FORM 10-QSB

                        SECURITY AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

(Mark One)

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

For the quarterly period ended

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)

For the transition period from ______________________ to _____________________.

Commission file number:


                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES
                     --------------------------------------
             (Exact name of registrant as specified in its charter)

                               FLORIDA 65-0926223
------------------------------------------------------------------------------
State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization                               Identification No.)

350 East Las Olas Boulevard, Suite 1700, Ft. Lauderdale, Florida   33301
        ---------------------------------------------------------------
(Address of principal executive offices)                      (Zip Code)


Registrant's telephone number, including area code:  (954)    763-1200


         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 report(s), and (2) has been subject to such
filing requirements for the past 90 days.

Yes        X                      No
     --------------                  ------------


                      APPLICABLE ONLY TO CORPORATE ISSUERS

As of March 31, 2000,  there were 940,000  shares of Class A Common  Stock,  par
value $.0001 per share,  and 1,700,000 shares of Class B Common stock, par value
$.0001 per share, outstanding.


<PAGE>


                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

          H:\2000WORK\CLIENTS\02582-001\BIOAQUA-MAR-00-DEC-99-10-Q.DOC


<PAGE>


                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                                      INDEX

Part I.           Financial Information

Item 1.           Financial Statements (unaudited)


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


Part II.          Other Information


<PAGE>


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

                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                           Consolidated Balance Sheets

                                   (Unaudited)
<TABLE>
<CAPTION>

                              A S S E T S                                     March 31, 2000          December 31, 1999

<S>                                                                              <C>                      <C>

Current Assets:
--------------------------------------------------------------------------------------------------------------------------
   Cash and cash equivalents                                                $       3,730,517          $        102,621
   Accounts receivable, net                                                         2,121,322                 1,882,127
   Due from related parties                                                           382,424                   357,743
   Other receivables                                                                  188,634                   242,937
   Inventory                                                                          610,159                   594,283
   Income taxes receivable                                                            152,065                   120,122
   Offering costs                                                                          -                    141,256
   Other current assets                                                               253,073                   346,340
                                                                            -----------------          ----------------

         Total Current Assets                                                       7,438,194                 3,787,429

Property and Equipment, net                                                           563,575                   622,364
Loan Receivable - Supplier                                                          1,988,051                 1,554,344
Intangibles, net                                                                       10,500                     9,835
                                                                            -----------------          ----------------

                                                                            $      10,000,320          $      5,973,972
                                                                            =================          ================

                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable and accrued expenses                                    $       1,463,473          $      1,159,966
   Line-of-credit                                                                   2,245,455                 2,189,508
   Obligations with banks - current portion                                            85,358                    85,358
   Notes payable                                                                      760,469                   644,415
   Due to stockholder                                                               1,300,000                 1,300,000
                                                                            -----------------          ----------------

         Total Current Liabilities                                                  5,854,755                 5,379,247
                                                                            -----------------          ----------------

Long-Term Liabilities:
   Obligations with banks, excluding current portion                                  403,720                   378,161
                                                                            -----------------          ----------------

Stockholders' Equity:
   Class A common stock                                                                    94                         9
   Class B common stock                                                                   170                       170
   Preferred stock                                                                         -                         -
   Additional paid-in capital                                                       4,035,289                   529,444
   Retained earnings                                                                  497,244                   428,160
   Cumulative translation adjustment                                                 (790,952)                 (741,219)
                                                                            -----------------          ----------------

     Total Stockholders' Equity                                                     3,741,845                   216,564
                                                                            -----------------          ----------------

                                                                            $      10,000,320          $      5,973,972
                                                                            =================          ================

</TABLE>



<PAGE>


                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                        Consolidated Statements of Income

                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                                    Three Months Ended

                                                                                         ----------------------------------------
                                                                                                        March 31,

                                                                                         -------------------  -------------------
                                                                                                2000                 1999
<S>                                                                                              <C>               <C>

-------------------------------------------------------------------------------------------------------------------------------
Revenues                                                                                   $    1,435,879       $    1,391,358
Cost of Operations                                                                              1,060,479              999,015
                                                                                           --------------       --------------

