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<SEC-DOCUMENT>0001295345-06-000089.txt : 20060811
<SEC-HEADER>0001295345-06-000089.hdr.sgml : 20060811
<ACCEPTANCE-DATETIME>20060811120751
ACCESSION NUMBER:		0001295345-06-000089
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20060630
FILED AS OF DATE:		20060811
DATE AS OF CHANGE:		20060811

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ZAXIS INTERNATIONAL INC
		CENTRAL INDEX KEY:			0000797542
		STANDARD INDUSTRIAL CLASSIFICATION:	BLANK CHECKS [6770]
		IRS NUMBER:				680080601
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-15746
		FILM NUMBER:		061023711

	BUSINESS ADDRESS:	
		STREET 1:		115 EAST 57TH STREET
		STREET 2:		SUITE 1118
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10022
		BUSINESS PHONE:		646-202-9679

	MAIL ADDRESS:	
		STREET 1:		115 EAST 57TH STREET
		STREET 2:		SUITE 1118
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10022

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INFERGENE CO
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>zaxs06302006.htm
<DESCRIPTION>QUARTERLY REPORT FOR THE PERIOD ENDED JUNE 30, 2006
<TEXT>
<html>

<head>
<title>ZAXS</title>
</head>

<body>
<div>

<hr SIZE="4" NOSHADE COLOR="#000000">

<hr SIZE="2" NOSHADE COLOR="#000000">

<p ALIGN="CENTER"><b><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="4">UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION<br>
</font><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="3">Washington, D.C. 20549<br>
</font></b><font SIZE="4" FACE="Times New Roman, Times, Serif">___________________<br>
<br>
<strong>FORM 10-QSB<br>
</strong>___________________</font></p>

<p style="MARGIN: 0in 0in 0pt 0.5in; COLOR: windowtext; TEXT-INDENT: -0.5in"
align="center"><b><font style="FONT-WEIGHT: bold; FONT-SIZE: 12pt" face="Wingdings"
size="3">&#253</font><font style="FONT-WEIGHT: bold; FONT-SIZE: 3pt" size="1">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</font><font style="FONT-WEIGHT: bold; FONT-SIZE: 12pt" size="3">QUARTERLY REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></b></p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext" align="center"><font size="1">&nbsp; </font></p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center" align="center"><font
style="FONT-SIZE: 10pt" face="Times New Roman" size="2">For the quarterly period ended
June 30, 2006</font></p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext" align="center"><font size="1">&nbsp;&nbsp;
</font></p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center" align="center"><font
style="FONT-SIZE: 10pt" face="Times New Roman" size="2">OR</font></p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center" align="center"><font
size="1">&nbsp; </font></p>

<p style="MARGIN: 0in 0in 0pt 0.5in; COLOR: windowtext; TEXT-INDENT: -0.5in"
align="center"><b><font style="FONT-WEIGHT: bold; FONT-SIZE: 12pt" face="Wingdings"
size="3">&#168</font><font style="FONT-WEIGHT: bold; FONT-SIZE: 3pt" size="1">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</font><font style="FONT-WEIGHT: bold; FONT-SIZE: 12pt" size="3">TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></b></p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center" align="center">&nbsp;</p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center" align="center"><font
style="FONT-SIZE: 10pt" face="Times New Roman" size="2">For the transition period from
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center" align="center"><font
size="1">&nbsp;&nbsp; </font></p>

<p style="FONT-SIZE: 10pt; MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center"
align="center"><font style="FONT-SIZE: 10pt" face="Times New Roman" size="2">Commission
file number: 0-15476</font></p>

<p style="FONT-SIZE: 10pt; MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center"
align="center"><font size="1">&nbsp; </font></p>

<p ALIGN="center"><font face="TIMES NEW ROMAN, TIMES, SERIF" size="5"><b>ZAXIS
INTERNATIONAL INC.<br>
</b></font><font face="TIMES NEW ROMAN, TIMES, SERIF" size="1">(Exact Name Of Registrant
As Specified In Its Charter)</font></p>

<table border="0" cellpadding="0" cellspacing="0" width="100%">
  <tr>
    <td width="50%" align="center"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><u>Delaware</u></font></td>
    <td width="50%" align="center"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><u>68-0080601</u></font></td>
  </tr>
  <tr>
    <td width="50%" align="center" bgcolor="#ccffcc"><font size="1">(State of Incorporation)</font></td>
    <td width="50%" align="center" bgcolor="#ccffcc"><font size="1">(I.R.S. Employer
    Identification No.)</font></td>
  </tr>
  <tr>
    <td width="50%" align="center"><font size="1">&nbsp; </font></td>
    <td width="50%" align="center"><font size="1">&nbsp; </font></td>
  </tr>
  <tr>
    <td width="50%" align="center"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><u>115
    East 57th Street, Suite 1118, New York, NY</u></font></td>
    <td width="50%" align="center"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><u>10022</u></font></td>
  </tr>
  <tr>
    <td width="50%" align="center" bgcolor="#ccffcc"><font size="1">(Address of Principal
    Executive Offices)</font></td>
    <td width="50%" align="center" bgcolor="#ccffcc"><font size="1">(ZIP Code)</font></td>
  </tr>
</table>

<p align="center"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">Registrant's
Telephone Number, Including Area Code: (646) 202-9679</font></p>

<p ALIGN="JUSTIFY"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.&nbsp;Yes&nbsp;</font><font
size="2" FACE="WINGDINGS">&#120</font><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">&nbsp;No&nbsp;</font><font
size="2" FACE="WINGDINGS">&#168</font><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><br>
</font><font size="2">Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). </font><font
FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">Yes&nbsp;</font><font size="2"
FACE="WINGDINGS">&#120</font><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">&nbsp;No&nbsp;</font><font
size="2" FACE="WINGDINGS">&#168</font></p>

<p ALIGN="JUSTIFY"><font
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer, or a
non-accelerated filer.</font></p>

<table border="0" cellpadding="0" cellspacing="0" width="100%">
  <tr>
    <td width="33%" align="center"><font
    style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">Large accelerated
    filer <font style="FONT-FAMILY: Wingdings">&#168</font></font></td>
    <td width="33%" align="center"><font
    style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">Accelerated filer <font
    style="FONT-FAMILY: Wingdings">&#168</font></font><font id="TAB2"
    style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</font></td>
    <td width="34%" align="center"><font
    style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">Non-accelerated
    filer <font style="FONT-FAMILY: Wingdings">&#120</font></font></td>
  </tr>
</table>

<p ALIGN="JUSTIFY"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">At June 30, 2006,
the Registrant had 92,933,155 shares of common stock outstanding.</font></p>

<hr SIZE="2" NOSHADE COLOR="#000000">

<hr SIZE="4" NOSHADE COLOR="#000000">
</div>

<p><br clear="all" style="page-break-before:always; mso-break-type:section-break">
</p>
<div>

<hr NOSHADE SIZE="5">
<font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="3">

<hr SIZE="1" NOSHADE COLOR="#000000">
</font>

<p ALIGN="CENTER">&nbsp;</p>

<p ALIGN="CENTER"><a name="TABLE OF CONTENTS"><strong><font size="2">TABLE OF CONTENTS</font></strong></a></p>

