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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 September 30, 2009

[    
]     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 905, 9/F, Two Chinachem Exchange Square, 338 Kings
Road, North Point, 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 [    
]

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.
(Check one):

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2

|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:

28,552,992 common shares issued and outstanding as of
November 13, 2009

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3

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

---

4

Biopack Environmental Solutions Inc.

Unaudited

Consolidated Financial Statements

For the Nine Months Ended September 30, 2009 and 2008

(Stated in US Dollars)

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5

Biopack Environmental Solutions Inc.

CONSOLIDATED FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|Consolidated Balance Sheets                                                   
|------------------------------------------------------------------------------
|Consolidated Statements of Operations                                         
|Consolidated Statements of Cash Flows                                         
|Consolidated Statements of Stockholders Equity and
      Comprehensive Income
|Notes to Consolidated Financial Statements                                    

---

|6                                                          
|-----------------------------------------------------------
|                                                           
|                                                           
|Biopack Environmental Solutions Inc. and
      Subsidiaries
|Consolidated Balance Sheets                                

|                                                                      |   | Unaudited          |   |   | Unaudited          |   |   | Audited           |  
|--------------------------------------------------------------------- | - | ------------------ | - | - | ------------------ | - | - | ----------------- | -
|                                                                      |   | September 30, 2009 |   |   | September 30, 2008 |   |   | December 31, 2008 |  
|Assets                                                                |   |                    |   |   |                    |   |   |                   |  
|Current assets                                                        |   |                    |   |   |                    |   |   |                   |  
|Cash and Cash equivalents                                             | $ | 12,228             |   | $ | 4,729              |   | $ | 128,039           |  
|Accounts receivables                                                  |   | 101,490            |   |   | 99,796             |   |   | 69,777            |  
|Prepaid expenses and other
      receivable                           |   | 187,103            |   |   | 34,270             |   |   | 334,995           |  
|Deposits                                                              |   | 53,659             |   |   | 55,345             |   |   | 56,056            |  
|Inventory                                                             |   | 68,110             |   |   | 226,734            |   |   | 376,773           |  
|Total current
      assets                                            |   | 422,590            |   |   | 420,874            |   |   | 965,640           |  
|                                                                      |   |                    |   |   |                    |   |   |                   |  
|Property and equipment                                                |   | 2,146,370          |   |   | 492,887            |   |   | 2,091,229         |  
|Construction in progress                                              |   | 111,675            |   |   | 1,984,231          |   |   | 174,426           |  
|Total assets                                                          |   | 2,680,635          |   |   | 2,897,992          |   |   | 3,231,295         |  
|                                                                      |   |                    |   |   |                    |   |   |                   |  
|Liabilities and stockholders' equity                                  |   |                    |   |   |                    |   |   |                   |  
|Current liabilities                                                   |   |                    |   |   |                    |   |   |                   |  
|Accounts payable and accrued expenses                                 |   | 2,631,521          |   |   | 856,074            |   |   | 1,394,230         |  
|Due to Shareholders &
      Directors                                 |   | 73,697             |   |   | 678,622            |   |   | 685,341           |  
|Short Term Debt                                                       |   | 1,102,782          |   |   | 563,400            |   |   | 1,008,786         |  
|Taxes Payable                                                         |   | -                  |   |   | 239,651            |   |   | 237,047           |  
|Total current
      liabilities                                       |   | 3,808,000          |   |   | 2,337,747          |   |   | 3,325,404         |  
|                                                                      |   |                    |   |   |                    |   |   |                   |  
|Long Term Liabilities                                                 |   |                    |   |   |                    |   |   |                   |  
|Long term debt                                                        |   | 1,775,103          |   |   | 810,796            |   |   | 1,886,103         |  
|Due to related parties                                                |   | 250,000            |   |   | 1,452,708          |   |   | 50,000            |  
|Total
      long term liabilities                                     |   | 2,025,103          |   |   | 2,263,504          |   |   | 1,936,103         |  
|                                                                      |   |                    |   |   |                    |   |   |                   |  
|Stockholders' equity                                                  |   |                    |   |   |                    |   |   |                   |  
|Preferred stock, $.001 par value,
      10,000,000 shares authorized; |   |                    |   |   |                    |   |  
|1,620,000 shares issued and outstanding                               |   | 1,620              |   |   | 1,620              |   |   | 1,620             |  
|Common stock; $.0001 par value;
      50,000,000 shares authorized;   |   |                    |   |   |                    |   |  
|25,050,300 shares issued and outstanding                              |   | 2,853              |   |   | 2,714              |   |   | 2,483             |  
|Additional paid-in capital                                            |   | 3,770,857          |   |   | 3,297,386          |   |   | 3,557,227         |  
|Stock issued at less than par
      value                             |   | (2,683             | ) |   | (2,683             | ) |   | (2,683            | )
|Accumulated other comprehensive income                                |   | (29,526            | ) |   | 136,292            |   |   | 170,621           |  
|Retained Earnings                                                     |   | (6,895,589         | ) |   | (5,138,588         | ) |   | (5,759,480        | )
|                                                                      |   |                    |   |   |                    |   |   |                   |  
|Total
      stockholders' equity                                      |   | (3,152,468         | ) |   | (1,703,259         | ) |   | (2,030,212        | )
|                                                                      |   |                    |   |   |                    |   |   |                   |  
|Total
      liabilities and stockholders' equity                      | $ | 2,680,635          |   | $ | 2,897,992          |   | $ | 3,231,295         |  

---

|7                                                          
|-----------------------------------------------------------
|                                                           
|                                                           
|Biopack Environmental Solutions Inc. and
      Subsidiaries
|Consolidated Statement of Operations                       
|September 30, 2009 and 2008                                

|                               |   | Unaudited          |   |   | Unaudited         |  
|------------------------------ | - | ------------------ | - | - | ----------------- | -
|                               |   | Three months ended |   |   | Nine months ended |  
|                               |   | September 30,      |   |   | September 30,     |  
|                               |   | 2009               |   |   | 2008              |  
|                               |   |                    |   |   |                   |  
|Revenues                       | $ | 204,965            |   | $ | 526,830           |  
|Cost of Sales                  |   | 230,098            |   |   | 461,564           |  
|Gross profit
      (Loss)      |   | (25,133            | ) |   | 65,266            |  
|                               |   |                    |   |   |                   |  
|General and administrative     |   | 192,851            |   |   | 186,151           |  
|Depreciation and amortization  |   | 31,254             |   |   | 20,140            |  
|Total operating
      expenses |   | 224,105            |   |   | 206,291           |  
|Income from operations         |   | (249,238           | ) |   | (141,025          | )
|                               |   |                    |   |   |                   |  
|Other Income (expense)         |   |                    |   |   |                   |  
|Other income                   |   |                    |   |   | 32                |  
|Interest income (expense)      |   | (82,418            | ) |   | (9,725            | )
|Income before income taxes     |   | (331,656           | ) |   | (150,718          | )
|                               |   |                    |   |   |                   |  
|Income tax                     |   | -                  |   |   | -                 |  
|                               |   |                    |   |   |                   |  
|Net income                     | $ | (331,656           | ) | $ | (150,718          | )
|                               |   |                    |   |   |                   |  
|Earnings per share             | $ | (0                 | ) | $ | (0                | )
|Weighted average common        |   |                    |   |   |                   |  
|shares outstanding             |   | 27,471,106         |   |   | 19,208,624        |  
|                               |   |                    |   |   |                   |  
|Diluted Earnings per share     |   | (0                 | ) |   | (0                | )
|Diluted Weighted average       |   |                    |   |   |                   |  
|common shares outstanding      |   | 27,471,106         |   |   | 19,208,624        |  