Gross Profit                                                                                      375,399              392,343

General and Administrative Expenses                                                               287,547              230,074
                                                                                           --------------       --------------

Income from Operations                                                                             87,852              162,269
                                                                                           --------------       --------------

Other Income (Expenses):
  Other, net                                                                                       50,267              (12,934)
  Interest expense                                                                                (69,035)             (90,629)
                                                                                           --------------       --------------

                                                                                                  (18,768)            (103,563)
                                                                                           --------------       --------------

Net Income                                                                                 $       69,084       $       58,706
                                                                                           ==============       ==============


Net Income Per Common Share                                                                          0.04                 0.03
                                                                                           ==============       ==============


Weighted Average Common Shares

  Outstanding                                                                              $    1,795,634       $    1,790,000
                                                                                           ==============       ==============

</TABLE>





<PAGE>



                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                 Consolidated Statements of Stockholders' Equity

                                   (Unaudited)
<TABLE>
<CAPTION>

                                   Class A        Class B         Additional                     Cumulative                Total
                             -----------------  -------------------  -------------  -------------------  ----------------------
                                 Common          Common           Paid-in         Retained       Translation     Stockholders'Equity
                                  Stock           Stock           Capital      --------------  ---------------------  -------------

                                                                                                                 Earnings Adjustment

<S>                              <C>             <C>                    <C>       <C>            <C>                      <C>


-----------------------------------------------------------------------------------------------------------------------------------
Balance at December
 31, 1999                  $         9         $    170        $   529,444      $ 428,160        $   (741,219)        $    216,564

Issuance of Class A
common stock from
  public offering, net               85            -             3,505,845          -                     -             3,505,930

Net Income                            -            -                    -         69,084                    -              69,084

Translation adjustment                -            -                    -           -                (49,733)            (49,733)
                                ----------      ----         ------------       ---------        --------------       ------------


Balance at March 31, 2000  $        94     $   170         $  4,035,289       $ 497,244        $     (790,952)      $  3,741,845
                              =====================      ============         =============        ==============    ============


</TABLE>







<PAGE>



                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                           Three Months Ended

                                                                          ----------------------------------------------------
                                                                                               March 31,
                                                                                    2000                       1999
<S>                                                                                       <C>                     <C>

Cash Flows from Operating Activities:

--------------------------------------------------------------------------------------------------------------------------------
   Net income                                                                 $         69,084            $        58,706
   Adjustments to reconcile net income to net cash provided
    by (used in) operating activities:
     Depreciation and amortization                                                      65,216                     60,562
     Translation adjustment                                                            (49,733)                   (52,252)
     Changes in assets and liabilities:
       Decrease (increase) in:
         Accounts receivable, net                                                     (239,195)                  (594,535)
         Other receivables                                                              54,303                     69,082
         Inventory                                                                     (15,876)                   119,884
         Income taxes receivable                                                       (31,943)                   (49,818)
         Other current assets                                                           93,267                   (356,589)
         Other assets                                                                 (293,116)                   (85,727)
       Increase (decrease) in:
         Accounts payable and accrued expenses                                         303,507                    348,004
                                                                              ----------------            ---------------

Net Cash (Used in) Operating Activities                                                (44,486)                  (482,683)
                                                                              ----------------            ---------------

Cash Flows from Investing Activities:
   Acquisition of property and equipment                                               (55,789)                    (7,684)
                                                                              ----------------            ---------------



</TABLE>



<PAGE>


                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                Consolidated Statements of Cash Flows (Continued)

                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                           Three Months Ended

                                                                          ----------------------------------------------------
                                                                                               March 31,
                                                                                    2000                       1999
<S>                                                                                <C>                              <C>

