---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

Form 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2011

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

For the transition period from __________ to ____________

Commission file number000-29981

BIOPACK ENVIRONMENTAL SOLUTIONS
INC.(Exact name of registrant as specified in its
charter)

|Nevada                                                               | 91-2027724                       
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)

Room 1302, 13/F, Enterprise Centre, 4 Hart Avenue, Tsim
Sha Tsui, Kowloon, Hong Kong(Address of principal executive offices)
(zip code)

852.3586.1383(Registrants telephone number,
including area code)

Not Applicable(Former name, former address and
former fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).Yes [    ]  No[    ]

---

2

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of large accelerated filer," "accelerated
filer, and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

|Large accelerated filer [    ]                | Accelerated filer [    ]       
|--------------------------------------------- | -------------------------------
|Non-accelerated filer [    ]                  | Smaller reporting company [ x ]
|(Do not check if a smaller reporting company) |                                

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).Yes [   
]  No [ x ]

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date:

42,161,104 common shares issued and outstanding as of
May 18, 2011

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3

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Biopack Environmental Solutions Inc.

Unaudited

Consolidated Financial Statements

For the ThreeMonths Ended March 31, 2011and 2010

(Stated in US Dollars)

---

4

Biopack Environmental Solutions Inc.

CONSOLIDATED FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|Consolidated Balance Sheets                
|-------------------------------------------
|Consolidated Statements of Operations      
|Consolidated Statements of
      Cash Flows
|Notes to Consolidated Financial Statements 

---

5

|Biopack Environmental Solutions, Inc. and
      Subsidiaries
|------------------------------------------------------------
|Consolidated Balance Sheets                                 

|                                                                                                                                |   | Unaudited    |   |   | Audited           |  
|------------------------------------------------------------------------------------------------------------------------------- | - | ------------ | - | - | ----------------- | -
|                                                                                                                                |   | Mar 31, 2011 |   |   | December 31, 2010 |  
|Assets                                                                                                                          |   |              |   |   |                   |  
|NON-Current assets                                                                                                              |   |              |   |   |                   |  
|Property and equipment                                                                                                          | $ | 2,154        |   | $ | 2,716             |  
|Deposits                                                                                                                        |   | 5,359        |   |   | 4,832             |  
|                                                                                                                                |   | 7,513        |   |   | 7,548             |  
|Current assets                                                                                                                  |   |              |   |   |                   |  
|Cash and Cash equivalents                                                                                                       |   | 9,606        |   |   | 97,804            |  
|Accounts receivables                                                                                                            |   | 2,212        |   |   | 4,903             |  
|Prepaid expenses and other
      receivables                                                                                    |   | 76,378       |   |   | 380               |  
|Total current assets                                                                                                            |   | 88,196       |   |   | 103,087           |  
|                                                                                                                                |   |              |   |   |                   |  
|Asset of the 3 subsidiaries held for sale                                                                                       |   | 864,125      |   |   | 905,532           |  
|                                                                                                                                |   | 952,321      |   |   | 1,008,619         |  
|                                                                                                                                |   |              |   |   |                   |  
|Total assets                                                                                                                    |   | 959,834      |   |   | 1,016,167         |  
|                                                                                                                                |   |              |   |   |                   |  
|Liabilities and stockholders' equity                                                                                            |   |              |   |   |                   |  
|Current liabilities                                                                                                             |   |              |   |   |                   |  
|Accounts payable and accrued expenses                                                                                           |   | 715,125      |   |   | 671,003           |  
|Due to Shareholders & Directors                                                                                                 |   | 838,888      |   |   | 787,060           |  
|Short Term Debt                                                                                                                 |   | 821,657      |   |   | 817,836           |  
|Total current liabilities                                                                                                       |   | 2,375,670    |   |   | 2,275,899         |  
|                                                                                                                                |   |              |   |   |                   |  
|Liabilities of the 3 Subsidiaries
      held for sale                                                                           |   | 767,643      |   |   | 432,679           |  
|                                                                                                                                |   | 3,143,313    |   |   | 2,708,578         |  
|Long Term Liabilities                                                                                                           |   |              |   |   |                   |  
|Long term debt                                                                                                                  |   | 60,000       |   |   | 60,000            |  
|Due to related parties                                                                                                          |   | 250,000      |   |   | 250,000           |  
|Total long term
      liabilities                                                                                               |   | 310,000      |   |   | 310,000           |  
|                                                                                                                                |   |              |   |   |                   |  
|Stockholders' equity                                                                                                            |   |              |   |   |                   |  
|Preferred stock, $.001 par value, 10,000,000 shares
      authorized; 
           1,620,000 shares issued and
      outstanding |   | 1,620        |   |   | 1,620             |  
|Common stock; $.0001 par value; 50,000,000
      shares authorized; 
           41,032,849 shares issued
      and outstanding  |   | 4,101        |   |   | 4,102             |  
|Additional paid-in capital                                                                                                      |   | 5,031,916    |   |   | 5,031,916         |  
|Stock issued at less than par value                                                                                             |   | (2,683       | ) |   | (2,683            | )
|Accumulated other comprehensive income                                                                                          |   | 221,086      |   |   | 239,557           |  
|Retained Earnings                                                                                                               |   | (7,749,519   | ) |   | (7,276,923        | )
|                                                                                                                                |   |              |   |   |                   |  
|Total stockholders'
      equity                                                                                                |   | (2,493,479   | ) |   | (2,002,411        | )
|                                                                                                                                |   |              |   |   |                   |  
|Total liabilities
      and stockholders' equity                                                                                | $ | 959,834      |   | $ | 1,016,167         |  

---

6

|Biopack Environmental Solutions, Inc. and
      Subsidiaries
|------------------------------------------------------------
|Consolidated Statement of Operations                        
|March 31, 2011 and 2010                                     

|                                                                                  |   | Unaudited          |  
|--------------------------------------------------------------------------------- | - | ------------------ | -
|                                                                                  |   | Three months ended |  
|                                                                                  |   | Mar 31,            |  
|                                                                                  |   | 2011               |  
|                                                                                  |   |                    |  
|Revenues                                                                          | $ | 3,594              |  
|Cost of Sales                                                                     |   | 4,634              |  
|Gross (Loss) / Profit                                                             |   | (1,040             | )
|                                                                                  |   |                    |  
|General and administrative                                                        |   | 82,454             |  
|Depreciation and amortization                                                     |   | 560                |  
|Total operating
      expenses                                                    |   | 83,014             |  
|                                                                                  |   |                    |  
|Loss from operations                                                              |   | (84,054            | )
|                                                                                  |   |                    |  
|Other Income (expense)                                                            |   |                    |  
|Other Income                                                                      |   | -                  |  
|Gain on disposal of Asset                                                         |   | -                  |  
|Finance cost                                                                      |   | (11,127            | )
|PROFIT/(LOSS) BEFORE TAX                                                          |   | (95,181            | )
|                                                                                  |   |                    |  
|Income tax                                                                        |   | -                  |  
|Income (loss) from discontinued operations of 3
      subsidiaries held for sales |   | (377,415           | )
|                                                                                  |   |                    |  
|NET PROFIT/(LOSS) FOR THE YEAR                                                    | $ | (472,596           | )
|                                                                                  |   |                    |  
|Earnings/(Loss) per share                                                         | $ | (0                 | )
|                                                                                  |   |                    |  
|Weighted average common shares outstanding                                        |   | 40,985,118         |  
|                                                                                  |   |                    |  
|Diluted Earnings/(Loss) Per Share                                                 |   | (0                 | )
|Diluted Weighted Average Common Shares
      Outstanding                          |   | 40,985,118         |  

