**UNITED      STATES **

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON**
**,      D.C. 20549**

**AMENDMENT      NO. 2**

**FORM      10-K/A**

**ANNUAL      REPORT **

**PURSUANT      TO SECTION 13 OR 15(d) **

**OF      THE SECURITIES EXCHANGE ACT OF 1934**

**(Mark      One)**

| x | **ANNUAL                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                SECURITIES** |
|---|---------------------------------------------------------------------------------------------------|

**EXCHANGE      ACT OF 1934**

**For      the Fiscal year ended December 25, 2005**

**OR**

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

**For      the transition period      from                **
**to                                      **

**Commission      File Number: 001-15046**

**NEW      DRAGON ASIA CORP.**

**(Exact      name of Registrant as Specified in its Charter)**

| **Florida**                                        | **88-0404114**                                       |
|----------------------------------------------------|------------------------------------------------------|
| **(State                or Other Jurisdiction of** | **(IRS                Employer Identification No.)** |
| **Incorporation                or Organization)**  |                                                 |

**Suite      2808, International Chamber of Commerce Tower**

**Fuhua      Three Road, Shenzhen, China**

**(Address      of Principal Executive Offices) (Zip Code)**

**(86      755) 8831-2115**

**(Registrant’s      telephone number, including area code)**

**Securities      registered pursuant Section 12(b) of the Exchange Act: **
**Class      A Common Stock, $ 0.0001 par value **

**Securities      registered pursuant Section 12(g) of the Exchange Act: None.**

|  Large Accelerated Filer o | Accelerated Filer o | Non-Accelerated Filer x |
|---------------------------------|---------------------|-------------------------|

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|                                                               |  PAGE |
|--------------------------------------------------------------------|------------|
| PART                I                                              |       |   |
|                                                               |       |   |
| ITEM                8. Financial Statements and Supplementary Data |       | 5 |
|                                                               |       |   |
| ITEM                15. Exhibits and Financial Statement Schedules |       | 6 |
|                                                               |       |   |
| SIGNATURES                                                         |       | 9 |
|                                                               |       |   |
| FINANCIAL                STATEMENTS                                |       | F-1 |

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**EXPLANATORY      NOTE**

----

**Forward-Looking      Information**

**Availability      of SEC Filings**

.

**ITEM      8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.**

----

**PART        IV**

**ITEM        15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

**(a)          1.****       ****Financial        Statements**

**2.  Schedules**

**(b)**
**Exhibits**

| **Exhibit                  Number** |   | **Description**                                                                                                                                                                                                                                                                                        |
|-------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1                                 |   | Share                  Exchange Agreement dated as of December 18, 2001 (incorporated                  herein by                  reference from our filing on the Definitive Proxy 14/A filed on                  October                  11, 2001).                                                 |
| 3.1                                 |   | Amended                  Articles of Incorporation (incorporated herewith by reference to                  Exhibit                  3.1 to our Definitive Proxy 14/A filed on October 11,                  2001).                                                                                      |
| 3.2                                 |   | By-laws                  (incorporated herewith by reference to Exhibit 3.2 to our Definitive                  Proxy                  14/A filed on October 11, 2001).                                                                                                                                 |
| 3.3                                 |   | Certificate                  of Designations of Preferences, Rights and Limitations of the Series                  A 7%                  Convertible Preferred Stock (incorporated herewith by reference                  to Exhibit                  3.1 of our Form 8-K filed on July 12, 2005).     |
| 3.4                                 |   | Certificate                  of Designations of Preferences, Rights and Limitations of the Series                  B 7%                  Convertible Preferred Stock (incorporated herewith by reference                  to Exhibit                  3.1 of our Form 8-K filed on December 23, 2005). |
| 4.1                                 |   | Subscription                  Agreement, dated September 4, 2003 (incorporated herewith by reference                  to                  Exhibit 4.1 to our Registration Statement on Form S-3 filed on                  October 3,                  2003).                                           |
| 4.2                                 |   | Subscription                  Agreement, dated October 3, 2003 (incorporated herewith by reference                  to                  Exhibit 4.2 to our Registration Statement on Form S-3 filed on                  October 3,                  2003).                                             |
| 4.3                                 |   | Common                  Stock Purchase Warrants for the September 4, 2003 Private Placement                  (incorporated herewith by reference to Exhibit 4.3 to our Registration                  Statement on Form S-3 filed on October 3, 2003).                                                  |
| 4.4                                 |   | Common                  Stock Purchase Warrants for the October 3, 2003 Private Placement                  (incorporated herewith by reference to Exhibit 4.4 to our Registration                  Statement on Form S-3 filed on October 3, 2003).                                                    |
| 4.5                                 |   | Form                  of Warrant issued to Midsummer Investment Ltd. and Islandia, L.P.                  (incorporated herewith by reference to Exhibit 4.1 to our Form                  8-K filed                  on July 12, 2005).                                                                 |

----

| **Exhibit                  Number** |   | **Description**                                                                                                                                                                                                                                                                                                                                                     |
|-------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.6                                 |   | Form                  of Warrant issued to Alliance Financial, LLC, Renaissance Advisors                  BVI,                  John F. Steinmetz, TN Capital Equities, Ltd. and Kathleen McDonnell                  (incorporated herewith by reference to Exhibit 4.2 to our Registration                  Statement on Form S-3 filed on August 11, 2005).       |
| 4.7                                 |   | Securities                  Purchase Agreement, dated July 11, 2005, relating to the sale of                  the                  Series A 7% Convertible Preferred Stock (incorporated herewith                  by                  reference to Exhibit 10.1 to our Form 8-K filed on July 12,                  2005).                                          |
| 4.8                                 |   | Registration                  Rights Agreement, dated July 11, 2005, by and among New Dragon                  Asia Corp.                  and the investors named therein (incorporated herewith by reference                  to                  Exhibit 10.2 to our Form 8-K filed on July 12, 2005).                                                            |
| 4.9                                 |   | Form                  of Warrant issued to Midsummer Investment Ltd. and Islandia, L.P.                  (incorporated herewith by reference to Exhibit 4.1 to our Form                  8-K filed                  on December 23, 2005).                                                                                                                          |
| 4.10                                |   | Form                  of Warrant issued to Alliance Financial, LLC, Renaissance Advisors,                  Inc.,                  John F. Steinmetz, TN Capital Equities, Ltd. and Kathleen McDonnell                  (incorporated herewith by reference to Exhibit 4.2 to our Registration                  Statement on Form S-3 filed on January 20, 2006).    |
| 4.11                                |   | Securities                  Purchase Agreement, dated December 22, 2005, relating to the sale                  of the                  Series B 7% Convertible Preferred Stock (incorporated herewith                  by                  reference to Exhibit 10.1 to our Form 8-K filed on December 23,                  2005).                                  |
| 4.12                                |   | Registration                  Rights Agreement, dated December 22, 2005, by and among New Dragon                  Asia                  Corp. and the investors named therein (incorporated herewith by                  reference                  to Exhibit 10.2 to our Form 8-K filed on December 23,                  2005).                                   |
| 4.13                                |   | Registration                  Rights Agreement, dated December 22, 2005, by and among New Dragon                  Asia                  Corp. and New Dragon Food Ltd. (incorporated herewith by reference                  to                  Exhibit 4.5 to our Registration Statement on Form S-3 filed on                  January 20,                  2006). |
| 10.1                                |   | Sino-Foreign                  Joint Venture Contract for the New Dragon Asia Flour (Yantai) Company                  Limited, dated June 1, 1999 (incorporated herewith by reference                  to Exhibit                  10.1 to our Registration Statement on Form S-3 filed on October                  3,                  2003).                       |
| 10.2                                |   | Subcontracting                  Agreement, for the New Dragon Asia Flour (Yantai) Company Limited,                  dated                  June 26, 1999 (incorporated herewith by reference to Exhibit 10.2                  to our                  Registration Statement on Form S-3 filed on October 3,                  2003).                                |
| 10.3                                |   | Sino-Foreign                  Joint Venture Contract for the New Dragon Asia Food (Yanti) Company                  Limited, dated November 28, 1998 (incorporated herewith by reference                  to                  Exhibit 10.3 to our Registration Statement on Form S-3 filed on                  October 3,                  2003).                    |
| 10.4                                |   | Subcontracting                  Agreement, for the New Dragon Asia Food (Yantai) Company Limited,                  dated                  December 26, 1998 (incorporated herewith by reference to Exhibit                  10.4 to                  our Registration Statement on Form S-3 filed on October 3,                  2003).                             |
| 10.5                                |   | Sino-Foreign                  Joint Venture Contract for the New Dragon Asia Food (Dalian) Company                  Limited, dated November 28, 1998 (incorporated herewith by reference                  to                  Exhibit 10.5 to our Registration Statement on Form S-3 filed on                  October 3,                  2003).                   |

----

| **Exhibit                  Number** |   | **Description**                                                                                                                                                                                                                                                                                                                                                 |
|-------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.6                                |   | Subcontracting                  Agreement, for the New Dragon Asia Food (Dalian) Company Limited,                  dated                  December 26, 1998 (incorporated herewith by reference to Exhibit                  10.6 to                  our Registration Statement on Form S-3 filed on October 3,                  2003).                         |
| 10.7                                |   | Sino-Foreign                  Joint Venture Contract for the Sanhe New Dragon Asia Food Company                  Limited,                  dated November 28, 1998 (incorporated herewith by reference to                  Exhibit                  10.7 to our Registration Statement on Form S-3 filed on October                  3,                  2003). |
| 10.8                                |   | Subcontracting                  Agreement, for the Sanhe New Dragon Asia Food Company Limited,                  dated                  December 26, 1998 (incorporated herewith by reference to Exhibit                  10.8 to                  our Registration Statement on Form S-3 filed on October 3,                  2003).                            |
| 10.9                                |   | Employment                  Agreement between New Dragon Asia Corp. and Peter Mak, dated November                  2,                  2004 (incorporated herewith by reference to Exhibit 10.9 to our                  Form 8-K                  filed on June 29, 2005).                                                                                      |
| 10.10                               |   | Employment                  Supplement between New Dragon Asia Corp. and Peter Mak, dated June                  22,                  2005 (incorporated herewith by reference to Exhibit 10.9 to our                  Form 8-K                  filed on June 29, 2005).                                                                                        |
| 10.11                               |   | Supplementary                  Agreement to Employment Agreement between New Dragon Asia Corp.                  and Peter                  Mak, dated January 20, 2006 (incorporated herewith by reference                  to Exhibit                  10.10 to our Form 8-K filed on January 24, 2006).                                                       |
| 10.11                               |   | Equity                  Incentive Plan (incorporated herewith by reference to Exhibit B                  to our                  Definitive Information Statement on Schedule 14C filed on March                  14,                  2006).                                                                                                                   |
| 23.1                                |   | Consent                  of Grobstein, Horwath & Company LLP, Independent Registered Public                  Accounting Firm, filed herewith.                                                                                                                                                                                                               |
| 31.1                                |   | Certification                  of Chief Executive Officer pursuant to Rule 13A-14(A)/15D-14(A)                  of the                  Securities Exchange Act of 1934, as adopted pursuant to Section                  302 of the                  Sarbanes-Oxley Act of 2002, filed herewith.                                                                |
| 31.2                                |   | Certification                  of the Principal Financial Officer pursuant to Rule 13A-14(A)/15D-14(A)                  of                  the Securities Exchange Act of 1934, as adopted pursuant to Section                  302 of                  the Sarbanes-Oxley Act of 2002, filed herewith.                                                        |
| 32.1                                |   | Certification                  of Chief Executive Officer Pursuant to 18 U.S.C. 1350 (Section                  906 of the                  Sarbanes-Oxley Act of 2002), filed herewith.                                                                                                                                                                         |
| 32.2                                |   | Certification                  of Principal Financial Officer Pursuant to 18 U.S.C. 1350 (Section                  906 of                  the Sarbanes-Oxley Act of 2002), filed                  herewith.                                                                                                                                                    |