Cash Flows from Financing Activities:
---------------------------------------------------------------------------------------------------------------------------------
   Net proceeds (repayments) of notes payable to vendors                     $          116,054           $        (42,043)
   Payment of underwriting discounts                                                   (552,500)                        -
   Payment of offering costs                                                           (191,570)                        -
   Net proceeds from lines-of-credit                                                     55,947                         -
   Net proceeds (repayments) to related parties                                          24,681                   (157,077)
   Proceeds from public offering                                                      4,250,000                         -
   Proceeds from long-term debt                                                          25,559                    600,327
                                                                             ------------------           ----------------

Net Cash Provided by Financing Activities                                             3,728,171                    401,207
                                                                             ------------------           ----------------

Increase (Decrease) in Cash and Cash Equivalents                                      3,627,896                    (89,160)

Cash and Cash Equivalents - Beginning of Period                                         102,621                    136,489
                                                                             ------------------           ----------------

Cash and Cash Equivalents - End of Period                                    $        3,730,517           $         47,329
                                                                             ==================           ================


Supplemental Disclosure of Cash Flow Information:
   Cash paid during the period for interest                                  $           69,035           $         90,629

</TABLE>









<PAGE>


                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

       Notes to Supplemental Consolidated Financial Statements (Continued)








                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

    (Unaudited) With Respect to March 31, 2000 and 1999 and December 31, 1999





NOTE 1  -  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization - Bio-Aqua Systems, Inc., (the "Company"), is a Florida corporation
incorporated in March 1999 as a holding
              ------------
company to acquire Tepual, S.A., a Chilean  corporation.  Tepual, S.A. is in the
business of researching and developing of production and control systems related
to animal  nutrition.  The Company  provides  brokerage  services and  technical
advice in
the production of meals for feed for aquaculture, poultry and cattle farming. In
addition, the Company researches poultry
              vaccines.

              Basis of Presentation - In March 2000, the Company  acquired 99.9%
              of the issued and  outstanding  common stock of Tepual,  S.A.,  in
              exchange for  1,700,000  shares of Class B common stock which took
              effect as of the  closing of the  initial  public  offering of the
              Company's  stock.  In order to  comply  with  Chilean  law and the
              requirements of the Central Bank of Chile for foreign investments,
              two stock purchase  agreements were effectuated at the time of the
              closing of the  initial  public  offering of the  Company's  stock
              whereby  (i)  Atik,  S.A.  ("Atik"),  a  Chilean  corporation  and
              Flagship  Import  Export  LLC   ("Flagship"),   a  Nevada  limited
              liability  company,  purchased  1,699,900 shares of Class B common
              stock and, (ii) the Company  purchased Atik and  Flagship's  99.9%
              interest in Tepual,  S.A. and Tepual,  S.A. then became a majority
              owned  (99.9%)  subsidiary  of the Company.  The substance of this
              transaction  is an exchange of shares between the Company and Atik
              and Flagship  which was accounted for as a combination of entities
              under common control.  Generally  accepted  accounting  principles
              prescribe giving effect to a consummated  business  combination in
              financial  statements that do not include the date of consummation
              as if the business  combination  occurred at the  beginning of the
              first  period  presented.   Accordingly,  the  combined  financial
              statements for all periods  presented have been prepared  assuming
              the acquisition by the Company took place on January 1, 1997, that
              the Company was  incorporated  on that date,  and the  exchange of
              shares was  effectuated at that time.  Because the Company was not
              formed  until  March  1999,   historical  and  proforma  financial
              statements   are  not   included   herein   because   the  assets,
              liabilities,  revenues  and  expenses  and net income of  Bio-Aqua
              Systems, Inc. are not material to the information presented. These
              financial  statements  became the  historical  combined  financial
              statements of the Company after financial  statements covering the
              date of consummation of the business combination were issued.

              Functional   Currency  -  The  financial   statements   have  been
              translated  in  accordance   with  the  provisions  set  forth  in
              Statement of Financial  Accounting  Standards No. 52, from Chilean
              pesos (the  functional  currency)  into US dollars (the  reporting
              currency).  The  exchange  rate used at March 31,  2000 was 501.41
              pesos to U.S. $1 and at December  31,  1999,  was 530.07  pesos to
              U.S. $1. The weighted  average  exchange rate used for the quarter
              ending March 31, 2000 was 519.78 pesos to U.S. $1 and for the year
              ending December 31, 1999 was 515.08 pesos to U.S. $1.