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7

|Biopack Environmental Solutions, Inc. and
      Subsidiaries
|------------------------------------------------------------
|Statements of Cash flow                                     

|                                                                                      |   | Three months ended |  
|------------------------------------------------------------------------------------- | - | ------------------ | -
|                                                                                      |   | Mar 31,            |  
|                                                                                      |   | 2011               |  
|Cash flows from operating activities                                                  |   |                    |  
|Net income                                                                            | $ | (472,596           | )
|                                                                                      |   |                    |  
|Adjustments to reconcile net loss to net cash provided by
      operating activities: |   |                    |  
|Depreciation and amortization                                                         |   | 4,362              |  
|Loss/(Gain) on Disposal of Asset                                                      |   |                    |  
|Write down in
      value of assets                                                   |   | -                  |  
|Provision for Bad debt                                                                |   |                    |  
|Write off of deposit                                                                  |   |                    |  
|Interest expenses accrual                                                             |   | 11,127             |  
|Other comprehensive (loss) / income                                                   |   | (18,471            | )
|Changes in assets and liabilities:                                                    |   |                    |  
|Accounts receivable and other receivable                                              |   | 2,691              |  
|Prepaid expenses                                                                      |   | (37,529            | )
|Advances to related parties                                                           |   | 51,828             |  
|Inventories                                                                           |   | 1,264              |  
|Deposits                                                                              |   | (679               | )
|Accounts payable and accruals                                                         |   | 367,958            |  
|Net cash Provided by (used in) operating
      activities                             |   | (90,045            | )
|Cash flow from investing activities                                                   |   |                    |  
|Purchase of
      property and equipment                                              |   | -                  |  
|Construction in
      progress                                                        |   | (379               | )
|Net cash used in investing activities                                                 |   | (379               | )
|                                                                                      |   |                    |  
|Cash flow from financing activities                                                   |   |                    |  
|Proceeds from notes payable                                                           |   |                    |  
|Debts Redemption                                                                      |   | 3,821              |  
|Additional Paid Up Capital                                                            |   | -                  |  
|Non-cash financing activities                                                         |   |                    |  
|Common stock issued to retire debts                                                   |   | -                  |  
|                                                                                      |   |                    |  
|Net cash used by financing activities                                                 |   | 3,821              |  
|                                                                                      |   |                    |  
|Net change in cash                                                                    |   | (86,603            | )
|Cash, beginning                                                                       |   | 97,888             |  
|Effects of exchange rate on the Balance of cash held in
      foreign currency        |   | (1,671             | )
|Cash, ending                                                                          | $ | 9,614              |  

---

8

BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

|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.

The Company evaluates consolidation of entities under FAS No.
167, Amendments to FASB Interpretation No. 46(R) (FAS 167), which changes
the approach to determining the primary beneficiary of a variable interest
entity (VIE), (Formerly known as Financial Accounting Standards Board (FASB)
Interpretation No.46, Consolidation of Variable Interest Entities (FIN 46)).
FAS 167 replaces the quantitative-based risks and rewards approach with a
qualitative approach that focuses on identifying which enterprise has (i) the
power to direct the activities of a VIE that most significantly impact the
entitys economic performance and (ii) the obligation to absorb losses or the
right to receive benefits of the entity that could potentially be significant to
the VIE. FAS 167 also requires ongoing reassessment of whether an enterprise is
the primary beneficiary of a VIE, and requires additional disclosures about an
enterprises involvement in VIEs. FAS 167 is effective for the Company as of the
beginning of fiscal year 2011 and its adoption is not expected to have a
material effect on the Companys unaudited condensed consolidated financial
statements.

|(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.

|(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 March 31, 2011, the Company had cash and cash equivalents of
$9,614.

|(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 amounts less an
allowance made for doubtful receivables, if any, based on a review of all
outstanding amounts at the end of the period. Full allowance 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 the original terms of a receivable.
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 are fully collectible. The Company does not accrue interest on trade
accounts receivable. The normal credit terms range from 15 to 60 days.

---

9

|(f) | 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 a customer change, estimates of the
recoverability of receivables would be further adjusted.

|(g) | Property, Plant and Equipment
|--- | -----------------------------

Property, plant and equipment are 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
    5Motor Vehicles
    5 to 10Computer equipment
    5Plant and Machinery
    5 to 20


|(h) | 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. There
was no impairment loss made for property and equipment as of March 31, 2011.

|(i) | Income Taxes
|--- | ------------

Income taxes are accounted for under the asset and liability
method. 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 and operating loss and tax credit carry forwards. 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. 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.

The FASB issued Accounting Standard Codification Topic 740 (ASC
740) Income Taxes, (Formerly known as interpretation No. 48, Accounting for
Uncertainty in Income Taxes, an interpretation of Statement of Financial
Accounting Standards No. 109 (FIN 48)). ASC 740 clarifies the accounting for
uncertainty in tax positions. This requires that an entity recognized in the
consolidated financial statements the impact of a tax position, if that position
is more likely than not of being sustained upon examination, based on the
technical merits of the position. The adoption of ASC 740 did not have any
impact on the Groups results of operations or financial condition for the
period ended March 31, 2011. As of the date of the adoption of ASC 740, the
Group has no material unrecognized tax benefit which would favourably affect the
effective income tax rate in future periods. The Group has elected to classify
interest and penalties related to unrecognized tax benefits, if and when
required, as part of income tax expense in the consolidated statements of
operations.

---

10

|(j) | Foreign Currency Transactions
|--- | -----------------------------

The Companys functional currency is Hong Kong Dollars (HKD)
and Renminbi (RMB) 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.

|(k) | 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.

|(l) | Earnings Per Share
|--- | ------------------

The Company computes earnings per share (EPS) in accordance
with FASB Accounting Standard Codification Topic 260 (ASC 260) Earnings Per
Share (Formerly known as Statement of Financial Accounting Standards No. 128,
Earnings per Share (SFAS No. 128)), and SEC Staff Accounting Bulletin No. 98
(SAB 98). ASC 260 requires companies with complex capital structures to
present basic and diluted EPS. Basic EPS is measured as the income or loss
available to common shareholders divided by the weighted average common shares
outstanding for the period. Diluted EPS is similar to basic EPS but presents the
dilutive effect on a per share basis of potential common shares (e.g.,
convertible securities, options, and warrants) as if they had been converted at
the beginning of the periods presented, or issuance date, if later. Potential
common shares that have an anti-dilutive effect (i.e., those that increase
income per share or decrease loss per share) are excluded from the calculation
of diluted EPS.

|(m) | 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.

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.

---

11

Effective January 1, 2006, the Company 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 it is 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 September 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.

|(p) | Recently issued accounting
  pronouncements
|--- | -------------------------------------------

In December 2007, ASC 805, Business Combinations (ASC 805)
(formerly included under Statement of Financial Accounting Standards No. 141
(revised 2007), Business Combinations) contains guidance that was issued by the
FASB. It requires the acquiring entity in a business combination to recognize
all assets acquired and liabilities assumed in a transaction at the
acquisition-date fair value, with certain exceptions. Additionally, the guidance
requires changes to the accounting treatment of acquisition related items,
including, among other items, transaction costs, contingent consideration,
restructuring costs, indemnification assets and tax benefits. ASC 805 also
provides for a substantial number of new disclosure requirements. ASC 805 also
contains guidance that was formerly issued as FSP FAS 141(R)-1, Accounting for
Assets Acquired and Liabilities Assumed in a Business Combination That Arise
from Contingencies which was intended to provide additional guidance clarifying
application issues regarding initial recognition and measurement, subsequent
measurement and accounting, and disclosure of assets and liabilities arising
from contingencies in a business combination. ASC 805 was effective for business
combinations initiated on or after the first annual reporting period beginning
after December 15, 2008. The Company implemented this guidance effective January
1, 2009. Implementing this guidance did not have an effect on the Companys
financial position or results of operations; however it will likely have an
impact on the Companys accounting for future business combinations, but the
effect is dependent upon acquisitions, if any, that are made in the future.

In March 2008, the FASB issued ASC 815 (SFAS No. 161,
Disclosures about Derivative Instruments and Hedging Activities, an amendment
of FASB Statement No. 133) to amend and expand the disclosures about derivatives
and hedging activities. The standard requires enhanced qualitative disclosures
about an entitys objectives and strategies for using derivatives, and tabular
quantitative disclosures about the fair value of derivative instruments and
gains and losses on derivatives during the reporting period. This standard is
effective for both fiscal years and interim periods that begin after November
15, 2008. The adoption of this standard on December 29, 2008, the beginning of
the Companys fiscal year, did not have a material impact on its unaudited
condensed consolidated financial statements.