----

**SIGNATURES**

| Dated:                November 29, 2006 | By:    | /s/                Li Xia Wang         |
|-----------------------------------------|--------|----------------------------------------|
|                                         | Name:  | Li                Xia Wang             |
|                                    | Title: | Chief                Executive Officer |

| Dated:                November 29, 2006 | By:    | /s/                Heng Jing Lu   |
|-----------------------------------------|--------|-----------------------------------|
|                                         |   | Name:                             | Heng                Jing Lu |
|                                         |        | Title:                            | Chairman |
|                                    |   |                              |   |
| Dated:                November 29, 2006 | By:    | /s/                Peter Mak      |
|                                         |   | Name:                             | Peter                Mak |
|                                         |        | Title:                            | Chief                Financial Officer |
|                                    |   |                              |   |
| Dated:                November 29, 2006 | By:    | /s/                Ling Wang      |
|                                         |   | Name:                             | Ling                Wang |
|                                         |        | Title:                            | Director |
|                                    |   |                              |   |
| Dated:                November 29, 2006 | By:    | /s/                De Lin Yang    |
|                                         |   | Name:                             | De                Lin Yang |
|                                         |        | Title:                            | Director |
|                                    |   |                              |   |
| Dated:                November 29, 2006 | By:    | /s/                Zhi Yong Jiang |
|                                         |   | Name:                             | Zhi                Yong Jiang |
|                                         |        | Title:                            | Director |
|                                    |   |                              |   |
| Dated:                November 29, 2006 | By:    | /s/                Qi Xue         |
|                                         |   | Name:                             | Qi                Xue |
|                                         |        | Title:                            | Director |
|                                    |   |                              |   |
| Dated:                November 29, 2006 | By:    | /s/                Feng Ju Chen   |
|                                         |   | Name:                             | Feng                Ju Chen |
|                                         |        | Title:                            | Director |

----

**NEW      DRAGON ASIA CORP. **

**FINANCIAL      STATEMENTS**

**TABLE      OF CONTENTS **

| Report                of Independent Registered Public Accounting Firm                                              | F-1    |
|---------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                |   |
| Consolidated                Balance Sheets as of December 25, 2005 and 2004                                         | F-2    |
|                                                                                                                |   |
| Consolidated                Statements of Operations for each of the three years in the period                ended |   |
| December                25, 2005                                                                                    | F-3    |
|                                                                                                                |   |
| Consolidated                Statements of Stockholders’ Equity and Comprehensive Income for each              |   |
| of                the three years in the period ended December 25, 2005                                             | F-4    |
|                                                                                                                |   |
| Consolidated                Statements of Cash Flows for each of the three years in the period                      |   |
| ended                December 25, 2005                                                                              | F-5    |
|                                                                                                                |   |
| Notes                to Consolidated Financial Statements                                                           | F-7    |

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**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM **

**/s/      GROBSTEIN, HORWATH & COMPANY LLP **

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**NEW      DRAGON ASIA CORP. AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEETS **

|                                                                                                                                                                                                                                                                                                 |   | **December                25,** **2005** |               | **December                25,****2004** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|--------------------|-----------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                 |   | **Restated**                                  |               |                                    |   |
| **ASSETS**                                                                                                                                                                                                                                                                                           |   |                                          |               |                                    |   |   |   |
|                                                                                                                                                                                                                                                                                                 |   |                                          |               |                                    |   |   |   |
| Current                assets:                                                                                                                                                                                                                                                                       |   |                                          |               |                                    |   |   |   |
| Cash                and cash equivalents                                                                                                                                                                                                                                                             |   | $                                             | 14,332             |                                    | $      | 219 |   |
| Accounts                receivable, net                                                                                                                                                                                                                                                              |   |                                          | 6,515              |                                    |   | 6,414 |   |
| Deposits                and prepayments, net                                                                                                                                                                                                                                                         |   |                                          | 4,970              |                                    |   | 2,520 |   |
| Inventories,                net                                                                                                                                                                                                                                                                      |   |                                          | 7,630              |                                    |   | 3,990 |   |
| Due                from related companies                                                                                                                                                                                                                                                            |   |                                          | 679                |                                    |   | 1,183 |   |
| Total                current assets                                                                                                                                                                                                                                                                  |   |                                          | 34,126             |                                    |   | 14,326 |   |
|                                                                                                                                                                                                                                                                                                 |   |                                          |               |                                    |   |   |   |
| Deposit                for property, machinery and equipment                                                                                                                                                                                                                                         |   |                                          | 1,000              |                                    |   | -- |   |
| Property,                machinery and equipment, net                                                                                                                                                                                                                                                |   |                                          | 18,315             |                                    |   | 16,098 |   |
| Land                use rights, net                                                                                                                                                                                                                                                                  |   |                                          | 3,980              |                                    |   | 3,822 |   |
| Total                assets                                                                                                                                                                                                                                                                          |   | $                                             | 57,421             |                                    | $      | 34,246 |   |
|                                                                                                                                                                                                                                                                                                 |   |                                          |               |                                    |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                                                                        |   |                                          |               |                                    |   |   |   |
|                                                                                                                                                                                                                                                                                                 |   |                                          |               |                                    |   |   |   |
| Current                liabilities:                                                                                                                                                                                                                                                                  |   |                                          |               |                                    |   |   |   |
| Accounts                payable                                                                                                                                                                                                                                                                      |   | $                                             | 2,696              |                                    | $      | 2,696 |   |
| Other                payables and accruals                                                                                                                                                                                                                                                           |   |                                          | 2,298              |                                    |   | 1,898 |   |
| Taxes                payable                                                                                                                                                                                                                                                                         |   |                                          | 1,854              |                                    |   | 1,491 |   |
| Due                to related companies                                                                                                                                                                                                                                                              |   |                                          | 598                |                                    |   | 831 |   |
| Embedded                derivatives at fair value                                                                                                                                                                                                                                                    |   |                                          | 12,135             |                                    |   | -- |   |
| Total                current liabilities                                                                                                                                                                                                                                                             |   |                                          | 19,581             |                                    |   | 6,916 |   |
|                                                                                                                                                                                                                                                                                                 |   |                                          |               |                                    |   |   |   |
| Due                to New Dragon Asia Food Limited                                                                                                                                                                                                                                                   |   |                                          | 137                |                                    |   | 303 |   |
| Due                to joint venture partners                                                                                                                                                                                                                                                         |   |                                          | 54                 |                                    |   | 110 |   |
|                                                                                                                                                                                                                                                                                                      |   |                                          |     |                                    |   | -- |   |
| Total                liabilities                                                                                                                                                                                                                                                                     |   |                                          | 19,772             |                                    |   | 7,329 |   |
| Minority                interests                                                                                                                                                                                                                                                                    |   |                                          | 91                 |                                    |   | 82 |   |
| Series                A & B Redeemable Convertible Preferred Stock, $0.0001 par                value:Authorized                shares - 5,000,000 Issued                and outstanding - 13,600 shares and nil shares at December 25, 2005                and                2004, respectively |   |                                          | 3,559              |                                    |   | -- |   |
|                                                                                                                                                                                                                                                                                                 |   |                                          |               |                                    |   |   |   |
| Commitments                                                                                                                                                                                                                                                                                          |   |                                          |               |                                    |   |   |   |
|                                                                                                                                                                                                                                                                                                 |   |                                          |               |                                    |   |   |   |
| Stockholders’                equity:                                                                                                                                                                                                                                                           |   |                                          |               |                                    |   |   |   |
| Class                A Common Stock, $0.0001 par value:Authorized                shares - 102,000,000Issued                and outstanding - 49,322,291 in 2005 and 45,061,242 in                2004                                                                                                |   |                                          | 5                  |                                    |   | 4 |   |
| Class                B Common Stock, $0.0001 par value:Authorized                shares - 2,000,000 - none issued and outstanding                                                                                                                                                                    |   |                                          |  --           |                                    |   | -- |   |
| Additional                paid-in capital                                                                                                                                                                                                                                                            |   |                                          | 15,216             |                                    |   | 9,909 |   |
| Receivable                from stockholder                                                                                                                                                                                                                                                           |   |                                          | (49                | )                                       |   | -- |   |
| Retained                earnings                                                                                                                                                                                                                                                                     |   |                                          | 18,029             |                                    |   | 16,922 |   |
| Accumulated                other comprehensive income                                                                                                                                                                                                                                                |   |                                          | 798                |                                    |   | -- |   |
| Total                stockholders’ equity                                                                                                                                                                                                                                                      |   |                                          | 33,999             |                                    |   | 26,835 |   |
| Total                liabilities and stockholders’ equity                                                                                                                                                                                                                                      |   | $                                             | 57,421             |                                    | $      | 34,246 |   |

----

**NEW      DRAGON ASIA CORP. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF OPERATIONS **

|                                                                                                  |   | **For                the years ended December 25,** |    |
|-------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|---------|
|                                                                                                  |   | **2005**                                            |    | **2004** |   | **2003** |   |
|                                                                                                  |   | **Restated**                                        |    |   |   |   |   |   |   |
| Net                revenue                                                                            |   | $                                                   | 44,180  |   | $ | 39,221 |   | $ | 30,773 |   |
| Cost                of goods sold                                                                     |   |                                                | (36,151 | ) |   | (31,887 | ) |   | (24,852 | ) |
| Gross                profit                                                                           |   |                                                | 8,029   |   |   | 7,334 |   |   | 5,921 |   |
| Operating                expenses:                                                                    |   |                                                |    |   |   |   |   |   |   |   |
| Selling                and distribution expenses                                                      |   |                                                | (721    | ) |   | (1,178 | ) |   | (1,330 | ) |
| General                and administrative expenses                                                    |   |                                                | (2,358  | ) |   | (1,611 | ) |   | (2,398 | ) |
| Income                from operations                                                                 |   |                                                | 4,950   |   |   | 4,545 |   |   | 2,193 |   |
| Other                income (expense):                                                                |   |                                                |    |   |   |   |   |   |   |   |
| Interest                expense                                                                       |   |                                                | --      |   |   | (72 | ) |   | (249 | ) |
| Other                income                                                                           |   |                                                | 186     |   |   | (54 | ) |   | - |   |
| Interest                income                                                                        |   |                                                | 10      |   |   | 3 |   |   | 4 |   |
| (Loss)                on fair value adjustments to                embedded                derivatives |   |                                                | (4,064  | ) |   | -- |   |   | -- |   |
| VAT                refund                                                                        |   |                                                | 2,158   |   |   | 1,478 |   |   | 1,226 |   |
| Income                before income taxes and minority interests                                      |   |                                                | 3,240   |   |   | 5,900 |   |   | 3,174 |   |
| Provision                for income taxes                                                             |   |                                                | (1,487  | ) |   | (1,296 | ) |   | (447 | ) |
| Income                before minority interests                                                       |   |                                                | 1,753   |   |   | 4,604 |   |   | 2,727 |   |
| Minority                interests                                                                     |   |                                                | (6      | ) |   | 41 |   |   | -- |   |
| Net                income                                                                             |   | $                                                   | 1,747   |   | $ | 4,645 |   | $ | 2,727 |   |
| Accretion                of Redeemable preferred stock                                                |   |                                                | (454    | ) |   | -- |   |   | -- |   |
| Preferred                Stock Dividends                                                              |   |                                                | (187    | ) |   | -- |   |   | -- |   |
| Income                (loss) available to common stockholders                                         |   | $                                                   | 1,106   |   | $ | 4,645 |   | $ | 2,727 |   |
|                                                                                                  |   |                                                |    |   |   |   |   |   |   |   |
|                                                                                                  |   |                                                |    |   |   |   |   |   |   |   |
| Earnings                per common share                                                              |   |                                                |    |   |   |   |   |   |   |   |
| Basic                                                                                                 |   | $                                                   | 0.02    |   | $ | 0.10 |   | $ | 0.06 |   |
| Diluted                                                                                               |   | $                                                   | 0.02    |   | $ | 0.10 |   | $ | 0.06 |   |
| Weighted                average number of common shares outstanding                                   |   |                                                |    |   |   |   |   |   |   |   |
| Basic                                                                                                 |   |                                                | 46,051  |   |   | 45,061 |   |   | 42,108 |   |
| Diluted                                                                                               |   |                                                | 46,949  |   |   | 45,061 |   |   | 42,108 |   |

