<PAGE>   1
                                  UNITED STATES
                       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, 1997

                                       or

            [ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
                                  EXCHANGE ACT
          For the transition period from             to
                                         -----------    --------------

                         Commission file number 0-29258

                               AQUAPRO CORPORATION
-------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


           Tennessee                                     62-1598919
           ---------                                     ----------
 (State or other jurisdiction                         (I.R.S. Employer
 of incorporation or organization)                    Identification number)

                  4307 Central Pike, Hermitage, Tennessee 37076
-------------------------------------------------------------------------------
             (Address and Zip Code of Principal Executive Offices)

Registrant's telephone number, including area code:             (615) 889-0804

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 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 [    ]

As of February 10, 1998, Registrant had outstanding 2,674,847 shares of common
stock, its only class of common equity outstanding.

Transitional Small Business Disclosure Format (Check one):   Yes [  ]   No [ X ]



<PAGE>   2



                                      INDEX


<TABLE>
<CAPTION>

PART I.   FINANCIAL INFORMATION
<S>      <C>                                                                     <C>
     Item 1.  Financial Statements                                               Page No.

              Condensed Consolidated Balance Sheets at December 31, 1997
              (Unaudited) and June 30, 1997 ....................................        3

              Condensed Consolidated Statements of Operations for the Three
              and Six Months Ended December 31, 1997 and 1996 (Unaudited) ......        5

              Condensed Consolidated Statements of Cash Flows for the Six
              Months Ended December 31, 1997 and 1996 (Unaudited) ..............        7

              Notes to Unaudited Condensed Consolidated Financial Statements ...        8

     Item 2   Management's Discussion and Analysis of Financial Condition
              and Results of Operations ........................................        9


PART II.  OTHER INFORMATION

     Item 1.  Legal Proceedings ................................................       14
                                                              
     Item 2.  Changes in Securities ............................................       14
                                                              
     Item 3.  Defaults Upon Senior Securities ..................................       14
                                                              
     Item 4.  Submission of Matters to a Vote of Security Holders...............       14
                                                              
     Item 5.  Other Information ................................................       14
                                                              
     Item 6.  Exhibits and Reports on Form 8-K .................................       14




                                                                                        2
</TABLE>
             


                                                                               





<PAGE>   3



                          PART I. FINANCIAL INFORMATION

Item 1.                    Financial Statements

                               AquaPro Corporation
                      Condensed Consolidated Balance Sheets


<TABLE>
<CAPTION>
                                                    December 31,      June 30,
                                                        1997           1997
                                                    -----------    -----------
                                                    (Unaudited)
<S>                                                 <C>            <C>        
Assets
Current assets:
 Cash and cash equivalents                          $   362,668    $   202,894
 Trade accounts receivable                              231,548        108,009
 Receivables from affiliates                             27,998         27,998
 Live fish inventories                                5,927,400      5,740,124
 Prepaid expenses                                        58,402         10,516
                                                    -----------    -----------
Total current assets                                  6,608,016      6,089,541
Property, buildings and equipment, net                5,774,446      5,639,753
Investments in cooperatives                           1,028,619        883,518
Delivery rights and other intangible assets, net         91,744        104,161
                                                    -----------    -----------
Total assets                                        $13,502,825    $12,716,973
                                                    ===========    ===========
</TABLE>



                                                                               3


<PAGE>   4








<TABLE>
<CAPTION>
                                                            December 31,    June 30,
                                                                1997          1997
                                                            ------------  -----------
<S>                                                         <C>           <C>        
Liabilities and stockholders' equity 
Current liabilities:
   Notes payable                                            $ 1,002,202   $   689,462
   Accounts payable                                             108,782       523,255
   Accrued salaries                                             229,994       239,994
   Accrued interest and other                                    39,248        74,628
   Current maturities of long-term debt                         340,965       272,258
                                                            -----------   -----------
Total current liabilities                                     1,721,191     1,799,597

Long-term debt, less current maturities                       3,024,563     4,102,980
                                                            
Stockholders' equity:
   Series A Preferred Stock, no par value 
   - authorized 1,900,000 shares,
   cumulative, convertible, issued and
   outstanding 590,623 at December 31, 1997 and 235,507       
   at June 30, 1997                                           4,584,708     1,837,408
   Preferred stock, par value to be determined by the
   Board of Directors - authorized 100,000 shares, none
   issued                                                            --           --
   Common stock, no par value - authorized 100,000,000
   shares, issued and outstanding 2,674,847 at December
   31, 1997 and 2,670,667 shares at June 30, 1997            10,604,534    10,588,311
   Unearned compensation                                        (65,624)     (126,563)
   Retained earnings (deficit)                               (6,366,547)   (5,484,760)
                                                            -----------   ----------
Total stockholders' equity                                    8,757,071     6,814,396
                                                            -----------   ----------
Total liabilities and stockholders' equity                  $13,502,825   $12,716,973
                                                            ===========   ===========

</TABLE>



See accompanying notes to unaudited consolidated financial statements.