In December 2007, ASC 810, Consolidation (ASC 810) includes
new guidance issued by the FASB governing the accounting for and reporting of
noncontrolling interests (previously referred to as minority interests). This
guidance established reporting requirements which include, among other things,
that noncontrolling interests be reflected as a separate component of equity,
not as a liability. It also requires that the interests of the parent and the
noncontrolling interest be clearly identifiable. Additionally, increases and
decreases in a parents ownership interest that leave control intact shall be
reflected as equity transactions, rather than step acquisitions or dilution
gains or losses. This guidance also requires changes to the presentation of
information in the financial statements and provides for additional disclosure
requirements. ASC 810 was effective for fiscal years beginning on or after
December 15, 2008. The Company implemented this guidance as of January 1, 2009.
The effect of implementing this guidance was not material to the Companys
financial position or results of operations.

---

12

In May 2009, ASC 855, Subsequent Events (ASC 855) (formerly
Statement of Financial Accounting Standards No. 165, Subsequent Events) includes
guidance that was issued by the FASB, and is consistent with current auditing
standards in defining a subsequent event. Additionally, the guidance provides
for disclosure regarding the existence and timing of a companys evaluation of
its subsequent events. ASC 855 defines two types of subsequent events,
recognized and non-recognized. Recognized subsequent events provide
additional evidence about conditions that existed at the date of the balance
sheet and are required to be reflected in the financial statements.
Non-recognized subsequent events provide evidence about conditions that did not
exist at the date of the balance sheet but arose after that date and, therefore;
are not required to be reflected in the financial statements. However, certain
non-recognized subsequent events may require disclosure to prevent the financial
statements from being misleading. This guidance was effective prospectively for
interim or annual financial periods ending after June 15, 2009. The Company
implemented the guidance included in ASC 855 as of April 1, 2009. The effect of
implementing this guidance was not material to the Companys financial position
or results of operations.

In June 2009, the FASB issued Statement of Financial Accounting
Standards No. 166, Accounting for Transfers of Financial Assets an amendment of
FASB Statement No. 140 (Statement No. 166). Statement No. 166 revises FASB
Statement of Financial Accounting Standards No.140, Accounting for Transfers and
Extinguishment of Liabilities a replacement of FASB Statement 125 (Statement
No. 140) and requires additional disclosures about transfers of financial
assets, including securitization transactions, and any continuing exposure to
the risks related to transferred financial assets. It also eliminates the
concept of a qualifying special-purpose entity, changes the requirements for
derecognizing financial assets, and enhances disclosure requirements. Statement
No. 166 is effective prospectively, for annual periods beginning after November
15, 2009, and interim and annual periods thereafter. Although Statement No. 166
has not been incorporated into the Codification, in accordance with ASC 105, the
standard shall remain authoritative until it is integrated. The Company does not
expect the adoption of Statement No. 166 will have a material impact on its
financial position or results of operations.

In September 2009, the FASB has published ASU 2009-12, Fair
Value Measurements and Disclosures (Topic 820) - Investments in Certain Entities
That Calculate Net Asset Value per Share (or Its Equivalent). This ASU amends
Subtopic 820-10, Fair Value Measurements and Disclosures  Overall, to permit
a reporting entity to measure the fair value of certain investments on the basis
of the net asset value per share of the investment (or its equivalent). This ASU
also requires new disclosures, by major category of investments including the
attributes of investments within the scope of this amendment to the
Codification. The guidance in this update is effective for interim and annual
periods ending after December 15, 2009. Early application is permitted. The
Company is in the process of evaluating the impact of this standard on its
consolidated financial position and results of operations.

In October 2009, the FASB has published ASU 2009-13, Revenue
Recognition (Topic 605)-Multiple Deliverable Revenue Arrangements, which
addresses the accounting for multiple-deliverable arrangements to enable vendors
to account for products or services (deliverables) separately rather than as a
combined unit. Specifically, this guidance amends the criteria in Subtopic
605-25, Revenue Recognition-Multiple-Element Arrangements, for separating
consideration in multiple-deliverable arrangements. This guidance establishes a
selling price hierarchy for determining the selling price of a deliverable,
which is based on: (a) vendor-specific objective evidence; (b) third-party
evidence; or (c) estimates. This guidance also eliminates the residual method of
allocation and requires that arrangement consideration be allocated at the
inception of the arrangement to all deliverables using the relative selling
price method and also requires expanded disclosures. The guidance in this update
is effective prospectively for revenue arrangements entered into or materially
modified in fiscal years beginning on or after June 15, 2010. Early adoption is
permitted. The adoption of this standard is not expected to have a material
impact on the Companys consolidated financial position and results of
operations.

ASC 105, Generally Accepted Accounting Principles (ASC 105)
(formerly SFAS No. 168, The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles a replacement of FASB
Statement No. 162), reorganized by topic existing accounting and reporting
guidance issued by the Financial Accounting Standards Board (FASB) into a
single source of authoritative generally accepted accounting principles (GAAP)
to be applied by nongovernmental entities. All guidance contained in the
Accounting Standards Codification (ASC) carries an equal level of authority.
Rules and interpretive releases of the Securities and Exchange Commission
(SEC) under authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. Accordingly, all other accounting
literature will be deemed non-authoritative. ASC 105 is effective on a
prospective basis for financial statements issued for interim and annual periods
ending after September 15, 2009. The Company has implemented the guidance
included in ASC 105 as of July 1, 2009. The implementation of this guidance changed the Companys
references to GAAP authoritative guidance but did not impact the Companys
financial position or results of operations.

---

13

In January 2010, the FASB issued Accounting Standards Update
No. 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures which amends
ASC Topic 820, adding new requirements for disclosures for Levels 1 and 2,
separate disclosures of purchases, sales, issuances, and settlements relating to
Level 3 measurements and clarification of existing fair value disclosures. ASU
2010-06 is effective for interim and annual periods beginning after December 15,
2009, except for the requirement to provide Level 3 activity of purchases,
sales, issuances, and settlements on a gross basis, which will be effective for
fiscal years beginning after December 15, 2010 (the Companys fiscal year 2012);
early adoption is permitted. The Company is currently evaluating the impact of
adopting ASU 2009-14 on its financial statements.

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

|Cost                           |   | 31.03.2011 |   |  | 31.12.2010 |  
|------------------------------ | - | ---------- | - |  | ---------- | -
|Office furniture and equipment |   | 6,721      |   |  | 3,228      |  
|Computer equipment             |   | 9,478      |   |  | 12,973     |  
|                               |   | 16,199     |   |  | 16,201     |  
|Accumulated depreciation       |   | (14,045    | ) |  | (13,485    | )
|                               | $ | 2,154      |   |  | 2,716      |  

Depreciation expense for the three month ended March 31, 2011
was $560.

|4. | Accounts receivable
|-- | -------------------

Accounts receivable consists of receivables on trade as
follows:

|Ageing of trade and other receivables |   | 31.03.2011 |  |  | 31.12.2010 | 
|------------------------------------- | - | ---------- |  |  | ---------- | 
|0  30 days                           | $ | 1,305      |  |  | -          | 
|Over 30 days                          |   | 907        |  |  | 4,903      | 
|                                      | $ | 2,212      |  |  | 4,903      | 

As of March 31, 2011, the Companys subsidiaries had total
receivables of $2,212. The Company believes that there is no issue of
recoverability and the balances receivable are indicative of fair value.

|5. | Prepaid expenses and other
  receivables
|-- | ----------------------------------------

|                  |   | 31.03.2011 |  |  | 31.12.2010 | 
|----------------- | - | ---------- |  |  | ---------- | 
|Prepaid expenses  | $ | 76,378     |  |  | -          | 
|Other receivables |   | -          |  |  | 380        | 
|                  | $ | 76,378     |  |  | 380        | 

|6. | Accounts payable and accrued
  expenses
|-- | ---------------------------------------

|                                   |   | 31.03.2011 |  |  | 31.12.2010 | 
|---------------------------------- | - | ---------- |  |  | ---------- | 
|Accrued expense and other payables | $ | 585,835    |  |  | 551,964    | 
|Accounts payables                  |   | 129,290    |  |  | 119,039    | 
|                                   | $ | 715,125    |  |  | 671,003    | 

|7. | Due to Shareholders &
  Directors
|-- | ---------------------------------

|                        |  | 31.03.2011 |  |  | 31.12.2010 | 
|----------------------- |  | ---------- |  |  | ---------- | 
|Amount due to Directors |  | 838,888    |  |  | 787,060    | 
|                        |  | 838,888    |  |  | 787,060    | 

Directors of the Company have advanced $838,888 in the form of
unsecured, non-interest bearing advances with no due date.

