<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
                 Annual Report Under Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

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

                              For Fiscal Year Ended
                                 March 31, 2003

                           Commission File # 333-69686

                            ANSCOTT INDUSTRIES, INC.
                            ------------------------
             (Exact name of registrant as specified in its charter)

                                     Florida
                                     -------
                (State or other jurisdiction of incorporation or
                                  organization)

                                   86-0000714
                                   ----------
                      (IRS Employer Identification Number)

                    26 Haynes Drive, Wayne, New Jersey 07470
                    ----------------------------------------
              (Address of principal executive offices ) (Zip Code)

                                  (973)696-7575
                                  -------------
                (Registrant's telephone no., including area code)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
           None

Securities registered pursuant to Section 12(g) of the Act:
           Common Stock, $0.0001 par value

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. Yes [X] No [ ]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure  will be contained,
to the best of the  registrant's  knowledge,  in definitive proxy or information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. ( )

Revenues for year ended March 31, 2003: $2,480,727.





<PAGE>





Aggregate market value of the voting common stock held by non-affiliates of the
registrant as of July 14, 2003, was: $6,237,482.

Number of shares of the  registrant's  common stock  outstanding  as of July 14,
2003 was: 45,685,806

Transfer Agent as of July 14, 2003:
                             Standard Register and Transfer Company
                              12528 South 1840 East
                               Draper, Utah 84020


                                     PART I
                                     ------

Item 1.  Description of Business

Business Development. We were formed in New York on June 28, 1996 under the name
Learners World, Inc. with the intent to own and operate facilities for the care,
education  and  recreation of children.  On September  26, 2001 (the  "Effective
Date"),  pursuant  to a Stock  Purchase  Agreement  and Share  Exchange  between
Learners World, Inc.  ("Learners  World"), a Florida  corporation and Liquidics,
Inc.  ("Liquidics") a Nevada  corporation,  Learners World, Inc. acquired all of
the shares of Advanced Fluid Systems,  Inc.  ("Advanced  Fluid") from Liquidics.
Pursuant  to the  terms  of the  Agreement,  Liquidics  sold  Advanced  Fluid to
Learners  World and paid  $400,000 to Learners  World in  consideration  for the
issuance of  27,000,000  Learners  World shares to the  Liquidics  shareholders.
Pursuant to the Agreement,  Advanced  Fluid became a wholly owned  subsidiary of
the  Company.  In  addition,   we  changed  our  name  to  Liquidix,   Inc.  and
redomesticated in the State of Florida.

Pursuant to this Agreement,  through Advanced Fluid we were principally  engaged
in developing,  manufacturing and marketing ferrofluids and products based on or
derived from its ferrofluid technology.  Ferrofluids are stable magnetic liquids
that  can  be  precisely   positioned  or  controlled  with  a  magnetic  force.
Ferrofluids  consist of  molecular-sized  magnetic  particles  that are  surface
treated so that they can be dispersed in various fluids, usually a synthetic low
vapor pressure oil. Ferrofluids are designed to have a choice of properties such
as viscosity, magnetic strength and vapor pressures to perform numerous specific
function  which is sealing.  We currently  sell our  industrial  products to the
semiconductor, optical, thin film coating and the vacuum industry.

On April 15, 2003,  pursuant to a Stock  Purchase  Agreement and Share  Exchange
between us AFS Seals, Inc and Anscott  Industries,  Inc., we acquired all of the
shares  of  Anscott  from the  Anscott  shareholders  in  consideration  for the
issuance  of a total of  45,000,000  shares of our common  stock to the  Anscott
shareholders  and the transfer of all of our current  assets and  liabilities to
AFS. Pursuant to the Agreement,  Anscott became a wholly owned subsidiary of the
Company and we filed articles of amendment in the state of Florida  changing our
name to Anscott Industries,  Inc. We maintain our principal offices at 26 Haynes
Drive, Wayne, New Jersey 07470 and our telephone number is (973)696-7575.

We have not been involved in any bankruptcy, receivership or similar proceeding.
We  have  not  been   involved  in  any   material   reclassification,   merger,
consolidation,  or purchase or sale of a significant amount of assets not in the
ordinary course of business.





<PAGE>





Business of Issuer.

Based on the Agreement and spin off of our assets,  we adopted the business plan
of Anscott Industries,  Inc.  Therefore,  currently our principal activity is to
manufacture and sell specialty  chemicals,  cleaning agents,  odor  eliminators,
repellents,  treatments,  purification  and  decontamination  processes  for the
commercial  laundry and cleaning  industries.  Our business is conducted through
three  segments:  chemical & additive  technology  for  cleaning and coatings of
textiles;  filtration  & equipment  that extends the life  traditional  cleaning
chemicals  through a recycling  process;  commercialization  venture  leveraging
aerospace  technology  and  distribution  in order to move  from  laboratory  to
commercial  products  quickly,  extending  the  company's  knowledge  to deliver
solutions  to  protect  people,  property  and  the  environment.  We  have  our
operations  in  New  Jersey,   California  and  Quebec.  We  sell  to  over  300
distributors  and 7,000  end-users  worldwide.  Chemicals &  Additives  products
accounted  for 78% of  Anscott  Industries,  Inc.  (subsidiary)  2002  revenues;
Filtration & Equipment, 20%; Commercialization, 2%.

We were established in 1960 and are a leading manufacturer servicing the laundry
and dry cleaning  industry.  We manufacture  chemicals and filter equipment that
clean clothes  professionally.  Our technology arm is the exclusive  licensee of
Raytheon Systems Company (formally HUGHES AIRCRAFT) for the DryWash Process. The
DryWash  Process  has  been  sub-licensed  to eight  of the  industries  largest
chemical,  machine and carbon dioxide  manufacturers.  We sells our products and
services to over 7,000 professional cleaners today. We believe that more service
coverage  and  technology  will more than double our  customer  base to fourteen
(14,000) thousand within two (2) years.

We have recently  acquired the rights to a method of non-hazardous  dry cleaning
called the "DryWash  Cleaning  Process".  DryWash  replaces  "PERC",  a probable
carcinogen  and  hazardous  material  by  utilizing  liquid  carbon  dioxide and
aerospace  technology.  DryWash has  revolutionized  the commercial dry cleaning
industry by providing a low cost  alternative  without toxic  chemicals  such as
perchloroethylene (perc) or petroleum.

We are a specialty  chemical company with a product line of disposable filters &
delivery  systems adding in the sales of its chemical  business.  We have one of
the largest  technical  forces in the industry.  Currently  servicing over 5,000
businesses  in more  than  40  cities  and we  expect  to  service  over  10,000
businesses within the next two years.

We develop  products  that are unique and satisfy a specific  need.  The DryWash
Cleaning  Process has been  commercialized  through a joint  venture with Itochu
Aviation,  a Japanese  aerospace  trader.  Other  development  partners  include
Raytheon Systems, Los Alamos National Laboratory and Unilever.

We have recently  acquired the rights to a method of non-hazardous  dry cleaning
called the "DryWash  Cleaning  Process".  DryWash  replaces  "PERC",  a probable
carcinogen  and  hazardous  material  by  utilizing  liquid  carbon  dioxide and
aerospace  technology.  DryWash is in position  to  revolutionize  the  cleaning
industry by providing a low cost  alternative  without toxic  chemicals  such as
perchloroethylene  (perc) or petroleum. We manufactures chemicals and disposable
filters that clean clothes  professionally.  Our technology arm is the exclusive
licensee of Raytheon Systems Company  (formally HUGHES AIRCRAFT) for the DryWash
Cleaning Process.

