<PAGE>
                      U.S. SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(X)     QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR 15(d) OF THE SECURITIES
        EXCHANGE  ACT  OF  1934

(   )   TRANSACTION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE
        SECURITIES  EXCHANGE  ACT  OF  1934

For  Quarter  Ended:                           Commission  File  Number:
  March  25,  2003
                              NEW DRAGON ASIA CORP.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

     FLORIDIA                                               88-0404114
-----------------                                -------------------------------
(State  or  other  jurisdiction  of     (IRS  Employer  Identification  Number)
incorporation  or  organization)

                          Room 1304 13/F Wing On Centre
                           111 Connaught Road Central
                           Sheung Wan, Hong Kong 33301
--------------------------------------------------------------------------------
(Address  of  Principal  Executive  Offices)              (Zip  Code)

                                 (852) 2815-9892
--------------------------------------------------------------------------------
              (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 filing requirements
for the past 90 days.
                                    Yes X     No
                                   ----          ----

The number of shares of Common Stock outstanding as of March 25, 2003 was
40,911,242.

Transitional  Small Business Disclosure Format (check one):  Yes      No  X
                                                                 ----    ----


<PAGE>




ITEM  1.  FINANCIAL  STATEMENTS

                     NEW DRAGON ASIA CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                       (THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>

                                                                            AS OF
                                                                -----------------------------
                                                                   MARCH 25,     DECEMBER 25,
                    A S S E T S                                      2003           2002
                                                                 (UNAUDITED)
                                                                -------------  --------------
<S>                                                             <C>            <C>
Current Assets:
  Cash and bank deposits                                         $        976   $         628
  Restricted cash                                                         181             181
  Accounts receivable, net of allowance for doubtful accounts
  of $471 at March 25, 2003 and $415 at December 25, 2002               7,733           7,328
  Other receivables, deposits and prepayments                             766           1,066
  Inventories                                                           4,849           5,202
  Due from related companies                                            2,303           2,499
                                                                -------------  --------------
   Total current assets                                                16,808          16,904

Property, machinery and equipment, net                                 19,033          19,340
Land use rights, net                                                    4,082           4,110
                                                                -------------  --------------
   Total assets                                                  $     39,923   $      40,354
                                                                =============  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Short-term borrowings                                           $      4,325   $      3,614
 Accounts payable                                                       5,110          4,728
 Other payables and accruals                                              870          1,282
 Taxes payable                                                            694            889
 Due to related companies                                                 833            802
                                                                -------------  --------------
   Total current liabilities                                           11,832         11,315

Due to an immediate parent company                                      4,181          5,782
Due to joint venture partners                                           5,908          5,571
                                                                -------------  --------------
   Total liabilities                                                   21,921         22,668

Stockholders' equity:
  Common stock, authorized - 107,000,000 shares, issued and
  outstanding - 40,911,242 at March 25, 2003 and December 25,
  2002                                                                      4              4
 Additional paid-in-capital                                             8,132          8,132
 Retained earnings                                                      9,866          9,550
                                                                -------------  --------------
   Total stockholders' equity                                          18,002         17,686
                                                                -------------  --------------

   Total liabilities and stockholders' equity                     $    39,923   $     40,354
                                                                =============  ==============

The  accompanying  notes are an integral  part of these  consolidated  financial
                                  statements.

</TABLE>


<PAGE>



                     NEW DRAGON ASIA CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                       (THOUSANDS, EXCEPT PER SHARE DATA)

                                   (Unaudited)




                                                      FOR THE THREE MONTHS
                                                         ENDED MARCH 25,
                                                    -----------------------
                                                         2003       2002
                                                    -----------   ---------
Net sales                                       $      6,548       $      6,893

Cost of goods sold                                    (5,701)            (5,524)
                                                ------------       ------------
Gross profit                                             847              1,369


Selling and distribution expenses                       (242)              (247)

General and administrative
expenses                                                (233)              (322)
                                                ------------       ------------
Income from operations                                   372                800

Other income and expenses:
   Interest expense                                      (60)               (61)
   Interest income                                        52                 44
   Other income                                           25                  5
                                                ------------       ------------
Income before provision for
income taxes                                             389                788

Provision for income taxes                               (73)              (149)
                                                ------------       ------------
Net income                                      $        316       $        639
                                                ============       ============
Basic and diluted earnings per
common share                                    $       0.01       $       0.02
                                                ============       ============
Weighted average shares used
to compute basic and diluted
net income per common share                       40,911,242         40,911,242
                                                ============       ============

The  accompanying  notes are an integral  part of these  consolidated  financial
                                  statements.