---

|8                                                          
|-----------------------------------------------------------
|                                                           
|                                                           
|Biopack Environmental Solutions Inc. and
      Subsidiaries
|Statements of Cash flow                                    

|                                                            |   | Three months ended |   |   | Nine months ended |  
|----------------------------------------------------------- | - | ------------------ | - | - | ----------------- | -
|                                                            |   | Sept 30,           |   |   | Sept 30,          |  
|                                                            |   | 2009               |   |   | 2008              |  
|Cash flows from operating activities                        |   |                    |   |   |                   |  
|Net income                                                  | $ | (331,656           | ) | $ | (150,718          | )
|Adjustments to reconcile net loss
      to net cash used in |   |                    |   |   |                   |  
|operating activities:                                       |   |                    |   |   |                   |  
|Depreciation and amortization                               |   | 31,254             |   |   | 20,140            |  
|Write down in value of
      assets                         |   | -                  |   |   | -                 |  
|Interest
      expenses accrual                             |   | (56,581            | ) |   | 9,725             |  
|Other comprehensive
      income (loss)                     |   | (205,014           | ) |   | (43,001           | )
|Changes in assets and liabilities:                          |   | -                  |   |   | -                 |  
|Accounts receivable and
      other receivable              |   | 52,108             |   |   | (98,384           | )
|Prepaid
      expenses                                      |   | 130,173            |   |   | (16,159           | )
|Advances to related
      parties                           |   | (366,116           | ) |   | -                 |  
|Inventories                                                 |   | 63,843             |   |   | (121,074          | )
|Deposits                                                    |   | 338                |   |   | (97               | )
|Accounts
      payable and accruals                         |   | 1,002,860          |   |   | 180,684           |  
|Taxes Payable                                               |   | (237,032           | ) |   | 1,197             |  
|Net cash used in operating activities                       |   | 84,177             |   |   | (217,688          | )
|Cash flow from investing activities                         |   |                    |   |   |                   |  
|Purchase
      of property and equipment                    |   | (59,169            | ) |   | 216,254           |  
|Construction in progress                                    |   | (14,759            | ) |   | (351,517          | )
|Net cash used in investing activities                       |   | (73,928            | ) |   | (135,263          | )
|Cash flow from financing activities                         |   |                    |   |   |                   |  
|Proceeds
      from notes payable                           |   | 50,000             |   |   | 318,400           |  
|Amounts due to related
      parties                        |   | -                  |   |   | (8,588            | )
|Proceeds
      from issuance of debentures                  |   | 16,000             |   |   | (481,493          | )
|Additional Paid Up
      Capital                            |   | -                  |   |   | (9,887            | )
|Common
      stock $.0001 par value                         |   | 370                |   |   | 1,038             |  
|Non-cash financing activities                               |   |                    |   |   |                   |  
|Common
      stock issued to retire debentures              |   | (71,370            | ) |   | 500,000           |  
|Net cash provided by financing activities                   |   | (5,000             | ) |   | 319,470           |  
|Net change in cash                                          |   | 5,249              |   |   | (33,479           | )
|                                                            |   |                    |   |   |                   |  
|Cash, beginning                                             |   | 6,979              |   |   | 38,2080           |  
|Cash, ending                                                | $ | 12,228             |   | $ | 4,729             |  

---

|9                                                          
|-----------------------------------------------------------
|                                                           
|                                                           
|Biopack Environmental Solutions Inc. and
      Subsidiaries
|Consolidated Statements of Shareholders' Equity            

|                                                       |                 |  |              |        |  |              |  |   |          |  |   |             |  |   | Stock Issued  |  |   |               |  |   | Accumulated |  |   |            | 
|------------------------------------------------------ | --------------- |  | ------------ | ------ |  | ------------ |  | - | -------- |  | - | ----------- |  | - | ------------- |  | - | ------------- |  | - | ----------- |  | - | ---------- | 
|                                                       |                 |  |              |        |  |              |  |   |          |  |   | Additional  |  |   | at Less       |  |   | Retained      |  |   | Other       |  |   | Total      | 
|                                                       | Preferred Stock |  | Common Stock |        |  | Paid-in      |  |   | Than Par |  |   | Earnings    |  |   | Comprehensive |  |   | Shareholders' | 
|                                                       | Shares          |  |              | Amount |  | Shares       |  |   | Amount   |  |   | Capital     |  |   | Value         |  |   | (Deficit)     |  |   | Income      |  |   | Equity     | 
|                                                       |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|Balance at December 31, 2005                           | 1,000,000       |  |              | 1,000  |  | 202,869,709  |  |   | 20,287   |  |   | 9,173,440   |  |   | -2,683        |  |   | -9,837,473    |  |   |             |  |   | -645,429   | 
|Common stock issued to repay debt                      |                 |  |              |        |  | 34,100,000   |  |   | 3,410    |  |   | 491,029     |  |   |               |  |   |               |  |   |             |  |   | 494,439    | 
|Common stock sold for cash                             | --              |  |              | --     |  | 260,000,000  |  |   | 26,000   |  |   | 194,000     |  |   | --            |  |   | --            |  |   |             |  |   | 220,000    | 
|Common stock issued to                                 |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|acquire StarMetro Group                                | --              |  |              | --     |  | 60,000,000   |  |   | 6,000    |  |   | -234,713    |  |   | --            |  |   | --            |  |   |             |  |   | -228,713   | 
|Private placement                                      | --              |  |              | --     |  | 800,000      |  |   | 80       |  |   | 384,812     |  |   | --            |  |   | --            |  |   |             |  |   | 384,892    | 
|Common stock issued for                                |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|services                                               | --              |  |              | --     |  | 30,500,000   |  |   | 3,050    |  |   | 236,950     |  |   | --            |  |   | --            |  |   |             |  |   | 240,000    | 
|Cancellation of GTI shares                             | --              |  |              | --     |  | -12,000,000  |  |   | -1,200   |  |   | 1,200       |  |   | --            |  |   | --            |  |   |             |  |   | --         | 
|Reverse split 4,000 to 1                               | --              |  |              | --     |  | -493,743,513 |  |   | -49,374  |  |   | 49,374      |  |   | --            |  |   | --            |  |   |             |  |   | --         | 
|Accumulated translation                                |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|adjustment                                             | --              |  |              | --     |  | --           |  |   | --       |  |   | --          |  |   | --            |  |   | --            |  |   | 6,599       |  |   | 6,599      | 
|Net loss for the year ended                            |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|December 31, 2006                                      | --              |  |              | --     |  | --           |  |   | --       |  |   | --          |  |   | --            |  |   | -1,149,781    |  |   | --          |  |   | -1,149,781 | 
|Restructuring for Reverse Merger                       | -1,000,000      |  |              | -1,000 |  | 25,473,804   |  |   | 2,547    |  |   | -10,296,092 |  |   |               |  |   | 12,106,679    |  |   | -7,386      |  |   | 1,804,748  | 
|Balance at December 31, 2006                           | --              |  | $            | --     |  | 108,000,000  |  | $ | 10,800   |  | $ | --          |  | $ | -2,683        |  | $ | 1,119,425     |  | $ | -787        |  | $ | 1,126,755  | 
|Recapitalization as result of                          |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|reverse merger Mar 27, 2007                            | --              |  |              | --     |  | 64,526,196   |  |   | 6,453    |  |   | -800,824    |  |   |               |  |   |               |  |   | 6,599       |  |   | -787,772   | 
|Stock issued to convert debt Mar 27, 2007              | --              |  |              | --     |  | 1,293,225    |  |   | 129      |  |   | 1,034,451   |  |   |               |  |   |               |  |   |             |  |   | 1,034,580  | 
|Preferred share issued for repay debt                  |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|owned by a subsidiiary on Aug 17, 2007                 | 2,000,000       |  |              | 2,000  |  |              |  |   |          |  |   | 1,232,795   |  |   |               |  |   |               |  |   |             |  |   | 1,234,795  | 
|Translation adjustment                                 |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   | 130,261     |  |   | 130,261    | 
|Net income for the year                                |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|ended Dec 31, 2007                                     |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   | -5,011,575    |  |   |             |  |   | -5,011,575 | 
|Balance at Dec 31, 2007                                | 2,000,000       |  | $            | 2,000  |  | 173,819,421  |  | $ | 17,382   |  | $ | 1,466,422   |  | $ | -2,683        |  | $ | -3,892,150    |  | $ | 136,073     |  | $ | -2,272,956 | 
|Share cancellation Feb 17, 2008                        |                 |  |              |        |  | -11,000,000  |  |   | -1,100   |  |   | 866         |  |   |               |  |   |               |  |   |             |  |   | -234       | 
|Convertion of Debt to Common Share May 14,
      2008  |                 |  |              |        |  | 4,758,212    |  |   | 476      |  |   | 665,664     |  |   |               |  |   |               |  |   |             |  |   | 666,140    | 
|Reverse split 10 to 1 June 11, 2008                    |                 |  |              |        |  | -150,819,870 |  |   | -15,082  |  |   | 15,082      |  |   |               |  |   |               |  |   |             |  |   | -0         | 
|Convertion of Preferred A share                        | -380,000        |  |              | -380   |  | 1,900,000    |  |   | 190      |  |   | -190        |  |   |               |  |   |               |  |   |             |  |   | -380       | 
|to Common Share Jul 14, 2008                           |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|Convertion of Debt to Common Share Sep 5,
      2008   |                 |  |              |        |  | 1,492,537    |  |   | 149      |  |   | 99,851      |  |   |               |  |   |               |  |   |             |  |   | 100,000    | 
|Convertion of Debt to Common Share Sep 19, 2008        |                 |  |              |        |  | 1,800,000    |  |   | 180      |  |   | 119,820     |  |   |               |  |   |               |  |   |             |  |   | 120,000    | 
|Convertion of Debt to Common Share Oct 15,
      2008  |                 |  |              |        |  | 2,750,000    |  |   | 275      |  |   | 399,725     |  |   |               |  |   |               |  |   |             |  |   | 400,000    | 
|Common stock issued in exchange of                     |                 |  |              |        |  | 125,000      |  |   | 13       |  |   | -13         |  |   |               |  |   |               |  |   |             |  |   | 0          | 
|consulting services Dec 1, 2008                        |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|Net income for year ended Dec 31, 2008                 |                 |  |              |        |  |              |  |   |          |  |   | 790,000     |  |   |               |  |   | -1,867,330    |  |   | 34,548      |  |   | -1,042,782 | 
|Balance at Dec 31, 2008                                | 1,620,000       |  | $            | 1,620  |  | 24,825,300   |  | $ | 2,483    |  | $ | 3,557,227   |  | $ | -2,683        |  | $ | -5,759,480    |  | $ | 170,621     |  | $ | -2,030,212 | 
|                                                       |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|Net income for three months ended March 31,
      2009 |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   | -239,187      |  |   |             |  |   | -239,187   | 
|Accumulated Translation adjustment                     |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   | -22,184     |  |   | -22,184    | 
|Balance at Mar 31, 2009                                | 1,620,000       |  | $            | 1,620  |  | 24,825,300   |  | $ | 2,483    |  | $ | 3,557,227   |  | $ | -2,683        |  | $ | -5,998,667    |  | $ | 148,437     |  | $ | -2,291,583 | 
|                                                       |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|Common stock issued in exchange of                     |                 |  |              |        |  | 225,000      |  |   | 23       |  |   | -23         |  |   |               |  |   |               |  |   |             |  |   | 0          | 
|consulting services 8th June, 2009                     |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|Intrinsic Value of Convertible Debenture               |                 |  |              |        |  |              |  |   |          |  |   | 158,000     |  |   |               |  |   | -158,000      |  |   |             |  |   | 0          | 
|Net income for three months ended June 30, 2009        |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   | -407,266      |  |   |             |  |   | -407,266   | 
|Accumulated Translation adjustment                     |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   | 27,051      |  |   | 27,051     | 
|Balance at June 30, 2009                               | 1,620,000       |  | $            | 1,620  |  | 25,050,300   |  | $ | 2,506    |  | $ | 3,715,204   |  | $ | -2,683        |  | $ | -6,563,933    |  | $ | 175,488     |  | $ | -2,671,798 | 
|                                                       |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|Convertion of Debt to Common Share                     |                 |  |              |        |  | 3,499,439    |  |   | 347      |  |   | -347        |  |   |               |  |   |               |  |   |             |  |   | 0          | 
|Intrinsic Value of Convertible Debenture               |                 |  |              |        |  |              |  |   |          |  |   | 56,000      |  |   |               |  |   |               |  |   |             |  |   | 56,000     | 
|Intrinsic Value of Convertible Debenture               |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   | 0          | 
|Net income for three months ended Sept 30,
      2009  |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   | -331,656      |  |   |             |  |   | -331,656   | 
|Accumulated Translation adjustment                     |                 |  |              |        |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   | -205,014    |  |   | -205,014   | 
|Balance at Sept 30, 2009                               | 1,620,000       |  | $            | 1,620  |  | 28,549,739   |  | $ | 2,853    |  | $ | 3,770,857   |  | $ | -2,683        |  | $ | -6,895,589    |  | $ | -29,526     |  | $ | -3,152,468 | 