<PAGE>


NOTE 1  -  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

              (Continued)

              Earnings Per Common Share - Earnings per common share are based on
              the weighted average number of shares outstanding of 1,795,634 for
              the three months ended March 31, 2000 and  1,790,000 for the three
              months  ended  March  31,  1999  giving  effect  to  common  stock
              equivalents, none of which existed in the aforementioned periods.


<PAGE>


                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF

            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

                       CONDITION AND RESULTS OF OPERATIONS

GENERAL

Management's   discussion  and  analysis   contains   various  "forward  looking
statements". Such statements consist of any statement other than a recitation of
historical fact and can be identified by the use of forward-looking  terminology
such as  "may",  "expect",  "anticipate",  "estimate"  or  "continue"  or use of
negative or other variations or comparable terminology.

We caution that these statements are further qualified by important factors that
could cause  actual  results to differ  materially  from those  contained in the
forward-looking   statements,   that  these   forward-looking   statements   are
necessarily  speculative,  and there are certain  risks and  uncertainties  that
could cause actual events or results to differ materially from those referred to
in such forward-looking statements.

OVERVIEW

We generate  substantially all of our revenues from the sale of certain products
such as fish meal,  feather  meal and krill meal  which we  purchase  from third
parties under our own brand for resale to our customers throughout the world. As
of March 31, 2000,  we have sold two of our automatic  control  systems for fish
meal  processing,  certain  immune  stimulants  on a testing  basis,  as well as
vaccines which we have developed.

THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999

Results of Operations

Gross  revenues for the three  months ended March 31, 2000  increased by $44,521
when  compared  to the three  months  ended March 31,  1999 from  $1,391,358  to
$1,435,879  or 3%, due to a modest  increase  in trading  activities  during the
first quarter of 2000.

Cost of  operations  for the three  months  ended March 31,  2000,  increased by
$61,464 when  compared to the three months ended March 31, 1999 from $999,015 to
$1,060,479  or 6%, as a result of the  fluctuations  of the prices of fish meal,
feather meal and krill meal in our  brokerage  business.  In  addition,  because
these  products are  generally  paid in U.S.  dollars,  the  devaluation  of the
Chilean pesos also contributed to the cost increased.

Our gross profit  percentage  declined by approximately 2% (from 28% to 26%) for
the three  months  ended March 31, 2000 when  compared to the three months ended
March 31, 1999 because of the increase in costs previously explained.


<PAGE>


THREE MONTHS ENDED MARCH 31, 2000  COMPARED TO THREE MONTHS ENDED MARCH 31, 1999
(Continued)

General and administrative expenses increased by $57,473 or 25% from $230,074 to
$287,547  for the three  months  ended March 31, 2000 when  compared to the same
period during 1999, mostly to an increase in payroll and selling expenses.

Other income  (expenses)  decreased  from  $(103,563) for the three months ended
March 31,  1999 to  $(18,768)  for the three  months  ended  March 31,  2000,  a
decrease of $84,795 or approximately  82%. This decrease is due to a decrease in
interest  expense  for the three  months  ended  March 31, 2000 as a result of a
decrease in the average  outstanding  balance of debt.  Additionally,  we earned
approximately  $50,000  in  interest  income on loans made to a  supplier.  (See
liquidity and capital resources.)

Our net income for the three months  ended March 31, 2000  increased by $10,378,
from  $58,706 for the three  months ended March 31, 1999 to $69,084 for the same
period in 2000. This increase was the result of interest earned,  reduced by the
declined  in the  gross  profit  percentage  and the  increase  in  general  and
administrative expenses.

Liquidity and Capital Resources

At March 31, 2000, the accounts  receivable  increased by $239,195 when compared
at December  31,  1999,  from  $1,882,127  in 1999 to  $2,121,322  in 2000.  The
increased  in  receivables  was  due  to  extending  payment  terms  to  certain
customers.