<PAGE>



                     NEW DRAGON ASIA CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (THOUSANDS)

                                   (Unaudited)


                                                         FOR THE THREE MONTHS
                                                            ENDED MARCH 25,
                                                       -----------------------
                                                            2003         2002
                                                       ------------  ----------

Cash flows from operating activities:
 Net income                                              $     316    $     639
 Allowance for doubtful accounts                                56            -
 Adjustments to reconcile net income to net cash
   provided by operating activities:
   Amortization and depreciation                               350          272
   Changes in assets and liabilities:
     Accounts receivable                                      (461)          78
     Other receivables, deposits and prepayments               300           14
     Inventories                                               353            1
     Accounts payable                                          382           24
     Other payables and accruals                              (412)         194
     Tax payables                                             (195)         723
                                                       ------------  ----------
Net cash provided by operating activities                      689        1,945
                                                       ------------  ----------
Cash flows from investing activities:
 Decrease in due from related companies                        196           36
 Increase (decrease) in due to related companies                31         (193)
 Decrease in investment                                                      72
 Proceeds from sale property, machinery and equipment           23            -
 Purchases of property, machinery and equipment                (38)        (183)
                                                       ------------  ----------
Net cash provided by (used in) investing activities            212         (268)
                                                       ------------  ----------
Cash flows from financing activities:
 Proceeds from short-term borrowings                           723          181
 Repayments of short-term borrowings                           (12)           -
 Decrease in due to an immediate parent company             (1,601)      (1,623)
 Increase (decrease) in due to joint venture partners          337         (355)
                                                       ------------  ----------
Net cash used in financing activities                         (553)      (1,797)
                                                       ------------  ----------
Net increase (decrease) in cash and bank deposits              348         (120)

Cash and bank deposits at the beginning of the period          628        1,293
                                                       ------------  ----------
Cash and bank deposits at the end of the period          $     976    $   1,173
                                                       ============  ==========



The  accompanying  notes are an integral  part of these  consolidated  financial
                                  statements.


<PAGE>



                     NEW DRAGON ASIA CORP. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                Three Months Ended March 25, 2003 and 2002 (Unaudited)

NOTE  1  -  ORGANIZATION  AND  NATURE  OF  OPERATIONS

     New Dragon  Asia  Corporation  (formerly  Bio-Aqua  Systems,  Inc.) and its
     Subsidiaries  (the  "Group"  or  "NDAC"),   a  United  States   corporation
     incorporated  in the  State  of  Florida,  is  principally  engaged  in the
     manufacturing,  marketing and  distribution of instant noodles and flour in
     the People's  Republic of China ("PRC").  NDAC has its principal offices in
     Hong Kong.  The Group is  composed  of four  limited  liability  companies,
     incorporated under the laws of the British Virgin Islands(BVI).

     Prior to December 2001, Bio-Aqua Systems,  Inc. ("Bio-Aqua") owned majority
     interests  in  Tepual,   S.A.  and  Krisel,   S.A.,  Chilean   corporations
     principally   engaged  in  the  business  of  (1)   research,   consulting,
     development  and  control of the  production  of meals for feed used by the
     aquaculture,  poultry and cattle farming  industries,  (2) sales of vaccine
     products, and (3) krill fishing in Uruguay.

     Due to lack of working  capital,  Bio-Aqua  suspended all of its operations
     during  2001.  On August 7, 2001,  it was  announced  that it would seek to
     divest its current  operations and acquire a new operating company with the
     goal of enhancing shareholder value.

     On December 13, 2001 Bio-Aqua entered into a Share Exchange  Agreement with
     Max Rutman,  Flagship Import Export LLC, a Nevada limited liability company
     and New Dragon Asia Food Limited, a company organized under the laws of the
     British Virgin Islands. Pursuant to the Share Exchange Agreement,  Bio-Aqua
     acquired  from New Dragon Asia Food Limited all of its equity  interests of
     four companies organized under the laws of the British Virgin Islands (each
     a "Subsidiary" and,  collectively the "Subsidiaries") each of which in turn
     holds an interest in a separate  sino-foreign  joint venture,  which equity
     interests constituted all of the issued and outstanding equity interests of
     the  Subsidiaries in exchange for 37,963,263  shares of common stock of the
     Registrant (the "Share Exchange").