We have expanded our exclusive role to include a sub-licensing  program. To date
the  technology  has  been  sub-licensed  to  eight  of the  industries  largest
manufacturers.  The licensing group of companies has collectively  invested over
$200 million into the development of the DryWash Cleaning process.  EPA, DOE and
DOD have also contributed directly and through Los Alamos National Laboratory.

We sell our products and services through an established distribution network of
local  warehouses  nationwide.   We  maintain  a  dedicated  force  of  chemical
technicians  that provide  service  throughout the US and Canada.  The following
sets forth some of our products:



<PAGE>



o        Flame  Fightera is an approved fire  retardant  that  protects  Drapes,
         Clothes and  Textiles.  It's perfect for Hotels,  Office  Buildings and
         Homes.

o        XPela Fabric  Protector is a barrier coating that protects  against all
         sorts of fluids such as blood that carries HIV or Hepatitis, Formulated
         for  Hospital   Scrubs,   Police   Uniforms  and  Protective  Gear  for
         professionals.


o        Smoke Outa Odor  Neutralizer  removes  all type of foul  odors.  It was
         specially formulated to remove Smoke, Pet and Musty Smells.

o        Rxa is the  prescription to clean hard to remove Paint,  Oil and Grease
         Stains. Professionally formulated to be safe and effective.

o        NuToucha is an advanced Cleaning Detergent that is Better, Whitener and
         Softer than other products.

o        HyPura Filters Recycle Chemicals and Improve Cleaning Performance.


<PAGE>





We manage the following four specific areas of business:

Caled  Chemical,  established  1953, is a leading  manufacturer  of  traditional
cleaning  products.  The products for existing  cleaning  methods include a full
line of brand name detergents, spotting agents and XPel Fabric Protection. Caled
has developed specially  formulated  additives for DryWash technology.  Unilever
Corporation and Raytheon have been working closely with Caled and currently hold
over twenty (20) worldwide patents for cleaning with carbon dioxide.


o        All the chemical products  translate 43 years of cleaning knowledge and
         experience  into  practical  cleaning  applications  customized for the
         specialized needs of the market.

o        Caled's  products  are  practical  and easy to use,  developed by Ph.D.
         chemists on staff.  The chemists  explain the basic use of the products
         in unusually clear and easy-to-understand terms.



HyPur Equipment,  established 1971, currently manufacturers filter equipment for
existing  dry  cleaning  machines.  In the near  future,  HyPur will  extend its
product  offering to provide the HyPur Laundry and Dry Cleaning  package,  which
incorporates the DryWash Fluid Management  System.  This system will be marketed
to  47,000   cleaners   throughout  the  United  States  and  Canada.   The  new
non-hazardous  process called  "DryWash" will replace the dangerous  chlorinated
chemicals currently used today. DryWash will eventually replace the costly water
cleaning process currently used in today's industrial and commercial laundries.


o        High quality and technical service is the key to HyPur's  long-standing
         customer base.

o HyPur has been innovative and aggressive in new product development.

o The services and products needed in the industry are:

<TABLE>
<CAPTION>
<S>       <C>                 <C>                 <C>                  <C>                   <C>
          -----------------------------------------------------------------------------------------------------------
          C02Solve Equipment  Vapormatic         Chillomatic            Carbon Core           All Carbon
                              Equipment          Equipment              Filtration            Filtration
          -----------------------------------------------------------------------------------------------------------
</TABLE>



Global Technologies, established 1995, acquires military technology, converts it
for industry use. The company  generates  revenue  through  transfer and royalty
fees. Combining the industry expertise of ANSCOTT with the wide reach of ITOCHU,
Global  Technologies  has been able to bring DryWash  Process to the laundry and
cleaning  industry in record  time.The  joint venture has been able to bring the
DryWash  Process to the garment  services  industry in record time.  This model,
developed  exclusively by Global  Technologies,  accomplished in five-years what
would  normally take twenty.  The model has been  highlighted  by a recent study
performed  for the USEPA as  setting  precedence  within the  technology  arena.
Specific  patents have been  exclusively  licensed from Raytheon Systems for use
within the garment services  industry.  The exclusive  license has sub-licensing
rights  that have been  transferred  to  several  companies  around  the  world.
Technology Providers - Raytheon and Los Alamos National Laboratory

This  system  will  be  marketed  to  150,000   cleaners   worldwide.   The  new
non-hazardous  process called  "DryWash" will replace the dangerous  chlorinated
chemicals  currently  used today.  In the future,  DryWash will be attempting to
replace the costly water cleaning process  currently used in today's  industrial
and commercial laundries.

Exclusive  rights for the DryWash Process were purchased by Global  Technologies
in  1996.  As a  master  licensee,  Global  Technologies  has  sub-licensed  the
technology  to some of the  industries  largest  chemical,  machine  and  carbon
dioxide manufacturers.

Tech Services,  is a self-standing  field service division that has 22 technical
service representatives. Tech Services is the only national service network that
serves  professional dry cleaners and laundries.  It currently  represents three
product lines and is in the process of adding  additional line needing technical
service at the field level.

Tech  Services  has  recently  allocated  $250,000  for  the  construction  of a
promotional  site  for new  technology.  The  promotional  site  will be used to
showcase  different  pieces of equipment that will be produced using the DryWash
process.  The site is located less than 30 min. from New York City and will also
act as a training facility for distributors on a worldwide basis.




Employees

We  currently  employ a total of 34 full time and 7 part time  employees  in the
following manner: 20 field  technicians and 21 headquarters  personnel.  None of
our employees are covered by a collective bargaining agreement and we believe we
have good relations with our employees.


Item 2. Description of Property

We own the property located at 26 Haynes Drive, Wayne, New Jersey 07470. We have
a 20 year term  mortgage  with a 1.75 % over prime with CIT as the lender.  This
property is our  headquarters  and is comprised of 41,000 square feet with 4,000
square feet of office space and  laboratory  and the rest is  warehouse  for our
products.

Item 3.  Legal Proceedings

None.  To the best of our knowledge  there is no  litigation  current or pending
against us. The lawsuits set forth in the financial  statements  are not against
Anscott Industries, Inc.

Item 4. Submission of Matters to a Vote of Security Holders

None

                                     PART II
                                     -------

Item 5. Market for Registrants's Common Equity and Related Stockholder Matters

On July 14, 2003, we had 568  shareholders  of record of our common  stock.  Our
common stock is available for trading through  electronic  trading  services via
the OTC Bulletin Board.





<PAGE>





Our common stock is currently  traded on the OTC Bulletin Board under the symbol
"ASCT."  The  following  charts  indicate  the high and low sales  price for the
common stock for each fiscal quarter  between  September 2000 and March 2003, as
quoted on the OTC Bulletin Board. These quotations reflect  inter-dealer prices,
without retail mark-up,  mark-down or commission,  and may not represent  actual
transactions.


                                                Price $
Quarter Ended                       High                     Low
-------------                       ----                     ---
September 2000                       0.97                    0.38
December 2000                        0.56                    0.03
March 2001                           0.06                    0.02
June 2001                            0.03                    0.01
September 2001                       0.90                    0.01
December 2001                        4.43                    1.74
March 2002                           2.33                    1.20
June 2002                            1.51                    0.35
September 2002                       0.45                    0.13
December 2002                        0.27                    0.10
March 31, 2003                       0.17                    0.05

Dividends

We currently intend to retain future earnings, if any to support our growth. Any
payment of cash  dividends in the future will be dependent  upon:  the amount of
funds legally available therefore;  our earnings;  financial condition;  capital
requirements; and other factors which our Board of Directors deems relevant.

