UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                                   (Mark One)

|X|   Quarterly report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934 for the Quarterly Period Ended March 31, 2003 or

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

                         Commission File Number: 0-24736

                    BIOPROGRESS TECHNOLOGY INTERNATIONAL, INC

                            (Exact name of registrant
                          as specified in its charter)

            Nevada                                        88-0361701
(State of other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization

9055 Huntcliff Trace
Atlanta, Georgia                                         30350-1735
(Address of principal executive offices)                 (Zip code)

                                 (770) 649-1133
              (Registrant's telephone number, including area code)
              ----------------------------------------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:

Yes |X| No |_|

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

As of June 10, 2003 there were 100 shares of common stock outstanding.

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE
PART I - FINANCIAL INFORMATION.................................................2

Item 1.  Financial Statements (Unaudited)......................................2

         Consolidated Balance Sheets as at March 31, 2003 and
         December 31, 2002.....................................................2

         Consolidated Statement of Operations for the three months ended
         March 31, 2003 and 2002...............................................3

         Consolidated Statement of Cash Flows for the three months ended
         March 31, 2003 and 2002...............................................4

         Notes to Financial Statements (unaudited).............................6

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations.................................................8

Item 3.  Quantitative and Qualitative Disclosures About Market Risk...........13

PART II - OTHER INFORMATION...................................................16

Item 6.  Exhibits and Reports on Form 8-K.....................................16

         SIGNATURES..........................................................S-1

<PAGE>

This filing includes interim financial statements as of March 31, 2003 and for
the three months then ended that have not been reviewed by an independent public
accountant because the company has no statutory requirement to have its
quarterly financial statements reviewed. No auditor has reported that it is not
aware of any material modifications that should be made to such consolidated
financial statements for them to be in conformity with accounting principles
generally accepted in the United States.

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

           BIOPROGRESS TECHNOLOGY INTERNATIONAL, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                           March 31, 2003         December 31, 2002
                                                                             (unaudited)
                                                                           --------------         -----------------
                                                                             $                       $
<S>                                                                          <C>                     <C>
CURRENT ASSETS
Cash and cash equivalents                                                         21,648                  11,396
Marketable securities                                                                 --                      --
Accounts receivable                                                               74 656                  39,243
Amounts due from related parties                                                 363,386                 340,535
Prepaid expenses and other current assets                                        300,393                 197,137
                                                                             -----------             -----------

Total current assets                                                             760,083                 588,311

FIXED ASSETS
Property, plant and equipment, net                                               487,018                 570,316

EQUITY INVESTMENTS, net                                                                0                      --

Other long term assets                                                           394,682                 394,682

INTANGIBLE ASSETS
Trademarks, licenses, patents, net                                                20,218                  20,894
Goodwill                                                                       4,088,369               4,088,369
                                                                             -----------             -----------
TOTAL ASSETS                                                                   5,750,370               5,662,572
                                                                             ===========             ===========
CURRENT LIABILITIES
Bank overdraft                                                                   460,722                 644,823
Accounts payable                                                               1,205,132               1,122,648
Amounts owed to related parties                                                  301,862                 381,134
Accrued rent deposit                                                             394,682                 394,682
Accrued expenses and other current liabilities                                 2,121,665               1,276,574
Unit penalty liability                                                         1,071,750                 535,875
Income tax payable                                                               165,365                 168,462
Deferred tax liability                                                            29,923                  30,484
                                                                             -----------             -----------
Total liabilities                                                              5,751,101               4,554,682
                                                                             -----------             -----------

Redeemable convertible preferred stock, Series B, par value $2.50                764,960                 764,960
                                                                             -----------             -----------
                                                                                 764,960                 764,960
                                                                             -----------             -----------

STOCKHOLDERS' EQUITY Common stock, $0.001 par value:
75,000,000 shares authorized
50,570,867 shares issued and outstanding (2002:50,120,846)                        50,656                  50,121

Additional paid-in capital                                                    29,203,271              28,742,177
Accumulated deficit                                                          (30,256,768)            (28,691,539)
Accumulated other comprehensive income                                           237,150                 242,171
                                                                             -----------             -----------
TOTAL STOCKHOLDERS' EQUITY                                                       765,691                 342,930
                                                                             -----------             -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                     5,750,370               5,662,572
                                                                             ===========             ===========
</TABLE>

THE ACCOMPANYING NOTES FORM AN INTEGRAL PART OF THESE STATEMENTS.


                                        2
<PAGE>

           BIOPROGRESS TECHNOLOGY INTERNATIONAL, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                             Three Months Ended March 31,
                                                                              2003                    2002
                                                                          $                       $
<S>                                                                        <C>                     <C>
Net revenues                                                                   50,738                 112,211

COSTS AND EXPENSES

Costs of revenues                                                                  --                  47,405

Depreciation                                                                   74,121                 103,623

Research and development                                                       55,837                  19,865

Amortization of intangible assets                                                 676                 337,250

Professional fees                                                             182,800                 194,985

Realized and unrealized loss (profit) on marketable securities                     --                 (20,450)

General and administrative expenses                                         1,300,465                 505,761
                                                                          -----------             -----------
Total cost and expenses                                                     1,613,899               1,188,439
                                                                          -----------             -----------

Profit (Loss) from operations                                              (1,563,161)             (1,076,228)

Loss on sale of fixed assets                                                       --                (216,252)

Share of loss from equity investment                                                0                 (81,865)
                                                                          -----------             -----------

Net profit (loss)                                                          (1,563,161)             (1,374,345)

Dividend payable and accretion of preferred stock                              (2,068)               (175,345)

                                                                          -----------             -----------

Net profit (loss) applicable to common stockholders                        (1,563,161)             (1,549,690)
                                                                          ===========             ===========

Net profit (loss) per common share - basic and diluted                          (0.03)                  (0.03)
                                                                          ===========             ===========
Weighted average number of common shares - basic                           50,493,611              47,770,968
                                                                          ===========             ===========
</TABLE>

THE ACCOMPANYING NOTES FORM AN INTEGRAL PART OF THESE STATEMENTS.


