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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>UNITED
                  STATES</strong></font></div>
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                  AND EXCHANGE COMMISSION</strong></font></div>
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                  D.C. 20549</strong></font></div>
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                  8-K</strong></font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CURRENT
                  REPORT</strong></font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Pursuant
                  to Section 13 OR 15(d) of the Securities Exchange Act of
                  1934</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
              </td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date
                  of Report (Date of earliest event reported)</font></div>
              </td>
              <td align="left" valign="top" width="55%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>December
                  22, 2005</u></font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 20pt; FONT-FAMILY: Times New Roman"><strong>New
                  Dragon Asia Corp.</strong></font></div>
              </td>
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              <td colspan="2" valign="top" width="100%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
                  name of registrant as specified in its
                  charter)</font></div>
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              <td valign="top" width="33%" style="BORDER-BOTTOM: black thin solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Florida</font></div>
              </td>
              <td valign="top" width="34%" style="BORDER-BOTTOM: black thin solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">001-15046</font></div>
              </td>
              <td valign="top" width="33%" style="BORDER-BOTTOM: black thin solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">88-0404114</font></div>
              </td>
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              <td valign="top" width="33%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(State
                  or other jurisdiction</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
                  incorporation) </font></div>
              </td>
              <td valign="top" width="34%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Commission</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">File
                  Number) </font></div>
              </td>
              <td valign="top" width="33%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(I.R.S.
                  Employer</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Identification
                  No.)</font></div>
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                <td colspan="2" valign="bottom" width="67%" style="BORDER-BOTTOM: black thin solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Suite
                    2808, International Chamber of Commerce Tower, Fuhua Three Road,
                    Shenzhen,
                    PRC</font></div>
                </td>
                <td valign="bottom" width="33%" style="BORDER-BOTTOM: black thin solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">518048</font></div>
                </td>
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                <td colspan="2" valign="top" width="67%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Address
                    of principal executive offices)</font></div>
                </td>
                <td valign="top" width="33%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Zip
                    Code)</font></div>
                </td>
              </tr>
              <tr>
                <td colspan="2" valign="top" width="67%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
                </td>
                <td valign="top" width="33%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
                </td>
              </tr>
              <tr>
                <td colspan="3" valign="top" width="100%" style="BORDER-BOTTOM: black thin solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registrant&#8217;s
                    telephone number, including area code (86 755) 8831
                    2115</font></div>
                </td>
              </tr>
              <tr>
                <td colspan="3" valign="top" width="100%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Former
                    name or former address, if changed since last
                    report.)</font></div>
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        </div>
        <div>&#160;</div>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check
                    the appropriate box below if the Form 8-K filing is intended
                    to
                    simultaneously satisfy the filing obligation of the registrant
                    under any
                    of the following provisions:</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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                </td>
                <td align="left" colspan="2" valign="top" width="94%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Written
                    communications pursuant to Rule 425 under the Securities Act
                    (17 CFR
                    230.425)</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" colspan="2" valign="top" width="94%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font></div>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Soliciting