Inventory  increased by $15,876 at March 31, 2000, when compared to December 31,
1999,  from  $594,283  to  $610,159.  Inventory  levels  varies  during the year
depending on the amount of trades and  availability  of product from  suppliers.
Increased in inventory was within the expected range.

Due from  related  parties  increased  from  $357,743  at  December  31, 1999 to
$382,424 at March 31, 2000, an increase of $24,681,  due to advances made to the
Company's main shareholder.

Other  receivables  decrease  to  $188,634  at March 31,  2000 from  $242,937 at
December 31, 1999. A decrease of $54,303 or 14% as a result of the collection of
amounts due from the prior installations of automatic control systems.

Income taxes receivable increased to $152,065 at March 31, 2000 from $120,122 at
December  31,  1999,  an increase of $31,943.  This  increase was prompted by an
increase in government incentives and credits arising out of export sales.


<PAGE>


THREE MONTHS ENDED MARCH 31, 2000  COMPARED TO THREE MONTHS ENDED MARCH 31, 1999
(Continued)

Loans  Receivable - Supplier  increased by $433,707 from  $1,554,344 at December
31, 1999 to  $1,988,051  at March 31, 2000.  This  increase is due to additional
loans made to Kelor Trading Ltd., a krill fishing and research operation.  Under
this agreement with Kelor, we have agreed to lend up to $2 million, payable over
18 months at an  interest  rate of 13.5% in return for the  exclusive  rights to
sell  all of the  vessel's  krill  products  and the  right to  perform  certain
research  and  development  on board the  vessel  located in  Antarctic  waters.
Additionally,  Kelor has agreed to pay us a brokerage  commission of 3% over the
F.O.B. sales and $20 per ton of krill meal and 5% for krill oil. Interest income
receivable  in the amount of $50,267 and $149,603 was recorded at March 31, 2000
and December 31, 1999, respectively and included in other receivables.

Accounts  payable  increased by $303,507 from $1,159,966 at December 31, 1999 to
$1,463,473 at March 31, 2000 because the Company obtained extended payment terms
from certain vendors.

Long-term debt has increased from  $2,274,866 at December 31, 1999 to $2,330,813
at March 31, 2000,  an increase of $55,947.  The increase was due to  additional
borrowings to cover short-term operations.

USE OF PROCEEDS

On March 29, 2000, the Securities and Exchange Commission declared effective our
registration  statement  on Form  SB-2 in  connection  with our  initial  public
offering.  A total of 425,000 units (each unit consisting of 2 shares of Class A
common stock and 2 redeemable  common stock  purchase  warrants)  were sold at a
price  of  $10  per  unit  to the  underwriters  through  their  representatives
Institutional  Equity  Corporation  and Capital West  Securities.  The aggregate
gross proceeds raised in connection with the IPO were $3,697,500 net of $552,500
of underwriters  discounts.  As of March 31, 2000,  $400,000 of our net proceeds
was paid as a portion of the $1.3 million  purchase  price for Profeed,  Inc. In
addition,  $150,000  was  paid to  repay  the  bridge  loans  from  third  party
accredited  investors and $50,000 for current  operations.  The remainder of our
anticipated  use of our net proceeds  will be used for  reduction of bank loans,
development  of red tide kits,  development of immune  stimulants,  research and
development of poultry vaccine, marketing and working capital.


<PAGE>


                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

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 Securities Holders
                  None


ITEM 5:  Other Information


<PAGE>




                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

ITEM 6  -  Exhibits and Reports on Form 8-K

(a)      Exhibits required by Item 601 of Regulation S-B

              27.1  Financial Data Schedule
(b)      Reports on Form 8-K

                  None


<PAGE>


                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned as a duly authorized  officer as the chief financial  officer of the
Registrant.

                             BIO-AQUA SYSTEMS, INC.




               By: ______________________________________________
                              Max Rutman, President
                           and Chief Executive Officer

               By: ______________________________________________
                    Guillermo Quiroz, Chief Financial Officer

                (authorized Officer and Chief Accounting Officer)

DATED:        May 18, 2000







<PAGE>