----

**NEW      DRAGON ASIA CORP. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME**

**(Amounts      in the thousands, restated) **

|                                                                                                                                   |   |                                                                                                                                                                                             |   |                     |   |                                       |   |             |   |                                |   |                           |   |                |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|--------------------------------------------|--------|------------------|--------|-------------------------------------|--------|--------------------------------|--------|---------------------|--------|
|                                                                                                                                   |   | Class                ACommon                StockShares                                    Amount |   | AdditionalPaid-inCapital |   | Receivable                from Stockholder |   | RetainedEarnings |   | AccumulatedOtherComprehensiveIncome |   | TotalStockholders’Equity |   | ComprehensiveIncome |   |
| Balance                at December 25, 2002                                                                                            |   |                                                                                                                                                                                             | 40,911 |                     | $      | 4                                          |   | $                | 8,132  |                                | $      | -                              |   | $                   | 9,550  |   | $ | - |   | $ | 17,686 |   | $ | - |   |
| Issuance                of common stock in connection with:                                                                            |   |                                                                                                                                                                                             |   |                     |   |                                       |   |             |   |                                |   |                           |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Private                placement in September                                                                                          |   |                                                                                                                                                                                             | 3,300  |                     |   | -                                          |   |             | 1,405  |                                |   | -                              |   |                | -      |   |   | - |   |   | 1,405 |   |   | - |   |
| Private                placement in October                                                                                            |   |                                                                                                                                                                                             | 850    |                     |   | -                                          |   |             | 372    |                                |   | -                              |   |                | -      |   |   | - |   |   | 372 |   |   | - |   |
| Net                income for the year ended December 25, 2003                                                                         |   |                                                                                                                                                                                             | -      |                     |   | -                                          |   |             | -      |                                |   | -                              |   |                | 2,727  |   |   | - |   |   | 2,727 |   |   | 2,727 |   |
| Balance                at December 25, 2003                                                                                            |   |                                                                                                                                                                                             | 45,061 |                     |   | 4                                          |   |             | 9,909  |                                |   | -                              |   |                | 12,277 |   |   | - |   |   | 22,190 |   |   | - |   |
| Net                income for the year ended December 25, 2004                                                                         |   |                                                                                                                                                                                             | -      |                     |   | -                                          |   |             | -      |                                |   | -                              |   |                | 4,645  |   |   | - |   |   | 4,645 |   |   | 4,645 |   |
| Balance                at December                25, 2004                                                                             |   |                                                                                                                                                                                             | 45,061 |                     |   | 4                                          |   |             | 9,909  |                                |   | -                              |   |                | 16,922 |   |   | - |   |   | 26,835 |   |   | - |   |
| Net                income                                                                                                              |   |                                                                                                                                                                                             | -      |                     |   | -                                          |   |             | -      |                                |   | -                              |   |                | 1,747  |   |   | - |   |   | 1,747 |   |   | 1,747 |   |
| Accretion                of Redeemable preferred stock                                                                                 |   |                                                                                                                                                                                             |   |                     |   |                                       |   |             |   |                                |   |                           |   |                | (454   | ) |   |   |   |   | (454 | ) |   |   |   |
| Preferred                Stock Dividends                                                                                               |   |                                                                                                                                                                                             |   |                     |   |                                       |   |             |   |                                |   |                           |   |                | (187   | ) |   |   |   |   | (187 | ) |   |   |   |
| Stock-basedcompensation                expense                                                                                         |   |                                                                                                                                                                                             | -      |                     |   | -                                          |   |             | 105    |                                |   | -                              |   |                | -      |   |   | - |   |   | 105 |   |   | - |   |
| Foreign                currency translation                adjustment                                                                  |   |                                                                                                                                                                                             | -      |                     |   | -                                          |   |             | -      |                                |   | -                              |   |                | -      |   |   | 798 |   |   | 798 |   |   | 798 |   |
| Preferred                Stock issuance cost                                                                                           |   |                                                                                                                                                                                             | -      |                     |   | -                                          |   |             | 565    |                                |   | -                              |   |                | -      |   |   | - |   |   | 565 |   |   | - |   |
| Conversion                of Preferred Stocks and related interest payments made in Class A                Common                Stock |   |                                                                                                                                                                                             | 2,039  |                     |   | 0.5                                        |   |             | 2,611  |                                |   | -                              |   |                | -      |   |   | - |   |   | 2,611.5 |   |   | - |   |
| Exercise                of warrants                                                                                                    |   |                                                                                                                                                                                             | 2,222  |                     |   | 0.5                                        |   |             | 2,025  |                                |   | -                              |   |                | -      |   |   | - |   |   | 2,025.5 |   |   | - |   |
| Receivable                from stockholder                                                                                             |   |                                                                                                                                                                                             | -      |                     |   | -                                          |   |             | -      |                                |   | (49                            | )      |                | -      |   |   | - |   |   | (49 | ) |   | - |   |
| Balance                at December                25, 2005 ( as restated)                                                              |   |                                                                                                                                                                                             | 49,322 |                     | $      | 5                                          |   | $                | 15,215 |                                | $      | (49                            | )      | $                   | 18,029 |   | $ | 798 |   | $ | 33,998 |   | $ | 2,545 |   |

----

**NEW      DRAGON ASIA CORP. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS **

**(Amounts      in thousands**
**,      restated) **

|                                                                                             |   | **For                the years ended December 25,** |   |
|--------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                                                             |   | **2005**                                            |   | **2004** |   | **2003** |   |
| **Cash                flows from operating activities:**                                         |   | **Restated**                                        |   |   |   |   |   |
| Net                income                                                                        |   | $                                                   | 1,747  |   | $ | 4,645 |   | $ | 2,727 |   |
| Adjustments                to reconcile net income to net cash provided by operating activities: |   |                                                |   |   |   |   |   |   |   |   |
| Allowance                for doubtful accounts                                                   |   |                                                | 118    |   |   | (218 | ) |   | 578 |   |
| Provision                for inventory reserve                                                   |   |                                                | (413   | ) |   | (35 | ) |   | - |   |
| Depreciation                and amortization of land use rights                                  |   |                                                | 1,266  |   |   | 1,187 |   |   | 1,425 |   |
| Gain                on disposal of PRC subsidiary                                                |   |                                                | --     |   |   | (162 | ) |   | -- |   |
| Loss                (Gain) on sale of machinery and equipment                                    |   |                                                | 5      |   |   | 199 |   |   | (346 | ) |
| (Loss)                on fair value adjustments to Embedded derivatives                          |   |                                                | 4,064  |   |   |   |   |   |   |   |
| Minority                interests                                                                |   |                                                | 6      |   |   | (41 | ) |   | -- |   |
| Stock-based                compensation expense                                                  |   |                                                | 105    |   |   | -- |   |   | -- |   |
| Changes                in operating assets and liabilities:                                      |   |                                                |   |   |   |   |   |   |   |   |
| Accounts                receivable                                                               |   |                                                | (219   | ) |   | 735 |   |   | (186 | ) |
| Deposits                and prepayments                                                          |   |                                                | (3,450 | ) |   | (1,242 | ) |   | (216 | ) |
| Inventories                                                                                      |   |                                                | (3,227 | ) |   | (1,278 | ) |   | 2,439 |   |
| Due                from related companies                                                        |   |                                                | 504    |   |   | (706 | ) |   | 2,375 |   |
| Accounts                payable                                                                  |   |                                                | --     |   |   | (1,583 | ) |   | (163 | ) |
| Other                payables and accruals                                                       |   |                                                | 316    |   |   | 920 |   |   | (48 | ) |
| Taxes                payable                                                                     |   |                                                | 363    |   |   | 573 |   |   | 32 |   |
| Due                to related companies                                                          |   |                                                | (233   | ) |   | (371 | ) |   | 400 |   |
| Net                cash provided by operating activities                                         |   |                                                | 952    |   |   | 2,623 |   |   | 9,017 |   |
|                                                                                             |   |                                                |   |   |   |   |   |   |   |   |
| **Cash                flows from investing activities:**                                         |   |                                                |   |   |   |   |   |   |   |   |
| Proceeds                from sale of property, machinery and equipment                           |   |                                                | 22     |   |   | 126 |   |   | 994 |   |
| Purchases                of property, machinery and equipment                                    |   |                                                | (3,395 | ) |   | (2,207 | ) |   | (92 | ) |
| Purchases                of land use rights                                                      |   |                                                | (273   | ) |   | -- |   |   | -- |   |
| Net                cash provided by (used in) investing activities                               |   |                                                | (3,646 | ) |   | (2,081 | ) |   | 902 |   |
|                                                                                             |   |                                                |   |   |   |   |   |   |   |   |
| **Cash                flows from financing activities:**                                         |   |                                                |   |   |   |   |   |   |   |   |
| Proceeds                from issuance of preferred stock                                         |   |                                                | 15,500 |   |   | -- |   |   | -- |   |
| Payments                of issuance costs related to preferred stock                             |   |                                                | (1,218 | ) |   | -- |   |   | -- |   |
| Preferred                Stock Dividends                                                         |   |                                                | (30    | ) |   |   |   |   |   |   |
| Proceeds                from short-term borrowings                                               |   |                                                | --     |   |   | -- |   |   | 4,325 |   |
| Repayments                of short-term borrowings                                               |   |                                                | --     |   |   | (2,676 | ) |   | (5,094 | ) |
| Restricted                cash                                                                   |   |                                                | --     |   |   | -- |   |   | 181 |   |
| Proceeds                from parent company                                                      |   |                                                | --     |   |   | 1,127 |   |   | -- |   |
| Repayment                to parent company                                                       |   |                                                | (166   | ) |   | -- |   |   | (5,586 | ) |
| Repayment                to joint venture partners                                               |   |                                                | (56    | ) |   | (681 | ) |   | (4,367 | ) |
| Proceeds                from exercise of warrants                                                |   |                                                | 1,977  |   |   | -- |   |   | 1,777 |   |
| Capital                contribution from minority interests                                      |   |                                                | --     |   |   | 124 |   |   | -- |   |
| Net                cash provided by (used in) financing activities                               |   |                                                | 16,007 |   |   | (2,106 | ) |   | (8,764 | ) |
| Foreign                currency translation adjustment                                           |   |                                                | 800    |   |   | -- |   |   | -- |   |
| Net                increase (decrease) in cash and cash equivalents                              |   |                                                | 14,113 |   |   | (1,564 | ) |   | 1,155 |   |
| Cash                and cash equivalents at the beginning of the period                          |   |                                                | 219    |   |   | 1,783 |   |   | 628 |   |
| Cash                and cash equivalents at the end of the period                                |   | $                                                   | 14,332 |   | $ | 219 |   | $ | 1,783 |   |
|                                                                                             |   |                                                |   |   |   |   |   |   |   |   |

