by requiring that the  compensation
         cost  relating to  share-based  payment  transactions  be recognized in
         financial  statements.  That  cost will be  measured  based on the fair
         value of the equity or liability instruments issued. SFAS 123(R) covers
         a wide range of share-based  compensation  arrangements including share
         options,  restricted  share  plans,   performance-based  awards,  share
         appreciation  rights,  and employee share purchase  plans.  SFAS 123(R)
         replaces SFAS No. 123, "Accounting for Stock-Based  Compensation",  and
         supersedes  APB  Opinion  No.  25,  "Accounting  for  Stock  Issued  to
         Employees".  SFAS 123, as  originally  issued in 1995,  established  as
         preferable a  fair-value-based  method of  accounting  for  share-based
         payment transactions with employees.  However, that Statement permitted
         entities the option of  continuing to apply the guidance in Opinion 25,
         as long as the  footnotes to financial  statements  disclosed  what net
         income would have been had the preferable  fair-value-based method been
         used.  Public  entities  (other  than  those  filing as small  business
         issuers)  will be required to apply SFAS 123(R) as of the first interim
         or annual  reporting  period  that  begins  after June 15,  2005.  This
         pronouncement is effective for the Company, a small business issuer, as
         of the  first  interior  annual  reporting  period  that  begins  after
         December 15, 2005. The Company has evaluated the impact of the adoption
         of SFAS 123(R),  and does not believe the impact will be significant to
         the Company's overall results of operations or financial position.

         In May 2005,  the FASB  issued SFAS No.  154,  "Accounting  Changes and
         Error  Corrections." This statement applies to all voluntary changes in
         accounting  principle and requires  retrospective  application to prior
         periods'  financial  statements  of  changes in  accounting  principle,
         unless  this  would  be  impracticable.  This  statement  also  makes a
         distinction  between  "retrospective   application"  of  an  accounting
         principle and the "restatement" of financial  statements to reflect the
         correction  of an error.  This  statement is effective  for  accounting
         changes and  corrections of errors made in fiscal years beginning after
         December  15, 2005.  This  statement is not expected to have a material
         effect on the Company's  consolidated  financial position or results of
         operations.

         In February  2006,  FASB issued SFAS No. 155,  "Accounting  for Certain
         Hybrid  Financial  Instruments".  SFAS  No.  155  amends  SFAS  No 133,
         "Accounting  for Derivative  Instruments and Hedging  Activities",  and
         SFAF No. 140,  "Accounting  for  Transfers  and  Servicing of Financial
         Assets and Extinguishments of Liabilities".  SFAS No. 155, permits fair
         value  remeasurement for any hybrid financial  instrument that contains
         an  embedded  derivative  that  otherwise  would  require  bifurcation,
         clarifies which interest-only strips and principal-only  strips are not
         subject to the requirements of SFAS No. 133,  establishes a requirement
         to  evaluate  interest  in  securitized  financial  assets to  identify
         interests  that  are  freestanding   derivatives  or  that  are  hybrid
         financial  instruments  that contain an embedded  derivative  requiring
         bifurcation,  clarifies that  concentrations of credit risk in the form
         of subordination are not embedded derivatives,  and amends SFAS No. 140
         to eliminate the prohibition on the qualifying  special-purpose  entity
         from  holding a  derivative  financial  instrument  that  pertains to a
         beneficial interest other than another derivative financial instrument.
         This statement is effective for all financial  instruments  acquired or
         issued  after the  beginning  of the  Company's  first fiscal year that
         begins after September 15,



                                      F-15
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


         2006.  This statement is not expected to have a material  effect on the
         Company's consolidated financial position or results of operations.

         In June 2005, the EITF reached consensus on Issue No. 05-6, Determining
         the Amortization Period for Leasehold  Improvements ("EITF 05-6.") EITF
         05-6  provides  guidance on  determining  the  amortization  period for
         leasehold  improvements  acquired in a business combination or acquired
         subsequent  to lease  inception.  The  guidance  in EITF  05-6  will be
         applied prospectively and is effective for periods beginning after June
         29, 2005.  EITF 05-6 is not  expected to have a material  effect on the
         Company's consolidated financial position or results of operations.