Item 6. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

INTRODUCTION

The  following  discussion  should  be read in  conjunction  with our  financial
statements and related notes included herein.  Certain  statements are not based
on historical  facts,  but are  forward-looking  statements  that are based upon
assumptions  about our  future  conditions  that could  prove to be  inaccurate.
Actual  events,   transactions  and  results  may  materially  differ  from  the
anticipated events, transactions or results described. Our ability to consummate
transactions  and  achieve  events or results  is  subject to certain  risks and
uncertainties,  which  include,  but are not limited to, the existence of demand
for and  acceptance of our  products,  regulatory  approvals  and  developments,
economic  conditions,  the impact of competition and pricing,  and other factors
affecting our business that are beyond our control.

We  undertake  no  obligation  and do not intend to update,  revise or otherwise
publicly release the result of any revisions to forward-looking  statements that
may be made to reflect future events or circumstances.

YEAR ENDED MARCH 31, 2003 COMPARED TO THE YEAR ENDED MARCH 31, 2002





<PAGE>





Revenues  for the year ended  March 31,  2003 were  $2,480,727  as  compared  to
$2,312,579 for the year ended March 31, 2002.  Sales  remained  stable even with
the continuing downturn in the market.

Cost of sales for the year ended March 31, 2003 were  $1,421,889  as compared to
$1,336,082 in 2002. As of  percentage of sales,  cost of sales  decreased 1% for
2003. This was due to the stability of sales and prices.

General and  administrative  expenses  were  $1,599,787  for 2002 as compared to
$1,915,803  for 2003.  As of  percentage  of sales,  general and  administrative
expenses increased from 69% for 2002 to 77% for 2003. The increase was primarily
due to a  one-time  charge  from the  issuance  of common  stock for  consulting
services and  additional  personnel in the United  Kingdom and rent for a larger
facility.

For the year ended March 31, 2003, we incurred a net operating  loss of $925,133
or $1.38 per share  compared to net  operating  loss of  $1,139,529 or $1.79 per
share for the year ended March 31, 2002.  The net loss resulted  primarily  from
stagnant business operations.
IMPACT OF INFLATION

We do not believe that inflation will have any material impact on its commercial
activities  for the ensuing year,  as our products do not fall under  categories
that are traditionally affected.

LIQUIDITY AND CAPITAL RESERVES

The primary  roadblock  facing our plans for growth is our need for capital.  We
are actively seeking  additional  capital  resources through the sale of equity.
With  additional  capital  resources we expect to be able to expand our services
and  products.  At the present  time we have  adequate  working  capital for our
immediate business.  Additional capital is needed for any and all expansion.  We
have no  long-term  debt,  which  assists in not  needing  additional  immediate
working  capital.  Historically,  the Company's  primary source of cash has been
from operations and debt financing by related parties.

Cash  provided  by  operating  activities  during  2003  declined  by  (708,578)
primarily  the  result of  increases  in  accounts  receivable  in the amount of
$107,622 and a decrease in accrued liabilities and accrued expenses of $231,727.

Cash  provided  by  operating  activities  during  2002  amounted  to  $252,212,
primarily  the result of  increases  in accounts  receivables  and  inventory of
$413,490 and 100,360 respectively.

Cash received in financing  activities  during 2003 amounted to $397,000 related
primarily to an increase in notes payable.

Cash used by  financing  activities  during  2002  amounted  to $21,686  related
primarily to the prepayment of debt from the prior year.

PLAN OF OPERATIONS FOR FISCAL YEAR 2003

We anticipate that as sales increase we will achieve profitability during fiscal
year 2003. Future activities will be directed towards expanding existing markets
for our products and  penetrating  new markets.  We currently have operations in
the United States and in Great Britain. Future expansion plans will move us into
the Pacific Rim.





<PAGE>





Advanced Fluid Systems, Ltd., our subsidiary has received a patent in Europe and
the United States for its controllable fluid damper. This special damper acts as
a shock absorber. Instead of using a metal coil spring, it uses the controllable
fluid to soften the jolting effect felt now with a conventional  shock absorber.
Prototypes  and some  additional  testing  are  needed  before  this  product is
marketable.  Discussions  have  been  held  with a major  manufacturer  to joint
venture the final developing.

We do  not  manufacture  our  own  magnetic  fluid  or  controllable  fluid  for
production. Our present supplier of fluid has approached us with the possibility
of purchasing  their company.  The purchase of this company would  eliminate any
probability of the loss of a critical part of our production  process. We are in
active  talks  with our fluid  supplier  and terms  should be worked out for the
purchase  before  the end of the year.  The  damper  and  purchase  of our fluid
supplier  will be put into  operation if adequate  funding is received.  We have
sufficient  cash flow to manage the  day-to-day  operations  of  completing  all
ongoing orders.  We have agreed upon terms with a private  investor for funding.
In addition,  we have entered into various  consulting  agreements to advise and
consult with the Company on certain  business and  financial  matters in foreign
markets and for business development advisory services.

Item 7. Financial Statements and Supplementary Data

The financial  statements of the Company,  together with the report of auditors,
are as follows:



<PAGE>

                         INDEPENDENT ACCOUNTANTS' REPORT



To the Stockholders and Board of Directors of
Liquidix, Inc. and Subsidiary



We have audited the accompanying  consolidated balance sheets of Liquidix,  Inc.
and Subsidiary as of March 31, 2003, and the related consolidated  statements of
operations,  changes in stockholders'  equity, and cash flows for the year ended
March 31, 2003. These consolidated  financial  statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain reasonable  assurance about whether the consolidated
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  consolidated  financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall  consolidated  financial  statement  presentation.  We
believe our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Liquidix,  Inc. and
Subsidiary  as of March 31, 2003 and the results of its  operations,  changes in
stockholders'  equity,  and its cash flows for the year ended March 31, 2003, in
conformity with accounting principles generally accepted in the United States of
America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue as a going  concern.  As  discussed  in the Notes to the
financial  statements,  the Company  has a net loss in the  current  year and an
accumulated  deficit.  This condition raises substantial doubt about its ability
to continue as a going  concern.  The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.

Draft

Sellers & Andersen, LLC
Certified Public Accountants

Salt Lake City, Utah
July 11, 2003




<PAGE>


                           LIQUIDIX, INC. & SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                                 March 31, 2003


<TABLE>
<CAPTION>

                                     ASSETS
                                                                         2003
                                                                      -----------

Current Assets
<S>                                                                   <C>
   Cash and cash equivalents                                          $    96,521
   Accounts receivable                                                    553,312
   Inventory                                                              411,036
                                                                      -----------
              Total Current Assets                                      1,060,869

Property and Equipment                                                    182,814

Acquisition Costs, Net                                                    143,237
Other Assets                                                               16,500
                                                                      -----------
              Total Assets                                            $ 1,403,420
                                                                      ===========


                         LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
   Accounts payable                                                   $   728,738
   Notes payable (Notes 5 and 6)                                          587,446
   Accrued liabilities                                                     35,642
                                                                      -----------
              Total Liabilities                                         1,351,826
                                                                      -----------
Minority interest: (Note 1)                                                   516
                                                                      -----------
Commitments and Contingencies: (Note 9)                                      --

