<PAGE>


                      U.S. SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(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:
  June 25, 2003

                              NEW DRAGON ASIA CORP.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

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

                          Room 1304 13/F Wing On Centre
                            111 Connaght 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 June 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
                                                                -----------------------------
                                                                  JUNE 25,      DECEMBER 25,
                    A S S E T S                                     2003           2002
                                                                 (Unaudited)
                                                                -------------  --------------
<S>                                                             <C>            <C>
Current Assets:
  Cash and cash equivalents                                      $        659   $         628
  Restricted cash                                                         181             181
  Accounts receivable, net of allowance for doubtful accounts
  of $507 at June 25, 2003 and $415 at December 25, 2002                6,731           7,328
  Other receivables, deposits and prepayments                             829           1,066
  Inventories                                                           4,685           5,202
  Due from related companies                                            2,296           2,499
                                                                -------------  --------------
   Total current assets                                                15,381          16,904

Property, machinery and equipment, net                                 18,669          19,340
Land use rights, net                                                    4,054           4,110
                                                                -------------  --------------
   Total assets                                                  $     38,104   $      40,354
                                                                =============  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Short-term borrowings                                           $      4,325   $      3,614
 Accounts payable                                                       4,673          4,728
 Other payables and accruals                                            1,027          1,282
 Taxes payable                                                            169            889
 Due to related companies                                                 733            802
                                                                -------------  --------------
   Total current liabilities                                           10,927         11,315

Due to an immediate parent company                                      3,687          5,782
Due to joint venture partners                                           6,077          5,571
                                                                -------------  --------------
   Total liabilities                                                   20,691         22,668
                                                                -------------  --------------
Stockholders' equity:
  Common  stock,  authorized -  107,000,000  shares,
  issued and  outstanding  - 40,911,242 at June 25, 2003
  and December 25, 2002                                                     4              4
 Additional paid-in-capital                                             8,132          8,132
 Retained earnings                                                      9,277          9,550
                                                                -------------  --------------
   Total stockholders' equity                                          17,413         17,686
                                                                -------------  --------------

   Total liabilities and stockholders' equity                     $    38,104   $     40,354
                                                                =============  ==============

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

</TABLE>




                                       2
<PAGE>

                     NEW DRAGON ASIA CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       (THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)



<TABLE>
<CAPTION>

                                   THREE MONTHS ENDED        SIX MONTHS ENDED
                                  ----------------------- -----------------------
                                    JUNE 25,   JUNE 25,     JUNE  25,   JUNE  25,
                                      2003       2002        2003         2002
                                  ----------------------- -----------------------
<S>                                 <C>         <C>        <C>         <C>
Net sales                           $ 5,478     $ 7,498    $ 12,026    $ 14,391

Cost of goods sold                   (5,345)     (6,098)    (11,046)    (11,622)
                                     ---------  ---------  ---------   ---------
Gross profit                            133       1,400         980       2,769


Selling and distribution expenses      (248)      (309)        (490)       (556)

General and administrative
expenses                               (439)      (105)        (672)       (427)
                                     ---------  ---------  ---------   ---------
Income (loss) from operations          (554)       986         (182)      1,786

Other income and expenses:
   Interest expense                     (68)       (88)        (128)        (149)
   Interest income                       56         46          108           90
   Other income                           6         (4)          31            1
                                     ---------  ---------  ---------   ---------
Income (loss) before provision for
income taxes                           (560)       940         (171)       1,728

Provision for income taxes              (29)      (166)        (102)        (315)
                                     ---------  ---------  ---------   ---------
Net income loss)                    $  (589)   $   774     $   (273)    $  1,413
                                     =========  =========  =========   =========
Basic and diluted earnings (loss)
per common share                    $(0.014)   $ 0.019     $ (0.007)    $  0.035
                                     =========  =========  =========   =========
Weighted average shares used
to compute basic and diluted
net income (loss) per common share    40,911     40,911       40,911      40,911
                                     =========  =========  =========   =========