                    material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                    240.14a-12)</font></div>
                </td>
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              <tr>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" colspan="2" valign="top" width="94%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font></div>
                </td>
                <td align="left" colspan="2" valign="top" width="94%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
                    communications pursuant to Rule 14d-2(b) under the Exchange Act
                    (17 CFR
                    240.14d-2(b))</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" colspan="2" valign="top" width="94%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font></div>
                </td>
                <td align="left" colspan="2" valign="top" width="94%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
                    communications pursuant to Rule 13e-4(c) under the Exchange Act
                    (17 CFR
                    240.13a-4(c))</font></div>
                </td>
              </tr>

          </table>
        </div>
      </div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td align="left" style="WIDTH: 72pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                1.01</strong></font></td>
              <td align="left">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ENTRY
                  INTO A MATERIAL DEFINITIVE
                  AGREEMENT</strong></font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 22, 2005, the Company entered into a Securities Purchase Agreement
        (the
&#8220;SPA&#8221;) with certain institutional investors (the &#8220;Investors&#8221;) pursuant to which
        the Company raised $9,500,000 in gross proceeds from a private placement
        (the
&#8220;Private Placement&#8221;) of Series B 7% Convertible Preferred Stock (the &#8220;Preferred
        Stock&#8221;) and six-year common stock purchase warrants (the &#8220;Warrants&#8221;). The
        Company and the Investors also entered into Registration Rights Agreements
        (the
&#8220;Registration Rights Agreements&#8221;) on such date, pursuant to which the Company
        agreed to register for resale the shares of the Company&#8217;s Class A common stock,
        par value $.0001 per share (the &#8220;Common Stock&#8221;), issuable upon the conversion of
        the Preferred Stock and exercise of the Warrants and an agreement to register
        up
        to 3,000,000 shares of Common Stock held by New Dragon Asia Food Ltd. The
        terms
        of the Private Placement are more fully described in Item 3.02 of this Form
        8-K,
        which description is hereby incorporated by reference herein. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td align="left" style="WIDTH: 72pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                2.03</strong></font></td>
              <td align="left">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CREATION
                  OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE
                  SHEET ARRANGEMENT OF A
                  REGISTRANT</strong></font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Under
        SFAS 150 &#8220;Accounting for Certain Financial Instruments with Characteristics of
        both Liabilities and Equity,&#8221; the Preferred Stock will be recorded by the
        Company as a liability since it is an unconditional obligation that must
        be
        either redeemed for cash or settled by issuing shares of Common Stock.
</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
        the
        terms of the</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificate
        of Designation of Preferences, Rights and Limitations of Series B 7% Convertible
        Preferred Stock (the &#8220;Designation&#8221;), the Company is required to pay dividends on
        the Preferred Stock at a rate of 7% per annum. Any dividends, whether paid
        in
        cash or shares, that are not paid within three trading days following a Dividend
        Payment Date (as defined in the Designation) shall continue to accrue and
        shall
        entail a late fee, which must be paid in cash, at the rate of 18% per annum
        or
        the lesser rate permitted by an applicable law (such fees to accrue daily,
        from
        the Dividend Payment Date through and including the date of payment). The
        material terms of the Preferred Stock are more fully described in Items 3.02
        and
        3.03 of this Form 8-K, which descriptions are hereby incorporated by reference
        herein.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td align="left" style="WIDTH: 72pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                3.02</strong></font></td>
              <td align="left">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>UNREGISTERED
                  SALES OF EQUITY SECURITIES</strong></font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 22, 2005, the Company entered into the SPA with the Investors pursuant
        to which it issued 9,500 shares of Preferred Stock for aggregate gross proceeds
        of $9,500,000 (the &#8220;Offering Amount&#8221;). The Preferred Stock is initially
        convertible into 5,937,500 shares of Common Stock (i.e. the Offering Amount
        divided by 105% of the lesser of the average of the daily volume weighted
        average price of the Company&#8217;s common stock for each of the 10 trading days
        immediately preceding the closing date (the &#8220;Conversion Price&#8221;)). The Investors