     Upon the closing of the share  exchange,  Max Rutman,  Nestor Lagos,  Pedro
     Sayes  and  Oscar  Cornejo  resigned  from the  board of  directors  and on
     December 14, 2001 Xue Jun Song, Man Fai Leung, Shu Hua Zhang and Wing Leung
     Lai became  members of Bio-Aqua's  board of directors.  The directors  then
     elected Wing Leung Lai as the Chief Financial Officer, Shu Hua Zhang as the
     Deputy General manager and Xue Jun Song as the Chief Executive Officer.

     As  conditions  of the  Share  Exchange  Agreement,  Bio-Aqua  amended  its
     Articles of Incorporation to:

     1)   Change the name of the Company to New Dragon Asia Corp.

     2)   To  increase  its  authorized  capital  stock to  107,000,000  shares,
          increasing the authorized Class A common stock to 100,000,000 shares.

     3)   Max Rutman  (through his ownership  interest in Flagship Import Export
          LLC) and Atik  S.A.,  owners  of all  1,700,000  shares of the Class B
          common stock, agreed to convert their Class B shares to Class A common
          stock.  Immediately after the share exchange,  Bio-Aqua began to carry
          on New Dragon Asia Food Group's business,  under the leadership of New
          Dragon Asia Food Group's current management.

     In  connection  with the terms and  provisions  of the amended and restated
     exchange  agreement,  Bio-Aqua issued 1,335,912 shares of restricted common
     stock to  investment  advisors and  attorneys in  connection  with services
     rendered to effectuate the Share  Exchange.  At the date of issuance of the
     shares,  the AMEX market  quotation of the stock was $3.00 per share.  NDAC
     included  these costs  approximating  $3,134,000  in other  expenses in the
     December 25, 2001 statements of consolidated  operations and  comprehensive
     income,  computed  utilizing  a 20%  discount  of  the  above  AMEX  market
     quotation due to the restricted nature of the stock.



<PAGE>


NOTE  1  -  ORGANIZATION  AND  NATURE  OF  OPERATIONS  (CONTINUED)


     The Group is subject to, among others, the following operating risks:

     COUNTRY RISK - As all of the Group's  operations  are conducted in the PRC,
     the Group is subject to special  considerations  and significant  risks not
     typically  associated with companies operating in North America and Western
     Europe.  These include risks associated with, among others,  the political,
     economic and legal environments and foreign currency exchange.  The Group's
     results may be adversely  affected by changes in the  political  and social
     conditions in the PRC, and by changes in governmental policies with respect
     to laws and regulations,  anti-inflationary  measures,  currency conversion
     and  remittance  abroad,  and rates and  methods of  taxation,  among other
     things.

     In addition, all of the Group's revenue is denominated in Renminbi ("RMB")
     which must be converted into other currencies before remittance out of the
     PRC. Both the conversion of RMB into foreign currencies and the remittance
     of foreign currencies abroad require approvals of the PRC government.

     OPERATING RISK - The Group conducts its manufacturing and sales operations
     through joint ventures established between the Group and certain PRC
     parties. Any deterioration of these strategic relationships may have an
     adverse effect on the operations of the Group.

     CONCENTRATION OF CREDIT RISK - Concentrations of credit risk with respect
     to customer receivables are limited due to the large number of customers
     comprising the Group's customer base, and their dispersion across the PRC.
     In addition, the Group performs ongoing credit evaluations of each
     customer's financial condition and maintains reserves for potential credit
     losses. Such losses in the aggregate have not exceeded management's
     expectations.

            Details of the companies comprising the Group are as follows:

<TABLE>
<CAPTION>

                                                                PERCENTAGE OF
                             DOMICILE AND                      EQUITY INTEREST
                                DATE OF             PAID-UP     ATTRIBUTABLE TO     PRINCIPLE
   NAME                      INCORPORATION          CAPITAL       THE GROUP        ACTIVITIES
--------------------        ------------------      --------    --------------   ------------------
<S>                         <C>                    <C>            <C>           <C>
Mix Creation Limited        The British Virgin        US$1        100% (a)     Investment holding
("MC")                           Islands
                            November 7, 1997

Rich Delta Limited          The British Virgin        US$1        100% (a)     Investment holding
("RD")                           Limited
                            October 28, 1998

Noble Point Limited         The British Virgin        US$1        100% (a)     Investment holding
("NP")                           Islands
                            October 29, 1998