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

</TABLE>



                                       3
<PAGE>

                     NEW DRAGON ASIA CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (THOUSANDS)
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                           SIX  MONTHS  ENDED
                                                       -------------------------
                                                          JUNE 25,     JUNE 25,
                                                            2003         2002
                                                       ------------ ------------
Cash flows from operating activities:
<S>                                                      <C>          <C>
 Net (loss) income                                       $    (273)   $ 1,413
 Adjustments to reconcile net (loss) income to net cash
   provided by operating activities:
   Amortization and depreciation                               712        862
   Loss on disposal of machinery and equipment                  37          2
   Provision for bad debts                                      92          6
   Changes in assets and liabilities:
     Accounts receivable                                       505       (350)
     Other receivables, deposits and prepayments               237       (177)
     Inventories                                               517       (409)
     Accounts payable and accrued liabilities                 (310)     2,239
     Taxes payable                                            (720)       459
                                                       ------------ ----------
Net cash provided by operating activities                      797      4,045
                                                       ------------ ----------
Cash flows from investing activities:
 Due from related companies                                    203       (521)
 Due to related companies                                      (69)      (205)
 Decrease in investment                                          -         72
 Proceeds from sale of machinery and equipment                   8          5
 Purchases of property, machinery and equipment                (30)      (213)
                                                       ------------ ----------
Net cash provided by (used in) investing activities            112       (862)
                                                       ------------ ----------
Cash flows from financing activities:
 Proceeds from short-term borrowings                         1,807      2,290
 Payments on short-term borrowings                          (1,096)    (1,627)
 Net decrease in due to an immediate parent company         (2,095)    (1,930)
 Net increase (decrease) in due to joint venture partners      506       (723)
                                                       ------------ ----------
Net cash used in financing activities                         (878)    (1,990)
                                                       ------------ ----------
Net increase in cash and cash equivalents                       31      1,193

Cash and cash equivalents at the beginning of the period       628      1,293
                                                       ------------ ----------
Cash and cash equivalents at the end of the period       $     659    $ 2,486
                                                       ============ ==========

</TABLE>

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



                                       4
<PAGE>


                     NEW DRAGON ASIA CORP. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(ALL INTERIM INFORMATION RELATING TO THE THREE- AND SIX-MONTH PERIODS ENDED JUNE
25,  2003  AND  2002  IS  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  of NDAC 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 the 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 in exchange for
     37,963,263 shares of common stock of the Registrant (the "Share Exchange").

     As a condition to the closure of the Share Exchange  Agreement,  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, converted
     their Class B shares to shares of Class A common stock.

     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 effectuated 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.

     New Dragon Asia Corporation and its subsidiaries (the "Group" or "NDAC") is
     principally  engaged in the  manufacturing,  marketing and  distribution of
     instant noodles and flour in the People's Republic of China ("PRC").

     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.

     NOTE  1  -  ORGANIZATION  AND  NATURE  OF  OPERATIONS  (CONTINUED)

     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.



                                       5
<PAGE>

     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 - Concentration 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>
Mix Creation                     The British Virgin        US$         100%          Investment holding
Limited                               Islands            1,500,000
("MC") (a) November 7, 1997

New Dragon Asia Flour            The PRC                   RMB          90% (b)      Manufacture,
(Yantai) Company                 August 13, 1999        28,500,000                   marketing and
Limited                                                                              distribution of
("NDAFLY")                                                                           flour

Rich Delta Limited               The British Virgin        US$         100%          Investment holding
("RD") (a)                            Limited            1,000,000
                                October 28, 1998

New Dragon Asia Food                  The PRC              RMB          90% (c)      Manufacture,
(Yantai) Company Limited         December 24, 1998      17,462,000                   marketing and
("NDAFY")                                                                            distribution of
                                                                                       instant noodles
Noble Point Limited              The British Virgin        US$         100%          Investment holding
("NP") (a)                             Islands           1,000,000
                                October 29, 1998