----

| **Non-cash                Investing and Financing Activities**              |   |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                        |   |   |   |   |   |   |   |   |   |   |
| Receivable                from Stockholder upon exercise of warrants        |   | $      | 49     |   | $      | --     |   | $      | --     |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |
| Conversion                of preferred stock to common stock                |   | $      | 2,611  |   | $      | --     |   | $      | --     |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |
| Dividend                payments on preferred stock in form of common stock |   | $      | 72     |   | $      | --     |   | $      | --     |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |
| **Supplemental                disclosure of cash flows information:**       |   |   |   |   |   |   |   |   |   |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |
| Interest                paid                                                |   | $      | 68     |   | $      | 72     |   | $      | 249    |   |
| Income                taxes paid                                            |   | $      | 1,865  |   | $      | 10     |   | $      | 380    |   |

----

**NEW      DRAGON ASIA CORP. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE      1. ORGANIZATION AND NATURE OF OPERATIONS **

| Name                                                                                         |   | Domicile                and date of incorporation                        |   | Paid-in                capital |   | Percentage                of ownership |   | Principal                activities                                                                     |
|----------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|--------|--------------------------------|--------|----------------------------------------|--------|---------------------------------------------------------------------------------------------------------|
|                                                                                         |   |                                                                     |   |                           |   |                                   |   |                                                                                                    |
| Mix                Creation Limited (“MC”)                                       |   | The                British Virgin IslandsNovember                7, 1997 |   | US$1,500,000                   |   | 100%                                   |   | Investment                holding                                                                       |
|                                                                                         |   |                                                                     |   |                           |   |                                   |   |                                                                                                    |
| Rich                Delta Limited (“RD”)                                         |   | The                British Virgin IslandsOctober                28, 1998 |   | US$1,000,000                   |   | 100%                                   |   | Investment                holding                                                                       |
|                                                                                         |   |                                                                     |   |                           |   |                                   |   |                                                                                                    |
| Hero                Treasure Limited (“HT”)                                      |   | The                British Virgin IslandsApril                19, 2004   |   | US$1                           |   | 100%                                   |   | Investment                holding                                                                       |
|                                                                                         |   |                                                                     |   |                           |   |                                   |   |                                                                                                    |
| Keen                General Limited(“KG”)                                        |   | The                British Virgin IslandsJuly                20, 1998    |   | US$1,500,000                   |   | 100%                                   |   | Investment                holding                                                                       |
|                                                                                         |   |                                                                     |   |                           |   |                                   |   |                                                                                                    |
| New                Dragon Asia Flour (Yantai) Company Limited (“NDAFLY”)         |   | The                PRCAugust                13, 1999                     |   | RMB28,500,000                  |   | 90%                (a)                 |   | Manufacture,                marketing and distribution of flour                                         |
|                                                                                         |   |                                                                     |   |                           |   |                                   |   |                                                                                                    |
| New                Dragon Asia Food (Yantai) Company Limited (“NDAFY”)           |   | The                PRCDecember                24, 1998                   |   | RMB17,462,000                  |   | 90%                (b)                 |   | Manufacture,                marketing and distribution of instant noodles                               |
|                                                                                         |   |                                                                     |   |                           |   |                                   |   |                                                                                                    |
| New                Dragon Asia Food (Sanhe) Company Limited (“NDAFS”)            |   | The                PRCDecember                25, 1998                   |   | RMB51,191,432                  |   | 79.64%                (b)              |   | Manufacture,                marketing and distribution of instant noodles                               |
|                                                                                         |   |                                                                     |   |                           |   |                                   |   |                                                                                                    |
| Penglai                New Dragon Jin Qiao Food Company Limited (“PNDJQ”)        |   | The                PRCDecember                5, 2003                    |   | US$850,000                     |   | 100%                                   |   | Manufacture,                marketing and distribution of flour                                         |
|                                                                                         |   |                                                                     |   |                           |   |                                   |   |                                                                                                    |
| Longkou                City Longyuan Packing Materials Company Limited (“LCLPM”) |   | The                PRCMarch                2004                          |   | RMB2,280,000                   |   | 55%                (c)                 |   | Manufacture                and sale of packing materials                                                |
|                                                                                         |   |                                                                     |   |                           |   |                                   |   |                                                                                                    |
| New                Dragon Asia (LongKou) Food Company Limited (“NDALS”)          |   | The                PRCMarch                17, 2005                      |   | RMB16,996,980                  |   | 100%                                   |   | Manufacture,                marketing and distribution of soybean products                              |
|                                                                                         |   |                                                                     |   |                           |   |                                   |   |                                                                                                    |
| Shandong                Xinlongya Industry and Trade Company Limited (“SXDC”)    |   | The                PRCSeptember                27, 2005                  |   | US$404,400                     |   | 100%                                   |   | Marketing                and distribution of instant noodles, flour and soybean                products |

(a)      NDAFLY is a contractual joint venture established in the PRC to be operated      for      50 years until August 13, 2049. In September 2000, MC contributed 90% of the      registered capital to NDAFLY. Under the joint venture agreement dated June      1,      1999 and the supplemental agreement dated June 26, 1999, the Chinese joint      venture partner is entitled to receive a pre-determined annual fee and is not      responsible for any profit or loss of NDAFLY effective from June 26, 1999.      In      view of the profit sharing arrangement NDAFLY is regarded as 100% owned by      the      Company. The annual fee has been charged to General and Administrative Expenses      for the years ended December 25, 2005, 2004 and 2003. 

----

**NOTE      2. BASIS OF PRESENTATION **

**Restatement      of Financial Statements **

**Derivative      Accounting**

----

**Earnings      per Share**

**Summary      of Restatement Items**

----

| **Consolidated                Statement of Operations (in thousands except per share                data)** |   |   |   |   |
|-------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|

|                                                                    |   | **As                previously reported** |    | **Adjustments** |   |   |   | **As                Restated** |           |
|-------------------------------------------------------------------------|--------|-------------------------------------------|---------|-----------------|--------|--------|--------|--------------------------------|----------------|
|                                                                    |   |                                      |    |            |   |   |   |                           |           |
| Net                revenue                                              |   | $                                         | 44,180  |            |   |   |   |                           |           |   | $ | 44,180 |   |
| Cost                of goods sold                                       |   |                                      | (36,151 | )               |   |   |   |                           |           |   |   | (36,151 | ) |
| Gross                profit                                             |   |                                      | 8,029   |            |   |   |   |                           |           |   |   | 8,029 |   |
| Operating                expenses:                                      |   |                                      |    |            |   |   |   |                           |           |   |   |   |   |
| Selling                and distribution expenses                        |   |                                      | (721    | )               |   |   |   |                           |           |   |   | (721 | ) |
| General                and administrative expenses                      |   |                                      | (2,358  | )               |   |   |   |                           |           |   |   | (2,358 | ) |
| Income                from operations                                   |   |                                      | 4,950   |            |   |   |   |                           |           |   |   | 4,950 |   |
| Other                income (expense):                                  |   |                                      |    |            |   |   |   |                           |           |   |   |   |   |
| Interest                expense                                         |   |                                      | (1,814  | )               |   | (1,816 | )      |                           | ***a***        |   |   | 2 |   |
| Other                income                                             |   |                                      | 186     |            |   |   |   |                           |           |   |   | 186 |   |
| (Loss)                on fair value adjustments to embedded derivatives |   |                                      |    |            |   | 4,064  |   |                           | ***b***        |   |   | (4,064 | ) |
| Interest                income                                          |   |                                      | 8       |            |   |   |   |                           |           |   |   | 8 |   |
| VAT                refund                                               |   |                                      | 2,158   |            |   |   |   |                           |           |   |   | 2,158 |   |
| Income                before income taxes and minority interests        |   |                                      | 5,488   |            |   | 2,248  |   |                           | ***c***        |   |   | 3,240 |   |
| Provision                for income taxes                               |   |                                      | (1,487  | )               |   |   |   |                           |           |   |   | (1,487 | ) |
| Income                before minority interests                         |   |                                      | 4,001   |            |   |   |   |                           |           |   |   | 1,753 |   |
| Minority                interests                                       |   |                                      | (6      | )               |   |   |   |                           |           |   |   | (6 | ) |
| Net                income                                               |   | $                                         | 3,995   |            |   |   |   |                           |           |   | $ | 1,747 |   |
| Accretion                of Redeemable preferred stock                  |   |                                      | --      |            |   | (454   | )      |                           | ***d***        |   |   | (454 | ) |
| Preferred                Stock Dividends                                |   |                                      | --      |            |   | (187   | )      |                           | ***e***        |   |   | (187 | ) |
| Income                (loss) available to common stockholders           |   |                                      | 3,995   |            |   |   |   |                           |           |   |   | 1,107 |   |
|                                                                    |   |                                      |    |            |   |   |   |                           |           |   |   |   |   |
| Earnings                per common share                                |   |                                      |    |            |   |   |   |                           |           |   |   |   |   |
| Basic                                                                   |   | $                                         | 0.09    |            |   | (0.07  | )      |                           | ***f***        |   | $ | 0.02 |   |
| Diluted                                                                 |   | $                                         | 0.08    |            |   | (0.06  | )      |                           | ***f***        |   | $ | 0.02 |   |
| Weighted                average number of common shares outstanding     |   |                                      |    |            |   |   |   |                           |           |   |   |   |   |
| Basic                                                                   |   |                                      | 46,125  |            |   | (74    | )      |                           | ***g***        |   |   | 46,051 |   |
| Diluted                                                                 |   |                                      | 49,860  |            |   | (2,911 | )      |                           | ***g******h*** |   |   | 46,949 |   |
|                                                                    |   |                                      |    |            |   |   |   |                           |           |   |   |   |   |

| ***Adjustments******a-                  reverse interest expense recoded for Mandatory Redeemable Preferred                  stock                  now accounted for and mezzanine equity******b-                    change in derivative value during the period******c-                      accretion of Redeemable preferred stock******d                        - accretion of Redeemable Convertible Preferred                        Stock.******e-                          Preferred Stock Dividend previously recorded as interest                          expense******f                            -to reflect basic and fully diluted earnings per share                            based upon                            corrected Income available to common                            stockholders******g-Adjust                              weighted average shares outstanding for corrected                              calculations******h-Correct                                diluted weighted average shares outstanding for******calculations                                and interpretive errors made in applying the requirements                                of FAS                                128*** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Balance      Sheet Impact***