<table ALIGN="CENTER" CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
  <tr VALIGN="BOTTOM">
    <th nowrap ALIGN="LEFT"><font size="2">Item</font><hr SIZE="1" NOSHADE COLOR="#000000"
    ALIGN="left">
    </th>
    <th></th>
    <th></th>
    <th></th>
    <th nowrap ALIGN="LEFT"><font size="2">Description</font><hr SIZE="1" NOSHADE
    COLOR="#000000" ALIGN="left">
    </th>
    <th COLSPAN="3" nowrap><font size="2">Page</font><hr SIZE="1" NOSHADE COLOR="#000000"
    WIDTH="60%">
    </th>
  </tr>
  <tr VALIGN="TOP" BGCOLOR="#ccffcc">
    <td ALIGN="CENTER" WIDTH="12%" COLSPAN="8"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2"><strong>PART I - FINANCIAL INFORMATION</strong></font></p>
    </div></td>
  </tr>
  <tr>
    <td><font size="2">&nbsp; </font></td>
  </tr>
  <tr VALIGN="TOP">
    <td ALIGN="LEFT" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 1.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="LEFT" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><a
    HREF="#a050"><p></a><font size="2">&nbsp;&nbsp; <a
    href="#ITEM 1.&nbsp;FINANCIAL STATEMENTS">FINANCIAL STATEMENTS.</a></font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT"><font size="2">3</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;</font></td>
  </tr>
  <tr VALIGN="TOP" BGCOLOR="#ccffcc">
    <td ALIGN="LEFT" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 2.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="LEFT" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><a
    HREF="#a051"><p></a><font size="2">&nbsp;&nbsp; <a
    href="#ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION">MANAGEMENT'S
    DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.</a></font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT"><font size="2">3</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr VALIGN="TOP">
    <td ALIGN="LEFT" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 3.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="LEFT" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><p><font
    size="2">&nbsp;&nbsp; <a href="#ITEM 3. CONTROLS AND PROCEDURES">CONTROLS AND PROCEDURES.</a></font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT"><font size="2">6</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="2">&nbsp; </font></td>
  </tr>
  <tr VALIGN="TOP">
    <td ALIGN="center" WIDTH="12%" COLSPAN="8" bgcolor="#ccffcc"><div
    STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font size="2"><strong>PART II - OTHER
    INFORMATION</strong></font></p>
    </div></td>
  </tr>
  <tr>
    <td><font size="2">&nbsp; </font></td>
  </tr>
  <tr VALIGN="TOP" BGCOLOR="#ccffcc">
    <td ALIGN="LEFT" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 1.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="LEFT" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><p><font
    size="2">&nbsp;&nbsp; <a href="#ITEM 1. LEGAL PROCEEDINGS">LEGAL PROCEEDINGS.</a></font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT"><font size="2">6</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;</font></td>
  </tr>
  <tr VALIGN="TOP">
    <td ALIGN="LEFT" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 2.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="LEFT" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><p><font
    size="2">&nbsp;&nbsp; <a href="#ITEM 2. CHANGES IN SECURITIES">CHANGES IN SECURITIES.</a></font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT"><font size="2">6</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr VALIGN="TOP" BGCOLOR="#ccffcc">
    <td ALIGN="LEFT" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 3.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="LEFT" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><p><font
    size="2">&nbsp;&nbsp; <a href="#ITEM 3.&nbsp;DEFAULTS UPON SENIOR SECURITIES">DEFAULT UPON
    SENIOR SECURITIES.</a></font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT" VALIGN="TOP"><font size="2">6</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr VALIGN="TOP">
    <td ALIGN="LEFT" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 4.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="LEFT" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><p><font
    size="2">&nbsp;&nbsp; <a
    href="#ITEM 4.&nbsp;SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS">SUBMISSION OF
    MATERS TO A VOTE OF SECURITY HOLDERS.</a></font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT"><font size="2">6</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr VALIGN="TOP" BGCOLOR="#ccffcc">
    <td ALIGN="left" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 5.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="left" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><p><font
    size="2">&nbsp;&nbsp; <a href="#ITEM 5.&nbsp;OTHER INFORMATION">OTHER INFORMATION.</a></font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT"><font size="2">6</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td ALIGN="left" WIDTH="12%"><font size="2">ITEM 6.</font></td>
    <td WIDTH="3%"><font size="2"></font></td>
    <td WIDTH="3%"><font size="2"></font></td>
    <td WIDTH="3%"><font size="2"></font></td>
    <td ALIGN="left" WIDTH="75%"><font size="2">&nbsp;&nbsp; <a
    href="#ITEM 6.&nbsp;EXHIBITS AND REPORTS ON FORM 8-K">EXHIBITS AND REPORTS ON FORM 8-K.</a></font></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2"></font></td>
    <td ALIGN="RIGHT"><font size="2">6</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2"></font></td>
  </tr>
</table>

<p>&nbsp;</p>
<b><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="3">

<hr SIZE="1" NOSHADE COLOR="#000000">
</font></b>

<hr NOSHADE SIZE="5">
</div>

<p><br clear="all" style="page-break-before:always; mso-break-type:section-break">
</p>
<div>

<p ALIGN="CENTER"><font size="2"><b>PART I - FINANCIAL INFORMATION</b></font></p>

<p ALIGN="JUSTIFY"><font size="2"><a name="ITEM 1.&nbsp;FINANCIAL STATEMENTS">ITEM
1.&nbsp;FINANCIAL STATEMENTS</a><b> </b></font><a href="#TABLE OF CONTENTS"><font size="1">Back
to Table of Contents</font></a></p>

<p ALIGN="JUSTIFY"><font size="2">The Registrant's unaudited interim financial statements
are attached hereto. <a href="#Unaudited Interim Financial Statements">Unaudited Interim
Financial Statements</a></font></p>

<p ALIGN="JUSTIFY"><font size="2"><a
name="ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION">ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION</a> </font><font size="1"><a
href="#TABLE OF CONTENTS">Back to Table of Contents</a></font></p>

<p ALIGN="JUSTIFY"><font size="2">Some of the statements contained in this quarterly
report of Zaxis International Inc., Delaware corporation (hereinafter referred to as
&quot;we&quot;, &quot;us&quot;, &quot;our&quot;, &quot;Company&quot; and the
&quot;Registrant&quot;) discuss future expectations, contain projections of our plan of
operation or financial condition or state other forward-looking information.
Forward-looking statements give our current expectations or forecasts of future events.
You can identify these statements by the fact that they do not relate strictly to
historical or current facts. They use of words such as &quot;anticipate,&quot;
&quot;estimate,&quot; &quot;expect,&quot; &quot;project,&quot; &quot;intend,&quot;
&quot;plan,&quot; &quot;believe,&quot; and other words and terms of similar meaning in
connection with any discussion of future operating or financial performance. From time to
time, we also may provide forward-looking statements in other materials we release to the
public.</font></p>

<p align="left"><u><font
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Organizational
History and General Background of the Registrant</font></u></p>

<p align="justify" style="text-align: justify"><font size="2">Zaxis was incorporated in
Ohio in 1989. On August 25, 1995, Zaxis merged with a subsidiary of The InFerGene Company
(&quot;InFerGene&quot;) and InFerGene changed its name to Zaxis International Inc.
InFerGene and its subsidiary were inactive and had no assets or liabilities at the time of
the merger. InFerGene was incorporated in California in 1984 and subsequently changed its
domicile to Delaware in 1985.</font></p>

<p align="justify"><font size="2">The Company was a biotechnology holding company that
operated its business through a wholly owned subsidiary. The Company was a manufacturer
and distributor of products that were used in a molecular separation process known as
electrophoresis, a procedure used in more than 55,000 research, industrial and clinical
laboratories worldwide. The more common applications of this procedure include
protein-based separations such as the HDL and LDL components and sub-components of
cholesterol, the identification of various genes and gene products (e.g. DNA, RNA, etc.)
and the separation and identification of proteins in drug discovery applications
(Proteomics). A variety of techniques, formats, materials, compounds, equipment and
devices are employed in electrophoresis and Zaxis provided products to meet these needs.
The primary focus of the Company's former research and development efforts as well as its
former sales and marketing efforts were targeted toward the consumables segment of this
market. The Company's core products were the pre-cast gels and reagents used in these
electrophoresis procedures.</font></p>

<p align="justify"><font size="2">The Company was not able to generate sufficient revenues
to support its operating expenses during fiscal year 2002. In addition, the Company was
not able to raise additional capital to fund its negative cash flow from operations
through borrowings or equity financing to support its business plan. As a result, the
Company ceased operations during the fourth quarter in 2002 and filed for bankruptcy
petition.</font></p>

<p align="justify"><font size="2">On November 6, 2002, the Registrant filed a petition
under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court Northern District of Ohio
(case no. 02-55160). </font><font face="Times New Roman" size="2">During 2003 and 2004,
the Bankruptcy Trustee had disposed of substantially all of the assets of the Registrant
and its subsidiary. </font><font size="2">On October 13, 2004, the Company emerged from
bankruptcy.</font></p>

<p style="text-align: justify"><font face="Times New Roman" size="2" color="#000000">As a
result of the Bankruptcy Court order, Ivo Heiden was appointed to the board of directors
of the Registrant. Mr. Heiden was subsequently appointed as sole officers of the
Registrant (&quot;Management&quot;).</font></p>

<p ALIGN="JUSTIFY"><font size="2" color="#000000"><u>Plan of Operation</u></font></p>

<p align="justify"><font color="#000000" face="TIMES NEW ROMAN, TIMES, SERIF" size="2">The
Registrant has no present operations. Management determined to direct its efforts and
limited resources to pursue and effect a business combination.</font></p>

<p align="justify" style="text-align: justify"><font size="2">&nbsp;&nbsp;&nbsp; <em>Current
trends</em></font></p>

