SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

|X|   Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
      of 1934.

                  For the quarterly period ended: June 30, 2002

                                       OR

|_|   Transition Report Under Section 13 or 15(d) of the Securities Exchange Act
      of 1934.

                  For the transition period from:       to

                       Commission File Number: 000-030813

                                  AlphaRx, Inc.
                 (Name of Small Business Issuer in its Charter)

           Delaware                                       98-0177440
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                             10-75 East Beaver Creek
                             Ontario L4B 1B8, Canada
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (905) 762-0745

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

           Securities registered pursuant to Section 12(g) of the Act:
                         Common Stock, $.0005 par value
                                (Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes |X| No |_|

The number of outstanding shares of registrant's Common Stock on August 8, 2002
was 13,345,000.

Transitional Small Business Disclosure Format. Yes |_| No |X|
<PAGE>

                                  ALPHARx, INC.

                                   FORM 10-QSB

                                  June 30, 2002

                                TABLE OF CONTENT

--------------------------------------------------------------------------------
DESCRIPTION                                                                 Page
--------------------------------------------------------------------------------
Part I           Financial Information

--------------------------------------------------------------------------------
Item 1           Financial Statements                                       3

--------------------------------------------------------------------------------
                 Unaudited Balance Sheets as of June 30, 2002 and 2001      3

--------------------------------------------------------------------------------
                 Unaudited Statements of Operations for the three months
                 ended June 30, 2002 and 2001                               5

--------------------------------------------------------------------------------
                 Unaudited Statements of Operations for the nine months
                 ended June 30, 2002 and 2001                               6

--------------------------------------------------------------------------------
                 Unaudited Statements of Cash Flows for the nine months
                 ended June 30, 2002 and 2001                               7

--------------------------------------------------------------------------------
                 Notes to the Financial Statements                          8

--------------------------------------------------------------------------------
Item II          Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                       11

--------------------------------------------------------------------------------
Part II          Other Information                                         14

--------------------------------------------------------------------------------
SIGNATURE PAGE                                                             15
--------------------------------------------------------------------------------


2
<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                                  ALPHARx, INC.
                          (A Development Stage Company)

                                 BALANCE SHEETS
                          As of June 30, 2002 and 2001

                                   (Unaudited)

<TABLE>
<CAPTION>
                                     ASSETS

                                                              June 30      June 30
                                                               2002          2001
<S>                                                          <C>          <C>
CURRENT ASSETS

   Cash                                                      $  5,072     $  (6,327)
   Accounts Receivable                                         14,488
   Due from Officer                                             1,587
   Notes Receivable                                             4,398

   Inventory                                                   47,797
                                                             --------     ---------

     TOTAL CURRENT ASSETS                                      73,342        (6,327)

PROPERTY, PLANT & EQUIPMENT, at cost

         Less accumulated deprecation of $46,594 (note 4)     121,059
         Less accumulated deprecation of $21,123                             69,506
                                                                          ---------

OTHER ASSETS

   Deposit
   Investment                                                  46,408        46,408
                                                             --------     ---------

TOTAL ASSETS                                                 $240,809     $ 109,587
                                                             ========     =========
</TABLE>

See accountant's review report

The accompanying notes are an integral part of this statement


3
<PAGE>

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                          As of June 30, 2002 and 2001

                                                   June 30          June 30
                                                     2002             2001
CURRENT LIABILITIES

   Accounts Payable and Accrued Liabilities      $       440      $    36,347
   Notes Payable-Current                             474,164
   Salary Payable                                    154,000
   Sales Tax Payable                                     787
   Accrued Interest                                   29,117            3,933
                                                 -----------      -----------
        TOTAL CURRENT LIABILITIES                    658,508           40,280

LONG-TERM LIABILITIES

   Deposit                                             5,000
   Loan Payable                                                         4,000
                                                 -----------      -----------
       TOTAL LONG-TERM LIABILITIES                     5,000            4,000

SHAREHOLDER'S EQUITY

Common Stock, common, $ 0.0005 par value,
   Authorized 100,000,000 shares, issued and
   outstanding 11,793,064 shares (note 5)        $     5,896
   Additional paid-in capital                      1,923,330
   Deficit                                        (2,351,925)
                                                 -----------
Common Stock, common, $0.0001 par value,
   Authorized 100,000,000 shares, issued and
   outstanding 50,855,630 shares                                  $     5,086
   Additional paid in capital                                       1,557,557
   Deficit                                                         (1,497,336)
                                                                  -----------
TOTAL SHAREHOLDER'S EQUITY                          (422,699)          65,307
                                                 -----------      -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       $   240,809      $   109,587
                                                 ===========      ===========

See accountant's review report

The accompanying notes are an integral part of this statement


4
<PAGE>

                                  ALPHARx, INC.