        received Warrants to purchase 2,968,750 shares of Common Stock at an exercise
        price of $1.76 per share (the &#8220;Exercise Price&#8221;). The Conversion Price and the
        Exercise Price are subject to full ratchet adjustment as provided for in
        the
        Designation and the Warrants, respectively.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TerraNova
        Capital acted as placement agent for the Private Placement (the &#8220;Placement
        Agent&#8221;).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Beginning
        on the 24</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman, serif"><sup>th</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        month
        following the date of the SPA, and each third monthly anniversary of that
        date
        (quarterly) thereafter, the Company shall redeem 1/13</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman, serif"><sup>th</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        of the
        face value of the Preferred Stock in either cash or Common Stock, at the
        option
        of the Company (the &#8220;Amortization&#8221;). For each Amortization payment that the
        Company elects to pay in stock, it must deliver a written notice to that
        effect
        to the Investors at least 20 trading days prior to the date set for that
        Amortization payment. Common Stock delivered in payment of Amortization will
        be
        valued at 90% of the average of each of the daily volume weighted average
        price
        for the 20 trading day period immediately preceding the Amortization
        date.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company shall have the right but not the obligation to force the Investors
        to
        convert any outstanding Preferred Stock into Common Stock at the Conversion
        Price if the daily volume weighted average price of the Company's Common
        Stock
        exceeds 300% of the Conversion Price for each of 20 consecutive trading
        days.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">2</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        compliance with Section 713 of the American Stock Exchange Company Guide,
        the
        Company obtained stockholder approval of the Private Placement in light of
        the
        potential issuance of greater than 19.999% of the outstanding shares of Common
        Stock at below market price.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        connection with the SPA and the transactions contemplated therein, the Company
        entered into an agreement with the Placement Agent pursuant to which the
        Placement Agent received, as compensation for services rendered, a 6% cash
        commission and a five-year warrant (the &#8220;Placement Warrant&#8221;) to purchase
        356,250</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">shares
        of
        Common Stock at an exercise price of $1.76 per share. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        net
        proceeds from the Private Placement will be used for working capital and
        general
        corporate purposes, as well as for potential acquisitions. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Private Placement was made to the Investors pursuant to an exemption provided
        by
        Section 4(2) of the Securities Act of 1933, as amended, and the rules and
        regulations promulgated thereunder. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        foregoing descriptions of the SPA, the Registration Rights Agreements, the
        Preferred Stock, the Warrants and the Placement Warrant are merely summaries,
        and are not intended to be complete. The SPA, Registration Rights Agreements,
        Designation and the Form of Warrant are each filed as exhibits to this Form
        8-K,
        and the full text of each such exhibit is incorporated herein by reference
        in
        its entirety.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td align="left" style="WIDTH: 72pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                3.03</strong></font></td>
              <td align="left">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>MATERIAL
                  MODIFICATION TO RIGHTS OF SECURITY
                  HOLDERS</strong></font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Preferred Stock has liquidation preferences over the Common Stock. Upon any
        liquidation, dissolution or winding-up of the Company, whether voluntary
        or
        involuntary (a &#8220;Liquidation&#8221;), the holders of the Preferred Stock shall be
        entitled to receive payment out of the assets of the Company, whether such
        assets are capital or surplus, for each share of Preferred Stock an amount
        equal
        to $1,000 per share plus any accrued and unpaid dividends thereon and any
        other
        fees or liquidated damages (as defined in the Designation) owing thereon
        before
        any distribution or payment shall be made to the holders of any Common Stock,
        and if the assets or the Company shall be insufficient to pay in full such
        amounts, then the entire assets to be distributed to the holders of the
        Preferred Stock shall be distributed among those holders ratably in accordance
        with the respective amounts that would be payable on such shares if all amounts
        payable thereon were paid in full. A &#8220;Fundamental Transaction&#8221; or &#8220;Change of
        Control Transaction&#8221; (as each capitalized term is defined in the Designation)
        shall not be treated as a Liquidation. The Designation also provides that
