<PAGE>

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

                                   FORM 10-QSB

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

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

For  Quarter  Ended:                           Commission  File  Number:
  September  25,  2002
                              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 Connaught Road Central
                          Sheung Wan, Hong Kong  33301
--------------------------------------------------------------------------------
(Address  of  Principal  Executive  Offices)              (Zip  Code)

                                 (852) 2815-9892
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the registrant was
required  to  file such reports) and (2) has been subject to filing requirements
for  the  past  90  days.
                                Yes  X     No
                                   ----       ----

The  number  of  shares  of  Common  Stock  outstanding  as of
September 25, 2002 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
                                                                -----------------------------
                                                                SEPTEMBER 25,     DECEMBER 25,
                    A S S E T S                                      2002           2001
                                                                 (Unaudited)
                                                                -------------  --------------
<S>                                                                   <C>            <C>
Current Assets:
  Cash and bank deposits                                         $      1,555   $       1,293
  Accounts receivable, net of allowance for doubtful accounts
  of $286 at September 25, 2002 and $281 at December 25, 2001           6,759           5,110
  Other receivables, deposits and prepayments                           1,549           1,048
  Inventories                                                           5,943           6,264
  Due from related companies                                            2,487           1,704
                                                                -------------  --------------
   Total current assets                                                18,293          15,419

Property, machinery and equipment, net                                 22,760          23,728
Investment                                                                  -              72
                                                                -------------  --------------
   Total assets                                                  $     41,053   $      39,219
                                                                =============  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Short-term borrowings                                           $      3,012   $      3,554
 Accounts payable and accrued liabilities                               6,241          4,178
 Taxes payable                                                          2,759          2,130
 Due to related companies                                               3,731          3,784
                                                                -------------  --------------
   Total current liabilities                                           15,743         13,646

Due to an immediate parent company                                      4,953          7,044
Due to joint venture partners                                           4,686          4,996
                                                                -------------  --------------
   Total liabilities                                                   25,382         25,686

Stockholders' equity:
  Common stock, $.0001 par value authorized - 107,000,000
  shares, issued and outstanding - 40,911,242 at
  September 25, 2002 and December 25, 2001                                 40             40
 Additional paid-in-capital                                             8,096          8,096
 Retained earnings                                                      7,535          5,397
                                                                -------------  --------------
   Total stockholders' equity                                          15,671         13,533
                                                                -------------  --------------

   Total liabilities and stockholders' equity                     $    41,053   $     39,219
                                                                =============  ==============

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

</TABLE>
<PAGE>
                     NEW DRAGON ASIA CORP. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME
                       (THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                            FOR THE               FOR THE
                                      THREE MONTHS ENDED    NINE MONTHS ENDED
                                         SEPTEMBER 25,         SEPTEMBER 25,
                                  ----------------------- -----------------------
                                      2002       2001        2002       2001
                                  ----------------------- -----------------------

<S>                                    <C>          <C>       <C>          <C>
Net sales                           $ 8,443     $ 7,713    $ 22,834    $ 21,017

Cost of goods sold                   (7,167)     (6,431)    (18,789)    (17,257)
                                     ---------  ---------  ---------   ---------
Gross profit                          1,276       1,282       4,045       3,760


Selling and distribution expenses      (224)      (301)        (780)       (787)

General and administrative
expenses                               (227)      (190)        (654)       (650)
                                     ---------  ---------  ---------   ---------
Income from operations                  825        791        2,611       2,323

Other income and expenses:
   Interest expense                     (48)       (18)        (197)       (207)
   Interest income                       52          -          143          67
                                     ---------  ---------  ---------   ---------
Income before provision for
income taxes                            829        773        2,557       2,183