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|10                                                         
|-----------------------------------------------------------
|                                                           
|                                                           
|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 September 30, 2009, the Company had cash and cash equivalents
of $12,228.

(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.

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11

(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
    5 to 10Motor Vehicles
    5Computer equipment
    5Plant and Machinery
    10


(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 September 30,
2009.

(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 recognize 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 Companyss results of operations or financial condition for the
nine-month period ended September 30, 2009. As of the date of the adoption of
ASC 740, the Company has no material unrecognized tax benefit which would
favorably affect the effective income tax rate in future periods. The Company
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.

(j) Foreign Currency Transactions

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12

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.

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

---

13

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.

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

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

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

In December 2004, the FASB issued SFAS No.123 (revised 2004),
"Share-Based Payment" ("SFAS 123(R)"). SFAS 123(R) will provide investors and
other users of financial statements with more complete and neutral financial
information by requiring that the compensation cost relating to share-based
payment transactions be recognized in

---

14

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

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

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

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

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

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

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

---

15

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

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

The Company believes that this statement will not have a
significant impact on its financial statements.

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

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

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

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

(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

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16

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 January 1, 2009, 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.

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.



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17

3. Property, Plant and Equipment, net

|Cost                           |   | 30.9.2009 |   |  | 31.12.2008 |  
|------------------------------ | - | --------- | - |  | ---------- | -
|Leasehold improvements         | $ | 283,531   |   |  | 283,531    |  
|Motor Vehicles                 |   | 78,010    |   |  | 78,010     |  
|Office furniture and equipment |   | 74,283    |   |  | 74,283     |  
|Computer equipment             |   | 13,028    |   |  | 13,028     |  
|Plant and Machinery            |   | 1,859,932 |   |  | 1,762,498  |  
|Construction in progress       |   | 111,675   |   |  | 174,426    |  
|                               |   | 2,420,459 |   |  | 2,385,776  |  
|Accumulated depreciation       |   | (162,414  | ) |  | (120,121   | )
|                               | $ | 2,258,045 |   |  | 2,265,655  |  

Depreciation expense for the nine-month period ended September
30, 2009 was $42,293.

(b) Construction in progress

|                                   |   | 30.9.2009 |   |  | 31.12.2008 |  
|---------------------------------- | - | --------- | - |  | ---------- | -
|Opening as at 1 January            | $ | 174,426   |   |  | 1,295,188  |  
|                                   |   |           |   |  |            |  
|Additions                          |   | 15,076    |   |  | 777,850    |  
|                                   |   |           |   |  |            |  
|Transfer to plant and Machinery    |   | (77,827   | ) |  | (1,675,626 | )
|                                   |   |           |   |  |            |  
|Transfer to lease hold improvement |   |           |   |  | (222,986   | )
|                                   |   |           |   |  |            |  
|                                   |   | 111,675   |   |  | 174,426    |  

Construction in progress represents the expenditure incurred in
the development project of a manufacturing plant by a subsidiary in Jiangmen,
PRC. As of September 30, 2009, the Company had a balance of $111,675 on the
construction. These costs are included on the balance sheet as property, plant
and equipment costs. No depreciation will be provided until the plant is
completed and operating. No interest has been capitalized in construction in
progress for the year.

The Company believes that the carrying amount of construction
in progress is approximate to its fair value.

4. Inventories

The Companys inventory consists of raw materials held for
production. As of September 30, 2009, the Companys subsidiary in Jiangmen, PRC
held inventory of $68,110.

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18

5. Accounts receivable

Accounts receivable consists of receivables on trade as
follows:

|Ageing of trade and other receivables |   | 30.9.2009 |  |  | 31.12.2008 | 
|------------------------------------- | - | --------- |  |  | ---------- | 
|0  30 days                           | $ | 101,490   |  |  | 69,777     | 
|31  60 days                          |   | -         |  |  | -          | 
|                                      | $ | 101,490   |  |  | 69,777     | 

As of September 30, 2009, the Companys subsidiaries had
receivables totaling $101,490. The Company believes that there is no issue of
recoverability and the balances receivable are indicative of fair value.