---

14

|8. | Loans payable
|-- | -------------

|                |   | 31.03.2011 |  |  | 31.12.2010 | 
|--------------- | - | ---------- |  |  | ---------- | 
|Short Term Loan | $ | 821,657    |  |  | 817,836    | 

As at March 31, 2011, the Company has short term loans on
demand of $821,657. The loans bear interest at the rate of 0.5% to 6% per
annum.

|Long Term Loan                                      |   |            |  |  |            | 
|--------------------------------------------------- | - | ---------- |  |  | ---------- | 
|                                                    |   | 31.03.2011 |  |  | 31.12.2010 | 
|Convertible Debts Issued to Non Related
      Party | $ | 60,000     |  |  | 60,000     | 
|Convertible Debts Issued to a Director              |   | 250,000    |  |  | 250,000    | 
|                                                    | $ | 310,000    |  |  | 310,000    | 

|Convertible Debts                                           |  |            |  |  |            | 
|----------------------------------------------------------- |  | ---------- |  |  | ---------- | 
|                                                            |  |            |  |  |            | 
|                                                            |  | 31.03.2011 |  |  | 31.12.2010 | 
|Opening Balance of Convertible
      Debts                  |  | 310,000    |  |  | 581,000    | 
|Plus:
      Convertible debentures issued during the period |  | -          |  |  | -          | 
|Less: Debentures converted to common shares                 |  | -          |  |  | 271,000    | 
|Closing Balance of Convertible Debts                        |  | 310,000    |  |  | 310,000    | 

The embedded beneficial conversion features present in the
convertible debenture is valued separately at issuance and recognized and
measured by allocating a portion of the proceeds equal to the intrinsic value of
that feature to additional paid-in capital. That amount is calculated as the
difference between the conversion price and the fair value of the common stock
into which the debenture is convertible, multiplied by the no. of shares. The
intrinsic value cannot exceed the proceeds.

|9. | Going Concern
|-- | -------------

The accompanying consolidated financial statements have been
prepared in accordance with 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 had a loss for the three month period
ended March 31, 2011 of $472,596 and, on March 31, 2011 it had an accumulated
deficit of $7,749,519 and a working capital deficit of $2,287,474. 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
profitable operations and raising the capital it will require in order to
achieve profitable operations through the issuance of equity securities,
borrowings or a combination thereof.

---

15

|10. | Concentrations and Credit
Risk
|--- | ------------------------------

Concentration of credit risk is limited to accounts receivable
and is subject to the financial condition 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.

|11. | Commitments and
Contingencies
|--- | -----------------------------

Operating Lease Arrangements

Minimum lease payments recognized as an expense under operating
leases in respect of the premises and land use right in Hong Kong during the
Three months Ended March 31, 2011:

|         |   | 31.03.2011 |  |  | 31.12.2010 | 
|-------- | - | ---------- |  |  | ---------- | 
|Premises | $ | 4,061      |  |  | 19,168     | 

At March 31, 2011, the Company had outstanding commitments for
future minimum lease payments under non-cancellable operating leases in respect
of premises in Hog Kong, which fall due as follows:

|                |   | 31.03.2011 |  |  | 31.12.2010 | 
|--------------- | - | ---------- |  |  | ---------- | 
|Within one year | $ | 14,003     |  |  | 2,552      | 
|                | $ | 14,003     |  |  | 2,552      | 

|12. | Related Party
Transactions
|--- | --------------------------

|Amount due to related parties    |  |            |  |  |            | 
|-------------------------------- |  | ---------- |  |  | ---------- | 
|                                 |  | 31.03.2011 |  |  | 31.12.2010 | 
|LAU Kin Chung, Gerald  Director |  | 563,056    |  |  | 511,934    | 
|Sean Webster  Director          |  | 275,832    |  |  | 275,126    | 
|                                 |  |            |  |  |            | 
|                                 |  | 838,888    |  |  | 787,060    | 

The advances are unsecured, interest free and have no fixed
terms of repayment. The respective parties are or were directors of the
company.

|13. | INCOME TAXES
|--- | ------------

No provision for HK Profits tax has been made in consolidated
financial statements as the subsidiaries sustained loss for the year. The
current year amount represented under provision of taxation in previous years.

No provision for PRC income tax has been made in the
consolidated financial statements as the PRC subsidiary sustained loss during
the year. No provision for deferred taxation has been recognized in the
financial statements as the amount involved is insignificant.

No provision for US tax has been made for any of the period
presented as the Group does not have any assessable profits during the
period.

No deferred tax is recognized in the consolidated balance
sheets as of March 31, 2011.

---

16

|14. | Discontinued Operation
|--- | ----------------------

Biopack Environmental Limited, a wholly owned subsidiary of
Starmetro Group Limited, which is the Companys wholly-owned subsidiary, entered
into a share purchase agreement dated July 9, 2010 with Well Talent Technology
Limited, a company incorporated in the British Virgin Islands, whereby Well
Talent agreed to purchase all of the issued and outstanding shares of Roots
Biopark Ltd., which wholly owns Jiangmen Roots Biopack Ltd. And Roots Biopack
(Intellectual Property) Limited. Completion of this purchase and sale agreement
was conditioned on, among other things, approval of the transaction by the
Companys shareholders.

On August 5, 2010, the Company filed a Preliminary Proxy
Statement on Schedule 14A with the Securities and Exchange Commission (the
SEC). This document was reviewed by staff at the SEC and, in response to a
series of comments, the Company filed amendments to its Preliminary Proxy
Statement on October 4, 2010, December 22, 2010 and February 11, 2011,
respectively. As of the date of this quarterly report on Form 10-Q, there are
outstanding comments on the Preliminary Proxy Statement and the Company is not
yet in a position to send a Proxy Statement to its shareholders, nor is it yet
in a position to schedule a shareholder meeting. During this period, the Company
was unable to pay its operating costs and, in November of 2010, it shut down the
operation of its factory. Without income from production and sales, the Company
has not had the revenue from which to pay expenses and it ceased to pay rent for
its factory premises. During the first few months of 2011, the Companys
landlord threatened to terminate the factory lease and take the Company to court
for past due rent. On April 21st, the Companys landlord initiated a
court action and a Writ of Summons was issued by the Peoples Court of Guandong
Jiangmen Penjiang District on April 25, 2011. A court hearing has been scheduled
for May 27, 2011.

In light of its lack of financial resources and the threats of
legal action from its landlord, in March, 2011, the Company offered to complete
the transaction with Well Talent without shareholder approval, informing Well
Talent that it could offer no assurance that it could clear comments on the
Preliminary Proxy Statement and call a shareholder meeting before its landlord
terminated its factory lease. Well Talent has not yet agreed to complete on its
agreement without first obtaining approval of the Companys shareholders. The
Company is currently attempting to confirm that Well Talent will complete the
transaction without shareholder approval or, in the alternative, that the
Companys agreement with Well Talent is no longer in effect. The Company is
currently seeking alternative solutions, and has been in active discussion with
others that have evidenced interest in purchasing its factory assets.

The operations of Jiangmen Roots Biopack Ltd, Roots Biopack
(Intellectual Property) Limited and Roots Biopark Ltd. have been the
manufacturing arm of the Company. The operation loss of the three subsidiaries
has been shown in the separate line as discontinued operations held for sale as
of 31 March 2011.