<p align="justify" style="text-align: justify"><font size="2">Management believes that as
a result of the relative uncertainty in the United States equity markets over the past few
years, many privately-held companies have been closed off from the public market and
traditional IPO's. During the past few years, many privately-held or public companies
attempted to divest non-core assets and divisions and valuations of these assets and
divisions have decreased significantly. Therefore, Management believes that there are
substantial business opportunities to effect attractive acquisitions. As a public entity
with its shares of common stock registered under the Exchange Act and publicly trading,
Management believes to be well positioned to identify target acquisitions and to effect a
business combination in order to take advantage of these current trends.</font></p>

<p align="justify"><font size="2">&nbsp;&nbsp;&nbsp; <em>Effecting a business combination</em></font></p>

<p align="justify" style="text-align: justify"><font size="2">Prospective investors in the
Company's common stock will invest in the Company without an opportunity to evaluate the
specific merits or risks of any one or more business combinations. A business combination
may involve the acquisition of, or merger with, a company which needs to raise substantial
additional capital by means of being a publicly trading company, while avoiding what it
may deem to be adverse consequences of undertaking a public offering itself. These include
time delays, significant expense, loss of voting control and compliance with various
Federal and state securities laws. A business combination may involve a company which may
be financially unstable or in its early stages of development or growth.</font></p>

<p align="justify" style="text-align: justify"><em>&nbsp;&nbsp;&nbsp; <font size="2">The
Registrant has not identified a target business or target industry</font></em></p>

<p align="justify" style="text-align: justify"><font size="2">The Company's effort in
identifying a prospective target business will not be limited to a particular industry and
the Company may ultimately acquire a business in any industry Management deems
appropriate. To date, the Company has not selected any target business on which to
concentrate our search for a business combination. While the Company intends to focus on
target businesses in the United States, it is not limited to those entities and may
consummate a business combination with a target business outside of the United States.
Accordingly, there is no basis for investors in the Company's common stock to evaluate the
possible merits or risks of the target business or the particular industry in which we may
ultimately operate. To the extent we effect a business combination with a financially
unstable company or an entity in its early stage of development or growth, including
entities without established records of sales or earnings, we may be affected by numerous
risks inherent in the business and operations of financially unstable and early stage or
potential emerging growth companies. In addition, to the extent that we effect a business
combination with an entity in an industry characterized by a high level of risk, we may be
affected by the currently unascertainable risks of that industry. An extremely high level
of risk frequently characterizes many industries which experience rapid growth. In
addition, although the Company's Management will endeavor to evaluate the risks inherent
in a particular industry or target business, we cannot assure you that we will properly
ascertain or assess all significant risk factors.</font></p>

<p align="justify" style="text-align: justify">&nbsp;&nbsp;&nbsp; <em><font size="2">Sources
of target businesses</font></em></p>

<p align="justify" style="text-align: justify"><font size="2">The Registrant anticipates
that target business candidates will be brought to our attention from various unaffiliated
sources, including securities broker-dealers, investment bankers, venture capitalists,
bankers and other members of the financial community, who may present solicited or
unsolicited proposals. Our Management may also bring to our attention target business
candidates. While we do not presently anticipate engaging the services of professional
firms that specialize in business acquisitions on any formal basis, we may engage these
firms in the future, in which event we may pay a finder's fee or other compensation. In no
event, however, will we pay Management any finder's fee or other compensation for services
rendered to us prior to or in connection with the consummation of a business combination.</font></p>

<p align="justify" style="text-align: justify">&nbsp;&nbsp;&nbsp; <em><font size="2">Selection
of a target business and structuring of a business combination</font></em></p>

<p align="justify" style="text-align: justify"><font size="2">Management owns 69.51% of
the issued and outstanding shares and will have broad flexibility in identifying and
selecting a prospective target business. In evaluating a prospective target business, our
Management will consider, among other factors, the following:</font></p>
<font size="2">

<p><font FACE="Wingdings">&#159</font> financial condition and results of operation of the
target company;<br>
</font><font size="2" FACE="Wingdings">&#159;</font><font size="2"> growth potential;<br>
</font><font size="2" FACE="Wingdings">&#159;</font><font size="2"> experience and skill of
management and availability of additional personnel;<br>
</font><font size="2" FACE="Wingdings">&#159;</font><font size="2"> capital requirements;<br>
</font><font size="2" FACE="Wingdings">&#159;</font><font size="2"> competitive position;<br>
</font><font size="2" FACE="Wingdings">&#159;</font><font size="2"> stage of development of
the products, processes or services;<br>
</font><font size="2" FACE="Wingdings">&#159;</font><font size="2"> degree of current or
potential market acceptance of the products, processes or services;<br>
</font><font size="2" FACE="Wingdings">&#159;</font><font size="2"> proprietary features and
degree of intellectual property or other protection of the products, processes or
services;<br>
</font><font size="2" FACE="Wingdings">&#159;</font><font size="2"> regulatory environment of
the industry; and<br>
</font><font size="2" FACE="Wingdings">&#159;</font><font size="2"> costs associated with
effecting the business combination.</font></p>

<p align="justify" style="text-align: justify"><font size="2">These criteria are not
intended to be exhaustive. Any evaluation relating to the merits of a particular business
combination will be based, to the extent relevant, on the above factors as well as other
considerations deemed relevant by our Management in effecting a business combination
consistent with our business objective. In evaluating a prospective target business, we
will conduct a due diligence review which will encompass, among other things, meetings
with incumbent management and inspection of facilities, as well as review of financial and
other information which will be made available to us.</font></p>

<p align="justify" style="text-align: justify"><font size="2">We will endeavor to
structure a business combination so as to achieve the most favorable tax treatment to us,
the target business and both companies' stockholders. We cannot assure you, however, that
the Internal Revenue Service or appropriate state tax authority will agree with our tax
treatment of the business combination. </font></p>

<p align="justify" style="text-align: justify"><font size="2">The time and costs required
to select and evaluate a target business and to structure and complete the business
combination cannot presently be ascertained with any degree of certainty. Any costs
incurred with respect to the identification and evaluation of a prospective target
business with which a business combination is not ultimately completed will result in a
loss to us.</font></p>

<p align="justify" style="text-align: justify">&nbsp;&nbsp;&nbsp; <em><font size="2">Probable
lack of business diversification</font></em></p>

<p align="justify" style="text-align: justify"><font size="2">We may seek to effect
business combinations with more than one target business, it is probable that we will have
the ability to effect only a single business combination. Accordingly, the prospects for
our success may be entirely dependent upon the future performance of a single business.
Unlike other entities which may have the resources to complete several business
combinations of entities operating in multiple industries or multiple areas of a single
industry, it is probable that we will not have the resources to diversify our operations
or benefit from the possible spreading of risks or offsetting of losses. By consummating a
business combination with only a single entity, our lack of diversification may:</font></p>

<p align="justify" style="text-align: justify"><font size="2" FACE="Wingdings">&#159</font><font
size="2"> subject us to numerous economic, competitive and regulatory developments, any or
all of which may have a substantial adverse impact upon the particular industry in which
we may operate subsequent to a business combination, and<br>
</font><font size="2" FACE="Wingdings">&#159</font><font size="2"> result in our dependency upon
the development or market acceptance of a single or limited number of products, processes
or services.</font></p>

<p align="justify" style="text-align: justify">&nbsp;&nbsp; <em><font size="2">Limited
ability to evaluate the target business' management</font></em></p>

<p align="justify" style="text-align: justify"><font size="2">Although we intend to
closely scrutinize the management of a prospective target business when evaluating the
desirability of effecting a business combination, we cannot assure you that our assessment
of the target business' management will prove to be correct. In addition, we cannot assure
you that the future management will have the necessary skills, qualifications or abilities
to manage a public company intending to embark on a program of business development.
Furthermore, the future role of our director, if any, in the target business cannot
presently be stated with any certainty. While it is possible that our director will remain
associated in some capacity with us following a business combination, it is unlikely that
he will devote his full efforts to our affairs subsequent to a business combination.
Moreover, we cannot assure you that our director will have significant experience or
knowledge relating to the operations of the particular target business. </font></p>

<p align="justify" style="text-align: justify"><font size="2">Following a business
combination, we may seek to recruit additional managers to supplement the incumbent
management of the target business. We cannot assure you that we will have the ability to
recruit additional managers, or that additional managers will have the requisite skills,
knowledge or experience necessary to enhance the incumbent management.</font></p>

<p align="justify"><font size="2" color="#000000"><u>Liquidity and Capital Resources</u></font></p>

<p align="justify"><font size="2" color="#000000">We will use our limited personnel and
financial resources in connection with seeking new business opportunities, including
seeking an acquisition or merger with an operating company. It may be expected that
entering into a new business opportunity or business combination will involve the issuance
of a substantial number of restricted shares of common stock. If such additional
restricted shares of common stock are issued, our shareholders will experience a dilution
in their ownership interest in the Registrant. If a substantial number of restricted
shares are issued in connection with a business combination, a change in control may be
expected to occur. </font></p>