6. Prepaid expenses and other receivables

|                           |   | 30.9.2009 |  |  | 31.12.2008 | 
|-------------------------- | - | --------- |  |  | ---------- | 
|Prepaid expenses           | $ | 163,540   |  |  | 169,359    | 
|Other receivables          |   | 23,563    |  |  | 165,636    | 
|                           | $ | 187,103   |  |  | 334,995    | 
|                           |   |           |  |  |            | 
|Rental and utility deposit |   | 53,659    |  |  | 56,056     | 

7. Accounts payable and accrued expenses

|                                   |   | 30.9.2009 |  |  | 31.12.2008 | 
|---------------------------------- | - | --------- |  |  | ---------- | 
|Accrued expense and other payables | $ | 2,277,522 |  |  | 1,112,709  | 
|Customers deposits received        |   | 126,307   |  |  | 126,315    | 
|Accounts payables                  |   | 227,692   |  |  | 155,206    | 
|                                   | $ | 2,631,521 |  |  | 1,394,230  | 

8. Due to Shareholders & Directors

|                           |   | 30.9.2009 |  |  | 31.12.2008 | 
|-------------------------- | - | --------- |  |  | ---------- | 
|Amount due to Shareholders | $ | -         |  |  | 625,589    | 
|Amount due to Directors    |   | 73,697    |  |  | 59,752     | 
|                           |   | 73,697    |  |  | 685,341    | 

Directors of the Company have advanced $73,697 in the form of
unsecured, non-interest bearing advances with no due date.

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19

9. Loans payable

|Tayna Environmental Technology Co Limited             | $ | 1,146,103 | 
|----------------------------------------------------- | - | --------- | 
|Convertible debenture issued to non related party     |   | 629,000   | 
|Convertible debenture issued to related
      parties |   | 250,000   | 
|                                                      |   | 2,025,103 | 
|                                                      |   |           | 
|Short Term Loan                                       | $ | 1,102,782 | 

Long Term Loan

No movement of long term loan was incurred for the nine-month
period ended September 30, 2009.

Convertible Debts

Additional convertible debts for a total amount of $174,000
were issued during the nine-month period ended September 30, 2009.

|The following
      summarizes the convertible debentures as 30/09/2009 |  |         |  |  |         |  |  |         | 
|----------------------------------------------------------------------- |  | ------- |  |  | ------- |  |  | ------- | 
|                                                                        |  | 2009    |  |  | 2008    |  |  | 2007    | 
|Opening balance of convertible debentures                               |  | 790,000 |  |  | 600,000 |  |  |         | 
|Convertible debentures issued during the year                           |  | 174,000 |  |  | 810,000 |  |  | 600,000 | 
|Less: debentures converted to common
      shares                       |  | 85,000  |  |  | 620,000 |  |  |         | 
|debentures not
      converted                                          |  | 879,000 |  |  | 790,000 |  |  | 600,000 | 

The embedded beneficial conversion feature present in the
convertible debentures are 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 number of shares. The
intrinsic value cannot exceed the proceeds.

Short Term Loan

No movement of short term loan was incurred for the nine-month
period ended September 30, 2009 except for the accrued interest on the loan.

---

20

10. 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 incurred a net loss for the nine-month
period ended September 30, 2009 of $1,136,109 and, on September 30, 2009 it had
an accumulated deficit of $6,895,589 and a working capital deficit of
$3,385,410. 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.

11. 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.

12. Commitments and Contingencies

(a) Operating Lease Arrangements

Minimum lease payments recognized as an expense under operating
leases in respect of the premises and land use right in PRC in PRC during the
nine-month period ended September 30 2009:

|         |   | 30.9.2009 |  |  | 31.12.2008 | 
|-------- | - | --------- |  |  | ---------- | 
|Premises | $ | 131,957   |  |  | 155,565    | 

At September 30, 2009, the Company had outstanding commitments
for future minimum lease payments under non-cancelable operating leases in
respect of premises and land use rights in PRC, which fall due as follows:

|                                        |   | 30.9.2009 |  |  | 31.12.2008 | 
|--------------------------------------- | - | --------- |  |  | ---------- | 
|Within one year                         | $ | 200,352   |  |  | 200,352    | 
|In the second to fifth years, inclusive |   | 748,399   |  |  | 748,399    | 
|After five years                        |   | 1,506,241 |  |  | 1,665,482  | 
|                                        | $ | 2,454,992 |  |  | 2,614,233  | 

Operating leases relate to the Companys manufacturing premises
in PRC with a lease term of 15 years from 1 March 2007, with an option to extend
the term. The Company does not have an option to purchase the leased asset at
the expiry of the lease period.

(b) Capital Commitments

|                                    |   | 2009    |  |  | 2008    | 
|----------------------------------- | - | ------- |  |  | ------- | 
|Contracted for but not provided for |   |         |  |  |         | 
|Construction projects in PRC        | $ | 200,209 |  |  | 200,509 | 

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21

13. Related Party Transactions

Amount due to related parties

|                                 |  | 30.9.2009 | 
|-------------------------------- |  | --------- | 
|LAU Kin Chung, Gerald  Director |  | 8,393     | 
|Sean Webster  Director          |  | 13,855    | 
|MA, Cheng Ji - Director          |  | 51,449    | 
|                                 |  | 73,697    | 

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

Related Party Transactions

|                      | Nature of             |  | Connected           |  | 30.9.2009 |  | 2008   | 
|--------------------- | --------------------- |  | ------------------- |  | --------- |  | ------ | 
|Name of the company   | transaction           |  | party (ies)         |  | $         |  | $      | 
|                      |                       |  |                     |  |           |  |        | 
|                      |                       |  |                     |  |           |  |        | 
|Grand Power           | Express Office rental |  | Mr. Ricky Chiu Tong |  | -         |  | 48,779 | 
|International Limited |                       |  |                     |  |           |  |        | 
|InterPacific Capital  | Consultant fee        |  | Spouse of           |  | -         |  | 12,850 | 
|Limited               |                       |  | Mr. Ricky           |  |           |  |        | 
|                      |                       |  | Chiu Tong           |  |           |  |        | 
|                      |                       |  |                     |  | -         |  | 61,629 | 

14. 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 U.S. tax has been made for any of the period
presented as the Company does not have any assessable profits during the
period.

No deferred tax is recognized in the consolidated balance
sheets as of 30 September, 2009.

15. Share Capital

On July 28, 2009, the Company issued 1,124,438 shares of its
common stock to the holder of a convertible debenture dated March 3, 2008
pursuant to the conversion of a portion of the principal balance of that
convertible debenture.

On July 28, 2009, the Company issued 1,125,001 shares of its
common stock to the holder of a convertible debenture dated December 29, 2008
pursuant to the conversion of a portion of the principal balance of that
convertible debenture.

On July 29, 2009, the Company issued 1,250,000 shares of its
common stock to the holder of a convertible debenture dated December 27, 2007
pursuant to the conversion of a portion of the principal balance of that
convertible debenture.

16. Subsequent Events

There are no subsequent events.

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22

17. Legal proceedings

The Company is involved in various unresolved legal actions,
administrative proceedings and claims in the ordinary course of business.
Although it is not possible to predict with certainty the outcome of these
unresolved actions, the Company believes these unresolved legal actions will not
have a material effect on its financial position or results of operation.

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23

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

Our financial statements are stated in United States dollars
and are prepared in conformity with generally accepted accounting principles in
the United States of America for interim financial statements. The following
discussion should be read in conjunction with our financial statements and the
related notes that appear elsewhere in this quarterly report.

As used in this quarterly report and unless otherwise
indicated, the terms we, us and our refer to Biopack Environmental
Solutions Inc. and our subsidiaries, unless otherwise indicated. Unless
otherwise specified, all dollar amounts are expressed in United States dollars
and all references to common shares refer to shares of our common stock.

Note Regarding Forward-Looking Statements

This quarterly report on Form 10-Q includes forward-looking
statements. Forward-looking statements are statements that relate to future
events or our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as may, should, expects,
plans, anticipates, believes, estimates, predicts, potential or
continue or the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including the risks in the section of this
quarterly report entitled Risk Factors beginning at page 38 below, any of
which may cause our or our industrys actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by these
forward-looking statements. While these forward-looking statements, and any
assumptions upon which they are based, are made in good faith and reflect our
current judgment regarding the direction of our business, actual results will
almost always vary, sometimes materially, from any estimates, predictions,
projections, assumptions or other future performance suggested herein.

We caution the reader that important factors in some cases have
affected and, in the future, could materially affect our actual results and
could cause our actual results in the future to differ materially from the
results expressed in any estimates, projections or other forward-looking
statements contained in this interim report on Form 10-Q. Except as may
otherwise be required by applicable law, including the securities laws of the
United States, we do not intend to update any of the forward-looking statements
to conform them to actual results.

Our Business

We develop, manufacture, distribute and market bio-degradable
food containers and disposable industrial packaging for consumer products. We
currently manufacture most of our products in our own factory, called Biopark
and located in Jiangmen City, in the Peoples Republic of China. We are in the
process of increasing the production capacity of our Biopark factory.