                                        3
<PAGE>

           BIOPROGRESS TECHNOLOGY INTERNATIONAL, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENT OF CASH FLOW

<TABLE>
<CAPTION>
                                                                                   (Unaudited)
                                                                           Three months ended March 31,
                                                                            2003                   2002
                                                                         $                      $
<S>                                                                      <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Net loss                                                                 (1,563,161)            (1,374,345)

Adjustments to reconcile net loss to net cash
used in operating activities
Impairment of goodwill                                                           --                167,706
Depreciation and amortization                                                74,797                196,943
Share of loss of associate                                                        0                 81,865
Realized and unrealized loss on marketable securities                            --                (20,450)
Loss on disposition of fixed assets                                              --                216,252

Changes in operating assets and liabilities:
Accounts receivable                                                         (35,413)                68,374
Net amounts receivable from related parties                                (102,123)                26,511
Prepaid expenses and other current assets                                  (103,256)               (23,762)
Deferred revenue                                                                 --                (33,400)
Accounts payable                                                             82,484                279,358
Accrued expenses and other current liabilities                            1,774,098                148,077
                                                                         ----------             ----------

Net cash provided by (used in) operating activities                         125,358               (266,871)
                                                                         ==========             ==========

Cash flows from investing activities:
Purchases of property and equipment                                          (1,066)              (112,584)
Amounts advanced to equity investment                                             0                (28,000)
Dividends paid                                                               (2,068)               (13,118)
                                                                         ----------             ----------

Net cash used in investing activities                                        (3,134)              (153,702)
                                                                         ==========             ==========

Cash flows from financing activities:

Proceeds from sale of new units                                                  --                361,072
Bank overdraft                                                             (184,101)                    --
                                                                         ----------             ----------

Net cash provided by (used in) financing activities                        (184,101)               361,072
                                                                         ----------             ----------

Effects of exchange rate changes on cash and cash equivalents                72,129                149,886
                                                                         ----------             ----------

Net increase (decrease) in cash and cash equivalents                         10,252                 90,385

Cash and cash equivalents, at beginning of period                            11,396                  5,851
                                                                         ----------             ----------

Cash and cash equivalents, at end of period                                  21,648                 96,236
                                                                         ==========             ==========
</TABLE>


                                        4
<PAGE>

           BIOPROGRESS TECHNOLOGY INTERNATIONAL, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF CASH FLOW (CONTINUED)

                                                           (Unaudited)
                                                   Three months ended March 31,
                                                       2003            2002
                                                     $                $
CASH PAID (RECEIVED) DURING THE PERIOD FOR
Interest                                              10,983            203
Income taxes                                              --             --


                                        5
<PAGE>

           BIOPROGRESS TECHNOLOGY INTERNATIONAL, INC. AND SUBSIDIARIES

                    Notes to Financial Statements (Unaudited)

In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation of the financial
condition of registrant have been included.

Note 1. A summary of significant accounting policies is currently on file with
the U.S. Securities and Exchange Commission in registrant's Form 10-KSB, which
is incorporated herein by reference. Certain reclassifications have been made to
the 2002 financial statements to conform to the 2003 presentation.

Note 2. The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and do not include all information
and footnotes required by generally accepted accounting principles in the United
States for complete financial statements.

Note 3. In July 2001, the Financial Accounting Standards Board issued Statements
of Financial Accounting Standards No. 141, Business Combinations (FAS 141) and
No. 142, Goodwill and Other Intangible Assets (FAS 142). FAS 141 requires all
business combinations initiated after June 30, 2001 to be accounted for using
the purchase method. Under FAS 142, goodwill and intangible assets with
indefinite lives are no longer amortized but are reviewed annually (or more
frequently if impairment indicators arise) for impairment. Separable intangible
assets that are not deemed to have indefinite lives will continue to be
amortized over their useful lives (but with no maximum life). The amortization
provisions of FAS 142 apply to goodwill and intangible assets acquired after
June 30, 2001. With respect to goodwill and intangible assets acquired prior to
July 1, 2001, the Company adopted FAS 142 effective January 1, 2002 and
continues to adopt FAS 142 in 2003

In June, 2002, the FASB issued Statement 146, "Accounting for Costs Associated
with Exit or Disposal Activities". SFAS 146 replaces previous accounting
guidance provided by EITF 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring)", and requires companies to recognize costs
associated with Exit or disposal activities only when a liability for these
costs are incurred (subsequent to a commitment to a plan) rather than at the
date of a commitment to an exit or disposal plan. Examples of costs covered by
the Statement include lease termination costs and certain employee severance
costs that are associated with a restructuring, discontinued operations, plant
closings, or other initiated after December 31, 2002. Although management
believes the adoption of SFAS 146 will not have a material impact on the
Company's financial statements, adoption of the Statement will result in timing
differences in the recognition and measurement of expenses relating to exit and
disposal activities.