<p align="justify"><font size="2" color="#000000">As of June 30, 2006, we had current
assets consisting of cash in the amount of $323 compared to $461 at December 31, 2005. As
of June 30, 2006, we had current liabilities consisting of payables in the amount of
$9,118 compared to $3,618 at December 31, 2005.</font></p>

<p align="justify"><font size="2" color="#000000">During the six-month period ended June
30, 2006, we generated cash from financing activities in the amount of $5,000 compared to
$5,100 in the prior year, which financing activities consisted of advances from our
president.</font></p>

<p align="justify"><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2" color="#000000">In
connection with our plan to seek new business opportunities and/or effecting a business
combination, we may determine to seek to raise funds from the sale of restricted stock or
debt securities.We have no agreements to issue any debt or equity securities and cannot
predict whether equity or debt financing will become available at terms acceptable to us,
if at all.</font></p>

<p align="justify"><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2" color="#000000">There
are no limitations in our articles of incorporation on our ability to borrow funds or
raise funds through the issuance of restricted common stock to effect a business
combination. Our limited resources may make it difficult to do borrow funds or raise
capital. Our inability to borrow funds or raise funds through the issuance of restricted
common stock required to effect or facilitate a business combination may have a material
adverse effect on our financial condition and future prospects, including the ability to
complete a business combination. To the extent that debt financing ultimately proves to be
available, any borrowing will subject us to various risks traditionally associated with
indebtedness, including the risks of interest rate fluctuations and insufficiency of cash
flow to pay principal and interest, including debt of an acquired business. </font></p>

<p ALIGN="JUSTIFY"><font size="2"><a name="ITEM 3. CONTROLS AND PROCEDURES">ITEM 3.
CONTROLS AND PROCEDURES</a><b> </b></font><font size="1"><a href="#TABLE OF CONTENTS">Back
to Table of Contents</a></font></p>

<p style="text-align: justify"><font size="2"><em>Evaluation of disclosure controls and
procedures.</em> As of June 30, 2006, the Company's chief executive officer and chief
financial officer conducted an evaluation regarding the effectiveness of the Company's
disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under
the&nbsp; Exchange Act. Based upon the evaluation of these controls and procedures, our
chief executive officer and chief financial officer concluded that our disclosure controls
and procedures were effective as of the end of the period covered by this report.</font></p>

<p style="text-align: justify"><font size="2"><em>Changes in internal controls.</em>
During the quarterly period covered by this report, no changes occurred in our internal
control over financial reporting that materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.</font></p>

<p ALIGN="center"><font size="2"><b>PART II - OTHER INFORMATION</b></font></p>

<p ALIGN="JUSTIFY"><font size="2"><a name="ITEM 1. LEGAL PROCEEDINGS">ITEM 1. LEGAL
PROCEEDINGS</a><b> </b></font><font size="1">&nbsp; <a href="#TABLE OF CONTENTS">Back to
Table of Contents</a></font></p>

<p ALIGN="JUSTIFY"><font size="2" color="#000000">None.</font></p>

<p ALIGN="JUSTIFY"><font size="2"><a name="ITEM 2. CHANGES IN SECURITIES">ITEM 2. CHANGES
IN SECURITIES</a> </font><font size="1"><a href="#TABLE OF CONTENTS">Back to Table of
Contents</a></font></p>

<p ALIGN="JUSTIFY"><font size="2">None.</font></p>

<p ALIGN="JUSTIFY"><font size="2"><a name="ITEM 3.&nbsp;DEFAULTS UPON SENIOR SECURITIES">ITEM
3.&nbsp;DEFAULTS UPON SENIOR SECURITIES</a><b> </b></font><font size="1"><a
href="#TABLE OF CONTENTS">Back to Table of Contents</a></font></p>

<p ALIGN="JUSTIFY"><font size="2">None.</font></p>

<p ALIGN="JUSTIFY"><font size="2"><a
name="ITEM 4.&nbsp;SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS">ITEM
4.&nbsp;SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</a> </font><font size="1"><a
href="#TABLE OF CONTENTS">Back to Table of Contents</a></font></p>

<p ALIGN="JUSTIFY"><font size="2">None.</font></p>

<p ALIGN="JUSTIFY"><font size="2"><a name="ITEM 5.&nbsp;OTHER INFORMATION">ITEM
5.&nbsp;OTHER INFORMATION</a><b> </b></font><font size="1"><a href="#TABLE OF CONTENTS">Back
to Table of Contents</a></font></p>

<p ALIGN="JUSTIFY"><font size="2">None.</font></p>

<p ALIGN="JUSTIFY"><font size="2"><a name="ITEM 6.&nbsp;EXHIBITS AND REPORTS ON FORM 8-K">ITEM
6.&nbsp;EXHIBITS AND REPORTS ON FORM 8-K</a><b> </b></font><font size="1"><a
href="#TABLE OF CONTENTS">Back to Table of Contents</a></font></p>

<p ALIGN="JUSTIFY" style="text-align: justify"><font size="2">(a) The following documents
are filed as exhibits to this report on Form 10-QSB or incorporated by reference herein.
Any document incorporated by reference is identified by a parenthetical reference to the
SEC filing that included such document.</font></p>

<table ALIGN="CENTER" CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%" height="0%">
  <tr VALIGN="BOTTOM">
    <th nowrap height="0" bgcolor="#ccffcc" width="8%"><p align="left"><font size="1">Exhibit
    No.</font></th>
    <th nowrap ALIGN="LEFT" height="0" bgcolor="#ccffcc" width="92%"><font size="1">Description</font></th>
  </tr>
  <tr>
    <td width="8%" bgcolor="#FFFFFF" height="0%"><font size="1">31.1</font></td>
    <td width="92%" bgcolor="#FFFFFF" height="0%"><font size="1">Certification of President
    and CFO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section
    302 of the Sarbanes-Oxley Act of 2002.</font></td>
  </tr>
  <tr>
    <td width="8%" bgcolor="#FFFFFF" height="0%"><font size="1">32.2</font></td>
    <td width="92%" bgcolor="#FFFFFF" height="0%"><font size="1">Certification of President
    and CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.</font></td>
  </tr>
</table>

<p><font size="2">(b)&nbsp;Reports on Form 8-K during the quarter covered by this report:</font></p>

<p><font size="2">The Registrant did not filed a Form 8-K during the quarter ended June
30, 2006.</font></p>
</div>

<p><br clear="all" style="page-break-before:always; mso-break-type:section-break">
</p>
<div>

<p align="center"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">SIGNATURES</font></p>

<p ALIGN="JUSTIFY"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the date
indicated.</font></p>

<p ALIGN="JUSTIFY"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><u>/s/ Ivo Heiden</u><br>
Ivo Heiden<br>
&nbsp;&nbsp; <em>President, CFO and Chairman</em><br>
<i>&nbsp;&nbsp; Dated: August 10, 2006</i></font></p>
</div>

<p><br clear="all" style="page-break-before:always; mso-break-type:section-break">
</p>
<div>

<p align="center"><font size="2"><a name="Unaudited Interim Financial Statements"><strong>Unaudited
Interim Financial Statements</strong></a> </font><a href="#TABLE OF CONTENTS"><font
size="1">Back to Table of Contents</font></a></p>