Keen General Limited        The British Virgin        US$1        100% (a)     Investment holding
("KG")                            Islands
                            July 20, 1998

New Dragon Asia Flour       The PRC                   RMB          90% (b)     Manufacture, marketing
(Yantai) Company            August 13, 1999        28,000,000                  and distribution of
Limited ("NDAFLY")                                                             flour

New Dragon Asia Food        The PRC                   RMB          90% (c)     Manufacture, marketing
(Yantai) Company Limited    December 24, 1998      17,462,000                  and distribution of
("NDAFY")                                                                      instant noodles

New Dragon Asia Food        The PRC                   RMB          90% (c)     Manufacture, marketing
(Dalian) Company Limited    December 25, 1998      17,430,000                  and distribution of
("NDAFD")                                                                      instant noodles

Sanhe New Dragon Asia       The PRC                   RMB          80% (c)     Manufacture, marketing
Food Company Limited        December 25, 1998      51,191,432                  and distribution of
("SNDAF")                                                                      instant noodles
</TABLE>


     (a)  MC, RD, NP and KG are wholly owned by New Dragon Asia Corporation.

     (b)  NDAFLY is a  contractual  joint venture  established  in the PRC to be
          operated for 50 years until August 13, 2049. In September 2000, MC

<PAGE>


          contributed 90% of the registered  capital to NDAFLY.  Under the joint
          venture  agreement dated June 1, 1999 and the  supplemental  agreement
          dated June 26, 1999, the Chinese joint venture  partner is entitled to
          receive a  pre-determined  annual fee and is not  responsible  for any
          profit or loss to NDAFLY  effective from June 26, 1999. In view of the
          profit  sharing  arrangement,  NDAFLY is regarded as 100% owned by the
          Group.  The  minority  interest  component  has  been  included  as  a
          component of General and Administrative expenses for the periods ended
          March 25, 2003 and 2002.

     (c)  NDAFY,  NDAFD and SNDAF are contractual joint ventures  established in
          the PRC to be operated for 50 years until  December 24, 2048. In March
          1999, RD and NP contributed 90% of the registered capital to NDAFY and
          NDAFD,  respectively,  while  KG  contributed  80% of  the  registered
          capital to SNDAF.  Under the joint venture  agreements  dated November
          28, 1998 and the  supplemental  agreement dated December 26, 1998, the
          PRC joint  venture  partner is  entitled  to receive a  pre-determined
          annual  fee and is not  responsible  for any  profit or loss of NDAFY,
          NDAFD and SNDAF  effective  from  December  26,  1998.  In view of the
          profit sharing  arrangements,  NDAFY,  NDAFD and SNDAF are regarded as
          100% owned by the Group.


NOTE  2  -  BASIS  OF  PRESENTATION

          The   unaudited   consolidated   financial   statements   include  the
          consolidated  financial  statements of MC and its subsidiary (NDAFLY),
          RD and its subsidiary  (NDAFY),  NP and its subsidiary  (NDAFD) and KG
          and its  subsidiary  (SNDAF),  as they are  enterprises  controlled by
          NDAC. All significant intra- group balances and transactions have been
          eliminated in consolidation.

          The consolidated financial statements were prepared in accordance with
          accounting   principles   generally  accepted  in  the  United  States
          ("U.S.GAAP").  The  preparation of financial  statements in conformity
          with U.S. GAAP requires  management to make estimates and  assumptions
          that  affect  the  reported  amounts of assets  and  liabilities,  the
          disclosure of contingent  assets and liabilities as of the date of the
          financial statements and the reported amounts of revenues and expenses
          during the reporting  period.  Actual  results could differ from those
          estimates. U.S. GAAP differs from that used in the statutory financial
          statements of the major  operating  subsidiaries  of the Group,  which
          were prepared in accordance  with the relevant  accounting  principles
          and  financial  reporting  regulations  applicable  to  joint  venture
          enterprises  as  established  by the  Ministry  of Finance of the PRC.
          Certain  accounting  principles  stipulated  under  U.S.  GAAP are not
          applicable in the PRC.

