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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

Form 10-KSB

(Mark One)

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

For the fiscal year ended December 31, 2007

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from [ ] to [ ]

Commission file number 000-29981

BIOPACK ENVIRONMENTAL SOLUTIONS
INC.(Name of small business issuer in its charter)

|Nevada                                                               | 91-2027724                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|                                                                     |                                     
|18/F Metroplaza Tower II, 223 Hing Fong Road, Kwai                   |                                     
|Chung, New Territories, Hong Kong                                    |                                     
|(Address of principal executive offices)                             | (Zip Code)                          

Issuer's telephone number +852.3586.1383

Securities registered pursuant to Section 12(b) of the Act:

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|Nil                 | Nil                                      

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.0001(Title of class)

Preferred Stock, par value $0.001(Title of class)

Check whether the issuer is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. [ ].

Note:Checking the box above will not relieve any
registrant required to file reports pursuant to Section 13 or 15(d) of the
Exchange act from their obligations under those Sections.

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).

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- 2 -

Yes [ ] No [X ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

State issuer's revenues for its most recent fiscal year:
$1,075,902

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was sold, or the average bid and asked prices of such common
equity, as of a specified date within 60 days. (See definition of affiliate in
Rule 12b-2 of the Exchange Act.)

Note: If determining whether a person is an affiliate will
involve an unreasonable effort and expense, the issuer may calculate the
aggregate market value of the common equity held by non-affiliates on the basis
of reasonable assumptions, if the assumptions are stated.

**28,237,930** common shares @ $0.12(1)
  = $3,388,551.60(1)Average of bid and ask closing prices on April 14, 2008.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS)

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's
classes of equity stock, as of the latest practicable date.

**162,811,155** common shares issued and outstanding
  as of April**11,**2008.

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference,
briefly describe them and identify the part of the Form 10-KSB (e.g., Part I,
Part II, etc.) into which the document is incorporated: (1) any annual report to
security holders; (2) any proxy or information statement; and (3) any prospectus
filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities
Act"). The listed documents should be clearly described for identification
purposes (e.g., annual report to security holders for fiscal year ended December
24, 1990).

Transitional Small Business Disclosure Format (Check one): Yes [
]; No [X].

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PART I

|Item 1. | Description of Business.
|------- | ------------------------

This annual report contains forward-looking statements.
Forward-looking statements are projections of events, revenues, income, future
economic performance or managements plans and objectives for our future
operations. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology such as "may", "should", "expects", "plans", "anticipates",
"believes", "estimates", "predicts", "potential" or "continue" or the negative
of these terms or other comparable terminology. These statements are only
predictions and involve known and unknown risks, uncertainties and other
factors, including the risks in the section entitled "Risk Factors", that may
cause our company's or our industry's actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by these
forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to "common
shares" refer to the common shares in our capital stock.

As used in this annual report, the terms "we", "us", "our", and
"Biopack Environmental Solutions" mean Biopack Environmental Solutions Inc. and
our subsidiaries, unless otherwise indicated.

Corporate History

We were incorporated on August 28, 2000 in the state of Nevada
under the name Quadric Acquisitions. Following our incorporation we were not
actively engaged in any business activities. On April 25, 2001, we were acquired
by Zkid Network Company and changed our name to ZKid Network Co. As a result, we
became engaged in the business of providing media content for children through
the use of our proprietary software.

On February 8, 2006, we announced that we would be unable to
raise the necessary funds to continue with our then-existing business model and
plan. Accordingly, we decided to seek an active company to acquire.

On May 8, 2006, we closed a share exchange agreement with Star
Metro Group Limited, which became our wholly-owned subsidiary. Under the terms
of the share exchange agreement we exchanged 60,000,000 shares of our company
for 100% of the issued and outstanding shares of Star Metro Group at a ratio of
1 share of our common stock for each 2,000 shares of Star Metro Group Limiteds
stock. As a result of the share exchange agreement, we became engaged in the
development of a line of biodegradable, single use, food and beverage
containers.

On March 20, 2006, we changed our name from ZKid Network Co. to
Eatware Corporation.

On November 27, 2006, we changed our name from Eatware
Corporation to Star Metro Corp.. We were required to effect this name change
by the terms of an agreement we entered into on November 13, 2006, with Glory
Team Industrial Limited and Eddie Chou. We effected this name change by merging
Star Metro Corp., our newly incorporated and wholly-owned subsidiary that was
created for this purpose, into our company, with our company carrying on as the
surviving corporation under the name Star Metro Corp..

On February 26, 2007, we changed our name from Star Metro
Corp. to Biopack Environmental Solutions Inc.. This name change was effected
by merging Biopack Environmental Solutions Inc., our newly incorporated and
wholly-owned subsidiary that was created for this purpose, into our company,
with our company carrying on as the surviving corporation under the name
Biopack Environmental Solutions Inc..

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On March 27, 2007, we completed a share exchange with the
shareholders of Roots Biopack Group Limited, a company formed under the laws of
the British Virgin Islands. Under the terms of the share exchange agreement we
acquired all of the issued and outstanding common shares of Roots Biopack Group
in exchange for the issuance by our company of 90,000,000 common shares to the
former shareholders of Roots Biopack Group. As of the closing date of the share
exchange agreement, the former shareholders of Roots Biopack Group held
approximately 62.13% of the issued and outstanding common shares of our
company.

Prior to our acquisition of the common shares of Roots Biopack
Group, we had one wholly owned subsidiary, Starmetro Group Limited, which is
incorporated in the British Virgin Islands. Starmetro Group Limited, in its
turn, had two wholly owned subsidiaries: Biopack Environmental Ltd. (formerly
named as E-ware Corporation Limited), a Hong Kong corporation, and Bioplanet
Distribution Sdn Bhd, a Malaysian corporation.

Effective July 25, 2007, we filed a certificate of designation
with the Secretary of State of Nevada, designating 1,000,000 Series B Preferred
Shares. Each Series B Preferred Share has the right to thirty (30) votes at any
meeting of our shareholders and the right to convert, at any time at the
holders option, into five (5) common shares in the capital stock of our
company. On February 25, 2008, we filed a certificate of designation with the
Secretary of State of Nevada designating 2,000,000 Series C Preferred Shares.
The rights and restrictions of these Series C Preferred Shares are identical to
the rights and restrictions for our Series B Preferred Shares.

When we acquired Roots Biopack Group Limited, we also acquired
its subsidiaries. The following tables show our current corporate structure:

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Subsidiaries

The following is a list of our subsidiaries;

Name of Subsidiary
    Corresponding number on
      diagram
    Date of
      Incorporation
    Jurisdiction of
      Incorporation
    PurposeRoots Biopack Group Limited
    1
    May 14, 2006
    British Virgin Islands
    Serves as an investment holding 
        company which holds some of our subsidiaries


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Roots Biopack Limited
      2
      May 24, 2004
      Hong Kong
      Served as a vehicle for the sales and marketing
        of our biodegradable food containers and industrial packaging products.
        Ceased operation effective Dec 31, 2007 and sales and marketing functions
        are now performed by Biopack Environmental Ltd.Roots Biopack (Intellectual 
        Property) Limited
      3
      April 27, 2005
      Hong Kong
      Serves as a vehicle for the patent and trademark
        registration of our biodegradable food container and industrial packaging
        products.Expert Result Group 
        Limited
      4
      April 19, 2006
      British Virgin 
        Islands
      Serves as an investment holding company, which
        holds Roots Biopark Limited, which in turn holds Jiangmen Roots Biopack
        Ltd.Eglinton Group Limited
      5
      April 20, 2004
      British Virgin 
        Islands
      A dormant company currently without any operating
        activities.Roots Biopark Limited
      6
      February 16, 2006
      Hong Kong
      Serves as an investment holding company which
        holds Jiangmen Roots Biopack Ltd.Jiangmen Roots Biopack 
        Ltd.
      7
      March 30, 2006
      The PRC
      Serves as an investment holding company for our
        future manufacturing plant, which will be located in Jiangmen China. We
        anticipate that the manufacturing plant, which will be known as Roots
        Biopack, will be in operation before the end of 2008.Starmetro Group Limited
      8
      April 1, 2005
      British Virgin 
        Islands
      Serves as an investment holding company which
        holds some of our subsidiaries.Biopack Environmental 
        Limited (formerly E-ware 
        Corporation Limited)
      9
      November 28, 2005
      Hong Kong
      Provided corporate administrative services until
        December 31, 2007; has served as a vehicle for sales and marketing of
        our biodegradable food containers and industrial packaging products since
        December 31, 2007.Bioplanet Distribution Sdn 
        Bhd
      10
      December 5, 2005
      Malaysia
      This company was involved in our raw material
        development project in Malaysia. We discontinued our Malaysia operations
        effective January 31, 2008 and this company is currently inactive.


Our Business

We develop, manufacture, distribute and market bio-degradable
food containers and disposable industrial packaging for consumer products. Until
mid-May, 2007, our products were manufactured by a factory located in Shunde
City, China. In mid-May, 2007 we terminated our relationship with this factory
as the result of quality control and supply issues. In July, 2007, we completed
arrangements with two independent factories located in Guang-Xi and Shunde City,
PRC, whereby they would manufacture our products on an open-order basis until
completion of the first phase of our Biopark facility in Jiangmen, PRC. In
August, 2007, we decided to retain only the factory located in Shunde City as
our exclusive OEM manufacturer and we terminated our relationship with the
factory in Guang-Xi. Production from the Shunde City factory began shipping in
mid-September, 2007. These changes in factories

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involved production flow and quality control issues which have
had an adverse impact on our sales. As a result, our sales this year were below
budget.

Prior to the date of our acquisition of Roots Biopack Group
Limited, Jiangmen Roots Biopack Limited, a PRC subsidiary of Roots Biopack Group
Limited, entered into a 15 year lease for a vacant factory located in Jiangmen
City, PRC. This is where we have located our Biopark facility.

On August 19, 2007, our wholly-owned subsidiary, Roots Biopack
Group Limited, entered into a comprehensive agreement with Tayna Environmental
Technology Co. Limited, an unrelated third party, to set up the first phase of
our planned production facility in the leased factory in Jiangmen. Under this
agreement, our subsidiary agreed to develop and sell to Tayna the 20 production
machines required for the operation of two production lines (there are ten
production machines for each production line) at our Biopark factory, to help
Tayna set up these production lines at our Biopark facility, train personnel,
manage the factory and assist in sales after the commencement of production. As
required by the terms of this agreement, we began the process of setting up the
factory. Recently, Tayna advised us that it could not continue to perform under
the agreement because it had been denied the required operating licenses by the
local government. We have been advised that these operating licenses can only be
granted to the owner or the lessee of the factory. As a result, on March 30,
2008, Roots Biopack Group Limited entered into a written cancellation agreement
with Tayna cancelling the August 19, 2007 agreement. To March 30, 2008, Tayna
had spent $1,146,102.56 in performance of its obligations under the
comprehensive agreement. In the cancellation agreement, Tayna agreed to loan
that amount to Roots pursuant to a separate loan agreement. In that separate
loan agreement, which is also dated March 30, 2008, Roots Biopack agreed to
repay to Tayna the sum of $1,146,102.56 over a three-year term expiring March
30, 2011. Roots Biopack has an option to extend this three-year initial term for
an additional two calendar years by sending written notice to Tayna no later
than three months prior to the original maturity date (i.e., no later than
December 30, 2010). Principal due under the loan bears interest at the rate of
12% per annum.

To date, 10 production machines, together with the boiler,
transformer and compressor units necessary for their operation, have been
installed in our Biopark facility. We plan to install one additional machine
within the next month. Finally, four additional production machines are stored
in our Biopark facility pending resolution of a dispute with Patrick Oung, one
of the former directors of Roots Biopack Group Limited and other subsidiaries of
our company (see discussion beginning at page 20).

After installation in our factory, each production machine is
fitted with a set of customer/product specific molds. These molds are designed
by our customers to suit their specific product specifications (e.g., shape and
size). Six of the 10 currently installed production machines are fitted with
molds and are fully operational. Molds for the other five machines (the four
that are already installed and the new machine to be installed within the month)
should be completed over the course of the next five weeks. The six machines
currently capable of production have been producing samples and limited
production runs since we announced our soft opening last December.

Once in production, each machine is capable of producing
16,000,000 product units per year. Therefore, we are now capable of producing
96,000,000 units per year. Once we receive the five sets of additional molds and
we complete the installation of our 11th machine, all of which we believe will
happen during the next five weeks, we should be in a position to produce
176,000,000 pieces per year.

Our original plan contemplated that we would complete our
Biopark facility in a three phase program, with the commencement of unit
production keyed to completion of phase one. Originally, phase one consisted of
two production lines with ten machines on each line, while each of phase two and
three consisted of one production line (consisting of ten machines in each
production line). In recent months we have scaled our original plan to
accommodate unforeseen factors, including a dispute with Patrick Oung, one of
the former directors of our subsidiary Roots Biopack Group Limited and other
subsidiaries of our company, over ownership of four of our machines (see
discussion at page 20) and the licensing difficulties encountered by Tayna.
Because our primary focus continues to be the commencement of production, we
have recently decided to scale phase one include only the ten machines currently
installed at our Biopark facility and the one machine that we anticipate
installing over the next five weeks. Once this last machine is installed and the
remaining five sets of molds are delivered and installed, we intend to begin
production of customer orders with an initial capacity of approximately
176,000,000 pieces per

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year. We intend to add the four additional machines (currently
stored in our Biopark facility pending resolution of the dispute with our former
director) when (and if) the dispute is resolved in our favor.

Commensurate with our reduction of the number of machines and
production capacity included in phase one, we have modified our plans to ramp-up
our production capacity during phase two and three. Under our current plan,
phase two will consist of ten machines and phase three will consist of 15
machines. Over the next few months, as we gain experience with our production,
we will address the timing of each of these phases.

We supply our biodegradable food containers and industrial
packaging products to multi-national corporations, supermarket chains and
restaurants located across North America, Europe and Asia.

Industry Overview

Currently, the majority of disposable packaging products are
made from plastic, paper or polystyrene, which are typically non-recyclable and
non-biodegradable. Consequently, millions of tons of plastic, paper, or
polystyrene disposable packaging products are discarded in landfills across the
world each year. In the last decade there has been increasing public concern
over the harmful impact that plastic, paper, or polystyrene disposable packaging
products have on the environment. Because of this public concern, governments
have begun to adopt regulations intended to restrict and in some cases even ban
the use of plastic, paper, or polystyrene disposable packaging products and
multi-national corporations, acknowledging the need for environmentally sound
solutions, have begun to seek alternatives to plastic, paper, or polystyrene
disposable packaging products that are less harmful to the environment. As these
trends continue, we believe that market for biodegradable food containers and
industrial packaging products will face rapid growth in the future.

Principal Products

Our current product line-up of food containers and industrial
packaging products include: plates, bowls, boxes, trays, shoe supporters and
cases for electronic devices. We can fabricate any of these of other items to
meet customer-specific requirements, including shape, size, colour, density and
the degree to which they are impervious to oil and water.

Each of our products is:

- biodegradable.
- made from natural materials (primarily sugarcane fiber, or bagasse, which
  is a renewable resource that is a by- product of the sugar refining process).
- refrigerator, freezer, microwave and oven friendly in temperatures ranging
  from -25°C to 220°C.
- sterilized by an ultraviolet light process.

Competitive Advantages

We believe that we have the following competitive
advantages:

- We employ our own research and development, sales and marketing, quality
  control team and customer service team.
- We have established long-term relationships with our key distributors, who
  supply our biodegradable food container and industrial packaging products to
  multi-national corporations, supermarket chains and restaurants, located
  across North America, Europe and Asia.
- We have registered our trademark ROOTS Biodegradeable in Switzerland, the
  European Union, Hong Kong and the United States and have filed trademark
  applications in Canada, Japan, China and India. We plan to apply for trademark
  registrations in Australia, New Zealand, Malaysia, Israel, Saudi Arabia and
  Turkey.

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- We have our own in-house production facilities and we manufacture our own
  proprietary product using fully automated machinery.

We have received a number of internationally recognized
certifications and awards for our biodegradable food container and industrial
packaging products, including: the Good Manufacturing Practises awarded by SGS
Hong Kong Ltd. for compliance with international practices pertaining to quality
and management systems; the HACCP awarded by the World Health Organization for
compliance with the standards for food safety management systems set by World
Health Organization & World Food and Agricultural Organization; the
BRC/Iop awarded by the British Retail Consortium / Institute of Packaging for
food packaging products (food contact items); the ISO 9001/14001 awarded by
International Organization for Standardization for compliance with the standards
for quality management systems and environmental management systems.

Sales and Marketing

Our sales and marketing efforts currently consist primarily of
direct marketing, agents, legacy clients and attendance at trade shows and
expositions. To enhance our corporate image and brand awareness we actively
participate in various events. Our biodegradable food container and industrial
packaging products were selected for use in the following events: 2006 Winter
Olympics, 2005 World Youth Day, 2005 Winterfest, 2003 World Alpine Ski
Championship, 2003 World Expo, 2002 World Expo.

Through our distributors we supply our biodegradable food
containers and industrial packaging products to multi-national corporations,
supermarket chains and restaurants, located across North America, Europe and
Asia. We have distributors in The Netherlands, Switzerland, Hong Kong, Sweden,
South Africa, the United States, Japan, Taiwan and Israel.

Manufacturing Process

We currently manufacture our products in two factories. One of
these factories, located in Shunde City, PRC, is an independent facility (owned
and operated by a third party) that manufactures product for us on an open order
basis. Our second factory is located in our Biopark facility but it is currently
only capable of limited production. We hope to substantially increase the
production capacity of our Biopark factory over the next five weeks.

The Shunde City factory currently manufactures approximately
90% of our biodegradable food container and industrial packaging products. This
factory is contained in a three-storey building with a total area of 5,000
square feet and currently operates two semi-automated production lines and one
fully-automated production line. The manufacturing process consists of eight
main components; Pulping, Coloring, Clinging, Forming, Laminating, Trimming,
Sterilization and Packing.

We are currently using our Biopark factory primarily for the
production of customer samples and limited production runs. To date, 10
production machines, together with the boiler, transformer and compressor units
necessary for their operation, have been installed in this facility. We plan to
install one additional machine within the next month. Four additional production
machines are stored in our Biopark facility pending resolution of a dispute with
one of the former directors of Roots Biopack Group Limited (see discussion
beginning at page 20).

After installation in our factory, each production machine is
fitted with a set of customer/product specific molds. These molds are designed
by our customers to suit their specific product specifications (e.g., shape and
size). Six of the 10 currently installed production machines are fitted with
molds and are fully operational. Molds for the other five machines (the four
that are already installed and the new machine to be installed within the month)
should be completed over the course of the next five weeks. The six machines
currently capable of production have been producing samples and limited
production runs since we announced our soft opening last December.

Once in production, each machine is capable of producing
16,000,000 units of product per year. Therefore, we are now capable of producing
96,000,000 units per year. Once we receive the five sets of additional molds and
we complete the installation of our 11th machine, all of which we believe will
happen during the next five weeks, we should be in a position to produce
176,000,000 pieces per year.

The manufacturing process at our Biopark facility consists of
the following stages:

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- 10 -

Raw Material Preparation

Crunching/ShreddingFine mixing (set
correct concentration) Dosing (adding additives)

These first 3 stages prepare the mixture for the pulp forming
stage.

Pulp Formation

Forming Cold press Hot
press

During these three phases the product is shaped. The mixture
(fibers in water suspension) is poured into the forming mold. Wire mesh filters
the water away leaving the fiber in the form of the product. The formed product
is transferred through automation to the cold press, where additional water is
squeezed out. The pressed product is then transferred through automation to the
final drying stage where it is heat dried.

Trimming & Packing

TrimmingUltra violet
Sterilization/Sanitization Packing

During the trimming stage, rough edges are trimmed from the
finished product  the material that is removed will be re-used for other
product (returned to stage 1). Exposure to ultra violet ensures that all
coliform, germs and bacteria that may have survived the prior processing is
killed. Trimming and packaging are currently not automated (these tasks are
currently performed manually by laborers in our factory) but we are currently
developing an automatic trimming machine.

Competition

The market for disposable packaging products is competitive and
subject to frequent product introductions with improved price and or performance
characteristics. We face competition from companies who provide disposable
packaging products which are made from plastic, paper or polystyrene. Many of
these companies have greater financial, research and development, marketing and
sales resources, offer a broader product line, have better brand recognition and
have a larger customer base than we do. Examples of these companies include:
Eastman Chemical Company, BASF Corporation -Apack AG, SK Chemicals, Showa and
Highpolymer. We also face competition from companies who provide disposable
packaging products which are made from bioplastics and other types of natural
materials. Example of these companies include: Earthshell Corp, Starch Tech
Incorporated, Biocorp NA, KTM Industries Incorporated, Eco-Products
Incorporated, Insulair, Incorporated, Novamont SPA, Green Shell Company Limited,
Far East Green World Corporation, Sanshi Green Packaging Company and Green
Eternity Company Limited.

Availability of Raw Materials

Our raw materials are sourced from the following regions:

Material Provided
      RegionSugarcane Fiber
    Guangdong Province (China) Guangxi Province
      (China)Palm Fiber
    MalaysiaPE/ PET Film
    Guangzhou (China)Coloring
    Guangdong Province (China)


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Material Provided
      RegionWater Repellent
    Guangdong Province (China)Oil Repellent
    Hong Kong CanadaCarton Box
    Guangdong Province (China)
      Hong KongMachinery
    Guangdong Province (China)


Intellectual Property

We have not registered any patent or proprietary
technology.

Trademarks

Our Roots Biodegradable trademark is currently registered in
Switzerland, the European Union, Hong Kong and the United States. We are
currently applying for trademark registration in Canada, Japan, China and India.
We plan to apply for trademark registrations in; Australia, New Zealand,
Malaysia, Israel, Saudi Arabia, Turkey. Details of our registered trademarks are
below:

Date
    Country
    Registration NumberJune 1, 2006
    Hong
      Kong
    200302488September 1, 2006
    Switzerland
    548477March 27, 2007
    United States
    3222538September 13, 2007
    European Union
    005083101


Our trademark registration applications in Switzerland and
Japan have been opposed by Roots Canada Limited. We believe that this opposition
is not warranted because we are not involved in the same or a similar industry
as Roots Canada Limited. We are currently engaged in discussions with Roots
Canada Limited in an effort to negotiate an amicable resolution to its
opposition.

Domain Names

We own and operate the following two registered internet domain
names:

- www.rootsbiopack.com.
- www.biopackenvironmental.com

The information contained on our website does not form part of
this annual report.

Dependence on one or more main customers

Until August of 2007, we relied on our five largest customers
  for approximately 80% of our sales in 2007. In August of 2007, these five customers
  were effectively consolidated when they made the decision to rely on one importer
  to source all of their needs. The loss of any or all of these customers would
  adversely affect revenues and results of operations, and the loss of any other
  significant customers could adversely affect revenues and results of operations
  unless and until the lost business is replaced.

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- 12 -

Pension Plan

We participate in a defined contribution pension plan under the
  Mandatory Provident Fund Schemes Ordinance for all our eligible employees in
  Hong Kong. The Mandatory Provident Fund Scheme is available to all employees
  aged 18 to 64 with at least 80 days of service in the employment in Hong Kong.
  Contributions are made at 5% of the participants relevant income with
  a ceiling of HK$20,000. The participants are entitled to 100% of our contributions
  together with accrued returns irrespective of their length of service with our
  company, but the benefits are required by law to be preserved until retirement
  age of 65. Our only obligation is to make the required contributions under the
  plan. The assets and the schemes are controlled by trustees and held separately
  from those of our company. The total pension cost for Roots Biopack Limited
  was $4,283 for the fiscal year end 2007 and $1,410 for the year ended December
  31, 2006. Our total pension cost was $12,495 for the year ended December 31,
  2007 and $4,504 for the year ended December 31, 2006.

