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 June 30, 2000

     ( )  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.
     ------------------- --------------------------------------------------
             (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) 766-7879


         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 June 30, 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.


                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS





<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
<TABLE>
<CAPTION>

                              A S S E T S                                     June 30, 2000           December 31, 1999
                                                                               (Unaudited)
Current Assets:
<S>                                                                                <C>                     <C>

   Cash and cash equivalents                                                $       1,140,520          $        102,621
   Accounts receivable net allowance of
    approximately $98,000                                                           1,634,084                 1,882,127
   Due from related parties                                                           229,704                   357,743
   Other receivables                                                                  589,591                   242,937
   Inventory                                                                          379,802                   594,283
   Income taxes receivable                                                            100,524                   120,122
   Offering costs                                                                          -                    141,256
   Other current assets                                                               602,419                   346,340
                                                                            -----------------          ----------------

         Total Current Assets                                                       4,676,644                 3,787,429

Property and Equipment, net                                                           522,588                   622,364
Loan Receivable - Supplier                                                          2,054,064                 1,554,344
Intangibles, net                                                                       11,266                     9,835
                                                                            -----------------          ----------------

                                                                            $       7,264,562          $      5,973,972
                                                                            =================          ================

                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable and accrued expenses                                    $       1,091,875          $      1,159,966
   Line-of-credit                                                                   1,641,348                 2,189,508
   Obligations under capital leases                                                    85,358                    85,358
   Notes payable                                                                      442,305                   644,415
   Due to stockholder                                                                 900,000                 1,300,000
                                                                            -----------------          ----------------

         Total Current Liabilities                                                  4,160,886                 5,379,247
                                                                            -----------------          ----------------

Long-Term Liabilities:
   Obligations under capital leases, excluding current portion                        314,647                   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                                                                  171,512                   428,160
   Cumulative translation adjustment                                               (1,418,036)                 (741,219)
                                                                            -----------------          ----------------

     Total Stockholders' Equity                                                     2,789,029                   216,564
                                                                            -----------------          ----------------

                                                                            $       7,264,562          $      5,973,972
                                                                            =================          ================
</TABLE>




<PAGE>


                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                        Consolidated Statements of Income

                                   (Unaudited)
<TABLE>
<CAPTION>

                    Three Months Ended June 30, 2000 and 1999

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

Revenues                                                                      $       1,969,501           $       1,571,682
Cost of Operations                                                                    1,511,433                     969,741
                                                                              -----------------           -----------------

Gross Profit                                                                            458,068                     601,941

General and Administrative Expense                                                      608,915                     716,700
                                                                              -----------------           -----------------

Loss from Operations                                                                   (150,847)                   (114,759)
                                                                              -----------------           -----------------

Other Income (Expenses):
   Other, net                                                                           (43,000)                    153,733
   Interest expense                                                                    (131,886)                   (110,239)
                                                                              -----------------           -----------------

                                                                                       (174,886)                     43,494
                                                                              -----------------           -----------------

Net Loss                                                                      $        (325,733)          $         (71,265)
                                                                              =================           =================


Net Loss Per Common Share                                                                $(0.12)                     $(0.04)
                                                                                         ======                      ======


Weighted Average Common Shares Outstanding                                            2,640,000                   1,790,000
                                                                                     ==========                  ==========


</TABLE>






<PAGE>


                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                        Consolidated Statements of Income

                                   (Unaudited)
<TABLE>
<CAPTION>

                     Six Months Ended June 30, 2000 and 1999

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

Revenues                                                                      $       3,405,380           $       2,963,040
Cost of Operations                                                                    2,571,912                   1,968,756
                                                                              -----------------           -----------------

Gross Profit                                                                            833,468                     994,284

General and Administrative Expense                                                      896,462                     946,774
                                                                              -----------------           -----------------

(Loss) Income from Operations                                                           (62,994)                     47,510
                                                                              -----------------           -----------------

Other Income (Expenses):
   Other, net                                                                             7,267                     153,618
   Interest expense                                                                    (200,921)                   (213,687)
                                                                              -----------------           -----------------

                                                                                       (193,654)                    (60,069)
                                                                              -----------------           -----------------

Net Loss                                                                      $        (256,648)          $         (12,559)
                                                                              =================           =================


Net Loss Per Common Share                                                                $(0.11)                     $(0.01)
                                                                                         ======                      ======


Weighted Average Common Shares Outstanding                                            2,215,000                   1,739,882
                                                                                     ==========                  ==========


</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'
                                     Stock            Stock           Capital      Earnings      Adjustment        Equity