New Dragon Asia                       The PRC              RMB          90% (c)      Manufacture,
Food (Dalian) Company            December 28, 1998       17,430,000                  marketing and
Limited                                                                              distribution of
("NDAFD")                                                                            instant noodles

Keen General                     The British Virgin        US$         100%          Investment holding
Limited                                Islands           1,500,000
("KG") (a) July 20, 1998

Sanhe New Dragon                       The PRC             RMB          80% (c)      Manufacture,
Asia Food Company                 December 25, 1998      51,191,432                  marketing and
Limited                                                                              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
          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 for financial reporting
          purposes 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 June 25, 2003 and 2002.



                                       6
<PAGE>

     (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 for
          financial reporting purposes 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
          NDAFL. All significant intra-group balances and transactions have been
          eliminated in consolidation.

          The  unaudited  consolidated  financial  statements  were  prepared in
          accordance with accounting principles generally accepted in the United
          States  of  America  ( "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 report 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 operations. The
          results for interim periods are not necessarily  indicative of results
          to be expected for the complete fiscal year.




                                       7
<PAGE>


NOTE  3  -  INVENTORIES

      Inventories consist of the following (in thousands):

                                    June 25,     December 25,
                                       2003          2002
                                   ---------     ---------
               Raw  materials      $  2,403      $  2,981
               Finished  goods        2,282         2,221
                                   ---------     ---------
                                   $  4,685      $  5,202
                                   =========     =========

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 June 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
          June 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  liability,
          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:


                                                       06/25/2003    6/25/2002
                                                       (US $ '000)  (US $ '000)
Sale of finished goods to:
  Joint Venture Partner:
    Shandong Long Feng Group Company                      184           120
  Related Parties:
    Shandong Long Feng Penglai Flour Company Limited        -             2
    Sanhe (Yantiai) Food Company Limited                    2             -
    Penglai Jinhai Food Company Limited                    12           175
                                                         --------------------
                                                          198           297
                                                         --------------------




                                       8
<PAGE>


<TABLE>
<CAPTION>
Purchase of raw materials from:
  Joint Venture Partner:
<S>                                                                  <C>          <C>
    Shandong Long Feng Group Company                                    -             5
  Related Parties:
    Sanhe (Yantai) Food Company Limited                                 8            12
    Shandong Long Feng Penglai Flour Company Limited                    -            35
    Longkou City Long Feng  Packing Manufacturing Factory             526             -
    Longkou City Long Feng Colour Printing Packing Factory              -           372
    Longkou City Long Feng Cartoon Printing Packing Factory             -           178
                                                                     --------------------
                                                                      534           602
                                                                     --------------------
</TABLE>


NOTE  7  -  CLOSURE  OF  OPERATIONS

     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
     Xinxiang factory were approximately $33 thousand of which $26 thousand were
     transferred to New Dragon Asia Flour (Yantai) Co Ltd 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,  have been written off.

     Due to the negative effects of SARS, the Company closed its Xinxian factory
     in May 2003.  Fixed assets of the Xinxian  factory were  approximately  $44
     thousand,  of which $26 thousand were  transferred to New Dragon Asia Flour
     (Yantai)  Company Limited and the Taian factory.  Approximately $8 thousand
     of the fixed assets were sold to Shandong  Long Feng Group  Company and the
     remaining $10 thousand  were written off. The Company  charged $27 thousand
     of  penalties  related to the  termination  of the lease,  $10  thousand of
     salaries and severence pay and $56 thousand of other operating  expenses to
     operations in the period ended June 25, 2003.


                                       9
<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 Company  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 Company 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 Company and
Current Reports on Form 8-K by the Company.

     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  "Company"),  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 the 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, in exchange for 37,963,263
shares of common stock of the Company.  At the closing,  the Company transferred
all of the assets of the Company  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 charges to
the  consolidated  statements of operations.  Currency  translation  adjustments
arising  from the use of  different  exchange  rates  from  period to period are
included in comprehensive income.