We also participate in a compulsory savings scheme in Malaysia.
All employees in Malaysia who have reached the age of 16 and employed under a
contract of service whether express or implied, and whether oral or in writing
must be registered as a member of the Employees Provident Fund. As an employer,
we contribute 12% of the employee's wages and the employee contributes 11% of
the monthly wages towards the employee's account. The total cost for this plan
through our Malaysian subsidiary was $3,983 in 2007 and $4,463 in 2006. On
January 31, 2008, we closed our office in Malaysia and we do not anticipate that
we will incur additional costs under this plan for the balance of 2008.

Independent Testing

To ensure that our products meet health and safety and
performance standards, we have them put through the tests described in the
following table.

Criteria
    Objectives / Purpose
    Independent Testing LaboratoriesPhysical Performance Test
    - Temperature resistance, steamer, microwave
      and oven tests - Water and oil proof tests - Acid
      Resistance tests
    Hong Kong Standards and Testing Centre
      Hong Kong Standards and Testing Centre Hong Kong
      Standards and Testing CentreFood Safety Tests
    - Microbiological Tests, Coliform Bacteria,
      Pesticides Residues, Moulds and Yeasts Tests - Overall
      Migration Test - Heavy Metals Analysis, - Hong Kong Q-Mark
      Product Award
    SGS Hong Kong Limited 
        SGS Hong Kong
      Limited SGS Hong Kong Limited Hong Kong Q-Mark CouncilBiodegradability
    - ASTM D6400 (USA), DIN V 54900 and DIN EN
      13432 (European Countries) - OK Compost and OK Compost Home
      Conformity Marks - Hong Kong Green Label Scheme
    DIN CERTCO, Belgium 
        AIB-Vincotte, Belgium Hong Kong Green Council


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- 13 -

Governmental Regulation

With the emergence of alternatives to disposable packaging products,
  which are made from plastic, paper and polystyrene, various standards and guidelines
  have been developed by government organizations to assess the performance of
  these substitutes. Through our quality assurance tests, we attempt to ensure
  that our biodegradable food containers and industrial packaging products meet
  or exceed the applicable government standards and guidelines.

Our products comply with the following international
regulations:

- German Regulation to the protection from dangerous materials 
  Gefhstoff-Verordnung (Oct 26, 1993);
- U.S. CFR Title 21 (FDA Regulation);
- Taiwan Hygienic Standard for Food Utensil, Container and Packaging (Revised
  82.7.7); and,
- Biodegradability and Food Standards of Hong Kong Environmental Protection
  Department (HKEPD).

Research and Development

Our research and development team consists of three employees.
The research and development expenses are mainly staff cost and product testing
fees which are minimal at this stage.

Employees

We currently have 81 full time and no part time employees.

RISK FACTORS

Much of the information included in this annual report includes
or is based upon estimates, projections or other "forward looking statements".
Such forward looking statements include any projections or estimates made by us
and our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.

Such estimates, projections or other "forward looking
statements" involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other "forward looking statements".

RISKS RELATED TO OUR BUSINESS

Going Concern

The accompanying consolidated financial statements have been
prepared assuming that we will continue as a going concern. We incurred a net
loss of $5,011,576 for the year ended December 31, 2007 and a net loss since
inception of $3,892,151. At December 31, 2007, we had a working capital deficit
of $1,717,380. We anticipate that we will continue to incur operating expenses
that will only partially be offset by operating revenues unless and until our
Biopark facility is completed and we begin producing enough product to become
profitable. On December 31, 2007 we had cash of $96,460. We estimate that our
monthly operating expenses over the next 12 months will be approximately $32,000
and that we will need to spend approximately $2,250,000 to complete the next two
production phases at our Biopark facility. Therefore, we estimate that we will
need approximately $3,634,000 over the next 12 months in order to continue our
operations and complete construction of the Biopark facility. As a result, we
believe that we will have to raise additional funds to meet our currently
budgeted operating requirements for the next 12 months. As we cannot assure a
lender that we will be able to successfully complete our Biopark facility and
begin profitable operations, we will probably find it difficult to raise debt
financing from traditional lending sources. We have traditionally raised our
operating capital from sales of equity and, more recently, convertible debt
securities but there can be no assurance that we will be able to continue to do
so. If we cannot raise

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- 14 -

the money that we need in order to continue to operate and
complete our Biopark facility, we may be forced to delay, scale back or even
eliminate some or all of our activities. If any of these were to occur, our
business could fail. These circumstances raise substantial doubt about our
ability to continue as a going concern, as described in the explanatory
paragraph to our independent auditors report on our consolidated financial
statements for the year ended December 31, 2007, which are included in this
annual report on Form 10-KSB. Although our consolidated financial statements
raise substantial doubt about our ability to continue as a going concern, they
do not include any adjustments relating to recoverability and classification of
recorded assets, or the amounts or classifications of liabilities that might be
necessary in the event our company cannot continue in existence.

We operate in a competitive industry and our failure to
compete effectively may adversely affect our ability to generate
revenue.

The disposable packaging industry is competitive and subject to
frequent product introductions with improved price and or performance
characteristics. Many companies, including those who manufacture their
disposable packaging products out of plastic, paper or polystyrene, have greater
financial, research and development, marketing and sales resources, offer a
broader product line, have better brand recognition and have a larger customer
base than we do. Increased competition in the disposable packaging industry
could result in significant price competition, reduced profit margins or loss of
market share, any one of which could have a material adverse effect on our
ability to generate revenues and successfully operate our business.

Established manufacturers in the disposable packaging
industry could reduce their prices or engage in advertising or marketing
campaigns designed to protect their respective market shares, improve their
ability to recycle their existing products or they could develop new
environmentally friendly products, which could render our products obsolete and
could negatively impact our ability to compete.

Our competitors may reduce their prices or engage in
advertising or marketing campaigns designed to protect their respective market
shares and impede the market acceptance of our disposable packaging products. We
expect that many of our competitors may actively seek competitive alternatives
to our disposable packaging products. The development of competitive disposable
packaging products could render our disposable packaging products obsolete and
could impair our ability to compete, which would have an adverse effect on our
business, financial condition and results of operations.

We may suffer significant losses resulting from general
product liability, which may harm our financial condition and result of
operations.

As a manufacturer of disposable packaging products we are at
risk for potentially significant product liability and associated losses. We
cannot predict or protect against all potential losses or liabilities that may
arise relating to our disposable food container and industrial packaging
products. We maintain insurance against many, but not all, potential losses and
liabilities, in accordance with customary industry practice and in amounts we
believe to be necessary. If any losses or liabilities are not covered by
insurance, or if the insurance is insufficient, we would be required to satisfy
these losses and liabilities and our financial condition and results of
operations may be adversely affected.

We rely on a number of different suppliers to supply us with
the materials that we require to manufacture our disposable packaging products.
We could be adversely affected by an increase in our suppliers prices or a
significant decline in our suppliers financial condition. As a result, our
business may fail and investors may lose their entire investment.

We rely on a number of different suppliers to supply our
company with the materials that we require to manufacture our disposable
packaging products. We could be adversely affected by an increase in any one of
our suppliers prices or a significant decline in any one of our suppliers
financial condition. If the relationship with anyone one of our suppliers is
terminated and we are unsuccessful in establishing a relationship with an
alternative supplier who offers similar products at similar prices, our results
of operations could be adversely affected. As a result, our business may fail
and investors may lose their entire investment.

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- 15 -

We rely on a number of distributors to distribute our
disposable packaging products to customers. We could be adversely affected by an
increase in our suppliers prices or a significant decline in our suppliers
financial condition. As a result, our business may fail and investors may lose
their entire investment.

We rely on a number of distributors to distribute our
disposable packaging products to our customers. We could be adversely affected
by an increase in our distributors prices of distribution services or a
significant decline in our distributors financial condition. If the
relationships with any one of our distributors is terminated and we are not
successful in establishing a relationship with an alternative distributor who
offers similar services at similar prices, our results of operations could be
adversely affected, our business may fail and investors may lose their entire
investment.

We rely on certain strategic raw materials for our
operations. If the raw materials we use to manufacture our disposable packaging
products increase substantially in price or for whatever reason becomes
unavailable to us our business could fail and investors could lose their entire
investment.

Although we believe that there are sufficient quantities of the
raw materials we use to manufacture our disposable packaging products, the
continuous existence and availability and price of these raw materials may be
affected by natural disasters, domestic and world markets, political conditions,
changes in government regulation and war or other outbreak of hostilities. If
the raw materials we use to manufacture our disposable packaging products
increase substantially in price or for any reason become unavailable to us our
business could fail and investors could lose their entire investment.

Substantially all of our assets, all of our directors and
all of our executive officers reside outside the United States. As a result it
may be difficult for investors to enforce within the United States any judgments
obtained against us or any of our directors or executive officers.

Substantially all of our assets are located outside the United
States and we do not currently maintain a permanent place of business within the
United States. In addition, all of our directors and executive officers are
nationals and residents of countries other than the United States, and all or a
substantial portion of such persons assets are located outside the United
States. As a result, it may be difficult for investors to enforce within the
United States any judgments obtained against us or our officers or directors,
including judgments predicated upon the civil liability provisions of the
securities laws of the United States or any state thereof. Consequently,
investors may be effectively prevented from pursuing remedies under United
States federal securities laws against us or any of our directors or executive
officers.

Our ability to hire and retain qualified personnel will be
an important factor in the success of our business and a failure to hire and
retain key personnel may result in our inability to manage and implement our
business plan.

Our ability to hire and retain qualified personnel will be an
important factor in the success of our business. The competition for qualified
personnel in the disposable packaging industry in which we operate is high. In
addition, in order to manage growth effectively, we must implement management
systems and continue to recruit and train new employees. We may not be able to
attract and retain the necessary qualified personnel. If we are unable to retain
or to hire qualified personnel as required, we may not be able to adequately
manage and implement our business plan.

Our international operations subject us to a number of
risks, including unfavorable political, regulatory, labor and tax conditions in
foreign countries. We may not be able to develop and implement policies and
strategies that will be effective in each location where we do business and as a
result our business could fail and investors could lose their entire
investment.

Our international operations subject us to the legal,
political, social and regulatory requirements and economic conditions of many
jurisdictions. Risks inherent to international operations include the following:

- difficulty in enforcing agreements in foreign legal systems;
- foreign countries may impose additional withholding taxes or otherwise tax
  our foreign income,

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- 16 -

- fluctuations in exchange rates may affect product demand and may adversely
  affect our profitability in United States dollars to the extent the price of
  our products and cost of raw materials is denominated in a foreign currency;
- Inability to obtain, maintain or enforce intellectual property rights;
- Changes in general economic and political conditions in the countries in
  which we operate;
- unexpected adverse changes in foreign laws or regulatory requirements,
  including those with respect to export duties and quotas;
- difficulty with staffing and managing widespread operations;
- trade barriers such as export requirements, tariffs, taxes and other
  restrictions and expenses, which could increase the prices of our products and
  make us less competitive in some countries; and,
- difficulty of and costs relating to compliance with the different
  commercial and legal requirements of the overseas markets in which we offer
  and sell our products.

Our international operations require us to respond to rapid
changes in market conditions in these countries. The success of our
international operations depends, in part, on our ability to succeed in
differing legal, regulatory, economic, social and political conditions. We may
not be able to develop and implement policies and strategies that will be
effective in each location where we do business and as a result our business
could fail and investors could lose their entire investment.

In addition, we source all of our manufacturing in China. China
is experiencing very rapid economic growth which could have a negative impact on
our business activities there. These include worsening inflation, fluctuations
in the yuan, and challenges to the nation's electric power supply capacity. In
addition, developments in China's financial system and current legislative
trends could pose future business risks, including changes to its laws that
might prohibit or restrict foreign ownership.

The limitation of our available manufacturing capacity due
to significant disruption in our manufacturing operation could have a material
adverse effect on sales revenue and results of operations and financial
condition.

We manufacture our disposable packaging products using complex
processes that require technologically advanced equipment and continuous
modification to improve yields and performance. From time to time, we have
experienced minor disruptions in our manufacturing process as a result of power
outages or equipment failures. If production at our manufacturing plant is
disrupted for any number of reasons, manufacturing yields may be adversely
affected and we may be unable to meet our customers requirements. Consequently,
our customers may purchase disposable food packaging products from our
competitors. This could result in a significant loss of revenues and damage to
our customer relationships, which could materially adversely effect our
business, results of operations or financial condition.

Our disposable packaging products may be perceived poorly by
environmental groups, customers and government regulators, which could have an
adverse effect on our business, causing us to cease operations.

Our success depends substantially on our ability to manufacture
disposable packaging products that are less harmful to the environment than
disposable packaging products, which are made from plastic, paper or
polystyrene. Although we believe that our disposable packaging products are less
harmful to the environment than other

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disposable packaging products, which are made from paper,
plastic and polystyrene, our disposable packaging products may also possess
characteristics that environmental groups could perceive as negative for the
environment. When biodegradable waste is disposed of in landfills, it breaks
down under uncontrolled anaerobic conditions. This produces landfill gas which,
if not harnessed, escapes into the atmosphere. Landfill gas contains methane, a
more harmful greenhouse gas than carbon dioxide. The European Union Landfill
Directive puts key requirements on member states for the management of
biodegradable waste in order to stop global warming. Whether, on balance, our
disposable packaging products are better for the environment than other
disposable packaging products, which are made from either plastic, paper or
polystyrene is a somewhat subjective judgment. Environmental groups, customers,
and governmental regulators may not agree that our disposable packaging products
have an advantage over other disposable packaging products, which are made from
plastic, paper or polystyrene. If our disposable packaging products are
perceived as being harmful to the environment, our revenues will likely suffer
and as a result we could go out of business.

We have a stable customer base; however, loss of, or
material financial weakness of, certain of our largest customers could adversely
affect our financial condition and results of operations until such business is
replaced and no assurances can be made that we would be able to regain or
replace any lost customers. This could cause us to go out of business and
investors could lose their entire investment.

Until August of 2007, we relied on our five largest customers
for approximately 80% of our sales in 2007. In August of 2007, these five
customers were effectively consolidated when they made the decision to rely on
one importer to source all of their needs. The loss of any or all of these
customers would adversely affect revenues and results of operations, and the
loss of any other significant customers could adversely affect revenues and
results of operations unless and until the lost business is replaced. We believe
that it is unlikely that we could replace these customers. If we were to lose
any of these customers and we did not replace them, our business would be
adversely affected. If we lost all or a substantial portion of these customers
and we did not replace them, we could be forced to cease operations and
investors in our company could lose their entire investment.

Our business is subject to complex health, safety and
environmental laws and industry regulations, which require and will continue to
require significant expenditures to remain in compliance with such laws and
regulations currently and in the future. Costs of such compliance will likely
reduce our probability.

Our business is subject to complex health, safety and
environmental laws and industry regulations, which require and will continue to
require significant expenditures to remain in compliance with such laws and
regulations currently and in the future. Unanticipated government enforcement
action, or changes in health, safety and environmental laws and industrial
regulations could result in higher costs which may negatively affect our
profitability.

We may lose our competitiveness if we are not able to
protect our proprietary technology and intellectual property rights against
infringement, and any related litigation may be time-consuming and costly.
If we cannot compete successfully we may go out of business.

Our success and ability to compete depends to a significant
degree on our proprietary technology. If any of our competitors copy or
otherwise gain access to our proprietary technology or develop similar
disposable packaging products independently, we may not be able to compete as
effectively. The measures we have implemented to protect our proprietary
technology and other intellectual property rights are currently based upon a
combination of provisional patent applications, patents, trademarks and trade
secrets. These measures, however, may not be adequate to prevent the
unauthorized use of our proprietary technology and our other intellectual
property rights. Further, the laws of foreign countries may provide inadequate
protection of such intellectual property rights. We may need to bring legal
claims to enforce or protect such intellectual property rights. Any litigation,
whether successful or unsuccessful, may result in substantial costs and a
diversion of our company's resources. In addition, notwithstanding our rights to
our intellectual property, other persons may bring claims against us alleging
that we have infringed on their intellectual property rights or claims that our
intellectual property rights are not valid. Any claims against us, with or
without merit, could be time consuming and costly to defend or litigate, divert
our attention and resources, result in the loss of goodwill associated with our
business or require us to make changes to our disposable food container and
industrial packaging products.

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Because our executive officers, directors control a high
percentage of our common stock, such insiders may have the ability to influence
matters affecting our shareholders.

Our executive officers and directors, in the aggregate,
beneficially own 66.03% of the issued and outstanding shares of our common
stock. As a result, they have the ability to influence matters affecting our
shareholders, including the election of our directors, the acquisition or
disposition of our assets, and the future issuance of our shares. Because our
executive officers, directors and principal shareholders control such shares,
investors may find it difficult to replace our management if they disagree with
the way our business is being operated. Because the influence by these insiders
could result in management making decisions that are in the best interest of
those insiders and not in the best interest of the investors, you may lose some
or all of the value of your investment in our common stock.

RISKS RELATED TO OUR COMMON STOCK

A decline in the price of our common stock could affect our
ability to raise further working capital and adversely impact our ability to
continue operations.

A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. Because a portion of our continued operations will
be financed through the sale of equity securities, a decline in the price of our
common stock could be especially detrimental to our liquidity and our
operations. Such reductions may force us to reallocate funds from other planned
uses and may have a significant negative effect on our business plan and
operations, including our ability to develop new products and continue our
current operations. If our stock price declines, we can offer no assurance that
we will be able to raise additional capital or generate funds from operations
sufficient to meet our obligations. If we are unable to raise sufficient capital
in the future, we may not be able to have the resources to continue our normal
operations.

The market price for our common stock may also be affected by
our ability to meet or exceed expectations of analysts or investors. Any failure
to meet these expectations, even if minor, may have a material adverse effect on
the market price of our common stock.

If we issue additional shares in the future, it will result
in the dilution of our existing shareholders.

Our certificate of incorporation, as amended, authorizes the
issuance of up to 500,000,000 shares of common stock with a par value of $0.0001
and 10,000,000 shares of preferred stock with a par value of $0.001. Our board
of directors may choose to issue some or all of such shares to provide
additional financing in the future. The issuance of any such shares will result
in a reduction of the book value and market price of the outstanding shares of
our common stock. If we issue any such additional shares, such issuance will
cause a reduction in the proportionate ownership and voting power of all current
shareholders. Further, such issuance may result in a change of control of our
company.

Trading of our stock may be restricted by the Securities
Exchange Commission's penny stock regulations, which may limit a stockholder's
ability to buy and sell our stock.

The Securities and Exchange Commission has adopted regulations
which generally define "penny stock" to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are covered by
the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
"accredited investors". The term "accredited investor" refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission, which provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the

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- 19 -

customer orally or in writing prior to effecting the
transaction and must be given to the customer in writing before or with the
customer's confirmation. In addition, the penny stock rules require that prior
to a transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in and limit the
marketability of our common stock.

The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a stockholder's ability
to buy and sell our stock.

In addition to the "penny stock" rules described above, FINRA
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for our shares.

Our common stock is illiquid and the price of our common
stock may be negatively impacted by factors which are unrelated to our
operations.

Our common stock currently trades on a limited basis on the OTC
Bulletin Board. Trading of our stock through the OTC Bulletin Board is
frequently thin and highly volatile. There is no assurance that a sufficient
market will develop in our stock, in which case it could be difficult for
shareholders to sell their stock. The market price of our common stock could
fluctuate substantially due to a variety of factors, including market perception
of our ability to achieve our planned growth, quarterly operating results of our
competitors, trading volume in our common stock, changes in general conditions
in the economy and the financial markets or other developments affecting our
competitors or us. In addition, the stock market is subject to extreme price and
volume fluctuations. This volatility has had a significant effect on the market
price of securities issued by many companies for reasons unrelated to their
operating performance and could have the same effect on our common stock.

|Item 2. | Description of Property.
|------- | ------------------------

Offices

Our head office is located at 18/F, Metroplaza Tower II 223
Hing Fong Road Kwai Chung, New Territories, Hong Kong. Our telephone number is
(852) 3586-1383. Our facsimile number is (852) 3586-2366. We have recently
signed a lease for new Hong Kong office space located at 905 Two Chinachem
Exchange Square, 338 Kings Road, North Point, Hong Kong. We intend to vacate
our offices in Metroplaza Tower II and move into our new office space by the end
of April, 2008. Our telephone and fax numbers will not change.

Our Malaysia subsidiary, Bioplanet Distribution Sdn Bhd,
maintained an office located at Suite E-09-07, Level 9, Block E, Plaza Mont
Kiara, No. 2, Jalan Kiara, Mont' Kiara, 50480 Kuala Lumpur, Wilayah Persekutuan,
Malaysia. We closed this office (and discontinued our operations in Malaysia)
effective January 31, 2008. We do not have any continuing lease obligations in
connection with this action.

Our subsidiary, Roots Biopack Limited, leases office space at
Unit 2009, Hopewell Centre, 183 Queens Road East, Wan Chai, Hong Kong.
Management of this subsidiary moved into our principal executive office on May
21, 2007 and the office space at Hopewell Centre is currently vacant. The lease
for this office does not expire until November 14, 2008. We continue to attempt
to sublease these premises or assign this lease to a new tenant.

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- 20 -

Our Peoples Republic of China (PRC) subsidiary, Jiangmen Roots
Biopack Limited, leases 4 adjacent properties situated at No.3, Yangjiaokeng
Industrial District, Tingyuan Village, Duruan Town, Jiangmen City, PRC. We call
this area Roots Biopark.

Roots Biopark includes a factory, dormitories, a shop on the
first floor, an office on the second floor, toilets, a garage, a storage shelter
and land, a substation and an electricity transformer (315kW). The premises are
equipped with kitchen appliances, water, electricity and fire prevention and
fire fighting equipment. Roots Biopark has a total area of 10,440 square meters,
including a 2,700 square meter dormitory.

The lease term is 15 years from March 1, 2007, with one option
to renew the term. A copy of the lease agreement and the translation of the
lease agreement were attached as exhibits to our annual report filed on April
17, 2007. We have a right of first refusal to purchase the premises in the event
that the landlord desires to sell.

We paid the sum of RMB 390,000.00 as a rental deposit. Pursuant
to the terms of our rental agreement, the rental deposit shall be refunded to us
without interest upon the expiration of the lease.

From the first to the fifth year, our monthly rent is RMB
103,000 (approximately $13,720), or RMB 1,236,000 (approximately $164,646 per
annum . From the sixth year onward, our rent will increase by 5% every 3
years.

|Item 3. | Legal Proceedings.
|------- | ------------------

Other than as disclosed below, we know of no material, active
or pending legal proceedings against us, nor are we involved as a plaintiff in
any material proceedings or pending litigation. There are no proceedings in
which any of our directors, officers or affiliates, or any registered beneficial
shareholder are an adverse party or has a material interest adverse to us.

By letter dated April 12, 2007 an attorney claiming to
represent Good Value Galaxy Limited, a British Virgin Islands corporation that
is a significant shareholder of our company, advised us that all of the issued
shares of Good Value Galaxy Limited had been transferred. This attorney advised
that the shares of Good Value Galaxy Limited, which had previously been
beneficially owned by Gerald Lau, our President and Chairman of our board of
directors, had been transferred to Oung Cheng Hai effective April 11, 2007. In
addition, this attorney advised that Gerald Lau, who had previously been the
sole director of Good Value Galaxy Limited, had resigned as a director of that
company and Mr. Albert Oung had been appointed as the sole director of Good
Value Galaxy Limited.