          The accompanying unaudited  consolidated  financial statements,  which
          are for interim  periods,  do not include all disclosures  provided in
          the  annual  consolidated   financial   statements.   These  unaudited
          consolidated  financial  statements should be read in conjunction with
          the  consolidated  financial  statements  and  the  footnotes  thereto
          contained  in the  Annual  Report on Form  10-KSB  for the year  ended
          December 25, 2002 of New Dragon Asia Corp. and Subsidiaries,  as filed
          with the  Securities  and Exchange  Commission.  The December 25, 2002
          balance  sheet  was  derived  from  audited   consolidated   financial
          statements,  but does not  include  all  disclosures  required by U.S.
          GAAP.

          In the opinion of the Group's management,  the accompanying  unaudited
          consolidated  financial  statements contain all adjustments (which are
          of a normal recurring nature) necessary for a fair presentation of the
          Group's consolidated financial position and results of operation.  The
          results for interim periods are not necessarily  indicative of results
          to be expected for the complete fiscal year.

NOTE  3  -  INVENTORIES

          Inventories consist of the following (in thousands):

                                    MARCH 25,    DECEMBER 25,
                                      2003           2002
                                   ---------     ---------
               Raw  materials      $  2,318      $  2,981
               Finished  goods        2,531         2,221
                                   ---------     ---------
                                   $  4,849      $  5,202
                                   =========     =========


<PAGE>


NOTE  4  -  EARNINGS  PER  SHARE  -  BASIC

          Basic earnings per common share ("EPS") is computed by dividing income
          available to common  stockholders  by the  weighted-average  number of
          common shares  outstanding for the period.  Diluted earnings per share
          reflects the  potential  dilution  that could occur if  securities  or
          other contracts to issue common stock were exercised or converted into
          common  stock.  As of March 25, 2003 and 2002,  the diluted share base
          excludes  incremental  shares  relating to stock  options and warrants
          since their effect was anti- dilutive. The weighted-average  number of
          common shares outstanding for computing basic EPS was 40,911,242 as of
          March 25, 2003 and 2002.

NOTE  5  -  INCOME  TAXES

          The income of the  Company  is  subject  to PRC income  taxes at rates
          ranging  from 27% to 33% of which  24% to 30% is  attributable  to the
          central government and 3% to the provincial government. On application
          and approval by the tax bureau, the PRC subsidiaries  within the Group
          are exempt  from  state  income tax and local tax in respect of income
          earned for the first two years of operation, and then subject to a 50%
          reduction in state income tax and a full exemption of local income tax
          for the following three years. The Company and its subsidiaries are in
          different stages of enjoying the above tax incentive program.

          The Group's  companies that are incorporated  under the  International
          Business  Companies Act of the British  Virgin Islands are exempt from
          Payment of the British Virgin Islands income tax.


NOTE  6  -  RELATED  PARTY  TRANSACTIONS

          Parties  are  considered  to be related if one party has the  ability,
          directly  or  indirectly,  to  control  the  other  party or  exercise
          significant  influence  over the other party in making  financial  and
          operational  decisions.  Parties are also  considered to be related if
          they are subject to common control or common significant influence.

          Particulars of significant  transactions between the Group and related
          companies are summarized below:


                                                            FOR THE THREE MONTHS
                                                               ENDED MARCH 25,
                                                            --------------------
                                                              2003         2002
                                                            (US $'000) (US $'000

Sale of finished goods to:
  Joint Venture Partner:
    Shandong Longfeng Group Company                            184           47
                                                              ------------------
                                                               184           47
                                                              ------------------

Purchase of raw materials from:
  Related Parties:
    Sanhe (Yantai) Food Company Limited                          5            -
    Longkou City Longfeng Carton Printing Packing Factory        -           82
    Longkou City Longfeng Colour Printing Packing Factory        -           95
    Longkou City Longfeng Packing Manufacturing Factory        300            -
                                                              ------------------
                                                               305          177
                                                              ------------------

NOTE  7  -  CLOSURE  OF  OPERATION

     There was a closure of a subcontracted factory in Xinxiang in January, 2003
due to the end of the subcontracting agreement. Total assets of the factory were
approximately $33 thousand and $26 thousand transferred to New Dragon Asia Flour
(Yantai) Co. Limited and Xinxiang Guoliang Flour Company Limited,  the lessor of
the  factory.  The rest of the  assets  of the  factory,  in the  amount  of $27
thousand has been written off.