Stockholders' Equity: (Note 10)
   Common stock - $.0001 par value, 75,000,000, (, 000 authorized,            684
   (684,269 Shares issued and outstanding)
   Paid in Capital                                                      3,543,648
   Accumulated deficit                                                 (3,639,358)
   Foreign currency translation adjustment (Note 1)                       146,104
                                                                      -----------

              Total Stockholders' Equity                                   51,078
                                                                      -----------
              Total Liabilities and Stockholders' Equity              $ 1,403,420
                                                                      ===========

</TABLE>





                     The Accompanying Notes are an Integral
                  Part of the Consolidated Financial Statements

                                       2

<PAGE>

                          LIQUIDIX, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   For the Years Ended March 31, 2003 and 2002



<TABLE>
<CAPTION>

                                                               2003           2002
                                                            -----------    -----------
<S>                                                         <C>            <C>
Sales                                                       $ 2,460,727    $ 2,312,579

Cost of Sales                                                 1,421,699      1,336,082
                                                            -----------    -----------
Gross Profit                                                  1,039,028        976,497

General and Administrative Expenses                           1,915,912      1,599,787
                                                            -----------    -----------
Income (Loss) from Operations                                  (876,884)      (623,290)
                                                            -----------    -----------
Other Income (Expenses)
   Interest income                                                  386          1,121
   Interest expense                                             (48,902)       (20,067)
   Impairment of license agreement (Note 1)                        --         (500,000)
                                                            -----------    -----------
                                                                               (48,516)
Total Other Income (Expense)                                   (518,946)

Minority Interest                                                   926          2,707
                                                            -----------    -----------
Net Income (Loss)                                           $  (924,474)   $(1,139,529)
                                                            ===========    ===========
Basic and Diluted Income (Loss) per Common Share (Note 1)        ($1.38)        $(1.94)
                                                            ===========    ===========
Weighted-Average Number of Common Shares Outstanding:
   Basic and Diluted                                            668,223        588,295
                                                            ===========    ===========
</TABLE>

                     The Accompanying Notes are an Integral
                  Part of the Consolidated Financial Statements


                                       3

<PAGE>


<TABLE>
<CAPTION>
                                                                           ADDITIONAL                   CUMULATIVE        TOTAL
                                            COMMON STOCK                    PAID-IN      ACCUMULATED    TRANSLATION    STOCKHOLDERS'
                                                SHARES       AMOUNT         CAPITAL        DEFICIT        ACCOUNT        EQUITY
                                             -----------   -----------    ------------   -----------    -----------    -----------
<S>                                          <C>           <C>            <C>            <C>            <C>            <C>
Balance at December 31, 1999                 $       519   $ 1,956,695    $(2,342,746)   $(2,342,746)   $      --      $  (385,532)
                                                                                                            518,630           --
Options exercised
                                                   8,582             9         75,650           --             --           75,659
Translation adjustment
                                                    --            --             --             --           41,406         41,406
Income for the period ended March 31, 2001
                                                    --            --             --          767,391           --          767,391
Balance at March 31, 2001
                                                 527,212           528      2,032,345     (1,575,355)        41,406        498,924
Merger with Learner's World, Inc. and
    recapitalization of equity
                                                   5,000             5             (5)          --             --             --
Issuance of common stock for
    services
                                                 117,500           118        305,382           --             --          305,500
Capital contribution
                                                    --            --          903,014           --             --          903,014
Translation adjustment
                                                    --            --             --             --          (30,180)       (30,180)
Loss for the year ended March 31, 2002
                                                    --            --             --       (1,139,529)          --       (1,139,529)
Balance at March 31, 2002                        649,712   $       651    $ 3,240,736    $(2,714,884)   $    11,226    $   537,729
</TABLE>






                     The Accompanying Notes are an Integral
                  Part of the Consolidated Financial Statements



                                       4




<PAGE>


<PAGE>


<TABLE>
<CAPTION>
                                                                         ADDITIONAL                 CUMULATIVE        TOTAL
                                            COMMON STOCK                  PAID-IN    ACCUMULATED    TRANSLATION    STOCKHOLDERS'
                                                SHARES       AMOUNT       CAPITAL      DEFICIT        ACCOUNT        EQUITY
                                             -----------   -----------  ------------ -----------    -----------    -----------
<S>                                          <C>           <C>            <C>            <C>            <C>            <C>
Cancellation of stock contributed to company
                                               (12,500)         (13)      (25,013)                                  25,000
Issuance of stock for conversion
                                                33,107           33        52,938                                   52,971
                                                                         ADDITIONAL                 CUMULATIVE       TOTAL
Stock issued for services
                                                13,750           13       274,987                                  275,000
Translation adjustment
                                                  --           --            --            --          86,441       86,441
Fractional shares rounded up in consolidation
                                                                                                                       200
Income for the period ended March 31, 2003
                                                  --           --            --        (924,474)         --       (925,133)
Balance at March 31, 2003
                                               684,269          684     3,543,648    (3,639,358)       97,667       52,008
</TABLE>







                     The Accompanying Notes are an Integral
                  Part of the Consolidated Financial Statements

                                       5


<PAGE>


                          LIQUIDIX, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        For the Year Ended March 31, 2003



<TABLE>
<CAPTION>
                                                                      2003           2002
                                                                  -----------    ------------
Cash flows from operating activities:
<S>                                                               <C>            <C>
   Net Income (Loss)                                              ($  924,474)   ($1,139,529)

Adjustments to reconcile net income (loss) to net cash provided
     by operating activities:
       Depreciation and amortization                                   94,988        100,482
       Stock issued for services                                      275,500        305,500
       Stock issued for sedebtes                                      (52,971)          --
        Net assets acquired in acquisition                               --          155,154
        Impairment of license agreement                                  --          500,000
Changes in Assets and Liabilities:
       Accounts receivable                                           (107,622)       413,491
       Inventory                                                       27,941        100,363
       Other assets                                                    32,245         47,223
       Accounts payable                                               178,951       (166,937)
       Accrued liabilities                                           (231,727)       (60,826)
                                                                  -----------    -----------
              Net cash provided by operating activities              (707,169)       252,214
                                                                  -----------    -----------
Cash flows from investing activities:

       Purchase of fixed assets                                       (89,104)       (95,795)
                                                                  -----------    -----------
              Net cash provided (used) by investing activities        (89,104)       (95,795)
                                                                  -----------    -----------
Cash flows from financing activities:
       Repaymementfofecapital lease                                   (11,850)
       Proceeds from debt                                             530,000           --
       Repayment of debt, net                                        (153,000)        (9,836)
                                                                  -----------    -----------
              Net cash provided (used) by financing activities        397,000        (21,686)
                                                                                 -----------
Effect of exchange rate changes on cash and intercompany
   accounts                                                            50,104         12,668
                                                                  -----------    -----------
Net increase in cash and cash equivalents                            (349,169)       214,069

Cash and cash equivalents at beginning of period                      445,690        231,621
                                                                  -----------
Cash and cash equivalents at end of period                        $    96,521    $   445,690
                                                                  ===========    ===========
</TABLE>



                     The Accompanying Notes are an Integral
                  Part of the Consolidated Financial Statements


                                       6

<PAGE>




LIQUIDIX, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
For the Year Ended March 31, 2003 and 2002



                                                      2003        2002
                                                    ---------   --------

Supplemental disclosure of cash flow information:

   Interest paid                                    $  48,902   $ 20,067
                                                    =========   ========

   Income taxes paid                                $    --     $   --
                                                    =========   ========

Non-cash investing and financing activities:

  Capital contribution                                   --     $903,014
                                                    =========   ========

   Stock issued for services                        $ 275,000   $305,500
                                                    =========   ========

    Debt converted to stock                         $  52,971       --
                                                    =========   ========







                     The Accompanying Notes are an Integral
                  Part of the Consolidated Financial Statements

                                       7

<PAGE>


                          LIQUIDIX, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003

--------------------------------------------------------------------------------
                                     NOTE 1
                        NATURE OF OPERATIONS AND HISTORY
--------------------------------------------------------------------------------

ORGANIZATION

Liquidix,  Inc.  (formerly  Learner's World,  Inc.) (the "Company") is a Florida
corporation  in  the  business  of  developing,   manufacturing   and  marketing
ferrofluids and products based on or derived from its ferrofluid technology. The
Company sells its industrial products throughout the world.