NOTE 2 - ACQUISITIONS AND DISPOSITION

         ACQUISITION

         On August 17,  2005,  the  Company  purchased  a 51%  interest in Laser
         Design  International,  LLC, a  California  limited  liability  company
         ("LDI").  The  Company  paid  $708,000  for a 51%  interest  in  LDI as
         follows;  $75,000 deposit already paid; $250,000 at closing and $76,600
         on each of the  following  dates:  December 31,  2005,  April 30, 2006,
         August 31, 2006, December 31, 2006 and April 8, 2007. In addition,  the
         Company paid $150,000 to Norwood Operating  Company,  LLC in connection
         with this  purchase  agreement.  A portion  of the  purchase  price was
         funded by the  convertible  note from the UAJC 2005  Irrevocable  Trust
         (See Note 6). The collateral for the $1,000,000  convertible  note will
         be the Company's 51% ownership in LDI. The  acquisition  was accounting
         for using the purchase  method of  accounting.  The  purchase  price of
         $858,000 was allocated to the fair value of the assets and liabilities.
         LDI is the  owner  of a  patent  for  sub  surfacing  laser  decorative
         imaging,  and also has  exclusive  rights to the  license for the color
         technology.  This  acquisition  of LDI is not  considered a significant
         acquisition,  therefore,  pro forma information has not been presented.
         Minority  interest  has  not  been  recorded  since  LDI's  liabilities
         exceeded their assets at the date of acquisition and LDI incurred a net
         loss from the date of acquisition to December 31, 2005.

         The fair  value of the  assets  acquired  and  liabilities  assumed  is
         summarized as follows:

             Current assets                      $  24,435
             Patent                                848,961
             Other assets                           16,843
             Current liabilities                   (32,239)
                                                 ----------
             Purchase price                      $ 858,000
                                                 ==========

         DISPOSITION

         On October 5, 2005, the Company entered into an agreement with a former
         officer  and  director of the  Company  whereby  the Company  agreed to
         exchange  its  Crystalix  Europe  subsidiary  for the  cancellation  of
         962,100 shares of Class A preferred stock and 5,058,000 share of common
         stock that were owned by the former officer and director.  There was no
         gain or loss recognized on this



                                      F-16
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


         transaction  since it was with a related party.  The shares of canceled
         stock in this transaction  were valued at the historical  carrying cost
         of the Company's Crystalix Europe subsidiary.

NOTE 3 - INVENTORY

         Inventory at December 31, 2005, consist of the following:

            Glass blocks, pre-made images and related products     $    549,827
            Electronic parts and accessories                             91,184
                                                                   ------------
                                                                   $    641,011
                                                                   =============

NOTE 4 - PROPERTY AND EQUIPMENT

         Property and equipment at December 31, 2005, consist of the following:

            Computers and equipment                                $    720,265
            Vehicles                                                      4,000
            Furniture and fixtures                                      108,815
            Leasehold improvements                                       32,188
                                                                   -------------
                                                                        865,268
            Less accumulated depreciation and amortization             (415,841)
                                                                   -------------
                                                                   $    449,427
                                                                   =============

         Depreciation expense for the years ended December 31, 2005 and 2004 was
         $410,164 and $438,752, respectively. During the year ended December 31,
         2005,  the Company  canceled  certain  agreements  with  licensees that
         resulting in the Company transferring  ownership of the equipment under
         leases to the licensee.  The cost and  accumulated  depreciation of the
         equipment  transferred was $1,732,630 and $775,613,  respectively.  The
         Company  recognized a gain of the  cancellation of these  agreements of
         $302,571.  During  the  year  ended  December  31,  2004,  the  Company
         recognized a loss on disposal of certain  assets of $243,893 and during
         the year ended  December  31,  2004,  the Company  recognized a gain on
         disposal of certain assets of $1,973.

NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

         Accounts payable and accrued expenses at December 31, 2005,  consist of
         the following:

            Accounts payable - trade                       $       439,066
            Royalties payable                                      445,967
            Accrued interest - related party                         8,343
            LDI acquisition                                        383,000
            Legal settlement                                       205,950
            Other accrued expenses                                 216,084
                                                           ---------------
                                                           $     1,698,410
                                                           ===============


                                      F-17
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


NOTE 6 - NOTES PAYABLE - INCLUDING RELATED PARTIES

         During the year ended December 31, 2005, Mr. Kevin Ryan loaned $381,500
         to the Company.  This note accrues interest at 10% per annum and is due
         on December 31, 2006.

         During the fourth quarter of 2005, the following  outstanding  debt was
         converted into shares of the Company's common stock:

            John Woodward (a)                          $     1,824,000
            Kevin Ryan (b)                                   5,396,764
            Ryan Capital Management, Inc. (c)                  452,137
            McCary & Rood, Inc. (d)                            280,000
            McCary & Rood, Inc. (e)                            214,037
            CMKXTREME.COM (f)                                2,000,000
            UAJC 2005 Irrevocable Trust (g)                    540,000
                                                       ---------------
                                                       $    10,706,938
                                                       ===============

         On November 26, 2005,  CMKXTREME.COM  and UAJC 2005  Irrevocable  Trust
         converted  an  aggregate  amount  of debt  of  $2,540,000  and  accrued
         interest of $265,265 into  47,000,000  shares of the  Company's  common
         stock. In addition,  the 2,500,000  warrants held by CMKXTREME.COM were
         canceled in connection with the transaction.

         On November 29, 2005,  John Woodward  converted  debt of $1,824,000 and
         accrued  interest of $247,864 into  34,000,000  shares of the Company's
         common stock.

         On December 9, 2005,  Kevin Ryan converted an aggregate  amount of debt
         of $6,342,938 and accrued interest of $877,969 into 119,000,000  shares
         of the Company's common stock. In addition, the 1,875,000 warrants held
         by Kevin Ryan were canceled in connection with the transaction.

         There was no gain or loss recognized on the above conversion of debt to
         equity as all three parties are deemed to be related parties due to the
         significant number of shares received in the transactions.  As a result
         of these three  transactions,  the Company  issued  stock  representing
         approximately 72% of its issued and outstanding shares.

         The  unamortized  debt  discount  at the date of  conversion  was fully
         amortized  to   financing   costs.   Financing   cost  related  to  the
         amortization  of these debt  discounts was  $2,756,696 and $460,816 for
         the years ended December 31, 2005 and 2004, respectively.

         Below is a  description  of each note that was  converted  into  common
         stock during the fourth quarter of 2005:

         a.   On July 21, 2004, the Company issued a convertible promissory note
              to Mr. John  Woodward,  the  Company's  former  President,  in the
              amount  of  $1,824,000,  which  represented  principal  due  on  a
              previously  issued note payable in the amount of  $1,343,722  plus
              accrued  interest  in the amount of  $480,278.  This note  carried
              interest at 10% per annum and called for monthly interest payments
              from August 1, 2004 to December 1, 2004.  Beginning  on January 1,
              2005,


                                      F-18
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


              the  note  required  monthly  principal  payments  of $50,405 plus
              accrued  interest  with any unpaid  principal  and interest due on
              July 1, 2007. The monthly principal and interest payments could be
              paid with shares of the  Company's  common  stock at the option of
              the  holder.  The  conversion  price was the lesser of the average
              closing  price of the  Company's  common stock five  business days
              immediately  prior to the conversion  notice or $0.08. The Company
              had  determined  that there was a  beneficial  conversion  feature
              associated with this convertible  promissory note in the amount of
              $615,600.  The  discount has been  amortized  over the term of the
              note.  This note was  secured  by all the  assets of the  Company,
              subordinated to Mr. Ryan's secured position.

