<SEQUENCE>1
<FILENAME>liquidix_10q-123102.txt

<PAGE>

       As Filed with the Securities and Exchange Commission on February 14, 2002

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB
                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                     FOR THE PERIOD ENDED DECEMBER 31, 2002

                           COMMISSION FILE NO. 0-28513

                             _______________________


                                 LIQUIDIX, INC.
                 (Name of Small Business Issuer in Its Charter)


                   FLORIDA                                     86-0000714
       (State or other jurisdiction of                      (I.R.S. Employer
       incorporation or organization)                     Identification No.)

         16648 E. LASER DRIVE, #9, FOUNTAIN HILLS, ARIZONA 85268
                    (Address of Principal Executive Offices)

                                 (480) 837-9007
                           (Issuer's Telephone Number)


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 at the latest practicable date.

As of February 14, 2003 the registrant had 13,681,387 shares of common stock,
$.001 par value, issued and outstanding.

Transitional small business disclosure format (check one): Yes [ ]  No [X]

================================================================================

<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.
                                                                    Page No.
                                                                    --------

         Balance Sheet                                               F-3
         Statements of Operations                                    F-4
         Statement of Stockholders' Equity                           F-5
         Statements of Cash Flows                                    F-8
         Notes to Financial Statements                               F-10

<PAGE>

<TABLE>
                                           LIQUIDIX, INC.
                                  (FORMERLY LEARNER'S WORLD, INC.)
                                    CONSOLIDATED BALANCE SHEETS
                         DECEMBER 31, 2002 (UNAUDITED) AND MARCH 31, 2002
<CAPTION>

                                               ASSETS

                                                                      December 31,
                                                                           2002                                            March 31,
                                                                       (Unaudited)                                         2002
                                                                      ------------                                   ------------
<S>                                                                   <C>                                         <C>
Current Assets
   Cash and cash equivalents                      $   47,890                                        $   445,690
   Accounts receivable, net                            623,312                                             438,977
   Inventory                                                    467,387                                             406,314
   Prepaid expenses                                            2,488                                                 --
   Note Receivable                                           16,500                                                 --
                                                                      ------------                                     ------------

             Total Current Assets                      1,157,577                                           1,290,981

Property and Equipment, net                          254,116                                               93,710

Acquisition Costs, net                                     136,571                                             192,346
Other Assets                                                      94,799                                               48,745
                                                                      ------------                                  ------------

             Total Assets                                 $ 1,643,063                                        $ 1,625,782
                                                               ============                          ============

                                LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
   Notes payable                                         $    87,787                                          $   253,375
   Accounts payable                                       534,539                                               549,787
   Accrued liabilities                                       245,125                                              267,379
   Obligation under capital lease                         6,630                                                 --
                                                                      ------------                                   ------------

             Total Liabilities                                  874,081                                         1,070,541
                                                                      ------------     ------------

Minority interest                                                17,512                                             17,512
                                                                      ------------                                  ------------

Commitments and Contingencies                       --                                                         --

Stockholders' Equity
   Common stock - $.0001 par value, 75,000,000 shares authorized,
      14,287,140 shares and 29,450,004 shares issued
      and 13,931,387 shares and 29,450,004 shares outstanding
                                                                                                   3,039                  2,945
   Additional paid-in capital                                                       4,092,919           3,238,442
   Accumulated deficit                                                              (3,396,705)         (2,714,884)
   Foreign currency translation adjustment                                     52,217                 11,226
                                                                                           ------------             ------------
                                                                                                     751,470                537,729
Less: treasury stock, 16,455,753 shares at cost                                --               --
                                                                                                  ------------     ------------

             Total Stockholders' Equity                                             751,470                537,729
                                                                                           ------------            ------------

             Total Liabilities and Stockholders' Equity              $  1,643,063           $ 1,625,782
                                                                                      ============     ===========

                  See Accompanying Notes to the Consolidated Financial Statements

                                                F-1
</TABLE>
<PAGE>

<TABLE>
                                               LIQUIDIX, INC.
                                      (FORMERLY LEARNER'S WORLD, INC.)
                                   CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
<CAPTION>

                           Three months ended December 31,     Nine months ended December 31,
                                             2002                 2001                        2002              2001
                                         (Unaudited)       (Unaudited)       (Unaudited)       (Unaudited)
                                        -------------     -------------     -------------     -------------
<S>                                     <C>               <C>               <C>               <C>
Sales                                   $    569,646      $    506,578      $  1,980,628      $  1,802,877