----

|                                                                                             |   | **As                previously reported** |   | **Adjustments** |   |   |   | **As                Restated** |    |
|--------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|-----------------|--------|--------|--------|--------------------------------|---------|
|                                                                                             |   |                                      |   |            |   |   |   |                           |    |
| Total                current assets                                                              |   | $                                         | 34,126 |            |   |   |   |                           |    |   | $ | 34,126 |   |
| Deposit                for property, machinery and equipment                                     |   |                                      | 1,000  |            |   |   |   |                           |    |   |   | 1,000 |   |
| Property,                machinery and equipment, net                                            |   |                                      | 18,315 |            |   |   |   |                           |    |   |   | 18,315 |   |
| Land                use rights, net                                                              |   |                                      | 3,980  |            |   |   |   |                           |    |   |   | 3,980 |   |
| Deferred                financing cost, net                                                      |   |                                      | 1,713  |            |   | (1,713 | )      |                           | ***a*** |   |   | -- |   |
| Total                assets                                                                      |   |                                      | 59,134 |            |   |   |   |                           |    |   |   | 57,421 |   |
|                                                                                             |   |                                      |   |            |   |   |   |                           |    |   |   |   |   |
| LIABILITIES                AND STOCKHOLDERS’ EQUITY                                        |   |                                      |   |            |   |   |   |                           |    |   |   |   |   |
|                                                                                             |   |                                      |   |            |   |   |   |                           |    |   |   |   |   |
| Current                liabilities:                                                              |   |                                      |   |            |   |   |   |                           |    |   |   |   |   |
| Accounts                payable                                                                  |   |                                      | 2,696  |            |   |   |   |                           |    |   |   | 2,696 |   |
| Other                payables and accruals                                                       |   |                                      | 2,298  |            |   |   |   |                           |    |   |   | 2,298 |   |
| Taxes                payable                                                                     |   |                                      | 1,854  |            |   |   |   |                           |    |   |   | 1,854 |   |
| Due                to related companies                                                          |   |                                      | 598    |            |   |   |   |                           |    |   |   | 598 |   |
| Embedded                derivatives at fair value                                                |   |                                      | --     |            |   | 12,135 |   |                           | ***b*** |   |   | 12,135 |   |
| Total                current liabilities                                                         |   |                                      | 7,446  |            |   |   |   |                           |    |   |   | 19,581 |   |
|                                                                                             |   |                                      |   |            |   |   |   |                           |    |   |   |   |   |
| Due                to New Dragon Asia Food Limited                                               |   |                                      | 137    |            |   |   |   |                           |    |   |   | 137 |   |
| Due                to joint venture partners                                                     |   |                                      | 54     |            |   |   |   |                           |    |   |   | 54 |   |
| Mandatorily                redeemable convertible preferred stock                                |   |                                      | 4,945  |            |   | (4,945 | )      |                           | ***c*** |   |   | -- |   |
| Total                liabilities                                                                 |   |                                      | 12,582 |            |   |   |   |                           |    |   |   | 19,772 |   |
| Minority                interests                                                                |   |                                      | 91     |            |   |   |   |                           |    |   |   | 91 |   |
|                                                                                             |   |                                      |   |            |   |   |   |                           |    |   |   |   |   |
| Convertible                Redeemable Preferred Stock, $0.0001 par value:                        |   |                                      |   |            |   | 3,559  |   |                           | ***c*** |   |   | 3,559 |   |
|                                                                                             |   |                                      |   |            |   |   |   |                           |    |   |   |   |   |
| Commitments                                                                                      |   |                                      |   |            |   |   |   |                           |    |   |   |   |   |
|                                                                                             |   |                                      |   |            |   |   |   |                           |    |   |   |   |   |
| Stockholders’                equity:                                                       |   |                                      |   |            |   |   |   |                           |    |   |   |   |   |
| Class                A Common Stock, $0.0001 par value:                                          |   |                                      |   |            |   |   |   |                           |    |   |   |   |   |
| Authorized                shares - 102,000,000                                                   |   |                                      |   |            |   |   |   |                           |    |   |   |   |   |
| Issued                and outstanding - 49,322,291 in 2005 and 45,061,242 in                2004 |   |                                      | 5.00   |            |   |   |   |                           |    |   |   | 5 |   |
| Class                B Common Stock, $0.0001 par value:                                          |   |                                      |   |            |   |   |   |                           |    |   |   |   |   |
| Authorized                shares - 2,000,000 - none issued and outstanding                       |   |                                      | --     |            |   |   |   |                           |    |   |   | -- |   |
| Additional                paid-in capital                                                        |   |                                      | 24,790 |            |   | (9,574 | )      |                           | ***d*** |   |   | 15,216 |   |
| Receivable                from stockholder                                                       |   |                                      | (49    | )               |   |   |   |                           |    |   |   | (49 | ) |
| Retained                earnings                                                                 |   |                                      | 20,917 |            |   | (2,888 | )      |                           | ***e*** |   |   | 18,029 |   |
| Accumulated                other comprehensive income                                            |   |                                      | 798    |            |   |   |   |                           |    |   |   | 798 |   |
| Total                stockholders’ equity                                                  |   |                                      | 46,461 |            |   |   |   |                           |    |   |   | 33,999 |   |
| Total                liabilities and stockholders’ equity                                  |   | $                                         | 59,134 |            |   |   |   |                           |    |   | $ | 57,421 |   |

| ***Adjustments******a-reclassify                  costs of offering to Redeemable Conversable preferred                  Stock******b-                    fair value of embedded derivatives at December                    25,2005******c-                      reverse Redeemable convertible preferred stock at September                      25,2006 and                      recorded as mezzanine equity******d-reverse                        values recorded for warrants and conversion features at date                        of the sale                        of redeemable convertible preferred stock******e-                          to reflect aggregate effect of income statement                          adjustments.*** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**NOTE      3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **

***Revenue      recognition***

----

***Shipping      and Handling Costs***

***Cash      and cash equivalents***

***Accounting      for Derivative Instruments***

***Financial      instruments***

***Accounts      receivable***

----

***Inventories***

***Property,      machinery and equipment***

***Land      use right***

***Income      taxes***

***Operating      lease***

----

***Comprehensive      Income***

***Foreign      currency translation***

***Earnings      per share***

----

|                                                                 |   | **Year Ended December                25,** |
|----------------------------------------------------------------------|--------|------------------------------------------------------|
|                                                                 |   | **2005**                                             |   | **2004** |   | **2003** |
|                                                                 |   |  Income                                         |   | Weighted |   |   |   |  Income |   | Weighted |   |   |   |   |   | Weighted |   |   |
|                                                                 |   | (Loss)                                               |   | Average |   |   |   | (Loss) |   | Average |   |   |   | Income |   | Average |   |   |
|                                                                 |   | Restated                                             |   | Shares |   | Per-Share |   | Restated |   | Shares |   | Per-Share |   | (Loss) |   | Shares |   | Per-Share |
|                                                                 |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                per share -                basic             |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                 |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                available to common stockholders               |   | $                                                    | 1,106 |   | 46,051 |   | $ | 0.02 |   | $ | 4,645 |   | 45,061 |   | $ | 0.10 |   | $ | 2,727 |   | 42,108 |   | $ | 0.06 |
| Effect                of dilutive securities                         |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Redeemable                Convertible Preferred                Stock |   | --                                                   |   | -- |   |   |   | -- |   | -- |   |   |   | -- |   | -- |   |   |
| Options                and Warrants                                  |   | --                                                   |   | 898 |   |   |   | -- |   | -- |   |   |   | -- |   | -- |   |   |
| Earnings                per share -                diluted           |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                 |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Income                available to common stockholders         |   | $                                                    | 1,106 |   | 46,949 |   | $ | 0.02 |   | $ | 4,645 |   | 45,061 |   | $ | 0.10 |   | $ | 2,727 |   | 42,108 |   | $ | 0.06 |

***Stock-Based      Compensation***

***Recent      accounting pronouncements***

***Reclassifications***

**NOTE      4. CONDENSED FINANCIAL STATEMENT INFORMATION**

----

|                                       |   | Inside                China |   | Outside                China |   | Total  |   |
|--------------------------------------------|--------|-----------------------------|--------|------------------------------|--------|--------|--------|
| Assets                                     |   |                        |   |                         |   |   |   |
| -                Cash and cash equivalents |   | $                           | 4,180  |                         | $      | 10,152 |   | $ | 14,332 |   |
| -                Others                    |   |                        | 41,988 |                         |   | 1,101  |   |   | 43,089 |   |
| Total                Assets                |   |                        | 46,168 |                         |   | 11,253 |   |   | 57,421 |   |
| Liabilities                                |   |                        | 7,006  |                         |   | 12,766 |   |   | 19,772 |   |
| Minority                interests          |   |                        | 91     |                         |   | --     |   |   | 91 |   |
| Intercompany                               |   |                        | 8,743  |                         |   | (8,743 | )      |   | -- |   |
| Equity                                     |   |                        | 30,328 |                         |   | 3,671  |   |   | 33,999 |   |

|                                               |   | Inside                China |    | Outside                China |   | Total  |   |
|----------------------------------------------------|--------|-----------------------------|---------|------------------------------|--------|--------|--------|
|                                               |   |                        |    |                         |   |   |   |
| Net                revenue                         |   | $                           | 44,180  |                         | $      | --     |   | $ | 44,180 |   |
| Cost                of goods sold                  |   |                        | (36,151 | )                            |   | --     |   |   | (36,151 | ) |
| General                and administrative expenses |   |                        | (1,330  | )                            |   | (1,028 | )      |   | (2,358 | ) |
| Income                (loss) from operation        |   |                        | 5,978   |                         |   | (1,028 | )      |   | 4,950 |   |
| Provision                for income taxes          |   |                        | (1,487  | )                            |   | --     |   |   | (1,487 | ) |
| Other                income (loss)                 |   |                        | 2,352   |                         |   | (4,062 | )      |   | (1,710 | ) |
| Net                income (loss)                   |   |                        | 6,837   |                         |   | (5,090 | )      |   | 1,747 |   |

**NOTE      5. ACCOUNTS RECEIVABLE**

|                                                 |   | **December                25,****2005** |   | **December                25,****2004** |   |
|------------------------------------------------------|--------|-----------------------------------------|--------|-----------------------------------------|--------|
|                                                 |   | (In                thousands)           |   | (In                thousands)           |   |
| Accounts                receivable                   |   | $                                       | 7,408  |                                    | $      | 7,189 |   |
| Less:                Allowance for doubtful accounts |   |                                    | (893   | )                                       |   | (775 | ) |
|                                                 |   | $                                       | 6,515  |                                    | $      | 6,414 |   |

|                                                |   |  **December                25,****2005** |   |  **December                25,**** ****2004** |   |
|-----------------------------------------------------|--------|-----------------------------------------------|--------|---------------------------------------------------------|--------|
|                                                |   |  (In                thousands)           |   |  (In              thousands)                       |   |
| Balance                at the beginning of the year |   | $                                             | 775    |                                                    | $      | 993 |   |
| Add:                provision during the year       |   |                                          | 250    |                                                    |   | 662 |   |
| Less:                write-offs during the year     |   |                                          | (132   | )                                                       |   | (880 | ) |
| Balance                at the end of the year       |   | $                                             | 893    |                                                    | $      | 775 |   |

**NOTE      6. DEPOSITS AND PREPAYMENTS**

|                                      |   | **December                25,****2005** |   | **December                25,****2004** |   |
|-------------------------------------------|--------|-----------------------------------------|--------|-----------------------------------------|--------|
|                                      |   | (In                thousands)           |   | (In                thousands)           |   |
| Deposits                for raw materials |   | $                                       | 4,350  |                                    | $      | 1,523 |   |
| Prepayments                and advances   |   |                                    | 620    |                                    |   | 997 |   |
|                                      |   | $                                       | 4,970  |                                    | $      | 2,520 |   |

----

**NOTE      7. INVENTORIES**

|                                                       |   | **December                25,****2005** |   | **December                25,****2004** |   |
|------------------------------------------------------------|--------|-----------------------------------------|--------|-----------------------------------------|--------|
|                                                       |   | (In                thousands)           |   | (In                thousands)           |   |
| Raw                materials (including packing materials) |   | $                                       | 6,133  |                                    | $      | 2,812 |   |
| Finished                goods                              |   |                                    | 1,631  |                                    |   | 1,725 |   |
|                                                       |   |                                    | 7,764  |                                    |   | 4,537 |   |
| Less:                Inventory reserve                     |   |                                    | (134   | )                                       |   | (547 | ) |
|                                                       |   | $                                       | 7,630  |                                    | $      | 3,990 |   |

|                                                |   | **December                25,****2005** |   | **December                25,****2004** |   |
|-----------------------------------------------------|--------|-----------------------------------------|--------|-----------------------------------------|--------|
|                                                |   | (In                thousands)           |   | (In                thousands)           |   |
| Balance                at the beginning of the year |   | $                                       | 547    |                                    | $      | 582 |   |
| Add:                provision during the year       |   |                                    | -      |                                    |   | -- |   |
| Less:                write-offs during the year     |   |                                    | (413   | )                                       |   | (35 | ) |
| Balance                at the end of the year       |   | $                                       | 134    |                                    | $      | 134 |   |