         b.   On July 21, 2004, the Company issued a convertible promissory note
              to Mr. Kevin Ryan, the Company's Chief Executive  Officer,  in the
              amount of $5,396,764,  which  represented (a) principal due on two
              previously  issued  notes  payable in the amounts of $852,680  and
              $1,010,000,  (b) principal due under a revolving  credit agreement
              in the amount of $1,766,500, (c) principal due under an additional
              note payable in the amount of $1,500,000 and (d) accrued  interest
              on the above mention  obligations in the amount of $267,584.  This
              note  carried  interest  at 10% per annum and called  for  monthly
              principal  payments  from  August 1, 2004 to  December  1, 2004 of
              $45,000. On the last day of the month beginning on August 31, 2004
              through  November 30, 2004, the accrued  interest was added to the
              principal amount. Beginning on January 1, 2005, this note required
              monthly  principal  payments of $174,584 with any unpaid principal
              and  interest  due on July 1,  2007.  The  monthly  principal  and
              interest  payments  could be paid  with  shares  of the  Company's
              common stock at the option of the holder. The conversion price was
              the lesser of the average  closing price of the  Company's  common
              stock  five  business  days  immediately  prior to the  conversion
              notice or $0.08.  In addition,  the Company  granted to Mr. Ryan a
              warrant to purchase 1,875,000 shares of the Company's common stock
              at $0.08 per share and may be  exercised by the holder at any time
              prior to July 21,  2011.  The  warrants  also  include a  cashless
              exercise  feature that allows the holder to pay the exercise price
              by  surrendering  a  sufficient  number of warrants to pay for the
              exercise  price  of  the  warrants  being  exercised  as  follows:
              warrants  to be  surrendered  equals the total  exercise  price of
              warrants  being  exercised  divided  by  the  fair  value  of  the
              Company's common stock at the date of exercise. In accordance with
              EITF 00-27, the Company first determined the value of the note and
              the fair value of the  detachable  warrants  issued in  connection
              with this note.  The  estimated  value of the warrants of $200,625
              was determined  using the  Black-Scholes  option pricing model and
              the following  assumptions:  term of 7 years, a risk free interest
              rate of 3.5%, a dividend  yield of 0% and  volatility of 371%. The
              face amount of the note payable of $5,396,764 was  proportionately
              allocated  to  the  note  and  the  warrants  in  the  amounts  of
              $5,203,330 and $193,434,  respectively.  The value of the note was
              then  allocated  between  the note and the  beneficial  conversion
              feature,    which   amounted   to   $3,188,488   and   $2,014,842,
              respectively.  The combined total discount was $2,208,276, and has
              been amortized over the term of the note.  This note is secured by
              all the assets of the Company.

         c.   On July 21, 2004,  the Company  issued a  promissory  note to Ryan
              Capital  Management,  Inc.  (this  company is  controlled by Kevin
              Ryan) in the amount of $452,137,  which represented  principal due
              on a previously issued note payable in the amount of $400,000 plus
              accrued



                                      F-19
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


              interest  in the  amount of  $52,137.  This note  carried interest
              at 10% per annum and called  for monthly  interest  payments  from
              August 1, 2004 to December 1, 2004.  Beginning on January 1, 2005,
              this note required  monthly  principal  payments  of $37,902  plus
              accrued  interest with any unpaid  principal and  interest due  on
              December  1, 2005.  This note was secured by all the assets of the
              Company.

         d.   On August 1, 2004, the Company issued a promissory  note to McCary
              & Rood (this company is controlled by Kevin Ryan) in the amount of
              $280,000,  which  represented  past due  consulting  fees  under a
              consulting  agreement  dated  May  28,  2003.  This  note  carried
              interest  at  10%  per  annum  and  called  for  monthly  payments
              beginning  August 1, 2004 of $30,000 with any unpaid principal due
              on May 1,  2005.  This note was  secured  by all the assets of the
              Company.

         e.   On August 1, 2004, the Company issued a promissory  note to McCary
              & Rood in the  amount  of  $214,037,  which  represented  past due
              reimbursable  expenses under a consulting  agreement dated May 28,
              2003.  This note carried  interest at 10% per annum and called for
              monthly  payments  beginning  August 1, 2004 of  $30,000  with any
              unpaid  principal  due on March 1, 2005.  This note was secured by
              all the assets of the Company.