Cost of Sales                            326,656             287,533          1,105,398          1,042,287
                                             -------------         -------------        -------------         -------------

Gross Profit                              242,990             219,045             875,230           760,590

General and Administrative Expenses
                                                 253,807             630,018          1,395,395        1,394,108
                                             -------------         -------------        -------------        -------------

Income (Loss) from Operations
                                                (10,817)             (410,973)          (520,165)        (633,518)
                                              -------------         -------------         -------------       -------------

Other Income (Expenses)  \
      Interest income                        347                      102                    678               1,122
      Interest expense                (71,941)                 (4,036)          (162,334)            (5,540)
                                                      -------------     -------------     -------------     -------------

Total Other Income (Expense)
                                               (71,594)                  (3,934)          (161,656)           (4,418)
                                                     -------------     -------------     -------------     -------------

Net Income (Loss)
                                         $   ( 82,411)         $   (414,907)     $   (681,821) $    (637,936)
           =============     =============     =============     =============


Basic and Diluted Income (Loss) per
  Common Share                          $      (0.01)     $      (0.01)     $      (0.02)     $      (0.07)
                                        =============     =============     =============     =============

Weighted-Average Number of Common
  Shares Outstanding:
   Basic and Diluted                    29,798,575      28,458,063    29,458,063     9,520,516
                                        =============     =============     =============     =============

                      See Accompanying Notes to the Consolidated Financial Statements

                                                    F-2
</TABLE>
<PAGE>

<TABLE>
                                           LIQUIDIX, INC.
                                  (FORMERLY LEARNER'S WORLD, INC.)
                               CONSOLIDATED STATEMENTS OF CASH FLOWS
   FOR THE NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001UNAUDITED)
<CAPTION>

                                                                   December 31,      December 31,
                                                                       2002                     2001
                                                                   (Unaudited)        (Unaudited)
                                                                  --------------         --------------
<S>                                                               <C>                <C>
Cash flows from operating activities:
   Net loss                                                  $    (681,821)      $     (637,936)

Adjustments to reconcile net loss to net cash provided
  by operating activities:
       Depreciation and amortization                   70,026               337,720
       Net assets acquired in acquisition                 --                         --
       Amortization of loan discount                  139,133                   --
       Issuance of stock for consulting fees        251,600                   --
       Minority Interest                                                                     (2,006)
       Stock Issued for Debt                                                           305,500
Changes in assets and liabilities:
       Accounts receivable                                 (184,335)             277,301
       Inventory                                                  (161,073)               79,162
       Prepaid expenses                                          (2,488)           (132,032)
       Other assets                                                       --                   --
       Accounts payable                                       (61,302)            (420,690)
       Accrued liabilities                                      (22,254)             109,325
       Note Receivable                                         (16,500)                   --
   --------------     --------------

             Net cash provided (used) by operating activities
                                                                            (669,014)           (83,656)
                                                                        --------------     --------------

Cash flows from investing activities:
       Proceeds from sale of fixed assets                     --                      --
       Purchase of fixed assets                             (160,406)              (1,200)
                                                                      --------------        --------------

             Net cash provided (used) by investing activities
                                                                            (160,406)            (1,200)
                                                                  --------------     --------------

Cash flows from financing activities:
       Proceeds from debt                                        550,000     100,566
       Repayment of debt                                        (167,601)      (5,191)
       Proceeds from capital lease                                6,630            --
       Repayment of capital lease                                     --       (11,850)
                                                                  --------------          --------------

             Net cash provided (used) by financing activities
                                                                               389,029      83,525
                                                                       --------------     --------------

Effect of exchange rate changes on cash and intercompany
   accounts                                                               42,591        14,312
                                                                        --------------     --------------

Net decrease in cash and cash equivalents         (397,800)        12,981

Cash and cash equivalents at beginning of period            445,690       269,003
                                                                        --------------     --------------

Cash and cash equivalents at end of period $     47,890      $     22,297
                                                                  ==============     ==============

                  See Accompanying Notes to the Consolidated Financial Statements

                                                F-3
</TABLE>
<PAGE>

                                 LIQUIDIX, INC.
                        (FORMERLY LEARNER'S WORLD, INC.)
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)