We installed two additional machines in our factory during the
second quarter of 2009. We plan to add eight more production machines by the end
of 2009 to the existing 16 machines currently installed. Our plan contemplates
that six of these new machines will be fully automated and two will be
semi-automated. When the new machines have been installed, we would have a total
of 24 production machines. We plan to set up four production lines of five fully
automated machines each, with the four semi-automated machines operating
separately. We have found that the semi-automated machines provide greater
flexibility when using different mixes of product moulds.

To accommodate the additional production capacity that these
new machines will add to our factory, we also intend to add two additional
mixing and pulping pools.

We estimate the cost of these improvements, including the new
machines and the additional mixing and pulping pools, to be approximately
$1,000,000 over the next three months. In addition, we believe that once all of
the new machines are installed and in operation, we will need to add additional
trimming machines but we cannot estimate the number needed until our expansion
is complete. In the short term, we plan to handle any additional trimming needs
by adding extra work shifts.

Over the next 12 months, we plan to increase sales of our
existing products and add new products, including additional industrial
packaging products and complementary products. Now that we have stabilized our
production

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24

capabilities at our Biopark facility, we believe that the pace
of our expansion will begin to increase. Our plan is to focus on increasing
European orders and expansion into the North American market.

We continue to see a difference in the environmental packaging
market. Although the European market has shown a preference for environmentally
sensitive products for some time now, we believe that the current U.S.
administrations focus on green technology for both economic and environmental
reasons is already influencing a shift away from more traditional packaging
products such as those made from Styrofoam, which has actually been banned in a
number of U.S. cities, towards environmentally friendly products like ours. We
believe that our products and our company can benefit from this trend.

Our sales and marketing team is located in Hong Kong. Through
our sales and marketing team and our distributors, we supply our biodegradable
food containers and industrial packaging products to multi-national
corporations, supermarket chains and restaurants located across North America,
Europe and Asia. During calendar year 2008 we were focused primarily on
establishing and expanding our production capabilities and servicing existing
accounts, primarily located in Europe. During calendar year 2009 we have
continued to focus on the expansion of our production capabilities and we hope
to expand our marketing efforts, focusing on an expansion of our sales,
primarily in North America. During the year, we entered the U.S. packaging
market through Biopack America and we entered into a distribution agreement with
Sonray Sales Ltd., a Canadian company that distributes to wholesalers,
retailers, supermarket chains and food service providers in Canada and abroad.
In addition, we have begun to market our products in Asia.

Result of Operations for the three-month period ended
September 30, 2009 as compared to the three-month period ended September 30,
2008.

During the three-month period ended September 30, 2009 we had a
net operating loss of $331,656, as compared to a net operating loss of
$1,136,109 for the three-month period ended September 30, 2008. The decrease in
the amount of our operating loss was due primarily to the valuation of
convertible debentures we issued during the three-month period ended September
30, 2008.

Revenue and Cost of Sales

Revenue for the three-month period ended September 30, 2009 was
$204,965, compared to revenue of $526,830 for the three-month period ended
September 30, 2008. The decrease in revenue is primarily attributable to the
fact that during the three-month period ended September 30, 2008, we had a
substantial number of backorders and we were manufacturing both in our own
factory and through OEM suppliers. During the three-month period ended September
30, 2009, we had reduced our order backlog and we were manufacturing all of our
products in our new own Jiangmen factory.

Cost of sales for the three-month period ended September 30,
2009 was $230,098, compared to cost of sales of $461,564 for the same period in
2008. Cost of sales decreased as a result of lower sales revenue for the
three-month period ended 2009 compare to the same period last year.

We had a gross loss of $25,133 or a gross loss margin rate of
12.3% for the three-month period ended September 30, 2009, compared to a gross
profit of 65,266 or a gross profit margin rate of 12.4% during the same period
in 2008. The decrease in gross profit for the three-month period ended 2009
compared to the same period last year is primarily due to the fact that the it
costs us more to manufacture our own products in our own factory than it cost us
to have our products manufactured in our OEM factory. With our increased
production capacity we have eliminated all OEM suppliers for the three-month
period ended September 30, 2009. Our Jiangmen factory products provide higher
quality products than previous OEM suppliers because we have better quality
control and we use better raw materials for our ingredients. Also, our factory
facilitys infrastructure was designed to support up to 40 machines and we are
currently operating only 10 machines, which also drives up our current cost of
sales.

Operating Expenses

Operating expenses for the three-month period ended September
30, 2009 were $224,105, compared to $206,291 during the same period in 2008. The
increase in operating expenses was due primarily to increased depreciation
expenses and investor relations consulting expenses incurred during the
three-month period ended September 30, 2009.

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25

Our depreciation expenses were $31,254 for the three-month
period ended September 30, 2009 compared to $20,140 for the same period last
year. The increase is primarily due to the fact that more of our factory
facility is subject to depreciation this year compared to the same period last
year.

Our expenses for investor relations consulting services were
$15,000 for the three-month period ended September 30, 2009 compared to $0 for
the same period last year. The increase is due to the a consulting agreement for
investor relations services that we signed in June 2009.

Other Income and Expenses

We incurred interest expense of $82,418 during the three-month
period ended September 30 2009, compared to $9,725 during the three-month period
ended September 30, 2008. Interest expense incurred during the three-month
period ended September 30, 2009 was primarily due to the interest accrued on the
demand promissory notes and convertible debenture we issued previously. The
increase in interest expense is primarily due to more interest bearing debts
outstanding during the three-month period ended September 30, 2009 compared to
the three-month period ended September 30, 2008.

Result of Operations for the nine-month period ended
September 30, 2009 as compared to the nine-month period ended September 30,
2008.

During the nine-month period ended September 30, 2009 we had a
net operating loss of $1,136,109, as compared to a net operating loss of
$1,243,446 for the nine-month period ended September 30, 2008. The decrease in
the amount of our operating loss was due primarily to cut backs in non-essential
spending as well as reductions of salaries and administrative personnel.

Revenue and Cost of Sales

Revenue for the nine-month period ended September 30, 2009 was
$868,463, compared to revenue of $691,260 for the nine-month period ended
September 30, 2008. The increase in sales is primarily attributable to our sales
teams effort to secure packaging orders in the European market for the fruit
season. We manufactured all products in our Biopark factory during the
nine-month period ended September 30, 2009, compared to the same period in 2008,
when we mainly filled orders through third-party OEM suppliers. With the
increase in production capacity, we expect that future production from our
Biopark factory will continue to increase.

Cost of sales for the nine-month period ended September 30,
2009 was $1,077,246, compared to cost of sales of $614,790 for the same period
in 2008. Cost of sales increased as a result of higher sales revenue for the
nine-month period ended September 30, 2009 compared to the same period last
year.

We had a gross loss of $208,786 or a gross loss margin rate of
24.0% for the nine-month period ended September 30, 2009, compare to a gross
profit of 76,470 or a gross profit margin rate of 11.1% during the same period
in 2008. The decrease in gross profit for the nine-month period ended September
30, 2009 compared to the same period last year is primarily due to the fact that
the products manufactured in our own factory cost more than OEM products. With
our increased production capacity we have eliminated all OEM suppliers for the
three-month period ended September 30, 2009. Our Jiangmen factory products
provide higher quality products than previous OEM suppliers because we have
better quality control and we use better raw materials for our ingredients.
Also, our factory facilitys infrastructure was designed to support up to 40
machines and we are currently operating only 10 machines, which also drives up
our current cost of sales.

We expect the cost of sales to decrease as we reach an economy
of scale in production. Most of the up-front costs have already been spent to
set up the necessary electrical, piping, water filtration, building
requirements, etc. We anticipate we will continue to generate an increasing
number of new orders that should correspond to the increase in our production
capacity. Certain changes to Chinese labour laws also contributed to higher cost
of our product. Systematically, many manufacturers in the Guang Dong province in
PRC saw their cost of labour rise as much as 30% due to the implementation of
poorly timed new labour laws that were introduced at a time that the economy was
growing at an exorbitant pace.

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26

Operating Expenses

Operating expenses for the nine-month period ended September
30, 2009 were $620,284, compared to $704,466 during the same period in 2008. The
decline in operating expenses was due primarily to reductions in staff in our
Hong Kong administrative office and lower litigation costs than those
experienced during the same period last year.