In a second letter, also dated April 12, 2007, this same
attorney advised that he represented both Good Value Galaxy Limited and Joyful
Services Limited and that these two companies owned in excess of 10% of our
companys issued and outstanding common shares. This attorney, allegedly on
behalf of Good Value Galaxy Limited and Joyful Services Limited, demanded that
our company convene a special meeting of our shareholders to consider and pass
resolutions to remove Gerald Lau (our President and a director) and Edwin Chan
(a director of our company), appointing Albert Oung and Patrick Oung to serve as
directors from that date forward.

Upon our receipt of this correspondence, our attorneys asked
Gerald Lau for confirmation of the alleged transfer of shares of Good Value
Galaxy Limited and they asked the attorney making the allegations to provide us
with credible evidence to support his allegations. Mr. Laus attorneys informed
us that no such transfer had taken place and that Mr. Lau continued to be the
sole shareholder of both Good Value Galaxy Limited and Joyful Services Limited.
The attorney making the allegation that the shares of Good Value Galaxy Limited
were transferred to Oung Cheng Hai has not yet provided us with any credible
evidence that this alleged transfer took place. In light of the absence of
credible evidence of a transfer and the assertion from Gerald Lau, through his
attorneys, that there has been no such transfer, we do not currently intend to
comply with the requests of April 12, 2007.

On May 8, 2007, we received a letter from a different law firm
asserting that it represented Good Value Galaxy Limited and Joyful Services
Limited and enclosing a document alleged to be the written consent of Good Value
Galaxy Limited and Joyful Services Limited. Albert Oung signed this alleged
written consent on behalf of each of Good Value Galaxy Limited and Joyful
Services Limited. The alleged written consent purports to appoint Albert Oung
and Patrick Oung to our board of directors effective immediately and to amend
and restate our Bylaws. Our

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- 21 -

attorneys replied to this letter of May 8, 2007, stating that
we cannot accept the claim that ownership of the shares of Good Value Galaxy
Limited and Joyful Services Limited has been transferred absent receipt of a
persuasive explanation of the circumstances of the transfer and credible
evidence showing how and why the alleged transfer took place. We have not yet
received any such explanation or credible evidence. Until we do, we cannot
accept the alleged written consent as the act of Good Value Galaxy Limited and
Joyful Services Limited.

On May 31, 2007, our President and Chairman of our board of
directors, Gerald Lau, filed a statement of claim in the High Court of the Hong
Kong Special Administrative Region  Court of First Instance against Albert
Oung, Oung Cheng Hai, Good Value Galaxy Limited and Joyful Services Limited
regarding ownership of approximately 54.06% shares of our common stock.

In his statement of claim, Mr. Lau alleges that in or about
January 2007, upon him learning of a severe medical condition that he developed,
he agreed to execute a declaration of trust in favour of Mr. Oung Cheng Hai
which was to take effect upon the completion of a number of conditions. Mr. Lau
alleges that he signed a declaration of trust, an instrument of transfer in
respect of the one (1) issued share in Good Value Galaxy Limited, a notice of
resignation of Good Value Galaxy Limited, a written resolution of the sole
director of Good Value Galaxy Limited approving the transfer of the share, the
resignation of the sole director and the appointment of Mr. Oung Cheng Hai. Mr.
Lau further alleges that all the executed documents were to remain undated and
were not to take effect until the following conditions were met:

- the declaration of trust was to give effect to Mr. Laus intentions that
  the shares in Good Value Galaxy Limited and any funds and benefits derived
  therefrom were to be utilized for charitable purposes;
- the declaration of trust should not take effect or become operative until
  12 to 18 months after the completion of the share exchange with the
  shareholders of Roots Biopack Group Limited and our company;
- the declaration of trust should not take effect or become operative until
  after the approval and or clearance from the United State Securities and
  Exchange Commission is obtained for the transfer of the share in Good Value
  Galaxy Limited and for the resignation of Mr. Lau from our company; and
- the declaration of trust was subject to Mr. Laus agreement and consent as
  to the date on which the documents shall take effect or become operative.

Mr. Lau further alleges that while the documents were held in
escrow by Mr. Oung Cheng Hai and Mr. Albert Oung, the documents were dated and
materially altered in breach of the agreement and the conditions referred to
above without the agreement, knowledge or consent of Mr. Lau. In particular, Mr.
Lau alleges that the declaration of trust was back-dated to the 17th
of September 2003 and the instrument of transfer, notice of resignation and
corporate resolution were dated the 11th of April 2007. Mr. Lau seeks
redress from the court to declare such documents as ineffective and/or void
and/or of no effect.

On July 13, 2007, Foshan City Shunde District Ka Fook Recycle
Products Ltd. with its legal representative Mr. Patrick Oung instituted civil
proceedings against our wholly owned subsidiary Jiangmen Roots Biopack Limited.
Foshan City Shunde District Ka Fook Recycle Products Ltd. and its legal
representative Mr. Patrick Oung allege that we and our subsidiary authorized
them to handle and establish early stage inspections, assessments, negotiations
and all matters which were in the set-up process and to provide consultation
services for setting up the factory. Foshan City Shunde District Ka Fook Recycle
Products Ltd. and its legal representative Mr. Patrick Oung further allege that
during this period our subsidiary had transferred a total of RMB 5,110,000 to
Foshan City Shunde District Ka Fook Recycle Products Ltd. but because of
conflicts arising during the course of the set-up processes between directors of
our subsidiary, our subsidiary had not checked or reconciled the transactions
with Foshan City Shunde District Ka Fook Recycle Products Ltd. Foshan City
Shunde District Ka Fook Recycle Products Ltd. and its legal representative Mr.
Patrick Oung have asked the court to confirm that RMB 5,110,000 has been paid to
Foshan City Shunde District Ka Fook Recycle Products Ltd. and to order our
subsidiary to check and reconcile these transactions.

On May 31, 2007, Foshan City Shunde District Ka Fook Recycle
Products Ltd. with its legal representative Mr. Patrick Oung instituted civil
proceedings against our wholly owned subsidiary Jiangmen Roots Biopack
Limited.

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- 22 -

Foshan City Shunde District Ka Fook Recycle Products Ltd. and
its legal representative Mr. Patrick Oung allege that in February 2007 they
signed a rental agreement with our wholly owned subsidiary for the sublease of
approximately 5,000 m2in a factory located in Yangjiaokeng
Industrial District, Tingyuan Village, Duran Town at a rate of 50,000 yans per
month.

Foshan City Shunde District Ka Fook Recycle Products Ltd. and
its legal representative Mr. Patrick Oung further allege that they had moved a
number of machines inside the factory and established production of machines for
environmentally friendly products. They further allege that on May 4, 2007 a
dispute arose amongst the directors of our company, and that our subsidiary
prohibited them from entering the factory, seized their assets and deliberately
used and damaged these properties. Foshan City Shunde District Ka Fook Recycle
Products Ltd. and its legal representative Mr. Patrick Oung have asked the court
to order our subsidiary to return all machinery, production facilities,
materials, products, tools, business data and information and any related
property belonging to Foshan City Shunde District Ka Fook Recycle Products Ltd.

On June 4, 2007, pending the hearing of the case, the court
ordered that the properties in dispute and RMB 2,800,000 be seized.

Also on June 4, 2007, the court ordered that all materials,
including all business information such as accounting records, information
registered under the name of Foshan City Green Machine Factory and placed at the
factory area of our wholly owned subsidiary plus our subsidiarys production
equipment, products and business records seized, detained, photographed,
video-taped, copied, investigated, and listed, in order to preserve the
evidence. Included among this property placed for safekeeping at our Biopark
factory facility are four new production machines that we cannot use in our
production line until this dispute has been resolved.

On May 10, 2007, our wholly owned subsidiary, Jiangmen Roots
Biopack Limited, and Gerald Lau as our subsidiarys legal representative filed a
report of crime with the Public Security Bureau of Jiangmen City. In the report
of crime we alleged that Patrick Oung, a former director of our subsidiary, was
given the authority to handle the early stages of the establishment of our
factory in Jiangmen due to a serious illness to our president, Gerald Lau. We
further alleged that in April 2007 we discovered that Patrick Oung had paid a
total of RMB 1,000,000 for a factory lease guarantee through our subsidiarys
bank account by affixing our subsidiarys company seal without proper
authorization from its board of directors or legal representative, where the
actual factory lease guarantee required was only RMB 309,000. Moreover, we
discovered that a total of RMB 610,000 was transferred to Patrick Oungs
personal account on March 6, 7, and 8, 2007. For these reasons, we decided to
file a criminal complaint and seek assistance from the Public Security Bureau of
Jiangmen City. On August 1, 2007, the Public Security Bureau of Jiangmen City
decided to prosecute Patrick Oung for embezzlement of our subsidiarys funds.
Mr. Oung was arrested on August 8, 2007, while entering the Peoples Republic of
China at Zhong Shan Port, and he was detained in the Jiangmen Detention Center.
While under detention, Mr. Oung was examined at the hospital and found to be in
serious physical condition. In view of his poor health and his promise to return
all of the money he had embezzled from our company within three months of his
release, Mr. Oung was released from detention on bail and for humanitarian
grounds. Part of Mr. Oungs bail consisted of 450,000 RMB and a condition that
he return 750,000 RMB to our companys subsidiary. Mr. Oungs release includes a
condition that he not be allowed to leave the Peoples Republic of China.

On September 1, 2007 our Hong Kong subsidiary Roots Biopack
Industry Limited filed suit against Patrick Oung in the High Court of the Hong
Kong Special Administrative Region Court of First Instance (Action No. 1860)
alleging that Mr. Oung acted as a shadow director of the plaintiff and that he
breached fiduciary duties owed to the plaintiff by causing the plaintiff to
engage in wrongful transactions that enriched the defendant. The plaintiff has
demanded an accounting and return of all money misapplied and/or misappropriated
by Mr. Oung.

|Item 4. | Submission of Matters to a Vote of Security
      Holders.
|------- | ----------------------------------------------------------

There were no matters submitted to a vote of our security
holders either through solicitation of proxies or otherwise in the fourth
quarter of the fiscal year ended December 31, 2007.

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- 23 -

PART II

|**Item 5.** | Market for Common Equity and Related Stockholder
      Matters and Small Business Issuer Purchases of Equity
      Securities.
|----------- | ------------------------------------------------------------------------------------------------------------------------------

Our common shares are quoted for trading on the OTC Bulletin
  Board under the symbol BPEV. The closing price of our common stock,
  as reported by the OTC Bulletin Board on April 14, 2008, was $0.12.

The following quotations obtained from www.finance.yahoo.com
reflect the highs and low bids for our common stock based on inter-dealer
prices, without retail mark-up, mark-down or commission an may not represent
actual transactions. The high and low bid prices of our common stock for the
periods indicated below are as follows:

National Association of Securities Dealers OTC Bulletin
      Board(1)Quarter
      Ended
    High
    LowDecember 31, 2006
    n/a
    n/aMarch 31, 2006
    n/a
    n/aJune 30, 2006
    $12.00
    $0.70September 30, 2006
    $0.81
    $0.60December 31, 2006
    $0.90
    $0.60March 31, 2007
    $0.85
    $0.65June 30, 2007
    $1.51
    $0.71September 30, 2007
    $0.95
    $0.40December 31, 2007
    $0.63
    $0.41


|(1) | Over-the-counter market quotations reflect inter-dealer
      prices without retail mark-up, mark-down or commission, and may not
      represent actual transactions.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

Transfer Agent and Registrar

Our transfer agent and registrar for our common stock is
Madison Stock Transfer Inc. Their address is PO Box 145, Brooklyn, New York, USA
11229-0145. Their telephone number is (718) 627-4453. Their fax number is (718)
627-6341.

Holders

On April 11, 2008 there were 1,392 registered holders of our
  common shares and 162,811,155 common shares issued and outstanding. In addition,
  on April 11, 2008, there were 1,000,000 shares of our Series A Preferred Stock
  and 1,000,000 shares of our Series B Preferred Stock issued and outstanding
  (both held by one registered holder).

Dividends

We have not paid dividends on our common stock in the past and
  do not anticipate paying dividends in the near future.

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- 24 -

We intend to retain earnings, if any, for use in our business
  and do not anticipate paying any cash dividends. Our board of directors will
  determine if and when dividends should be declared and paid in the future based
  on our financial position at the relevant time. All of our shares of common
  stock are entitled to an equal share in any dividends declared and paid.

Recent Sales of Unregistered Securities

On August 17, 2007 we issued 1,000,000 Series A Preferred
Shares and 1,000,000 Series B Preferred Shares to Begonia Participation Corp.
pursuant to a Debt Settlement and Subscription Agreement dated August 1, 2007.
We issued the Series A and Series B Preferred Shares to a non-U.S. person (as
that term is defined in Regulation S of the Securities Act of 1933) in an
offshore transaction relying on Regulation S and/or Section 4(2) of the
Securities Act of 1933.

In December, 2007, we sold two
convertible debentures, one to each of two investors and each in the face amount
of $300,000, for gross proceeds of $600,000. Each of these convertible
debentures is for a term of three years and amounts due are convertible, at any
time at the option of the holder after giving 60 days prior notice to our
company, into shares of our Series C Preferred Stock at a price of $0.50 per
preferred share. Neither of these investors is a U.S. person, the transactions
did not occur in the United States and, in selling these debentures we relied on
the registration exemption provided by Regulation S, promulgated under the
Securities Act of 1933, as amended.

On January 31, 2008, we sold one
convertible debenture with a face amount of $150,000 to one investor for gross
proceeds of $150,000. This convertible debenture is for a two year term and is
convertible, at any time at the option of the holder after giving 60 days prior
notice to our company, into shares of our common stock at a price of six and
two-thirds cents per share. This investor is not a U.S. person, the transaction
did not occur in the United States and, in selling this debenture we relied on
the registration exemption provided by Regulation S, promulgated under the
Securities Act of 1933, as amended.

On February 4, 2008, we sold one
convertible debenture with a face amount of $100,000 to one investor for gross
proceeds of $100,000. This convertible debenture is for a three year term and is
convertible, at any time at the option of the holder after giving 60 days prior
notice to our company, into shares of our common stock at a price of six and
two-thirds cents per share. This investor is not a U.S. person, the transaction
did not occur in the United States and, in selling this debenture we relied on
the registration exemption provided by Regulation S, promulgated under the
Securities Act of 1933, as amended.

On March 3, 2008, we sold one
convertible debenture with a face amount of $400,000 to one investor for gross
proceeds of $400,000. This convertible debenture is for a three year term and is
convertible, at any time at the option of the holder after giving 60 days prior
notice to our company, into shares of our common stock at a price of six and
two-thirds cents per share. This investor is not a U.S. person, the transaction
did not occur in the United States and, in selling this debenture we relied on
the registration exemption provided by Regulation S, promulgated under the
Securities Act of 1933, as amended.

Securities Authorized for Issuance Under Equity Compensation
Plans

The following table summarizes our equity compensation plan
information for the fiscal year end December 31, 2007;

Plan Category
    Number of Securities to be Issued Upon
      Exercise of Outstanding Options, Warrants and
      Rights
    Weighted-Average Exercise Price of
      Outstanding Options, Warrants and Rights
    Number of Securities Remaining Available
      for Future Issuance Under Equity Compensation
      Plans (Excluding Securities Reflected in
      Column)Equity compensation plans approved by security
      holders
    Nil
    Nil
    NilEquity compensation plans
    6,000,000
    $Nil
    Nil


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- 25 -

not approved by security holders(1)Total
    6,000,000
    $Nil
    Nil


|(1) | On July 8, 2005, we filed a registration statement on
      Form S-8 registering 6,000,000 shares at a proposed offering price of
      $0.013 per share or $78,000. Under this plan we issued 6,000,000 shares to
      five individuals in consideration for consulting
  services.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Purchases of Equity Securities by the Issuer and Affiliated
Purchasers

We did not purchase any of our shares of common stock or other
securities during our fiscal year ended December 31, 2007.

|Item 6. | Management's Discussion and Analysis or Plan
      of Operation.
|------- | ----------------------------------------------------------------

Overview

The following discussion of our financial condition and results
of operations should be read in conjunction with the audited financial
statements and the notes to the audited financial statements included in this
annual report. This discussion contains forward-looking statements that reflect
our plans, estimates and beliefs. Our actual results may differ materially from
those anticipated in these forward-looking statements.

On March 27, 2007, we completed a share exchange agreement with
Roots Biopack Group and the former shareholders of Roots Biopack Group. As a
result of the share exchange agreement, we integrated our existing development
of a line of biodegradable, single use, food and beverage containers with the
business of Roots Biopack Group, which consisted of the research and
development, manufacturing and sale of biodegradable food container and
industrial packaging products made from natural materials. Because we are the
successor business to Roots Biopack Group and because the operations and assets
of Roots Biopack Group represents our entire business and operations from the
closing date of the share exchange agreement, our management's discussion and
analysis and audited financial statements are based on the Roots Biopack Group
financial results for the relevant periods.

Through our sales and marketing team and our distributors we
supply our biodegradable food container and industrial packaging products to
multinational corporations, supermarket chains and restaurants located across
North America, Europe and Asia.

Result of Operations for the Fiscal Year Ended December 31,
2007 as compared to the Fiscal Year Ended December 31, 2006.

Our net loss for the year ended December 31, 2007 was
$5,011,576, compared to a profit for the year ended December 31, 2006 of
$613,474. The increase in net loss of $5,625,050 for the year ended December 31,
2007 was primarily due to a decrease in sales, increases in administrative costs
as we geared up the operation of our new production facility, a write-off of
construction work in Malaysia in the amount of $154,506, the provision for
doubtful debts in the amount of $243,625 and a write-off of amounts due from
related parties of $2,876,402.

Net Sales and Cost of Sales

Our net sales for the year ended December 31, 2007 were
$1,075,902. Net sales for the year ended December 31, 2006 were $6,622,362. The
decrease in net sales of $5,546,460 for the year ended December 31, 2007 was
primarily due to the termination of our relationship with the Shunde Factory,
which limited our production/manufacturing capacity. Our new Biopark factory,
which we had hoped to look to for additional manufacturing capacity, took longer
to develop than we had anticipated and it was not available to replace some of
the production capacity that we lost when we discontinued our relationship with
the Shunde factory.

Our cost of sales for the year ended December 31, 2007 was
$851,469. Our cost of sales for the year ended December 31, 2006 was $5,248,104.
The decrease of $4,396,635 in cost of sales for the year ended December 31, 2007
was directly related to the decrease in sales.

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- 26 -

Operating Expenses

Our operating expenses for the year ended December 31, 2007
were $5,065,716, compared to operating expenses for the year ended December 31,
2006 of $627,433. The increase in operating expenses of $4,438,283 for the year
ended December 31, 2007 was primarily due to the write-off of a write-off of
construction work in Malaysia in the amount of $154,506, provision for doubtful
debts in the amount of $243,625, a write-off of amounts due from related parties
of $2,876,402 and an increase in administration expenses resulting from the
development of phase one of our production capacity at our Biopark facility.

Our advertising and promotion expenses for the year ended
December 31, 2007 were $6,453. Our advertising and promotion expenses for the
year ended December 31, 2006 were $20,619. The decrease in advertising and
promotion expenses of $14,166 for the year ended December 31, 2007 was primarily
due to the decrease in our production capacity resulting from the termination of
our relationship with one of our independent factories while at the same time
failing to bring our Biopark production facility on-line as early as originally
projected. We decided to ramp down our sales efforts until our Biopark factory
was capable of production at its projected levels.

Our rent for the year ended December 31, 2007 was $228,159. Our
rent for the year ended December 31, 2006 was $30,379. The increase in rent of
$197,780 for the year ended December 31, 2007 was primarily due to the payment
of rent for our Biopark factory.

Other Income and Expenses

We recognized a foreign exchange loss for the year ended
December 31, 2007 of $32,136, compared to a foreign exchange loss for the year
ended December 31, 2006 of $1,250. The increase in foreign exchange loss for the
year ended December 31, 2007 was primarily due to the weakening of the U.S.
dollar.

We incurred interest expense for the year ended December 31,
2007 of $60,143 compared to interest expense for the year ended December 31,
2006 of $1,816. The increase in interest expense of $58,327 for the fiscal year
ended December 31, 2007 was primarily due to accrued interest payable on a loan
from an unrelated third party.

Liquidity and Capital Resources

Our principal cash requirements are for daily working capital
and for the purchase of machinery and other development of our Roots Biopark
facility. Over the next 12 months we plan to spend approximately $2,250,000 on
this project, primarily consisting of the cost to build and install new
production machinery. We intend to source the capital required for this project
from revenue from operations and from the sale of debt or equity in our company.
We do not currently have any arrangements for the sale of any debt or equity in
place and there can be no assurance that we will be able to raise the capital
required in this manner.

Capital Resources

For the year ended December 31, 2007 we had a working capital
deficit of $1,717,380. For the year ended December 31, 2006 we had working
capital of $1,105,477. The decline in working capital of $2,822,857 for the year
ended December 31, 2007 was primarily due to the cost of developing our new
production facilities, as well as loans from our directors and related parties
which are classified as current liabilities.

At December 31, 2007, we had cash and cash equivalents of
$96,460. At December 31 2006, we had cash and cash equivalents of $793,262. The
decrease in cash and cash equivalents of $696,802 is due primarily to the
misappropriation of funds from our company and a subsidiary of our company by a
former director and to the development of our new production facility. For
additional information about this misappropriation of funds, please refer to the
section of this Annual Report on Form 10-KSB titled Legal Proceedings
beginning at page 20, above.

Cash Flow Used in Operating Activities

For the year ended December 31, 2007 our operating activities
used cash of $2,797,650. For the year ended December 31, 2006 our operating
activities used cash of $535,357. The increase in cash used for operating
expenses

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- 27 -

of $2,262,293 during the year ended December 31, 2007 was
primarily due to repayment of trade deposits, increases in receivables from
customers and related parties and increases in prepaid expenses.

Cash Flow Used in Investing Activities

For the year ended December 31, 2007, investing activities used
cash of $1,450,246. For the year ended December 31, 2006, investing activities
used cash of $18,958. The increase in cash used in investing activities of
$1,431,288 for the year ended December 31, 2007 was primarily due to the cost of
developing our Roots Biopark facility.

On August 1, 2007, we entered into a Debt Settlement and
Subscription Agreement with Begonia Participation Corp. to settle a Loan and
Shareholders Agreement dated December 21, 2006. Begonia agreed to accept, in
full satisfaction of the $1,133,667.70 owed to them by our subsidiary, Roots
Biopack Group Limited, under the Loan and Shareholders Agreement between
Begonia and Roots Biopack Group, 1,000,000 Series A Preferred Shares in the
capital stock of our company and 1,000,000 Series B Preferred Shares in the
capital stock of our company. Each Series A Preferred Share and each Series B
Preferred Share has the right to thirty (30) votes at any meeting of our
shareholders and the right to convert, at any time at the holders option, into
five (5) common shares in the capital stock of our company.

Cash Flow Provided by Financing Activities

For the year ended December 31, 2007, cash flow provided by
financing activities provided cash of $3,542,392. For the year ended December
31, 2006, cash flow provided by financing activities provided cash of
$1,284,759. The increase in cash flow provided by financing activities of
$2,257,633 for the year ended December 31, 2007 was primarily due to advances
from a third party and advances from directors, shareholders, related parties
and the sale of convertible debentures.