<table style="BORDER-BOTTOM: rgb(0,0,0) 1px" height="0%" cellSpacing="0" cellPadding="0"
width="100%" border="0">
  <tr>
    <td vAlign="middle" width="100%" height="0%" colspan="5" align="center" bgcolor="#ccffcc"><font
    size="2"><b>Zaxis International Inc.</b></font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="100%" height="0%" colspan="5" align="center"><font size="2">Balance
    Sheets</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="100%" height="0%" colspan="5" align="center"><font size="1">&nbsp;
    </font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="1"><strong>&nbsp;&nbsp; </strong></font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="1"><strong>June 30,
    2006</strong></font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="1"><strong>December
    31, 2005</strong></font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="1">(Unaudited)</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="1">&nbsp; </font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="1">&nbsp; </font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><p align="center"><font size="2">Assets</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">Current assets:</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Cash</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"><font size="2">$</font></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">323</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"><font size="2">$</font></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">461</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Total
    current assets</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">323</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">461</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; </font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Other assets</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">0</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"
    style="border-bottom: 1px none rgb(0,0,0)"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">0</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%" bgcolor="#ccffcc"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Total Assets</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%" bgcolor="#ccffcc"><font size="2">$</font></td>
    <td vAlign="middle" align="right" width="13%" height="0%" bgcolor="#ccffcc"
    style="border-bottom: 2px double rgb(0,0,0)"><font size="2">323</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%" bgcolor="#ccffcc"
    style="border-bottom: 2px none rgb(0,0,0)"><font size="2">$</font></td>
    <td vAlign="middle" align="right" width="13%" height="0%" bgcolor="#ccffcc"
    style="border-bottom: 2px double rgb(0,0,0)"><font size="2">461</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp; </font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><p align="center"><font size="2">Liabilities
    and Stockholders' Deficiency</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">Current liabilities:</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Accounts payable</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">500</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%">0</td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Payable-related
    parties</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">8,618</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">3,618</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%" bgcolor="#ccffcc"><font size="2">&nbsp;&nbsp;
    &nbsp;&nbsp; Total current liabilities</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%" bgcolor="#ccffcc"><font size="2">$</font></td>
    <td vAlign="middle" align="right" width="13%" height="0%" bgcolor="#ccffcc"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">9,118</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%" bgcolor="#ccffcc"
    style="border-bottom: 1px none rgb(0,0,0)"><font size="2">$</font></td>
    <td vAlign="middle" align="right" width="13%" height="0%" bgcolor="#ccffcc"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">3,618</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp; </font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">Stockholders' deficiency:</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">Preferred stock, 10,000,000
    shares authorized, $0.0001 par value, none issued</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">-</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">-</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">Common stock, 100,000,000
    shares authorized, $0.0001 par value;</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
    92,933,155 issued and outstanding at June 30, 2006 and </font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
    92,333,155 issued and outstanding at December 31, 2005</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">9,293</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">9,233</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Additional paid in
    capital</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">14,691</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">(3,249)</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Accumulated
    deficit</font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 1px" vAlign="middle" align="right" width="2%"
    height="0%"></td>
    <td style="border-bottom: 1px solid rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%"><font size="2">(32,779)</font></td>
    <td style="border-bottom: 1px none rgb(0,0,0)" vAlign="middle" align="right" width="2%"
    height="0%"></td>
    <td style="border-bottom: 1px solid rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%"><font size="2">(9,141)</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Total
    stockholders' deficiency</font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 1px" vAlign="middle" align="right" width="2%"
    height="0%"></td>
    <td style="border-bottom: 1px none rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%"><font size="2">(8,795)</font></td>
    <td style="border-bottom: 1px none rgb(0,0,0)" vAlign="middle" align="right" width="2%"
    height="0%"></td>
    <td style="border-bottom: 1px none rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%"><font size="2">(3,157)</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp; </font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 1px" vAlign="middle" align="right" width="2%"
    height="0%"></td>
    <td style="border-bottom: 1px solid rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%"><font size="2">&nbsp;&nbsp; </font></td>
    <td style="border-bottom: 1px none rgb(0,0,0)" vAlign="middle" align="right" width="2%"
    height="0%"></td>
    <td style="border-bottom: 1px solid rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%"><font size="2">&nbsp; </font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%" bgcolor="#ccffcc"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Total liabilities and stockholders' deficiency</font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 2px" vAlign="middle" align="right" width="2%"
    height="0%" bgcolor="#ccffcc"><font size="2">$</font></td>
    <td style="border-bottom: 2px double rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%" bgcolor="#ccffcc"><font size="2">323</font></td>
    <td style="border-bottom: 2px none rgb(0,0,0)" vAlign="middle" align="right" width="2%"
    height="0%" bgcolor="#ccffcc"><font size="2">$</font></td>
    <td style="border-bottom: 2px double rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%" bgcolor="#ccffcc"><font size="2">461</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="100%" height="0%" bgcolor="#FFFFFF" colspan="5"><font size="2">&nbsp;
    </font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="100%" height="0%" bgcolor="#FFFFFF" colspan="5"><font size="2">See
    notes to unaudited interim financial statements</font></td>
  </tr>
</table>
</div>

<p><br clear="all" style="page-break-before:always; mso-break-type:section-break">
</p>
<div>