                                                                               4

<PAGE>   5



                               AquaPro Corporation
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                        Three Months ended
                                                             December 31

                                                         1997            1996
                                                     -----------     -----------
<S>                                                  <C>             <C>        
Revenues:
Net sales                                            $   962,345     $ 1,178,073
Management fees from affiliates                               --           4,500
                                                     -----------     -----------
                                                         962,345       1,182,573

Cost of products sold                                    857,462       1,017,979
Selling, general and administrative                      449,259         426,237
                                                     -----------     -----------
Operating loss                                          (344,376)       (261,643)

Other (income) expense:
   Equity in losses on investment in cooperatives         27,112              --
   Interest expense                                      116,553         200,034
   Other, net                                            (47,079)        (63,078)
                                                     -----------     -----------
                                                          96,586         136,956
                                                     -----------     -----------
Net loss                                             $  (440,962)    $  (398,599)
                                                     ===========     ===========
Basic net loss per share                             $     (0.21)    $     (0.15)
                                                     ===========     ===========
Weighted average common shares outstanding             2,671,712       2,636,831
                                                     ===========     ===========
</TABLE>



See accompanying notes to unaudited consolidated financial statements.





                                                                               5

<PAGE>   6



                               AquaPro Corporation
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                            Six Months ended
                                                               December 31

                                                          1997            1996
                                                     -----------     -----------
<S>                                                  <C>             <C>        
Revenues:
Net sales                                            $ 2,255,788     $ 2,015,564
Management fees from affiliates                            1,500           9,000
                                                     -----------     -----------
                                                       2,257,288       2,024,564

Cost of products sold                                  1,948,472       1,911,495
Selling, general and administrative                      880,177         684,516
                                                     -----------     -----------
Operating loss                                          (571,361)       (571,447)

Other (income) expense:
   Equity in losses on investment in cooperatives         27,112          30,000
   Interest expense                                      212,187         325,804
   Other, net                                            (91,477)       (100,964)
                                                     -----------     -----------
                                                         147,822         254,840
                                                     -----------     -----------
Net loss                                             $  (719,183)    $  (826,287)
                                                     ===========     ===========
Basic net loss per share                             $     (0.33)    $     (0.32)
                                                     ===========     ===========
Weighted average common shares outstanding             2,671,264       2,614,699
                                                     ===========     ===========
</TABLE>



See accompanying notes to unaudited consolidated financial statements.







                                                                               6


<PAGE>   7





                               AquaPro Corporation
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                                Six months ended
                                                                  December 31

                                                              1997             1996
                                                          -----------     -----------

<S>                                                       <C>             <C>         
Net cash used in operating activities                     $(1,130,379)    $  (960,536)

Cash flows from investing activities:
Purchases of property and equipment                          (452,472)       (153,055)
Purchases of cooperative stock and related payments          (145,101)        (62,000)
                                                          -----------     -----------
Net cash used in investing activities                        (597,573)       (215,055)

Cash flows from financing activities:
Net increase in notes payable                                 312,740         185,270
Principal payments on long-term borrowings                   (174,912)       (370,576)
Proceeds from long-term borrowings                            149,216         148,874
Proceeds from issuance of preferred stock                   1,763,286         748,169
Payments of preferred stock dividends                        (162,604)         (5,225)
                                                          -----------     -----------
Net cash provided by financing activities                   1,887,726         706,512
                                                          -----------     -----------
Net increase (decrease) in cash and cash equivalents          159,774        (469,079)
Cash and cash equivalents at beginning of period              202,894       1,228,136
                                                          -----------     -----------
Cash and cash equivalents at end of period                $   362,668     $   759,057
                                                          ===========     ===========


Non-cash financing activities:                            
Conversion of long-term debt to Series A Preferred 
Stock                                                     $   984,014     $     --
                                                          ===========     ===========  
</TABLE>


See accompanying notes to unaudited consolidated financial statements.