Provision for income taxes             (104)       (73)        (419)       (176)
                                     ---------  ---------  ---------   ---------
Net income                          $   725    $   700     $  2,138    $  2,007
                                     =========  =========  =========   =========
Basic and diluted earnings per
common share                        $ 0.018    $ 0.017     $  0.052    $  0.049
                                     =========  =========  =========   =========
Weighted average shares used
to compute basic and diluted
net income per common share          40,911     40,911       40,911      40,911
                                     =========  =========  =========   =========

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

</TABLE>

<PAGE>

                     NEW DRAGON ASIA CORP. AND SUBSIDIARIES

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

                                                       FOR THE NINE MONTHS ENDED
                                                       -------------------------
                                                       SEPTEMBER 25, SEPTEMBER 25,
                                                       ------------ ------------
2001
                                                       ------------ ------------

<S>                                                        <C>          <C>

Cash flows from operating activities:
 Net income                                              $   2,138    $ 2,007
 Adjustments to reconcile net income to net cash
   provided by operating activities:
   Amortization and depreciation                             1,212        809
   Loss on disposal of machinery and equipment                   2          -
   Provision for bad debts                                       5         (2)
   Effect on exchange difference                                 -         17
   Changes in assets and liabilities:
     Accounts receivable                                    (1,654)    (1,421)
     Other receivables, deposits and prepayments              (501)       101
     Inventories                                               321      2,968
     Accounts payable and accrued liabilities                2,063     (2,764)
     Taxes payables                                            629        691
                                                       ------------ ----------
Net cash provided by operating activities                    4,215      2,406
                                                       ------------ ----------
Cash flows from investing activities:
 Increase in related companies                                (783)         -
 Due to related companies                                      (53)         -
 Decrease in investment                                         72
 Proceeds from sale of property, machinery and equipment         4          -
 Purchases of property, machinery and equipment               (250)      (821)
                                                       ------------ ----------
Decrease in net cash used in investing activities           (1,010)      (821)
                                                       ------------ ----------
Cash flows from financing activities:
 Issuance of common stock                                        -      5,000
 Proceeds from short-term borrowings                         3,735      2,054
 Payments on short-term borrowings                          (4,277)    (3,345)
 Net decrease in due to an immediate parent company         (2,091)    (3,555)
 Net decrease in due to joint venture partners                (310)    (1,337)
                                                       ------------ ----------
Net cash used in financing activities                       (2,943)    (1,183)
                                                       ------------ ----------
Net increase in cash and bank deposits                         262        402

Cash and bank deposits at the beginning of the period        1,293      1,015
                                                       ------------ ----------
Cash and bank deposits at the end of the period          $   1,555    $ 1,417
                                                       ============ ==========

</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
<PAGE>
                     NEW DRAGON ASIA CORP. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(ALL INTERIM INFORMATION RELATING TO THE THREE- AND NINE-MONTH PERIODS ENDED SEP
25,  2002  AND  2001  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.

     New  Dragon  Asia  Corp.,  formerly  Bio-Aqua  Systems,  Inc.,  a  Florida
     corporation  (the  'Company"),  was Incorporated in March l999. On December
     13,  2001,  the  Company  entered  into  a  Share  Exchange  Agreement (the
     "Agreement") with Max Rutman ("Rutman"), Flagship Import Export LLC and New
     Dragon Asia Food Limited, a company organized under the laws of the British
     Virgin  Islands  ("Asia").  Pursuant to the Agreement, on December 13, 2001
     (the "Closing"), the Company acquired from Asia all of its equity interests
     in  four  companies  organized under the laws of the British Virgin Islands
     (each  a  "Subsidiary" and, collectively, the "Subsidiaries") each of which
     in turn hold interests in separate sino-foreign joint ventures which equity
     interests constituted all of the issued and outstanding equity interests of
     the  Subsidiaries  in exchange for 37,963,263 shares of common stock of the
     Company.  At  the  closing,  the  Company  transferred all of the assets to
     Rutman  and  Rutman  assumed  all  of  the  liabilities associated with the
     transfer  assets.

