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: December 31, 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
incorporation or organization)                               Identification No.)

                             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, $.0001 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 February 17,
2002 was 16,318,885.

Transitional Small Business Disclosure Format. Yes |_|  No |X|

<PAGE>

                                  ALPHARx, INC.

                                   FORM 10-QSB

                                December 31, 2002


                                TABLE OF CONTENT

--------------------------------------------------------------------------------
DESCRIPTION                                                                 Page
--------------------------------------------------------------------------------
Part I            Financial Information
--------------------------------------------------------------------------------
Item 1            Financial Statements                                       3
--------------------------------------------------------------------------------
                  Unaudited Balance Sheets as of December 31, 2002 and 2001  4
--------------------------------------------------------------------------------
                  Unaudited Statements of Operations for the three
                  months ended December 31, 2002 and 2001                    5
--------------------------------------------------------------------------------
                  Unaudited Statements of Cash Flows for the three
                  months ended December 31, 2002 and 2001                    6
--------------------------------------------------------------------------------
                  Notes to the Financial Statements                          7
--------------------------------------------------------------------------------
Item II           Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                       12
--------------------------------------------------------------------------------
Part II           Other Information                                         15
--------------------------------------------------------------------------------
SIGNATURE PAGE                                                              16
--------------------------------------------------------------------------------

2
<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS


                                  ALPHARX, INC.
                          (A Development Stage Company)

                                 BALANCE SHEETS
                        AS OF DECEMBER 31, 2002 and 2001

                                     ASSETS

                                                        December 31  December 31
                                                           2002         2001
CURRENT ASSETS

   Cash                                                   $ 1,046      $ 4,626
   Accounts Receivable                                        835            0
   Prepaid Legal Fees                                      40,364            0
   Loan Payable                                                 0        2,928
   Due from officer                                            83        1,335
   Subscription Receivable                                 32,466            0
   Inventory                                               64,772       13,688
                                                         --------      -------

     TOTAL CURRENT ASSETS                                 139,566       22,577

PROPERTY, PLANT & EQUIPMENT, at cost

       Less accumulated deprecation of $58,305(note 4)    125,278
       Less accumulated deprecation of $35,367                         129,789
                                                                       -------

OTHER ASSETS

   Deposit
   Investment                                              20,000       46,408
                                                         --------      -------

TOTAL ASSETS                                             $284,844     $198,774
                                                         ========     ========


See accountant's review report
The accompanying notes are an integral part of this statement

3

<PAGE>

                      LIABILITIES AND SHAREHOLDERS' EQUITY

                                                    December 31     December 31
                                                         2002            2001
CURRENT LIABILITIES

   Accounts Payable and Accrued Liabilities         $    99,884     $    32,222
   Accrued Interest                                           0          15,285
   Salary Payable                                        60,000               0
   Sales Tax Payable                                        130               0
   Notes Payable                                         43,148         316,945
   Litigation Liabilities(note 9)                        25,000               0
                                                    -----------     -----------
        TOTAL CURRENT LIABILITIES                       228,162         364,452

LONG-TERM LIABILITIES

   Notes Payable                                         12,015


SHAREHOLDER'S EQUITY

Common Stock, common, $ 0.0001 par value,
   Authorized 100,000,000 shares, issued and
   outstanding 15,734,526 shares (note 5)           $     1,574
   Additional paid-in capital                         3,121,188
   Deficit                                           (3,078,095)
                                                    -----------
Common Stock, common, $0.0001 par value,
   Authorized 100,000,000 shares, issued and
   outstanding 53,984,723 shares                                    $     5,398
   Additional paid in capital                                         1,828,348
   Deficit                                                           (1,999,424)
                                                                    -----------
TOTAL SHAREHOLDER'S EQUITY                               44,667        (165,678)
                                                    -----------     -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY          $   284,844     $   198,774
                                                    ===========     ===========

See accountant's review report
The accompanying notes are an integral part of this statement


4

<PAGE>

                                  ALPHARX, INC.

                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS
              FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 and 2001


                                                             December 31
                                                          2002           2001
                                                       ---------      ---------
SALES                                                  $   1,854      $       0

COST OF SALES                                              1,463              0
                                                       ---------      ---------

          GROSS PROFIT                                       391              0

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES             267,724        207,331
                                                       ---------      ---------

         LOSS FROM OPERATION                            (267,333)      (207,331)

OTHER INCOME

   Interest Income                                     $       2      $       0
   Exchange Rate Gain                                        619              0
                                                       ---------      ---------
                                                             621              0

         LOSS BEFORE INCOME TAXES                       (266,712)      (207,331)


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

NET LOSS                                               $(266,712)     $(207,331)
                                                       =========      =========


5

<PAGE>


                                  ALPHARX, INC.
                          (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS
              FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 and 2001