                                                                               7


<PAGE>   8



                               AquaPro Corporation
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)
                                December 31, 1997

1.     Basis of Presentation of Unaudited Financial Statements

       The accompanying unaudited financial statements have been prepared in
       accordance with the rules of the Securities and Exchange Commission and,
       therefore, do not include all information and footnotes otherwise
       necessary for a fair presentation of financial position, results of
       operations and cash flows, in conformity with generally-accepted
       accounting principles. However, the information furnished, in the opinion
       of management, reflects all adjustments necessary to present fairly the
       financial position, results of operations and cash flows on a consistent
       basis. The results of operations are not necessarily indicative of
       results which may be expected for any other interim period or for the
       year as a whole.

2.     Long-Term Debt and Stockholders' Equity

       During the six months ended December 31, 1997, the Company commenced and
       completed an exchange offer to certain holders of its 10.35% investor
       notes payable. Each holder was offered 1.3 shares of Series A Preferred
       Stock for each $10 of notes held. The offer was made for a total of
       $1,147,513 of notes. In the aggregate, $984,014 of notes were exchanged
       for 127,922 shares of Series A Preferred Stock.

       Also during the six months ended December 31, 1997, the Company realized
       net proceeds of $1,763,286 from the sale of 227,194 shares of Series A
       Preferred Stock through its Preferred Stock Rights Offering.

2.     Basic and Diluted Net Loss per Common Share

       In 1997, the Financial Accounting Standards Board issued Statement of
       Financial Standards No. 128, Earnings per Share. Statement No. 128
       replaced the previously reported primary and fully diluted earnings per
       share with basic and diluted earnings per share. Unlike primary earnings
       per share, basic earnings per share excludes any dilutive effects of
       options, warrants, and convertible securities. Diluted earnings per share
       is very similar to the previously reported fully diluted earnings per
       share. All earnings per share amounts for all periods have been
       presented, and where necessary, restated to conform to the Statement No.
       128 requirements.

       Basic net loss per common share is computed by dividing net loss
       applicable to common stock (net loss less dividend requirements for
       Series A Preferred Stock of $121,310 and $162,604 in the three and six
       month periods ended December 31, 1997, respectively, and $5,225 in the
       three and six month periods ended December 31, 1996) by the weighted
       average number of common shares outstanding (2,671,712 and 2,671,264
       shares in the three and six month periods ended December 31, 1997,
       respectively, and 2,636,831 and 2,614,699 shares in the three and six
       month



                                                                               8


<PAGE>   9



       periods ended December 31, 1996, respectively). Diluted loss per common
       share has not been presented due to the antidilutive effects of
       outstanding stock options and warrants.





Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
                                 OF OPERATIONS

       This report contains forward-looking statements within the meaning of
       Section 27A of the Securities Act of 1933 and Section 21E of the
       Securities Exchange Act of 1934. Actual results could differ materially
       from those projected in the forward-looking statements as a result of
       certain factors including those set forth in this Item 2 and elsewhere
       in, or incorporated by reference into, this report. The Registrant has
       attempted to identify forward-looking statements in this report by
       placing an asterisk (*) following each sentence containing such
       statements.


       RESULTS OF OPERATIONS THREE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO
       THREE MONTHS ENDED DECEMBER 31, 1996

       REVENUE. Net sales during the three month period ended December 31, 1997
       totaled $962,345 compared to $1,178,073 for the same period in 1996. This
       represents a decline of $215,728 or 18.3%. Volume decreased 211,000
       pounds to 1,349,000 pounds of fish sold compared to 1,560,000 pounds sold
       during the three month period ended December 31, 1996. Accordingly,
       volume represented a 13.5% decline during the three months ended December
       31, 1997 compared to the same period in 1996. The remainder of the
       decline was due to a price decrease of approximately 5 cents a pound to
       71 cents realized in 1997 compared to 1996 when the average price of fish
       sold was 76 cents. This decrease in average price resulted from lower
       prices received by the Company's major customers from food distributors,
       restaurants, and grocers due to an increase in competitive pricing
       policies as processors attempted to increase their market share. The
       Company's major customers in turn passed on the lower prices to the
       catfish farmers, including the Company. However, in February 1998,
       prices began to rise and, currently, approximate 74 to 75 cents per
       pound. 