Capital Expenditures

During the year ended December 31, 2008 the bulk of our capital
expenditure was focused on the development of our Roots Biopark production
facility. As of April 14, 2008, we do not have any material commitments for
capital expenditures. Over the next twelve months, we plan to spend
approximately $2,250,000 on the completion of the second and third production
phases at our Roots Biopark production facility.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to investors.

Prior to the date that we acquired our wholly-owned subsidiary
Roots Biopack Group Limited, Roots Biopack Group Limited had entered into an
agreement to purchase land in Jiangmen upon which it intended to build a large
new factory facility designed to handle all of its production requirements.
Roots Biopack Group Limited did not complete this proposed acquisition. We
decided not to complete this acquisition in favor of leasing the land (which we
have done). We have agreed to forfeit the deposit paid in respect of the
proposed purchase in return for the vendors agreement that it will not pursue
any other damages or remedies for our failure to complete the purchase.

Significant Accounting Policies

Use of estimates

In preparing financial statements in conformity with accounting
principles generally accepted in the United States of America, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the dates of
the financial statements, as well as the reported amounts of revenues and
expenses during the reporting years. These accounts and estimates include, but
are not limited to, the valuation & accounts receivable, deferred income
taxes and the estimation on useful lives of plant and equipment. Actual results
could differ from those estimates.

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- 28 -

Cash and cash equivalents

Cash and cash equivalents include all cash, deposits in banks
  and other highly liquid Investments with initial maturities of three months
  or less.

Allowance for Doubtful Accounts

Our company recognizes an allowance for doubtful accounts to
  ensure accounts receivable are not overstated due to uncollectibility. An allowance
  for doubtful accounts is maintained for all customers based on a variety of
  factors, including the length of time the receivables are past due, significant
  one-time events and historical experience. An additional reserve for individual
  accounts is recorded when our company becomes aware of a customer’s inability
  to meet its financial obligations, such as in the case of bankruptcy filings
  or deterioration in the customer’s operating results or financial position.
  If circumstances related to customers change, estimates of the recoverability
  of receivables would be further adjusted. There was no accounts receivable and
  no allowance for doubtful accounts as of December 31, 2007.

Accounts receivable

Accounts receivable are stated at original amount less an allowance
  made for doubtful receivables, if any, based on a review of all outstanding
  amounts at the end of the period. Full allowances for doubtful receivables are
  made when the receivables are overdue for one year and an allowance is made
  when there is objective evidence that our company will not be able to collect
  all amounts due according to original terms of receivables. Bad debts are written
  off when identified against the allowance when identified. Our company extends
  credit to customers on an unsecured basis in the normal course of business and
  believes that all accounts receivable in excess of the allowance for doubtful
  accounts to be fully collectible. We do not accrue interest on trade accounts
  receivable. The normal credit terms range from 15 to 60 days.

Property, Plant and equipment

Property, plant and equipment is stated at cost. Depreciation
  is provided principally by use of the straight-line method over the useful lives
  of the related assets, except for leasehold properties, which are depreciated
  over the terms of their related leases or their estimated useful lives, whichever
  is less. Expenditures for maintenance and repairs, which do not improve or extend
  the expected useful life of the assets, are expensed to operations while major
  repairs are capitalized.

The estimated useful lives are as follows:

|                                         | Years  
|---------------------------------------- | -------
|Leasehold improvements                   | 5      
|Furniture, fixtures and office equipment | 5 to 10
|Motor vehicles                           | 5      
|Computer equipment                       | 5      
|Plant and Machinery                      | 10     

Impairment of assets

In accordance with Statement of Financial Accounting Standards
  (“SFAS”) No. 144, "Accounting for Impairment or Disposal of
  Long-Lived Assets", our company evaluates its long-lived assets to determine
  whether later events and circumstances warrant revised estimates of useful lives
  or a reduction in carrying value due to impairment. If indicators of impairment
  exist and if the value of the assets is impaired, an impairment loss would be
  recognized.

As of December 31, 2007, we impaired property and equipment in
  the amount of $170,923, which amount is reflected in the operating expenses
  section of the operating statement.

Revenue recognition

Revenue from sales of our products is recognized when the
significant risks and rewards of ownership have been transferred to the buyer at
the time of delivery and the sales price is fixed or determinable and collection
is reasonably assured.

Income taxes

We use the asset and liability method of accounting for income
taxes pursuant to SFAS No. 109 Accounting for Income Taxes. Under the asset
and liability method of SFAS 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to temporary differences
between the financial statements carrying amounts of existing assets and
liabilities and loss carry forwards and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. Valuation allowances are established when necessary to
reduce deferred tax assets to the amount expected to be realized.



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- 29 -

Accumulated Other Comprehensive income

Accumulated other comprehensive income represents the change
  in equity of our company during the periods prensented from foreign currency
  translation adjustments.

Foreign currency translation

Our functional currency is Hong Kong Dollars (“HKD”),
  Renminbi (“RMB”) and Malaysia Ringatt (“MYR”)and our
  reporting currency is U.S. dollars. Our consolidated balance sheet accounts
  are translated into U.S. dollars at the year-end exchange rates and all revenue
  and expenses are translated into U.S. dollars at the average exchange rates
  prevailing during the periods in which these items arise. Translation gains
  and losses are deferred and accumulated as a component of other comprehensive
  income in stockholders’ equity. Transaction gains and losses that arise
  from exchange rate fluctuations from transactions denominated in a currency
  other than the functional currency are included in the statement of operations
  as incurred.

Fair value of financial instruments

SFAS No. 107, “Disclosures about Fair Values of Financial
  Instruments”, requires disclosing fair value to the extent practicable
  for financial instruments that are recognized or unrecognized in the balance
  sheet. The fair value of the financial instruments disclosed herein is not necessarily
  representative of the amount that could be realized or settled, nor does the
  fair value amount consider the tax consequences of realization or settlement.

For certain financial instruments, including cash, accounts and
  other receivables, accounts payable, accruals and other payables, it was assumed
  that the carrying amounts approximate fair value because of the near term maturities
  of such obligations. The carrying amounts of long-term loans approximate fair
  value as the interest on these loans is minimal.

Earnings per share

Basic earnings per share is computed by dividing the earnings
  for the year by the weighted average number of common shares outstanding for
  the period. Diluted earnings per share reflects the potential dilution of securities
  by including other potential common stock, including stock options and warrants,
  in the weighted average number of common shares outstanding for a period, if
  dilutive.

Recent Accounting Pronouncements

In November 2004, the FASB issued SFAS No. 151 "Inventory
  Costs, an amendment of ARB No. 43, Chapter 4”, (" SFAS No. 151").
  The amendments made by SFAS 151 clarify that abnormal amounts of idle facility
  expense, freight, handling costs, and wasted materials (spoilage) should be
  recognized as current-period charges and require the allocation of fixed production
  overheads to inventory based on the normal capacity of the production facilities.
  The guidance is effective for inventory costs incurred during fiscal years beginning
  after June 15, 2005. Earlier application is permitted for inventory costs incurred
  during fiscal years beginning after November 23, 2004. Our company has evaluated
  the impact of the adoption of SFAS 151, and does not believe the impact will
  be significant to our company’s overall results of operations or financial
  position.

In December 2004, the FASB issued SFAS No.152, "Accounting
  for Real Estate Time-Sharing Transactions-an amendment of FASB Statements No.
  66 and 67" ("SFAS 152") SFAS 152 amends SFAS No. 66, "Accounting
  for Sales of Real Estate", to reference the financial accounting and reporting
  guidance for real estate time-sharing transactions that is provided in AICPA
  Statement of Position (SOP) 04-2, "Accounting for Real Estate Time-Sharing
  Transactions". SFAS 152 also amends SFAS No. 67, "Accounting for Costs
  and Initial Rental Operations of Real Estate Projects", to state that the
  guidance for (a) incidental operations and (b) costs incurred to sell real estate
  projects does not apply to real estate time-sharing transactions. The accounting
  for those operations and costs is subject to the guidance in SOP 04-2. SFAS
  152 is effective for financial statements for fiscal years beginning after June
  15, 2005, with earlier application encouraged. We have evaluated the impact
  of the adoption of SFAS 152, and do not believe the impact will be significant
  if any, to our company's overall results of operations or financial position
  since we do not enter into such transactions.

In December 2004, the FASB issued SFAS No.153, "Exchanges
  of Nonmonetary Assets, an amendment of APB Opinion No. 29, Accounting for Nonmonetary
  Transactions." The amendments made by SFAS 153 are based on the principle
  that exchanges of nonmonetary assets should be measured based on the fair value
  of the assets exchanged. Further, the amendments eliminate the narrow exception
  for nonmonetary exchanges of similar productive assets and replace it with a
  broader exception for exchanges of nonmonetary assets that do not have commercial
  substance. Previously, Opinion 29 required that the accounting for an exchange
  of a productive asset for a similar productive asset or an equivalent interest
  in the same or similar productive asset should be based on the recorded amount
  of the asset relinquished. Opinion 29 provided an exception to its basic measurement
  principle (fair value) for exchanges of similar productive assets. That exception
  required that some nonmonetary exchanges, although commercially substantive,
  to be recorded on a carryover basis. By focusing the exception on exchanges
  that lack commercial substance, the FASB believes SFAS No.153 produces financial
  reporting that more faithfully represents the economics of the transactions.
  SFAS No.153 is effective for nonmonetary asset exchanges occurring in fiscal
  periods beginning after June 15, 2005. Earlier application is permitted for
  nonmonetary asset exchanges occurring in fiscal periods beginning after the
  date of issuance. The provisions of SFAS No.153 shall be applied prospectively.
  We have evaluated the impact of the adoption of SFAS 153, and does not believe
  the impact will be significant to our company's overall results of operations
  or financial position.

In December 2004, the FASB issued SFAS No.123 (revised 2004),
  "Share-Based Payment" ("SFAS 123(R)"). SFAS 123(R) will
  provide investors and other users of financial statements with more complete
  and neutral financial information by requiring that the compensation cost relating
  to share-based payment transactions be recognized in financial statements. That
  cost will be measured based on the fair value of the equity or liability instruments
  issued. SFAS 123(R) covers a wide range of share-based compensation arrangements
  including share options, restricted share plans, performance-based awards, share
  appreciation rights, and employee share purchase plans. SFAS 123(R) replaces
  SFAS No. 123, "Accounting for Stock-Based Compensation", and supersedes
  APB Opinion No. 25, "Accounting for Stock Issued to Employees". SFAS
  123, as originally issued in 1995, established as preferable a fair-value-based
  method of accounting for share-based payment transactions with employees. However,
  that statement permitted entities the option of continuing to apply the guidance
  in Opinion 25, as long as the footnotes to financial statements disclosed what
  net income would have been had the preferable fair-value-based method been used.
  Public entities (other than those filing as small business issuers) will be
  required to apply SFAS 123(R) as of the first interim or annual reporting period
  that begins after June 15, 2005. This pronouncement is effective for our company,
  a small business issuer, as of the first interior annual reporting period that
  begins after December 15, 2005. We have evaluated the impact of the adoption
  of SFAS 123(R), and do not believe the impact will be significant to our company's
  overall results of operations or financial position.

---

- 30 -

In May 2005, The FASB issued SFAS No. 154, entitled Accounting
  Changes and Error Corrections – a replacement of APB Opinion No. 20 and
  FASB Statement No. 3. This Statement replaces APB Opinion No. 20, Accounting
  Changes and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial
  Statements, and changes the requirements for the accounting for and reporting
  of a change in accounting principle. This statement applies to all voluntary
  changes in accounting principle. It also applies to changes required by an accounting
  pronouncement in the unusual instance that the pronouncement does not include
  specific transition provisions. Opinion 20 previously required that most voluntary
  changes in accounting principle be recognized by including in net income of
  the period of the change the cumulative effect of changing to the new accounting
  principle. This Statement requires retrospective application to prior periods’
  financial statements of changes in accounting principle, unless it is impracticable
  to determine either the period-specific effects or the cumulative effect of
  the change. This Statement defines as the application of a different accounting
  principle to prior accounting periods as if that principle had always been used
  or as the adjustment of previously issued financial statements to reflect a
  change in the reporting entity. This statement also redefines restatement as
  the revising of previously issued financial statements to reflect the correction
  of an error. The adoption of SFAS 154 did not impact the financial statements.

In February, 2006, FASB issued SFAS No. 155, “Accounting
  for Certain Hybrid Financial Statements”. SFAS No. 155 amends SFAS No.
  133, “Accounting for Derivative Instruments and Hedging Activities”
  and SFAS No. 140, “Accounting for Transfers and Servicing of Financial
  Assets and Extinguishments of Liabilities”. SFAS No. 155, permits fair
  value measurement for any hybrid financial instrument that contains an embedded
  derivative that otherwise would require bifurcation, clarifies which interest-only
  strips and principal-only strips are not subject to the requirements of SFAS
  No. 133, establishes a requirement to evaluate interest in securitized financial
  assets to identify interests that are freestanding derivatives or that are hybrid
  financial statements that contain an embedded derivative requiring bifurcation,
  clarifies that concentrations of credit risk in the form of subordination are
  not embedded derivatives, and amends SFAS No. 140 to eliminate the prohibition
  on the qualifying special-purpose entity from holding a derivative financial
  instrument that pertains to a beneficial interest other than another derivative
  financial instrument. This statement is effective for all financial instruments
  acquired or issued after the beginning of our company’s first fiscal year
  that begins after September 15, 2006. Management believes that this statement
  will not have a significant impact on the financial statements.

In March, 2006 FASB issued SFAS 156 “Accounting For Servicing
  of Financial Assets” this Statement amends FASB Statement No. 140, “Accounting
  for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”,
  with respect to the accounting for separately recognized servicing assets and
  servicing liabilities. This Statement:

> Requires an entity to recognize a servicing asset or servicing
>     liability each time it undertakes an obligation to service a financial asset
>     by entering into a servicing contract.
>   Requires all separately recognized servicing assets and
>     servicing liabilities to be initially measured at fair value, if practicable.
>   Permits an entity to choose “Amortization method”
>     or “Fair value measurement method” for each class of separately
>     recognized servicing assets and servicing liabilities.
>   At its initial adoption, permits a one-time reclassification
>     of available-for-sale securities to trading securities by entities with recognized
>     servicing rights, without calling into question the treatment of other available-for-sale
>     securities under Statement 115, provided that the available-for-sale securities
>     are identified in some manner as offsetting the entity’s exposure to
>     changes in fair value of servicing assets or servicing liabilities that a
>     servicer elects to subsequently measure at fair value.
>   Requires separate presentation of servicing assets and liabilities
>     subsequently measured at fair value in the statement of financial position
>     and additional disclosures for all separately recognized servicing assets
>     and servicing liabilities.

Management believes that this statement will not have a significant
  impact on the financial statements.

In September 2006, FASB issued SFAS 157 ‘Fair Value Measurements’.
  This Statement defines fair value, establishes a framework for measuring fair
  value in generally accepted accounting principles (GAAP), and expands disclosures
  about fair value measurements. This Statement applies under other accounting
  pronouncements that require or permit fair value measurements, the Board having
  previously concluded in those accounting pronouncements that fair value is the
  relevant measurement attribute. Accordingly, this Statement does not require
  any new fair value measurements. However, for some entities, the application
  of this Statement will change current practice. This Statement is effective
  for financial statements issued for fiscal years beginning after November 15,
  2007, and interim periods within those fiscal years. Management is currently
  evaluating the effect of this pronouncement on financial statements.

In September 2006, FASB issued SFAS 158 “Employers’
  Accounting for Defined Benefit Pension and Other Postretirement Plans—an
  amendment of FASB Statements No. 87, 88, 106, and 132(R). This Statement improves
  financial reporting by requiring an employer to recognize the overfunded or
  underfunded status of a defined benefit postretirement plan (other than a multiemployer
  plan) as an asset or liability in its statement of financial position and to
  recognize changes in that funded status in the year in which the changes occur
  through comprehensive income of a business entity or changes in unrestricted
  net assets of a not-for-profit organization. This Statement also improves financial
  reporting by requiring an employer to measure the funded status of a plan as
  of the date of its year-end statement of financial position, with limited exceptions.
  An employer with publicly traded equity securities is required to initially
  recognize the funded status of a defined benefit postretirement plan and to
  provide the required disclosures as of the end of the fiscal year ending after
  December 15, 2006. An employer without publicly traded equity securities is
  required to recognize the funded status of a defined benefit postretirement
  plan and to provide the required disclosures as of the end of the fiscal year
  ending after June 15, 2007. However, an employer without publicly traded equity
  securities is required to disclose the following information in the notes to
  financial statements for a fiscal year ending after December 15, 2006, but before
  June 16, 2007, unless it has applied the recognition provisions of this Statement
  in preparing those financial statements. The requirement to measure plan assets
  and benefit obligations as of the date of the employer’s fiscal year-end
  statement of financial position is effective for fiscal years ending after December
  15, 2008. Management is currently evaluating the effect of this pronouncement
  on financial statements.

In February 2007, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 159, “The Fair Value Option
  for Financial Assets and Financial Liabilities” and is effective for fiscal
  years beginning after November 15, 2007. This Statement permits entities to
  choose to measure many financial instruments and certain other items at fair
  value. The objective is to improve financial reporting by providing entities
  with the opportunity to mitigate volatility in reported earnings caused by measuring
  related assets and liabilities differently without having to apply complex hedge
  accounting provisions. Our company is currently assessing the impact the adoption
  of this pronouncement will have on the financial statements.

|Item 7. | Financial Statements.
|------- | ---------------------

Our consolidated audited financial statements are stated in
United States dollars (US$) and are prepared in accordance with United States
Generally Accepted Accounting Principles.

The following consolidated audited financial statements are
filed as part of this annual report:

| | Independent Auditor's Report, dated April 11, 2008 of Gruber
        & Company, LLC                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                     
| | Audited Consolidated Balance Sheets as at December 31,
      2007 and December 31, 2006                                                             
| |                                                                                                                                                     
| | Audited Consolidated Statements of Operations for the
      year ended December 31, 2007 and for the year ended December 31, 2006                   
| |                                                                                                                                                     
| | Audited Consolidated Statements of Cash Flows for the
      year ended December 31, 2007 and for the year ended December 31, 2006                   
| |                                                                                                                                                     
| | Audited Consolidated Statements of Changes in
      Stockholders' Equity (Deficiency) for the period from August 25, 1999 to
      December 31, 2007
| |                                                                                                                                                     
| | Notes to the Consolidated Financial Statements                                                                                                      

---

BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES 
  CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007 And 2006 
  Together With Report Of 
  Independent Registered Public Accounting Firm

---

BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|Report of Independent
      Registered Public Accounting Firm    | F-2
|---------------------------------------------------------------- | ---
|Consolidated Balance Sheet                                       | F-3
|Consolidated Statements
      of Operations                      | F-4
|Consolidated Statements of Cash Flows                            | F-5
|Consolidated Statements
      of Changes in Stockholders Equity | F-6
|Notes to Consolidated Financial Statements                       | F-7

F-1

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
  Biopack Environmental Solutions Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of
  Biopack Environmental Solutions Inc. and Subsidiaries as of December 31, 2007,
  and the related consolidated statements of operations, stockholders equity,
  and cash flows for the each of the two years ended December 31, 2007. These
  consolidated financial statements are the responsibility of the Companys
  management. Our responsibility is to express an opinion on these consolidated
  financial statements based on our audits.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform the audit to obtain reasonable assurance about whether
  the consolidated statements are free of material misstatement. The Company is
  not required to have, nor were we engaged to perform an audit of the Companys
  internal control over financial reporting. Our audit included consideration
  of internal control over financial reporting as a basis for designing audit
  procedures that are appropriate in the circumstances, but not for the purpose
  of expressing an opinion on the effectiveness of the Companys internal
  control over financial reporting. Accordingly, we express no such opinion. An
  audit includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the consolidated financial statements, assessing the accounting
  principles used and significant estimates made by management, as well as evaluating
  the overall consolidated financial statement presentation. We believe that our
  audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
  to above present fairly, in all material respects, the consolidated financial
  position of Biopack Environmental Solutions Inc. and Subsidiaries as of December
  31, 2007 and the results of its consolidated operations and its consolidated
  cash flows for each of the two years ended December 31, 2007 in conformity with
  accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming
  that the Company will continue as a going concern. As described in Note 1 to
  the financial statements conditions exist which raise substantial doubt about
  the companys ability to continue as a going concern unless it is able
  to generate sufficient cash flows to meet its obligations and sustain its operations.
  Those conditions raise substantial doubt about its ability to continue as a
  going concern. Managements plans regarding those matters are also described
  in Note 1. The financial statements do not include any adjustments that might
  result from the outcome of this uncertainty.