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

     As  conditions  of  the  Share  Exchange Agreement, the Company amended its
     Articles  of  Incorporation  to:

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

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

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

          New  Dragon  Asia  Food  Limited  and its subsidiaries (the "Group" or
          "NDAC") a United States corporation incorporated under the laws of the
          British  Virgin  Islands, is principally engaged in the manufacturing,
          marketing  and  distribution  of  instant  noodles  and  flour  in the
          People's  Republic  of  China  ("PRC").

          On  the  date  of  the issuance of the 37,963,263 shares in connection
          with  the  Shares Exchange, 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.

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

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

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

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

            Details of the companies comprising the Group are as follows:

<TABLE>
<CAPTION>

                                                                     Percentage of
                                  Domicile and                      Equity Interest
                                    Date of             Paid-Up     Attributable to       Principle
     Name                         Incorporation         Capital        the Group          Activities
------------------------       -------------------   ------------  ----------------  -------------------

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

Mix Creation                     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                                                                     marketing
Limited                          August 13, 1999       28,000,000                    and distribution of
("NDAFLY")                                                                           flour
Rich Delta Limited               The British Virgin        US$         100%          Investment holding
("RD") (a)                            Islands          1,500,000
                                  October 28, 1998
New Dragon Asia                       The PRC              RMB          90% (c)      Manufacture,
Food                                                                                 marketing
(Yantai) Company Limited         December 24, 1998     17,462,000                    and distribution of
("NDAFY")                                                                            instant noodles
Noble Point Limited              The British Virgin        US$          100%         Investment holding
("NP") (a)                             Islands          1,500,000
                                 October 29, 1998
 New Dragon Asia                       The PRC              RMB         90% (c)      Manufacture,
 Food                                                                                marketing
(Dalian) Company                 December 25, 1998       17,430,000                  and distribution of
Limited                                                                              instant noodles
("NDAFD")
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                                                                                 marketing
Food Company                      December 25, 1998      51,191,432                  and distribution of
Limited                                                                              instant noodles
("SNDAF")
</TABLE>



     (a)  MC,  RD,  NP  and  KG are wholly owned by New Dragon Asia Food Limited
          ("NDAFL")  a company incorporated in the British Virgin Islands. NDAFL
          is  51%  owned  by New Dragon International Investment Limited and 49%
          owned  by Long Feng Food (Overseas) Company Limited, both incorporated
          in  the  British  Virgin  Islands,  through  a  number of intermediate
          holding  companies.
     (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 as 100% owned by the
          Group.
     (c)  NDAFY,  NDAFD  and SNDAF are contractual joint ventures established in
          the  PRC to be operated for 50 years until December 24, 2048. In March
          1999, RD and NP contributed 90% of the registered capital to NDAFY and
          NDAFD,  respectively,  while  KG  contributed  80%  of  the registered
          capital  to  SNDAF.  Under the joint venture agreements dated November
          28,  1998  and the supplemental agreement dated December 26, 1998, the
          PRC  joint  venture  partner  is  entitled to receive a pre-determined
          annual  fee  and  is  not responsible for any profit or loss of NDAFY,
          NDAFD  and  SNDAF  effective  from  December  26, 1998. In view of the
          profit  sharing  arrangements,  NDAFY, NDAFD and SNDAF are regarded as
          100%  owned  by  the  Group.
<PAGE>
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  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, 2001 of New Dragon Asia Corp. and Subsidiaries, as filed
          with  the Securities and Exchange Commission. The summary December 25,
          2001  balance  sheet  was  derived from audited consolidated financial
          statements, but does not include all disclosures required by generally
          accepted  accounting  principles.

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

NOTE  3  -  INVENTORIES
      Inventories  consist  of  the  following  (in  thousands):

                                September  25,  December  25,
                                                     2002           2001
                                   ---------     ---------
               Raw  materials      $  3,893      $  3,730
               Finished  goods        2,050         2,534
                                   ---------     ---------
                                   $  5,943      $  6,264
                                   =========     =========

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  September 25, 2002 and 2001, 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.