       Management expects to substantially increase sales beginning in the March
       1998 quarter due to the normal seasonal increase in demand during Lent.*
       Total sales for the March 1998 quarter should exceed the sales in the
       March 1997 quarter due to overall increased stocking and feeding levels
       during 1997 compared to 1996.*

       COST OF PRODUCTS SOLD AND MARGIN. Cost of Products Sold was $857,462, a
       decrease of $160,517 or 15.8% compared to the same three month period of
       1996, while net sales decreased 18.3%. Margin from fish sales was 10.9%
       during the three month period ended December 31, 1997 as compared to
       13.6% in the same period in 1996. Cost of Products sold is largely
       dependent on the Company's cost structure in the previous year due to the
       12 to 18 month grow out period required for fish to mature. The cost of
       feed was lower during the period affecting the




                                                                               9

<PAGE>   10



       quarter ended December 31, 1996 than the quarter ended December 31, 1997.
       Additionally, there was a 7% decline in average price in the quarter
       ended December 31, 1997 compared to the same period in 1996.

       SELLING, GENERAL AND ADMINISTRATIVE. Selling, General and Administrative
       expenses during the three month period ended December 31, 1997 were
       $449,259 or $23,022 higher than in the three month period ended December
       31, 1996. Legal and accounting fees increased in 1997 compared to the
       same period in 1996 as the Company prepared to become a public company
       registered with the Securities and Exchange Commission.

       DELTA PRIDE ASSESSMENT (EQUITY IN LOSSES ON INVESTMENT IN COOPERATIVE).
       During the three month period ended December 31, 1997, the Company
       recorded a net charge of $27,112 for its share of estimated losses of
       Delta Pride's operations. During the same period in 1996, there was no
       such adjustment. In January 1998, the Company made its final assessment
       payment to Delta Pride covering the year ended June 30, 1997. Such
       payments totaling $191,377 were made at various times from July 1997
       through the final payment in January 1998.

       INTEREST EXPENSE. Interest expense decreased $83,481 or 41.7% to $116,553
       in the three month period ended December 31, 1997 compared to the same
       period in 1996. Debt levels were lower during the 1997 period compared to
       1996 due to the conversion of $984,014 in debt to preferred stock during
       the quarter ended September 31, 1997. Also, interest rates were lower due
       to variable rate adjustments on certain debt effective January 1, 1997.
       Management anticipates slightly higher levels of debt and interest
       expense during the next four quarters due to funding certain capital
       expenditures.*

       SEASONALITY OF OPERATING RESULTS. In prior years, the revenues of AquaPro
       have fluctuated from quarter to quarter depending on stocking levels and
       results of feeding. Also, prices for live fish have tended to rise during
       the first part of the year and drift downward during the summer, only to
       rise again in September and October and fall in November and December
       before beginning the annual price cycle again. However, this did not
       occur in 1997 as prices fell in the early part of 1997 and have not fully
       recovered. Accordingly, interim operating results of the Company may vary
       from quarter to quarter and year to year and cannot be predicted with 
       certainty.*

       RESULTS OF OPERATIONS SIX MONTHS ENDED DECEMBER 31, 1997 COMPARED TO SIX
       MONTHS ENDED DECEMBER 31, 1996

       REVENUE. Net sales during the six month period ended December 31, 1997
       totaled $2,255,788 compared to $2,015,564 for the same period in 1996.
       This represents an increase of $240,224 or 11.9%. Volume increased
       524,000 pounds to 3,130,000 pounds of fish sold compared to 2,606,000
       pounds sold during the six month period ended December 31, 1996.
       Accordingly, volume represented a 20.1% increase during the six months
       ended December 31, 1997 compared to the same period in 1996. This volume
       increase was partially offset by a price decrease of approximately 5
       cents a pound to 72 cents realized in 1997 compared to 1996 when the
       average price of fish sold was 77 cents. This decrease in average price
       resulted from lower prices received by the Company's major customers from
       food distributors, restaurants, and grocers due




                                                                              10

<PAGE>   11



       to an increase in competitive pricing policies as processors attempted to
       increase their market share. The Company's major customers in turn passed
       on the lower prices to the catfish farmers, including the Company.
       However, in February 1998, prices began to rise and, currently,
       approximate 74 to 75 cents per pound.