                                                   December 31,   December 31,
                                                       2002                 2001
                                                    (Unaudited)     (Unaudited)
                                                   -------------   -------------

Supplemental disclosure of cash flow information:

   Interest paid                                   $      5,340    $      2,937
                                                   =============   =============

   Income taxes paid                          $         --       $         --
                                                   =============   =============


Non-cash investing and financing activities

   Common stock isued for consulting fees
                                                    $    251,600     $   --
                                                   =============   =============

   Amortization of loan discount      $     137,883    $         --
                                                   =============   =============

   Discount on note payable               $     550,000    $         --
                                                   =============   =============

   Stock issued for debt                        $     52,971    $          0
                                                   =============   =============

   Capital contribution                         $         --    $    903,014
                                                   =============   =============

         See Accompanying Notes to the Consolidated Financial Statements

                                       F-4
<PAGE>

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information. These statements do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the nine month period ended December 31,
2002 are not necessarily indicative of the results that may be expected for the
year ended March 31, 2003. The unaudited consolidated financial statements
should be read in conjunction with the audited financial statements and
footnotes thereto for the year ended March 31, 2002.

Merger

Effective October 1, 2001, Learner's World, Inc. ("LWI") acquired one hundred
percent (100%) of the outstanding common stock of Advanced Fluid Systems, Inc.
("AFS"), from its parent company Liquidics, Inc. ("LI"). The stockholders of LWI
received $400,000 and issued 27,000,000 common shares of LWI stock to LI. The
transaction was accounted for as a recapitalization with Liquidics, Inc. as the
accounting acquiror (a reverse merger), as LI's stockholders are the controlling
stockholders of the combined companies. The accompanying consolidated financial
statements of LWI include the accounts of AFS for all periods presented, and the
accounts of LWI from the effective date of the merger.

In conjunction with the merger, LWI changed its name to Liquidix, Inc.

During the three months ended December 31, 2002, Liquidics, Inc. returned
16,618,598 shares of common stock to treasury. No compensation was given for the
return of the common stock.


NOTE 2 - CONVERTIBLE DEBT

During the nine month period ended December 31, 2002, the Company secured
$550,000 in financing through the issuance of 8% Convertible Promissory Notes
$300,000 due May 9, 2004 and $250,000 due August 28, 2004. The notes may be
prepaid at any time, in whole or in part, without penalty. During the term of
the notes, the debtor has the option to repay the notes in cash, or by the
issuance of shares of Liquidix, Inc. common stock.

The holder of the notes may elect to convert the amount outstanding there under
into shares of common stock at any time during the term of the note and ending
upon the repayment in full of the principal, at a conversion price equal to the
lesser of $0.73 (on the $300,000 Convertible Promissory Note) and $0.30 (on the
$250,000 Convertible Promissory Note) or sixty percent (60%) of the average of

                                      F-5
<PAGE>

the three lowest closing bid prices for the common stock for the ten trading
days prior to but not including the conversion date. As of December 31, 2002
the company converted $52,971 of the principal balance. In addition, the Company
issued 753,000 common stock warrants with exercise prices of the lesser of $0.73
or sixty percent (60%) of the average of the three lowest closing bid prices for
the common stock for the ten trading days prior to but not including the
conversion date. The beneficial features of the notes resulted in a discount to
the notes of $550,000, which were recorded to additional paid-in-capital at the
time the notes was issued and is being charged to interest expense over the life
of the notes.


NOTE 3 - SUBSEQUENT EVENTS

None

                                      F-6
<PAGE>

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

WITH THE EXCEPTION OF HISTORICAL MATTERS, THE MATTERS DISCUSSED HEREIN ARE
FORWARD LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. FORWARD LOOKING
STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO STATEMENTS CONCERNING ANTICIPATED
TRENDS IN REVENUES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THE RESULTS
DISCUSSED IN SUCH FORWARD LOOKING STATEMENTS. THERE IS ABSOLUTELY NO ASSURANCE
THAT WE WILL ACHIEVE THE RESULTS EXPRESSED OR IMPLIED IN FORWARD LOOKING
STATEMENTS.