NOTE 5 -  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.

<PAGE>

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:


<TABLE>
<CAPTION>


                                                                       FOR THE NINE MONTHS ENDED
                                                                              SEPTEMBER 25,
                                                                          --------------------
                                                                             2002       2001
                                                                          --------- ----------
                                                                           US$'000    US$'000
<S>                                                                       <C>             <C>
Sale of finished goods to:
  Joint Venture Partner:
    Shandong Longfeng Group Company                                        121            40
  Related Parties:
    New Dragon Asia Food (Luoyang) Company Limited (2)                       -             1
    Shandong Longfeng Penglai Flour Company Limited                          2            15
    Sanhe (Yantai) Food Company Limited                                      -             3
    Xinliang Guo Liang Flour Company Limited                                 -             5
    Penglai Jinhai Food Company Limited                                    237             -
                                                                          --------------------
                                                                           360            64
                                                                          --------------------
Purchase of raw materials from:
  Joint Venture Partner:
    Shandong Longfeng Group Company                                          5             -
  Related Parties:
    Sanhe (Yantai) Food Company Limited                                     19            38
    Shandong Longfeng Penglai Flour Company Limited (1)                     35         2,026
    Longkou City Longfeng Colour Printing Packing Factory                  514           388
    Longkou City Longfeng Carton Printing Packing Factory                  369           245
                                                                          --------------------
                                                                           942         2,697
                                                                          --------------------
</TABLE>


NOTE  7  -  CONTINGENCIES

The  Group  did  not  properly report certain of its tax obligations in Mainland
China  during  the years ended December 25, 2001 and 2000. As a consequence, the
Group  may  be  subject  to additional surcharge or penalties as a result of the
unpaid  taxes in accordance with tax laws in the PRC, of which the amount cannot
be  reasonably  estimated  and is not recorded in the financial statements as of
December  25,  2001  and  2000. In addition, the holding companies of the Group,
namely New Dragon International Investment Limited and Long Feng Food (Overseas)
Company  Limited,  have  agreed  to  indemnify the Group against any liabilities
which  may  arise as a result of the above surcharges or penalties which are not
recorded  in  the  financial  statements  of  the  Group.



<PAGE>

ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION

     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, 2001, 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, the Company entered into a Share Exchange Agreement (the "Agreement") with
Max  Rutman  ("Rutman"),  Flagship  Import  Export  LLC and New Dragon Asia Food
Limited,  a  company  organized  under  the  laws  of the British Virgin Islands
("Asia").  Pursuant  to the Agreement, on December 13, 2001 (the "Closing"), the
Company  acquired  from  Asia  all  of  its  equity  interests in four companies
organized under the laws of the British Virgin Islands (each a "Subsidiary" and,
collectively,  the  "Subsidiaries")  each  of  which  in  turn hold interests in
separate  sino-foreign joint ventures, which equity interests constituted all of
the  issued and outstanding equity interests of the Subsidiaries in exchange for
37,963,263  shares  of common stock of the Company.  At the closing, the Company
transferred  all  of  the  assets  to  Rutman  and  Rutman  assumed  all  of the
liabilities  associated  with  the  transfer  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.

<PAGE>

PLAN  OF  OPERATIONS

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

     Our  long  term  growth  strategy  includes  the  strategic  acquisition 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.

RESULTS  OF  OPERATIONS

NINE MONTHS ENDED SEPTEMBER 25, 2002 COMPARED TO NINE MONTHS ENDED SEPTEMBER 25,
--------------------------------------------------------------------------------
2001
----

     REVENUE

     Total  revenue  for  the  nine  months  ended September 25, 2002 were $22.8
million  as  compared  to  $21.0  million,  an increase of 9% for the comparable
period  last year.  The increase in revenues is mainly due to increased capacity
in  our  flour  mills as a result of the addition of three sub-contracting flour
millers.