Gruber & Company, LLC
  Lake Saint Louis, Missouri 63367 
  April 11, 2008

F-2

---

|BioPack Envirnomental Solutions, Inc. and Subsidiaries
|------------------------------------------------------
|Consolidated Balance Sheets                           
|December 31, 2007                                     

|Assets                                                                |   |            |  
|--------------------------------------------------------------------- | - | ---------- | -
|Current assets                                                        |   |            |  
|Cash and equivalents                                                  | $ | 96,460     |  
|Prepaid expenses and other receivables                                |   | 258,381    |  
|Inventory                                                             |   | 58,840     |  
|Total current assets                                                  |   | 413,682    |  
|                                                                      |   |            |  
|Property, plant and equipment, net                                    |   | 1,479,286  |  
|Deposits                                                              |   | 45,119     |  
|Total assets                                                          |   | 1,938,087  |  
|                                                                      |   |            |  
|Liabilities and stockholders' equity                                  |   |            |  
|Current liabilities                                                   |   |            |  
|Accounts payable and accrued expenses                                 |   | 624,650    |  
|Due to related parties                                                |   | 1,267,966  |  
|Taxes Payable                                                         |   | 238,445    |  
|Total current liabilities                                             |   | 2,131,062  |  
|                                                                      |   |            |  
|Long Term Liabilities                                                 |   |            |  
|Long term Debt                                                        |   | 638,525    |  
|Due to related Parties                                                |   | 1,441,454  |  
|Total long term liabilities                                           |   | 2,079,980  |  
|                                                                      |   |            |  
|Stockholders' equity                                                  |   |            |  
|Preferred stock, $.001 par value, 10,000,000
      shares authorized; |   |            |  
|2,000,000 shares issued and outstanding                               |   | 2,000      |  
|Common stock; $.0001 par value; 500,000,000
      shares authorized;  |   |            |  
|173,819,421 shares issued and outstanding                             |   | 17,382     |  
|Additional paid-in capital                                            |   | 1,466,422  |  
|Stock issued at less than par value                                   |   | (2,683     | )
|Accumulated other comprehensive income                                |   | 136,074    |  
|Retained Earnings                                                     |   | (3,892,150 | )
|                                                                      |   |            |  
|Total stockholders' equity                                            |   | -2,272,955 |  
|                                                                      |   |            |  
|Total liabilities and stockholders' equity                            | $ | 1,938,087  |  

See accompanying notes to consolidated financial statements

F-3

---

|BioPack Envirnomental Solutions, Inc. and Subsidiaries
|------------------------------------------------------
|Consolidated Statement of Operations                  
|For the Years Ended December 31, 2007 and 2006        

|                                           |   | 2007        |   |   | 2006        | 
|------------------------------------------ | - | ----------- | - | - | ----------- | 
|Sales                                      | $ | 1,075,902   |   | $ | 6,622,362   | 
|Cost of Sales                              |   | 851,469     |   |   | 5,248,104   | 
|Gross profit                               |   | 224,433     |   |   | 1,374,258   | 
|Expenses                                   |   |             |   |   |             | 
|General and administrative                 |   | 1,462,396   |   |   | 627,433     | 
|Depreciation                               |   | 24,053      |   |   | 3,792       | 
|Legal & Professional                       |   | 163,707     |   |   | -           | 
|Bad debt - Related party                   |   | 2,876,402   |   |   | -           | 
|Provision for doutful accounts             |   | 243,625     |   |   | -           | 
|Impairment of property and equipment       |   | 170,293     |   |   | -           | 
|Wages and Salaries                         |   | 175,213     |   |   | -           | 
|                                           |   |             |   |   |             | 
|Total operating expenses                   |   | 5,115,688   |   |   | 631,225     | 
|In come from operations                    |   | -4,891,255  |   |   | 743,033     | 
|Other Income (expense)                     |   |             |   |   |             | 
|Other income                               |   | 12,249      |   |   | 8,357       | 
|Interest expense                           |   | -60,143     |   |   | -1,816      | 
|Income before income taxes                 |   | -4,939,149  |   |   | 749,574     | 
|                                           |   |             |   |   |             | 
|Income tax                                 |   | -72,427     |   |   | -136,100    | 
|Net income                                 | $ | -5,011,576  |   | $ | 613,474     | 
|Earnings per share                         | $ | (0.032      | ) | $ | 0.006       | 
|Weighted average common shares outstanding |   | 158,491,534 |   |   | 108,000,000 | 

See accompanying notes to consolidated financial statements

F-4

---

|BioPack Environmental Solutions, Inc. and Subsidiaries
|------------------------------------------------------
|Statements of Cash Flows                              

|                                                                        |   | For the years ended | 
|----------------------------------------------------------------------- | - | ------------------- | 
|                                                                        |   | December 31,        | 
|                                                                        |   | 2007                | 
|Cash flows from operating activities                                    |   |                     | 
|Net income                                                              |   | -5,011,576          | 
|                                                                        |   |                     | 
|Adjustments to reconcile net loss to net cash used in                   |   |                     | 
|operating activities:                                                   |   |                     | 
|Depreciation and amortization                                           |   | 24,053              | 
|Deferred income
      taxes                                             |   |                     | 
|Loss on Disposal                                                        |   | 5,067               | 
|Common stock issued
      for services                                  |   |                     | 
|Write down in value of assets                                           |   | 170,293             | 
|Provision for bad
      debt                                            |   | 3,043,508           | 
|Write off of deposit                                                    |   | 59,691              | 
|Other comprehensive
      income (loss)                                 |   | 51,354              | 
|                                                                        |   |                     | 
|Changes in assets and liabilities:                                      |   |                     | 
|Accounts receivable                                                     |   | -62,840             | 
|Prepaid expenses                                                        |   | -250,621            | 
|Advances to related Parties                                             |   | -1,179,633          | 
|Inventories                                                             |   | -58,840             | 
|Deposits                                                                |   | 90,334              | 
|Accounts payable
      and accruals                                     |   | 329,590             | 
|Taxes Payable                                                           |   | -8,032              | 
|                                                                        |   |                     | 
|Net cash used in operating activities                                   |   | -2,797,650          | 
|                                                                        |   |                     | 
|Cash flow from investing activities                                     |   |                     | 
|Purchase of property
      and equipment                                |   | -155,058            | 
|Construction in progress                                                |   | -1,295,188          | 
|                                                                        |   |                     | 
|Net cash used in investing activities                                   |   | -1,450,246          | 
|                                                                        |   |                     | 
|Cash flow from financing activities                                     |   |                     | 
|Proceeds from notes
      payable                                       |   | 3,106,834           | 
|Repayment of lease obligation                                           |   | -3,924              | 
|Proceeds from issuance
      of notes to related party                  |   |                     | 
|Amounts due to related parties                                          |   | 1,105,816           | 
|Repayment to shareholder                                                |   | -666,334            | 
|Proceeds from issuance of common
      stock                            |   |                     | 
|                                                                        |   |                     | 
|                                                                        |   |                     | 
|Net cash provided by financing activities                               |   | 3,542,392           | 
|                                                                        |   |                     | 
|Net change in cash                                                      |   | -705,504            | 
|                                                                        |   |                     | 
|Effect of foreign currency translation on cash
      & cash equivalents |   |                     | 
|                                                                        |   |                     | 
|Cash, beginning of year                                                 |   | 801,964             | 
|                                                                        |   |                     | 
|Cash, end of year                                                       | $ | 96,460              | 
|                                                                        |   |                     | 
|Supplemental disclosure of cash flow information:                       |   |                     | 
|Cash paid for income taxes                                              |   | 72,427              | 
|Cash paid for interest                                                  |   | 63,546              | 
|                                                                        |   |                     | 
|Non-cash investing and financing activities:                            |   |                     | 
|                                                                        |   |                     | 
|Stock issued to retire
      debt                                       |   | 2,269,375           | 

See accompanying notes to financial statements

F-5

---

|Biopack Environmental Solutions, Inc and Subsidiaries
|-----------------------------------------------------
|Consolidated Statements of Shareholders' Equity      

|                                          |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   | Stock Issued  |  |   |               |  |   | Accumulated |  |   |            | 
|----------------------------------------- |  | --------------- |  | - | ------------ |  |  | ------------ |  | - | -------- |  | - | ----------- |  | - | ------------- |  | - | ------------- |  | - | ----------- |  | - | ---------- | 
|                                          |  |                 |  |   |              |  |  |              |  |   |          |  |   | Additional  |  |   | at Less       |  |   | Retained      |  |   | Other       |  |   | Total      | 
|                                          |  | Preferred Stock |  |   | Common Stock |  |  | Paid-in      |  |   | Than Par |  |   | Earnings    |  |   | Comprehensive |  |   | Shareholders' | 
|                                          |  | Shares          |  |   | Amount       |  |  | Shares       |  |   | Amount   |  |   | Capital     |  |   | Value         |  |   | (Deficit)     |  |   | Income      |  |   | Equity     | 
|Balance at December 31, 2005              |  | 1,000,000       |  |   | 1,000        |  |  | 202,869,709  |  |   | 20,287   |  |   | 9,173,440   |  |   | -2,683        |  |   | -9,837,473    |  |   |             |  |   | -645,429   | 
|Common stock issued to repay debt         |  |                 |  |   |              |  |  | 34,100,000   |  |   | 3,410    |  |   | 491,029     |  |   |               |  |   |               |  |   |             |  |   | 494,439    | 
|Common stock sold for cash                |  | --              |  | $ | --           |  |  | 260,000,000  |  |   | 26,000   |  |   | 194,000     |  |   | --            |  |   | --            |  |   |             |  |   | 220,000    | 
|Common stock issued to                    |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|acquire StarMetro Group                   |  | --              |  |   | --           |  |  | 60,000,000   |  |   | 6,000    |  |   | -234,713    |  |   | --            |  |   | --            |  |   |             |  |   | -228,713   | 
|Private placement                         |  | --              |  |   | --           |  |  | 800,000      |  |   | 80       |  |   | 384,812     |  |   | --            |  |   | --            |  |   |             |  |   | 384,892    | 
|Common stock issued for                   |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|services                                  |  | --              |  |   | --           |  |  | 30,500,000   |  |   | 3,050    |  |   | 236,950     |  |   | --            |  |   | --            |  |   |             |  |   | 240,000    | 
|Cancellation of GTI shares                |  | --              |  |   | --           |  |  | -12,000,000  |  |   | -1,200   |  |   | 1,200       |  |   | --            |  |   | --            |  |   |             |  |   | --         | 
|Reverse split 4,000 to 1                  |  | --              |  |   | --           |  |  | -493,743,513 |  |   | -49,374  |  |   | 49,374      |  |   | --            |  |   | --            |  |   |             |  |   | --         | 
|Accumulated translation                   |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|adjustment                                |  | --              |  |   | --           |  |  | --           |  |   | --       |  |   | --          |  |   | --            |  |   | --            |  |   | 6,599       |  |   | 6,599      | 
|Net loss for the year ended               |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|December 31, 2006                         |  | --              |  |   | --           |  |  | --           |  |   | --       |  |   | --          |  |   | --            |  |   | -1,149,781    |  |   | --          |  |   | -1,149,781 | 
|Restructuring for Reverse Merger          |  | -1,000,000      |  |   | -1,000       |  |  | 25,473,804   |  |   | 2,547    |  |   | -10,296,092 |  |   |               |  |   | 12,106,679    |  |   | -7,386      |  |   | 1,804,748  | 
|Balance at December 31, 2006              |  | --              |  |   | --           |  |  | 108,000,000  |  | $ | 10,800   |  | $ | --          |  | $ | -2,683        |  | $ | 1,119,425     |  | $ | -787        |  | $ | 1,126,755  | 
|Recapitalization as result of             |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|reverse merger Mar 27, 2007               |  | --              |  |   | --           |  |  | 64,526,196   |  |   | 6,453    |  |   | -800,824    |  |   |               |  |   |               |  |   | 6,599       |  |   | -787,772   | 
|Stock issued to convert debt Mar 27, 2007 |  | --              |  |   | --           |  |  | 1,293,225    |  |   | 129      |  |   | 1,034,451   |  |   |               |  |   |               |  |   |             |  |   | 1,034,580  | 
|Preferred share issued for repay debt     |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|owned by a subsidiiary on Aug 17, 2007    |  | 2,000,000       |  |   | 2,000        |  |  |              |  |   |          |  |   | 1,232,795   |  |   |               |  |   |               |  |   |             |  |   | 1,234,795  | 
|Translation adjustment                    |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   | 130,262     |  |   | 130,262    | 
|Net income for the year                   |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|ended Dec 31, 2007                        |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   | -5,011,575    |  |   |             |  |   | -5,011,575 | 
|Balance at Dec 31, 2007                   |  | 2,000,000       |  |   | 2,000        |  |  | 173,819,421  |  | $ | 17,382   |  | $ | 1,466,422   |  | $ | -2,683        |  | $ | -3,892,150    |  | $ | 136,074     |  |   | -2,272,955 | 



F-6

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|BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES
|----------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS          

|1. | The Company
|-- | -----------

Biopack Environmental Solutions Inc. and Subsidiaries (formerly
  Star Metro Corp.) that is develop, manufacture, distribute and market bio-degradable
  food containers and disposable industrial packaging for consumer products. made
  from natural materials.

On March 27, 2007, the Company executed a share exchange with
  Roots Biopack Group Limited, in which Roots Biopack Group Limited proposed to
  exchange 90,000,000 shares of Star Metro Corp for 100% of the issued and outstanding
  shares of Roots Biopack Group Limited.

|2. | Summary of Significant Accounting Policies
|-- | ------------------------------------------

(a) Basis of Presentation

The consolidated financial statements include the accounts of
  Biopack Environmental Solutions Inc. and its wholly owned subsidiaries. All
  material intercompany balances and transactions have been eliminated from the
  consolidated financial statements.

On March 27, 2007, we completed a share exchange with Roots Biopack
  Group and the shareholders of Roots Biopack Group. Under the terms of the share
  exchange agreement we acquired all of the issued and outstanding common shares
  of Roots Biopack Group in exchange for the issuance by our company of 90,000,000
  common shares to the former shareholders of Roots Biopack Group. As of the closing
  date of the share exchange agreement, the former shareholders of Roots Biopack
  Group held approximately 62.13% of the issued and outstanding common shares
  of our company.

The acquisition of Roots Biopack Group is deemed to be a reverse
  acquisition for accounting purposes. Roots Biopack Group, the acquired entity
  is regarded as our predecessor entity as of March 27, 2007. Starting with the
  periodic report for the quarter in which the acquisition was consummated, we
  will file annual and quarterly reports based on the December 31 fiscal year
  end of Roots Biopack Group, which is considered the accounting acquirer. Such
  financial statements will depict the operating results of Roots Biopack Group,
  including the acquisition of our company from March 27, 2007.

(b) Use of Estimates

In preparing consolidated financial statements in conformity
  with US GAAP, management is required to make estimates and assumptions that
  affect the reported amounts of assets and liabilities and the disclosure of
  contingent assets and liabilities at the date of the financial statements and
  revenues and expenses during the reported periods. Significant estimates include
  depreciation. Actual results could differ from those estimates.

F-7

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|BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES  
|------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(c) Cash and Cash Equivalents

The Company considers all highly liquid investments with original
  maturities of three months or less at the time of purchase to be cash equivalents.
  As of December 31, 2007, the Company have $96,460 cash equivalents.

(d) Short-term Investment

The Company classifies its short-term investment as held-to-maturity
  debt securities and is measured at amortized cost (which approximates fair value)
  with interest and realized gains and losses, if any, reported in non-operating
  income in the income statement.

(e) Accounts Receivable

Accounts receivable are stated at original amount less an allowance
  made for doubtful receivables, if any, based on a review of all outstanding
  amounts at the end of the period. Full allowances for doubtful receivables are
  made when the receivables are overdue for one year and an allowance is made
  when there is objective evidence that the Company will not be able to collect
  all amounts due according to original terms of receivables. Bad debts are written
  against the allowance when identified. The Company extends credit to customers
  on an unsecured basis in the normal course of business and believes that all
  accounts receivable in excess of the allowance for doubtful accounts to be fully
  collectible. The Company does not accrue interest on trade accounts receivable.
  The normal credit terms range from 15 to 60 days.

(e) Allowance for Doubtful Accounts

The Company recognizes an allowance for doubtful accounts to
  ensure accounts receivable are not overstated due to uncollectibility. An allowance
  for doubtful accounts is maintained for all customers based on a variety of
  factors, including the length of time the receivables are past due, significant
  one-time events and historical experience. An additional reserve for individual
  accounts is recorded when the Company becomes aware of a customers inability
  to meet its financial obligations, such as in the case of bankruptcy filings
  or deterioration in the customers operating results or financial position.
  If circumstances related to customers change, estimates of the recoverability
  of receivables would be further adjusted. There was no accounts receivable and
  no allowance for doubtful accounts as of December 31, 2007.

F-8

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|BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES  
|------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(f) Property, Plant and Equipment

Property, plant and equipment is stated at cost. Depreciation
  is provided principally by use of the straight-line method over the useful lives
  of the related assets, except for leasehold properties, which are depreciated
  over the terms of their related leases or their estimated useful lives, whichever
  is less. Expenditures for maintenance and repairs, which do not improve or extend
  the expected useful life of the assets, are expensed to operations while major
  repairs are capitalized.

The estimated useful lives are as follows:

YearsLeasehold improvements
      5Furniture, fixtures and office equipment
      5 to 10Motor Vehicles
      5Computer equipment
      5Plant and Machinery
      10


(g) Impairment of Assets

In accordance with Statement of Financial Accounting Standards
  (SFAS) No. 144, "Accounting for Impairment or Disposal of Long-Lived
  Assets", the Company evaluates its long-lived assets to determine whether later
  events and circumstances warrant revised estimates of useful lives or a reduction
  in carrying value due to impairment. If indicators of impairment exist and if
  the value of the assets is impaired, an impairment loss would be recognized.
  As of December 31, 2007, the Company impaired property and equipment in the
  amount of $170,293, which amount is reflected in the operating expenses section
  of the operating statement.

(h) Income Taxes

The Company accounts for income taxes under SFAS No. 109, "Accounting
  for Income Taxes". Under SFAS No. 109, deferred tax assets and liabilities are
  recognized for the future tax consequences attributable to differences between
  the financial statement carrying amounts of existing assets and liabilities
  and their respective tax bases. Deferred tax assets and liabilities are measured
  using enacted tax rates expected to apply to taxable income in the years in
  which those temporary differences are expected to be recovered or settled. Under
  SFAS No. 109, the effect on deferred tax assets and liabilities of a change
  in tax rates is recognized in income in the period that includes the enactment
  date.

(i) Foreign Currency Transactions

The Companys functional currency is Hong Kong Dollars (HKD),
  Renminbi (RMB) and Malaysia Ringatt (MYR)and its reporting
  currency is U.S. dollars. The Companys consolidated balance sheet accounts
  are translated into U.S. dollars at the year-end exchange rates and all revenue
  and expenses are translated into U.S. dollars at the average exchange rates
  prevailing during the periods in which these items arise. Translation gains
  and losses are deferred and accumulated as a component of other comprehensive
  income in stockholders equity. Transaction gains and losses that arise
  from exchange rate fluctuations from transactions denominated in a currency
  other than the functional currency are included in the statement of operations
  as incurred.

F-9

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BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(j) Fair Value of Financial Instruments

SFAS No. 107, Disclosures about Fair Values of Financial
  Instruments, requires disclosing fair value to the extent practicable
  for financial instruments that are recognized or unrecognized in the balance
  sheet. The fair value of the financial instruments disclosed herein is not necessarily
  representative of the amount that could be realized or settled, nor does the
  fair value amount consider the tax consequences of realization or settlement.

For certain financial instruments, including cash, accounts and
  other receivables, accounts payable, accruals and other payables, it was assumed
  that the carrying amounts approximate fair value because of the near term maturities
  of such obligations. The carrying amounts of long-term loans approximate fair
  value as the interest on these loans is minimal.

(k) Earnings Per Share

Basic earnings per share is computed by dividing the earnings
  for the year by the weighted average number of common shares outstanding for
  the period. Diluted earnings per share reflects the potential dilution of securities
  by including other potential common stock, including stock options and warrants,
  in the weighted average number of common shares outstanding for a period, if
  dilutive.

(l) Accumulated Other Comprehensive Income

Accumulated other comprehensive income represents the change
  in equity of the Company during the periods presented from foreign currency
  translation adjustments.

(n) Stock-Based Compensation

In March 2004, the FASB issued a proposed statement, Share-Based
  Payment, which addresses the accounting for share-based payment transactions
  in which an enterprise receives employee services in exchange for equity instruments
  of the enterprise or liabilities that are based on the grant-date fair value
  of the enterprise's equity instruments or that may be settled by the issuance
  of such equity instruments. The proposed statement would eliminate the ability
  to account for share-based compensation transactions using Accounting Principles
  Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and
  generally would require instead that such transactions be accounted for using
  a fair-value-based method. In December 2004, the FASB issued SFAS No. 123(R),
  Share-Based Payment, which is a revision of SFAS No. 123. Generally, the approach
  in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However,
  SFAS No. 123(R) requires all share-based payments to employees, including grants
  of employee stock options, to be recognized in the income statement based on
  their grant-date fair values. Pro forma disclosure is no longer an alternative.

F-10

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|BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES  
|------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As permitted by SFAS No. 123, for 2005, the Company accounted
  for share-based payments to employees using APB Opinion No. 25's intrinsic value
  method and, as such, generally recognized no compensation cost for employee
  stock options.

Effective January 1, 2006, we have adopted SFAS No. 123(R)'s
  fair value method of accounting for share based payments. Accordingly, the adoption
  of SFAS No. 123(R)'s fair value method may have a significant impact on the
  Company's results of operations as we are required to recognize the cost of
  employee services received in exchange for awards of equity instruments based
  on the grant-date fair value of those awards. SFAS No. 123(R) permits public
  companies to adopt its requirements using either the "modified prospective"
  method or the "modified retrospective" method.

The Company adopted SFAS No. 123(R) using the modified prospective
  method. In April 2005, the SEC delayed the effective date of SFAS No. 123(R),
  which is now effective for public companies for annual, rather than interim
  periods that begin after June 15, 2005. The impact of the adoption of SFAS No.
  123(R) cannot be predicted at this time because it will depend on levels of
  share-based payments granted in the future.

(o) Revenue Recognition

Revenue is recognized in accordance with SEC Staff Accounting
  Bulletin No. 101, Revenue Recognition in Financial Statements. The
  Company recognizes revenue when the significant risks and rewards of ownership
  have been transferred to the customer pursuant to applicable laws and regulations,
  including factors such as when there has been evidence of a sales arrangement,
  the performance has occurred, or service have been rendered, the price to the
  buyer is fixed or determinable, and collectability is reasonably assured.

In November 2004, the FASB issued SFAS No. 151 "Inventory Costs,
  an amendment of ARB No. 43, Chapter 4, (" SFAS No. 151"). The amendments
  made by SFAS 151 clarify that abnormal amounts of idle facility expense, freight,
  handling costs, and wasted materials (spoilage) should be recognized as current-period
  charges and require the allocation of fixed production overheads to inventory
  based on the normal capacity of the production facilities. The guidance is effective
  for inventory costs incurred during fiscal years beginning after June 15, 2005.
  Earlier application is permitted for inventory costs incurred during fiscal
  years beginning after November 23, 2004. The Company has evaluated the impact
  of the adoption of SFAS 151, and does not believe the impact will be significant
  to the Company's overall results of operations or financial position.

In December 2004, the FASB issued SFAS No.152, "Accounting for
  Real Estate Time-Sharing Transactions-an amendment of FASB Statements No. 66
  and 67" ("SFAS 152") SFAS 152 amends SFAS No. 66, "Accounting for Sales of Real
  Estate", to reference the financial accounting and reporting guidance for real
  estate time-sharing transactions that is provided in AICPA Statement of Position
  (SOP) 04-2, "Accounting for Real Estate Time-Sharing Transactions". SFAS 152
  also amends SFAS No. 67, "Accounting for Costs and Initial Rental Operations
  of Real Estate Projects", to state that the guidance for (a) incidental operations
  and (b) costs incurred to sell real estate projects does not apply to real estate
  time-sharing transactions. The accounting for those operations and costs is
  subject to the guidance in SOP 04-2. SFAS 152 is effective for financial statements
  for fiscal years beginning after June 15, 2005, with earlier application encouraged.
  The Company has evaluated the impact of the adoption of SFAS 152, and does not
  believe the impact will be significant if any, to the Company's overall results
  of operations or financial position since the Company does not enter into such
  transactions.

F-11

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|BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES  
|------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In December 2004, the FASB issued SFAS No.153, "Exchanges of
  Nonmonetary Assets, an amendment of APB Opinion No. 29, Accounting for Nonmonetary
  Transactions." The amendments made by SFAS 153 are based on the principle that
  exchanges of nonmonetary assets should be measured based on the fair value of
  the assets exchanged. Further, the amendments eliminate the narrow exception
  for nonmonetary exchanges of similar productive assets and replace it with a
  broader exception for exchanges of nonmonetary assets that do not have commercial
  substance. Previously, Opinion 29 required that the accounting for an exchange
  of a productive asset for a similar productive asset or an equivalent interest
  in the same or similar productive asset should be based on the recorded amount
  of the asset relinquished. Opinion 29 provided an exception to its basic measurement
  principle (fair value) for exchanges of similar productive assets. That exception
  required that some nonmonetary exchanges, although commercially substantive,
  to be recorded on a carryover basis. By focusing the exception on exchanges
  that lack commercial substance, the FASB believes SFAS No.153 produces financial
  reporting that more faithfully represents the economics of the transactions.
  SFAS No.153 is effective for nonmonetary asset exchanges occurring in fiscal
  periods beginning after June 15, 2005. Earlier application is permitted for
  nonmonetary asset exchanges occurring in fiscal periods beginning after the
  date of issuance. The provisions of SFAS No.153 shall be applied prospectively.
  The Company has evaluated the impact of the adoption of SFAS 153, and does not
  believe the impact will be significant to the Company's overall results of operations
  or financial position.