                          (A Development Stage Company)

                             STATEMENT OF OPERATIONS
                FOR THE THREE MONTHS ENDED JUNE 30, 2002 and 2001
                                   (Unaudited)

                                                                June 30
                                                            2002           2001
                                                            ----           ----
SALES                                                  $     142       $      0

COST OF SALES                                                 59
                                                       ---------

GROSS PROFIT                                                  83

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES             135,104         47,354
                                                       ---------       --------

         LOSS FROM OPERATION                            (135,021)       (47,354)

OTHER INCOME
   Interest Income                                     $       1       $      0
   Other Income                                                0              0
                                                       ---------       --------
                                                               0              0

         LOSS BEFORE INCOME TAXES                       (135,020)       (47,354)

INCOME TAX                                                     0              0
                                                       ---------       --------

NET LOSS                                               $(135,020)      $(47,354)
                                                       =========       ========

See accountant's review report

The accompanying notes are an integral part of this statement


5
<PAGE>

                                  ALPHARX, INC.

                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS
                FOR THE NINE MONTHS ENDED JUNE 30, 2002 and 2001

                                                               June 30
                                                           2002            2001
                                                           ----            ----
SALES                                                 $  13,982       $       0

COST OF SALES                                             9,991
                                                      ---------

GROSS PROFIT                                              3,991

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES            563,824         210,695
                                                      ---------       ---------

         LOSS FROM OPERATION                           (559,833)       (210,695)

OTHER INCOME
   Interest Income                                    $       1       $      12
                                                      ---------       ---------
                                                              1              12

         LOSS BEFORE INCOME TAXES                      (559,832)       (210,683)

INCOME TAX                                                    0               0
                                                      ---------       ---------

NET LOSS                                              $(559,832)      $(210,683)
                                                      =========       =========


6
<PAGE>

                                  ALPHARX, INC.

                          (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS
                FOR THE NINE MONTHS ENDED JUNE 30, 2002 and 2001

                                                                June 30
                                                          2002           2001
CASH FLOWS FROM OPERATING ACTIVITIES
   Net Loss                                            $(559,832)     $(210,683)
   Depreciation Amount                                    16,793         10,064

   Adjustments to reconcile note income to net cash
     Cash provided by operating activities:
        Changes in assets and liabilities:
        Increase in Accounts Receivable                  (14,488)
        Increase (Decrease) in Accounts Payable          (27,337)         7,508
        Increase in Customer Deposits                      5,000
        Increase in Accrued Interest                      18,782          3,932
        Increase in Loan Payable                                          4,000
        Decrease in Loan from Shareholders                               (2,365)
        Decrease in Salary Payable                      (124,000)
        Increase in Sales Tax Payable                        787
        Increase in Due from Officer                      (1,587)
        Increase in Loan-Kai Yi Sung                      (4,399)
        Increase in Inventory                            (47,797)
        Increase in Notes Payable-Current                224,410
                                                       ------------------------
NET CASH PROVIDED/(USED) BY OPERATIONS ACTIVITIES      $(513,668)     $(187,544)

CASH FLOWS FROM INVESTING ACTIVITIES
        Increase of Improvements                                         (1,837)
        Acquisition of Machinery & Equipment              (2,497)       (14,303)
                                                       ------------------------
NET CASH PROVIDED/(USED) BY INVESTING ACTIVITIES       $  (2,497)     $ (16,140)

CASH FLOWS FROM FINANCING ACTIVITIES
        Proceeds from Issuance of Stock                      945            147
        Increase in Additional Paid-In Capital           536,551        183,266
                                                       ------------------------
NET CASH PROVIDED/(USDED) BY FINANCING ACTIVITIES      $ 537,496      $ 183,413

NET INCREASE (DECREASE) IN CASH                           21,331        (20,271)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

CASH AS OF September 30, 2001 (2000)                     (16,259)        13,944
                                                       ------------------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD             $   5,072      $  (6,327)
                                                       =========      =========

SUPPLEMENTARY DISCLOSURE:

The statement of cash flows using indirect method as defined under Statement of
Financial Accounting Standard of No. 95.