         f.   On September 23, 2004, the Company issued a convertible promissory
              note to  CMKXTREME.COM  in the  amount  of  $2,000,000.  This note
              carried interest at 10% per annum and called for monthly principal
              payments of $83,333 plus accrued  interest  beginning  November 1,
              2004 with any  unpaid  principal  and  interest  due on October 1,
              2006.  The monthly  principal and interest  payments could be paid
              with  shares of the  Company's  common  stock at the option of the
              holder. The conversion price was the lesser of the average closing
              price of the Company's common stock five business days immediately
              prior to the conversion notice or $0.08. In addition,  the Company
              granted to CMKXTREME.COM a warrant to purchase 2,500,000 shares of
              the Company's common stock at $0.08 per share and may be exercised
              by the  holder  at any  time  prior to  September  23,  2011.  The
              warrants also includes a cashless exercise feature that allows the
              holder to pay the  exercise  price by  surrendering  a  sufficient
              number of warrants to pay for the  exercise  price of the warrants
              being exercised as follows:  warrants to be surrendered  equal the
              total exercise price of warrants  being  exercised  divided by the
              fair value of the Company's  common stock at the date of exercise.
              In accordance  with EITF 00-27,  the Company first  determined the
              value of the note and the fair  value of the  detachable  warrants
              issued in connection  with this note.  The estimated  value of the
              warrants of $200,000 was determined using the Black-Scholes option
              pricing model and the following  assumptions:  term of 7 years,  a
              risk  free  interest  rate of  3.5%,  a  dividend  yield of 0% and
              volatility of 371%. The face amount of the convertible  promissory
              note of $2,000,000 was  proportionately  allocated to the note and
              the  warrants  in  the  amounts  of   $1,818,182   and   $181,818,
              respectively,  using the relative fair value method.  The value of
              the note was then  allocated  between the note and the  beneficial
              conversion  feature,  which  amounted to $1,636,364  and $181,818,
              respectively.  The combined total  discount was $363,636,  and has
              been amortized over the term of the note. This note was secured by
              all the assets of the Company,  subordinated to Mr. Ryan's secured
              position.



                                      F-20
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


         g.   On April 11, 2005,  the Company  executed  and  delivered to Urban
              Casavant,  as the trustee of the UAJC 2005  Irrevocable  Trust,  a
              convertible promissory note in the principal amount of $1,000,000.
              The note was secured by the Company's 51%  membership  interest in
              LDI,  accrued  interest at 10% per annum, was due May 1, 2007, and
              required  monthly  payments  of  principal  and  accrued  interest
              beginning July 1, 2005. The loan proceeds were to be funded over a
              two-year  period.  The note was convertible as to any payment when
              due,  as to all or any portion of the note upon the sale of 51% or
              more of the Company's  outstanding  common stock or sale of all of
              the Company's assets, or as to a portion of the note not to exceed
              $1,000,000  upon an  event of  default.  The  conversion  price is
              $0.05.  The value of the note was  allocated  between the note and
              the beneficial conversion feature,  which amounted to $510,000 and
              $30,000,   respectively.  The  beneficial  conversion  feature  of
              $30,000 has been  amortized over the term of the note. The trustee
              of the Trust is the  beneficial  owner of CMKXTREME,  Inc.,  which
              loaned  $2,000,000 to the Company in September  2004.  The Company
              had received funding of $540,000.

NOTE 7 - STOCKHOLDERS' DEFICIT

         On July 21, 2004,  the Company  issued  3,019,000  common shares of the
         Company's  common stock to Kevin Ryan as additional  consideration  for
         the financing provided to the Company. The value of these common shares
         issued to Mr.  Ryan  (determined  using the 10-day  average  per shares
         price of the  Company's  common stock prior to the  issuance  date) was
         $323,033.  Also,  certain  holders of the Company's  Series A preferred
         stock  reallocated  2,647,900 of their shares to certain  investors and
         senior  members of the Company's  management  team.  The value of these
         Series A  preferred  shares  (determined  using the 10-day  average per
         shares price of the  Company's  common stock prior to the issuance date
         multiplied by the 10 to 1 conversion rate) was $2,833,253.  The Company
         took a charge to financing costs and compensation expense of $2,747,011
         and  $409,275,  respectively,  related to the issuance of common shares
         and reallocation of the Series A preferred shares.