**NOTE      8. DUE FROM RELATED COMPANIES**

|                                                   |   | **December                25,****2005** |   | **December                25,****2004** |   |
|--------------------------------------------------------|--------|-----------------------------------------|--------|-----------------------------------------|--------|
|                                                   |   | (In                thousands)           |   | (In                thousands)           |   |
| Due                from affiliated companies for sales |   | $                                       | 679    |                                    | $      | 1,183 |   |

**NOTE      9. PROPERTY, MACHINERY AND EQUIPMENT **

|                                                           |   | Useful                Life |                 | **December                25,****2005** |   | **December                25,****2004** |   |
|----------------------------------------------------------------|--------|----------------------------|----------------------|-----------------------------------------|--------|-----------------------------------------|--------|
|                                                           |   | (In                years)  |                 | (                In thousands)          |   | (In                thousands)           |   |
| Buildings                                                      |   |                       | 40                   |                                    | $      | 9,967                                   |   | $ | 9,415 |   |
| Machinery                and equipment                         |   |                       | 5-                12 |                                    |   | 14,663                                  |   |   | 11,940 |   |
|                                                           |   |                       |                 |                                    |   | 24,630                                  |   |   | 21,355 |   |
| Less:                Accumulated depreciation and amortization |   |                       |                 |                                    |   | (6,315                                  | )      |   | (5,257 | ) |
|                                                           |   |                       |                 |                                    | $      | 18,315                                  |   | $ | 16,098 |   |

**NOTE      10. LAND USE RIGHTS **

|                                          |   | **December                25,****2005** |   | **December                25,****2004** |   |
|-----------------------------------------------|--------|-----------------------------------------|--------|-----------------------------------------|--------|
|                                          |   | (In                thousands)           |   | (In                thousands)           |   |
| Land                use rights                |   | $                                       | 4,705  |                                    | $      | 4,432 |   |
| Less:                Accumulated amortization |   |                                    | (725   | )                                       |   | (610 | ) |
|                                          |   | $                                       | 3,980  |                                    | $      | 3,822 |   |

----

**NOTE      11. OTHER PAYABLES AND ACCRUALS**

|                                                    |   | **December                25,****2005** |   | **December                25,****2004** |   |
|---------------------------------------------------------|--------|-----------------------------------------|--------|-----------------------------------------|--------|
|                                                    |   | (In                thousands)           |   | (In                thousands)           |   |
| Deposits                from customers                  |   | $                                       | 502    |                                    | $      | 554 |   |
| Accruals                for payroll, bonus and benefits |   |                                    | 218    |                                    |   | 515 |   |
| Utilities                and accrued expenses           |   |                                    | 1,578  |                                    |   | 829 |   |
|                                                    |   | $                                       | 2,298  |                                    | $      | 1,898 |   |

**NOTE      12. TAXATION **

|                                               | **2005** |   | **2004** |   | **2003** |
|----------------------------------------------------|----------|--------|----------|--------|----------|
|                                               |     |   |     |   |     |
| Statutory                income tax                | 33%      |   | 33%      |   | 33%      |
| Reduction                for preferential tax rate | (9)      |   | (9)      |   | --       |
| Impact                of effective tax holiday     | --       |   | --       |   | (21)     |
| Various                differences                 | 2        |   | (2)      |   | 2        |
| Effective                rate                      | 26%      |   | 22%      |   | 14%      |

----

For      the      years ended December 25, 2005, 2004 and 2003, the impact from effective tax      rate      varied from the statutory tax rate is summarized as follows:

|                                                               |   | **2005** |   | **2004** |   | **2003** |   |
|--------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                                                               |   |     |   |     |   |     |   |
| Effective                rate                                      |   |     | 26     | %        |   | 22       | %      |   | 14 | % |
| Statutory                income tax                                |   |     | 33     | %        |   | 33       | %      |   | 33 | % |
| Income                available to common stockholders as reported |   | $        | 1,106  |     | $      | 4,645    |   | $ | 2,727 |   |
| Earnings                per common share:                          |   |     |   |     |   |     |   |   |   |   |
| Basic                                                              |   |     | 0.02   |     |   | 0.10     |   |   | 0.06 |   |
| Diluted                                                            |   |     | 0.02   |     |   | 0.10     |   |   | 0.06 |   |
| Income                available to common stockholders - pro forma |   |     | 777    |     |   | 3,991    |   |   | 2,124 |   |
| Earnings                per common share - pro forma:              |   |     |   |     |   |     |   |   |   |   |
| Basic                                                              |   |     | 0.01   |     |   | 0.09     |   |   | 0.05 |   |
| Diluted                                                            |   |     | 0.01   |     |   | 0.09     |   |   | 0.05 |   |
| Impact                of effective rate                            |   | $        | 329    |     | $      | 654      |   | $ | 603 |   |
| Per                share effect:                                   |   |     |   |     |   |     |   |   |   |   |
| Basic                                                              |   | $        | 0.01   |     | $      | 0.01     |   | $ | 0.01 |   |
| Diluted                                                            |   | $        | 0.01   |     | $      | 0.01     |   | $ | 0.01 |   |

**NOTE      13. REDEEMABLE CONVERTIBLE PREFERRED STOCK**

----

|                                | Preferred                Stock A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Preferred                Stock B                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Preferred                Dividend   | 7%                per annum, payable quarterly in arrears in cash or, at the Company’s                option subject to satisfaction of certain conditions, shares of Class                A                Common Stock valued at 95% of the volume-weighted current market                price.                                                                                                                                                                                                                                                                                                                                                                                                                                            | 7%                per annum, payable quarterly in arrears in cash or, at the Company’s                option subject to satisfaction of certain conditions, shares of Class                A                Common Stock valued at 95% of the volume-weighted current market                price.                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Redemption                          | July                11, 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | December                22, 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Mandatory                Conversion | Beginning                on the 24th month following closing and each month thereafter, the                Company                shall redeem 1/37th of the face value of the Preferred Stock in either                cash or Class A Common Stock valued at 90% of the volume-weighted                current                market price. The                Company may at any time force the conversion of the Preferred Stock                if the                volume-weighted current market price of the Class A Common Stock                exceeds                300% of the then applicable conversion price.                                                                                                                 | Beginning                at the end of the 24th month following closing and on each third                monthly                anniversary of that date (quarterly) thereafter, the Company shall                redeem                1/13th of the face value of the Preferred Stock in either cash or                Class                A Common Stock valued at 90% of the volume-weighted current market                price. The                Company may at any time force the conversion of the Preferred Stock                if the                volume-weighted current market price of the Class A Common Stock                exceeds                200% of its price at issuance of the Preferred Stock.              |
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Registration                        | The                Company shall file to register the underlying Class A common shares                within                30 days of the closing date and make its best effects to have the                Registration declared effective at the earliest date. In the event                such                Registration is not continuously effective during the period such                shares                are subject to transfer restrictions under the U.S. federal securities                laws, then (subject to certain exceptions) the holders are entitled                to                receive liquidated damages equal to 2.0% of the purchase price of                the                Preferred Stock per month. | The                Company shall file to register the underlying Class A common shares                with                30 days of the closing date and make its best effects to have the                Registration declared effective at the earliest date. In the event                such                Registration is not continuously effective during the period such                shares                are subject to transfer restrictions under the U.S. federal securities                laws, then (subject to certain exceptions) the holders are entitled                to                receive liquidated damages equal to 2.0% of the purchase price of                the                Preferred Stock per month. |
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Anti-dilution                       | In                the event the Company issues at any time while Preferred Stock are                still                outstanding Common Stock or any type of securities giving right to                Common                Stock at a price below the Issue Price, the Company agrees to extend                full-ratchet anti-dilution protection to the investors.                                                                                                                                                                                                                                                                                                                                                                        | In                the event the Company issues at any time while Preferred Stock are                still                outstanding Common Stock or any type of securities giving right to                Common                Stock at a price below the Issue Price, the Company agrees to extend                full-ratchet anti-dilution protection to the                investors.                                                                                                                                                                                                                                                                                                                                                       |

| **Redeemable                Convertible Preferred Stock**              |   |                                |   |                        |   |                        |   |
|------------------------------------------------------------------------|--------|-------------------------------------|--------|-----------------------------|--------|-----------------------------|--------|
|                                                                   |   | **Number                of shares** |   | **Series                A** |   | **Series                B** |   | **Combined** |   |
| Sale                of Series A Preferred Stock                        |   |                                | 6000   |                        | $      | 6,000                       |   |   |   |   | $ | 6,000 |   |
| Sale                of Series B Preferred Stock                        |   |                                | 9500   |                        |   |                        |   | $ | 9,500 |   |   | 9,500 |   |
| Expenses                of Offering                                    |   |                                |   |                        |   | (685                        | )      |   | (1,082 | ) |   | (1,767 | ) |
| Allocation                to Derivative Liabilities                    |   |                                |   |                        |   | (4,557                      | )      |   | (5,702 | ) |   | (10,259 | ) |
| Conversion                of Series A Preferred Stock to common stocks |   |                                | (1,900 | )                           |   | (368                        | )      |   |   |   |   | (368 | ) |
| Accretion                of discount                                   |   |                                |   |                        |   | 454                         |   |   |   |   |   | 454 |   |
|                                                                   |   |                                | 13,600 |                        | $      | 844                         |   | $ | 2,716 |   | $ | 3,560 |   |

----

|                                    | Warrants                                        | Embedded                Conversion Feature                                                           |
|-----------------------------------------|-------------------------------------------------|------------------------------------------------------------------------------------------------------|
| Expected                life (in years) | Remaining                term at valuation date | Remaining                Term to conversion or redemption date at each valuation                date |
| Expected                volatility      | 50%                                             | 50%                                                                                                  |
| Risk-free                interest rate  | 4.04%                to 4.44%                   | 3.87%                to 4.44%                                                                        |
| Dividend                yield           | 0                                               | 0                                                                                                    |

| Fair                Value at issuances                                               |   | $      | 10,259 |   |
|--------------------------------------------------------------------------------------|--------|--------|--------|--------|
| Change                in value of derivatives during the period                      |   |   | 4,064  |   |
| Conversion                of 1900 shares of Series A Preferred Stock to common stock |   |   | (2,188 | )      |
|                                                                                 |   | $      | 12,135 |   |

**NOTE      14. COMMON STOCK**

**NOTE      15. WARRANTS**

----

|                                                     | Shares    |   | Weighted                Average Exercise Price |
|----------------------------------------------------------|-----------|--------|------------------------------------------------|
| Outstanding                at December 25, 2003          | 2,075,000 |   | 0.9883                                         |
| Issued                                                   | --        |   | --                                             |
| Exercised                                                | --        |   | --                                             |
| Forfeited/Cancelled                                      | --        |   | --                                             |
| Outstanding                at December 25, 2004          | 2,075,000 |   | 0.9883                                         |
| Issued                                                   | 6,861,842 |   | 1.3889                                         |
| Exercised                                                | 2,327,368 |   | 0.9945                                         |
| Forfeited/Cancelled                                      | --        |   | --                                             |
| Outstanding                at December 25, 2005          | 6,609,474 |   | 1.4020                                         |
|                                                     |      |   |                                           |
| Warrants                exercisable at December 25, 2004 | 2,075,000 |   | 0.9883                                         |
| Warrants                exercisable at December 25, 2005 | 6,609,474 |   | 1.4020                                         |

|                                           |   | Shares                of Class A Common StockIssuable                Under Warrants |      | ExercisePrice |   |
|------------------------------------------------|--------|-------------------------------------------------------------------------------------|-----------|---------------|--------|
| October                2003 private placement  |   |                                                                                | 25,000    |          | $      | 0.979 |   |
|                                           |   |                                                                                |      |          |   |   |   |
| July                2005 private placement     |   |                                                                                |      |          |   |   |   |
| 6-year                warrants                 |   |                                                                                | 3,157,895 |          |   | 1.04 |   |
| 5-year                warrants                 |   |                                                                                | 101,579   |          |   | 1.04 |   |
|                                           |   |                                                                                |      |          |   |   |   |
| December                2005 private placement |   |                                                                                |      |          |   |   |   |
| 6-year                warrants                 |   |                                                                                | 2,968,750 |          |   | 1.76 |   |
| 5-year                warrants                 |   |                                                                                | 356,250   |          |   | 1.76 |   |