LWI was formed as a state of New York  corporation  on June 28, 1996,  on August
15,  2001,  the state of Domicile  was changed to Florida by  formation of a new
entity and merger of the old company of the same name.

Effective September 26, 2001, Learner's World, Inc. ("LWI") acquired one hundred
percent (100%) of the outstanding  common stock of Advanced Fluid Systems,  Inc.
("AFS,  Inc.")  from its parent  company,  Liquidics,  Inc.  ("Liquidics").  The
transaction was accounted for as a  recapitalization  with LWI as the accounting
acquirer in a reverse merger. The restricted common stock received by Liquidics,
Inc.  in LWI was then issued to the  Shareholders  of  Liquidics , making  these
shareholders the majority owners of LWI.

In conjunction with the merger, LWI changed its name to Liquidix, Inc.

--------------------------------------------------------------------------------
                                     NOTE 2
         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES
--------------------------------------------------------------------------------

PRINCIPLES OF CONSOLIDATION

The consolidated  financial  statements  include the accounts of the Company and
its ninety-nine  percent (99%) owned  subsidiary,  Advanced Fluid Systems,  Ltd.
(based out of Great Britain).  All  significant  intercompany  transactions  and
accounts are eliminated in consolidation.

REVENUE RECOGNITION

Revenues for sales of products and services are recognized when the related
products are sold and shipped, or services are performed .

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

For financial  accounting  purposes,  cash equivalents include cash in banks and
all highly liquid investments with a maturity of three months or less.

ACCOUNTS RECEIVABLE

The Company provides for potentially uncollectible accounts receivable by use of
the  allowance  method.  The  allowance  is provided  based upon a review of the
individual accounts outstanding, and the Company's prior


                                       8

<PAGE>

                          LIQUIDIX, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
--------------------------------------------------------------------------------
                               NOTE 2 (CONTINUED)
         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES
--------------------------------------------------------------------------------


history of uncollectible  accounts receivable.  As of March 31, 2003 and 2002, a
provision for uncollectible  accounts  receivable in the amounts of $ 22,181 and
$25,016, respectively, had been established.


INVENTORY

Inventory consists  primarily of raw materials and finished goods.  Inventory is
stated at the lower of cost,  using the first-in,  first-out  (FIFO) method,  or
market.  Reserves and writedowns are established against Company-owned inventory
for excess,  slow moving,  and obsolete items where the estimated net realizable
value is less than the carrying value.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Depreciation is provided for on the
straight-line method over the estimated useful lives of the assets. Maintenance
and repairs that neither materially add to the value of the property nor
appreciably prolong its life are charged to expense as incurred. Betterments or
renewals are capitalized when incurred. For the years ended March 31, 2003 and
March 31, 2002, depreciation expense was
 $49,283  And   $51,372, respectively.

The estimated useful lives of the assets are as follows:

                  Furniture and fixtures    5 years
                  Machinery and equipment   5 years
                  Office equipment          3 years
                  Leasehold improvements 5-10 years

The Company  leased  equipment  under a capital  lease  agreement  that  expired
November,  2001. The asset and liability  under the capital lease agreement were
recorded at the lower of the present value of the minimum lease  payments or the
fair market value of the asset.  The asset was depreciated over the lower of its
related lease term or its estimated  productive life.  Depreciation of the asset
under the capital lease agreement is included in depreciation  expense, as noted
above, for the years ended March 31, 2003 and March 31, 2002.

ACQUISITION COSTS

Acquisition  costs  represent  costs  incurred in  relation to a Stock  Purchase
Agreement.  Acquisition  costs are being amortized  ratably over five (5) years.
Amortization  expense  for the year ended  March 31, 2003 and March 31, 2002 was
$49,110 and $ 49,110, respectively.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company reviews long-lived assets for impairment  whenever events or changes
in  circumstances   indicate  the  carrying  amount  of  an  asset  may  not  be
recoverable.  Recoverability  of  assets  to be held and used is  measured  by a
comparison of the carrying  amount of an asset to future  undiscounted  net cash
flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets  exceeded the fair value of the assets.  Assets to
be disposed of are  reported at the lower of the  carrying  amount or fair value
less costs to sell.

                                       9

<PAGE>


                          LIQUIDIX, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 MARCH 31, 2003

--------------------------------------------------------------------------------
                               NOTE 2 (CONTINUED)
   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES (CONTINUED)
--------------------------------------------------------------------------------

During the year ended March 31,  2002,  the Company  recorded an  impairment  in
relation to a licensing  agreement  in the amount of $500,000 as the fair market
value of the agreement  would be less than the carrying  value of the long-lived
asset.

For the year ended  March 31,  2003,  there  were no  additional  impairment  of
long-lived assets belonging to the company or subsidiary as fair market value of
the assets was greater than book value.


INCOME TAXES

Deferred  income taxes are provided on an asset and  liability  method,  whereby
deferred tax assets are  recognized  for deductible  temporary  differences  and
operating loss and tax credit  carryforwards,  and deferred tax  liabilities are
recognized for taxable  temporary  differences.  Temporary  differences  are the
differences between the reported amounts of assets and liabilities and their tax
basis.  Deferred tax assets are reduced by a valuation  allowance  when,  in the
opinion of management,  there is uncertainty of the utilization of the operating
losses in future  periods.  Deferred tax assets and liabilities are adjusted for
the effects of changes in tax laws and rates on the date of enactment.

BASIC AND DILUTED LOSS PER COMMON SHARE

Basic  loss per  common  share is  computed  based on  weighted  average  shares
outstanding and excludes any potential dilution from stock options, warrants and
other  common  stock  equivalents.  Basic loss per share is computed by dividing
loss available to common  shareholders by the weighted  average number of common
shares  outstanding  for the  period.  Diluted  loss per common  share  reflects
potential  dilution from the exercise or  conversion  of securities  into common
stock or from other  contracts to issue common  stock.  As of March 31, 2003 and
2002 there are no common stock equivalents.

FOREIGN CURRENCY TRANSLATION

Account  balances and  transactions  denominated  in foreign  currencies and the
accounts of the  Corporation's  foreign  operations  have been  translated  into
United  States funds,  as follows:  (i) assets and  liabilities  at the rates of
exchange  prevailing  at the balance sheet date;  (2) exchange  gains and losses
arising  from  the  translation  of the  Corporation's  foreign  operations  are
deferred  and  included as a separate  component of  stockholders'  equity.  The
foreign currency translation  adjustments for the years ended March 31, 2003 and
for March 31, 2002 were ($ 20,003) and $11,226, respectively.