        no
        dividends shall be declared or paid or set apart for payment on shares of
        Common
        Stock unless full cumulative dividends due on the Preferred Stock have been
        or
        contemporaneously are declared and paid.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td align="left" style="WIDTH: 72pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                5.03</strong></font></td>
              <td align="left">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AMENDMENTS
                  TO ARTICLES OF INCORPORATION OR
                  BYLAWS</strong></font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 22, 2005, the Company filed the Designation with the Secretary of
        State
        of Florida authorizing 9,500 shares of Preferred Stock. Except as otherwise
        provided herein and as otherwise required by law, the Preferred Stock shall
        have
        no voting rights. However, so long as any shares of Preferred Stock are
        outstanding, the Company shall not, without the affirmative vote of the holders
        of the shares of the Preferred Stock then outstanding, (a) alter or change
        adversely the powers, preferences or rights given to the Preferred Stock
        or
        alter or amend the Designation, (b) authorize or create any class of stock
        ranking as to dividends, redemption or distribution of assets upon a Liquidation
        senior to or otherwise pari passu with the Preferred Stock, (c) amend its
        certificate of incorporation or other charter documents so as to affect
        adversely any rights of the holders of the Preferred Stock, (d) increase
        the
        authorized number of shares of Preferred Stock, or (e) enter into any agreement
        with respect to the foregoing. The conversion rights and liquidation preferences
        of the Preferred Stock are described in Items 1.01, 3.02 and 3.03 of this
        Form
        8-K, which descriptions are hereby incorporated by reference herein. The
        Designation is attached as an Exhibit to this Form 8-K. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">3</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td align="left" style="WIDTH: 72pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                7.01.</strong></font></td>
              <td align="left">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>REGULATION
                  FD DISCLOSURE</strong></font></div>
              </td>
            </tr>

        </table>
      </div>
      <div>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 22, 2005, the Company issued a press release relating to the Private
        Placement, which release is which attached hereto as Exhibit 99.1.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td align="left" style="WIDTH: 72pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                9.01.</strong></font></td>
              <td align="left">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FINANCIAL
                  STATEMENTS AND EXHIBITS</strong></font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 36pt">
              </td>
              <td align="left" style="WIDTH: 27pt"><font size="2">(c)</font></td>
              <td align="left">
                <div align="left"><font size="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibits:</font></font></div>
              </td>
            </tr>

        </table>
      </div>
      <div>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

                <tr valign="top" style="LINE-HEIGHT: 1.25">
                  <td style="WIDTH: 63pt">
                  </td>
                  <td align="left" style="WIDTH: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.1</font></td>
                  <td align="left">
                    <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificate
                      of Designation of Preferences, Rights and Limitations of Series
                      B 7%
                      Convertible Preferred Stock
</font></div>
                  </td>
                </tr>

            </table>
          </div>
        </div>
      </div>
      <div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

                <tr valign="top" style="LINE-HEIGHT: 1.25">
                  <td style="WIDTH: 63pt">
                  </td>
                  <td align="left" style="WIDTH: 27pt">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.1</font></div>
                  </td>
                  <td align="left">
                    <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                      of Warrant </font></div>
                  </td>
                </tr>

            </table>
          </div>
        </div>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 63pt">
              </td>
              <td align="left" style="WIDTH: 27pt">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</font></div>
              </td>
              <td align="left">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities
                  Purchase Agreement</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 63pt">
              </td>
              <td align="left" style="WIDTH: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2</font></td>
              <td align="left">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registration
                  Rights Agreement</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 63pt">
              </td>
              <td align="left" style="WIDTH: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1</font></td>
              <td align="left">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Press