                                       6
<PAGE>

Note 4. During the first and subsequent quarters of 2002, the Company has
entered into agreements with various accredited investors for the issue of
1,294,352 shares of common stock and 2,125,500 warrants, exercisable at various
prices for a term of five years, for cash consideration totaling $792,136. The
agreements are pursuant to an offering by the Company for the sale up to 600
"units" of its equity at a price of $5,000 per unit. Each unit is comprised of
7,500 shares of unregistered common stock and 6 warrants, each such warrant
expiring on December 31, 2006 and each exercisable for 2,500 common shares at
purchase prices which range from $1.00 up to $10.00. The Company committed to
have declared "effective" the registration of the common shares issued in this
offering by September 30, 2002, or otherwise issue an additional 1/10th unit (to
a maximum of 90%) for each full month beyond that date through such time as
declaration of effectiveness has been achieved. On May 22, 2003 the Company
merged with Bioprogress Holdings Inc. a wholly owned subsidiary of BioProgress
PLC the holders of the Company's common stock received ordinary shares in
BioProgress PLC in exchange for their common stock pursuant to this merger. The
issue of the ordinary shares was registered with the SEC on a Registration
Statement on form F-4 which was declared effective by the SEC on May 16, 2003.
Thus the Common Stock sold in the unit were effectively registered in
satisfaction of the Company's obligations set out in this Note 4.

5.    On June 9, 2003, the litigation commenced against the Company by Fusion
      Capital Fund II, LLC ("Fusion") was decided by the court. The decision was
      in favor of the Company and dismissed Fusion's complaint with prejudice.

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS

The following description of "Management's Plan of Operation" constitutes
forward-looking statements for purposes of the Securities Act and the Exchange
Act and as such involves known and unknown risks, uncertainties and other
factors that may cause our actual results, performance or achievements to be
materially different from future results, performance or achievements expressed
or implied by such forward-looking statements. The words "expect", "estimate",
"anticipate", "predict", "believes", "plan", "seek", "objective" and similar
expressions are intended to identify forward-looking statements. Important
factors that could cause the actual results, performance or achievement to
differ materially from our expectations include the following:

      (1) one or more of the assumptions or other factors discussed in
      connection with particular forward-looking statements prove not to be
      accurate;

      (2) we are unsuccessful in increasing sales through our anticipated
      marketing efforts;

      (3) mistakes in cost estimates and cost overruns with respect to our
      products or services;

      (4) our inability to obtain financing for general operations including the
      marketing of our technology and products, and acquisitions;

      (5) non-acceptance, generally of our technology or one or more of our
      products in the marketplace for whatever reason;

      (6) our inability to supply any of our technology or products to meet
      market demand;

      (7) generally unfavorable economic conditions that would adversely effect
      purchasing decisions by purchasers of our technology or distributors,
      resellers or consumers of products using out technologies;

      (8) development of a similar competing product at a similar price point;

      (9) the inability to negotiate a favorable agreement for or to adequately
      protect our intellectual property;

      (10) if we experience labor and/or employment problems such as the loss of
      key personnel, inability to hire and/or retain competent personnel;

      (11) if we experience unanticipated problems and/or force majeure events
      (including but not limited to accidents, fires, acts of God etc.), or we
      are adversely affected by problems of our suppliers, shippers, customers
      or others; and

      (12) our revenues could be negatively affected by the loss of a major
      client.

      All written or oral forward-looking statements attributable to us are
expressly qualified in their entirety by such factors. We undertake no
obligation to publicly release the result of any revisions to these
forward-looking statements which may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.

The following discussion should be read in conjunction with our Unaudited
Consolidated Financial Statements, including the notes thereto.

Overview

We are a company engaged primarily in the research, development, manufacturing,
marketing, sales and distribution of products that use water soluble and
biodegradable films for the dietary supplement, pharmaceutical, recreational and
cosmetic industries and other applications. Our research and development
operations are located in the United Kingdom. During 2002, 2001 and 2000 our
primary focus remained and remains on the development and commercialization of
our unique and proprietary process, the XGel(TM) film system.

We generate revenues from fees pursuant to research and development contracts,
licensing the rights to use our intellectual property in the XGel(TM) film
system, the sale of the XGel(TM) film systems, the sale of XGel(TM) film to use
in the film systems and research and development services to assist customers in
gaining maximum benefit from


                                       7
<PAGE>

the license. Revenues from license arrangements and the sale of XGel(TM) film
system are recognized when there is persuasive evidence of an agreement with a
customer, collectibility is probable and the fee is fixed or determinable, and
we have no continuing obligations. These factors vary by contract, but generally
revenue is recognized over the term of the contract either time base or on some
milestone basis. Revenues from research and development contracts are recognized
ratably over the period to which the contract relates, unless significant
acceptance criteria exist. If acceptance criteria exist, revenues are recognized
upon the earlier of customer acceptance or the expiration of the acceptance
period. With certain contracts, revenues are recognized on a milestone basis,
when there is persuasive evidence of customer acceptance.

We currently have agreements with Peter Black and Farmasierra providing for the
purchase of XGel(TM) film systems, the future supply of film for use in the film
systems and license agreements to allow them to use XGel(TM) technology in their
products . Apart from the XGel(TM) film systems which they have already
committed to purchase, the recognition of revenues from the contracts is
dependent upon them beginning production of consumer products incorporating
XGel(TM) film in commercial quantities at which time we would begin to recognize
revenues from the sale of film and in royalty payments under licenses. In
addition we have previously completed, and are currently working on, development
contracts with a number of customers. Pursuant to these contracts we design and
develop consumer products (sometimes adapted from existing products) which use
XGel(TM) technology. The contracts usually involve our producing and testing
samples. In addition to receiving specified payments for completing this
development work, we hope that successful completion of these development
contracts will lead to execution of license, film supply and film system
agreements as development customers put the new or adapted products into
commercial production.