STOCK-BASED COMPENSATION

The Company has elected to follow  Accounting  Principles  Board Opinion No. 25,
Accounting   for  Stock   Issued  to   Employees   (APB  25)  and  the   related
interpretations  in accounting  for its employee  stock  options.  Under APB 25,
because the  exercise  price of  employee  stock  options  equals or exceeds the
market  price of the  underlying  stock on the date of  grant,  no  compensation
expense is recorded.  The Company has adopted the disclosure-only  provisions of
Statement of Financial  Accounting Standards No. 123, Accounting for Stock-Based
Compensation  (SFAS No. 123).  During the fiscal year ended March 31, 2002,  the
company did pay stock based  compensation  to employees.  During the fiscal year
ended March 31, 2003 there was no stock based  compensation  paid by the company
under stock option plans.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Accounts receivable,  notes receivable,  accounts payable,  notes payable, lease
obligation and accrued liabilities are substantially  current or bear reasonable
interest rates. As a result, the carrying values of these financial  instruments
approximate fair value.


                                       10
<PAGE>



                          LIQUIDIX, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 MARCH 31, 2003

--------------------------------------------------------------------------------
                                     NOTE 3
                                LICENSE AGREEMENT
--------------------------------------------------------------------------------

The Company has an agreement that gives the right to process silicon wafers in a
method that will reduce size, weight,  and heat generation.  The license will be
amortized  over the  term of the  license  agreement.  The  agreement  commenced
February,  2000 and  remains  in full  force and  effect for a period of fifteen
years from the date of  execution.  The  agreement  also  provides  for  royalty
payments  to be made to the  licensor  based on the  number  of  silicon  wafers
produced.  As of March 31, 2002,  the Company had yet to commence  production of
the  product  and  determined  that  the  technology  related  to same  had been
superseded,  therefore,  an impairment in the amount of $500,000, the full value
of the license agreement, was recorded for the fiscal year ended March 31, 2002.
As of March  31,  2003  nothing  has been done with the  license  agreement  and
management is considering seeking remedies to recover the company's investment.


--------------------------------------------------------------------------------
                                     Note 4
                             Property and Equipment
--------------------------------------------------------------------------------

Property and equipment as of March 31, 2003 and 2002 consists of the following:


                                   2003         2002
                                ---------    ---------


Furniture and fixtures             19,305       17,052
Machinery and equipment           369,348      297,115
Office equipment                   96,961       47,480
Leasehold improvements             68,033       49,817
                                ---------    ---------
                                  553,647      411,464

Less accumulated depreciation    (370,833)    (317,754)
                                ---------    ---------

                                $ 182,814    $  93,710
                                =========    =========

--------------------------------------------------------------------------------
                                     NOTE 5
                          CONCENTRATION OF CREDIT RISK
--------------------------------------------------------------------------------

The Company  maintains cash balances at a London  financial  institution.  As of
March 31, 2003 and 2002, the Company had uninsured cash of approximately $93,907
and $ 378,119, respectively.


--------------------------------------------------------------------------------
                                     NOTE 6
                           RELATED PARTY TRANSACTIONS
--------------------------------------------------------------------------------

NOTE PAYABLE

At March 31, 2003, the related party notes payable,  in the aggregate  amount of
$100,375,  consisted of various notes to an officer and a related  entity,  with
interest  rates  ranging  from ten  percent  (10%) to ten and  one-half  percent
(10.5%) per annum.  The notes require payments of accrued interest and principal
at maturity. Various notes, in the aggregate of $100,375 matured during the year
ended March 31, 2003 and remain unpaid as of March 31, 2003.  These notes are in
default and are due on demand. Also see Note 7, convertible debt.


                                       11
<PAGE>


                          LIQUIDIX, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 MARCH 31, 2003



-------------------------------------------------------------------------------
                                     NOTE 7
                                  NOTE PAYABLE
-------------------------------------------------------------------------------



CONVERTIBLE DEBT

In May,  2002,  the Company  issued a convertible  note payable in the amount of
$300,000.  The convertible  note payable accrues  interest at eight percent (8%)
per annum and matures May 9, 2004. The note is convertible into shares of common
stock at sixty percent (60%) of the trading  price prior to the  conversion,  or
$0.73 per share,  whichever is lower.  The Company  issued  753,000 common stock
warrants with the convertible note payable.  The warrants have an exercise price
of the lesser of $0.73 or sixty  percent (60%) of the trading price prior to the
conversion and a term of five (5) years.

Pursuant to the convertible debt agreement, the Company has filed on Form SB-2 a
registration statement with the Securities and Exchange Commission,  registering
8,839,333 shares of common stock.

Concurrent  with the filing of the Form SB-2,  the Company  has  entered  into a
convertible  note payable in the amount of $250,000.  The terms of the agreement
include the  conversion of the debt into shares of common stock at the lesser of
sixty percent (60%) of the trading price prior to conversion or $0.73.

The Registration  Statement  registered two hundred percent (200%) of the shares
of common stock needed should the aggregate of $550,000 of  convertible  debt be
converted.

During  the year  ended  March  31,  2003 a total of  $52,971  of this  debt was
converted into 662,136 shares of common stock of the corporation.  The remaining
debt was assumed by the  transferee of all the Liquidix  assets and  liabilities
subsequent to the balance sheet date. (See note 13 Subsequent Events)


--------------------------------------------------------------------------------
                                     NOTE 8
                                  INCOME TAXES
--------------------------------------------------------------------------------

As of March 31, 2002 and 2001, deferred tax assets consist of the following:


                                      2003    2    2002
                                   ---------    ---------

Net operating loss carryforwards   $ 259,549    $ 307,500
Less: valuation allowance           (258,549)    (307,500)
                                   ---------    ---------

Net deferred tax asset             $    --      $    --
                                   =========    =========


As of March 31, 2002, the Company established a valuation allowance equal to the
full amount of the deferred tax asset due to the  uncertainty of the utilization
of operating losses in the future.

At March 31, 2002, the Company had federal net operating loss  carryforwards  in
the  approximate  amount of $904,000  available to offset future  taxable income
through 2021.

The  deferred  tax  assets  exclude  the  activity  of  the  Company's   foreign
operations.



                                       12

<PAGE>



                          LIQUIDIX, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 MARCH 31, 2003

-------------------------------------------------------------------------------
                                     NOTE 9
                        OBLIGATION UNDER CAPITAL LEASE
-------------------------------------------------------------------------------

The Company was the lessee of equipment, with an original cost of approximately
$109,000, under a capital lease agreement which expired November, 2001.

The interest rate on the obligation under capital lease was approximately
fourteen percent (14%) per annum, and was imputed based on the lessor's implicit
rate of return at the inception of the lease.



--------------------------------------------------------------------------------
                                     NOTE 10
                          COMMITMENTS AND CONTINGENCIES
--------------------------------------------------------------------------------

OFFICE LEASE COMMITMENTS

The Company is obligated under a long-term operating lease for an office
facility through the year 2005.

As of March 31, 2003, future minimum lease payments due under the non-cancelable
operating lease agreement is as follows:

                            Year ending
                             March 31,      Amount
                           -------------   =======
                                    2004    93,028
                                    2005    86,028
                                    2006    86,028
                                            ------
                           Total           265,084



In addition,  the Company leases office  facilities under  short-term  operating
leases.

Rent expense  under the  aforementioned  operating  leases was  approximately  $
25,766 and  $109,375  for the years  ended  March 31,  2003 and March 31,  2002,
respectively.