         On October 5, 2005, the Company entered into an agreement with a former
         officer  and  director of the  Company  whereby  the Company  agreed to
         exchange  its  Crystalix  Europe  subsidiary  for the  cancellation  of
         962,100 shares of Class A preferred stock and 5,058,000 share of common
         stock that were owned by the former officer and director.  There was no
         gain or loss recognized on this transaction since it was with a related
         party.  The shares of canceled stock in this transaction were valued at
         the  historical   carrying  cost  of  the  Company's  Crystalix  Europe
         subsidiary.

         On November 26, 2005,  CMKXTREME.COM  and UAJC 2005  Irrevocable  Trust
         converted  an  aggregate  amount  of debt  of  $2,540,000  and  accrued
         interest of $265,265 into  47,000,000  shares of the  Company's  common
         stock.

         On November 28, 2005,  the Company  issued  1,800,000  shares of common
         stock to two consultants for services  rendered valued at $45,000.  The
         value was  determined  by taking the number of shares  issued times the
         market value of the Company's stock on the date of issuance.


                                      F-21
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


         On November 28, 2005, the Company converted 2,847,900 shares of Class A
         preferred stock into 28,789,000 shares of common stock.

         On November 29, 2005,  John Woodward  converted  debt of $1,824,000 and
         accrued  interest of $247,864 into  34,000,000  shares of the Company's
         common stock.

         On  December 8, 2005,  the Company  entered  into an  agreement  with a
         former  stockholder  of the  Company  whereby  the  Company  agreed  to
         exchange  certain  equipment for the  cancellation of 110,000 shares of
         Class A preferred  stock and 2,796,000  share of common stock that were
         owned by the stockholder.  There was no gain or loss recognized on this
         transaction  since it was with a related party.  The shares of canceled
         stock in this transaction  were valued at the historical  carrying cost
         of the equipment.

         On December 9, 2005,  Kevin Ryan converted an aggregate  amount of debt
         of $6,342,938 and accrued interest of $877,969 into 119,000,000  shares
         of the Company's common stock.

         On December 9, 2005,  the Company  issued  21,150,000  shares of common
         stock  to  certain  key  employees  for  services  rendered  valued  at
         $423,000.  The value was  determined  by  taking  the  number of shares
         issued  times the market  value of the  Company's  stock on the date of
         issuance.

NOTE 8 - 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, 2005 are as follows:

            Deferred tax assets:
               Net operating loss                               $     5,500,000
               Stock issued for services and financing costs          1,807,000
               Allowance for doubtful accounts                            8,000
                                                                ----------------
                                                                      7,315,000
            Deferred tax liabilities:
               Step-up of basis of intangible assets                   (359,000)
               Depreciation of property and equipment                  (686,000)
               Other basis differences for assets acquired             (251,000)
                                                                ----------------
                                                                     (1,296,000)
               Net deferred tax asset                                 6,019,000
               Less valuation allowance                              (6,019,000)
                                                                ----------------

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

         At December  31,  2005,  the Company  had  federal net  operating  loss
         ("NOL") carryforwards of approximately $16,000,000. 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, 2005 AND 2004


         The valuation  allowance  increased by $1,368,000 and $2,628,000 during
         2005 and 2004, respectively.

         The  reconciliation  of the  effective  income tax rate to the  federal
         statutory  rate for the years  ended  December  31, 2005 and 2004 is as
         follows:

                                                             2005         2004
                                                          ---------    ---------
           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 9 - RELATED PARTY TRANSACTIONS

         During  the year  ended  December  31,  2005  and  2004,  purchases  of
         technology  consulting services from a related party vendor amounted to
         approximately $0 and $88,290,  respectively.  This related party vendor
         is wholly owned by a major shareholder of the Company and does not have
         a formal  agreement.  Management  believes that these  transactions are
         negotiated at arms length.