     NET  INCOME

Net  income  for  the  first  nine  months  of 2002 increased 7% to $2.1 million
compared  to $2.0 million for the corresponding period last year.  This increase
is  attributable  to  an  increase  in  sales.

     ADMINISTRATIVE  AND  GENERAL  EXPENSES

     Administrative and general expenses for the nine months ended September 25,
2002  increased  to  $654  thousand  or  1%  compared  to  $650 thousand for the
corresponding  period  in  2001.  The  increase  was  primarily  due  to  costs
associated  with  the  addition  of  the  three  sub-contracting  flour millers.

     SELLING  AND  DISTRIBUTION  EXPENSES

     Selling  and  distribution expenses for the nine months ended September 25,
2002  was  $780 thousand which was a decrease of 1% from $787 thousand for the
corresponding  period  of the prior year.  This decrease was the result of lower
transportation cost associated with the additional sub-contracting factories and
their  respective  distribution  outlets which were set up closer to the market.

<PAGE>

THREE  MONTHS  ENDED SEPTEMBER 25, 2002 COMPARED TO THREE MONTHS ENDED SEPTEMBER
--------------------------------------------------------------------------------
25,  2001
---------

     NET  SALES

     Net  Sales  for  the  third  quarter  of  2002 increased 9% to $8.4 million
compared  to  $7.7  million for the corresponding quarter of 2001.  The increase
was  attributed  to  the  promotional  sales  held  during  the  period.

     NET  INCOME

     Net  income  for  the  third  quarter  of  2002  was  $725  thousand.  This
represents  an  increase  of  4%  from  net  income  of  $700  thousand from the
comparable  quarter  of  2001.

     ADMINISTRATIVE  AND  GENERAL  EXPENSES

     Administrative  and  general  expenses increased from $190 thousand for the
third  quarter  of  2001 to $227 thousand for the third quarter of 2002, or 19%.
This  increase  is  due to the start-up costs and administration of our recently
acquired  sub-contracting  factories.

     SELLING  AND  DISTRIBUTION  EXPENSES

     Selling  and  distribution  expenses  decreased  from $301 thousand for the
third  quarter  of  2001 to $224 thousand, or 26%, for the corresponding period
this year.  The decrease was attributable to an increase in distribution outlets
following  the  addition  of  three  sub-contracting  of  factories  in  various
locations  which  resulted  in  a  reduction  of  transportation  cost.

     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 $1.6 million as of September 25, 2002. This
represents  an  increase  of $138 Thousand from September 25, 2001. The increase
was  primarily  due  to a positive cash flow from operating activities. Net cash
provided  by  operating  activities for the nine months ended September 25, 2002
was  approximately $4.2 million as compared to net cash generated from operating
activities  of  approximately $2.4 million for the corresponding period in 2001.
Net  cash  flows from the Company's operating activities are attributable to the
Company's  income  and  changes  in  operating  assets  and  liabilities.

     Accounts  receivable  and  accounts  payable  increased  by  32%  and  18%
respectively,  from  December 25, 2001 to September 25, 2002. There was a slight
increase  in  accounts  receivable  due  to  our  expansion  of the distribution
networks  in  new  market outlets such as supermarkets. The increase in accounts
payable  was mainly due to an increase of purchase of raw materials. 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 period ended
September 25,  2002.  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 the Renminbi, which is the official currency of China.  However,
we  use  the United States dollar for financial reporting purposes.  With effect
from  1st January, 1994, pursuant to the reforms of foreign exchange, conversion
of  Renminbi  into foreign currencies is regulated by the People's Bank of China
through  a  unified  floating exchange rate system.  Although the PRC government
has  stated  its  intention  to  support  the value of Renminbi, there can be no
assurance  that  such  exchange  rate  will  not  again  become volatile or that
Renminbi  will  not  devalue significantly against the US dollar.  Exchange rate
fluctuations  may adversely affect the value, in US dollar terms, of the Group's
net  assets  and  income  derived  from  its  operations  in  the  PRC.