Our legal and professional expenses for the nine-month period
ended September 30, 2009 were $27,359, compared to $74,216 for the nine-month
period ended September 30, 2008. The decrease in legal and professional expense
was primarily due to the lack of activity in the litigation proceedings during
the nine-month period ended September 30, 2009 as described in the Legal
Proceedings section of this interim report on Form 10-Q. Most of the legal
expenses incurred during the nine-month period ended September 30, 2009, are
related to U.S. regulatory compliance and the cost of financing
transactions.

Our rent for the nine-month period ended September 30, 2009 was
$114,883 compared to rent for the nine-month period ended September 30, 2008 of
$154,684. The decrease in rent for the nine-month period ended September 30,
2009 was primarily due to the downsizing of our Hong Kong offices.

Other Income and Expenses

We incurred interest expense of $307,693 during the nine-month
period ended September 30, 2009, compared to $678,528 during the nine-month
period ended September 30, 2008. The interest expense incurred was primarily due
to the recognition of the intrinsic value of the conversion feature embedded in
the convertible debentures issued by our company, as well as interest accrued on
the demand promissory notes and convertible debenture we issued previously. Each
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 in the conversion price and the fair value of the common stock into
which the debenture is convertible, multiplied by the number of shares. The
intrinsic value cannot exceed the proceeds. The decrease in the interest expense
during the nine-month period ended September 30, 2009, compared to the
nine-month period ended September 30, 2008, was primarily due to a decrease of
the intrinsic value recognised as a result of less convertible debentures
issued.

Liquidity and Capital Resources

Our principal cash requirements are for daily working capital,
manufacturing and installation of plant and machinery and the cost of
infrastructure at our leased factory in Jiangmen City, PRC. On September 30,
2009 we had cash and equivalents of $12,228, compared to $128,039 at December
31, 2008. We estimate that our operating expenses over the next three months
will be approximately $75,000 per month and we plan to spend approximately
$1,000,000 to add additional production capacity to our Biopark facility.
Therefore, we estimate that we will need approximately $1,225,000 over the next
three months in order to continue our operations and complete construction of
our Jiangmen factory. We look to construct an equity and/or debt financing plan
in the amount of approximately $1,000,000 over the next three months. There is
currently no definitive offering of financing in place.

As at September 30, 2009 we had a working capital deficit of
$3,385,410, compared to a deficiency of $2,359,764 at December 31, 2008. The
increase in working capital for the period was primarily financed by the
issuance of debentures and demand promissory notes.

Cash Flow Used in Operating Activities

For the nine-month period ended September 30, 2009 our
operating activities used net cash of $234,128, compared to $324,088 for the
nine-month period ended September 30, 2008. The decrease in cash outflow was
primarily due to the decrease in working capital and revenues.

Cash Flow Used in Investing Activities

For the nine-month period ended September 30, 2009 investing
activities used net cash of $34,683 compared to $1,062,611 for the nine-month
period ended September 30, 2008. The decrease in net cash used in investing
activities this year was primarily due to the slower pace of construction at our
Biopark production facility compared to the nine-month period ended September
30, 2008.

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Cash Flow Provided by Financing Activities

For the nine-month period ended September 30, 2009 $153,000 was
provided by financing activities, compared to $1,294,968 for the nine-month
period ended September 30, 2008. Cash flow from financing activities are
primarily from issuance of convertible debentures and promissory notes. The
decrease is cash flow in this year was primarily due to less financing activity
compared to the nine-month period ended September 30, 2008.

On April 8, 2009, we sold one convertible debenture to one
investor for gross proceeds of $60,000. This convertible debenture has a three
year term and is convertible, at the option of the holder upon 90 days prior
notice, into shares of our common stock at a price of six and two-thirds cents
per share.

On May 15, 2009, we sold one convertible debenture to one
investor for gross proceeds of $50,000. This convertible debenture has a face
amount of $50,000, a three year term, earns interest at a rate of 1% per annum
and is convertible, at the option of the holder upon not less than 61 days prior
notice, into shares of our common stock at a price of ten cents per share.

On May 15, 2009, we sold one convertible debenture to one
investor for gross proceeds of $48,000. This convertible debenture has a face
amount of $48,000, a three year term, earns interest at a rate of 12% per annum
and is convertible, at the option of the holder upon not less than 61 days prior
notice, into shares of our common stock at a price of six and two-thirds cents
per share.

On July 28, 2009, we issued 1,124,438 shares of our common
stock to the holder of a convertible debenture dated March 3, 2008 pursuant to
the conversion of a portion of the principal balance of that convertible
debenture at a conversion price of $0.0666 per share. After adjustment for this
conversion, the convertible debenture has a remaining principal balance
outstanding of $205,000.

On July 28, 2009, we issued 1,125,001 shares of our common
stock to the holder of a convertible debenture dated December 29, 2008 pursuant
to the conversion of a portion of the principal balance of that convertible
debenture at a conversion price of $0.0666 per share. After adjustment for this
conversion, the convertible debenture, which had an original face amount of
$150,000, has a remaining principal balance outstanding of $75,000.

On July 29, 2009, we issued 1,250,000 shares of our common
stock to the holder of a convertible debenture dated December 27, 2007 pursuant
to the conversion of a portion of the principal balance of that convertible
debenture at a conversion price of $0.0666 per share. After adjustment for this
conversion, the convertible debenture has a remaining principal balance
outstanding of $175,000.

On July 31, 2009, we sold one convertible debenture to one
investor for gross proceeds of $16,000. This convertible debenture has a face
amount of $16,000, a three year term, earns interest at a rate of 1% per annum
and is convertible, at the option of the holder upon not less than 61 days prior
notice, into shares of our common stock at a price of ten cents per share.

Capital Expenditures

As of September 30, 2009, we did not have any material
commitments for capital expenditures. During the year ended December 31, 2008,
the bulk of our capital expenditure was focused on the development of our
Jiangmen factory production facility. Over the next nine months, we plan to
spend approximately $1,650,000 on the completion of the third production phase
at our Jiangmen factory.

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 incurred a net loss for nine-month period ended
September 30, 2009 of $1,136,109 and, at September 30, 2009 we had an
accumulated deficit of $6,895,589 and a working capital deficit of $3,385,410.
These conditions raise substantial doubt as to our 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

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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 we be unable to
continue as a going concern.

Our future depends upon our becoming profitable and raising the
capital that we will require in order to achieve profitable operations through
the issuance of equity securities, borrowings or a combination thereof.

Off-Balance Sheet Arrangements

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

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.

Our 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 our company as of the
beginning of fiscal year 2011 and its adoption is not expected to have a
material effect on our 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

Our 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 September 30, 2009, we had cash and cash equivalents of
$12,228.

(d) Short-term Investment

Our 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 our 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. Our company extends
credit to customers on an unsecured basis in

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the normal course of business and believes that all accounts
receivable in excess of the allowance for doubtful accounts are fully
collectible. Our company does not accrue interest on trade accounts receivable.
The normal credit terms range from 15 to 60 days.

(f) Allowance for Doubtful Accounts

Our company recognizes an allowance for doubtful accounts to
ensure accounts receivable are not overstated due to uncollectibility. An
allowance for doubtful accounts is maintained for all customers based on a
variety of factors, including the length of time the receivables are past due,
significant one-time events and historical experience. An additional reserve for
individual accounts is recorded when our company becomes aware of a customers
inability to meet its financial obligations, such as in the case of bankruptcy
filings or deterioration in the customers operating results or financial
position. If circumstances related to 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
    5 to 10Motor Vehicles
    5Computer equipment
    5Plant and Machinery
    10


(h) Impairment of Assets

In accordance with Statement of Financial Accounting Standards
(SFAS) No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets",
our company evaluates its long-lived assets to determine whether later events
and circumstances warrant revised estimates of useful lives or a reduction in
carrying value due to impairment. If indicators of impairment exist and if the
value of the assets is impaired, an impairment loss would be recognized. There
was no impairment loss made for property and equipment as of September 30,
2009.

(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 Companys results of operations or financial condition for the
nine-month period ended September 30, 2009. As of the date of the adoption of
ASC 740, the Company has no material unrecognized tax benefit which would
favorably affect the effective income tax rate in future periods. The Company
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.

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(j) Foreign Currency Transactions

Our companys functional currency is Hong Kong Dollars (HKD)
and Renminbi (RMB) and its reporting currency is U.S. dollars. Our 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

Our 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 our 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, our 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.

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Effective January 1, 2006, our 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 our 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.