INTRODUCTION

The following discussion should be read in conjunction with our financial
statements and related notes included herein. Certain statements are not based
on historical facts, but are forward-looking statements that are based upon
assumptions about our future conditions that could prove to be inaccurate.
Actual events, transactions and results may materially differ from the
anticipated events, transactions or results described. Our ability to consummate
transactions and achieve events or results is subject to certain risks and
uncertainties, which include, but are not limited to, the existence of demand
for and acceptance of our products, regulatory approvals and developments,
economic conditions, the impact of competition and pricing, and other factors
affecting our business that are beyond our control.

We undertake no obligation and do not intend to update, revise or otherwise
publicly release the result of any revisions to forward-looking statements that
may be made to reflect future events or circumstances.

Although we incurred a significant loss in the current year we believe that the
introduction of our new generation of improved products to the consumer products
industry, provides an expectation that we will achieve profitability during
fiscal year 2002. The past year had an increase in financial and operational
overhead due to the merger with Advanced Fluid Systems, Inc. in October 2001.

RESULTS OF OPERATIONS THREE MONTH PERIOD ENDED DECEMBER 31, 2002 COMPARED TO THE
THREE MONTH PERIOD ENDED DECEMBER 31, 2001

Revenues for the three months ended December 31, 2002 were $569,646 as compared
to $506,578 for the same period ended 2001. The increase in sales, in the amount
of $63,066, or 12% was due to some product deliveries on hold being called for
and delivered. However the technology sector is continuing with its downturn as
there has been no significant increase in product orders.

Cost of sales for the three months ended December 31, 2002 were $326,656 as
compared to $287,533 in 2001. As of percentage of sales, cost of sales increased
from 56% for 2001 to 57% for 2002. The increase was primarily due to the
increased depreciation due to the purchase of factory equipment during the
relocation of facilities.

General and administrative expenses were $253,807 for December 31, 2002 as
compared to $630,018 for 2001. As of percentage of sales, general and
administrative expenses decreased from 124% in 2001 to 53% in 2002. This was due
to costs associated with various registration statements and consulting fees
incurred in 2001.

                                       3
<PAGE>

For the three months ended December 31, 2002, we incurred a net operating loss
of $10,817 or .001 per share compared to net operating loss of $410,973
or one cent per share for the three month period ended December 31,
2001. The loss for December 31, 2002 was primarily due to the final
relocation costs.

IMPACT OF INFLATION

We do not believe that inflation will have any material impact on the commercial
activities for the ensuing year, as our products do not fall under categories
that are traditionally affected.

RESULTS OF OPERATIONS NINE MONTH PERIOD ENDED DECEMBER 31, 2002 COMPARED TO THE
NINE MONTH PERIOD ENDED DECEMBER 31, 2001

Revenues for the nine months ended December 31, 2002 were $1,980,628 as compared
to $1,802,877 for the same period ended 2001. The increase in sales, in the
amount of $177,751, or 9% was due to some product deliveries on hold being
called for and delivered. However the technology sector is continuing with its
downturn as there has been no significant increase in product orders.

Cost of sales for the nine months ended December 31, 2002 were $1,105,398 as
compared to $1,042,287 in 2001. As of percentage of sales, cost of sales
increased to 59% for 2002 from 58% for 2001. The increase was primarily due
to the increase in packaging and shipping charges.

General and administrative expenses were $1,395,395 for December 31, 2002 as
compared to $1,394,108 for December 31, 2001. As of percentage of sales, general
and administrative expenses increased by less than 1%.

For the nine months ended December 31, 2002, we incurred a net operating loss of
$520,165 or one cent per share compared to a net operating loss of $653,518 or
two cents per share for the nine month period ended December 31, 2001.

IMPACT OF INFLATION

We do not believe that inflation will have any material impact on the commercial
activities for the ensuing year, as our products do not fall under categories
that are traditionally affected.

                                       4
<PAGE>

LIQUIDITY AND CAPITAL RESERVES

The primary roadblock facing our plans for growth is our need for capital. We
are actively seeking additional capital resources through the sale of equity.
With additional capital resources we expect to be able to expand our services
and products. At the present time we have adequate working capital for our
immediate business. Additional capital is needed for any and all expansion.
Historically, the Company's primary source of cash has been from operations and
debt financing by related parties.