In December 2004, the FASB issued SFAS No.123 (revised 2004),
  "Share-Based Payment" ("SFAS 123(R)"). SFAS 123(R) will provide investors and
  other users of financial statements with more complete and neutral financial
  information by requiring that the compensation cost relating to share-based
  payment transactions be recognized in financial statements. That cost will be
  measured based on the fair value of the equity or liability instruments issued.
  SFAS 123(R) covers a wide range of share-based compensation arrangements including
  share options, restricted share plans, performance-based awards, share appreciation
  rights, and employee share purchase plans. SFAS 123(R) replaces SFAS No. 123,
  "Accounting for Stock-Based Compensation", and supersedes APB Opinion No. 25,
  "Accounting for Stock Issued to Employees". SFAS 123, as originally issued in
  1995, established as preferable a fair-value-based method of accounting for
  share-based payment transactions with employees. However, that statement permitted
  entities the option of continuing to apply the guidance in Opinion 25, as long
  as the footnotes to financial statements disclosed what net income would have
  been had the preferable fair-value-based method been used. Public entities (other
  than those filing as small business issuers) will be required to apply SFAS
  123(R) as of the first interim or annual reporting period that begins after
  June 15, 2005. This pronouncement is effective for the Company, a small business
  issuer, as of the first interior annual reporting period that begins after December
  15, 2005. The Company has evaluated the impact of the adoption of SFAS 123(R),
  and does not believe the impact will be significant to the Company's overall
  results of operations or financial position.

In May, 2005, The FASB issued SFAS No. 154, entitled Accounting
  Changes and Error Corrections  a replacement of APB Opinion No. 20 and
  FASB Statement No. 3. This Statement replaces APB Opinion No. 20, Accounting
  Changes and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial
  Statements, and changes the requirements for the accounting for and reporting
  of a change in accounting principle. This statement applies to all voluntary
  changes in accounting principle. It also applies to changes required by an accounting
  pronouncement in the unusual instance that the pronouncement does not include
  specific transition provisions. Opinion 20 previously required that most voluntary
  changes in accounting principle be recognized by including in net income of
  the period of the change the cumulative effect of changing to the new accounting
  principle. This Statement requires retrospective application to prior periods
  financial statements of changes in accounting principle, unless it is impracticable
  to determine either the period-specific effects or the cumulative effect of
  the change. This Statement defines as the application of a different accounting
  principle to prior accounting periods as if that principle had always been used
  or as the adjustment of previously issued financial statements to reflect a
  change in the reporting entity. This statement also redefines restatement as
  the revising of previously issued financial statements to reflect the correction
  of an error. The adoption of SFAS 154 did not impact the financial statements.

F-12

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES  
|------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In February, 2006, FASB issued SFAS No. 155, Accounting
  for Certain Hybrid Financial Statements. SFAS No. 155 amends SFAS No.
  133, Accounting for Derivative Instruments and Hedging Activities
  and SFAS No. 140, Accounting for Transfers and Servicing of Financial
  Assets and Extinguishments of Liabilities. SFAS No. 155, permits fair
  value measurement for any hybrid financial instrument that contains an embedded
  derivative that otherwise would require bifurcation, clarifies which interest-only
  strips and principal-only strips are not subject to the requirements of SFAS
  No. 133, establishes a requirement to evaluate interest in securitized financial
  assets to identify interests that are freestanding derivatives or that are hybrid
  financial statements that contain an embedded derivative requiring bifurcation,
  clarifies that concentrations of credit risk in the form of subordination are
  not embedded derivatives, and amends SFAS No. 140 to eliminate the prohibition
  on the qualifying special-purpose entity from holding a derivative financial
  instrument that pertains to a beneficial interest other than another derivative
  financial instrument. This statement is effective for all financial instruments
  acquired or issued after the beginning of the Companys first fiscal year
  that begins after September 15, 2006. Management believes that this statement
  will not have a significant impact on the financial statements.

In March, 2006 FASB issued SFAS 156 Accounting For Servicing
  of Financial Assets this

Statement amends FASB Statement No. 140, Accounting for
  Transfers and Servicing of Financial Assets and Extinguishment of Liabilities,
  with respect to the accounting for separately recognized servicing assets and
  servicing liabilities. This Statement:

Requires an entity to recognize a servicing asset or servicing
  liability each time it undertakes an obligation to service a financial asset
  by entering into a servicing contract.

Requires all separately recognized servicing assets and servicing
  liabilities to be initially measured at fair value, if practicable.

Permits an entity to choose Amortization method or
  Fair value measurement method for each class of separately recognized
  servicing assets and servicing liabilities.

At its initial adoption, permits a one-time reclassification
  of available-for-sale securities to trading securities by entities with recognized
  servicing rights, without calling into question the treatment of other available-for-sale
  securities under Statement 115, provided that the available-for-sale securities
  are identified in some manner as offsetting the entitys exposure to changes
  in fair value of servicing assets or servicing liabilities that a servicer elects
  to subsequently measure at fair value.

Requires separate presentation of servicing assets and liabilities
  subsequently measured at fair value in the statement of financial position and
  additional disclosures for all separately recognized servicing assets and servicing
  liabilities.

Management believes that this statement will not have a significant
  impact on the financial statements.

In September 2006, FASB issued SFAS 157 Fair Value Measurements.
  This Statement defines fair value, establishes a framework for measuring fair
  value in generally accepted accounting principles (GAAP), and expands disclosures
  about fair value measurements. This Statement applies under other accounting
  pronouncements that require or permit fair value measurements, the Board having
  previously concluded in those accounting pronouncements that fair value is the
  relevant measurement attribute. Accordingly, this Statement does not require
  any new fair value measurements. However, for some entities, the application
  of this Statement will change current practice. This Statement is effective
  for financial statements issued for fiscal years beginning after November 15,
  2007, and interim periods within those fiscal years. Management is currently
  evaluating the effect of this pronouncement on financial statements.

F-13

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES  
|------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In September 2006, FASB issued SFAS 158 Employers
  Accounting for Defined Benefit Pension and Other Postretirement Plansan
  amendment of FASB Statements No. 87, 88, 106, and 132(R).

This Statement improves financial reporting by requiring an employer
  to recognize the overfunded or underfunded status of a defined benefit postretirement
  plan (other than a multiemployer plan) as an asset or liability in its statement
  of financial position and to recognize changes in that funded status in the
  year in which the changes occur through comprehensive income of a business entity
  or changes in unrestricted net assets of a not-for-profit organization. This
  Statement also improves financial reporting by requiring an employer to measure
  the funded status of a plan as of the date of its year-end statement of financial
  position, with limited exceptions. An employer with publicly traded equity securities
  is required to initially recognize the funded status of a defined benefit postretirement
  plan and to provide the required disclosures as of the end of the fiscal year
  ending after December 15, 2006. An employer without publicly traded equity securities
  is required to recognize the funded status of a defined benefit postretirement
  plan and to provide the required disclosures as of the end of the fiscal year
  ending after June 15, 2007. However, an employer without publicly traded equity
  securities is required to disclose the following information in the notes to
  financial statements for a fiscal year ending after December 15, 2006, but before
  June 16, 2007, unless it has applied the recognition provisions of this Statement
  in preparing those financial statements. The requirement to measure plan assets
  and benefit obligations as of the date of the employers fiscal year-end
  statement of financial position is effective for fiscal years ending after December
  15, 2008. The management is currently evaluating the effect of this pronouncement
  on financial statements.

In February 2007, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 159, The Fair Value Option
  for Financial Assets and Financial Liabilities and is effective for fiscal
  years beginning after November 15, 2007. This Statement permits entities to
  choose to measure many financial instruments and certain other items at fair
  value. The objective is to improve financial reporting by providing entities
  with the opportunity to mitigate volatility in reported earnings caused by measuring
  related assets and liabilities differently without having to apply complex hedge
  accounting provisions. The Company is currently assessing the impact the adoption
  of this pronouncement will have on the financial statements.

|3. | Property, Plant and Equipment, net
|-- | ----------------------------------

|Cost                           |   |           |  
|------------------------------ | - | --------- | -
|                               |   |           |  
|Leasehold improvements         | $ | 5,688     |  
|Motor vehicle                  |   | 75,188    |  
|Office furniture and equipment |   | 58,293    |  
|Computer equipment             |   | 12,874    |  
|Plant and Machinery            |   | 86,872    |  
|Construction in progress       |   | 1,295,188 |  
|                               |   | 1,534,103 |  
|Accumulated depreciation       |   | (54,817   | )
|                               |   |           |  
|                               |   |           |  
|                               | $ | 1,479,286 |  

Depreciation expense for the year ended December 31, 2007 was
  $24,053.

F-14

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES  
|------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(b) Construction in progress

The Company intends to build and operate a production plant in
  Malaysia. As of December 31, 2007, the Company had spent $154,506 on the construction.
  These costs are included on the balance sheet in the property, plant and equipment
  costs. No depreciation will be provided until the plant is completed and operating.
  During the year, the aforesaid project was abandoned and in the opinion of director,
  the whole amount was considered to be impaired. The subsidiary company which
  operated this construction project was also ceased operation in January 2007.

Construction in progress represents the expenditure incurred
  in the development project of a manufacturing plant by a subsidiary in Jiangmen,
  PRC. As of December 31, 2007, the Company had spent $1,295,188 on the construction.
  No interest has been capitalized in construction in progress for the year.

The directors consider that the carrying amount of construction
  in progress approximate to its fair value.

|4. | Due to Related Parties
|-- | ----------------------

Five directors of the Company have advanced $1,267,966 in the
  form of unsecured, non-interest bearing advances with no due date.

|5. | Going Concern
|-- | -------------

The accompanying consolidated financial statements have been
  prepared in accordance with the accounting principles generally accepted in
  the United States of America (US GAAP), which contemplate the continuation
  of the Company as a going concern. The Company incurred a net loss for the year
  ended December 31, 2007 of $5,011,576, had an accumulated deficit of $3,892,150
  and a working capital deficit of $1,717,380. These conditions raise substantial
  doubt as to the Companys ability to continue as a going concern. These
  consolidated financial statements do not include any adjustments that might
  result from the outcome of this uncertainty. These consolidated financial statements
  do not include any adjustments that might result from the outcome of this uncertainty.
  These consolidated financial statements do not include any adjustments relating
  to the recoverability and classification of recorded asset amounts, or amounts
  and classifications of recorded asset amounts, or amounts and classifications
  of liabilities that might be necessary should the Company be unable to continue
  as a going concern.

The future of the Company is dependent upon its attaining successful
  operations, or raise the capital it will require through the issuance of equity
  securities, borrowings or a combination thereof.

|6. | Concentrations and Credit Risk
|-- | ------------------------------

Concentration of credit risk is limited to accounts receivable
  and is subject to the financial conditions of major customers. The Company does
  not require collateral or other security to support accounts receivable. The
  Company conducts periodic reviews of its clients financial condition and
  customers payment practices to minimize collection risk on accounts receivable.

F-15

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES  
|------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

|7. | Commitments and Contingencies
|-- | -----------------------------

(a) Operating Lease Arrangements

Minimum lease payments recognised as an expense under operating
  leases during the year:

|         |  | 2007    |  |  | 2006   | 
|-------- |  | ------- |  |  | ------ | 
|         |  | $       |  |  | $      | 
|         |  |         |  |  |        | 
|Premises |  | 209,793 |  |  | 46,953 | 

At 31 December 2007, the Group had outstanding commitments for
  future minimum lease payments under non-cancelable operating leases in respect
  of premises and land use right, which fall due as follows:

|                                        |  | 2007      |  |  | 2006    | 
|--------------------------------------- |  | --------- |  |  | ------- | 
|                                        |  | $         |  |  | $       | 
|                                        |  |           |  |  |         | 
|Within one year                         |  | 170,980   |  |  | 52,779  | 
|In the second to fifth years, inclusive |  | 691,047   |  |  | 47,726  | 
|After five years                        |  | 1,746,225 |  |  | -       | 
|                                        |  | 2,608,252 |  |  | 100,505 | 

Operating leases relate to manufacturing premise in PRC with
  lease terms of 15 years from 1 March 2007, with an option to extend for renew.
  The Group does not have an option to purchase the leased asset at the expiry
  of the lease period.

(b) Capital Commitments

|                                                  |  | 2007      |  |  | 2006       | 
|------------------------------------------------- |  | --------- |  |  | ---------- | 
|                                                  |  | $         |  |  | $          | 
|Contracted for but not provided for               |  |           |  |  |            | 
|- Capital injection for a subsidiary
      in PRC |  | 969,022   |  |  | 24,816,448 | 
|- Purchase of three
      pieces of land in PRC   |  | -         |  |  | 2,633,527  | 
|- Construction projects in PRC                    |  | 199,962   |  |  | -          | 
|                                                  |  | 1,168,984 |  |  | 27,449,975 | 

Pursuant to the resolution of board of directors meeting on 5
  December 2007, the registered capital of a subsidiary in PRC has been decreased
  to HK$25 millions from HK$200 millions.

F-16

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES  
|------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

|8. | Related Party Transactions
|-- | --------------------------

Two directors of the Company have advanced $670,734 in the form
  of unsecured, non-interest bearing advances with no due date. On March 27, 2007
  these advances were converted into common stock.

|                             |  | 2007 |  |  | 2006      | 
|---------------------------- |  | ---- |  |  | --------- | 
|                             |  | $    |  |  | $         | 
|Advance to a director        |  | -    |  |  | 2,057     | 
|Advance to a related company |  | -    |  |  | 2,154,706 | 
|                             |  | -    |  |  | 2,156,763 | 

The advance to a related company represents the amount due from
  Roots Biopack Industry Limited, which is controlled by a former director of
  the company. The directors are of the opinion that the advance is not likely
  recoverable and accordingly, full provision for bad debts has been made in the
  consolidated financial statements in 2007.

In addition to the transactions and balances disclosure elsewhere
  in these consolidated financial statements, the Group entered into the following
  transactions during the year:

|                      |  | Nature of      |  |  | Connected   |  |  | 2007    |  |  | 2006    | 
|--------------------- |  | -------------- |  |  | ----------- |  |  | ------- |  |  | ------- | 
|Name of the company   |  | transaction    |  |  | party (ies) |  |  | $       |  |  | $       | 
|                      |  |                |  |  |             |  |  |         |  |  |         | 
|Grand Power Express   |  | Renovation     |  |  | Mr. Ricky   |  |  | 34,281  |  |  | 14,363  | 
|International Limited |  | and equipment  |  |  | Chiu Tong   |  |  |         |  |  |         | 
|                      |  |                |  |  |             |  |  |         |  |  |         | 
|                      |  | Office rental  |  |  | Mr. Ricky   |  |  | 27,451  |  |  | 50,956  | 
|                      |  |                |  |  | Chiu Tong   |  |  |         |  |  |         | 
|                      |  |                |  |  |             |  |  |         |  |  |         | 
|                      |  | Management fee |  |  | Mr. Ricky   |  |  | 37,926  |  |  | 41,086  | 
|                      |  |                |  |  | Chiu Tong   |  |  |         |  |  |         | 
|                      |  |                |  |  |             |  |  |         |  |  |         | 
|InterPacific Capital  |  | Consultant fee |  |  | Spouse of   |  |  | 38,308  |  |  | -       | 
|Limited               |  |                |  |  | Mr. Ricky   |  |  |         |  |  |         | 
|                      |  |                |  |  | Chiu Tong   |  |  |         |  |  |         | 
|                      |  |                |  |  |             |  |  | 137,966 |  |  | 106,405 | 

F-17

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES  
|------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

|9. | Vehicle Obligation Payable
|-- | --------------------------

The Company has an agreement to lease a motor vehicle under a
  direct financing lease. The payment for this direct financing lease is $373
  per month. This obligation is included in the balance sheet under current liabilities.

|                          |  | 2007   |  |  | 2006   | 
|------------------------- |  | ------ |  |  | ------ | 
|                          |  | $      |  |  | $      | 
|                          |  |        |  |  |        | 
|Payable within 1 year     |  | 20,400 |  |  | 5,836  | 
|Payable later than 1 year |  | -      |  |  | 18,488 | 
|                          |  | 20,400 |  |  | 24,324 | 

|**10.** | INCOME TAXES
|------- | ------------

|                      |  | 2007   |  |  | 2006    | 
|--------------------- |  | ------ |  |  | ------- | 
|                      |  | $      |  |  | $       | 
|                      |  |        |  |  |         | 
|Hong Kong profits tax |  | 72,427 |  |  | 134,209 | 
|Deferred taxes        |  | -      |  |  | 1,891   | 
|                      |  | 72,427 |  |  | 136,100 | 

Income taxes in the consolidated income statement represents
  the under-provision of the Hong Kong profits tax in respect of the previous
  years.

F-18

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES  
|------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

|                                                 |  | 2007       |   |  | 2006    |  
|------------------------------------------------ |  | ---------- | - |  | ------- | -
|                                                 |  | $          |   |  | $       |  
|                                                 |  |            |   |  |         |  
|(Loss) / Profit before taxes                     |  | (3,958,361 | ) |  | 749,574 |  
|                                                 |  |            |   |  |         |  
|Provision for income taxes at Hong Kong income   |  |            |   |  |         |  
|tax rate 17.5%                                   |  | (692,713   | ) |  | 131,175 |  
|Under provision of taxation in previous year     |  | 74,303     |   |  | -       |  
|Tax effect of non-deductible expenses            |  | 430,083    |   |  | 7,738   |  
|Tax effect of non-taxable income                 |  | (153       | ) |  | (69     | )
|Tax effect of reversal of temporary difference   |  | (1,876     | ) |  | -       |  
|Tax effect of utilized tax losses not recognised |  | 225,472    |   |  | -       |  
|Tax effect of tax losses not allowed             |  | 37,311     |   |  |         |  
|Tax exemption granted to PRC subsidiary          |  | -          |   |  | (2,744  | )
|                                                 |  | 72,427     |   |  | 136,100 |  

The major components of deferred tax recognized in the consolidated
  balance sheets as of 31 December 2007 is as follows: -

|                                                        |  | 2007 |  |  | 2006  | 
|------------------------------------------------------- |  | ---- |  |  | ----- | 
|                                                        |  | $    |  |  | $     | 
|Deferred tax liabilities, net                           |  |      |  |  |       | 
|Temporary difference on accelerated tax depreciation on |  |      |  |  |       | 
|plant
      and equipment                               |  | -    |  |  | 1,889 | 

|**11.** | Preferred Stock Issued to Convert Debt
|------- | --------------------------------------

On August 17, 2007 the Company repaid the principal and accrued
  interest on a promissory note in the amount of $ 1,133,668 through the issuance
  of 1,000,000 shares of Series A preferred stock and 1,000,000 shares of newly
  authorized Series B preferred stock. Each of these preferred shares have thirty
  votes, and are convertible into five common shares.

F-19

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES  
|------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

|**12.** | Subsequent Events
|------- | -----------------

On January 31, 2008, we sold one convertible debenture with a
  face amount of $150,000 to one investor for gross proceeds of $150,000. This
  convertible debenture is for a two year term and is convertible, at any time
  at the option of the holder after giving 60 days prior notice to our company,
  into shares of our common stock at a price of six and two-thirds cents per share.
  This investor is not a U.S. person, the transaction did not occur in the United
  States and, in selling this debenture we relied on the registration exemption
  provided by Regulation S, promulgated under the Securities Act of 1933, as amended.

On February 4, 2008, we sold one convertible debenture with a
  face amount of $100,000 to one investor for gross proceeds of $100,000. This
  convertible debenture is for a three year term and is convertible, at any time
  at the option of the holder after giving 60 days prior notice to our company,
  into shares of our common stock at a price of six and two-thirds cents per share.
  This investor is not a U.S. person, the transaction did not occur in the United
  States and, in selling this debenture we relied on the registration exemption
  provided by Regulation S, promulgated under the Securities Act of 1933, as amended.

On March 3, 2008, we sold one convertible debenture with a face
  amount of $400,000 to one investor for gross proceeds of $400,000. This convertible
  debenture is for a three year term and is convertible, at any time at the option
  of the holder after giving 60 days prior notice to our company, into shares
  of our common stock at a price of six and two-thirds cents per share. This investor
  is not a U.S. person, the transaction did not occur in the United States and,
  in selling this debenture we relied on the registration exemption provided by
  Regulation S, promulgated under the Securities Act of 1933, as amended.

On February 17, 2008, pursuant to a Share Cancellation Agreement
  with Eddie Chou, one of our directors and our Chief Technical Officer, 1,200,000
  shares of our common stock held by Mr. Chou were cancelled and returned to treasury.

On February 17, 2008, pursuant to a Share Cancellation Agreement
  with Ricky Chiu, an ex-director of our company, 1,800,000 shares of our common
  stock held by Mr. Chiu were cancelled and returned to treasury. On February
  17, 2008, pursuant to a Share Cancellation Agreement with Legend View Limited,
  8,000,000 shares of our common stock were cancelled and returned to treasury.
  Our President and the chairman of our Board of Directors, Mr. Gerald Lau, owns
  a controlling interest in Legend View Limited.

F-20

---

- 32 -

|Item 8. | Changes In and Disagreements With
      Accountants on Accounting and Financial Disclosure.
|------- | -------------------------------------------------------------------------------------------

None.

|Item 8A. | Controls and Procedures
|-------- | -----------------------

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president and
chief executive officer (also our principal executive officer) and our
secretary, treasurer and chief financial officer (also our principal financial
and accounting officer) to allow for timely decisions regarding required
disclosure. In designing and evaluating our disclosure controls and procedures,
our management recognizes that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the
desired control objectives, and our management is required to apply its judgment
in evaluating the cost-benefit relationship of possible controls and
procedures.

As of December 31, 2007, the end of the fiscal year covered by
this report, our president and chief executive officer (also our principal
executive officer) and our secretary, treasurer and chief financial officer
(also our principal financial and accounting officer) carried out an evaluation
of the effectiveness of the design and operation of our disclosure controls and
procedures. Based on the foregoing, our president and chief executive officer
(also our principal executive officer) and our secretary, treasurer and chief
financial officer (also our principal financial and accounting officer)
concluded that our disclosure controls and procedures were effective as of the
end of the period covered by this annual report.

There have been no significant changes in our internal controls
over financial reporting that occurred during the fiscal year ended December 31,
2007 that have materially or are reasonably likely to materially affect, our
internal controls over financial reporting.

Management's Report on Internal Control over Financial
Reporting

Management of our company is responsible for establishing and
maintaining adequate internal control over financial reporting, as such term is
defined in the Securities Exchange Act Rule 13a-15(f). Our principal executive
officer and our principal financial officer conducted an evaluation of the
effectiveness of our internal control over financial reporting as of December
31, 2007 as required by the Securities Exchange Act of 1934 Rule 13a-15(c). In
making this assessment, our management used the criteria set forth in the
framework in Internal Control  Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission. Based on the evaluation
conducted under the framework in Internal Control  Integrated Framework, our
management concluded that our companys internal control over financial
reporting was effective, as of December 31, 2007, in providing reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles.

This report does not include an attestation report of our
registered public accounting firm regarding internal control over financial
reporting. Managements report was not subject to attestation by our companys
registered public accounting firm pursuant to temporary rules of the SEC that
permit our company to provide only management's report in this Annual Report on
Form 10-KSB.

PART III

|**Item 9.** | Directors, Executive Officers, Promoters,
      Control Persons and Corporate Governance; Compliance with Section
      16(a) of the Exchange Act.
|----------- | --------------------------------------------------------------------------------------------------------------------------------------------------

The following individuals serve as the directors, executive
officers and key employees of our company. All directors of our company and our
subsidiary hold office until the next annual meeting of our shareholders or
until their successors have

---

- 33 -

been elected and qualified. The executive officers of our
company and our subsidiaries are appointed by our board of directors and hold
office until their death, resignation or removal from office.