<table height="1" cellSpacing="0" cellPadding="0" width="100%" border="0">
  <tr>
    <td width="100%" height="0" colspan="9" align="center" bgcolor="#ccffcc"><font size="2"><b>Zaxis
    International Inc.</b></font></td>
  </tr>
  <tr>
    <td width="100%" height="0" colspan="9" align="center"><font size="2">Statements of
    Operations</font></td>
  </tr>
  <tr>
    <td width="100%" height="25" colspan="9"><font size="1">&nbsp; </font></td>
  </tr>
  <tr>
    <td width="40%" height="0"></td>
    <td width="2%" align="right" height="0"></td>
    <td width="13%" align="right" height="0"><font size="1"><strong>Three Months</strong></font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"><font size="1"><strong>Three Months</strong></font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"><font size="1"><strong>Six Months</strong></font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"><font size="1"><strong>Six Months</strong></font></td>
  </tr>
  <tr>
    <td width="40%" height="0"></td>
    <td width="2%" align="right" height="0"></td>
    <td width="13%" align="right" height="0"><font size="1"><strong>Ended</strong></font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"><font size="1"><strong>Ended</strong></font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"><font size="1"><strong>Ended</strong></font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"><font size="1"><strong>Ended</strong></font></td>
  </tr>
  <tr>
    <td width="40%" height="0"></td>
    <td width="2%" align="right" height="0"></td>
    <td width="13%" align="right" height="0"><font size="1"><strong>June 30, 2006</strong></font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"><font size="1"><strong>June 30, 2005</strong></font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"><font size="1"><strong>June 30, 2006</strong></font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"><font size="1"><strong>June 30, 2005</strong></font></td>
  </tr>
  <tr>
    <td width="40%" height="0"></td>
    <td width="2%" align="right" style="border-bottom: 1px none rgb(0,0,0)" height="0"></td>
    <td width="13%" align="right" style="border-bottom: 1px solid rgb(0,0,0)" height="0"><font
    size="1">(Unaudited)</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="1">(Unaudited)</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" style="border-bottom: 1px solid rgb(0,0,0)" height="0"><font
    size="1">(Unaudited)</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="1">(Unaudited)</font></td>
  </tr>
  <tr>
    <td width="40%" height="0" bgcolor="#FFFFFF"><font size="1">&nbsp; </font></td>
    <td width="2%" bgcolor="#FFFFFF" align="right" height="0"></td>
    <td width="13%" bgcolor="#FFFFFF" align="right" height="0"></td>
    <td width="2%" height="0" bgcolor="#FFFFFF" align="right"></td>
    <td width="13%" height="0" bgcolor="#FFFFFF" align="right"></td>
    <td width="2%" height="0" bgcolor="#FFFFFF" align="right"></td>
    <td width="13%" bgcolor="#FFFFFF" align="right" height="0"></td>
    <td width="2%" height="0" bgcolor="#FFFFFF" align="right"></td>
    <td width="13%" height="0" bgcolor="#FFFFFF" align="right"></td>
  </tr>
  <tr>
    <td width="40%" height="0" bgcolor="#ccffcc"><font size="2">Revenue</font></td>
    <td width="2%" bgcolor="#ccffcc" align="right" height="0"><font size="2">$</font></td>
    <td width="13%" bgcolor="#ccffcc" align="right" height="0"><font size="2">0</font></td>
    <td width="2%" height="0" bgcolor="#ccffcc" align="right"><font size="2">$</font></td>
    <td width="13%" height="0" bgcolor="#ccffcc" align="right"><font size="2">0</font></td>
    <td width="2%" height="0" bgcolor="#ccffcc" align="right"><font size="2">$</font></td>
    <td width="13%" bgcolor="#ccffcc" align="right" height="0"><font size="2">0</font></td>
    <td width="2%" height="0" bgcolor="#ccffcc" align="right"><font size="2">$</font></td>
    <td width="13%" height="0" bgcolor="#ccffcc" align="right"><font size="2">0</font></td>
  </tr>
  <tr>
    <td width="40%" height="0"><font size="2">Costs and expenses:</font></td>
    <td width="2%" align="right" height="0"></td>
    <td width="13%" align="right" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
  </tr>
  <tr>
    <td width="40%" height="1"><font size="2">&nbsp;&nbsp; General and administrative</font></td>
    <td width="2%" align="right" height="1" style="border-bottom: 1px none rgb(0,0,0)"></td>
    <td width="13%" align="right" height="1" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">3,094</font></td>
    <td width="2%" height="1" align="right"></td>
    <td width="13%" height="1" align="right" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">2,500</font></td>
    <td width="2%" height="1" align="right"></td>
    <td width="13%" align="right" height="1" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">23,638</font></td>
    <td width="2%" height="1" align="right"></td>
    <td width="13%" height="1" align="right" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">5,035</font></td>
  </tr>
  <tr>
    <td width="40%" height="0"><font size="2">Total costs and expenses</font></td>
    <td width="2%" align="right" height="0"></td>
    <td width="13%" align="right" height="0"><font size="2">3,094</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"><font size="2">2,500</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"><font size="2">23,638</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"><font size="2">5,035</font></td>
  </tr>
  <tr>
    <td width="40%" height="1"><font size="2">&nbsp; </font></td>
    <td width="2%" align="right" height="1"></td>
    <td width="13%" align="right" height="1"></td>
    <td width="2%" height="1" align="right"></td>
    <td width="13%" height="1" align="right"></td>
    <td width="2%" height="1" align="right"></td>
    <td width="13%" align="right" height="1"></td>
    <td width="2%" height="1" align="right"></td>
    <td width="13%" height="1" align="right"></td>
  </tr>
  <tr>
    <td width="40%" height="0" bgcolor="#ccffcc"><font size="2"><strong>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </strong>Net loss</font></td>
    <td width="2%" align="right" bgcolor="#ccffcc" style="border-bottom: 2px none rgb(0,0,0)"
    height="0"><font size="2">$</font></td>
    <td width="13%" align="right" bgcolor="#CCFFCC"
    style="border-bottom: 2px double rgb(0,0,0)" height="0"><font size="2">(3,094)</font></td>
    <td width="2%" height="0" align="right" bgcolor="#ccffcc"><font size="2">$</font></td>
    <td width="13%" height="0" align="right" bgcolor="#ccffcc"
    style="border-bottom: 2px double rgb(0,0,0)"><font size="2">(2,500)</font></td>
    <td width="2%" height="0" align="right" bgcolor="#ccffcc"><font size="2">$</font></td>
    <td width="13%" align="right" bgcolor="#ccffcc"
    style="border-bottom: 2px double rgb(0,0,0)" height="0"><font size="2">23,638</font></td>
    <td width="2%" height="0" align="right" bgcolor="#ccffcc"><font size="2">$</font></td>
    <td width="13%" height="0" align="right" bgcolor="#ccffcc"
    style="border-bottom: 2px double rgb(0,0,0)"><font size="2">(5,035)</font></td>
  </tr>
  <tr>
    <td width="40%" height="0"><font size="2">&nbsp; </font></td>
    <td width="2%" align="right" height="0"></td>
    <td width="13%" align="right" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
  </tr>
  <tr>
    <td width="40%" height="0"><font size="2">Basic and diluted per share amounts:</font></td>
    <td width="2%" align="right" height="0"></td>
    <td width="13%" align="right" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
  </tr>
  <tr>
    <td width="40%" height="0"><font size="2">Basic and diluted net loss</font></td>
    <td width="2%" align="right" height="0" style="border-bottom: 1px none rgb(0,0,0)"><font
    size="2">$</font></td>
    <td width="13%" align="right" height="0" style="border-bottom: 2px double rgb(0,0,0)"><font
    size="2">(0.00)</font></td>
    <td width="2%" height="0" align="right"><font size="2">$</font></td>
    <td width="13%" height="0" align="right" style="border-bottom: 2px double rgb(0,0,0)"><font
    size="2">(0.00)</font></td>
    <td width="2%" height="0" align="right"><font size="2">$</font></td>
    <td width="13%" align="right" height="0" style="border-bottom: 2px double rgb(0,0,0)"><font
    size="2">(0.00)</font></td>
    <td width="2%" height="0" align="right"><font size="2">$</font></td>
    <td width="13%" height="0" align="right" style="border-bottom: 2px double rgb(0,0,0)"><font
    size="2">(0.00)</font></td>
  </tr>
  <tr>
    <td width="40%" height="0"><font size="2">&nbsp; </font></td>
    <td width="2%" align="right" height="0"></td>
    <td width="13%" align="right" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
  </tr>
  <tr>
    <td width="40%" height="0"><font size="2">Weighted average shares outstanding</font></td>
    <td width="2%" align="right" height="0"></td>
    <td width="13%" align="right" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
  </tr>
  <tr>
    <td width="40%" height="1" bgcolor="#ccffcc"><font size="2">Basic and diluted</font></td>
    <td width="2%" align="right" bgcolor="#ccffcc" style="border-bottom: 2px none rgb(0,0,0)"
    height="1"></td>
    <td width="13%" align="right" bgcolor="#ccffcc"
    style="border-bottom: 2px double rgb(0,0,0)" height="1"><font size="2">92,933,155</font></td>
    <td width="2%" height="1" align="right" bgcolor="#ccffcc"></td>
    <td width="13%" height="1" align="right" bgcolor="#ccffcc"
    style="border-bottom: 2px double rgb(0,0,0)"><font size="2">16,245,623</font></td>
    <td width="2%" height="1" align="right" bgcolor="#ccffcc"></td>
    <td width="13%" align="right" bgcolor="#ccffcc"
    style="border-bottom: 2px double rgb(0,0,0)" height="1"><font size="2">92,639,822</font></td>
    <td width="2%" height="1" align="right" bgcolor="#ccffcc"></td>
    <td width="13%" height="1" align="right" bgcolor="#ccffcc"
    style="border-bottom: 2px double rgb(0,0,0)"><font size="2">16,245,623</font></td>
  </tr>
  <tr>
    <td width="100%" height="0" bgcolor="#FFFFFF" colspan="9">&nbsp; </td>
  </tr>
  <tr>
    <td width="100%" height="0" bgcolor="#FFFFFF" colspan="9"><font size="2">See notes to
    unaudited interim financial statements</font></td>
  </tr>
</table>
</div>

<p><br clear="all" style="page-break-before:always; mso-break-type:section-break">
</p>
<div>