We have entered into an exclusive agreement with Convatec to commercialize our
flushable and biodegradable ostomy pouch. We are not obligated to fund the
commercialization of this product further although as part of the amendments to
our agreements with EcoProgress we agreed to pay EcoProgress a royalty of 5% of
all proceeds we receive on any account from our ostomy products up to a maximum
cumulative amount of US $1,000,000.

Since inception, we have incurred substantial operating losses and we expect
operating losses to continue in the near term as we continue our product
development efforts, conduct trials and undertake marketing and sales activities
for the XGel(TM) film system. Our ability to achieve profitability is dependent
upon our ability to successfully execute our marketing and sales plan for the
XGel(TM) film system and various versions of XGel(TM) film, and to complete in
an efficient and timely manner development work on other versions of the
XGel(TM) film system.

We continue to review our operations -- in particular, the projects and products
under development being undertaken together with a full review of our overheads
with regard to cash burn, financial resources and the amount of funds required
until cash flow break-even. As a result of this review, projects and product
development have been re-prioritized with a view to bringing those projects to
market more quickly which will have a positive cash flow impact. As an
indication of the depth and quality of our intellectual property rights and
products in various stages of development, we did not feel that any projects
should be shelved completely as all the projects could earn significant future
revenues for our business. We have decided to seek third party investors or
joint venture partners for certain projects to mitigate current cash outflows
and to bring these projects to commercialization more quickly.

On May 22, 2003, we completed the merger with BioProgress Holdings a wholly
owned subsidiary of BioProgress PLC which merger accomplished the
reincorporation of the BioProgress group into England. On May 22, 2003
BioProgress PLC successfully completed its proposed listing on the Alternative
Investment Market (AiM) of the London Stock Exchange. Immediately prior to being
admitted to AiM, BioProgress PLC raised (pound)5,000,000 (approximately
$8,150,000) by way of a private placement of its ordinary shares of common stock
with institutions in the UK. Graham Hind was appointed Chairman, Chief Executive
Officer and President to replace Barry J. Muncaster who resigned from the
Company and has taken semi-retirement. Mr. Muncaster will continue to assist the
Company as a part-time consultant for a period of at least one year.

As of June 13, 2003, our cash at bank balance was (pound)58,000.08 (equivalent
to approximately $87,000). We no longer have need for a bank overdraft facility,
so we have cancelled this arrangement., we now receive support from our parent
company Bioprogress PLC.

We have reported earlier that BioProgress Technology International's directors
and the directors of all of our operating subsidiaries had taken a 66.6% pay cut
for the twelve month period commencing July 1, 2001, after which period the
salaries would be reviewed. During 2002, Jade International, a related party,
paid $200,000 directly to a director his accrued salary upon his departure form
BioProgress because BioProgress did not have sufficient cash to make the payment
at that time. Jade has recharged this payment to us, and our balance due from
them has been reduced. We have conducted such a review and will retain the pay
cut for the foreseeable future. The London office,


                                       8
<PAGE>

opened in early 2001, has been closed and the Norwood Road premises were leased,
then sold during the first quarter of 2002 to The Healthy Forum Limited, which
resulted in a loss on sale of $117,000. We have gradually reduced cash burn from
operations throughout the final six months of 2001 and through the four quarters
of 2002 and we intend to closely control and plan our cash outlay moving
forward. We believe that we continue to manage our working capital effectively.

On September 9, 2002 Ms. Elizabeth Edwards, Group Accountant, agreed to act as
the Company's Chief Financial Officer.

On July 28, 2002 we received notice from Arthur Andersen that its business would
cease to exist on July 31, 2002 and, therefore, it would resign as our auditors
effective that date. We appointed Grant Thornton to succeed Arthur Andersen as
auditors on November 14, 2002.

Research and Development Projects

The following table summarizes information relating to the material ongoing
research and development projects. The table presents for such groups of
projects, the amounts spent in each of the fiscal years 2003, 2002 and 2001
together with our current expectation for completion of these projects and
current expectations when such projects will begin generating revenues

<TABLE>
<CAPTION>
Project                       Amount of R&D
                              Expenditure for   Amount of R&D        Amount of R&D      Expected Date   When Revenue
                              the three month   Expenditure for      Expenditure for    of Completion   is Expected to
                              Period ending     the Year Ended       the Year Ended     of Project      be Realized
                              March 31, 2003    December 31, 2002    December 31, 2001                  from Project
<S>                                  <C>                  <C>            <C>              <C>                <C>
Liquid Fill Encapsulation            $47,653              $67,551        $ 1,191,138       On going          2003
Powder & Solid Encapsulation           4,684               17,895             27,311       On going          2004
Ostomy                                 3,500                2,547              6,850      End of 2003        2003
                              ------------------------------------------------------
                                     $55,837              $87,994        $ 1,225,299
                              ======================================================
</TABLE>

The above information is based on our current expectations and the results of
the projects thus far and is also contingent on our ability to continue to
devote the cash and other resources to such projects. We cannot assure you that
any of these projects will be completed successfully or even if completed
successfully that customers will decide to commercialize products that are
developed. Thus, even if successful, such projects may not necessarily lead to
our recognizing license, film or film system revenue.