7
<PAGE>

                                  ALPHARX, INC.

                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 2002

NOTE 1. INTERIM FINANCIAL INFORMATION

In the opinion of management, the accompanying unaudited financial statements
contain all necessary adjustments, which are of a normal recurring nature, to
present fairly the financial position of AlphaRx, Inc. as of June 30, 2002 and
2001, the results of operations for the nine months ended June 30, 2002 and
2001, and the cash flows for the nine months ended June 30, 2002 and 2001, in
conformity with generally accepted accounting principles. Operating results for
the nine months period ended June 30, 2002 are not necessarily indicative of the
results that may be expected for the entire year ending September 30, 2002 or
future operating periods.

These unaudited interim financial statements should be read in conjunction with
the financial statements and related notes contained in AlphaRx's Form 10SB
registration statement.

NOTE 2. FORMATION AND ORGANIZATION OF BUSINESS

ALPHARX, INC. (the Company) was incorporated under the laws of the State of
Delaware on August 8, 1997. The company is still in its developing stage and had
no active business operation as of June 30, 2002.


8
<PAGE>

                                  ALPHARX, INC.

                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 2002

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of ALPHARX, INC. is presented to
assist in understanding the Company's financial statements. The financial
statements and notes are representations of the Company's management who is
responsible for their integrity and objectivity. These accounting policies
conform to generally accepted accounting principles and have been consistently
applied in the preparation of the financial statements.

Cash and Cash Equivalent

For purpose of these statements, cash equivalent included cash on hand, cash in
bank, and all short-term debt securities purchased with a maturity of three
months or less.

Depreciation

The company's property, plant, and equipment are depreciated using the Modified
Accelerated Cost Recovery System Method, with recovery period of 3 years & 7
years.

Property and Equipment

Property and equipment are stated at cost. Depreciation is calculated by using
Modified Accelerated Cost Recovery System Method for financial reporting as well
as income tax reporting purposes at rates based on the following estimated
useful lives:

                  Automobiles                 5 years
                  Machinery and Equipment     3 years
                  Furniture and Fixtures      7 years
                  Improvements                10 years

The company capitalizes expenditures that materially increase assets' lives and
expense ordinary repairs and maintenance to operating as incurred. When assets
are sold or disposed or otherwise fully depreciated, the cost and related
accumulated deprecation are removed from the accounts and any gain or loss is
included in the statement of income and related earnings.


9
<PAGE>

                                  ALPHARX, INC.

                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                                  June 30, 2002

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued.)

Income Taxes

The company is a C Corporation that subjects to accrual of federal tax according
to tax laws. There is no income tax for year ended since the company was under a
development stage and did not have active business operations. The State of
Delaware does not impose tax on corporation net income.

NOTE 4. PROPERTY, PLANT & EQUIPMENT

                                                                     Life Year
                  Automobiles                            $ 22,067            5
                  Machinery & Equipments                  132,093            3
                  Furniture & Fixtures                     11,656            7
                  Improvements                              1,837           10
                                                         --------
                       Less accumulated depreciation       46,594
                                                         --------
                                                         $121,059

NOTE 5. COMMON STOCK

The Company is authorized to issue 100,000,000 shares of common stock. As of
June 30, 2002, 11,793,064 shares of such common stock had been issued and
outstanding, each share bears a par value of $0.0005.


10
<PAGE>

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATION

      The following discussion and analysis should be read in conjunction with
the Financial Statements, including the Notes thereto, appearing in this Form
10-QSB. Except for the historical information contained herein the foregoing
discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those projected
in the forward-looking statements discussed herein.

General

      We are a development stage drug delivery company specializing in the
development of innovative therapeutic products for the pharmaceutical and
consumer health care market. Our core competence is in the development of novel
drug formulations for therapeutic molecules or compounds that have exhibited
poor G.I. absorption due to poor solubility or have yet be administerable to the
human body with an acceptable delivery method. Our drug delivery system is
versatile and offers significant flexibility in the development of suitable
dosage formulations (i.e. oral, topical or parenteral) to meet the requirements
of specific drug molecules. Our primary activities since inception (August 7,
1997) have been, in addition to research and development, establishing our
offices and research facilities, recruiting personnel, filing patent
applications, developing a business strategy and raising capital.