**NOTE      16. STOCK-BASED COMPENSATION**

|                                     |   | **DECEMBER                25,**** 2005** |   | **DECEMBER                25,**** 2004** |
|------------------------------------------|--------|-----------------------------------------------|--------|-----------------------------------------------|
| Life                (years)              |   | 10                                            |   | 10                                            |
| Dividend                yield            |   |                  None                    |   | None                                          |
| Risk                - free interest rate |   | 3.6%                                          |   | 3.6%                                          |
| Volatility                               |   | 40%                                           |   | 40%                                           |

|                                                    |   | **Options****Outstanding** |      | **Price                Range****Per                Share** |   | **Weighted                Average**** Exercise                Price****Per                Share** |   |
|---------------------------------------------------------|--------|----------------------------|-----------|------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------|--------|
|                                                    |   |                       |      |                                                       |   |                                                                                                   |   |
| Options                outstanding at December 25, 2003 |   |                       | --        |                                                       | $      | --                                                                                                     |   | $ | -- |   |
| Granted                on November 2, 2004              |   |                       | 400,000   |                                                       |   | 1.00                                                                                                   |   |   | 1.00 |   |
| Options                outstanding at December 25, 2004 |   |                       | 400,000   |                                                       |   | 1.00                                                                                                   |   |   | 1.00 |   |
| Granted                on June 22, 2005                 |   |                       | 600,000   |                                                       |   | 1.20                                                                                                   |   |   | 1.20 |   |
| Options                outstanding at December 25, 2005 |   |                       | 1,000,000 |                                                       | $      | 1.00-1.20                                                                                              |   | $ | 1.12 |   |

----

|                                             |   | Options                Outstanding                     |   | Options                Exercisable         |
|--------------------------------------------------|--------|--------------------------------------------------------|--------|--------------------------------------------|
| Range                of Exercise Price Per Share |   | Number                Outstanding at December 25, 2005 |   | Weighted                Average Fair Value |   | Weighted                Average Remaining Life (Years) |   | Number                Exercisable at December 25, 2005 |   | Weighted                Average Exercise Price |
|                                             |   |                                                   |   |                                       |   |   |   |   |   |   |
| $1.00                to $1.20                    |   | 1,000,000                                              |   | $0.105                                     |   | 9.18 |   | 1,000,000 |   | $1.120 |

**NOTE      17. COMMITMENTS**

***Lease      commitments***

|   |   | Operating                leaseobligations |   |
|--------|--------|-------------------------------------------|--------|
|   |   | (In                thousands)             |   |
| 2006   |   | $                                         | 62     |   |
| 2007   |   |                                      | 62     |   |
| 2008   |   |                                      | 62     |   |
| 2009   |   |                                      | 10     |   |
| Total  |   | $                                         | 196    |   |

***Annual      fees***

| 2006       |   | $      | 111   |   |
|------------|--------|--------|-------|--------|
| 2007       |   |   | 111   |   |
| 2008       |   |   | 111   |   |
| 2009       |   |   | 111   |   |
| 2010       |   |   | 111   |   |
| Thereafter |   |   | 3,877 |   |
| Total      |   | $      | 4,432 |   |

***Acquisition      of property, plant and equipment***

----

**NOTE      18. RELATED PARTY TRANSACTIONS **

|                                                                         |   | **2005** |   | **2004** |   | **2003** |   |
|------------------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                                                                         |   |     |   |     |   |     |   |
| Sales                of finished goods to:                                   |   |     |   |     |   |     |   |
| A                joint venture partner, Shandong Longfeng Group Company (a)  |   | $        | --     |     | $      | 2        |   | $ | -- |   |
| Related                parties (b)                                           |   |     | 8      |     |   | 33       |   |   | 113 |   |
|                                                                         |   | $        | 8      |     | $      | 35       |   | $ | 113 |   |
|                                                                         |   |     |   |     |   |     |   |   |   |   |
| Sales                of machinery to Shandong Longfeng Group Company         |   | $        | --     |     | $      | --       |   | $ | 993 |   |
|                                                                         |   |     |   |     |   |     |   |   |   |   |
| Purchases                of raw materials from related parties (b)           |   | $        | --     |     | $      | 914      |   | $ | 1,344 |   |
|                                                                         |   |     |   |     |   |     |   |   |   |   |
| Pre-determined                annual fees charged by joint venture partners: |   |     |   |     |   |     |   |   |   |   |
| Shandong                Longfeng Group Company                               |   | $        | 75     |     | $      | 72       |   | $ | 78 |   |
| Shandong                Longfeng Flour Company Limited (b)                   |   |     | 36     |     |   | 36       |   |   | 36 |   |
|                                                                         |   | $        | 111    |     | $      | 108      |   | $ | 114 |   |
|                                                                         |   |     |   |     |   |     |   |   |   |   |
| Management                fees charged by a related party (b)                |   | $        | 12     |     | $      | -        |   | $ | - |   |
|                                                                         |   |     |   |     |   |     |   |   |   |   |
| Interest                expenses paid to a joint venture partner:            |   |     |   |     |   |     |   |   |   |   |
| Shandong                Longfeng Group Company                               |   | $        | --     |     | $      | 3        |   | $ | 17 |   |
|                                                                         |   |     |   |     |   |     |   |   |   |   |
| Rental                expenses paid to related companies (b)                 |   | $        | --     |     | $      | 120      |   | $ | -- |   |
|                                                                         |   |     |   |     |   |     |   |   |   |   |
| Rental                income from a joint venture partner:                   |   |     |   |     |   |     |   |   |   |   |
| Shandong                Longfeng Group Company                               |   | $        | 64     |     | $      | 64       |   | $ | 64 |   |
|                                                                         |   |     |   |     |   |     |   |   |   |   |
| Purchase                of machinery from a related party (b)                |   | $        | 70     |     | $      | -        |   | $ | - |   |

(a)      Shandong Longfeng Group Company is a joint venture partner of the Company and      the parent company.

**NOTE      1**
**9.      DISPOSAL OF SUBSIDIARY**

**NOTE      20. SEGMENT INFORMATION **

----

|                                          |   | **2005**                      |   | **2004** |   | **2003** |   |
|-----------------------------------------------|--------|-------------------------------|--------|----------|--------|----------|--------|
|                                          |   | (In                thousands) |   |
|                                          |   | Restated                      |   |     |   |     |   |
| Net                revenue:                   |   |                          |   |     |   |     |   |
| Instant                noodles                |   | $                             | 15,353 |     | $      | 12,909   |   | $ | 11,702 |   |
| Flour                                         |   |                          | 28,827 |     |   | 26,312   |   |   | 19,070 |   |
|                                          |   | $                             | 44,180 |     | $      | 39,221   |   | $ | 30,773 |   |
|                                          |   |                          |   |     |   |     |   |   |   |   |
| Income                from operations:        |   |                          |   |     |   |     |   |   |   |   |
| Instant                noodles                |   | $                             | 1,336  |     | $      | 607      |   | $ | 296 |   |
| Flour                                         |   |                          | 3,614  |     |   | 3,938    |   |   | 1,897 |   |
|                                          |   | $                             | 4,950  |     | $      | 4,545    |   | $ | 2,193 |   |
|                                          |   |                          |   |     |   |     |   |   |   |   |
| Interest                expenses:             |   |                          |   |     |   |     |   |   |   |   |
| Instant                noodles                |   | $                             | --     |     | $      | 6        |   | $ | 22 |   |
| Flour                                         |   |                          | --     |     |   | 66       |   |   | 227 |   |
|                                          |   |  $                       | --     |     | $      | 72       |   | $ | 249 |   |
|                                          |   |                          |   |     |   |     |   |   |   |   |
| Depreciation                and amortization: |   |                          |   |     |   |     |   |   |   |   |
| Instant                noodles                |   | $                             | 537    |     | $      | 587      |   | $ | 868 |   |
| Flour                                         |   |                          | 729    |     |   | 600      |   |   | 557 |   |
|                                          |   | $                             | 1,266  |     | $      | 1,187    |   | $ | 1,425 |   |
|                                          |   |                          |   |     |   |     |   |   |   |   |
| Identifiable                long-term assets: |   |                          |   |     |   |     |   |   |   |   |
| Instant                noodles                |   | $                             | 11,836 |     | $      | 12,031   |   | $ | 14,001 |   |
| Flour                                         |   |                          | 10,459 |     |   | 7,889    |   |   | 7,468 |   |
|                                          |   | $                             | 22,295 |     | $      | 19,920   |   | $ | 21,469 |   |

**NOTE      21. MAJOR CUSTOMERS**

**NOTE      22. RETIREMENT PLAN**

**NOTE      23. BUSINESS COMBINATIONS**

***Soy      Bean Plant***

----

***Xinlongya      Distributor***

| Allocation                of Initial Purchase Consideration (in thousands): |   |
|-----------------------------------------------------------------------------|--------|
|                                                                        |   |   |   |
| Cash                and cash equivalent                                     |   | $ | 414 |   |
| Accounts                Receivable                                          |   |   | 25 |   |
| Other                receivable                                             |   |   | 154 |   |
| Inventory                                                                   |   |   | 122 |   |
| Fixed                assets, net                                            |   |   | 70 |   |
|                                                                        |   |   | 785 |   |
|                                                                        |   |   |   |   |
| Accounts                payable                                             |   |   | (355 | ) |
| Other                payable                                                |   |   | (26 | ) |
|                                                                        |   |   | (381 | ) |
|                                                                        |   |   |   |   |
| Net                asset value                                              |   | $ | 404 |   |
| Acquisition                consideration                                    |   | $ | 404 |   |

**NOTE      24. QUARTERLY FINANCIAL DATA (UNAUDITED)**

|                                        |   |                                                 |   |                        |   |                                |   | Net                Income (loss) per share |   |
|---------------------------------------------|--------|------------------------------------------------------|--------|-----------------------------|--------|-------------------------------------|--------|--------------------------------------------|--------|
| Year                Ended December 25, 2005 |   | Net                Revenue                           |   | Gross                Profit |   | Net                Income(Restated) |   |  Basic(Restated)                      |   | Diluted(Restated) |   |
|                                        |   | (In                thousands, except per share data) |   |
| First                Quarter                |   | $                                                    | 8,282  |                        | $      | 1,492                               |   | $                                          | 588    |   | $ | 0.01 |   | $ | 0.01 |   |
| Second                Quarter               |   |                                                 | 8,993  |                        |   | 1,409                               |   |                                       | 1,372  |   |   | 0.03 |   |   | 0.03 |   |
| Third                Quarter                |   |                                                 | 11,645 |                        |   | 2,157                               |   |                                       | (6,440 | ) |   | (0.14 | ) |   | (0.14 | ) |
| Fourth                Quarter               |   |                                                 | 15,260 |                        |   | 2,971                               |   |                                       | 6,227  |   |   | 0.14 |   |   | 0.13 |   |
|                                        |   | $                                                    | 44,180 |                        | $      | 8,029                               |   | $                                          | 1,747  |   |   |   |   |   |   |   |
|                                        |   |                                                 |   |                        |   |                                |   |                                       |   |   |   |   |   |   |   |   |
| Year                Ended December 25, 2004 |   |                                                 |   |                        |   |                                |   |                                       |   |   |   |   |   |   |   |   |
| First                Quarter                |   | $                                                    | 7,398  |                        | $      | 1,333                               |   | $                                          | 338    |   | $ | 0.01 |   | $ | 0.01 |   |
| Second                Quarter               |   |                                                 | 8,547  |                        |   | 1,561                               |   |                                       | 539    |   |   | 0.01 |   |   | 0.01 |   |
| Third                Quarter                |   |                                                 | 9,886  |                        |   | 1,928                               |   |                                       | 1,192  |   |   | 0.03 |   |   | 0.03 |   |
| Fourth                Quarter               |   |                                                 | 13,390 |                        |   | 2,512                               |   |                                       | 2,576  |   |   | 0.06 |   |   | 0.06 |   |
|                                        |   | $                                                    | 39,221 |                        | $      | 7,334                               |   | $                                          | 4,645  |   |   |   |   |   |   |   |

**NOTE      25. SUBSEQUENT EVENTS**

***Acquisition      of Chengdu Plant***

***Expansion      of Longyuan Packing Plant***

----

**NOTE      26. CONDENSED PARENT COMPANY FINANCIAL INFORMATION**

**BASIS      OF PRESENTATION **

      Rule      12-04 of      Regulation S-X. New Dragon Asia Corp. is a holding company that conducts its      operations through its subsidiaries,      which      are more fully described in Note 1. 