Cash used by operating activities during the nine month period ending December
31, 2002 was $669,014, primarily the result of a net loss and increases in
accounts receivable, other assets and prepaid expenses in the amounts of
$599,410, 201,913 and $46,054, respectively. Cash provided by operating
activities during the nine month period ended December 31, 2001 was $34,428,
primarily the result of the decrease in accounts receivable, inventory and
accounts payable assets in the amounts of $184,335, $161,073 and $61,302
respectively.

Cash used in investing activities during the nine month period ended December
31, 2002 was $160,406 related to the purchase of property and equipment. Cash
provided by investing activities during the nine month period ended December 31,
2001 was $1,200 related to proceeds from the sale of property and equipment.

Cash provided by financing activities during the nine month period ended
December 31, 2002 was $387,029 related primarily to proceeds received from a
note payable. Cash used in financing activities during the nine month period
ended December 31, 2001 amounted to $83,525 related primarily to the repayment
of notes payable.

PLAN OF OPERATIONS FOR FISCAL YEAR 2003

We anticipate that as sales increase we will achieve profitability during fiscal
year 2003. Future activities will be directed towards expanding existing markets
for our products and penetrating new markets. We currently have operations in
the United States and in Great Britain. Future expansion plans will move us into
the Pacific Rim. Advanced Fluid Systems, Ltd., our subsidiary has received a
patent in Europe and the United States for its controllable fluid damper. This
special damper acts as a shock absorber. Instead of using a metal coil spring,
it uses the controllable fluid to soften the jolting effect felt now with a
conventional shock absorber. Prototypes and some additional testing are needed
before this product is marketable. Discussions have been held with a major
manufacturer to joint venture the final developing.

                                       6
<PAGE>

We do not manufacture our own magnetic fluid or controllable fluid for
production. Our present supplier of fluid has approached us with the possibility
of purchasing their company. The purchase of this company would eliminate any
probability of the loss of a critical part of our production process. We are in
active talks with our fluid supplier and terms should be worked out for the
purchase before the end of the year. The damper and purchase of our fluid
supplier will be put into operation if adequate funding is received. We have
sufficient cash flow to manage the day-to-day operations of completing all
ongoing orders. We have agreed upon terms with a private investor for funding.
In addition, we have entered into various consulting agreements to advise and
consult with the Company on certain business and financial matters in foreign
markets and for business development advisory services.


ITEM 3.  CONTROLS AND PROCEDURES

         As of December 31, 2002, an evaluation was performed under the
supervision and with the participation of the Company's management, including
the Chief Executive Officer and the Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. Based on that evaluation, the Company's management, including
the Chief Executive Officer and the Chief Financial Officer, concluded that the
Company's disclosure controls and procedures were effective as of December 31,
2002. There have been no significant changes in the Company's internal controls
or in other factors that could significantly affect internal controls subsequent
to December 31, 2002.

                                       7
<PAGE>

                                     PART II
                                OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

         From time to time we are subject to litigation incidental to our
business including possible product liability claims. Such claims, if
successful, could exceed applicable insurance coverage. We are not currently a
party to any legal proceedings that we consider to be material.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

PRIVATE PLACEMENTS OF COMMON STOCK AND WARRANTS FOR CASH

None.

SALES OF DEBT AND WARRANTS FOR CASH

None.

OPTION GRANTS

None.

ISSUANCES OF STOCK FOR SERVICES OR IN SATISFACTION OF OBLIGATIONS

None.

                                       8
<PAGE>

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         Not Applicable.

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

         Not Applicable.

ITEM 5.  OTHER INFORMATION

         None.

ITEM 6.  EXHIBITS AND REPORTS ON 8-K:

(a)      Exhibits.

Exhibit Number               Description
--------------               -----------

99.1              Certification of the President of Liquidix, Inc. Pursuant to
                  18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of
                  the Sarbanes-Oxley Act of 2002.

99.2              Certification of the Chief Financial Officer of Liquidix, Inc.
                  Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002.


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

                                       9
<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Exchange Act of 1933, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                      LIQUIDIX, INC., a Florida Corporation


Date:  February 14, 2003             By:  /s/ Perry Barker
                                           -------------------------------------
                                           Perry Barker, Chairman & President



Date: February 14, 2003               By:  /s/ Jenelle Ray
                                           -------------------------------------
                                           Jenelle Ray, Chief Financial Officer,
                                           Vice President, Secretary, Treasurer,
                                           and Director

                                       10