       COST OF PRODUCTS SOLD AND MARGIN. Cost of Products Sold was $1,948,472 an
       increase of $36,977 or 1.9% compared to the same six month period of
       1996, while net sales increased 11.9%. Margin from fish sales was 13.6%
       during the six month period ended December 31, 1997 as compared to 5.2%
       in the same period in 1996. In the prior year, certain ponds were emptied
       for refurbishing and mortality adjustments of approximately $218,000 were
       recorded in Cost of Products Sold. Had these mortality adjustments not
       occurred, margin from fish sales would have been 16%. The higher margin
       from fish sales (without reserve and mortality adjustments) resulted from
       a lower average cost to produce fish in 1996. Cost of Products sold is
       largely dependent on the Company's cost structure in the previous year
       due to the 12 to 18 month grow out period required for fish to mature.
       The cost of feed was lower during the period affecting the six months
       ended December 31, 1996 than the six months ended December 31, 1997.
       Additionally, there was a 6% decline in average price in the six months
       ended December 31, 1997 compared to the same period in 1996.

       SELLING, GENERAL AND ADMINISTRATIVE. Selling, General and Administrative
       expenses during the six month period ended December 31, 1997 were
       $880,177 or $195,661 higher than in the six month period ended December
       31, 1996. This increase was primarily due to a 20.1% increase in volume
       of fish sold during the period as discussed above. Additionally, legal
       and accounting fees increased in 1997 compared to the same period in 1996
       as the Company prepared to become a public company registered with the
       Securities and Exchange Commission.

       DELTA PRIDE ASSESSMENT (EQUITY IN LOSSES ON INVESTMENT IN COOPERATIVE).
       During the six month period ended December 31, 1997, the Company recorded
       a net charge of $27,112 for its share of estimated losses of Delta
       Pride's operations. During the same period in 1996, the charge was
       estimated at $30,000. In January 1998, the Company made its final
       assessment payment to Delta Pride covering the year ended June 30, 1997.
       Such payments totaling $191,377 were made at various times from July 1997
       through the final payment in January 1998.

       INTEREST EXPENSE. Interest expense decreased $113,617 or 34.9% to
       $212,187 in the six month period ended December 31, 1997 compared to the
       same period in 1996. Debt levels were lower during the 1997 period
       compared to 1996 due to the conversion of $984,014 in debt to preferred
       stock during the quarter ended September 31, 1997. Also, interest rates
       were lower due to variable rate adjustments on certain debt effective
       January 1, 1997. Management anticipates slightly higher levels of debt
       and interest expense during the next four quarters due to funding certain
       capital expenditures.*

       SEASONALITY OF OPERATING RESULTS. In prior years, the revenues of AquaPro
       have fluctuated from quarter to quarter depending on stocking levels and
       results of feeding. Also, prices for live fish have tended to rise during
       the first part of the year and drift downward during the summer, only to
       rise again in September and October and fall in November and December
       before beginning the annual price cycle again. However, this did not
       occur in 1997 as prices fell in the early part




                                                                              11
<PAGE>   12



       of 1997 and have not fully recovered. Accordingly, interim operating
       results of the Company may vary from quarter to quarter and year to year
       and cannot be predicted with certainty.*

       LIQUIDITY AND CAPITAL RESOURCES

       As of December 31, 1997, the Company had a current ratio of 3.8 to 1, as
       opposed to 3.4 to 1 at June 30, 1997. Current assets exceeded current
       liabilities by $4,886,825 in December 1997 compared to $4,289,944 in June
       1997. Cash and cash equivalents increased during the six month period
       ended December 31, 1997 by $159,774.

       Cash and cash equivalents were used primarily to fund operating losses
       and grow live fish inventories. Life fish inventories increased by
       approximately $187,000 during the six month period ended December 31,
       1997. During the summer months and through the end of October, fish
       consume the greatest amount of feed in the year. Feed costs are added to
       inventory when purchased. The increase in inventory during the six months
       ended December 31, 1997 was about as expected by the Company.