LITIGATION

In the normal course of business,  the Company is subject to certain contractual
obligations  and  litigation.  As of March 31, 2003, a legal claim has been made
against the Company in the amount of $201,841.23 for a breach of the lease for a
location in Scottsdale,  Az . The Company  intends to defend  vigorously,  but a
provision  for  liability  from  such a claim  has  been  made in the  financial
statements.

At March 31, 2002, a claim was filed in the amount of $30,908, at the end of the
current  fiscal year this claim is  unresolved.  The  company  intents to defend
vigoroursly and, feels that it has adequate defenses against this claim.

The  company  does not feel that it has  liability  in either of the two  claims
noted above, but has accrued a contingent liability in the amount of $50,000.


                                       13
<PAGE>


                          LIQUIDIX, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 MARCH 31, 2003


--------------------------------------------------------------------------------
                                     NOTE 11
                                     EQUITY
--------------------------------------------------------------------------------

STOCK ISSUED FOR SERVICES

During the year ended March 31,  2003,  the  Company  issued  275,000  shares of
common stock for consulting services valued at $275,000. During the current year
250,000 shares of common stock was returned to the company and cancelled for non
performance under a contract.


TREASURY STOCK

During the year ended March 31, 2003, the company cancelled 16,647,309 shares of
its'  common  stock that had been held in the  treasury.  It was the  opinion of
management  that a reissue of stock in event of a need was preferable to holding
the common stock in the treasury.



--------------------------------------------------------------------------------
                                     NOTE 12
                                  GOING CONCERN
--------------------------------------------------------------------------------

The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities  in the normal course of business.  The Company has an a loss for
the year ended March 31, 2003 in the amount of $925,133, and accumulated deficit
at  March  31,  2003  and  2002 in the  amounts  of  $3,640,957  and  $2,715,824
respectively. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.


--------------------------------------------------------------------------------
                                     NOTE 13
                               MINORITY INTERESTS
--------------------------------------------------------------------------------

MINORITY INTEREST

The Company has a ninety nine percent  (99%) owned  Subsidiary,  Advanced  Fluid
System,  Limited  ("AFS,  Ltd.").  During  fiscal  year ending  March 31,  2003,
Liquidix,  Inc.  offered the then 7% minority  shareholders  shares of Liquidix,
Inc. in exchange for their shares in AFS, Ltd. By March 31, 2003, all but 51,120
shares  (or 1%) of AFS,  Ltd.  stock  were  exchanged  for  1,700,402  shares of
Liquidix, Inc. common stock. and were paid out of the Company treasury strock..


--------------------------------------------------------------------------------
                                     NOTE 14
                           SUBSEQUENT EVENTS (AUDITED)
--------------------------------------------------------------------------------

SALE OF THE LIQUIDIX ASSETS

In April, 2003,  subsequent to the date of the financial  statements the company
entered into an  agreement  to  consolidate  the  outstanding  common stock by a
factor of 20 old shares  being  equal to one new  share.  As  extension  of this
transaction,  the company  entered  into an  agreement  to acquire the assets of
Anscott  Industries,  Inc. by the issuance of  45,000,000  shares of  restricted
capital stock. Each of the previous directors  resigned.  After this purchase of
the assets and  liabilities of Anscott  Industries,  Inc was completed,  the new
Board of Directors  voted to divest itself of all the assets and  liabilities of
Liquidix,  Inc,  The sale of the assets and  liabilities  was  completed  during
April, 2003. The financial  statements give effect to the 1 for 20 reverse stock
split for all periods presented.

                                       14


<PAGE>


                          LIQUIDIX, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 MARCH 31, 2003

--------------------------------------------------------------------------------
                                     NOTE 15
                          SUBSEQUENT EVENTS (UNAUDITED)
--------------------------------------------------------------------------------


Subsequent  to purchase and sale as described in Note 14,  management of Anscott
Industries,  Inc. furnished the unaudited information.  This information has not
been audited or verified.

                            ANSCOTT INDUSTRIES, INC.
                                  BALANCE SHEET
                           PROFORMA AS OF MARCH, 2003
                                   (Unaudited)


<TABLE>
<CAPTION>

ASSETS
<S>                                                     <C>
 Current assets Cash                               $     2,750
 Accounts receivable                                   535,547
 Inventory                                             489,819
 Prepaid expenses                                      212,311
                                                   -----------

         TOTAL CURRENT ASSETS                      $ 1,210,427

         PROPERTY PLANT AND EQUIPMENT                  967,201

         OTHER ASSETS                                1,741,758
                                                   -----------

         TOTAL ASSETS                              $ 3,919,386





       LIABILITIES AND STOCKHOLDERS EQUITY

LIABILITIES

       Current liabilities
       Accounts payable                            $   887,498
       Notes payable                                 1,501,642
                                                   -----------

         TOTAL CURRENT LIABILITIES                 $ 2,389,140

         LONG TERM LIABILITIES                       2,633,537
                                                   -----------

         TOTAL LIABILITIES                         $ 5,022,678

STOCKHOLDERS EQUITY
       Common stock                                $   724,135
       Paid in Capital                                 305,056
       Accumulated Earnings (Deficit)               (2,132,483)
                                                   -----------

       TOTAL STOCKHOLDERS EQUITY                   $(1,103,292)

       TOTAL LIABILITIES AND STOCKHOLDERS EQUITY   $ 3,919,386
                                                   -----------

</TABLE>

<PAGE>






Item  8.  Changes  In and  Disagreements  With  Accountants  on  Accounting  and
          Financial Disclosure


We recently  changed our accountant from Semple & Cooper,  LLP in Arizona to our
current accountant,  Sellers & Andersen, LLC of Utah. We do not presently intend
to change  accountants.  At no time has there been any  disagreements  with such
accountants   regarding  any  matter  of  accounting  principles  or  practices,
financial statement disclosure, or auditing scope or procedure.

                                    PART III
                                    --------

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

Our  directors  and  officers,  as of July 14, 2003,  are set forth  below.  The
directors hold office for their  respective term and until their  successors are
duly elected and  qualified.  Vacancies  in the  existing  Board are filled by a
majority vote of the remaining directors.  The officers serve at the will of the
Board of Directors.

                             With Company
Name                   Age   Position
--------------------   ---   -----------------------------
Jack Belluscio         41    President, Chief Financial Officer and Chairman
                             of the Board
Steven Hoh             55    Secretary Treasurer and Director

Jack Belluscio has been the President,  Chief Executive Officer, Chief Financial
Officer and Chairman of our Board of Directors since April 15, 2003. He has been
employed as the Chief financial Officer of our subsidiary,  Anscott  Industries,
Inc.,  since  2000.  From  1995 to 2000 Mr.  Belluscio  was  employed  by Global
Technologies,  El  Segundo,  Ca.  as its  President.  From  1990  to 1995 he was
President of Caled  Chemical,  Wayne,  NJ. From 1987 to 1990 Mr.  Belluscio  was
employed  by Western  Union,  Upper  Saddle  River,  NJ. From 1983 - 1987 he was
employed  by  Citibank,   New  York,  NY.  Mr.  Belluscio  has  an  MBA  with  a
concentration  in finance and  economics.  He has held positions on the Board of
Directors of the Textile Care Association and New York Military Academy.

Steven Hoh has been our Secretary  and  Treasurer  and Director  since April 15,
2003.  Mr. Hoh has been the Vice  President  of  Operations  of our  subsidiary,
Anscott  Industries,  Inc.  since 1980.  He has held  several  positions  within
Anscott  Industries,   Inc.  and  currently  is  responsible  for  manufacturing
personnel   coordination  of  materials   throughout  the  company's   worldwide
distribution network.