                  Release</font></div>
              </td>
            </tr>

        </table>
      </div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">4</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SIGNATURES</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 hereunto
        duly authorized.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr valign="top" bgcolor="#ffffff">
              <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr valign="top" bgcolor="#ffffff">
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
                DRAGON ASIA CORP</strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></font></td>
            </tr>
            <tr valign="top" bgcolor="#ffffff">
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<br>&#160;</font></td>
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<br>&#160;</font></td>
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<br>&#160;</font></td>
            </tr>
            <tr valign="top" bgcolor="#ffffff">
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:&#160;December
                23, 2005</font></td>
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:&#160;&#160;</font></td>
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                Peter Mak</font></td>
            </tr>
            <tr valign="top" bgcolor="#ffffff">
              <td colspan="2"><font style="FONT-FAMILY: Times New Roman" size="1">&#160;</font></td>
              <td align="left">
                <hr style="COLOR: #000000" align="left" noshade size="2" width="80%"><font size="2">Name:
                Peter Mak</font></td>
            </tr>
            <tr valign="top" bgcolor="#ffffff">
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{"company-data": {"conformed-name": "NEW DRAGON ASIA CORP", "cik": "0001089590", "assigned-sic": "2000", "irs-number": "650926223", "state-of-incorporation": "FL", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-15046", "film-number": "051285989"}, "business-address": {"street1": "SUITE 2808, INTERNATIONAL CHAMBER OF COM", "street2": "FUHUA THREE ROAD", "city": "SHENZHEN", "state": "F4", "zip": "00000", "phone": "852 2815 9892"}, "mail-address": {"street1": "SUITE 2808, INTERNATIONAL CHAMBER OF COM", "street2": "FUHUA THREE ROAD", "city": "SHENZHEN", "state": "F4", "zip": "00000"}, "former-company": {"former-conformed-name": "BIO AQUA SYSTEMS INC", "date-changed": "19990629"}}
Unassociated Document
UNITED
                  STATES
SECURITIES
                  AND EXCHANGE COMMISSION
Washington,
                  D.C. 20549
FORM
                  8-K
CURRENT
                  REPORT
Pursuant
                  to Section 13 OR 15(d) of the Securities Exchange Act of
                  1934
Date
                  of Report (Date of earliest event reported)
December
                  22, 2005
New
                  Dragon Asia Corp.
(Exact
                  name of registrant as specified in its
                  charter)
Florida
001-15046
88-0404114
(State
                  or other jurisdiction
of
                  incorporation)
(Commission
File
                  Number)
(I.R.S.
                  Employer
Identification
                  No.)
Suite
                    2808, International Chamber of Commerce Tower, Fuhua Three Road,
                    Shenzhen,
                    PRC
518048
(Address
                    of principal executive offices)
(Zip
                    Code)
Registrant's
                    telephone number, including area code (86 755) 8831
                    2115
(Former
                    name or former address, if changed since last
                    report.)
Check
                    the appropriate box below if the Form 8-K filing is intended
                    to
                    simultaneously satisfy the filing obligation of the registrant
                    under any
                    of the following provisions:
o
Written
                    communications pursuant to Rule 425 under the Securities Act
                    (17 CFR
                    230.425)
o
Soliciting
                    material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                    240.14a-12)
o
Pre-commencement
                    communications pursuant to Rule 14d-2(b) under the Exchange Act
                    (17 CFR
                    240.14d-2(b))
o
Pre-commencement
                    communications pursuant to Rule 13e-4(c) under the Exchange Act
                    (17 CFR
                    240.13a-4(c))
ITEM
                1.01
ENTRY
                  INTO A MATERIAL DEFINITIVE
                  AGREEMENT
On
        December 22, 2005, the Company entered into a Securities Purchase Agreement
        (the
"SPA") with certain institutional investors (the "Investors") pursuant to which
        the Company raised $9,500,000 in gross proceeds from a private placement
        (the
"Private Placement") of Series B 7% Convertible Preferred Stock (the "Preferred
        Stock") and six-year common stock purchase warrants (the "Warrants"). The
        Company and the Investors also entered into Registration Rights Agreements
        (the
"Registration Rights Agreements") on such date, pursuant to which the Company
        agreed to register for resale the shares of the Company's Class A common stock,
        par value $.0001 per share (the "Common Stock"), issuable upon the conversion of
        the Preferred Stock and exercise of the Warrants and an agreement to register
        up
        to 3,000,000 shares of Common Stock held by New Dragon Asia Food Ltd. The
        terms
        of the Private Placement are more fully described in Item 3.02 of this Form
        8-K,
        which description is hereby incorporated by reference herein.