<TABLE>
<CAPTION>
                                                                                        December 31
                                                                                     2002         2001
<S>                                                                               <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net Loss                                                                       $(266,712)   $(207,331)
   Depreciation Amount                                                                5,973        5,566

   Adjustments to reconcile note income to net cash
        Cash provided by operating activities:
           Change in Assets and Liabilities:
           Increase in Accounts Receivable                                             (835)           0
           Increase in Prepaid Legal Fees                                           (10,979)           0
           Increase in Accounts Payable                                              75,204        4,445
           Increase in Accrued Interest                                                   0        4,949
           Increase (Decrease) in Payroll Liabilities                                60,000     (278,000)
           Increase in Due from Officer                                                 (83)      (1,335)
           Increase in Loan Payable                                                       0       (2,928)
           Increase in Inventory                                                    (12,631)     (13,688)
           Increase in Sales Tax Payable                                                130            0
           Increase in Notes Payable                                                 10,491            0
           Increase (Decrease) in Notes Payable-Current                              (7,647)      67,191
                                                                                  ----------------------
NET CASH PROVIDED/(USED) BY OPERATIONS ACTIVITIES                                 $(147,089)   $(421,131)

CASH FLOWS FROM INVESTING ACTIVITIES
          Increase of Investments                                                   (20,000)           0
          Acquisition of Automobiles                                                (14,149)           0
                                                                                  ----------------------
NET CASH PROVIDED/(USED) BY INVESTING ACTIVITIES                                  $ (34,149)           0

CASH FLOWS FROM FINANCING ACTIVITIES
          Increase in Subscription Receivable                                       (32,466)           0
          Proceeds from Issuance of Stock                                                41          447
          Increase in Additional Paid-In Capital                                    223,911      441,569
                                                                                  ----------------------
NET CASH PROVIDED/(USDED) BY FINANCING ACTIVITIES                                 $ 191,486    $ 442,016

NET INCREASE (DECREASE) IN CASH                                                      10,248       20,885

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

CASH AS OF September 30, 2002 (2001)                                                 (9,202)     (16,259)
                                                                                  ----------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                        $   1,046    $   4,626
                                                                                  =========    =========
SUPPLEMENTARY DISCLOSURE:
</TABLE>

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


6

<PAGE>

                                  ALPHARX, INC.

                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 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 December 31, 2002
and 2001, the results of operations for the three months ended December 31, 2002
and 2001, and the cash flows for the three months ended December 31, 2002 and
2001, in conformity with generally accepted accounting principles. Operating
results for the three months period ended December 31, 2002 are not necessarily
indicative of the results that may be expected for the entire year ending
September 30, 2003 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 most recent
audited financial statements and notes thereto included in its September 30,
2002 Annual Report on Form 10-KSB.

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 an emerging pharmaceutical company
specializing in the formulation of therapeutic products using proprietary drug
delivery technologies. The company was formally known as LOGIC TECH
INTERNATIONAL, INC., and had its corporate name amended during the fiscal year
of 1998.


See accountant's review report


7

<PAGE>

                                  ALPHARX, INC.

                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 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 & 10
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              7 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.


See accountant's review report


8

<PAGE>

                                  ALPHARX, INC.

                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 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.

Research and Development (R&D)

All research and development cost were charged to expense for the period ended.
These costs included traveling to explore and evaluate new products and
negotiating marketing rights, products licensing, and various legal and
professional fees incurred for preparation of patent applications. A total of
$103,643 R&D expense had been spent during the interim period.

NOTE 4. PROPERTY, PLANT & EQUIPMENT

                                                    Life Year
Automobiles                         $ 36,216               5
Machinery & Equipments               133,875               7
Furniture & Fixtures                  11,656               7
Improvements                           1,836              10
                                    --------
     Less accumulated depreciation    58,305
                                    --------
                                    $125,278
                                    ========

NOTE 5. COMMON STOCK

The Company is authorized to issue 100,000,000 shares of common stock. As of
December 31, 2002, 15,734,526 shares of such common stock had been issued and
outstanding, each share bears a par value of $0.0001.


See accountant's review report


9

<PAGE>

                                  ALPHARX, INC.

                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2002

NOTE 6. STOCK OPTION PLAN

The Company has a Stock Option Plan (Plan) under which officers, key employees,
certain independent contractors, and non-employee directors may be granted
options to purchase shares of the Company's authorized but unissued common
stock. Since the fiscal year of 2001, the option plan was terminated and no
longer exercisable. Under the Plan, the option exercise price and its fair
market value are determined to be $0.05. Options currently expire no later than
10 years from the grant date and generally vest within five years. Proceeds
received by the Company from exercises of stock options are credited to common
stock and additional paid-in capital. Additional information with respect to the
Plan's stock option activity is as follows:


                                                                Weighted
                                                  Number of     Average
                                                  Shares        Exercise Price
                                                  ---------     --------------
Outstanding at June 20, 2000 (plan adoption)      1,600,000           $0.05
Granted                                           1,150,000           $0.05
Exercised                                                 0           $0.05
Cancelled                                           450,000           $0.05
                                                  ---------           -----
Outstanding at December 31, 2002                  1,150,000           $0.05
                                                  =========           =====
Options exercisable at December 31, 2002            862,500           $0.05
                                                  =========           =====

The Company has elected to follow APB Opinion No. 25 (Accounting for Stock
Issued to Employees) in accounting for its employee stock options. Accordingly,
no compensation expense is recognized in the Company's financial statements
because none of the vested options were exercised.