Comparison of the Period for the quarter ended March 31, 2003 to the Quarter
ended March 31, 2002

Consolidated Statement of Operations

As discussed above our operations were streamlined during fiscal year 2002 to
reduce cash burn and conserve resources and are expected to remain stabilized at
current levels in terms of premises and other overhead, primarily through the
reduction of research and development expenditure. We expect to recruit between
10 and 15 additional research, design and production engineering staff during
the third quarter of 2003 in order to deliver contracts in hand and in
negotiations.

Revenues

Our total revenues for the period ended March 31, 2003 were $50,738 compared to
$112,211 for the period ended March 31, 2002.

The following is a summary of major contracts signed during the first quarter of
2003, and years 2002 and 2001 that have had a major impact on our revenues and
which are expected to lead to the generation of material revenues in 2003.

On May 21, 2002 we announced that we had executed another new product
development agreement with Boots. This is the second agreement with Boots and is
separate from the first agreement executed in October 2000, which has progressed
to Stage 3 as announced by us during April 2002. Once again the aim is to
develop a range of innovative new consumer products utilizing our unique
XGel(TM) film system. This new agreement will focus on the new NRobe(TM) version
of the XGel(TM) technology. For commercial reasons the specific products and
categories are


                                       9
<PAGE>

confidential. Boots will pay us $100,000 in two installments pursuant to our
agreement at key stages in the products development.

On May 23, 2002 we announced we had gained Kosher approval for our XGel(TM) film
system. Dayan M. D. Elzas, Rabbi in charge of the Kashrus Board of the
London-based Federation of Synagogues issued a letter stating the XGel(TM) film
system is capable of Kosher Certification. After thorough research into both
ingredients and manufacturing processes, Dayan M. D. Elzas concluded that the
XGel(TM) film system is suitable for Kosher purposes. Our customers will be able
to apply for Kosher Certification, which will be readily forthcoming provided
their own products meet the necessary requirements.

On August 27, 2002 we announced that we had executed an amendment to the license
agreement held by Consolidated EcoProgress Technologies. We waived all
outstanding royalties due to us from EcoProgress and agreed to waive all future
royalties that would accrue in respect of sales of all products produced by
EcoProgress under the terms of an exclusive license agreement. In addition, we
and EcoProgress agreed to a mutual release of all obligations under the Research
and Development Agreement between the parties. In consideration of our agreement
to amend the exclusive license agreement, EcoProgress has irrevocably waived any
and all rights it may have or may have had to participate in the ownership and
commercialization of BioProgress' technology as employed in ostomy products.
BioProgress will pay EcoProgress a royalty of 5% of all proceeds it receives on
any account from its ostomy products to a maximum cumulative amount of US
$1,000,000.

On August 30, 2002 we executed a worldwide exclusive license agreement, ending
April 17, 2021, in respect of a variation of our flushable and biodegradable
technology with Convatec, a division of a major medical device manufacturer. As
a result of this agreement, we have ceased exploring commercial opportunities
for our ostomy pouch. For the time being, details of the Worldwide Exclusive
License agreement are to be held in strictest confidence at the request of our
Licensee. We will receive a license fee related to sales of ostomy products
containing our technology. On September 30, 2002 we announced that we had
executed a new product development agreement with a global pharmaceutical
company for up to $200,000 paid in four equal installments on commencement of
each optional development program undertaken in the agreement.

On November 27, 2002 we executed a contract with a potential customer whereby
the potential customer paid us $500,000 for certain rights to evaluate certain
of our technologies. Under certain circumstances we may be required to refund
this amount and therefore this has been recorded as other liability until we
have determined that it could be earned as revenue.

On December 18, 2002 we executed a new product development agreement with a
global pharmaceutical company for $40,000 of which $20,000 has been paid and the
remainder is to be paid when we deliver specified sample products.

On January 29th 2003, we executed an agreement with Farmasierra to supply a full
scale XGel(TM) NRobe system.Farmasierra paid $1,000,000 in advance to finance
the build of its system.

We are continuing to work with major international corporations engaged in
pharmaceuticals, consumer durables and confectionery products to determine the
suitability of the XGel(TM) film system to replace traditional encapsulation
processes and, in some cases, to facilitate new product development not possible
with competitive technologies. Most, if not all of our customers are the owners
of major product brands. Market sensitivities surrounding such brands call for a
high degree of confidentiality. We respect the needs of our customers and
therefore refrain from naming them unless we have their full prior approval to
do so.

Cost of Revenues

Our cost of revenues decreased from $47,405 in the first quarter of 2002 to $Nil
in quarter one of 2003. Due to the nature of our sales and because our
development costs are expensed as incurred, our cost of revenues do not
correlate to our revenues. The cost for 2002 primarily consisted of expenditures
made by our subsidiary ProDesign Technology Limited , including direct labor
costs of $25,081. The remaining expense in 2002 included materials purchased by
the ProDesign division to complete a consulting contract in place at the time of
acquisition and direct materials purchased for use in the XGel(TM) film system..
We do not expect to incur material cost of revenue expense until we begin
shipment of XGel(TM) film systems to customers, or unless we enter into
additional revenue based development agreements with our customers.


                                       10
<PAGE>

Research and Development Expenditure

Research and development expenditure in the first quarter of 2003 increased from
$19,865 in 2002 to $55,837 in the first quarter of 2003. A significant portion
of our research and development expenses are dependent on the requirements of
our customers. During 2003 and 2002, we have expensed as operating costs most
continuing research and development expenditures, and intend to capture as cost
of revenues only those expenses directly related to inventory of film and film
systems and the sale thereof and identifiable costs of development contracts.