Item 3. Controls and Procedures

(a) Evaluation of Disclosure Controls and procedures

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

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

(b) Changes in Internal Controls

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

<PAGE>

PART  II  -  OTHER  INFORMATION

ITEM  1.  Legal  Proceedings
None.

ITEM  2.  Changes  in  Securities  and  Use  of  Proceeds
None.

ITEM  3.  Default  Upon  Senior  Securities
None.

ITEM  4.  Submission  of  Matters  to  a  Vote  of  Security  Holders
None.

ITEM  5.  Other  Information
None.

ITEM  6.  Exhibits  and  Reports  on  Form  8-K

(a)       Exhibits:

          Exhibit  99.1: Certification

(b)       Reports  on  Form  8-K

          None.

<PAGE>


                                   SIGNATURES

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

Dated:  November  14,  2002
                                             NEW  DRAGON  ASIA  CORP.
                                             By:  /s/  Willie  Lai
                                             -------------------------------
                                             Name:  Willie  Lai
                                             Title: Chief Financial Officer


<PAGE>
                                  CERTIFICATION

     I,  Willie  Lai,  certify  that:

1.   I have reviewed this quarterly report on Form 10-QSB of New Dragon Asia
     Corp.:

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report.

4.   The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          (a)  designed  such  disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries,  is  made  known  to  us  by  others  within  those entities,
     particularly  during  the  period  in  which this quarterly report is being
     prepared;

          (b)  evaluated  the  effectiveness  of  the  registrant's  disclosure
     controls  and  procedures  as  of a date within 90 days prior to the filing
     date  of  this  quarterly  report  (the  "Evaluation  Date");  and

          (c)  presented  in  this  quarterly  report  our conclusions about the
     effectiveness  of  the  disclosure  controls  and  procedures  based on our
     evaluation  as  of  the  Evaluation  Date;

5.   The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

          (a)  all  significant  deficiencies  in  the  design  or  operation of
     internal  controls which could adversely affect the registrant's ability to
     record,  process,  summarize  and report financial data and have identified
     for the registrant's auditors any material weaknesses in internal controls;
     and

          (b)  any  fraud,  whether or not material, that involves management or
     other  employees  who  have a significant role in the registrant's internal
     controls;  and

6.   The registrant's other certifying officer and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


November  14,  2002
                             /s/ Willie  Lai
                             --------------------------
                             Willie  Lai
                             Chief  Financial
                             Officer


<PAGE>

                                  CERTIFICATION

     I,  Xue Dun Song,  certify  that:

1.   I have reviewed this quarterly report on Form 10-QSB of New Dragon Asia
     Corp.:

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report.

4.   The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          (a)  designed  such  disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries,  is  made  known  to  us  by  others  within  those entities,
     particularly  during  the  period  in  which this quarterly report is being
     prepared;

          (b)  evaluated  the  effectiveness  of  the  registrant's  disclosure
     controls  and  procedures  as  of a date within 90 days prior to the filing
     date  of  this  quarterly  report  (the  "Evaluation  Date");  and

          (c)  presented  in  this  quarterly  report  our conclusions about the
     effectiveness  of  the  disclosure  controls  and  procedures  based on our
     evaluation  as  of  the  Evaluation  Date;

5.   The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

          (a)  all  significant  deficiencies  in  the  design  or  operation of
     internal  controls which could adversely affect the registrant's ability to
     record,  process,  summarize  and report financial data and have identified
     for the registrant's auditors any material weaknesses in internal controls;
     and

          (b)  any  fraud,  whether or not material, that involves management or
     other  employees  who  have a significant role in the registrant's internal
     controls;  and

6.   The registrant's other certifying officer and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


November  14,  2002
                             /s/ Xue Jun Song
                             --------------------------
                             Xue Jun Song
                             Chief Executive Officer




<PAGE>