<table cellSpacing="0" cellPadding="0" width="100%" border="0" height="419">
  <tr>
    <td width="101%" height="0" colspan="5" align="center" bgcolor="#ccffcc"><font size="2"><b>Zaxis
    International Inc.</b></font></td>
  </tr>
  <tr>
    <td width="101%" height="0" colspan="5" align="center"><font size="2">Statement of Cash
    Flows</font></td>
  </tr>
  <tr>
    <td width="101%" height="17" colspan="5" align="center"><p align="left"><font size="1">&nbsp;&nbsp;
    &nbsp; </font></td>
  </tr>
  <tr>
    <td width="70%" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"><font size="1"><strong>Six Months</strong></font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"><font size="1"><strong>Six Months</strong></font></td>
  </tr>
  <tr>
    <td width="70%" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"><font size="1"><strong>Ended</strong></font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"><font size="1"><strong>Ended</strong></font></td>
  </tr>
  <tr>
    <td width="70%" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"><font size="1"><strong>June 30, 2006</strong></font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"><font size="1"><strong>June 30, 2005</strong></font></td>
  </tr>
  <tr>
    <td width="70%" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" style="border-bottom: 1px solid rgb(0,0,0)" height="0"><font
    size="1">(Unaudited)</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="1">(Unaudited)</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="1">&nbsp; </font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="13%" height="0"></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">Cash flows from operating activities:</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="13%" height="0"></td>
  </tr>
  <tr>
    <td width="70%" height="0" bgcolor="#ccffcc"><font size="2">Net loss</font></td>
    <td width="2%" height="0" align="right" bgcolor="#ccffcc"><font size="2">$</font></td>
    <td width="13%" height="0" align="right" bgcolor="#ccffcc"><font size="2">(23,638)</font></td>
    <td align="right" width="2%" height="0" bgcolor="#ccffcc"><font size="2">$</font></td>
    <td align="right" width="13%" height="0" bgcolor="#ccffcc"><font size="2">(5,035)</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">Expenses paid by issuance of common stock</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"><font size="2">18,000</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="13%" height="0"><font size="2">-</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">Adjustments to reconcile net loss to cash used
    in operating activities:</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="13%" height="0"></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">&nbsp;&nbsp; (Increase) decrease in current
    assets</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"><font size="2">0</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="13%" height="0"><font size="2">0</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">&nbsp;&nbsp; Increase (decrease) in accounts
    payable and accrued expenses</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">500</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="13%" style="border-bottom: 1px solid rgb(0,0,0)" height="0"><font
    size="2">0</font></td>
  </tr>
  <tr>
    <td width="70%" height="0" bgcolor="#ccffcc"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Cash
    flows used by operating activities</font></td>
    <td width="2%" height="0" bgcolor="#ccffcc" align="right"></td>
    <td width="13%" height="0" bgcolor="#ccffcc" align="right"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">(5,138)</font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 1px" align="right" width="2%" height="0"
    bgcolor="#ccffcc"></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" align="right" width="13%" height="0"
    bgcolor="#ccffcc"><font size="2">(5,035)</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">&nbsp; </font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="13%" height="0"></td>
  </tr>
  <tr>
    <td width="70%" height="0" bgcolor="#FFFFFF"><font size="2">Cash flows from investing
    activities:</font></td>
    <td width="2%" height="0" bgcolor="#FFFFFF" align="right"></td>
    <td width="13%" height="0" bgcolor="#FFFFFF" align="right"
    style="border-bottom: 1px solid rgb(0,0,0)">&nbsp; </td>
    <td align="right" width="2%" height="0" bgcolor="#FFFFFF"></td>
    <td align="right" width="13%" height="0" bgcolor="#FFFFFF"
    style="border-bottom: 1px solid rgb(0,0,0)">&nbsp; </td>
  </tr>
  <tr>
    <td width="70%" height="0" bgcolor="#ccffcc"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Cash
    used in investing activities</font></td>
    <td width="2%" height="0" bgcolor="#ccffcc" align="right"></td>
    <td width="13%" height="0" bgcolor="#ccffcc" align="right"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">0</font></td>
    <td align="right" width="2%" height="0" bgcolor="#ccffcc"></td>
    <td align="right" width="13%" style="border-bottom: 1px solid rgb(0,0,0)" height="0"
    bgcolor="#ccffcc"><font size="2">0</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">&nbsp;&nbsp; </font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="13%" height="0"></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">Cash flows from financing activities:</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="13%" height="0"></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">&nbsp;&nbsp; Advances from related party</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">5,000</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="13%" style="border-bottom: 1px solid rgb(0,0,0)" height="0"><font
    size="2">5,100</font></td>
  </tr>
  <tr>
    <td width="70%" height="0" bgcolor="#ccffcc"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Cash
    generated by financing activities</font></td>
    <td width="2%" height="0" bgcolor="#ccffcc" align="right"></td>
    <td width="13%" height="0" bgcolor="#ccffcc" align="right"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">5,000</font></td>
    <td align="right" width="2%" height="0" bgcolor="#ccffcc"></td>
    <td align="right" width="13%" style="border-bottom: 1px solid rgb(0,0,0)" height="0"
    bgcolor="#ccffcc"><font size="2">5,100</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">&nbsp; </font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="13%" height="0"></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Change in cash</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"><font size="2">(138)</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="13%" height="0"><font size="2">65</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">Cash - beginning of period</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">461</font></td>
    <td align="right" width="2%" height="0"></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" align="right" width="13%" height="0"><font
    size="2">84</font></td>
  </tr>
  <tr>
    <td width="70%" height="0" bgcolor="#ccffcc"><font size="2">Cash - end of period</font></td>
    <td width="2%" height="0" bgcolor="#ccffcc" align="right"><font size="2">$</font></td>
    <td width="13%" height="0" bgcolor="#ccffcc" align="right"
    style="border-bottom: 2px double rgb(0,0,0)"><font size="2">323</font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 2px" align="right" width="2%" height="0"
    bgcolor="#ccffcc"><font size="2">$</font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 2px double" align="right" width="13%" height="0"
    bgcolor="#ccffcc"><font size="2">149</font></td>
  </tr>
  <tr>
    <td width="100%" height="0" bgcolor="#FFFFFF" colspan="5"><font size="2">&nbsp; </font></td>
  </tr>
  <tr>
    <td width="100%" height="0" bgcolor="#FFFFFF" colspan="5"><font size="2">See notes to
    unaudited interim financial statements</font></td>
  </tr>
</table>
</div>

<p><br clear="all" style="page-break-before:always; mso-break-type:section-break">
</p>
<div><font size="2"><b>

<p ALIGN="center">ZAXIS INTERNATIONAL INC.<br>
</b>Notes to Unaudited Interim Financial Statements</p>
<b>

<p ALIGN="JUSTIFY">1. Basis of Presentation</b></p>

<p ALIGN="JUSTIFY">The consolidated financial statements include the accounts of Zaxis
International, Inc., a Delaware corporation.</p>

<p ALIGN="JUSTIFY">The Financial Statements presented herein have been prepared by us in
accordance with the accounting policies described in our December 31, 2005 Annual Report
on Form 10-KSB and should be read in conjunction with the Notes to Consolidated Financial
Statements which appear in that report.</p>

<p ALIGN="JUSTIFY">The preparation of these financial statements in conformity with
accounting principles generally accepted in the United States requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities, revenues
and expenses, and related disclosure of contingent assets and liabilities. On an on going
basis, we evaluate our estimates, including those related intangible assets, income taxes,
insurance obligations and contingencies and litigation. We base our estimates on
historical experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from other
resources. Actual results may differ from these estimates under different assumptions or
conditions.</p>

<p ALIGN="JUSTIFY">In the opinion of management, the information furnished in this Form
10-QSB reflects all adjustments necessary for a fair statement of the financial position
and results of operations and cash flows as of and for the three month and six-month
periods ended June 30, 2006 and 2005. All such adjustments are of a normal recurring
nature. The Consolidated Financial Statements have been prepared in accordance with the
instructions to Form 10-QSB and therefore do not include some information and notes
necessary to conform with annual reporting requirements.</p>
<b>

<p ALIGN="JUSTIFY">&quot;Fresh Start&quot; Accounting: </b>On November 6, 2002 all assets
were transferred to the chapter 7 trustee in settlement of all outstanding corporate
obligations. We adopted &quot;fresh-start&quot; accounting as of November 7, 2002 in
accordance with procedures specified by AICPA Statement of Position (&quot;SOP&quot;) No.
90-7, &quot;Financial Reporting by Entities in Reorganization under the Bankruptcy
Code.&quot;</p>

<p ALIGN="JUSTIFY">All results for periods subsequent to November 7, 2002 are referred to
as those of the &quot;Successor Company&quot;.</p>

<p ALIGN="JUSTIFY">In accordance with SOP No. 90-7, the reorganized value of the Company
was allocated to the Company's assets based on procedures specified by SFAS No. 141,
&quot;Business Combinations&quot;. Each liability existing at the plan sale date, other
than deferred taxes, was stated at the present value of the amounts to be paid at
appropriate market rates. It was determined that the Company's reorganization value
computed immediately before November 6, 2002 was $0. We adopted &quot;fresh-start&quot;
accounting because holders of existing voting shares immediately before filing and
confirmation of the sale received less than 50% of the voting shares of the emerging
entity and its reorganization value is less than its post-petition liabilities and allowed
claims.</p>
<b>

<p ALIGN="JUSTIFY">2. Bankruptcy Proceedings</b></p>

<p ALIGN="JUSTIFY">On November 6, 2002, the Registrant filed a voluntary Chapter 7
petition under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court Northern District of
Ohio (case no. 02-55160). On October 13, 2004, the Bankruptcy Court approved an Order
confirming the sale of debtor's interest in personal property to Park Avenue Group Inc.
The material terms of the transaction confirmed by Bankruptcy Court authorized Park Avenue
Group to appoint new members to the Registrant's board of directors and authorized those
newly-appointed board of directors be to:</p>

<ul>
  <li>amend the Article of Incorporation to increase the number of authorized shares to
    100,000,000 shares;</li>
  <li>amend the Article of Incorporation to change the par value of our common and preferred
    stock to $0.0001;</li>
  <li>issue up to 30,000,000 shares of common stock, par value $0.0001 to the new management
    which management was appointed by the newly-constituted board of directors;</li>
  <li>implement a reverse split of the issued and outstanding shares in a ratio to be
    determined by the board of directors;</li>
  <li>cancel and extinguish all common share conversion rights of any kind, including without
    limitation, warrants, options, convertible bonds, other convertible debt instruments and
    convertible preferred stock; and</li>
  <li>cancel and extinguish all preferred shares of every series and accompanying conversion
    rights of any kind.</li>
</ul>

<p ALIGN="JUSTIFY">The accounts of the former subsidiaries were not included in the sale
and have not been carried forward<font SIZE="3">.</font><b><font size="1"></p>
</font>

<p ALIGN="JUSTIFY">Change in Control</b></p>

<p ALIGN="JUSTIFY">In connection with the Order confirming the sale of debtor's interest
in certain intangible personal property to Park Avenue Group Inc. approved by the U.S.
Bankruptcy Court Northern District of Ohio on October 13, 2004, the Court authorized a
change in control pursuant to which Ivo Heiden became our sole director on October 13,
2004, and was appointed president by the new board of directors on October 19, 2004. The
Court order further provided that the sale was free and clear of liens, claims and
interests of others and that the sale was free and clear of any and all other real or
personal property interests, including any interests in Zaxis's subsidiaries. The
Bankruptcy Court Order provided that the existing officers and directors were deemed
removed from office and also authorized the appointment of new members to the board of
directors. </p>