**NEW      DRAGON ASIA CORP. AND SUBSIDIARIES **

**CONDENSED      PARENT COMPANY BALANCE SHEETS**

|                                                                                                                                                                                                                                                                                                 |   | **December                25,****2005** |         | **December                25,****2004** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------------|-----------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                 |   |                                    |         |                                    |   |
| **ASSETS**                                                                                                                                                                                                                                                                                           |   |                                    |         |                                    |   |
|                                                                                                                                                                                                                                                                                                 |   |                                    |         |                                    |   |
| Current                assets:                                                                                                                                                                                                                                                                       |   |                                    |         |                                    |   |
| Cash                and cash equivalents                                                                                                                                                                                                                                                             |   | $                                       | 10,150       |                                    | $      | -- |   |
| Other                receivable                                                                                                                                                                                                                                                                      |   |                                    | 1,069        |                                    |   | 20 |   |
| Deferred                expenses, net                                                                                                                                                                                                                                                                |   |                                    | 33           |                                    |   | -- |   |
| Total                current assets                                                                                                                                                                                                                                                                  |   |                                    | 11,252       |                                    |   | 20 |   |
|                                                                                                                                                                                                                                                                                                 |   |                                    |         |                                    |   |   |   |
| Investment                in and advances to subsidiaries                                                                                                                                                                                                                                            |   |                                    | 39,522       |                                    |   | 27,902 |   |
| Total                assets                                                                                                                                                                                                                                                                          |   | $                                       | 50,774       |                                    | $      | 27,922 |   |
|                                                                                                                                                                                                                                                                                                 |   |                                    |         |                                    |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                                                                        |   |                                    |         |                                    |   |   |   |
|                                                                                                                                                                                                                                                                                                 |   |                                    |         |                                    |   |   |   |
| Current                liabilities:                                                                                                                                                                                                                                                                  |   |                                    |         |                                    |   |   |   |
| Other                payables and accruals                                                                                                                                                                                                                                                           |   | $                                       | 661          |                                    | $      | 197 |   |
| Dividend                payable on preferred shares                                                                                                                                                                                                                                                  |   |                                    | 80           |                                    |   | -- |   |
| Embedded                derivatives at fair value                                                                                                                                                                                                                                                    |   |                                    | 12,135       |                                    |   | -- |   |
| Total                current liabilities                                                                                                                                                                                                                                                             |   |                                    | 12,876       |                                    |   | 197 |   |
|                                                                                                                                                                                                                                                                                                 |   |                                    |         |                                    |   |   |   |
| Due                to New Dragon Asia Food Limited                                                                                                                                                                                                                                                   |   |                                    | 340          |                                    |   | 890 |   |
|                                                                                                                                                                                                                                                                                                 |   |                                    |    |                                    |   | -- |   |
| Total                liabilities                                                                                                                                                                                                                                                                     |   |                                    | 13,216       |                                    |   | 1,087 |   |
| Series                A & B Redeemable Convertible Preferred Stock, $0.0001 par                value:Authorized                shares - 5,000,000 Issued                and outstanding - 13,600 shares and nil shares at December 25, 2005                and                2004, respectively |   |                                    | 3,559        |                                    |   | -- |   |
|                                                                                                                                                                                                                                                                                                 |   |                                    |         |                                    |   |   |   |
| Commitments                                                                                                                                                                                                                                                                                          |   |                                    |         |                                    |   |   |   |
|                                                                                                                                                                                                                                                                                                 |   |                                    |         |                                    |   |   |   |
| Stockholders’                equity:                                                                                                                                                                                                                                                           |   |                                    |         |                                    |   |   |   |
| Class                A Common Stock, $0.0001 par value:Authorized                shares - 102,000,000Issued                and outstanding - 49,322,291 in 2005 and 45,061,242 in                2004                                                                                                |   |                                    | 5            |                                    |   | 4 |   |
| Class                B Common Stock, $0.0001 par value:Authorized                shares - 2,000,000 - none issued and outstanding                                                                                                                                                                    |   |                                    | --           |                                    |   | -- |   |
| Additional                paid-in capital                                                                                                                                                                                                                                                            |   |                                    | 15,216       |                                    |   | 9,909 |   |
| Receivable                from stockholder                                                                                                                                                                                                                                                           |   |                                    | (49          | )                                       |   | -- |   |
| Retained                earnings                                                                                                                                                                                                                                                                     |   |                                    | 18,029       |                                    |   | 16,922 |   |
| Accumulated                other comprehensive income                                                                                                                                                                                                                                                |   |                                    | 798          |                                    |   | -- |   |
| Total                stockholders’ equity                                                                                                                                                                                                                                                      |   |                                    | 33,999       |                                    |   | 26,835 |   |
| Total                liabilities and stockholders’ equity                                                                                                                                                                                                                                      |   | $                                       | 50,774       |                                    | $      | 27,922 |   |

----

**NEW      DRAGON ASIA CORP. AND SUBSIDIARIES **

**CONDENSED      PARENT COMPANY STATEMENTS OF OPERATIONS **

|                                                                                                |   | **For                the years ended December 25,** |   |
|-----------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                                                                |   | **2005**                                            |   | **2004** |   | **2003** |   |
|                                                                                                |   |                                                |   |   |   |   |   |
| General                and administrative expenses                                                  |   |                                                | (1,020 | ) |   | (413 | ) |   | (2,220 | ) |
| Loss                from operations                                                                 |   |                                                | (1,020 | ) |   | (413 | ) |   | (2,220 | ) |
| Other                income (expense):                                                              |   |                                                |   |   |   |   |   |   |   |   |
| Interest                income                                                                      |   |                                                | 9      |   |   | -- |   |   | -- |   |
| Loss                on fair value adjustments to                embedded                derivatives |   |                                                | (4,064 | ) |   | -- |   |   | -- |   |
| Total                parent only expenses                                                           |   |                                                | (5,075 | ) |   | (413 | ) |   | (2,220 | ) |
| Equity                in subsidiary earnings, net of taxes                                          |   |                                                | 6,822  |   |   | 5,058 |   |   | 4,947 |   |
| Net                income                                                                           |   | $                                                   | 1,747  |   | $ | 4,645 |   | $ | 2,727 |   |
| Accretion                of redeemable preferred stock                                              |   |                                                | (454   | ) |   | -- |   |   | -- |   |
| Preferred                stock dividends                                                            |   |                                                | (187   | ) |   | -- |   |   | -- |   |
| Income                available to common stockholders                                              |   | $                                                   | 1,106  |   | $ | 4,645 |   | $ | 2,727 |   |

----

**NEW      DRAGON ASIA CORP. AND SUBSIDIARIES **

**CONDENSED      PARENT COMPANY STATEMENTS OF CASH FLOWS **

**(Amounts      in thousands) **

|                                                                                                      |   |  **For                the years ended December 25,** |   |
|-----------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|
|                                                                                                      |   | **2005**                                                  |   | **2004** |   | **2003** |   |
| **Cash                flows from operating activities:**                                                  |   |                                                      |   |   |   |   |   |
| Net                loss                                                                                   |   | $                                                         | (5,075 | ) | $ | (413 | ) | $ | (2,220 | ) |
| Adjustments                to reconcile net income to net cash provided by operating activities:          |   |                                                      |   |   |   |   |   |   |   |   |
| Loss                 on                fair value adjustments to embedded                derivatives |   |                                                      | 4,064  |   |   |   |   |   |   |   |
| Stock-based                compensation expense                                                           |   |                                                      | 105    |   |   | -- |   |   | -- |   |
| Changes                in operating assets and liabilities:                                               |   |                                                      |   |   |   |   |   |   |   |   |
| Other                receivable                                                                           |   |                                                      | (1,032 | ) |   | -- |   |   | -- |   |
| Other                payables and accruals                                                                |   |                                                      | 459    |   |   | 14 |   |   | 152 |   |
| Net                cash provided by operating activities                                                  |   |                                                      | (1,479 | ) |   | (399 | ) |   | (2,068 | ) |
|                                                                                                      |   |                                                      |   |   |   |   |   |   |   |   |
| **Cash                flows from investing activities:**                                                  |   |                                                      |   |   |   |   |   |   |   |   |
| Investment                and advances to subsidiaries                                                    |   |                                                      | (4,848 | ) |   | -- |   |   | -- |   |
| Disposal                of subsidiaries                                                                   |   |                                                      | --     |   |   | -- |   |   | 690 |   |
| Net                cash provided by (used in) investing activities                                        |   |                                                      | (4,848 | ) |   | -- |   |   | 690 |   |
|                                                                                                      |   |                                                      |   |   |   |   |   |   |   |   |
| **Cash                flows from financing activities:**                                                  |   |                                                      |   |   |   |   |   |   |   |   |
| Proceeds                from issuance of preferred stock                                                  |   |                                                      | 15,500 |   |   | -- |   |   | -- |   |
| Payments                of issuance costs related to preferred stock                                      |   |                                                      | (1,218 | ) |   | -- |   |   | -- |   |
| Preferred                Stock Dividends                                                                  |   |                                                      | (30    | ) |   |   |   |   |   |   |
| Repayment                to parent company                                                                |   |                                                      | (550   | ) |   | -- |   |   | -- |   |
| Proceeds                from exercise of warrants                                                         |   |                                                      | 1,977  |   |   | -- |   |   | 1,777 |   |
| Net                cash provided by financing activities                                                  |   |                                                      | 15,679 |   |   | -- |   |   | 1,777 |   |
| Foreign                currency translation adjustment                                                    |   |                                                      | 798    |   |   | -- |   |   | -- |   |
| Net                increase (decrease) in cash and cash equivalents                                       |   |                                                      | 10,150 |   |   | (399 | ) |   | 399 |   |
| Cash                and cash equivalents at the beginning of the period                                   |   |                                                      | --     |   |   | 399 |   |   | -- |   |
| Cash                and cash equivalents at the end of the period                                         |   | $                                                         | 10,150 |   | $ | -- |   | $ | 399 |   |
|                                                                                                      |   |                                                      |   |   |   |   |   |   |   |   |

----