General and Administrative Expenses

General and administrative expenses have increased to $1,558,062 in 2003 from
$1,121,169 in 2002. The material balances classified within general and
administrative expenses are discussed below:

Directors and senior management costs

Payments in relation to directors and senior management services have increased
to $261,462 during the first quarter of 2003 from $132,397 in the corresponding
period of 2002. Since July 1, 2001, the salaries of directors were cut by two
thirds and all bonus provisions reversed for a period of twelve months, at which
time the salaries were subsequently reviewed again and the status quo
maintained. All directors salaries were reviewed, hence the increase in the
quarter. Graham Hind has now been appointed Chairman, Chief Executive Officer
and President of the Company.

Staff related costs

Staff related costs, which consist primarily of salary costs (other than
directors and senior management), recruitment, and travelling have increased to
$281,041 in the first quarter of 2003 from $236,159 in the comparable period of
2002. This increase is a result of increases in the headcount as we develop
different variations of the XGel(TM) film system and an increase in travelling
costs.

Other general and administrative costs

Other costs within the general and administrative area have increased to
$765,962 in the first quarter of 2003 from $137,205 in the corresponding quarter
of 2002. The following are the major reasons for the changes:

      o     During 2003 we incurred a non-cash penalty of $535,875 related to
            common stock unit holders for our delay in filing a registration
            statement; there was no such expense in the first Quarter of 2002.

      o     Other expenses within this category include such items as office
            overheads (rent, stationery, maintenance and similar categories) and
            were approximately the same as 2002, although individual items may
            have fluctuated in line with our expectations due to our review of
            operations in 2002 and implementation of cost reductions during
            2003.

General administration charges are likely to increase in the short term as a
result of our review of operations and recruitment of extra staff &
Consultants.. However we continue to make efforts to minimize day-to-day
overheads and periodic reviews of overhead costs continue to be undertaken
internally, to ensure all costs are reasonable.

Amortization and depreciation

Depreciation expense is $74,121 in the first quarter of 2003 compared to
$103,623 in the 1st quarter of 2002. During Q1 2002 we owned a building, that
was subsequently sold, In Q1 2002 their was a depreciation charge for the
building.

Amortization on intangibles decreased from $337,250 in 2002 to $676 in 2003.

Amortization of goodwill was zero in 2003 as we adopted the provisions of SFAS
142 on January 1, 2002 and accordingly no longer amortize goodwill.

Under SFAS 142, we are required to review the goodwill for impairment. During
2002, we impaired goodwill by a total of $826,550, which was due to a $167,606
impairment of ProDesign Technology Limited and $432,844 on BioProgress
Technology, and $226,100 in DHA Nutrition Limited. The impairments were due to
technological changes and advancements throughout the year.


                                       11
<PAGE>

Realized and unrealized profit on marketable securities

A profit of $20,450 was recognized during the first quarter of 2002 as compared
to a Nil in 2003. We have now disposed of all marketable securities. The
holdings were sold to provide working capital.

Professional Fees

Professional fees decreased to $182,800 in the first three months of 2003 from
$194,985 in the comparable period of 2002.

Loss from Operations

The result of the above is that a net loss from operations of $1,563,161 was
generated in the quarter ending March 2003 compared to a loss of $1,076,228 in
the same period of 2002, a change of $486,933. The increase in Loss is due to
higher revenue in 2002 & higher general and Administration costs in 2003. We
expect that costs will stabilize during the forthcoming quarters as a result of
management review of operations measures and controls implemented and as we
begin delivering XGel(TM) machines.

Share of Loss of Equity Investment

During the first three months 2003 our share of the losses were $117,925
compared to $81,865 in Q1 2002. Due to the continued loss, we have written off
our net investment including advances to Healthy Forum during 2002.

The Healthy Forum was formed to build a global well-being brand in the
complimentary medical and specialty food sectors. The principal products of The
Healthy Forum are feminine hygiene, beneficial foods and vitamins, minerals and
supplements. In April 2001, we increased our shareholding in The Healthy Forum
from 29.9% to 46.6% by way of $120,000 cash and $500,000 settlement of debt.
Additionally, we provided The Healthy Forum with cash loans since that time. As
previously reported, The Healthy Forum served notice on the Company alleging
that the 5,843,750 shares of The Healthy Forum owned by the Company are partly
paid and requested the payment of $526,910, failing which, the shares owned by
the Company would be forfeited. We vehemently disputed this allegation and
served The Healthy Forum with a Statement of Claim demanding, inter alia, that
it withdrew its allegation. Subsequently, we filed an application with the High
Court in London seeking a declaration that the 5,843,750 shares of The Healthy
Forum owned by the Company had been issued and fully paid. On May 27, 2003 the
High Court granted summary judgment in our favor and awarded our costs in the
matter. We intend to pursue our rights as shareholders to the full extent of the
law.

Provision for Income Taxes

During 2002, BioProgress Technology Limited generated taxable profits and as a
result we have recorded a provision for UK taxes of $158,613. We have provided a
100% valuation allowance against the deferred tax asset arising on the net
operating losses in the US due to the uncertainty of their ultimate realization.

Dividends Payable and Accretion of Preferred Stock

During the quarter ended March 2003 a charge of $2,068 was recorded, as compared
to $175,345 for 2002.

                         LIQUIDITY AND CAPITAL RESOURCES

Since its inception, we have financed our operations primarily through the
private sale of preferred stock to accredited investors and more recently
through sales of common stock units on a private placement basis.