       During the six month period ended December 31, 1997, the Company
       purchased approximately $452,000 in property and equipment. In August
       1997, the Company moved its administrative offices in Mississippi to one
       of its farms from an office facility it had previously shared with
       another catfish farming operation. This move required the purchase and
       installation of double wide mobile trailer homes on the Company's farm
       land in Sunflower, Mississippi. The total cost of this move was
       approximately $150,000, including the trailers, utility hook-ups, well
       construction, and ground preparation. For the fiscal year ending June 30,
       1998, the Company's capital budget was $1,350,000. To increase production
       capacity, certain major pond reworking programs were scheduled to be
       completed at a cost of $750,000. Additionally, equipment purchases to
       provide double aeration equipment to the refurbished ponds and to replace
       older vehicles and tractors were planned to total approximately $600,000.
       To conserve cash, the Company has substantially reduced its capital
       budget and now expects total capital expenditures to approximate $750,000
       for the year ending June 30, 1998.*

       During the six month period ended December 31, 1997, the Company realized
       net proceeds from the sale of preferred stock and additional long-term
       borrowings of $1,763,286 and $149,216, respectively. Short-term notes
       payable increased approximately $313,000 as the Company's feed credit
       lines increased by $63,000 and an additional short-term note of $250,000
       was made by the Company's bank in Mississippi. This short-term note is
       due in full in March 1998 with all accrued interest thereon at prime rate
       plus 165 basis points. The short-term note is secured by certain catfish
       farm real property. The Company expects to pay this note off on the due
       date. Additionally, in July 1997, officers and directors of the Company
       advanced $163,000 in short-term loans to the Company. These short-term
       officer and director advances were repaid in full in October 1997 with
       the proceeds from the Company's Preferred Stock Rights Offering. These
       funds were used to fund the Company's operations and to increase its
       inventory as discussed above. Additionally, principal payments totaling
       $174,912 were made to reduce long-term debt and preferred stock dividends
       of $162,604 were paid during the six months ended December 31, 1997.





                                                                              12

<PAGE>   13



       The Company intends to fund its operations primarily through fish sales,
       working capital, its feed credit line, and additional credit lines. On
       April 16, 1997, a $750,000 credit line was established with a bank in
       Mississippi as a revolving line of credit for catfish feed purchases.
       Borrowings are secured by shares of the Company's cooperative processing
       stock and all accounts receivable and live fish inventories on and
       related to seven of the Company's eight farms. Interest is paid monthly
       and principal is paid with 50 percent of all collections of accounts
       receivable from sales of the seven farms. Interest accrues at the prime
       rate plus 165 basis points and the commitment expires March 8, 1998 with
       no prepayment penalty. At December 31, 1997, the outstanding balance on
       this feed line was $463,992. The Company expects that this feed line will
       be paid off with proceeds from fish sales prior to the end of February
       and has been negotiating with this bank and other potential lenders to
       obtain a new credit facility of up to $2,500,000. However, as of February
       13, 1998, the bank has not yet agreed to renew the commitment or extend
       additional credit to the Company. The Company anticipates its cash needs
       during the six months ending June 30, 1998 will exceed its current
       borrowing capacity. It is anticipated any new credit facility will
       replace the feed line of credit mentioned above. The new credit facility,
       if obtained, will give the Company added flexibility to access funds for
       general corporate purposes in addition to catfish feed purchases.

       Moreover, the Company may require additional capital for growth through
       acquisition, which it may seek through equity or debt financing,
       collaborative arrangements with corporate partners, equipment lease
       financing or funds from other sources. No assurance can be given that
       these funds will be available to the Company on acceptable terms, if at
       all. In addition, because of the Company's need for funds to support
       future operations, it may seek to obtain funds when conditions are
       favorable, even if it does not have an immediate need for additional
       capital at such time.













                                                                              13








<PAGE>   14




PART II.       OTHER INFORMATION



Item 1.        Legal Proceedings

               None

Item 2.        Changes in Securities

               During the six months ended December 31, 1997, the Company
               commenced and completed an exchange offer to certain holders of
               its 10.35% investor notes payable. Each holder was offered 1.3
               shares of Series A Preferred Stock for each $10 of notes held.
               The offer was made for a total of $1,147,513 of notes. In the
               aggregate, $984,014 of notes were exchanged for 127,922 shares of
               preferred stock.

               Also during the six months ended December 31, 1997, the Company
               realized net proceeds of $1,763,286 from the sale of 227,194
               shares of Series A Preferred Stock through its Preferred Stock
               Rights Offering.

Item 3.        Defaults Upon Senior Securities

               None

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

               Exhibits:  27 Financial Data Schedule (SEC use only)

               Reports on Form 8-K:               None






                                                                              14


<PAGE>   15




                                   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.



                                       AquaPro Corporation
                                       (Registrant)

Dated:      February 13, 1998                  By: /s/ Eric P. Braschwitz
            -----------------                      -----------------------
                                               Chief Financial Officer
                                               and Secretary





















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