         During the year ended  December 31,  2004,  the Company paid $1,995 for
         computer   consulting   services  from  a  company  that  our  majority
         shareholder has an ownership interest.

         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.  Mr. Ryan became an officer of
         the Company in July 2004,  which  terminated  this  agreement.  For the
         years ended December 31, 2005 and 2004,  consulting expenses related to
         this agreement amounted to $0 and $140,000, respectively.

         During the year ended  December 31,  2005,  the Company paid $1,357 for
         marketing  materials from a company that our President has an ownership
         interest.

         See Note 2, 6 and 7 for additional related party transactions.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

         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, 2005:


                                      F-23
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


              Year ending December 31,
                2006                               $         121,086
                2007                                         124,548
                2008                                          63,138
                                                   -----------------

                                                   $         308,772
                                                   =================

         Rent  expense  amounted to $155,398  and  $229,937  for the years ended
         December 31, 2005 and 2004, respectively.

         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, 2005, the
         Company was not a named party to any pending legal  proceedings,  other
         than routine litigation deemed incidental to our business.

NOTE 11 - IMPAIRMENT EXPENSE

         For the year ended December 31, 2004,  impairment  expense consisted of
         the following:

                                                                   2004
                                                          ----------------
             Impairment of capitalized software costs     $       176,052
             Impairment of website development costs               36,163
                                                          ----------------
                                                          $       399,113
                                                          ================

NOTE 12 - SUBSEQUENT EVENTS

         U.C. LASER

         On December  29,  2005,  the  Company  entered  into an Asset  Purchase
         Agreement  with U.C.  Laser Ltd.,  to be effective  January 1, 2006, in
         which the Company  agreed to purchase  all of the assets of U.C.  Laser
         used in connection with the  manufacturing,  distribution and marketing
         of its  decorative  images  and  products.  The  assets to be  acquired
         include  U.C.  Laser's  subsidiaries,  U.C.  Laser,  Inc. and CIC Laser
         Technologies Ltd., as well as U.C. Laser's worldwide, exclusive license
         to use the  colored  glass  technology  owned by Laser  Glass  Ltd.  In
         consideration  for the  purchased  assets,  the Company will assume the
         liabilities arising from or related to the purchased assets and issue a
         number of  shares of Class B  Preferred  Stock of the  Company  as will
         collectively  have voting  rights equal to 45% of all voting  rights of
         all the capital stock of the Company outstanding  immediately after the
         closing,  determined on a fully diluted basis.  The shares to be issued
         to U.C. Laser will be convertible  into a total number of shares of the


                                      F-24
<PAGE>
              CRYSTALIX GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


         Company's  common stock as would,  immediately  after such  conversion,
         represent  45% of all  shares  of  capital  stock of the  Company  then
         outstanding on a fully diluted  basis.  Twenty percent of the shares to
         be issued to U.C.  Laser  will be placed  into  escrow to  satisfy  any
         obligations  of U.C.  Laser to indemnify the Company for losses arising
         from  (1) a  material  breach  by  U.C.  Laser  of any  representation,
         warranty,  covenant,  restriction,  or  agreement  made  in  the  Asset
         Purchase Agreement or (2) fraud or an intentional  misstatement by U.C.
         Laser.  The escrow period shall  terminate 90 days after the closing of
         the  transaction.  As of the date of this report,  this transaction has
         not closed.

         AMENDMENTS TO ARTICLES OF INCORPORATION

         The Company  also agreed to change its name to Seaena,  Inc.  following
         the closing of this  transaction.  The Company filed  amendments to its
         Articles  of  Incorporation  to effect  the name  change,  as well as a
         1-for-35 reverse stock split on its outstanding  shares of common stock
         and a reduction in the number of authorized shares of common stock from
         300,000,000 to 50,000,000. These amendments will be effective March 31,
         2006.


















                                      F-25