<PAGE>



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

     In addition to  historical  information,  this  Quarterly  Report  contains
forward-looking  statements. The forward-looking statements contained herein are
subject to certain risks and  uncertainties  that could cause actual  results to
differ  materially  from  those  reflected  in the  forward-looking  statements.
Factors that might cause such a difference include, but are not limited to those
discussed in this section.  Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's analysis only as of
the date hereof.  The Group  undertakes no  obligation to publicly  revise these
forward-looking  statements to reflect events or circumstances  that arise after
the date thereof.  Readers should  carefully review the risks described in other
documents  the Group files from time to time with the  Securities  and  Exchange
Commission, including the Annual Report on Form 10-KSB for the fiscal year ended
December 25, 2002,  the Quarterly  Reports on Form 10-QSB filed by the Group and
Current Reports on Form 8-K by the Group.

     The following  discussion and analysis  should be read in conjunction  with
the consolidated financial statements and the notes thereto, included as part of
this Quarterly Report.


OVERVIEW

     New  Dragon  Asia  Corp.,  formerly  Bio-Aqua  Systems,   Inc.,  a  Florida
corporation (the "Group" or "NDAC"), was incorporated in March 1999. On December
13, 2001, we entered into a Share Exchange  Agreement with Max Rutman,  Flagship
Import Export LLC, a Nevada limited  liability  company and New Dragon Asia Food
Limited,  a company  organized  under the laws of the  British  Virgin  Islands.
Pursuant to the Share Exchange  Agreement,  on December 3, 2001 (the "Closing"),
we acquired  from New Dragon Asia Food  Limited all of its equity  interests  of
four  companies  organized  under the laws of the British Virgin Islands (each a
"Subsidiary" and,  collectively,  the "Subsidiaries") each of which in turn hold
an interest in a separate  sino-foreign  joint venture,  which equity  interests
constituted  all  of  the  issued  and  outstanding   equity  interests  of  the
Subsidiaries, in exchange for 37,963,263 shares of common stock of the Group. At
the closing,  the Group  transferred all of the assets of the Group  immediately
prior to the Closing to Mr. Rutman and Mr. Rutman assumed all of the liabilities
associated with the transferred assets.

     The  consolidated   financial  statements  are  presented  in  US  dollars.
transactions  and monetary  assets  denominated in currencies  other than the US
dollars are  translated  into US dollars at the respective  applicable  exchange
rates.  Monetary  assets and  liabilities  denominated  in other  currencies are
translated  into US dollars at the  applicable  rate of  exchange at the balance
sheet date.  The resulting  exchange  gains or losses are credited or charged to
the consolidated statements of operations.


PLAN  OF  OPERATIONS

     Our current  strategy is to expand our customer  sales base and  production
lines.  Plans for  expansion  on the  existing  plants are expected to be funded
through current working capital from ongoing sales.

     Our long term growth strategy includes strategic  acquisition of additional
plants with regional brand recognition to increase our market shares in China. A
significant  acquisition  will require  additional  funds in the form of debt or
equity, or a combination thereof. However, there can be no assurance these funds
will be available.


RESULTS  OF  OPERATIONS

Three months ended March 25, 2003 compared to three months ended March 25, 2002
--------------------------------------------------------------------------------

Total  revenue

     Total  revenues for the three months ended March 25, 2003 were $6.5 million
as compared to $6.9 million for the three  months  ended March 25,  2002,  which
represented  a  decline  of  5%  from  the  previous  year.   This  decrease  is
attributable  mainly to the  outbreak of the Severe Acute  Respiratory  Syndrome
("SARS") which affected the overall market environment in China.
<PAGE>

Net  income

     Net income for the first quarter of 2003 decreased to $316  thousand,  when
compared to $639 thousand for the first  quarter of 2002.  The reduction was due
to  the  increase  of  manufacturing  expenses,  additional  expenses  spent  on
preventive  steps  relating  to  SARS  and a  general  increase  in  cost of raw
materials such as palm oil.




General  and  administrative  expenses

     General and  administrative  expenses  decreased from $322 thousand for the
three  months  ended March 25, 2002 to $233  thousand for the three months ended
March  25,  2003,  due to  the  improved  controls  on  administrative  overhead
implemented during the period.

Selling  and  distribution  expenses

     Selling and  distribution  expenses  decreased by 2% from $247 thousand for
the three  months  ended March 25, 2002 to $242  thousand  for the three  months
ended March 25, 2003. The decrease is attributable to the decrease in sales.