<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 Loss                                -                -                -        (256,648)             -             (256,648)

Translation adjustment                  -                -                -              -        (676,817)            (676,817)
                                -----------     -----------         ------------  -------------        -------------- ------------


Balance at June 30, 2000         $        94    $       170         $  4,035,289 $  171,512   $ (1,418,036)      $    2,789,029
                                 ===========     ===========         ============   =============        ======     ==============

</TABLE>








<PAGE>



                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

                                   (Unaudited)
<TABLE>
<CAPTION>

                     Six Months Ended June 30, 2000 and 1999

                                                                                    2000                       1999

Cash Flows from Operating Activities:
<S>                                                                              <C>                       <C>

   Net loss                                                                   $       (256,648)           $       (12,559)
   Adjustments to reconcile net income to net cash provided
    by (used in) operating activities:
     Depreciation and amortization                                                     128,546                    117,777
     Allowance for bad debt                                                             98,285                         -
     Loss on disposal of fixed assets                                                   18,740                         -
     Translation adjustment                                                           (676,817)                  (153,208)
     Changes in assets and liabilities:
       Decrease (increase) in:
         Accounts receivable, net                                                      149,758                     95,560
         Other receivables                                                            (346,654)                    69,082
         Inventory                                                                     214,481                    (31,217)
         Income taxes receivable                                                        19,598                     15,039
         Other current assets                                                         (256,079)                  (362,773)
         Due from suppliers                                                           (499,720)                  (342,387)
         Intangibles                                                                    (1,431)                        -
       Increase (decrease) in:
         Accounts payable and accrued expenses                                         (68,091)                   161,530
                                                                              ----------------            ---------------

Net Cash (Used in) Operating Activities                                             (1,476,032)                  (443,156)
                                                                              ----------------            ---------------

Cash Flows from Investing Activities:
   Acquisition of property and equipment                                               (47,510)                    (9,049)
                                                                              ----------------            ---------------
</TABLE>







<PAGE>


                     BIO-AQUA SYSTEMS, INC. AND SUBSIDIARIES

                Consolidated Statements of Cash Flows (Continued)

                                   (Unaudited)
<TABLE>
<CAPTION>

                     Six Months Ended June 30, 2000 and 1999

                                                                                    2000                       1999

Cash Flows from Financing Activities:
<S>                                                                              <C>                      <C>

   (Repayments) of notes payable                                             $         (202,110)          $        (23,911)
   Payment of underwriting discounts                                                   (552,500)                        -
   Payment of offering costs                                                            (50,314)                  (205,127)
   Net (repayments) proceeds of lines-of-credit                                        (548,160)                   625,541
   Net proceeds (repayments) to related parties                                         128,039                     (5,865)
   Proceeds from bridge loan                                                                 -                     150,000
   Proceeds from public offering                                                      4,250,000                         -
   Repayment due to stockholder                                                        (400,000)                        -
   Payment on capital leases                                                            (63,514)                   (93,227)
                                                                             ------------------           ----------------

Net Cash Provided by Financing Activities                                             2,561,441                    447,411
                                                                             ------------------           ----------------

Increase (Decrease) in Cash and Cash Equivalents                                      1,037,899                     (4,794)

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

Cash and Cash Equivalents - End of Period                                    $        1,140,520           $        131,695
                                                                             ==================           ================


Supplemental Disclosure of Cash Flow Information:
   Cash paid during the period for interest                                  $          200,921           $         60,069

Supplemental Disclosure of Non-Cash Financing Activities:
   Issuance of Class A common stock in
    connection with offering                                                                 -                     118,122

</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 June 30, 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.


<PAGE>



NOTE 1  -  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING

               POLICIES (Continued)

              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 June 30,  2000 was  538.61
              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 six
              months ended June 30, 2000 was 524.70 pesos to U.S. $1 and for the
              year ending December 31, 1999 was 515.08 pesos to U.S. $1.

              Earnings Per Common Share - Earnings per common share are based on
              the weighted average number of shares  outstanding of 2,215,00 and
              2,640,000  for the three and six months  ended  June 30,  2000 and
              1,739,882  and  1,790,000  for the three and six months ended June
              30, 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 June 30, 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.

SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999

Results of Operations

Gross revenues for the six months ended June 30, 2000 increased by $442,340 when
compared to the six months ended June 30, 1999 from  $2,963,040 to $3,405,380 or
15%,  due to an  increase in trading  activities  during the first six months of
2000.