Name
    Position Held with our
      Company
    Age
    Date First Elected or AppointedGerald Lau
    President, Chief Executive Officer and
      Director
    51
    March 27, 2007Eddie Chou(1)
    Chief Technical Officer,
      Chief Financial Officer, Secretary, Treasurer and
      Director(1)
    37
    February 6, 2006Ricky Chiu Tong(2)
    Director
    37
    February 6, 2006Ma Cheng Ji
    Director of Starmetro Group Limited
    65
    April 8, 2008Edwin Chan(3)
    Director until April 1, 2008
      Director of Roots Biopack Group Limited
    42
    March 27, 2007 May 4,
      2007James Yiu Yeung Loong
    Director
    54
    April 1, 2008Hilary W. L. Chu(4)
    Director
    31
    March 27, 2007Cheng King Hung
    Director of Roots Biopack Group Ltd.
    52
    May 4, 2007Erich Muller
    Director of Roots Biopack Limited
    52
    June 7, 2006Faith Lam
    Director of Jiangmen Roots Biopack Limited
    39
    May 10, 2007Alex Chan
    Director of Bioplanet
      Distribution Sdn Bhd and Eatware Development Sdn Bhd (Malaysia
      Subsidiaries)
    35
    December 5, 2006Wong Lai Wah
    Director of Bioplanet
      Distribution Sdn Bhd and Eatware Development Sdn Bhd (Malaysia
      Subsidiaries)
    60
    December 5, 2006


|(1) | Eddie Chou was appointed as our Secretary, Treasurer,
      Chief Financial Officer and a director on February 6, 2006. He resigned as
      our Chief Financial Officer on July 24, 2007 and was then re-appointed as
      our Chief Financial Officer on October 2, 2007. He was appointed as our
      Chief Technical Officer upon the closing of the share exchange agreement
      with Roots Biopack Group, which occurred on March 27, 2007.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(2) | Ricky Chiu Tong resigned from our Board of Directors
      effective February 4, 2008.                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(3) | Edwin Chan was our Chief Financial Officer from July 24,
      2007 to October 2, 2007. Mr. Chan resigned from our Board of Directors
      effective April 1, 2008.                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(4) | Hillary Chu resigned from our Board of Directors
      effective February 25, 2008.                                                                                                                                                                                                                                                                                                                                                                  

Business Experience

The following is a brief account of the education and business
  experience during at least the past five years of each director, executive officer
  and key employee of our company, indicating the person's principal occupation
  during that period, and the name and principal business of the organization
  in which such occupation and employment were carried out.

---

- 34 -

Gerald Lau  Chief Executive Officer and Director

Gerald Lau was appointed as our Chief Executive Officer and a
  director upon the closing of the share exchange agreement with Roots Biopack
  Group, which occurred on March 27, 2007. He is responsible for accounting functions,
  as well as overall financial planning and management. During the period of November
  2004 to June 2006, Mr. Lau served as a director for Good Value International
  Limited, Good Value Galaxy Limited and Joint Eagle Investment Limited. From
  November 2002 to October 2004, he served as an executive director of GIN International
  Limited, a Hong Kong based company specializing in SMS text messaging services.
  While with GIN International Limited, Mr. Lau was responsible for the general
  administration and accounting matters. Mr. Lau was awarded a bachelors degree
  in Business Administration majoring in Business Economics & Quantitative
  Methods at University of Hawaii at Manoa in August 1981.

Eddie Chou  Chief Technical Officer, Chief Financial
Officer, Secretary, Treasurer and Director

Eddie Chou became our Secretary, Treasurer, Chief Financial
Officer and a director on February 6, 2006. He resigned as our Chief Financial
Officer on July 27, 2007 and then was re-appointed as our Chief Financial
Officer on October 2, 2007. He was appointed as our Chief Technical Officer upon
the closing of the share exchange agreement with Roots Biopack Group, which
occurred on March 27, 2007. Mr. Chou is responsible for the development of our
technology and project development. From 2003 to 2006, Mr. Chou served as a
director and general manager of Glory Team Industrial Ltd., where he was in
charge of research and development and responsible for the development of
machinery, technology and production line design. Glory Team Industrial Ltd.
owns the rights to the EATware intellectual property that was, until December of
2006, licensed to our company. From 1997 to 2003, Mr. Chou was the chief design
engineer of ASM Pacific Technology Ltd. (HKEx:ASMPT), which is the world's
largest assembly and packaging equipment supplier for the semiconductor
industry. At December 31, 2005, 53.59% of the equity of ASM Pacific Technology
Ltd. was owned by ASM International N.V., a Netherlands company. ASM
International N.V. is a reporting issuer in the United States; its common shares
are listed on the NASDAQ Global Select Market (NASD:ASMI).

Mr. Chou was awarded a B.Eng (Hons) in Mechanical Engineering
from London University, in London, England in 1994. In 2002, Mr. Chou obtained a
Certificate for Mechatronics from Philips CFT centre, Singapore which is the
exclusive in-house institution of Philips Group.

James Yiu Yeung Loong - Director

Mr. Yiu was appointed a director of our subsidiaries Biopack
Environmental Limited and Starmetro Group Limited on March 25, 2008 and a
director of our company on April 1, 2008. Mr. Yiu is the Managing Director of a
consulting company in Hong Kong providing consultancy services to both the
private and public company sectors. Mr. Yiu specializes in raising capital,
corporate and financial restructuring, mergers and acquisitions. Mr. Yiu is an
experienced entrepreneur and is familiar with business practices in the Greater
China region. Mr. Yiu graduated from the College of Education in Hong Kong in
1973.

Ma Cheng Ji  Director of our company and our subsidiaries
Starmetro Group Limited and Biopack Environmental Limited

Mr. Ma was appointed a director of our subsidiaries Biopack
Environmental Limited and Starmetro Group Limited on April 8, 2008. Mr. Ma is
the Director of Jiujiang Gaofeng Mining Industry, a production and exploration
mining company focused in the Greater China region. Mr. Ma is also the President
of Shanghai Trust Investment Consultant Co., Ltd, where he specializes in
research and analysis of Asian public equity markets; he also provides
management consultation to both public and private enterprises. Mr. Ma graduated
in 1961 with a Bachelors degree in publishing from Shanghai Publishing College,
and he received a postgraduate degree in comparative literature from Japan
University in Tokyo in 1989.

Edwin Chan - Director

Edwin Chan was appointed as a director upon the closing of the
  share exchange agreement with Roots Biopack Group, which occurred on March 27,
  2007. Mr. Chan resigned from our Board of Directors effective April 1, 2008.
  Mr. Chan was our Chief Financial Officer from July 24, 2007 to October 2, 2007.
  Mr. Chan served as a Director of Roots Biopack Group Limited since July 2006.
  From July 2004 to June 2006, Mr. Chan was the Senior Manager at China Everbright
  Securities (HK) Limited (Hong Kong), an investment banking firm. While with
  China Everbright Securities (HK) Limited, Mr. Chan was responsible for sales
  and brokerage of securities to institutional investors in China and Hong Kong.
  During the period April 2002 to June 2004, he was the Senior Manager (Business
  Valuation) of Vigers Appraisal & Consulting Ltd. (Hong Kong). From January
  2000 to March 2002, Mr. Chan was the Research Manager for Asia Financial Securities
  Ltd. (Hong Kong).

---

- 35 -

Mr. Chan was awarded an MBA degree from the Schulich School of
Business, York University, Canada, with a specialization in Corporate Finance,
Investment and Financial Management in 1999. He also graduated with an LLB
degree from Tsinghua University in the Peoples Republic of China in 2005, a
Bachelors of Science degree (Environmental Science Stream) from the Chinese
University of Hong Kong in 1987 and a postgraduate certificate in Education from
the University of Hong Kong in 1988.

Cheng Kin-hung  Director of Jiangmen Roots Biopack
Limited

Mr. Cheng King-hung has been an executive with the government
and a few major public organizations in Hong Kong, including the Kowloon-Canton
Railway Corporation and the University of Science and Technology for over 25
years, before focusing on his own investment in environmental industry and
financial services since 2005. Mr. Cheng received a B.Sc from Southern Illinois
University, USA in 1980, a M.Phil from the Chinese University of Hong Kong in
1986. and a Ph.D from Zhu Hai College of Hong Kong in 1991. He has been serving
the community in various positions, such as Chairman of Writers Fellowship and
Board Member of Tang Siu Tong Secondary School. He also serves as an independent
non-executive director of Innotech Holdings Limited (Stock Code 8202), a Hong
Kong company listed on the GEM Board of The Stock Exchange of Hong Kong.

Faith Lam  Director of Jiangmen Roots Biopack
Limited

Mr. Lam Koon Fai Faith started his career in Auditing in 1990.
Mr. Lam later joined Deloitte Touche Tohmatsu in 1994. He has served clients as
auditor in various industries including telecommunication, airline, truck
manufacturing and the rail industry. Prior to joining our group, Mr. Lam was the
qualified accountant in a company listed on the main board of the Stock Exchange
of Hong Kong. He is a Certified Public Accountant of the Hong Kong Institute of
Certified Public Accountants and a fellow member of The Association of Chartered
Certified Accountants.

Hilary Chu - Director

Hilary Chu was appointed as a director upon the closing of the
share exchange agreement with Roots Biopack Group, which occurred on March 27,
2007. Ms. Chu has been Green Manager of Roots Biopack Group Limited since March
2005, where she has been responsible for the implementation of various
compliance systems into Roots Biopack Group Limiteds factory in Shunde. As
Green Manager she is in charge of all environmental issues, including compliance
with all local, national and international environmental regulations. From March
2004 to March 2005, Ms. Chu was the Assistant Manager of KA Construction Co.,
Ltd. HK. From February 2002 to July 2003, she served as the Higher Scientific
Officer (HSO) for the UK Department for Environment, Food and Rural Affairs
(Defra), UK.

In 2000, Ms. Chu obtained her Masters degree in Environmental
Technology from the Imperial College of Science, Technology and Medicine, U.K.
Ms. Chu graduated from the University of Westminster, U.K., with a BSc (HONS) in
Environmental Sciences and Business Management in 1999. She is a member of the
Institution of Environmental Sciences (MIEnvSc) and is an active member in
various environmental groups and institutions. Ms. Chu is a qualified auditor
for ISO 9001  2000 QMS Internal Auditing Course of Construction Industry
Training Authority (CITA). She is also a qualified professional trainer for
occupational health and safety from the Hong Kong Polytechnic University. Ms.
Chu resigned from our Board of Directors on February 25, 2008.

Alex Chan  Director of Bioplanet Distribution Sdn
Bhd

Alex Chan was appointed as the director of Bioplanet
Distribution Sdn Bhd (formerly named Eatware Malaysia Sdn Bhd) on December 5,
2005. Mr. Chan has been responsible for our project development in Malaysia
since December 2005. Mr. Chan was awarded a B.Eng in Mechanical Engineering from
Kings College of London, England in 1995. Mr. Chan returned to Malaysia to
pursue his career in the engineering field for the next 10 years. From 1995 to
1997, Mr. Chan was attached to Malaysias largest electrical manufacturer of
High Tension electrical equipment known as LKH Holdings which is listed on Kuala
Lumpur Stock Exchange in Malaysia (LKH:KLSE). Subsequently, from 1997 to 2005,
Mr. Chan was the General Manager of RBS Solutions Sdn Bhd (a private limited
company) in Malaysia involved in several of Malaysias premier landmark projects
which includes the KLCC twin towers, Kuala Lumpur towers and the Kuala Lumpur
international airport to name a few.

---

- 36 -

Alex Chan was also a director of Eatware Development Sdn Bhd,
our former Malaysia Subsidiary that was struck off by the Malaysian registry of
companies on January 15, 2007.

Wong Lai Wah  Director of Bioplanet Distribution Sdn
Bhd

Lai Wah Wong was appointed as director of Bioplanet
Distribution Sdn Bhd (formerly named Eatware Malaysia Sdn Bhd) on December 5,
2005. Ms. Wong was also a director of Eatware Development Sdn Bhd, our former
Malaysia Subsidiary that was struck off of the Malaysian registry of companies
on January 15, 2007.

Family Relationships

There are no family relationships between our directors and
executive officers other than the following:

-Wong Lai Wah is Alex Chans
mother.

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters or control
persons have been involved in any of the following events during the past five
years:

| | 1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;                                                                                                            
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                
| | 2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
      minor offences);                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                
| | 3. | being subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities; or
| |    |                                                                                                                                                                                                                                                                                                                                
| | 4. | being found by a court of competent jurisdiction (in a
      civil action), the Securities and Exchange Commission or the Commodity
      Futures Trading Commission to have violated a federal or state securities
      or commodities law, and the judgment has not been reversed, suspended, or
      vacated.             

Promoters

Our directors and our executive officers are our promoters.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act requires our
executive officers and directors, and persons who own more than 10% of our
common stock, to file reports regarding ownership of, and transactions in, our
securities with the Securities and Exchange Commission and to provide us with
copies of those filings. Based solely on our review of the copies of such forms
received by us, or written representations from certain reporting persons, we
believe that during fiscal year ended December 31, 2007, all filing requirements
applicable to its officers, directors and greater than 10% percent beneficial
owners were complied with, with the exception of the following:

Name
    Number of Late
      Reports
    Number of Transactions Not
      Reported on a Timely Basis
    Failure to
      File Requested FormsGerald Lau
    1(1)
    3(1)
    NoneEddie Chou
    3(2)(3)
    15(2)(3)
    NoneChan Choon Hoong
      (Alex Chan)
    None
    None
    None


---

- 37 -

Name
    Number of Late
      Reports
    Number of Transactions Not
      Reported on a Timely Basis
    Failure to
      File Requested FormsWong Lai Wah
    None
    None
    NoneHillary Chu
    1(1)
    None
    NoneEdwin Chan
    1(1)
    None
    NoneRicky Chiu
    1(2)(3)
    2(2)(3)
    NoneBegonia Participation Corp.
    2(1)(3)
    2(1)(3)
    NoneCheng King-hung
    None
    1(3)
    2(3)Faith Lam Kam Fai
    None
    1(3)
    1(3)Erich Muller
    None
    1(3)
    1(3)


|(1) | The named officer, director or greater than 10%
      stockholder, as applicable, filed a late Form 3 - Initial Statement of
      Beneficial Ownership of Securities.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                       
|(2) | The named officer, director or greater than 10%
      stockholder, as applicable, filed a late Form 4  Statement in Changes of
      Beneficial Ownership.           
|    |                                                                                                                                                                       
|(3) | The named person filed a late Schedule
  13D.                                                                                                                         

Code of Ethics

Effective March 26, 2003, our company's board of directors
adopted a Code of Business Conduct and Ethics that applies to, among other
persons, our company's president and secretary (being our principal executive
officer, principal financial officer and principal accounting officer), as well
as persons performing similar functions. As adopted, our Code of Business
Conduct and Ethics sets forth written standards that are designed to deter
wrongdoing and to promote:

1. honest and ethical conduct, including the ethical handling
of actual or apparent conflicts of interest between personal and professional
relationships;

2. full, fair, accurate, timely, and understandable disclosure
in reports and documents that we file with, or submit to, the Securities and
Exchange Commission and in other public communications made by us;

3. compliance with applicable governmental laws, rules and
regulations;

4. the prompt internal reporting of violations of the Code of
Business Conduct and Ethics to an appropriate person or persons identified in
the Code of Business Conduct and Ethics; and

5. accountability for adherence to the Code of Business Conduct
and Ethics.

Our Code of Business Conduct and Ethics requires, among other
things, that all of our company's senior officers commit to timely, accurate and
consistent disclosure of information; that they maintain confidential
information; and that they act with honesty and integrity.

In addition, our Code of Business Conduct and Ethics emphasizes
that all employees, and particularly senior officers, have a responsibility for
maintaining financial integrity within our company, consistent with generally
accepted accounting principles, and federal and state securities laws. Any
senior officer who becomes aware of any incidents involving financial or
accounting manipulation or other irregularities, whether by witnessing the
incident or being told of it, must report it to our company. Any failure to
report such inappropriate or irregular conduct of others is to be treated as a
severe disciplinary matter. It is against our company policy to retaliate
against any individual who reports in good faith the violation or potential
violation of our company's Code of Business Conduct and Ethics by another.

---

- 38 -

Our Code of Business Conduct and Ethics was filed with the
Securities and Exchange Commission on April 15, 2003 as Exhibit 20.1 to our
annual report. We will provide a copy of the Code of Business Conduct and Ethics
to any person without charge, upon request. Requests can be sent to: Biopack
Environmental Solutions Inc., 18/F Metroplaza Tower II, 223 Hing Fong Road, Kwai
Chung, New Territories, Hong Kong.

Nomination Process

As of April 14, 2008, we did not effect any material changes to
the procedures by which our shareholders may recommend nominees to our board of
directors. Our board of directors does not have a policy with regards to the
consideration of any director candidates recommended by our shareholders. Our
board of directors has determined that it is in the best position to evaluate
our companys requirements as well as the qualifications of each candidate when
the board considers a nominee for a position on our board of directors. If
shareholders wish to recommend candidates directly to our board, they may do so
by sending communications to the president of our company at the address on the
cover of this annual report.

|Item 10. | Executive Compensation.
|-------- | -----------------------

The particulars of compensation paid to the following
persons:

(a) our principal executive
officer;

(b) each of our four most highly
compensated executive officers who were serving as executive officers at the end
of the year ended December 31, 2007 and our two most recent fiscal years prior
to the change in our fiscal year, and whose total salary and bonus exceeded
$100,000 per year; and

(c) any additional individuals for whom
disclosure would have been provided under (b) but for the fact that the
individual was not serving as our executive officer at the end of the year ended
December 31, 2007.

who we will collectively refer to as the named executive
officers, are set out in the following summary compensation table.

|SUMMARY COMPENSATION TABLE           
|-------------------------------------
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|Name and Principal                   
|Position                             
|Gerald Lau(1)                        
|President, :Chief Executive          
|Officer                              
|                                     
|Eddie Chou(2)                        
|Secretary, Treasurer, Chief          
|Financial Officer and Chief          
|Technology Officer                   
|                                     
|Chief
      Executive Officer, E-Ware
|Corporation Ltd.                     
|                                     
|Donald Weisberg(4)                   
|Former
      President, CEO, CFO     
|and Director                         
|                                     
|Ricky Chiu(5)                        
|Former
      President and Director  
|                                     
|Edwin
      Chan(6)                  
|Former Chief Financial Officer       
|                                     
|Hilary Chu                           
|Director(7)                          
|                                     

---

- 39 -

|SUMMARY COMPENSATION TABLE      
|--------------------------------
|                                
|                                
|                                
|                                
|                                
|                                
|                                
|Name and Principal              
|Position                        
|Cheng King Hung                 
|Director                        
|                                
|SUMMARY
      COMPENSATION TABLE

(1) Gerald Lau was appointed our President and Chief Executive
Officer on March 27, 2007.

(2) Eddie Chou was appointed as our Secretary, Treasurer and
Chief Financial Officer on February 6, 2006 and as our Chief Technology Officer
on March 27, 2007. On July 24, 2007, Eddie Chou resigned as our Chief Financial
Officer and was then reappointed as our Chief Financial Officer on October 2,
2007.

(3) This amount reflects compensation paid to Eddie Chou for
his services as both director of our company and as Chief Executive Officer and
director of our wholly owned subsidiary, E-Ware Corporation Limited. Mr. Chous
compensation is provided pursuant to an oral arrangement with our company.

(4) Donald Weisberg resigned as an officer and director of our
company on February 6, 2006.

(5) Ricky Chiu resigned as our President and Chief Executive
Officer on March 27, 2007. He resigned from our Board of Directors on February
4, 2008.

(6) Edwin Chan was our Chief Financial Officer from July 24,
2007 to October 2, 2007. He resigned from our Board of Directors effective April
1, 2008.

(7) Ms. Chu resigned from our Board of Directors on February
25, 2008.

Employment Contracts and Termination of Employment
Arrangements

We have not entered into any employment agreement or consulting
agreements with our directors and executive officers. There are no arrangements
or plans in which we provide pension, retirement or similar benefits for
directors or executive officers. Our directors and executive officers may
receive stock options at the discretion of our board of directors in the future.
We do not have any material bonus or profit sharing plans pursuant to which cash
or non-cash compensation is or may be paid to our directors or executive
officers, except that stock options may be granted at the discretion of our
board of directors.

Stock Option Plan

There were no grants of stock options or stock appreciation
rights to our executive officers and directors made during the fiscal years
ended December 31, 2007 and December 31, 2006.

Stock Options/SAR Grants

None

Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Values

None

Directors Compensation

Except those mentioned in the above Summary Compensation Table,
no director received compensation for the fiscal years December 31, 2007,
December 31, 2006 and December 31, 2005. We have no formal plan for compensating
our

---

- 40 -

directors for their service in their capacity as directors,
although such directors are expected in the future to receive stock options to
purchase common shares as awarded by our board of directors or (as to future
stock options) a compensation committee which may be established. Directors are
entitled to reimbursement for reasonable travel and other out-of-pocket expenses
incurred in connection with attendance at meetings of our board of directors.
Our board of directors may award special remuneration to any director
undertaking any special services on our behalf other than services ordinarily
required of a director.

|Item 11. | Security Ownership of Certain Beneficial
      Owners and Management and Related Stockholder
      **Matters.**
|-------- | ---------------------------------------------------------------------------------------------------------------

The following table sets forth, as of April 11, 2008, certain
  information with respect to the beneficial ownership of our common stock by
  each stockholder known by us to be the beneficial owner of more than 5% of our
  common stock, as well as by each of our current directors and executive officers
  and the directors and executive officers of our subsidiary as a group. Each
  person has sole voting and investment power with respect to the shares of common
  stock, except as otherwise indicated. Beneficial ownership consists of a direct
  interest in the shares of common stock, except as otherwise indicated.