NOTE 7. PRIVATE PLACEMENT

The Company did a Private Placement, under which shareholders within the
placement were granted warrants to purchase shares of the Company's authorized
but unissued common stock at $1.10 per share. The private placement was done at
$0.55 per share with one warrant. The warrant will expire on November 30, 2003.
As of December 31, 2002, 290,275 shares were issued under the Private Placement.


See accountant's review report


10

<PAGE>

                                  ALPHARX, INC.

                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2002

NOTE 8. NOTES PAYABLE

At December 31, 2002, the Company has a note payable of $55,163. This note is
unsecured and bears interest at 0%-11% per annum. $43,148 of the notes payable
has been classified as current in the accompanying Balance Sheets because
repayment is anticipated from January 2, 2003 to September 30, 2003.

NOTE 9. LITIGATION LOSS

The Company is a defendant in a lawsuit, filed by a prospective investor
alleging breach of contract, which seeks damages totaling $25,000. Due to the
fact that we had failed to obtain a legal opinion from the Company's counsel,
the entire claim is accrued in the financial statements.

NOTE 10. COMMITMENTS

Leases

The Company leased its computer until August 31, 2005 and the aggregate minimum
monthly payments due are as follows:

                         Year                      Amount
                         ----                      ------
                         2004                     $  937
                         2003                     $1,022
                         2002                     $1,022

The Company leased its automobile until October 31, 2006 and the aggregate
minimum monthly payments due are as follows:

                         Year                      Amount
                         ----                      ------
                         2006                      $  284
                         2005                      $3,403
                         2004                      $3,403
                         2003                      $3,403
                         2002                      $3,658


11

<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. Test marketing and
additional clinical human studies to substantiate expected marketing claims,
including comparative advertising claims, are expected to continue throughout
2003. Assuming the successful completion of test marketing, a national roll-out
of several over-the-counter products are expected to occur in mid 2003, 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 three months of fiscal year 2003 ending December 31, 2002
resulted in a net loss $266,712 from operations as compared to $207,331 for the
corresponding fiscal 2002 period. The increase was primarily due to higher R&D
and general administrative costs as a result of spending on clinical development
and marketing.

LIQUIDITY AND CAPITAL RESOURCES


12

<PAGE>

      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 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. establishment of our own pilot scale manufacturing and marketing
capabilities or a search for third party manufacturers and marketing partners to
manufacture and market our products for us.

      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 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


13

<PAGE>

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.


14

<PAGE>

PART II: OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

      Farhad Walji vs. AlphaRx, Inc. and AlphaRx Canada Limited filed in the
Supreme Court of British Columbia on August 23, 2002. Farhad Walji has filed a
claim asking for $25,000 plus interest for allegedly providing $20,000 pursuant
to a subscription agreement to purchase common shares of AlphaRx's stock and
damages resulting from lost opportunity. The Company has denied any liability in
this case and is currently defending this action vigorously. Nonetheless, the
value of the entire claim has been accrued in our financial statements as a
contingent liability.

ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS

      During the three months ended December 31, 2002, we have issued or sold an
aggregate of 407,185 common shares to foreign investors under Regulation S for a
total amount of $233,952 that were not registered under the Securities Act of
1933, as amended.

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.

          10.1     2003 Stock Incentive Plan
          99       Certification

      (b) REPORTS ON FORM 8-K

          No reports on Form 8-K were filed during the quarter ended
          December 31, 2002.


15

<PAGE>

                                   SIGNATURES:

      Pursuant to the requirements 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: February 14, 2003


                                          ALPHARx, INC.

                                       By: /S/ Michael M. Lee
                                          ----------------------------
                                       Michael M.  Lee, Chief Executive
                                       Officer and Chief Financial Officer

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant, in
the capacities, and on the dates, indicated.

DATED: February 17, 2003

                                       Directors:


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


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


                                       /S/ Joseph Schwarz
                                       ----------------------------
                                       Joseph Schwarz, Director


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


16

<PAGE>

                                INDEX TO EXHIBITS

EXHIBIT
NO.               DESCRIPTION
-------           -----------

10.1              2003 Stock Incentive Plan

99                Certification of Michael Lee pursuant to Section 1350 of
                  Chapter 63 of Title 18 United States Code.


17