A summarized statement of operations for the discontinued
operations for the comparable three month periods ended 31 March, 2011 and 31
March, 2010 is as follows:

|                                                                                  |  | Three months ended |   |  | Three months ended |  
|--------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------ | -
|                                                                                  |  | 31.03.2011         |   |  | 31.03.2010         |  
|                                                                                  |  |                    |   |  |                    |  
|Revenues                                                                          |  | 0                  |   |  | 0                  |  
|Cost of Sales                                                                     |  | 0                  |   |  | 12,035             |  
|Gross
      Profit/(Loss)                                                         |  | 0                  |   |  | (12,035            | )
|                                                                                  |  |                    |   |  |                    |  
|General and administrative                                                        |  | 373,613            |   |  | 148,439            |  
|Depreciation and amortization                                                     |  | 3,802              |   |  | 48,602             |  
|Total operating
      expenses                                                    |  | 377,415            |   |  | 197,041            |  
|                                                                                  |  |                    |   |  |                    |  
|Income (loss) from discontinued opertations
      of 3 subsidiaries held for sale |  | (377,415           | ) |  | (209,076           | )

---

17

Assets of the 3 subsidiaries held for sales :

|                                       |  |              |  |  |              | 
|-------------------------------------- |  | ------------ |  |  | ------------ | 
|                                       |  | Unaudited    |  |  | Audited      | 
|                                       |  | Mar 31, 2011 |  |  | Dec 31, 2010 | 
|                                       |  |              |  |  |              | 
|Assets                                 |  |              |  |  |              | 
|Current assets                         |  |              |  |  |              | 
|Cash and Cash equivalents              |  | 8            |  |  | 84           | 
|Prepaid expenses and other receivables |  | 89,023       |  |  | 127,492      | 
|Inventory                              |  | 46,916       |  |  | 48,180       | 
|Total current assets                   |  | 135,947      |  |  | 175,756      | 
|                                       |  |              |  |  |              | 
|Property and equipment                 |  | 562,363      |  |  | 564,492      | 
|Construction in progress               |  | 118,365      |  |  | 117,986      | 
|Deposits                               |  | 47,450       |  |  | 47,298       | 
|Total assets                           |  | 864,125      |  |  | 905,532      | 

Liability of the 3 subsidiaries held for sale:

|                                      |  |              |  |  |              | 
|------------------------------------- |  | ------------ |  |  | ------------ | 
|                                      |  | Unaudited    |  |  | Audited      | 
|                                      |  | Mar 31, 2011 |  |  | Dec 31, 2010 | 
|                                      |  |              |  |  |              | 
|Liabilities and stockholders' equity  |  |              |  |  |              | 
|Current liabilities                   |  |              |  |  |              | 
|Accounts payable and accrued expenses |  | 767,643      |  |  | 432,679      | 
|Total current liabilities             |  | 767,643      |  |  | 432,679      | 

---

18

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

Our managements discussion and analysis of financial condition
and results of operation provides a narrative about our financial performance
and condition that should be read in conjunction with the unaudited consolidated
financial statements and related notes thereto included in this quarterly report
on Form 10-Q. This discussion contains forward looking statements reflecting our
current expectations and estimates and assumptions about events and trends that
may affect our future operating results or financial position. Our actual
results and the timing of certain events could differ materially from those
discussed in these forward-looking statements due to a number of factors,
including, but not limited to, those set forth in the sections of this Form 10-Q
titled Risk Factorsand Forward-Looking Statements.

Our Business

Until recently, we developed, manufactured, distributed and
marketed bio-degradable food containers and disposable industrial packaging for
consumer products. We supplied these biodegradable food containers and
industrial packaging products to multi-national corporations, supermarket chains
and restaurants located across North America, Europe and Asia. We manufactured
our products in our own factory, known as Jiangmen Roots Biopack Ltd., which is
located in Jiangmen City in the PRC.

During the year ended December 31, 2010, we were unable to
raise the money we needed in order to properly equip and continue the operation
of our factory and we decided to sell the factory and disengage from the
manufacturing portion of our business. We entered into an agreement dated July
9, 2010, with Well Talent Technology Limited pursuant to which we agreed to sell
the operating subsidiaries that own our factory to Well Talent in exchange for
money and Well Talents agreement to grant to our company an exclusive right to
market and distribute the products manufactured at the factory. Completion of
this purchase and sale agreement was conditioned on, among other things,
approval of the transaction by our shareholders.

On August 5, 2010, we filed a Preliminary Proxy Statement on
Schedule 14A with the Securities and Exchange Commission (the SEC). This
document was reviewed by staff at the SEC and, in response to a series of
comments, we filed amendments to our Preliminary Proxy Statement on October 4,
2010, December 22, 2010 and February 11, 2011, respectively. As of the date of
this quarterly report on Form 10-Q, there are outstanding comments on the
Preliminary Proxy Statement and we are not yet in a position to send a Proxy
Statement to our shareholders, nor are we yet in a position to schedule a
shareholder meeting. During this period, we were unable to pay our operating
costs and, in November of 2010, we shut down our factory. Without income from
production and sales, we have not had the revenue from which to source expenses
and we ceased to pay rent for our factory premises. During the first few months
of 2011, our landlord threatened to terminate our factory lease and take us to
court for past due rent.

In March, we offered to complete the transaction with Well
Talent without shareholder approval, informing Well Talent that we could offer
no assurance that we could clear comments on our Preliminary Proxy Statement and
call a shareholder meeting before our landlord terminated our lease. Well Talent
has not yet agreed to complete on our agreement without first obtaining approval
of our shareholders. We are currently attempting to confirm that Well Talent
will complete our transaction without shareholder approval or, in the
alternative, that our agreement with Well Talent is no longer in effect. We are
currently seeking alternative solutions.

On April 25, 2011, the Peoples Court of Guandong Jiangmen
Pengjiang District issued a Writ of Summons calling for the settlement of unpaid
rent for our factory plus penalty interest and other claims. The claim calls for
the payment of overdue rental in the amount of RMB 1,236,000, penalty interest
in the amount of RMB 1,067,930 and a claim for potential loss of income in the
amount of RMB 618,000, for a total amount claimed of RMB 2,921,930
(approximately USD $451,379). A court hearing has been scheduled for May 27,
2011. In negotiations with the landlord, we have delayed adjudication of this
matter by agreeing to sell some of our assets and using the proceeds to pay the
factory workers some of the wages owed to them. If we are unable to complete a
sale of our manufacturing subsidiaries to Well Talent or another party, it is
probable that our assets, including our factory, will be seized and liquidated
in order to pay our debts in the PRC.

We have not delivered any product during the three month period
ended March 31, 2011 but we have continued to work on orders and the development
of new products for clients in anticipation of a change in circumstance that
will enable us to supply product. We currently have approximately USD
$216,436.70 in existing orders for our Roots Biopack brand of products and another USD$292,934.00 in the
pipeline but these are subject to the resolution of our liquidity issues and our
ability to guarantee production and delivery. As we continue to anticipate that
we will be able to source products from our factory after the sale to Well
Talent, we have not yet investigated the availability of third party
manufacturing capability.

---

19

Our Agreement with Well Talent

On July 9, 2010, Biopack Environmental Limited, a wholly-owned
subsidiary of Starmetro Group Limited, which is our wholly-owned subsidiary,
entered into a share purchase agreement with Well Talent Technology Limited, a
company incorporated in the British Virgin Islands, whereby Well Talent agreed
to purchase:

- all of the issued and outstanding shares of Roots Biopark Limited (which
  wholly owns Jiangmen Roots Biopack Ltd.) and Roots Biopack (Intellectual
  Property) Limited; and
- the shareholders loan in the amount of HK$26,526,213.91 (approximately
  US$3,394,486.39) advanced by Biopack Environmental Limited to Roots Biopark
  Limited and the shareholders loan of HK$275,742.56 (approximately US$35,286)
  advanced by Biopack Environmental Limited to Roots Biopack (Intellectual
  Property) Limited.

The total consideration payable to Biopack Environmental
Limited for the sale of these shares and the shareholders loans is HK$6,800,000
(approximately US$875,161). The consideration of HK$6,800,000 is payable on the
completion of the sale:

- by way of cash payment of HK$2,800,000 (approximately US$360,360); and
- by way of cancellation of the loans in the amount of HK$4,000,000
  (approximately US$514,800) advanced by Well Talent to Biopack Environmental
  Limited.

At the completion of the sale, Well Talent also agreed to
release Gerald Lau, our president and director, from his obligations as a
guarantor over the HK$4,000,000 loans advanced by Well Talent to Biopack
Environmental Limited.