ITEM
                2.03
CREATION
                  OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE
                  SHEET ARRANGEMENT OF A
                  REGISTRANT
Under
        SFAS 150 "Accounting for Certain Financial Instruments with Characteristics of
        both Liabilities and Equity," the Preferred Stock will be recorded by the
        Company as a liability since it is an unconditional obligation that must
        be
        either redeemed for cash or settled by issuing shares of Common Stock.
Under
        the
        terms of the
Certificate
        of Designation of Preferences, Rights and Limitations of Series B 7% Convertible
        Preferred Stock (the "Designation"), the Company is required to pay dividends on
        the Preferred Stock at a rate of 7% per annum. Any dividends, whether paid
        in
        cash or shares, that are not paid within three trading days following a Dividend
        Payment Date (as defined in the Designation) shall continue to accrue and
        shall
        entail a late fee, which must be paid in cash, at the rate of 18% per annum
        or
        the lesser rate permitted by an applicable law (such fees to accrue daily,
        from
        the Dividend Payment Date through and including the date of payment). The
        material terms of the Preferred Stock are more fully described in Items 3.02
        and
        3.03 of this Form 8-K, which descriptions are hereby incorporated by reference
        herein.
ITEM
                3.02
UNREGISTERED
                  SALES OF EQUITY SECURITIES
On
        December 22, 2005, the Company entered into the SPA with the Investors pursuant
        to which it issued 9,500 shares of Preferred Stock for aggregate gross proceeds
        of $9,500,000 (the "Offering Amount"). The Preferred Stock is initially
        convertible into 5,937,500 shares of Common Stock (i.e. the Offering Amount
        divided by 105% of the lesser of the average of the daily volume weighted
        average price of the Company's common stock for each of the 10 trading days
        immediately preceding the closing date (the "Conversion Price")). The Investors
        received Warrants to purchase 2,968,750 shares of Common Stock at an exercise
        price of $1.76 per share (the "Exercise Price"). The Conversion Price and the
        Exercise Price are subject to full ratchet adjustment as provided for in
        the
        Designation and the Warrants, respectively.
TerraNova
        Capital acted as placement agent for the Private Placement (the "Placement
        Agent").
Beginning
        on the 24
th
month
        following the date of the SPA, and each third monthly anniversary of that
        date
        (quarterly) thereafter, the Company shall redeem 1/13
th
of the
        face value of the Preferred Stock in either cash or Common Stock, at the
        option
        of the Company (the "Amortization"). For each Amortization payment that the
        Company elects to pay in stock, it must deliver a written notice to that
        effect
        to the Investors at least 20 trading days prior to the date set for that
        Amortization payment. Common Stock delivered in payment of Amortization will
        be
        valued at 90% of the average of each of the daily volume weighted average
        price
        for the 20 trading day period immediately preceding the Amortization
        date.
The
        Company shall have the right but not the obligation to force the Investors
        to
        convert any outstanding Preferred Stock into Common Stock at the Conversion
        Price if the daily volume weighted average price of the Company's Common
        Stock
        exceeds 300% of the Conversion Price for each of 20 consecutive trading
        days.
2
In
        compliance with Section 713 of the American Stock Exchange Company Guide,
        the
        Company obtained stockholder approval of the Private Placement in light of
        the
        potential issuance of greater than 19.999% of the outstanding shares of Common
        Stock at below market price.
In
        connection with the SPA and the transactions contemplated therein, the Company
        entered into an agreement with the Placement Agent pursuant to which the
        Placement Agent received, as compensation for services rendered, a 6% cash
        commission and a five-year warrant (the "Placement Warrant") to purchase
        356,250
shares
        of
        Common Stock at an exercise price of $1.76 per share.
The
        net
        proceeds from the Private Placement will be used for working capital and
        general
        corporate purposes, as well as for potential acquisitions.
The
        Private Placement was made to the Investors pursuant to an exemption provided
        by
        Section 4(2) of the Securities Act of 1933, as amended, and the rules and
        regulations promulgated thereunder.