Our 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. Our company
recognizes revenue when the significant risks and rewards of ownership have been
transferred to the customer pursuant to applicable laws and regulations,
including factors such as when there has been evidence of a sales arrangement,
the performance has occurred, or service have been rendered, the price to the
buyer is fixed or determinable, and collectability is reasonably assured.

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

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

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

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

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

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

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

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

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

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

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

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

Our company believes that this statement will not have a
significant impact on its financial statements.

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

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

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

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

(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

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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. Our company implemented this guidance effective January 1, 2009.
Implementing this guidance did not have an effect on our companys financial
position or results of operations; however it will likely have an impact on our
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
our 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. Our company implemented this guidance as of January 1, 2009.
The effect of implementing this guidance was not material to our companys
financial position or results of operations.

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. Our company
implemented the guidance included in ASC 855 as of April 1, 2009. The effect of
implementing this guidance was not material to our 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. Our company does not
expect the adoption of Statement No. 166 will have a material impact on its
financial position or results of operations.

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Item 3. Quantitative and Qualitative Disclosures About
Market Risk.

Not Applicable.

Item 4. 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 September 30, 2009, the end of the nine-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
effective as of the end of the period covered by this quarterly report.

There have been no significant changes in our internal controls
over financial reporting that occurred during the nine-month period ended
September 30, 2009 that have materially or are reasonably likely to materially
affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

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

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

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

Upon our receipt of this correspondence, our attorneys asked
Gerald Lau for confirmation of the alleged transfer of shares of Good Value
Galaxy Limited and they asked the attorney making the allegations to provide us
with credible evidence to support his allegations. Mr. Laus attorneys informed
us that no such transfer had taken place and that Mr. Lau continued to be the
sole shareholder of both Good Value Galaxy Limited and Joyful Services Limited.
The attorney making the allegation that the shares of Good Value Galaxy Limited
were transferred to Oung Cheng Hai

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has not yet provided us with any credible evidence that this
alleged transfer took place. In light of the absence of credible evidence of a
transfer and the assertion from Gerald Lau, through his attorneys, that there
has been no such transfer, we do not currently intend to comply with the
requests of April 12, 2007.

On May 8, 2007, we received a letter from a different law firm
asserting that it represented Good Value Galaxy Limited and Joyful Services
Limited and enclosing a document alleged to be the written consent of Good Value
Galaxy Limited and Joyful Services Limited. Albert Oung signed this alleged
written consent on behalf of each of Good Value Galaxy Limited and Joyful
Services Limited. The alleged written consent purports to appoint Albert Oung
and Patrick Oung to our board of directors effective immediately and to amend
and restate our Bylaws. Our attorneys replied to this letter of May 8, 2007,
stating that we cannot accept the claim that ownership of the shares of Good
Value Galaxy Limited and Joyful Services Limited has been transferred absent
receipt of a persuasive explanation of the circumstances of the transfer and
credible evidence showing how and why the alleged transfer took place. We have
not yet received any such explanation or credible evidence. Until we do, we
cannot accept the alleged written consent as the act of Good Value Galaxy
Limited and Joyful Services Limited.

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

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

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

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

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

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Shunde District Ka Fook Recycle Products Ltd. Foshan City
Shunde District Ka Fook Recycle Products Ltd. and its legal representative Mr.
Patrick Oung have asked the court to confirm that RMB 5,110,000 has been paid to
Foshan City Shunde District Ka Fook Recycle Products Ltd. and to order our
subsidiary to check and reconcile these transactions.

On May 31, 2007, Foshan City Shunde District Ka Fook Recycle
Products Ltd. with its legal representative Mr. Patrick Oung instituted civil
proceedings against our wholly owned subsidiary Jiangmen Roots Biopack Limited.
Foshan City Shunde District Ka Fook Recycle Products Ltd. and its legal
representative Mr. Patrick Oung allege that in February 2007 they signed a
rental agreement with our wholly owned subsidiary for the sublease of
approximately 5,000 m2in a factory located in Yangjiaokeng
Industrial District, Tingyuan Village, Duran Town at a rate of 50,000 yans per
month.

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

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

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

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

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

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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.

RISKS RELATED TO OUR BUSINESS

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 incurred a net loss for the nine-month period
ended September 30, 2009 of $1,136,109 had an accumulated deficit of $6,895,589
and a working capital deficit of $3,385,410. These conditions raise substantial
doubt as to our companys ability to continue as a going concern. We anticipate
that we will continue to incur operating expenses that will only partially be
offset by operating revenues unless and until our Biopark facility is completed
and we begin producing enough product to become profitable. On September 30,
2009, we had cash of $12,228. We estimate that our operating expenses over the
next three months will be approximately $75,000 per month and we plan to spend
approximately $1,000,000 to add additional production capacity to our Biopark
facility. Therefore, we estimate that our cash outflow would be approximately
$1,225,000 over the next 3 months attributable to continue our operations and
complete construction of the Biopark facility. We look to construct an equity
and/or debt financing plan in the amount of approximately $1,000,000 over the
next three months. As a result, we believe that we will have to raise additional
funds to meet our currently budgeted operating requirements for the next nine
months. As we cannot assure a lender that we will be able to successfully
complete our Biopark facility and begin profitable operations, we will probably
find it difficult to raise debt financing from traditional lending sources. We
have traditionally raised our operating capital from sales of equity and, more
recently, convertible debt securities but there can be no assurance that we will
be able to continue to do so. If we cannot raise the money that we need in order
to continue to operate and complete our Biopark facility, we may be forced to
delay, scale back or even eliminate some or all of our activities. If any of
these were to occur, our business could fail. These circumstances raise
substantial doubt about our ability to continue as a going concern, as described
in the consolidated financial statements for the nine-month period ended
September 30, 2009, which are included in our interim 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.

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.

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

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

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

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

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

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

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

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

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

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

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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;
- 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.

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

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

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

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

We have a stable customer base; however, loss of, or
material financial weakness of, 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 control a high
percentage of our common stock, such insiders may have the ability to influence
matters affecting our shareholders.

Our executive officers and directors, in the aggregate,
beneficially own 36.64% of the issued and outstanding shares of our common
stock. As a result, they have the ability to influence matters affecting our
shareholders, including the election of our directors, the acquisition or
disposition of our assets, and the future issuance of our shares. Because

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our executive officers, directors and principal shareholders
control such shares, investors may find it difficult to replace our management
if they disagree with the way our business is being operated. Because the
influence by these insiders could result in management making decisions that are
in the best interest of those insiders and not in the best interest of the
investors, you may lose some or all of the value of your investment in our
common stock.

RISKS RELATED TO OUR COMMON STOCK

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

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

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

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

Our certificate of incorporation, as amended, authorizes the
issuance of up to 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.

---

43

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

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

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

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

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

On September 1, 2009, we borrowed the sum of $50,000 from
Creative Mind Assets Ltd., a stockholder of our company. To evidence this debt
we issued a promissory note to Creative Mind Assets Ltd. in the amount of
$50,000. The promissory note is payable on demand and bears interest at a rate
of 1% per annum, which is payable on the first day of each and every month.

Item 3. Defaults Upon Senior Securities.

None.

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

None.

Item 5. Other Information.

None.

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44

Item 6. Exhibits.

Exhibits required by Item 601 of Regulation S-B

|Exhibit |                                                                                                                                                                                                                                                                                                                                              
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                              
|(2)     | Plan of Purchase, Sale, Reorganization, Arrangement,
      Liquidation or Succession                                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                              
|2.1     | Share exchange agreement dated February 8, 2007 between
      our company, Roots Biopack Group, Good Value Galaxy Limited, Joyful
      Services Ltd., Legend View Holdings Ltd, Erich Muller Holding AG, and
      Eddie Chou and Ricky Chiu (incorporated by reference from our Current
      Report on Form 8-K filed on January 11, 2007)
|        |                                                                                                                                                                                                                                                                                                                                              
|(3)     | Articles of Incorporation and Bylaws                                                                                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                              
|3.1     | Articles of Incorporation (incorporated by reference from
      our Current Report on Form 8-K filed on May 9, 2001)                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                              
|3.2     | Bylaws (incorporated by reference from our Current Report
      on Form 8-K filed on May 9, 2001)                                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                              
|3.3     | Certificate of Amendment of Articles of Incorporation
      (incorporated by reference from our Current Report on Form 8-K filed on
      May 9, 2001)                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                              
|3.4     | Articles of Merger (incorporated by reference from our
      Current Report on Form 8-K filed on May 9, 2001)                                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                              
|3.5     | Certificate of Designation (incorporated by reference
      from our Current Report on Form 8-K filed on May 9, 2001)                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                                                                                              
|3.6     | Articles of Merger filed with the Secretary of State of
      Nevada on November 21, 2006 effective on November 26, 2006 (incorporated
      by reference from our Current Report on Form 8-K filed on November 28,
      2006)                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                              
|3.7     | Articles of Merger filed with the Secretary of State of
      Nevada on February 21, 2007 effective on February 26, 2007 (incorporated
      by reference from our Current Report on Form 8-K filed on February 27,
      2007)                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                              
|3.8     | Certificate of Correction filed with the Secretary of
      State of Nevada on June 27, 2007 (incorporated by reference from our
      Annual Report on Form 10-KSB filed on April 15, 2008)                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                              
|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, 2008)                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                              
|3.10    | Certificate of Change filed with the Secretary of State
      of Nevada on June 6, 2008 (incorporated by reference from our Current
      Report on Form 8-K filed on June 11, 2008)                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                              
|(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)                                                                                                                               