PLAN  OF  OPERATIONS

     Our current strategy is twofold:  (1) to expand our customer sales base and
production  lines;  and (2) impose  ongoing  strict  control  on the  factories'
hygiene in view of  prevention  of SARS.  Plans for  expansion  of the  existing
plants are expected to be funded through  current  working  capital from ongoing
sales.

     Our long term growth strategy includes strategic acquisitions of additional
plants with regional brand  recognition to increase our market share 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.




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<PAGE>


RESULTS  OF  OPERATIONS

Six months ended June 25, 2003 compared to six months ended June 25, 2002
--------------------------------------------------------------------------------

Total revenue

     Total revenue for the six months ended June 25, 2003 was  USD12,025,661  as
compared to USD14,391,032 a decrease of 16% for the comparable period last year.
Management  believes that the SARS (Severe acute respiratory  syndrome) outbreak
had a  negative  impact  on our  business.  However,  as the  epidemic  has been
contained,  management  believes  that our business  will return to at least the
pre-SARS levels.


Net Loss

     The Company recorded a net loss of USD274,398 for the six months ended June
25, 2003 compared to a net income of USD1,413,435 for the  corresponding  period
last year. The result this quarter was adversely  affected by the  deterioration
in  consumer  demand  on retail  commodities  caused  by the  widespread  public
concerns over the outbreak of SARS.


SARS  Effect
The outbreak of SARS negatively impacted our business as follows:-

1)   Blockage of  Distribution  Network
     The  transportation  of our products was  adversely  affected in some rural
     areas  as  villagers  atempted  to  block  roads  with a view to  isolating
     "quarantine" areas infected with the virus.

2)   Incurred  Additional   Operating  Expenses
     Manufacturing  expenses were increased as significant efforts were directed
     towards ensuring absolute hygiene standards in our operating facilites.

3)   Sales and Promotional  Activities Halted
     During the period,  the provincial  governments  imposed strict controls on
     citizens travelling. Our staff, including salespeople,  was also prohibited
     from leaving the factory area,  negatively  impacting our sales activities.
     Promotional events for our products were also cancelled.

4)   Deterioration  in Consumer  Demand
     As consumers were reluctant to go out, they had more time available at home
     to prepare their meals resulting in less demand for  convenience  food such
     as instant noodles.


Administrative  and  general  expenses

     Administrative  and general expenses for the six months ended June 25, 2003
increased  by  USD246,195  to   USD672,408,   compared  to  USD426,213  for  the
corresponding  period in 2002. The increase was mainly due to expenses  relating
to the closure expenses of two sub-contracting  factories resulting in the write
off of stock and deferred expenses and additional general provision for obsolete
stock and doubtful debts.  The Xinxiang  factory was closed due to the expiry of
the contract.  The Xinxian branch was closed due to the sudden drop of demand in
the SARS period and the Company cannot foresee the market  situation in the next
six  months,  therefore,  the shut  down can help the  Company  to  utilize  its
internal resources more efficiently.


Selling  and  distribution  expenses

     Selling and  distribution  expenses  for the six months ended June 25, 2003
were  USD490,267 , which was  comparable  to  USD556,068  for the  corresponding
period of the prior year.  During the current  period,  the Company  encountered
abrupt disruption of its sales caused by the outbreak of the SARS. Thus, selling
and distribution expenses decreased accordingly.



                                       11
<PAGE>

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

Net  Sales

     Net Sales for the second  quarter  of 2003  decreased  27% to  USD5,477,551
compared to USD7,497,900 for the corresponding quarter of 2002. The decrease was
mainly due to the outbreak of SARS, which had seriously affected our business.


Net  Loss

     The Company  incurred a net loss of  USD590,004  for the second  quarter of
2003.  This reflected the effect of SARS which caused a decrease in sales in the
current quarter period.