Cost of operations for the six months ended June 30, 2000, increased by $603,156
when  compared  to the six  months  ended  June  30,  1999  from  $1,968,756  to
$2,571,912 or 31%, 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  increase.  Also, for the six months
ended June 30, 2000,  management  decided to reserve  approximately  $200,000 of
existing inventory as obsolete due to decline in demand. This decision increased
the cost of operations by approximately  10% when compared to 1999 and decreased
profits accordingly.


<PAGE>



SIX MONTHS  ENDED JUNE 30,  2000  COMPARED  TO SIX  MONTHS  ENDED JUNE 30,  1999
(Continued)

Gross profit percentage  declined by approximately 10% (from 34% to 24%) for the
six months  ended June 30, 2000 when  compared to the six months  ended June 30,
1999 because of the increase in costs previously explained.

General and administrative  expenses decreased by $50,312 or 5% from $946,774 to
$896,462 for the six months ended June 30, 2000 when compared to the same period
during  1999.  This  decrease  was  principally  attributed  to a  reduction  in
administrative overhead.

Other income  (expenses)  decreased  from $153,618 for the six months ended June
30,  1999 to $7,267  for the six  months  ended June 30,  2000,  a  decrease  of
$146,351 or approximately  95%. This decrease is due to a reduction in drawbacks
from Chilean customs collected in 1999 but not in 2000.

Net loss for the six months  ended June 30, 2000  increased  by  $244,089,  from
$12,559 for the six months  ended June 30, 1999 to $256,648  for the same period
in 2000.  The  increase in net loss was  prompted by an  allowance  for bad debt
recorded for the six months ended June 30, 2000 of approximately  $98,000 and an
inventory reserve recorded of approximately $200,000 previously explained.

Liquidity and Capital Resources

At June 30, 2000, the accounts receivable decreased by $248,043 when compared at
December 31, 1999,  from  $1,882,127 in 1999 to $1,634,084 in 2000. The decrease
in receivables was due to collection of outstanding  balances on certain Chilean
government contracts.

Inventory  decreased by $214,481 at June 30, 2000, when compared to December 31,
1999, from $594,283 to $379,802.  The decrease was  attributable to the increase
in the reserve for obsolete inventory recorded at June 30, 2000.


<PAGE>



SIX MONTHS  ENDED JUNE 30,  2000  COMPARED  TO SIX  MONTHS  ENDED JUNE 30,  1999
(Continued)

Due from  related  parties  decreased  from  $357,743  at  December  31, 1999 to
$229,704 at June 30, 2000, a decrease of $128,039, due to reimbursements made to
the Company by its principal shareholder.

Other  receivables  increased  to  $597,256  at June 30,  2000 from  $242,937 at
December  31, 1999.  An increase of  $346,654.  The increase is mostly due to an
increase in interest  receivable from the Kelor project and an increase in other
miscellaneous receivables.

Income taxes receivable  decreased to $100,524 at June 30, 2000 from $120,122 at
December  31,  1999,  a decrease of $19,598.  This  decrease  was  prompted by a
decrease in government incentives and credits arising out of export sales.

Loan Receivable - Supplier increased by $499,720 from $1,554,344 at December 31,
1999 to  $2,054,064 at June 30, 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 $252,091  and  $154,702 was recorded at June 30, 2000 and December 31,
1999, respectively and is included in other receivables.

Accounts  payable and accrued  expenses  decreased by $68,091 from $1,159,966 at
December 31, 1999 to $1,091,875 at June 30, 2000.

The  lines-of-credit  with banks  decreased from  $2,189,508 at June 30, 1999 to
$1,641,348  at June 30, 2000, a decrease of $548,160.  This  decrease was due to
payments  made on these  lines-of-credit  with  the  proceeds  from  the  public
offering made on March 2000.


<PAGE>



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 June  30,  2000,  the  Company  had used the
proceeds from this offering as follows:

1.       Reduction of bank debt by approximately $740,000.
2.       $400,000 was paid as a portion of the $1.3 million purchase price for
         Profeed, Inc.
3.       Paid offering costs of approximately $466,000 excluding underwriters
         discounts.
4.       Repayment of bridge loans by approximately $160,000.
5.       Paid approximately $338,000 for development of Red Tide Kits, Immune
         Stimulants and Poultry Vaccines.
6.       Used approximately $643,500 for trading working capital.
7.       Open a certificate of deposit with bank for $950,000.





<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:  /s/Max Rutman

                                            Max Rutman, President
                                            and Chief Executive Officer

                                    By:  /s/Guillermo Quiroz
                                     Guillermo Quiroz, Chief Financial Officer
                              (authorized Officer and Chief Accounting Officer)



DATED:        August 24, 2000

<PAGE>