The
        foregoing descriptions of the SPA, the Registration Rights Agreements, the
        Preferred Stock, the Warrants and the Placement Warrant are merely summaries,
        and are not intended to be complete. The SPA, Registration Rights Agreements,
        Designation and the Form of Warrant are each filed as exhibits to this Form
        8-K,
        and the full text of each such exhibit is incorporated herein by reference
        in
        its entirety.
ITEM
                3.03
MATERIAL
                  MODIFICATION TO RIGHTS OF SECURITY
                  HOLDERS
The
        Preferred Stock has liquidation preferences over the Common Stock. Upon any
        liquidation, dissolution or winding-up of the Company, whether voluntary
        or
        involuntary (a "Liquidation"), the holders of the Preferred Stock shall be
        entitled to receive payment out of the assets of the Company, whether such
        assets are capital or surplus, for each share of Preferred Stock an amount
        equal
        to $1,000 per share plus any accrued and unpaid dividends thereon and any
        other
        fees or liquidated damages (as defined in the Designation) owing thereon
        before
        any distribution or payment shall be made to the holders of any Common Stock,
        and if the assets or the Company shall be insufficient to pay in full such
        amounts, then the entire assets to be distributed to the holders of the
        Preferred Stock shall be distributed among those holders ratably in accordance
        with the respective amounts that would be payable on such shares if all amounts
        payable thereon were paid in full. A "Fundamental Transaction" or "Change of
        Control Transaction" (as each capitalized term is defined in the Designation)
        shall not be treated as a Liquidation. The Designation also provides that
        no
        dividends shall be declared or paid or set apart for payment on shares of
        Common
        Stock unless full cumulative dividends due on the Preferred Stock have been
        or
        contemporaneously are declared and paid.
ITEM
                5.03
AMENDMENTS
                  TO ARTICLES OF INCORPORATION OR
                  BYLAWS
On
        December 22, 2005, the Company filed the Designation with the Secretary of
        State
        of Florida authorizing 9,500 shares of Preferred Stock. Except as otherwise
        provided herein and as otherwise required by law, the Preferred Stock shall
        have
        no voting rights. However, so long as any shares of Preferred Stock are
        outstanding, the Company shall not, without the affirmative vote of the holders
        of the shares of the Preferred Stock then outstanding, (a) alter or change
        adversely the powers, preferences or rights given to the Preferred Stock
        or
        alter or amend the Designation, (b) authorize or create any class of stock
        ranking as to dividends, redemption or distribution of assets upon a Liquidation
        senior to or otherwise pari passu with the Preferred Stock, (c) amend its
        certificate of incorporation or other charter documents so as to affect
        adversely any rights of the holders of the Preferred Stock, (d) increase
        the
        authorized number of shares of Preferred Stock, or (e) enter into any agreement
        with respect to the foregoing. The conversion rights and liquidation preferences
        of the Preferred Stock are described in Items 1.01, 3.02 and 3.03 of this
        Form
        8-K, which descriptions are hereby incorporated by reference herein. The
        Designation is attached as an Exhibit to this Form 8-K.
3
ITEM
                7.01.
REGULATION
                  FD DISCLOSURE
On
        December 22, 2005, the Company issued a press release relating to the Private
        Placement, which release is which attached hereto as Exhibit 99.1.
ITEM
                9.01.
FINANCIAL
                  STATEMENTS AND EXHIBITS
(c)
Exhibits:
3.1
Certificate
                      of Designation of Preferences, Rights and Limitations of Series
                      B 7%
                      Convertible Preferred Stock
4.1
Form
                      of Warrant
10.1
Securities
                  Purchase Agreement
10.2
Registration
                  Rights Agreement
99.1
Press
                  Release
4
SIGNATURES
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 hereunto
        duly authorized.
NEW
                DRAGON ASIA CORP
.
Date: December
                23, 2005
By:
/s/
                Peter Mak
Name:
                Peter Mak
Title:
Chief
                  Fiancial Officer
5