---

45

|10.4  | Agreement for Transfer of State-Owned Land Usage Right
      (incorporated by reference from our Current Report on Form 8-K filed on
      April 2, 2007)                                                                                                                                   
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                             
|10.5  | Factory Leasing Agreement (incorporated by reference from
      our Current Report on Form 8-K filed on April 2, 2007)                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                             
|10.6  | Factory Leasing Agreement  Translation (incorporated by
      reference from our Current Report on Form 8-K filed on April 2,
    2007)                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                             
|10.7  | Roots Tenancy Agreement (incorporated by reference from
      our Current Report on Form 8-K filed on April 2, 2007)                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                             
|10.8  | Sales and Purchase of Machinery, Technical Assistance and
      Factory Management Agreement dated August 19, 2007 between our company and
      Tayna Environmental Technology Co. Limited (incorporated by reference from
      our Quarterly Report on Form 8-K filed on August 21, 2007)
|      |                                                                                                                                                                                                                                                                                             
|10.9  | Distribution Agreement dated July 26, 2007 between our
      wholly owned subsidiary, Roots Biopack Limited and Packagegroup Moonen
      (incorporated by reference from our Current Report on Form 8-K filed on
      August 27, 2007)                                                    
|      |                                                                                                                                                                                                                                                                                             
|10.10 | Boiler Project Contract dated June 28, 2007 between our
      wholly owned subsidiary, Jiangmen Roots Biopack Limited and Dongguan
      Hongyuan Boiler Equipments Co., Ltd. (incorporated by reference from our
      Current Report on Form 8-K filed on August 27, 2007)                
|      |                                                                                                                                                                                                                                                                                             
|10.11 | Construction Project Agreement dated June 11, 2007
      between our wholly owned subsidiary, Jiangmen Roots Biopack Limited and Li
      Bailia (incorporated by reference from our Current Report on Form 8-K
      filed on August 27, 2007)                                             
|      |                                                                                                                                                                                                                                                                                             
|10.12 | Compressor Project Contract dated June 6, 2007 between
      our wholly owned subsidiary, Jiangmen Roots Biopack Limited and Sky Blue
      (incorporated by reference from our Current Report on Form 8-K filed on
      August 27, 2007)                                                  
|      |                                                                                                                                                                                                                                                                                             
|10.13 | Debt Settlement and Subscription Agreement dated August
      1, 2007 between our company and Begonia Participation Corp. (incorporated
      by reference from our Quarterly Report on Form 8-K filed on August 20,
      2007)                                                            
|      |                                                                                                                                                                                                                                                                                             
|10.14 | Share Cancellation Agreement dated February 17, 2008
      between our company and Eddie Chou (incorporated by reference from our
      Current Report on Form 8-K filed on March 5, 2008)                                                                                                  
|      |                                                                                                                                                                                                                                                                                             
|10.15 | Share Cancellation Agreement dated February 17, 2008
      between our company and Ricky Chiu (incorporated by reference from our
      Current Report on Form 8-K filed on March 5, 2008)                                                                                                  
|      |                                                                                                                                                                                                                                                                                             
|10.16 | Share Cancellation Agreement dated February 17, 2008
      between our company and Legend View Holdings Limited (incorporated by
      reference from our Current Report on Form 8-K filed on March 5,
    2008)                                                                            
|      |                                                                                                                                                                                                                                                                                             
|10.17 | Land Purchase Settlement Agreement dated April 8, 2008
      (incorporated by reference from our Annual Report on Form 10-KSB filed on
      April 15, 2008)                                                                                                                                
|      |                                                                                                                                                                                                                                                                                             
|10.18 | Cancellation Agreement dated March 30, 2008 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, 2008)                                                     
|      |                                                                                                                                                                                                                                                                                             
|10.19 | Loan Agreement dated March 30, 2008 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,
      2008)                                                             

---

46

|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, 2008)
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                        
|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, 2008)                                                                                                                   
|      |                                                                                                                                                                                                                                                                                        
|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, 2009)                                                                                                           
|      |                                                                                                                                                                                                                                                                                        
|10.23 | Demand Promissory Note with Lainey Advisors Inc. dated
      July 1, 2008 (incorporated by reference from our Current Report on Form
      8-K filed on March 31, 2009)                                                                                                                
|      |                                                                                                                                                                                                                                                                                        
|10.24 | Demand Promissory Note with Creative Mind Assets Limited
      dated July 1, 2008 (incorporated by reference from our Current Report on
      Form 8-K filed on March 31, 2009)                                                                                                        
|      |                                                                                                                                                                                                                                                                                        
|10.25 | Demand Promissory Note with Lainey Advisors Inc. dated
      July 20, 2008 (incorporated by reference from our Current Report on Form
      8-K filed on March 31, 2009)                                                                                                               
|      |                                                                                                                                                                                                                                                                                        
|10.26 | Demand Promissory Note with Kuo-Hsien Chen dated
      September 15, 2008 (incorporated by reference from our Current Report on
      Form 8-K filed on March 31, 2009)                                                                                                                
|      |                                                                                                                                                                                                                                                                                        
|10.27 | Demand Promissory Note with Creative Mind Assets Limited
      dated December 31, 2008 (incorporated by reference from our Current Report
      on Form 8-K filed on March 31, 2009)                                                                                                   
|      |                                                                                                                                                                                                                                                                                        
|10.28 | Demand Promissory Note with Kuo-Hsien Chen dated December
      31, 2008 (incorporated by reference from our Current Report on Form 8-K
      filed on March 31, 2009)                                                                                                                 
|      |                                                                                                                                                                                                                                                                                        
|10.29 | Subscription Agreement with Manzanis Business Inc. dated
      April 8, 2009 (incorporated by reference from our Current Report on Form
      8-K filed on April 9, 2009)                                                                                                              
|      |                                                                                                                                                                                                                                                                                        
|10.30 | Subscription Agreement with K.A. Erdmann dated May 15,
      2009 (incorporated by reference from our Current Report on Form 8-K filed
      on May 20, 2009)                                                                                                                          
|      |                                                                                                                                                                                                                                                                                        
|10.31 | Subscription Agreement with Scharfe Holdings Inc. dated
      May 15, 2009 (incorporated by reference from our Current Report on Form
      8-K filed on May 20, 2009)                                                                                                                 
|      |                                                                                                                                                                                                                                                                                        
|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, 2009)                                                                                                                      
|      |                                                                                                                                                                                                                                                                                        
|10.33 | Subscription Agreement with Keiand Capital Corp.
      (incorporated by reference from our Quarterly Report on Form 10-Q filed on
      August 14, 2009)                                                                                                                               
|      |                                                                                                                                                                                                                                                                                        
|10.34 | Promissory Note dated September 1, 2009 with Creative
      Mind Assets Ltd. (incorporated by reference from our Current Report on
      Form 8-K filed on September 2, 2009)                                                                                                          
|      |                                                                                                                                                                                                                                                                                        
|(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 Biopack Group Roots Biopack Limited Roots Biopack
      (Intellectual Property) Limited                                                                                                                                          

---

47

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

*Filed herewith.

---

48

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.

BIOOPACK ENVIRONMENTAL SOLUTIONS INC.

By: /s/ Gerald LauGerald LauPresident, Chief
Executive Officer and Director (Principal Executive Officer) Date:
November 13, 2009

By: /s/ Sean WebsterSean Webster Chief
Financial Officer, Secretary, Treasurer and Director(Principal Financial
Officer and Principal Accounting Officer) Date: November 13, 2009

---