                                       16



<PAGE>





All  officers  and  directors  listed above will remain in office until the next
annual meeting of our  stockholders,  and until their  successors have been duly
elected and qualified.  There are no agreements  with respect to the election of
Directors.  We have not  compensated  our  Directors for service on our Board of
Directors,  any  committee  thereof,  or  reimbursed  for expenses  incurred for
attendance  at meetings of our Board of  Directors  and/or any  committee of our
Board of Directors.  Officers are  appointed  annually by our Board of Directors
and each Executive Officer serves at the discretion of our Board of Directors.

We do not have any standing committees. Our Board of Directors may in the future
determine to pay Directors' fees and reimburse Directors for expenses related to
their activities.

None of our Officers and/or Directors have filed any bankruptcy  petition,  been
convicted of or been the subject of any criminal  proceedings  or the subject of
any order,  judgment or decree  involving  the violation of any state or federal
securities laws within the past five (5) years.

COMMITTEES OF THE BOARD

We presently do not have any committees.

Compliance with Section 16(a) of the Exchange Act

None

Item 10. Executive Compensation

The  following  table  sets  forth the annual  and  long-term  compensation  for
services in all capabilities to the Company.

<TABLE>
<CAPTION>
Name & Position            Year    Salary       Bonus      Other       Annual Long Term
                                                         Compensation     Compensation
                           --------------------------------------------------------------
<S>                        <C>    <C>            <C>      <C>               <C>
Jack Belluscio             2003   $27,996         0        0                 0
President and Director

Steven Hoh                 2003   $47,277         0        0                 0
Secretary, Treasurer
and Director
</TABLE>

Our Directors do not receive  compensation  for their  services as directors but
may be reimbursed for their reasonable expenses for attending Board meetings.

Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth as of July 14, 2003,  information with respect to
the beneficial  ownership of the Company's Common Stock by (i) each person known
by the Company to own beneficially 5% or more of such stock,  (ii) each Director
of the Company who owns any Common  Stock,  and (iii) all Directors and Officers
as a group,  together  with  their  percentage  of  beneficial  holdings  of the
outstanding shares.



                                       17



<PAGE>





                                   Number of Shares of
Name of Beneficial Owner/          Common Stock               % of Beneficial
Identity of Group                  Beneficially Owned         Ownership
--------------------------------------------------------------------------------

Jack Belluscio                     44,000,000 (1)            96.31%

Steven Hoh                                  0                  0

DIRECTORS AND
OFFICERS AS A
GROUP                              44,000,000                 96.31%


Item 12. Certain Relationships and Related Transactions.

None.


Item 13. Exhibits and Reports on Form 8-K

(a)  The following documents are filed as part of this report:

1.   Financial  statements;  see  index to  financial  statement  and  schedules
     immediately following the signature pages of this report.

2.   Financial  statement  schedules;  see  index to  financial  statements  and
     schedules immediately following the signature pages of this report.

3.   Exhibits:

The following exhibits are filed with this Form 10-KSB and are identified by the
numbers  indicated:  see  index  to  exhibits  immediately  following  financial
statements and schedules of this report.

3.1  Certificate of Incorporation, as amended (1)

3.2  Bylaws, as amended (1)

10.1 Stock Purchase Agreement and Share Exchange between the Company and Anscott
     Industries, Inc.(2)


(1)  Incorporated by reference to the Registrant's Form 10-SB, filed on December
     15, 1999 (SEC File No. (000-28513).

(2)  Incorporated by reference to the  Registrant's  Form 8-K filed with the SEC
     on April 29, 2003.



                                       18



<PAGE>





(3)  Reports  on Form  8-K In April  2002 we  filed a  report  on Form 8-K for a
     change in auditors.

     On April 29,  2003 we filed a report on Form 8-K for change in control  and
     we filed an amendment thereto on July 3, 2003.

     On May 9, 2003 we filed a report on Form 8-K for a change in auditor and we
     filed an amendment thereto on May 27, 2003.

                                   SIGNATURES

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

                        ANSCOTT INDUSTRIES, INC.

                        By: /s/ Jack Belluscio
                        -----------------------------
                         Jack Belluscio
                         President and Director

Dated: July 14, 2003

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 dates indicated.

<TABLE>
<CAPTION>
Name                         Title                                      Date
----                         -----                                      ----
<S>                         <C>                                     <C>
/s/ Jack Belluscio          President, CEO, CFO and Director        July 14, 2003
------------------------
    Jack Belluscio

/s/ Steven Hoh
------------------------    Secretary, Treasurer and Director       July 14, 2003
    Steven Hoh
</TABLE>





                                       19



<PAGE>





                                CERTIFICATION OF
           PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
                                   PURSUANT TO
                             18 U.S.C. SECTION 1350,
                    AS ADOPTED PURSUANT TO SECTION 906 OF THE
                           SARBANES-OXLEY ACT OF 2002

I, Jack Belluscio certify that:

1. I have reviewed this annual report on Form 10-KSB of Anscott Industries, Inc.

2.  Based on my  knowledge,  this  annual  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 annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. I am responsible for  establishing  and maintaining  disclosure  controls and
procedures  (as  defined  in  Exchange  Act Rules  13a-14  and  15d-14)  for the
registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and  procedures  as of a date with 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about effectiveness of
          the disclosure  controls and procedures  based on our evaluation as of
          the Evaluation Date;

5. I have disclosed,  based on our most recent  evaluation,  to the registrant's
auditors and the audit committee of registrant's  board of directors (or persons
performing the
     equivalent functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified  for the  registrant's  auditors and  material  weakness in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6. I have indicated in this annual report whether there were significant changes
in  internal  controls  or in other  factors  that  could  significantly  affect
internal  controls  subsequent  to the  date  of  our  most  recent  evaluation,
including any  corrective  actions with regard to significant  deficiencies  and
material weaknesses.

Dated: July 14, 2003


                                        /s/ Jack Belluscio
                                        --------------------------------------
                                        Jack Belluscio
                                        Principal Executive Officer and
                                        Principal Financial Officer




                                       20



<PAGE>







      CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350

     IN CONNECTION WITH THE ACCOMPANYING ANNUAL REPORT ON FORM 10-KSB OF ANSCOTT
INDUSTRIES, INC. FOR THE PERIOD ENDED MARCH 31, 2003, JACK BELLUSCIO,  PRINCIPAL
EXECUTIVE OFFICER AND PRINCIPAL  FINANCIAL OFFICER OF ANSCOTT  INDUSTRIES,  INC.
HEREBY  CERTIFY  PURSUANT  TO 18 U.S.C.  SECTION  1350,  AS ADOPTED  PURSUANT TO
SECTION 906 OF THE  SARBANES-OXLEY  ACT OF 2002, TO THE BEST OF MY KNOWLEDGE AND
BELIEF, THAT:

1. Such Annual Report on Form 10-KSB for the period ended March 31, 2003,  fully
complies  with the  requirements  of  section  13(a) or 15(d) of the  Securities
Exchange Act of 1934; and

2. The information contained in such Annual Report on Form 10-KSB for the period
ended March 31, 2003, fairly presents,  in all material respects,  the financial
condition and results of operations of Anscott Industries, Inc.

                                 ANSCOTT INDUSTRIES,  INC.


                                 By: /s/ Jack Belluscio
                                    -------------------------------------
                                    Jack Belluscio
                                    Principal  Executive Officer and
                                    Principal  Financial  Officer

Dated: July 14, 2003


                                       21