Title of Class
    Name and Address of Beneficial Owner
    Amount and Nature of Beneficial
      Ownership(1)
    Percentage of Class(2)Common Shares
    Ricky Chiu 85 Waterloo Road, Kowloon, Hong
      Kong
    16,687,733
      10.25%Common Shares
    Eddie Chou 25C Grand
      Excelsior 25 Tai Hang Drive, Hong Kong
    11,125,492
      6.83%Common Shares
    Gerald Lau(3)(4)(5)18/F Metroplaza Tower II, 223 Hing Fong Road, Kwai Chung, New
      Territories, Hong Kong
    95,360,000
      58.57%Common Shares
    Edwin Chan 18/F Metroplaza
      Tower II, 223 Hing Fong Road, Kwai Chung, New Territories, Hong
      Kong
    Nil
    0%Common Shares
    Cheng King Hung(6)18/F Metroplaza Tower II, 223 Hing Fong Road, Kwai Chung, New
      Territories, Hong Kong
    1,400,000
      0.86%Common Shares
    Alex Chan 62, Jalan USJ
      11/5 47620 Subang Jaya Selanor Darul Ehsan
    Nil
    0%Common Shares
    Wong Lai Wah 62, Jalan USJ
      11/5 47620 Subang Jaya Selanor Darul Ehsan
    Nil
    0%Common Shares
    Begonia Participation
      Corp.(7)Pasea Estate Road Town, Tortola BVI
    10,000,000(7)
      6.14% of class 26.93%
      of voting powerCommon Shares
    Directors and Executive Officers as a Group
      106,485,492
      65.40%


---

- 41 -

|(1) | Regulation S-B promulgated under the Exchange Act, defines
        a beneficial owner of a security as any person who, directly or indirectly,
        through any contract, arrangement, understanding, relationship, or otherwise,
        has or shares: (i) voting power, which includes the power to vote, or
        to direct the voting of shares; and (ii) investment power, which includes
        the power to dispose or direct the disposition of shares. Certain shares
        may be deemed to be beneficially owned by more than one person (if, for
        example, persons share the power to vote or the power to dispose of the
        shares). In addition, shares are deemed to be beneficially owned by a
        person if the person has the right to acquire the shares (for example,
        upon exercise of an option) within 60 days of the date as of which the
        information is provided. In computing the percentage ownership of any
        person, the amount of shares outstanding is deemed to include the amount
        of shares beneficially owned by such person (and only such person) by
        reason of these acquisition rights. As a result, the percentage of outstanding
        shares of any person as shown in this table does not necessarily reflect
        the persons actual ownership or voting power with respect to the
        number of shares of common stock actually outstanding on April 11, 2008,
        and the date of this annual report.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(2) | Calculated based on the basis of 162,811,155 issued and
        outstanding shares of common stock as of April 11, 2008 plus, for each
        person or group, any securities that person or group has the right to
        acquire within 60 days pursuant to options, warrants, conversion privileges
        or other rights.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(3) | Gerald Lau, our President, Chief Executive Officer and
      Director, is 50% owner and controller of Legend View Holdings Ltd., which
      owns 2,800,000 common shares of our company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(4) | Gerald Lau, our President, Chief Executive Officer and
      Director, owns and controls Good Value Galaxy Limited, which owns
      75,600,000 common shares of our company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(5) | Gerald Lau, our President, Chief Executive Officer and
      Director, owns and controls Joyful Services Ltd, which owns 18,360,000
      common shares of our company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(6) | Cheng King Hung, a director of our company, is a 50%
      owner and controller of Legend View Holdings Ltd., which owns 2,800,000
      shares of our common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(7) | Begonia Participation Corp. owns 1,000,000 shares of our
      Series A Preferred Stock and 1,000,000 shares of our Series B Preferred
      Stock. Each share of Series A Preferred Stock and each share of Series B
      Preferred Stock is entitled to 30 votes at any meeting of our security
      holders and is convertible, at any time at the option of the holder, into
      5 shares of our common stock. Therefore, Begonia Participation Corp.
      beneficially owns 10,000,000 shares of our common stock but, unless and
      until it elects to convert any of the Series A Preferred Stock or any of
      the Series B Preferred Stock it controls 30,000,000 votes at any meeting
      of our security holders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

Changes in Control

We are unaware of any contract or other arrangement the
operation of which may at a date subsequent to the filing of this annual report
result in a change in control of our company.

|Item 12. | Certain Relationships and Related
      Transactions, and Director Independence.
|-------- | --------------------------------------------------------------------------------

Other than set out below, we have not been a party to any
transaction, proposed transaction, or series of transactions during the last two
years in which the amount involved exceeded $60,000, and in which, to our
knowledge, any of the following persons had, or is to have, a direct or indirect
material interest: a director or executive officer of our company; a nominee for
election as a director of our company; a beneficial owner of more than five
percent of the outstanding shares of our common stock; or any member of the
immediate family of any such person.

During the period November 22, 2005 to March 27, 2007, Ricky
Chiu, our former President and an ex-director, loaned an aggregate of $790,186
to our company for use as working capital. This aggregate amount breaks down as
follows: from November 22, 2005 to December 31, 2005, Mr. Chiu loaned a total of
$44,316; from January 1, 2006 to December 31, 2006, Mr. Chiu loaned a total of
$414,515; and from January 1, 2007 to March 27, 2007, Mr. Chiu loaned our
company a total of $331,355. Pursuant to the share exchange agreement that we
entered into with Roots Biopack Group Limited and its stockholders, Mr. Chiu
converted all of this debt into common shares of our company at a price of $0.80
per common share on the closing date. Mr. Chiu resigned from our Board of
Directors on February 4, 2008.

---

- 42 -

During the period beginning on March 6, 2005 and ending on
March 27, 2007, Eddie Chou, our Chief Financial Controller, Secretary, Treasurer
and a director, loaned an aggregate of $244,394 to our company for use as
working capital and initial project cost by our company and our subsidiaries.
This aggregate amount breaks down as follows: from May 6, 2006 to December 31,
2006, Mr. Chou loaned a total of $196,440; and from January 1, 2007 to March 27,
2007, Mr. Chiu loaned a total of $47,954. Pursuant to the share exchange
agreement that we entered into with Roots Biopack Group Limited and its
stockholders, Mr. Chou has agreed to convert all of this debt into common shares
of our company at a price of $0.80 per common share on the closing date. $38,882
was due to Mr Chou for remuneration during the period May 1, 2007 to August 31,
2007; this amount has not yet been paid.

On March 27, 2007, $231,067 was owed to us by our director
Ricky Chiu pursuant to a prior arrangement. In accordance with an understanding
between us and Ricky Chiu and Eddie Chou, the balance was to be repaid over 12
months. Since March 28, 2007, $231,067 has been paid to us by Ricky Chiu.

During the period from November 22, 2007 to December 27, 2007,
  Mr Chiu Wan Kee, father of Ricky Chiu, loaned an aggregate of $338,525 to our
  subsidiary, Starmetro Group Limited. The proceeds of this loan were used to
  fund some of the cost of phase one of our Biopark facility.

On May 8, 2006, we completed the acquisition, by way of share
exchange, of one hundred percent (100%) of the issued and outstanding shares of
Starmetro Group Limited, a British Virgin Islands corporation, in exchange for
the issuance of 60,000,000 shares of our common stock. Our President, Ricky
Chiu, was a shareholder of Starmetro Group Limited and upon the closing of the
acquisition received 28,000,000 shares of our common stock, our Secretary and
Treasurer, Eddie Chou, who was also a shareholder of Starmetro Group Limited,
received 20,000,000 shares of our common stock upon the closing of the
acquisition and Glory Team Industrial Limited, also a shareholder of Starmetro
Group Limited, received 12,000,000 shares of our common stock upon the closing
of the acquisition.

During the period April 26, 2007 to December 31, 2007, Gerald
Lau, our President and Chief Executive Officer, loaned an aggregate of $319,182
to our subsidiary, Roots Biopark Ltd, for use as working capital. During the
period April 26, 2007 to December 31, 2007, Mr Gerald Lau advanced to our
company the amount of $20,862 by way of expenses paid on behalf of our
subsidiary, Roots Biopark Ltd.; this amount has not yet been reimbursed.

During the period from April 1, 2007 to December 31, 2007,
Eddie Chou, our Chief Financial Controller, Secretary, Treasurer and a director,
advanced an aggregate of $38,882 to Roots Biopark Ltd. by way of expenses paid
on behalf of, and by way of outstanding remuneration yet to be paid by, our
subsidiary Roots Biopark Ltd; this amount has not yet been reimbursed.

On May 14, 2007, Edwin Chan, our former Chief Financial Officer
and a former director, loaned $63,837. to our subsidiary, Roots Biopark Ltd, for
use as working capital. $8,682 was due to Mr Chan from our subsidiary, Roots
Biopark Ltd, for remuneration during the period June 1, 2007 to August 31, 2007;
these amounts have not yet been paid.

On June 22, 2007, Hilary Chu, a former director, loaned
$63,836. to our subsidiary, Roots Biopark Ltd, for use as working capital.

During the period from May 11, 2007 to June 15, 2007, Cheng
King Hung, a director, loaned $127,673 to our subsidiary, Roots Biopark Ltd, for
use as working capital. $3,703 was due to Mr Cheng from our subsidiary, Roots
Biopark Ltd, for remuneration during the period June 1, 2007 to August 31, 2007;
these amounts have not yet been paid.

During the period from January 1, 2006 to December 31, 2007,
our subsidiary, Roots Biopark Ltd. borrowed from Good Value Galaxy Ltd the
amount of $686,956, of which it has repaid $65,560. The balance due is
$621,396.

On December 7, 2005, our wholly owned subsidiary, Starmetro
Group Limited, entered into a licensing agreement with Glory Team Industrial
Limited providing for, among other things, the licensing of certain intellectual
property rights including the use of the "Eatware" brand name. On May 8, 2006,
our company acquired all of the shares of Starmetro Group Limited from, among
others, Glory Team Industrial Limited. On November 13, 2006, our company entered
into an agreement with Glory Team Industrial Limited and Eddie Chou (one of our
directors), whereby we agreed to change the name of our company from Eatware
Corporation to another name in exchange

---

- 43 -

for the cancellation of the 12,000,000 shares of common stock
of our company then owned by Glory Team Industrial Limited. Glory Team
Industrial Limited is a related party because Glory Team Industrial was a
shareholder of our subsidiary, Starmetro Group Limited, until May 8, 2006, and a
shareholder of our company from May 8, 2006 until these shares were cancelled
pursuant to the agreement referred to, above.

On February 17, 2008, pursuant to a Share Cancellation
Agreement with Eddie Chou, one of our directors and our Chief Technical Officer,
1,200,000 shares of our common stock held by Mr. Chou were cancelled and
returned to treasury.

On February 17, 2008, pursuant to a Share Cancellation
Agreement with Ricky Chiu, an ex-director of our company, 1,800,000 shares of
our common stock held by Mr. Chiu were cancelled and returned to treasury.

On February 17, 2008, pursuant to a Share Cancellation
Agreement with Legend View Limited, 8,000,000 shares of our common stock were
cancelled and returned to treasury. Our President and the chairman of our Board
of Directors, Mr. Gerald Lau, owns a controlling interest in Legend View
Limited.

During the year ended December 31, 2007 we have become involved
in a number of disputes with Patrick Oung, an ex-director of Roots Biopack Group
Limited and other subsidiaries of our company. These disputes are discussed in
some detail in the section of this Annual Report on Form 10-KSB titled Legal
Proceedings beginning at page 20, above. Mr. Oung resigned from the Board of
Directors of our company at the completion of the transaction whereby we
acquired our subsidiary Roots Biopack Group Limited and he has subsequently been
removed from the Board of Directors of all of our subsidiary companies.

Corporate Governance

Our Board of Directors currently consists of: Gerald Lau, Eddie
Chou and James Yiu Yeung Loong.

Committees of the Board

All proceedings of the board of directors for the year ended
December 31, 2007 were conducted by resolutions consented to in writing by the
board of directors and filed with the minutes of the proceedings of our board of
directors. Our company currently does not have nominating, compensation or audit
committees or committees performing similar functions nor does our company have
a written nominating, compensation or audit committee charter. Our board of
directors does not believe that it is necessary to have such committees because
it believes that the functions of such committees can be adequately performed by
the board of directors.

Our company does not have any defined policy or procedural
requirements for shareholders to submit recommendations or nominations for
directors. The board of directors believes that, given the stage of our
development, a specific nominating policy would be premature and of little
assistance until our business operations develop to a more advanced level. Our
company does not currently have any specific or minimum criteria for the
election of nominees to the board of directors and we do not have any specific
process or procedure for evaluating such nominees. The board of directors will
assess all candidates, whether submitted by management or shareholders, and make
recommendations for election or appointment.

A shareholder who wishes to communicate with our board of
directors may do so by directing a written request addressed to our president at
the address appearing on the first page of this annual report.

Audit Committee Financial Expert

Our board of directors has determined that we do not have a
board member that qualifies as an "audit committee financial expert" as defined
in Item 401(e) of Regulation S-B, nor do we have a board member that qualifies
as "independent" as the term is used in Rule 4200(a)(15) of the NASDAQ
Marketplace Rules.

We believe that our board of directors is capable of analyzing
  and evaluating our financial statements and understanding internal controls
  and procedures for financial reporting. The board of directors of our company
  does not believe that it is necessary to have an audit committee because management
  believes that the functions of an audit committee can be adequately performed
  by the board of directors. In addition, we believe that retaining an independent
  director who would qualify as an "audit committee financial expert" would be
  overly costly and burdensome and is not warranted in our circumstances given
  the stage of our development and the fact we have not generated any positive
  cash flows from operations to date.

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Transactions with Independent Directors

Other than as set out below or disclosed under the heading
Certain Relationships and Related Transactions, and Director Independence,
none of our independent directors entered into any transaction, relationship or
arrangement during the year ended December 31, 2007 that was considered by our
board of directors in determining whether the director maintained his or her
independence in accordance with Nasdaq Marketplace Rule 4200(a)(15).

|Item 13. | Exhibits.
|-------- | ---------

Exhibits required by Item 601 of Regulation S-B

|Exhibit |                                                                                                                                                                                                                                                                                                                                              
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                                                                                                                  
|(2)     | Plan of Purchase, Sale, Reorganization, Arrangement,
      Liquidation or Succession                                                                                                                                                                                                                                                         
|2.1     | Share exchange agreement dated February 8, 2007 between
      our company, Roots Biopack Group, Good Value Galaxy Limited, Joyful
      Services Ltd., Legend View Holdings Ltd, Erich Muller Holding AG, and
      Eddie Chou and Ricky Chiu (incorporated by reference from our Current
      Report on Form 8-K filed on January 11, 2007)
|(3)     | Articles of Incorporation and Bylaws                                                                                                                                                                                                                                                                                                         
|3.1     | Articles of Incorporation (incorporated by reference from
      our Current Report on Form 8-K filed on May 9, 2001)                                                                                                                                                                                                                         
|3.2     | Bylaws (incorporated by reference from our Current Report
      on Form 8-K filed on May 9, 2001)                                                                                                                                                                                                                                            
|3.3     | Certificate of Amendment of Articles of Incorporation
      (incorporated by reference from our Current Report on Form 8-K filed on
      May 9, 2001)                                                                                                                                                                                       
|3.4     | Articles of Merger (incorporated by reference from our
      Current Report on Form 8-K filed on May 9, 2001)                                                                                                                                                                                                                                
|3.5     | Certificate of Designation (incorporated by reference
      from our Current Report on Form 8-K filed on May 9, 2001)                                                                                                                                                                                                                        
|3.6     | Articles of Merger filed with the Secretary of State of
      Nevada on November 21, 2006 effective on November 26, 2006 (incorporated
      by reference from our Current Report on Form 8-K filed on November 28,
      2006)                                                                                                              
|3.7     | Articles of Merger filed with the Secretary of State of
      Nevada on February 21, 2007 effective on February 26, 2007 (incorporated
      by reference from our Current Report on Form 8-K filed on February 27,
      2007)                                                                                                              
|3.8*    | Certificate of Correction filed
        with the Secretary of State of Nevada on June 27, 2007                                                                                                                                                                                                                                               
|3.9*    | Certificate of Designation filed
        with the Secretary of State of Nevada on July 27, 2007                                                                                                                                                                                                                                              
|(10)    | Material Contracts                                                                                                                                                                                                                                                                                                                           
|10.1    | Technology License and Materials Purchase Agreement with
      Glory Team Industrial Ltd., Starmetro Group Limited dated December 7, 2005
      (incorporated by reference from our quarterly report on Form 10-QSB filed
      on November 20, 2006)                                                                                        
|10.2    | Agreement dated effective November 13, 2006 with Glory
      Team Industrial Ltd. and Eddie Chou S. Hou (incorporated by reference from
      our Current Report on Form 8-K filed on November 17, 2006)                                                                                                                                     

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- 45 -

|10.3  | Share Exchange
        Agreement dated January 5, 2007 among our company, Roots, the Stockholders,
        Chou and Chiu (incorporated by reference from our Current Report on Form
        8-K filed on January 10, 2007)                                                                                
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.4  | Agreement for Transfer of State-Owned
        Land Usage Right (incorporated by reference from our Current Report on
        Form 8-K filed on April 2, 2007)                                                                                                                                             
|10.5  | Factory Leasing
        Agreement (incorporated by reference from our Current Report on Form 8-K
        filed on April 2, 2007)                                                                                                                                                                          
|10.6  | Factory Leasing Agreement 
        Translation (incorporated by reference from our Current Report on Form
        8-K filed on April 2, 2007)                                                                                                                                                            
|10.7  | Roots Tenancy
        Agreement (incorporated by reference from our Current Report on Form 8-K
        filed on April 2, 2007)                                                                                                                                                                           
|10.8  | Sales and Purchase of Machinery,
        Technical Assistance and Factory Management Agreement dated August 19,
        2007 between our company and Tayna Environmental Technology Co. Limited
        (incorporated by reference from our Quarterly Report on Form 8-K filed
        on August 21, 2007)
|10.9  | Distribution
        Agreement dated July 26, 2007 between our wholly owned subsidiary, Roots
        Biopack Limited and Packagegroup Moonen (incorporated by reference from
        our Current Report on Form 8-K filed on August 27, 2007)                                                            
|10.10 | Boiler Project Contract dated
        June 28, 2007 between our wholly owned subsidiary, Jiangmen Roots Biopack
        Limited and Dongguan Hongyuan Boiler Equipments Co., Ltd. (incorporated
        by reference from our Current Report on Form 8-K filed on August 27, 2007)                        
|10.11 | Construction
        Project Agreement dated June 11, 2007 between our wholly owned subsidiary,
        Jiangmen Roots Biopack Limited and Li Bailia (incorporated by reference
        from our Current Report on Form 8-K filed on August 27, 2007)                                                     
|10.12 | Compressor Project Contract dated
        June 6, 2007 between our wholly owned subsidiary, Jiangmen Roots Biopack
        Limited and Sky Blue (incorporated by reference from our Current Report
        on Form 8-K filed on August 27, 2007)                                                          
|10.13 | Debt Settlement
        and Subscription Agreement dated August 1, 2007 between our company and
        Begonia Participation Corp. (incorporated by reference from our Quarterly
        Report on Form 8-K filed on August 20, 2007)                                                                    
|10.14 | Share Cancellation Agreement
        dated February 17, 2008 between our company and Eddie Chou (incorporated
        by reference from our Current Report on Form 8-K filed on March 5, 2008)                                                                                                            
|10.15 | Share Cancellation
        Agreement dated February 17, 2008 between our company and Ricky Chiu (incorporated
        by reference from our Current Report on Form 8-K filed on March 5, 2008)                                                                                                            
|10.6* | Land
        Purchase Settlement Agreement dated April 8, 2008                                                                                                                                                                                                                                            
|(14)  | Code of Ethics                                                                                                                                                                                                                                                                                            
|14.1  | Code of Business Conduct and
        Ethics (incorporated by reference from our Annual Report on Form 10-KSB
        filed on April 15, 2003)                                                                                                                                                             

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- 46 -

|(21)  | Subsidiaries of the Small Business
      Issuer                               
|----- | ------------------------------------------------------------------------------
|      | Roots Biopack Group                                                           
|      | Roots Biopack Limited                                                         
|      | Roots Biopack (Intellectual Property) Limited                                 
|      | Expert Result Group Limited                                                   
|      | Roots Biopark Limited                                                         
|      | Jiangmen Roots Biopack Ltd.                                                   
|      | Eglinton Group Limited                                                        
|      | Starmetro Group Limited                                                       
|      | Biopack Environmental Limited (f/k/a E-ware Corporation
      Limited)        
|      | Bioplanet Distribution Sdn Bhd                                                
|(31)  | Rule 13a-14(a)/15d-14(a) Certifications                                       
|31.1* | Section
      302 Certification under Sarbanes-Oxley Act of 2002 of Gerald Lau
|31.2* | Section 302 Certification
      under Sarbanes-Oxley Act of 2002 of Eddie Chou
|(32)  | Section 1350 Certifications                                                   
|32.1* | Section 906 Certification
      under Sarbanes-Oxley Act of 2002              

* Filed herewith

|Item 14. | Principal Accountants Fees and Services
|-------- | ---------------------------------------

Audit Fees

For the fiscal years ended December 31, 2007 and 2006, the aggregate
  fees billed by Gruber & Company, LLC for professional services rendered
  for the audit of our annual consolidated financial statements included in our
  annual report on Form 10-KSB were $15,000 and $10,500, respectively.

Audit Related Fees

For the fiscal years ended December 31, 2007 and 2006, the aggregate
  fees billed for assurance and related services by Gruber & Company, LLC
  relating to the performance of the audit of our financial statements which are
  not reported under the caption "Audit Fees" above, were $5,250 and $4,750, respectively.

Tax Fees

For the fiscal years ended December 31, 2007 and 2006, the aggregate
  fees billed by Gruber & Company, LLC for other non-audit professional services,
  other than those services listed above, totalled $0 and $0, respectively.

We do not use Gruber & Company, LLC for financial
information system design and implementation. These services, which include
designing or implementing a system that aggregates source data underlying the
financial statements or generates information that is significant to our
financial statements, are provided internally or by other service providers. We
do not engage Gruber & Company, LLC to provide compliance outsourcing
services.

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- 47 -

Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before Gruber & Company, LLC is engaged by
us to render any auditing or permitted non-audit related service, the engagement
be:

- approved by our audit committee (which consists of our entire board of
  directors); or
- entered into pursuant to pre-approval policies and procedures established
  by the board of directors, provided the policies and procedures are detailed
  as to the particular service, the board of directors is informed of each
  service, and such policies and procedures do not include delegation of the
  board of directors' responsibilities to management.

The board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.

The board of directors has considered the nature and amount of
fees billed by Gruber & Company, LLC and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
Gruber & Company, LLC's independence.

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- 48 -

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

BIOPACK ENVIRONMENTAL SOLUTIONS INC.

|By: /s/ Gerald Lau                                                                                                                                                                                                       
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Gerald Lau                                                                                                                                                                                                               
|President, Chief Executive Officer and Director                                                                                                                                                                          
|(Principal Executive Officer)                                                                                                                                                                                            
|Date: April 15, 2008                                                                                                                                                                                                     
|                                                                                                                                                                                                                         
|By: /s/ Eddie Chou                                                                                                                                                                                                       
|Eddie Chou                                                                                                                                                                                                               
|Chief Financial Officer, Chief Technology Officer,                                                                                                                                                                       
|Secretary, Treasurer and Director                                                                                                                                                                                        
|(Principal Financial Officer and Principal Accounting
      Officer)                                                                                                                                                     
|Date: April 15, 2008                                                                                                                                                                                                     
|                                                                                                                                                                                                                         
|Pursuant to the requirements of the Securities Exchange
      Act of 1934, this report has been signed below by the following persons on
      behalf of the registrant and in the capacities and on the dates indicated.
|                                                                                                                                                                                                                         
|By: /s/ Gerald Lau                                                                                                                                                                                                       
|Gerald Lau                                                                                                                                                                                                               
|President, Chief Executive Officer and Director                                                                                                                                                                          
|Principal Executive Officer)                                                                                                                                                                                             
|Date: April 15, 2008                                                                                                                                                                                                     
|                                                                                                                                                                                                                         
|By: /s/ Eddie Chou                                                                                                                                                                                                       
|Eddie Chou                                                                                                                                                                                                               
|Chief Financial Officer, Chief Technology Officer,                                                                                                                                                                       
|Secretary, Treasurer and Director                                                                                                                                                                                        
|(Principal Financial Officer and Principal Accounting
      Officer)                                                                                                                                                     
|Date: April 15, 2008                                                                                                                                                                                                     
|                                                                                                                                                                                                                         
|By: /s/ Yeung Lung James Yiu Yeung Loong                                                                                                                                                                                 
|Yeung Lung James Yiu Yeung Loong                                                                                                                                                                                         
|Director                                                                                                                                                                                                                 
|Date: April 15, 2008                                                                                                                                                                                                     

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