Income  taxes

     The income of the Company is subject to PRC income  taxes at rates  ranging
from 27% to 33% of which 24% to 30% is  attributable  to the central  government
and 3% to the  provincial  government.  On  application  and approval by the tax
bureau,  the PRC subsidiaries  within the Group are exempt from state income tax
and local tax in respect of income  earned for the first two years of operation,
and then subject to a 50% reduction in state income tax and a full  exemption of
local income tax for the  following  three years.  The Group's  companies are in
different stages of enjoying the above tax incentive program.

     The  Group's  companies  that  are  incorporated  under  the  International
Business  Companies Act of the British Virgin Islands are exempt from payment of
the British Virgin Islands income tax.

LIQUIDITY  AND  CAPITAL  RESOURCES

     Cash and cash  equivalents  were $976  thousand as of March 25, 2003.  This
represents an increase of $348 thousand from December 25, 2002. The increase was
primarily  due  to  the  cash  flow  from  operating  activities  and  investing
activities. Net cash provided by operating activities for the three months ended
March 25, 2003 was approximately $689 thousand as compared to net cash generated
from operating  activities of approximately  $1.9 million for the  corresponding
period in 2002. Decrease in net cash flows from the Group's operating activities
was attributable to the decrease in sales affected by the outbreak of SARS.

INFLATION  AND  CHANGING  PRICES

     The Group does not foresee any adverse  effects on its earnings as a result
of inflation or changing prices.

FOREIGN  CURRENCY  RISK

     Substantially all of the revenues and expenses of the Group are denominated
in Renminbi, which is the official currency of China. However, we use the United
States dollar for financial reporting purposes.  Effective from January 1, 1994,
pursuant to the reforms of foreign exchange, conversion of Renminbi into foreign
currencies is regulated by the People's Bank of China through a unified floating
exchange rate system.  Although the PRC  government  has stated its intention to
support the value of Renminbi, there can be no assurance that such exchange rate
will not again become  volatile or that Renminbi will not devalue  significantly
against the US dollar.  Exchange  rate  fluctuations  may  adversely  affect the
value, in US dollar terms, of the Group's net assets and income derived from its
operations in the PRC.


<PAGE>



ITEM 3.  CONTROLS  AND  PROCEDURES

(a)  Evaluation of Disclosure  Controls and Procedures  Disclosure  controls and
     procedures are designed to ensure that information required to be disclosed
     in the reports  filed or  submitted  under the  Exchange  Act is  recorded,
     processed,  summarized and reported,  within the time periods  specified in
     the SEC's rules and forms.  Disclosure  controls  and  procedures  include,
     without  limitation,  controls  and  procedures  designed  to  ensure  that
     information  required  to be  disclosed  in the  reports  filed  under  the
     Exchange Act is accumulated and  communicated to management,  including the
     Chief Executive  Officer and Chief Financial  Officer,  as appropriate,  to
     allow timely decisions regarding required disclosure.

     Within 90 days prior to the filing of this report, the Group carried out an
     evaluation, under the supervision and with the participation of the Group's
     management,  including  the  Group's  Chief  Executive  Officer  and  Chief
     Financial Officer,  of the effectiveness of the design and operation of the
     Group's disclosure  controls and procedures.  Based upon and as of the date
     of that evaluation, the Chief Executive Officer and Chief Financial Officer
     concluded that the Group's  disclosure control and procedures are effective
     to ensure that the information  required to be disclosed in the reports the
     Group files and submits  under the  exchange  act is  recorded,  processed,
     summarized and reported as and when required.

(b)  Change in Internal  Controls

     There were no  changes in the  Group's  internal  controls  or in the other
     factors that could have significantly affected those controls subsequent to
     the date of the Group's most recent evaluation.


<PAGE>


                           PART II. OTHER INFORMATION

Item  1.     Legal  Proceedings

             None.

Item  2.     Changes  in  Securities  and  Use  of  Proceeds.

             None.

Item  3.     Defaults  Upon  Senior  Securities

             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

            (a)     Exhibits:

                    Exhibit 99.1:  Certification

            (b)     Reports  on  Form  8-K:

                    None.



<PAGE>



                                   SIGNATURES

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

Dated:  May  9,  2003
                                            NEW  DRAGON  ASIA  CORP.

May  9,  2003
                                                   /s/ Xue Jun Song
                                                 --------------------------
                                                   Xue Jun Song
                                                   CHIEF EXECUTIVE OFFICER


                                            By:    /s/  Willie  Lai
                                                 -------------------------------
                                            Name:  Willie  Lai
                                            Title: Chief Financial Officer


<PAGE>