The sale of these shares and the shareholders loans is
conditional upon, among other things,:

- obtaining approval from our stockholders of the sale;
- Biopack Environmental Limited, Well Talent, Roots Biopark Limited, and
  Roots Biopack (Intellectual Property) Limited entering into a deed of
  assignment, whereby Biopack Environmental Limited will assign the
  shareholders loans to Well Talent; and
- Biopack Environmental Limited entering into a distributorship agreement
  with Well Talent. The distributorship agreement grants Biopack Environmental
  Limited the exclusive right to sell bio-degradable food container and
  packaging product produced by Roots Biopark Limited and Roots Biopack
  (Intellectual Property) Limited in Europe, North America, Australia, Africa,
  South America and Hong Kong for a period of 12 months.

The sale of all of the issued and outstanding shares of Roots
Biopark Limited and Roots Biopack (Intellectual Property) Limited will
constitute the sale of substantially all of our operating assets. As discussed
above, the completion of this transaction has been delayed and may be in
jeopardy.

Result of Operations for the three months ended March 31,
2011 as compared to the three months ended March 31, 2010.

During the three months ended March 31, 2011 we had a net loss
of $472,596, compared to net profit of $28,966 for the three months ended March
31, 2010. The profit from the same period in the previous year was mainly due to
a one-off gain on disposal of asset. The loss for the three months ended March
31, 2011, was primarily due to lack of sales activities and revenue as a result
of our pending sale of subsidiaries.

---

20

Our loss from operation was $84,054 for the three months ended
March 31, 2011 compare to $87,436 for the three months ended March 31, 2010. The
decrease in the amount of our operating loss was due primarily to decreased
operation expenses compared to the same period in 2010.

Net Sales and Cost of Sales

Net sales for the three months ended March 31, 2011 were
$3,594, compared to net sales of $68,639 for the three months ended March 31,
2010. The decrease in sales is primarily due to lack of sales activities as a
result of our pending proposed sale of subsidiaries.

Cost of sales for the three months ended March 31, 2011 was
$4,634, which provided a gross loss of $1,040, compared to cost of sales of
$56,168 for the three months ended March 31, 2010, which provided a gross profit
of $12,471. The decrease gross profit is primarily due to the increase in the
market price of the product we bought from our factory in China, the subsidiary
held for sale. The rising inflation rate in China was the main contributor for
increased price of the product exported from China.

Operating Expenses

Operating expenses for the three months ended March 31, 2011
were $83,014, compared to $99,907 for the three months ended March 31, 2010. The
decrease in general and administrative expenses as a result of less sales and
marketing expenses.

Our depreciation expenses for the three months ended March 31,
2011 were $560 compare to $1,581 for the three months ended March 31, 2010. Most
of our continuing operations assets are office equipment with low value.

Our legal and professional expenses for the three months ended
March 31, 2011 were $10,938, compared to $8,456 for the three months ended March
31, 2010. The increase in legal and professional expenses is mainly due to the
additional requirement related to U.S. SEC regulatory compliance and responding
to the comments from the SEC related to our proposed sale of subsidiaries.

Interest Expenses

We incurred interest expense of $11,127 during the three months
ended March 31, 2011, compared to $11,423 during the three months ended March
31, 2010. Interest expense was incurred primarily due to interest expenses
accrued on long term and short term debt. The decrease in interest expense was
due primarily to the decrease in the principal amount of our debt for the three
month period ended March 31, 2011, compared to the three month period ended
March 31, 2010.

Result of discontinued operations of the three subsidiaries
held for sale

The three discontinued subsidiaries held for sale have incurred
a loss of $377,415 for the three month ended March 31, 2011, compared to loss of
$209,076 for the three month ended March 31, 2010. The decrease in the loss is
primarily due to. The loss in the manufacturing operations in our factory in
China is mainly due the fact that the production level hasnt reached the
economy of scale to generate operating profit. The decreased loss for the three
months ended 31 March, 2011 compare to the three months ended 31 March, 2010, is
mainly due to the reduced production activity as a result of the pending sale of
subsidiaries.

The general economic environment also had a negative impact on
the operating result, including the increasing raw material price, as well as
increasing labor cost in China due to the stimulation package China government
has injected into the infrastructure projects which created a shortage of labor
force for 2010.

Liquidity and Capital Resources

Our principal cash requirements are for daily working capital,
manufacturing and installation of plant and machinery at our leased factory in
Jiangmen City, PRC. On March 31, 2011 we had cash and cash equivalents of $9,614
compared to $26,492 at March 31, 2010. As at March 31, 2011 we had a working
capital deficit of $2,287,474, compare to a working capital deficit of
$2,172,812 at December 31, 2010. The increase in working capital for the period
was primarily financed by the director loans.

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21

The sale of all of the issued and outstanding shares of Roots
Biopark Limited and Roots Biopack (Intellectual Property) Limited to Well Talent
Technology Limited is a course of action that we proposed to take to address our
funding shortfalls. Also as discussed below under the section entitled Cash
Flow Provided by Financing Activities, we obtained loans from Well Talent and
others to address our funding shortfalls. We expect our operating expenses would
dramatically decrease after the sale of the subsidiaries to Well Talent as the
factory operations historically represented the majority of the total
operational expenses for our company (historically, the factory operations have
accounted for approximately 65-66% of total operational expenses). We hope that
removing the factory operations from our company would allow our company to
continue operating more efficiently since we expect to concentrate on the sales,
marketing and distribution activities without being responsible for the large
expenses associated with the factory operations. If we cannot complete the sale,
we expect that our factory will be seized and liquidated in order to fund
payment of our trade debts (including factory rent and factory workers wages)
but we hope to be able to source product to fill customer orders from third
party manufacturers and continue the marketing and distribution portion of our
business, though there is some possibility that we will be forced to wind up our
business.

Cash Flow Used in Operating Activities

For the three months ended March 31, 2011 our operating
activities provided net cash of $90,045, compared to $369,843 used for the three
months ended March 31, 2010. The decrease in cash inflow was primarily due to
decrease in advances from related parties.

Cash Flow Used in Investing Activities

For the three months ended March 31, 2011 investing activities
used net cash of $379 compared to $33,492 for the three months ended March 31,
2010. The net cash used in investing activities was primarily due to low value
office equipment purchase.

Cash Flow Provided by Financing Activities

For the three-month period ended March 31, 2011, financing
activities provided cash of $3,821 compared to $313,856 cash used in the three
months ended March 31, 2010. The cash flow provided in financing activities for
the three months ended March 31, 2010 was primarily from debt notes issuance.
During the three month period ended March 31, 2011, there were no financing
activities other than director loans.

Capital Expenditures

During the three-month period ended March 31, 2011, we did not
have any material commitments for capital expenditures.

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 our
company as a going concern. We had a net loss for the three months ended March
31, 2011 of $472,596 and, on March 31, 2011 we had an accumulated deficit of
$7,749,519 and a working capital deficit of $2,287,474. These conditions raise
substantial doubt as to our 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 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 our company be unable to continue as a going concern.

The future of our company is dependent upon its attaining
profitable operations and raising the capital it will require in order to
achieve profitable operations through the issuance of equity securities,
borrowings or a combination thereof.

We are currently negotiating with several parties to try and
arrange financing options, possibilities or alternatives should the current
proposed sale of three of our subsidiaries fail; in the event that the sale does
not result in a contribution of adequate cash for continued operations for the
company; or if the companys factory is seized and disposed of by the Chinese
authorities.

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22

Off-Balance Sheet Arrangements

Other than as disclosed below, 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.

On April 22, 2010, we entered into a loan agreement with Well
Talent, whereby Well Talent loaned HK$2,000,000 (approximately US$257,400) to
us. Well Talent has the right to terminate or demand repayment at any time upon
giving written notice to us. Notwithstanding this right, we must repay the loan
within 6 months from the date of the loan, subject to the parties agreeing to a
3 month extension. There is no interest on the loan for the first six months and
if the parties agree to the 3 month extension, the loan is subject to interest
at a rate of 1% per month.