                                       12
<PAGE>

Starting in February, 2002, the Company has entered into agreements with certain
accredited investors for the issue of 1,070,750 shares common stock and
2,141,500 warrants, exercisable at various prices for a term of five years, for
cash consideration totaling $713,500, which was received in the first half of
2002. The agreements are pursuant to an offering by the Company for the sale up
to 600 "units" of its equity at a price of $5,000 per unit. Each unit is
comprised of 7,500 shares of unregistered common stock and 6 warrants, each such
warrant expiring on December 31, 2006 and each exercisable for 2,500 common
shares at purchase prices which range from $1.00 up to $10.00. The company
believes the warrants currently have a nominal fair value and accordingly no
fair value has been assigned to the warrants issued. The Company committed to
have declared "effective" the registration of the common shares issued in this
private placement by September 30, 2002, or otherwise issue an additional 1/10th
unit (to a maximum of 90%) for each full month beyond that date through such
time as declaration of effectiveness has been achieved. On May 21, 2003 the
Company merged with BioProgress PLC following BioProgressPLC's Form-4 being
declared effective by the SEC on May 16, 2003. On completion of the merger with
BioProgress PLC all of the Company's shares were effectively registered in
satisfaction of the Company's obligations set out in this Note 4.

We are in discussion with several parties regarding joint ventures, license
agreements and distribution agreements for XGel(TM) FS and derived products. On
November 27, 2002 we executed an agreement with a potential customer who paid
$1,500,000, for the right to evaluate our technology in September we are
required to discuss our ability to repay this amount if the customer has not
entered into a binding agreement by time.

On May 22, 2003 we completed our reincorporation into England and BioProgress
PLC, our new parent company, completed a private placement of ordinary shares to
UK institutional investors. The private placement raised (pounds) 5 million
((pounds) 4 million net of commissions, costs and expenses (approximately $ 6
million)). The funds raised will be used to fund operations of our business.

The Company may require additional financing in order to fund the growth
potential of the Company. Management estimates that additional financing may be
required to fulfill the Company's working capital requirements for a period up
to the point at which net sales revenues could sustain the Company's day to day
operations and also enable the Company to further accelerate its growth both
organically and maybe through acquisition. In the event that additional funding
is required.

                               EXERCISE OF OPTIONS

On November 18, 2002 certain directors and officers exercised options to
purchase common shares of the Company as follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
Name                   Position           Options Exercised at $0.35  Options Exercised at $0.75
---------------------------------------------------------------------------------------------------
<S>                    <C>                          <C>                          <C>
Barry J. Muncaster     Chairman & CEO               100,000                      20,000
---------------------------------------------------------------------------------------------------
Graham R. Hind         Director                     100,000
---------------------------------------------------------------------------------------------------
Malcolm D. Brown       Director                     100,000                      20,000
---------------------------------------------------------------------------------------------------
</TABLE>


                                       13
<PAGE>

                                LEGAL PROCEDINGS

On October 4, 2002 we received notice from The Healthy Forum (THF) calling on
the Company to pay (pound)337,459.71($526,909.59) in respect of its 5,843,750
shares of THF, which THF has alleged are partly paid. On October 28, 2002 we
served notice on THF that we intended to petition the court seeking an
injunction to restrain THF from taking any action to forfeit our shares. Upon
receiving such notice THF agreed to defer any action in respect of its
allegations pending resolution of the claim. Subsequently, we filed an
application with the High Court in London seeking a declaration that the
5,843,750 shares of The Healthy Forum owned by the Company had been issued and
fully paid. On May 27, 2003 the High Court granted summary judgment in our favor
and awarded our costs. We intend to pursue our rights as shareholders to the
full extent of the law.

On February 24,2003, Fusion filed suit against us in the Circuit Court of Cook
County Illinois, Chancery Division. Fusion alleges that despite the facts that
the Commitment Shares were never registered and Fusion terminated the agreement,
BioProgress had a duty to remove the restrictive legend. Fusion seeks
declaratory judgment and unspecified damages. On June 9, 2003 the court ruled in
our favor and dismissed Fusion's claims with prejudice.

Item 2 Changes in Securities

On May 22, 2003, the company completed its reorganisation and reincorporation
into the UK, on that date the company merged with Bioprogress Holdings Inc, a
wholly owned subsidiary of Bioprogress PLC, company organised in the UK. The
company survived the merger as a subsidiary of Bioprogress PLC. Each share of
Series B preference stock and common stock of the company was converted pursuant
of the merger into one preference share of ordinary share as applicable of
Bioprogress PLC. The shares of Series C preferred stock remained outstanding,
Bioprogress PLC's ordinary shares are admitted to trading on the Alternative
Investment Market of the London Stock Exchange.