Administrative  and  general  expenses

     Administrative  and general  expenses  increased  from  USD104,564  for the
second quarter of 2002 to USD439,065 for the second quarter of 2003,  mainly due
to the closure  expenses  incurred upon the closure of a flour branch in Xinxian
during the period and  additional  general  provisions  for  obsolete  stock and
doubtful  debts.  The closure  expenses mainly composed of indemnity paid to the
lessor for breach of lease  agreement,  severance  payment  and the write off of
deferred expenses and assets upon closure of the branch.

Selling  and  distribution  expenses

     Selling and distribution  expenses decreased from USD309,265 for the second
quarter of 2002 to  USD247,820  for the  corresponding  period  this  year.  The
decrease was attributable to a decrease in corresponding revenue.


Income  taxes

     The income of the Company is subject to PRC income  taxes at rates 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.



LIQUIDITY  AND  CAPITAL  RESOURCES

     The Company's  primary  liquidity needs are to fund  inventories,  accounts
receivable  and  capital  expenditures.  The Company  has  financed  its working
capital  requirements  through  a  combination  of  internally  generated  cash,
short-term bank loans and advances from affiliates.

     Cash  and cash  equivalents  were  USD658,795  as of June  25,  2003.  This
represents  a decrease of  USD1,827,199  from June 25,  2002.  The  decrease was
primarily due to less cash flow from operating activities due to the decrease in
sales caused by the outbreak of SARS. Net cash provided by operating  activities
for the six months ended June 25, 2003 was approximately  USD797,000 as compared
to net cash generated from operating  activities of  approximately  USD4,045,000
for the  corresponding  period  in 2002.  Net  cash  flows  from  the  Company's
operating  activities are  attributable  to the Company's  income and changes in
operating assets and liabilities.



                                       12
<PAGE>


      Accounts   receivable  and  accounts  payable   decreased  by  8%  and  1%
respectively,  from  December  25,  2002 to June 25,  2003.  There  was a slight
decrease in accounts receivable due to settlement  received from customers.  The
Company  evaluates  the  allowance  level  from  time to time  by  applying  the
Company's  provision  policy.  Apart  from the  above,  there  has been no other
significant  change in financial  condition and liquidity  since the fiscal year
ended June 25,  2003.  The Company  believes  that  internally  generated  funds
together  with   available  bank  credit  will  be  sufficient  to  satisfy  its
anticipated working capital needs for at least the next twelve months.

INFLATION  AND  CHANGING  PRICES

     The  Company  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  Company  are
denominated in Renminbi,  which is the official currency of China.  However,  we
use the United States dollar for financial reporting purposes.  With effect from
January 1, 1994,  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.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company  does not have any market risk with respect to such factors
as commodity prices,  equity prices, and other market changes that affect market
risk sensitive investments.

         With respect to foreign  currency  exchange rates, the Company does not
believe that a devaluation  or fluctuation of the RMB against the USD would have
a detrimental  effect on the Company's  operations,  since the Company  conducts
virtually  all of its  business in China,  and the sale of its  products and the
purchase  of raw  materials  and  services  is settled  in RMB.  The effect of a
devaluation or fluctuation of the RMB against the USD would affect the Company's
results of operations,  financial position and cash flows, when presented in USD
(based on a current exchange rate) as compared to RMB.

         The Company does not have any interest rate risk, as the Company's debt
obligations are primarily short-term in nature, with fixed interest rates.

ITEM 4.  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 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.




                                       13
<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 31.1:  Section 302 Sarbanes Oxley Certification of the
                            Chief Financial Officer

             Exhibit 31.2:  Section 302 Sarbanes Oxley Certification of the
                            Chief Financial Officer

             Exhibit 32.1:  Section 906 Sarbanes Oxley Certification of both the
                            Chief Financial Officer and the Chief Executive
                            Officer

            (b) Reports on Form 8-K:

            None.




                                       14
<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:  August  13,  2003
                                            NEW  DRAGON  ASIA  CORP.


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



                                       15