On June 3, 2010, we entered into another loan agreement with
Well Talent, whereby Well Talent loaned additional HK$2,000,000 (approximately
US$257,400) to us. The terms of this loan agreement are substantially the same
as the loan agreement dated April 22, 2010.

Gerald Lau, our president and director, personally guaranteed
to Well Talent on these two loans.

On August 19, 2010, we entered into a loan from Sean Webster, a
director of our company, in the form of unsecured, non-interest bearing advances
with no due date.

Item 3. Quantitative and Qualitative Disclosures About
Market Risk.

Not Applicable.

Item 4. Controls and Procedures.

Disclosure 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 March 31, 2011, the end of the three-month period 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 not effective as of
the end of the period covered by this quarterly report.

The conclusion that our disclosure controls and procedures were
ineffective at the end of the period was due primarily to the identification of
certain material weaknesses in our internal control over financial reporting
that are the result of our having scaled back our operations and ceased
production at our factory. Without revenue from sales of our product, we have
lost personnel, including accounting staff with knowledge of U.S. GAAP. Although
we continue to employ accountants in both Hong Kong and in the PRC, none of our
current employees, officers or directors has a working knowledge of U.S. GAAP.
In addition, although we have an independent contractor with knowledge of U.S.
GAAP, since January, 2011, this independent contractor has cut back the number
of hours devoted to our company and the limited number of hours per week spent
on our affairs is insufficient. Because of our current lack of revenue, we have
been unable to hire more than the limited staff we currently employ.

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23

Changes in Internal Control over Financial Reporting

The term internal control over financial reporting is defined
as a process designed by, or under the supervision of, our principal executive
and principal financial officers, or persons performing similar functions, and
effected by our board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that:

| | 1. | Pertain to the maintenance of records that in reasonable
      detail accurately and fairly reflect the transactions and dispositions of
      our assets;                                                                                                                                                                                   
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                              
| | 2. | Provide reasonable assurance that transactions are
      recorded as necessary to permit preparation of financial statements in
      accordance with generally accepted accounting principles, and that our
      receipts and expenditures are being made only in accordance with
      authorizations of our management and directors; and
| |    |                                                                                                                                                                                                                                                                                                                                              
| | 3. | Provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, use or disposition of our
      assets that could have a material effect on our financial
    statements.                                                                                                                           

We believe that the loss of personnel with a working knowledge
of U.S. GAAP during the three-month period ended March 31, 2011 has materially
affected, and is reasonably likely to continue to materially affect, our
internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Other than as disclosed below and in our annual reports on Form
10-K for the years ended 2008, 2009 and 2010, 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. There
have been no material changes to the litigation described in our annual reports
on Form 10-K for the years ended 2008, 2009 and 2010 during the three month
period ended March 31, 2011 or from April 1 2011 until the date of this
quarterly report on Form 10-Q.

On April 25, 2011, the Peoples Court of Guandong Jiangmen
Pengjiang District issued a Writ of Summons calling for the settlement of unpaid
rent for our factory plus penalty interest and other claims. The claim, details
of which are set out below, calls for the payment of overdue rental in the
amount of RMB 1,236,000, penalty interest in the amount of RMB 1,067,930 and a
claim for potential loss of income in the amount of RMB 618,000, for a total
amount claimed of RMB 2,921,930 (approximately USD $451,379). A court hearing
has been scheduled for May 27, 2011. In negotiations with the landlord, we have
delayed adjudication of this matter by agreeing to sell some of our assets and
using the proceeds to pay the factory workers some of the wages owed to them. If
we are unable to complete a sale of our manufacturing subsidiaries to Well
Talent or another party, it is probable that our assets, including our factory,
will be seized and liquidated in order to pay our debts in the PRC.

Details of the claim are as follows:

|Writ of Summons issued by the Peoples Court of Guangdong
      Jiangmen Pengjiang District on April 25, 2011.                                                                                                                        
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Case Number: (2011) Jiang Peng Court No. 791                                                                                                                                                                                          
|Case Reference: Disputes over Lease Rental Contract dated
      March 1, 2007                                                                                                                                                         
|Case Details: Claim on the defendant for overdue lease
      rentals (RMB1,236,000), related penalty interest (RMB1,067,930) and other related compensation charges
      (potential loss of income RMB618,000) totaling RMB2,921,930.
|Plaintiff: Chen Jin Yao (Landlord)                                                                                                                                                                                                    
|Defendant: Jiangmen Roots Biopack Limited (Tenant)                                                                                                                                                                                    
|Court Hearing Schedule: May 27, 2011 at 9:00 am                                                                                                                                                                                       

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Place of Hearing: Peoples Court of Jiangmen Municipal
Pengjiang District

Item 1A. Risk Factors.

Our common shares are considered speculative during the
development of our new business operations. Prospective investors should
consider carefully the risk factors set out below.

Risk Factors Related to the Proposed Sale of Our
Subsidiaries

If we cannot complete our transaction with Well Talent or a
similar strategic buyer in time, our business will fail:

Our factory is the key to the continuation of our business,
whether it is owned by Well Talent or another strategic buyer from which we can
purchase products for distribution to our customers. We cannot afford to keep
the factory because the costs of operation are higher than the revenue it can
generate for us. We have been unable to raise the funds needed to make the
improvements to the factory that would decrease the operating costs to an amount
less than the revenue derived from sales and, over time, the excess of operating
cost over sales revenue has forced us to close the factory. With our factory
closed we continue to incur operating costs but we have no revenue from which we
can pay these costs and our debts continue to accrue. In addition, our landlord
has filed a claim in court seeking to seize our factory and a hearing in this
action is currently scheduled for May 27, 2011. If we cannot sell the factory,
it will probably be seized and sold to pay our debts. If our factory is sold to
pay our debts, the sale price will almost certainly be an amount less than the
total amount of money we owe. If this happens, our business will fail, our
company will be insolvent and you will lose your entire investment in our
company.

We will incur certain costs in connection with the proposed
sale of our subsidiaries, whether or not we complete it.

We expect to incur certain costs related to the proposed sale
of our subsidiaries. These expenses include financial advisory, legal and
accounting fees and expenses, filing fees, and other related charges. We may
also incur additional unanticipated expenses in connection with the transaction.
A portion of the costs related to the proposed sale, such as legal and
accounting fees, will be incurred regardless of whether the transaction is
completed. These expenses may affect our business operations going forward.

If we do complete our transaction with Well Talent
Technology Limited or with another strategic purchaser, we expect that we will
be dependant on the purchaser to obtain our products.

If the transactions contemplated under our share purchase
agreement with Well Talent are completed (or a similar transaction is completed
with another strategic purchaser), we expect that we will be dependant on the
purchaser to supply our products under the distribution agreement contemplated
by the share purchase agreement. Failure by the purchaser to supply products,
for whatever reason, would adversely affect our profit margins and our ability
to deliver our products to our customers. We will have no control over the
purchaser of our factory or the quality of the product. Further, the proposed
distribution agreement will be terminated 12 months after the entry. If the
purchaser does not renew the proposed distribution agreement, we may be unable
to obtain any products for resale.

RISKS RELATED TO OUR COMPANY

Our consolidated financial statements have been prepared
assuming that we will continue as a going concern.

The accompanying consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America (US GAAP), which contemplate the continuation of our
company as a going concern. We had a net loss for the three months ended March
31, 2011 of $472,596 and, on March 31, 2011 we had an accumulated deficit of
$7,749,519 and a working capital deficit of $2,287,474. We anticipate that we
will continue to incur operating expenses that will only partially be offset by
sales revenues. On March 31, 2011, we had cash and cash equivalents of $9,614.
Our average operating expenses is $75,000 per month. We estimate that our
operating expenses over the next twelve months will be approximately $900,000.
We are uncertain these expenses can be offset by our sales revenues.

As we cannot assure a lender that our operation will become
profitable, 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 the money that we need in order to
continue to operate, 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 consolidated financial statements for
the three-month period ended March 31, 2011, which are included in our quarterly
report on Form 10-Q. 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.