      We began to test market several consumer health products to the Canadian
and US markets under the AlphaRx brand name in February 2002, via the company's
website at www.alpharxonline.com. Test marketing and additional clinical human
studies to substantiate expected marketing claims, including comparative
advertising claims, are expected to continue throughout 2002. Assuming the
successful completion of test marketing, a national roll-out of several
over-the-counter products are expected to occur in the fourth quarter of 2002,
at which time management anticipates the Company emerging from the development
stage.

      We intend to continue investing in the further development of our drug
delivery technologies and to actively seek collaborators and licensees to
accelerate the development and commercialization of products incorporating our
drug delivery systems. Depending upon a variety of factors, including
collaborative arrangements, available personnel and financial resources, we will
conduct or fund clinical trials on such products and will undertake the
associated regulatory activities.

RESULTS OF OPERATIONS

      The first nine months of fiscal year 2002 ending June 30, 2002 resulted in
a net loss $559,832 from operations as compared to $210,683 for the
corresponding fiscal 2001 period. The increase was primarily due to higher R&D
costs as a result of spending on pre-clinical and clinical development.


11
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

      Since inception, we have financed operations principally from the sale of
Common Stock and expect to continue this practice to fund our ongoing
activities.

      We incurred a net loss of approximately $559,832 for the nine months ended
June 30, 2002, resulting in an accumulated deficit of approximately $2,351,925.
We expect to continue to incur operating losses and may require additional
financing to continue our operations thereafter.

      We currently do not have sufficient resources to complete the
commercialization of any of our proposed products or to carry out our business
strategy. Therefore, we will likely need to raise substantial additional capital
to fund our operations sometime in the future. We cannot be certain that any
financing will be available when needed. Any additional equity financings may be
dilutive to our existing shareholders, and debt financing, if available, may
involve restrictive covenants on our business.

      We expect to continue to spend capital on:

      1.    research and development programs;

      2.    preclinical studies and clinical trials;

      3.    regulatory processes; and

      4.    manufacture and market products using our drug delivery systems.

      The amount of capital we may need will depend on many factors, including:

      1.    the progress, timing and scope of our research and development
            programs;

      2.    the progress, timing and scope of our preclinical studies and
            clinical trials;

      3.    the time and cost necessary to obtain regulatory approvals;

      4.    the time and cost necessary to establish our own sales and marketing
            capabilities or to seek marketing partners to market our products
            for us;

      5.    the time and cost necessary to respond to technological and market
            developments; and

      6.    new collaborative, licensing and other commercial relationships that
            we may establish.

      The inability to raise capital would have a material adverse effect on the
Company. We currently have no capital commitments other than the payment of rent
on our facilities lease.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

      AlphaRx is a development stage company. Certain of the information
contained in this document constitutes "forward-looking statements", including
but not limited to those with respect to the future revenues, our development
strategy, involve known and unknown risks, uncertainties, and other factors
which may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among others,
the risks and uncertainties associated with a drug delivery company which has
not commercialized our first product, including


12
<PAGE>

a history of net losses, unproven technology, lack of manufacturing experience,
current and potential competitors with significant technical and marketing
resources, need for future capital and dependence on collaborative partners and
on key personnel. Additionally, we are subject to the risks and uncertainties
associated with all drug delivery companies, including compliance with
government regulations and the possibility of patent infringement litigation, as
well as those factors disclosed in our documents filed from time to time with
the United States Securities and Exchange Commission.


13
<PAGE>

PART II: OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

      None.

ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS

      None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

      Not applicable.

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

      None.

ITEM 5 - OTHER INFORMATION

      None.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

      (a)   EXHIBITS.

            None.

      (b)   REPORTS ON FORM 8-K

            No reports on Form 8-K were filed during the quarter ended June 30,
            2002.


14
<PAGE>

                                   SIGNATURES:

      Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

DATED: August 13, 2002

                                           ALPHARx, INC.

                                        By: /S/ Michael M. Lee
                                            ------------------------------------
                                                Michael M.  Lee, President


                                        Directors:

                                            /S/ Michael M. Lee
                                            ------------------------------------
                                            Michael M.  Lee, Director

                                            /S/ Sai Ming Wong
                                            ------------------------------------
                                            Sai Ming Wong, Director

                                            /S/ Joseph Schwartz
                                            ------------------------------------
                                            Joseph Schwartz, Director

                                            /S/ Sandro Persia
                                            ------------------------------------
                                            Sandro Persia, Director


15