                                       14
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a. Exhibits

The following exhibits are included herein:

3.1         Articles of Incorporation(5)

3.2         Bylaws(2)

4.1         Specimen Share certificate(1)

10.1        Reorganization Agreement between the Company and BioProgress
            Technology.(4)

10.2        Acquisition Agreement--DHA Nutrition(5)

10.3        Acquisition Agreement--BioProgress Limited (UK)(5)

10.4        Amendment to Acquisition Agreement--BioProgress Limited(1)

10.5        Employment Agreement--Malcolm D. Brown(5)

10.6        Employment Agreement--Edward I. Nowak(5)

10.7        Employment Agreement--Graham Hind(5)

10.8        Professional Services Agreement--The Jade Partnership International,
            Inc.(5)

10.9        Professional Services Agreement--Company and Ormiston-Gore
            Securities Limited(5)

10.10       Professional Services Agreement--BioProgress Technology Limited and
            Ormiston-Gore Securities Limited(5)

10.11       TruTona Purchase Agreement(5)

10.12       Exclusive Evaluation Agreement, dated February 18, 2000 between the
            Company and the Fortune 500 company(6)

10.13       Technology Collaboration Agreement for the Development of
            Non-Gelatin Paintballs, dated March 7, 2000 between the Company and
            JT USA(6)

10.14       Agreement for Supply of Prototype Machine, dated July 24, 2000
            between the Company and Peter Black(7)

10.15       Machine Supply Agreement, dated July 24, 2000 between the Company
            and Peter Black(7)

10.16       Patent License Agreement, dated July 24, 2000 between the Company
            and Peter Black(7)

10.17       Guarantee by BioProgress Technology Limited in favor of Peter Black,
            dated July 24, 2000(7)

10.18       Option Agreement--Barry J. Muncaster(7)

10.19       Option Agreement--Edward Nowak(7)

10.20       Option Agreement Gregory L. Bowers(7)

10.21       Option Agreement--Graham R. M. Hind(7)

10.22       Option Agreement--James T. C. Longley(7)

10.23       Option Agreement--Larry C. Shattles(7)

10.24       Option Agreement--Malcolm D. Brown(7)

10.25       Stock Purchase Agreement--Fusion Capital(7)

10.26       Premises lease--Hostmoor property(8)

10.27       Agreement to lease--Hostmoor property(8)

10.28       Agreement for Supply of Prototype Machine, dated July 10th, 2001
            between the Company and Farmasierra, S.A.(8)

10.29       Machine Supply Agreement, dated July 10th, 2001 between the Company
            and Farmasierra, S.A.(8)

10.30       Patent License Agreement, dated July 10th, 2001 between the Company
            and Farmasierra, S.A.(8)

10.31       Film Supply Agreement, dated July 10th, 2001 between the Company and
            Farmasierra, S.A.(8)

10.32       Consultant Supply Agreement, dated July 10th, 2001 between the
            Company and Farmasierra, S.A.(8)

10.33       2002 Common Stock Offering of up to 600 units, including warrants(8)

10.34       Product Development Agreement, dated November 26, 2001 between the
            Company and Boots(9)

10.35       Product Development Agreement (Stage 1), dated April 19, 2002
            between the Company The Boots Company plc(9)


                                       15
<PAGE>

10.37       License Agreement between Convatec, a division of E.R. Squibb & Sons
            LLC and BioProgress Technology International, Inc. dated 28 August
            2002 together with an amendment dated 11 November 2002(9) *

10.38       Agreement and Plan of Merger among BioProgress PLC, BioProgress
            Holdings, Inc. and the Company dated December 20, 2002 and amendment
            No.1 thereto dated February 28, 2003(9)

10.39       Joint Development Agreement between BioProgress Technology
            International, Inc. and Farmasierra, S.A. dated January 29, 2003(9)

10.40       Loan Agreement between BioProgress Technology International, Inc.
            and Farmasierra, S.A. dated January 29, 2003(9)

10.41       Memorandum of variation between BioProgress Technology
            International, Inc. and Consolidated EcoProgress Technology Inc.(9)

(1)         Filed as an exhibit to the Company's Registration Statement on Form
            10-KSB dated August 23,1994, or October 21, 1994 (Registration No.
            0-24736).

(2)         Filed as an exhibit to the Company's Form 10-KSB for the year ended
            December 31, 1995.

(3)         Filed as an exhibit to the Company's Form 10-KSB for the year ended
            December 31, 1996

(4)         Filed as an exhibit to the Company's Form 10-KSB for the year ended
            December 31, 1997.

(5)         Filed as an exhibit to the Company's Form 10-KSB for the year ended
            December 31, 1998.

(6)         Filed as an exhibit to the Company's Form 10-KSB for the year ended
            December 31, 1999.

(7)         Filed as an exhibit to the Company's Form 10-KSB for the year ended
            December 31, 2000.

(8)         Filed as an exhibit to the Company's Form 10-KSB for the year ended
            December 31, 2001.

(9)         Filed as an exhibit to the Registration Statement/Proxy Statement of
            BioProgress PLC and BioProgress Technology International Inc. filed
            December 20, 2002 and amended March 19, 2003, May 7, 2003 and May
            16, 2003 (Registration Number 333-102045).

----------

*     Certain portions of the identified Exhibit have been omitted and
      separately filed with the Commission based upon a request for confidential
      treatment.


                                       16
<PAGE>

b. Form 8-K

No reports on Form 8-K were filed during the three months ended March 31, 2003.

                                       17
<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.

                   BioProgress Technology International, Inc.
                                  (Registrant)


Date: June 17, 2003                   By: /s/ R. Graham Hind
                                          --------------------------------------
                                              R. Graham Hind
                                              Chief Executive Officer


                                       S-1
<PAGE>

Certification Pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act
                              of 1934, as amended

I, Graham Hind, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Bioprogress
      Technology International Inc;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

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

Date: June 17, 2003


                                                 By: /s/ Graham Hind
                                                     Graham Hind
                                                     Chief Executive Officer

I, Elizabeth Edwards, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Bioprogress
      Technology International Inc.;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

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

Date: June 17, 2003


                                                 By: /s/ Elizabeth Edwards
                                                     Elizabeth Edwards
                                                     Chief Financial Officer