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RISKS RELATED TO OUR BUSINESS

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 or a distributor 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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26

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 or, if applicable, Well Talent, 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 used 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 price of the raw materials we use to manufacture our disposable packaging
products increase substantially 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, impose tariffs or adopt other restrictions on foreign
  trade and investment, including currency exchange controls;

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27

- 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 distribute
disposable packaging products that are less harmful to the environment than
disposable packaging products made from plastic, paper or polystyrene. Although
we believe that our disposable packaging products are less harmful to the
environment than disposable packaging products 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 disposable
packaging products 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. 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.

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28

We have a stable customer base; however, loss of, or
material financial weakness of, our largest distributor 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.

We rely on one distributor for approximately 80% of our sales.
The loss of this distributor 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 this one
distributor. If we were to lose this distributor and we did not replace it, 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.

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

Our executive officers and directors, in the aggregate,
beneficially own 25.52% of the issued and outstanding shares of our common
stock. In addition, Begonia Participation Corp. owns 1,900,000 shares of our
common stock, 620,000 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 stockholders and is convertible, at any time at the option of the
holder, into 5 shares of our common stock. Therefore, Begonia Participation
Corp. has approximately 55.64% of the voting power of our shareholders. 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 Begonia Participation Corp. 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.

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29

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 50,000,000 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 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

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30

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Removed and Reserved).

Item 5. Other Information.

None.

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31

Item 6. Exhibits.

|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 (incorporated by reference from our
      Annual Report on Form 10-KSB filed on April 15, 2009)                                                                                                                                                 
|3.9     | Certificate of Designation filed with the Secretary of
      State of Nevada on July 27, 2007 (incorporated by reference from our
      Annual Report on Form 10-KSB filed on April 15, 2009)                                                                                                                                                
|3.10    | Certificate of Change filed with the Secretary of State
      of Nevada on June 6, 2009 (incorporated by reference from our Current
      Report on Form 8-K filed on June 11, 2009)                                                                                                                                                         
|(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)                                                                                                                                     
|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)                                                                                                                               

---

32

|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, 2009
      between our company and Eddie Chou (incorporated by reference from our
      Current Report on Form 8-K filed on March 5, 2009)                                                                                                  
|10.15 | Share Cancellation Agreement dated February 17, 2009
      between our company and Ricky Chiu (incorporated by reference from our
      Current Report on Form 8-K filed on March 5, 2009)                                                                                                  
|10.16 | Share Cancellation Agreement dated February 17, 2009
      between our company and Legend View Holdings Limited (incorporated by
      reference from our Current Report on Form 8-K filed on March 5,
    2009)                                                                            
|10.17 | Land Purchase Settlement Agreement dated April 8, 2009
      (incorporated by reference from our Annual Report on Form 10-KSB filed on
      April 15, 2009)                                                                                                                                
|10.18 | Cancellation Agreement dated March 30, 2009 between Roots
      Biopack Group Limited and Tayna Environmental Technology Co. Limited
      (incorporated by reference from our Current Report on Form 8-K filed on
      April 3, 2009)                                                     
|10.19 | Loan Agreement dated March 30, 2009 between Roots Biopack
      Group Limited and Tayna Environmental Technology Co. Limited (incorporated
      by reference from our Current Report on Form 8-K filed on April 3,
      2009)                                                             
|10.20 | Form of Subscription Agreement between our company and
      LAU Kin Chung (Gerald Lau), CHENG King Hung (King Cheng), CHAN Kam Fai (Edwin Chan) and CHU
      Wei Ling Hilary (Hilary Chu) (incorporated by reference from our Current
  Report on Form 8-K filed on May 30, 2009)         

---

33

|10.21 | Consulting Agreement with San Diego Torrey Hills Capital,
      Inc. (incorporated by reference from our Current Report on Form 8-K filed
      on October 10, 2009)                                                               
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.22 | Loan Amendment Agreement with Tayna Environmental
      Technology Co. Limited (incorporated by reference from our Current Report
      on Form 8-K filed on March 31, 2010)                                                       
|10.23 | Demand Promissory Note with Lainey Advisors Inc. dated
      July 1, 2009 (incorporated by reference from our Current Report on Form
      8-K filed on March 31, 2010)                                                            
|10.24 | Demand Promissory Note with Creative Mind Assets Limited
      dated July 1, 2009 (incorporated by reference from our Current Report on
      Form 8-K filed on March 31, 2010)                                                    
|10.25 | Demand Promissory Note with Lainey Advisors Inc. dated
      July 20, 2009 (incorporated by reference from our Current Report on Form
      8-K filed on March 31, 2010)                                                           
|10.26 | Demand Promissory Note with Kuo-Hsien Chen dated
      September 15, 2009 (incorporated by reference from our Current Report on
      Form 8-K filed on March 31, 2010)                                                            
|10.27 | Demand Promissory Note with Creative Mind Assets Limited
      dated December 31, 2009 (incorporated by reference from our Current Report
      on Form 8-K filed on March 31, 2010)                                               
|10.28 | Demand Promissory Note with Kuo-Hsien Chen dated December
      31, 2009 (incorporated by reference from our Current Report on Form 8-K
      filed on March 31, 2010)                                                             
|10.29 | Subscription Agreement with Manzanis Business Inc. dated
      April 8, 2010 (incorporated by reference from our Current Report on Form
      8-K filed on April 9, 2010)                                                          
|10.30 | Subscription Agreement with K.A. Erdmann dated May 15,
      2010 (incorporated by reference from our Current Report on Form 8-K filed
      on May 20, 2010)                                                                      
|10.31 | Subscription Agreement with Scharfe Holdings Inc. dated
      May 15, 2010 (incorporated by reference from our Current Report on Form
      8-K filed on May 20, 2010)                                                             
|10.32 | Consulting Agreement with San Diego Torrey Hills Capital,
      Inc. (incorporated by reference from our Current Report on Form 8-K filed
      on June 12, 2010)                                                                  
|10.33 | Subscription Agreement with Keiand Capital Corp.
      (incorporated by reference from our Quarterly Report on Form 10-Q filed on
      August 14, 2010)                                                                           
|10.34 | Promissory Note dated September 1, 2010 with Creative
      Mind Assets Ltd. (incorporated by reference from our Current Report on
      Form 8-K filed on September 2, 2010)                                                      
|10.35 | Share Purchase Agreement dated July 9, 2010 between
      Biopack Environmental Limited and Well Talent Technology Limited
      (incorporated by reference from our Quarterly Report on Form 10-Q filed on
      August 12, 2010) 
|10.36 | Loan Agreement dated April 22, 2010 between Biopack
      Environmental Limited, Well Talent Technology Limited, Gerald Lau
      (incorporated by reference from our Quarterly Report on Form 10-Q filed on
      August 12, 2010)
|10.37 | Loan Agreement dated June 3, 2010 between Biopack
      Environmental Limited, Well Talent Technology Limited, Gerald Lau
      (incorporated by reference from our Quarterly Report on Form 10-Q filed on
      August 12, 2010)  

---

34

|(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)                                                                                                                                       
|(21)  | Subsidiaries of the Small Business
      Issuer 
      Roots Biopark Limited 
      Roots Biopack (Intellectual Property) Limited 
      Jiangmen Roots Biopack Ltd. 
      Starmetro Group Limited 
      Biopack Environmental Limited (f/k/a E-ware Corporation Limited)
|(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 Sean Webster                                                                                                                                                                                           
|(32)  | Section 1350 Certifications                                                                                                                                                                                                                                                
|32.1* | Section 906 Certification
      under Sarbanes-Oxley Act of 2002                                                                                                                                                                                                           

*Filed herewith.

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35

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

BIOPACK ENVIRONMENTAL SOLUTIONS INC.

|By:                                                                  | /s/ Gerald Lau   | 
|-------------------------------------------------------------------- | ---------------- | 
|Gerald Lau                                                           |                 
|President, Chief
      Executive Officer and Director                |                 
|(Principal Executive
      Officer)                                  |                 
|Date: May 19, 2011                                                   |                 
|                                                                     |                  | 
|By:                                                                  | /s/ Sean Webster | 
|Sean Webster                                                         |                 
|Chief Financial
      Officer,                                       |                 
|Secretary, Treasurer
      and Director                              |                 
|(Principal Financial
      Officer and Principal Accounting Officer) |                 
|Date: May 19, 2011                                                   |                 

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