<p ALIGN="JUSTIFY">On November 30, 2004 the board of directors approved and authorized an
amendment of our Article of Incorporation to establish a series B convertible preferred
stock, par value $0.0001 (&quot;Series B Convertible Preferred Stock&quot;). The holders
of the Series B Convertible Preferred Stock shall be entitled to 20 (twenty) votes on all
matters submitted to a vote of the stockholders of the Registrant. The holders of Series B
Convertible Preferred Stock shall have the right to convert each share into 20 (twenty)
shares of common stock upon their written request at any time. On December 7, 2004, the
board of directors authorized the issuance of 2,000,000 shares of Series B Convertible
Preferred Stock, which resulted in a change in control.</p>
<b>

<p ALIGN="JUSTIFY">3. Earnings/Loss Per Share</b></p>

<p ALIGN="JUSTIFY">Basic earnings per share is computed by dividing income available to
common shareholders (the numerator) by the weighted-average number of common shares
outstanding (the denominator) for the period. Diluted earnings per share assume that any
dilutive convertible securities outstanding were converted, with related preferred stock
dividend requirements and outstanding common shares adjusted accordingly. It also assumes
that outstanding common shares were increased by shares issuable upon exercise of those
stock options for which market price exceeds the exercise price, less shares which could
have been purchased by us with the related proceeds. In periods of losses, diluted loss
per share is computed on the same basis as basic loss per share as the inclusion of any
other potential shares outstanding would be anti-dilutive.</p>
<b>

<p ALIGN="JUSTIFY">4. New Accounting Standards</b></p>

<p ALIGN="JUSTIFY">On January 1, 2006, we adopted the provisions of Statement of Financial
Accounting Standards (&quot;SFAS&quot;) 123R, &quot;Share-Based Payment&quot; (&quot;SFAS
123(R)&quot;), which requires that companies measure and recognize compensation expense at
an amount equal to the fair value of share-based payments granted under compensation
arrangements. Prior to January 1, 2006, we accounted for our stock-based compensation
plans under the recognition and measurement principles of Accounting Principles Board
(&quot;APB&quot;) Opinion 25, &quot;Accounting for Stock Issued to Employees,&quot; and
related interpretations, and would typically recognize no compensation expense for stock
option grants if options granted had an exercise price equal to the market value of the
underlying common stock on the date of grant.</p>

<p ALIGN="JUSTIFY">We adopted SFAS 123(R) using the &quot;modified prospective&quot;
method, which results in no restatement of prior period amounts. Under this method, the
provisions of SFAS 123(R) apply to all awards granted or modified after the date of
adoption. In addition, compensation expense must be recognized for any unvested stock
option awards outstanding as of the date of adoption on a straight-line basis over the
remaining vesting period. We calculate the fair value of options using a Black-Scholes
option pricing model. We do not currently have any outstanding options subject to future
vesting therefore no charge is required for the six months ended June 30, 2006. SFAS
123(R) also requires the benefits of tax deductions in excess of recognized compensation
expense to be reported in the Statement of Cash Flows as a financing cash inflow rather
than an operating cash inflow. In addition, SFAS 123(R) required a modification to the
Company&#146;s calculation of the dilutive effect of stock option awards on earnings per
share. For companies that adopt SFAS 123(R) using the &quot;modified prospective&quot;
method, disclosure of pro forma information for periods prior to adoption must continue to
be made.</p>

<p ALIGN="JUSTIFY">In May 2005, the FASB issued SFAS No. 154, &quot;Accounting Changes and
Error Corrections,&quot; which replaces APB Opinion No. 20 &quot;Accounting Changes,&quot;
and FASB Statement No. 3 &quot;Reporting Accounting Changes in Interim Financial
Statements,&quot; and changes the requirements for the accounting for and reporting of a
change in accounting principle. This Statement requires retrospective application to prior
periods&#146; financial statements of changes in accounting principle, unless it is
impracticable to determine either the period-specific effects or the cumulative effect of
the change. This Statement shall be effective for accounting changes and corrections of
errors made in fiscal years beginning after December 15, 2005. Early adoption is permitted
for accounting changes and corrections of errors made in fiscal years beginning after the
date this Statement is issued. We do not believe that adoption of SFAS 154 will have a
material impact on our financial statements.</p>
</font></div>
</body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>2
<FILENAME>exh31_1.htm
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
<html>

<head>
<title>Exhibit 31.1</title>
</head>

<body>
<font SIZE="1">
                        <b><u><p></font><font size="2">CERTIFICATION</font></p>
</u>

<p></b><font size="2">I, Ivo Heiden, certify that:</font>

<dir>
  <p><font size="2">1. I have reviewed this quarterly report of Zaxis International Inc.;</font>
    <p><font size="2">2. Based on my knowledge, this report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary to make the
    statements made, in light of the circumstances under which such statements were made, not
    misleading with respect to the period covered by this report;</font></p>
    <p><font size="2">3. Based on my knowledge, the financial statements, and other financial
    information included in this report, fairly present in all material respects the financial
    condition, results of operations and cash flows of the small business issuer as of, and
    for, the periods presented in this report;</font></p>
    <p><font size="2">4. The small business issuer's other certifying officer(s) and I are
    responsible for establishing and maintaining disclosure controls and procedures (as
    4efined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
    reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small
    business issuer and have:</font>
      <p><font size="2">(a) Designed such disclosure controls and procedures, or caused such
      disclosure controls and procedures to be designed under our supervision, to ensure that
      material information relating to the small business issuer, including its consolidated
      subsidiaries, is made known to us by others within those entities, particularly during the
      period in which this report is being prepared;</font></p>
      <p><font size="2">(b) Designed such internal control over financial reporting, or caused
      such internal control over financial reporting to be designed under our supervision, to
      provide reasonable assurance regarding the reliability of financial reporting and the
      preparation of financial statements for external purposes in accordance with generally
      accepted accounting principles;</font></p>
      <p><font size="2">(c) Evaluated the effectiveness of the small business issuer's
      disclosure controls and procedures and presented in this report our conclusions about the
      effectiveness of the disclosure controls and procedures, as of the end of the period
      covered by this report based on such evaluation; and</font></p>
      <p><font size="2">(d) Disclosed in this report any change in the small business issuer's
      internal control over financial reporting that occurred during the small business issuer's
      most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case
      of an annual report) that has materially affected, or is reasonably likely to materially
      affect, the small business issuer's internal control over financial reporting; and</font></p>
    </dir>
    <p><font size="2">5. The small business issuer's other certifying officer(s) and I have
    disclosed, based on our most recent evaluation of internal control over financial
    reporting, to the small business issuer's auditors and the audit committee of the small
    business issuer's board of directors (or persons performing the equivalent functions):</font>
      <p><font size="2">(a) All significant deficiencies and material weaknesses in the design
      or operation of internal control over financial reporting which are reasonably likely to
      adversely affect the small business issuer's ability to record, process, summarize and
      report financial information; and</font></p>
      <p><font size="2">(b) Any fraud, whether r not material, that involves management or other
      employees who have a significant role in the small business issuer's internal control over
      financial reporting.</font></p>

<p><font size="2">Date: August 10, 2006</font></p>

<p><font size="2">/s/ Ivo Heiden<br>
President, CFO and Chairman</font></p>
</body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>3
<FILENAME>exh32_1.htm
<DESCRIPTION>EXHIBIT 32.1
<TEXT>
<html>

<head>
<title>Exhibit 32.1</title>
</head>

<body>

<p align="left"><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">Exhibit 32.1</font></p>

<p align="center"><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">CERTIFICATION
PURSUANT TO<br>
18 U.S.C. SECTION 1350,<br>
AS ADOPTED PURSUANT TO SECTION 906<br>
OF THE SARBANES-OXLEY ACT OF 2002</font></p>

<p style="text-align: justify"><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">In
connection with the quarterly report of Zaxis International Inc. (the &#147;Company&#148;)
on Form 10-QSB for the period ended June 30, 2006 (the &#147;Report&#148;), as filed with
the Securities and Exchange Commission on the date hereof, I, Ivo Heiden, President and
Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:</font></p>

<p style="text-align: justify"><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">1. The
Report fully complies with the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended; and</font></p>

<p style="text-align: justify"><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">2. The
information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.</font></p>

<p>&nbsp;</p>

<p><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">/s/ Ivo Heiden</font></p>

<p><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">Ivo Heiden<br>
President and Chief Financial Officer<br>
Dated: August 10, 2006</font></p>

<p><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">A signed original of this written
statement required by Section 906 has been provided to Zaxis International Inc. and will
be retained by the Company and furnished to the Securities and Exchange Commission or its
staff upon request.</font></p>
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