---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2008

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

For the transition period from __________ to ____________

Commission file number 000-29981

BIOPACK ENVIRONMENTAL SOLUTIONS
INC.(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)

18/F Metroplaza Tower II, 223 Hing Fong Road, Kwai Chung,
New Territories, Hong Kong(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.

[X]  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):

|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:

162,811,155 common shares issued and outstanding as of May
  13, 2008

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

3

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

|                                                                |   | Unaudited      |   |   | Audited           |  
|--------------------------------------------------------------- | - | -------------- | - | - | ----------------- | -
|                                                                |   | March 31, 2008 |   |   | December 31, 2007 |  
|Assets                                                          |   |                |   |   |                   |  
|Current assets                                                  |   |                |   |   |                   |  
|Cash and equivalents                                            | $ | 152,611        |   | $ | 96,460            |  
|Accounts receivables                                            |   | 31,488         |   |   | -                 |  
|Prepaid expenses and other receivables                          |   | 278,280        |   |   | 258,381           |  
|Inventory                                                       |   | 61,494         |   |   | 58,840            |  
|Total current assets                                            |   | 523,873        |   |   | 413,682           |  
|                                                                |   |                |   |   |                   |  
|Property, plant and equipment, net                              |   | 1,874,561      |   |   | 1,479,286         |  
|Deposits                                                        |   | 54,004         |   |   | 45,119            |  
|Total assets                                                    |   | 2,452,438      |   |   | 1,938,087         |  
|                                                                |   |                |   |   |                   |  
|Liabilities and stockholders' equity                            |   |                |   |   |                   |  
|Current liabilities                                             |   |                |   |   |                   |  
|Accounts payable and accrued expenses                           |   | 624,164        |   |   | 624,650           |  
|Due to related parties                                          |   | 1,341,855      |   |   | 1,267,966         |  
|Taxes Payable                                                   |   | 239,089        |   |   | 238,445           |  
|Total current liabilities                                       |   | 2,205,108      |   |   | 2,131,062         |  
|                                                                |   |                |   |   |                   |  
|Long Term Liabilities                                           |   |                |   |   |                   |  
|Long term debt                                                  |   | 2,120,580      |   |   | 1,141,454         |  
|Due to related parties                                          |   | 639,440        |   |   | 938,525           |  
|Total long term liabilities                                     |   | 2,760,020      |   |   | 2,079,980         |  
|                                                                |   |                |   |   |                   |  
|Stockholders' equity                                            |   |                |   |   |                   |  
|Preferred stock, $.001 par value, 10,000,000 shares authorized; |   |                |   |   |                   |  
|2,000,000 shares issued
      and outstanding                   |   | 2,000          |   |   | 2,000             |  
|Common stock; $.0001 par value; 500,000,000 shares authorized;  |   |                |   |   |                   |  
|162,823,421 shares
      issued and outstanding                 |   | 16,282         |   |   | 17,382            |  
|Additional paid-in capital                                      |   | 2,117,288      |   |   | 1,466,422         |  
|Stock issued at less than par value                             |   | (2,683         | ) |   | (2,683            | )
|Accumulated other comprehensive income                          |   | 165,367        |   |   | 136,074           |  
|Retained Earnings                                               |   | (4,810,944     | ) |   | (3,892,150        | )
|                                                                |   |                |   |   |                   |  
|Total stockholders' equity                                      |   | -2,512,690     |   |   | -2,272,955        |  
|                                                                |   |                |   |   |                   |  
|Total liabilities and stockholders' equity                      | $ | 2,452,438      |   | $ | 1,938,087         |  
|                                                                |   |                |   |   |                   |  
|                                                                |   | -              |   |   |                   |  

See accompanying notes to consolidated financial statements

F-1

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|Biopack Envirnomental Solutions, Inc. and Subsidiaries
|------------------------------------------------------
|Consolidated Statement of Operations                  
|For the Three Months Ended March 31, 2008 and 2007    

|                                           |   | For the three months ended | 
|------------------------------------------ | - | -------------------------- | 
|                                           |   | March 31,                  | 
|                                           |   | 2008                       | 
|Revenues                                   | $ | 41,238                     | 
|Cost of Sales                              |   | 38,805                     | 
|Gross profit                               |   | 2,433                      | 
|Expenses                                   |   |                            | 
|General and administrative                 |   | 260,020                    | 
|Depreciation and amortization              |   | 17,469                     | 
|                                           |   |                            | 
|Total operating expenses                   |   | 277,489                    | 
|Income from operations                     |   | -275,056                   | 
|Other Income (expense)                     |   |                            | 
|Other income                               |   | 66,059                     | 
|Interest expense                           |   | -666,042                   | 
|Income before income taxes                 |   | -875,039                   | 
|                                           |   |                            | 
|Income tax                                 |   | -                          | 
|Net income                                 | $ | -875,039                   | 
|Earnings per share                         | $ | -0.005                     | 
|Weighted average common shares outstanding |   | 168,412,728                | 
|Diluted Earnings per share                 |   | -0.005                     | 

See accompanying notes to consolidated financial statements

F-2

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

|                                                                |   | For the three months ended | 
|--------------------------------------------------------------- | - | -------------------------- | 
|                                                                |   | March 31,                  | 
|                                                                |   | 2008                       | 
|Cash flows from operating activities                            |   |                            | 
|Net income                                                      | $ | -875,039                   | 
|                                                                |   |                            | 
|Adjustments to reconcile net loss to net cash used in           |   |                            | 
|operating activities:                                           |   |                            | 
|Depreciation and amortization                                   |   | 17,469                     | 
|Deferred income
      taxes                                     |   | -                          | 
|Write down in value of assets                                   |   | 10,452                     | 
|Interest expenses                                               |   | 666,042                    | 
|Other comprehensive income (loss)                               |   | -8,649                     | 
|                                                                |   |                            | 
|Changes in assets and liabilities:                              |   |                            | 
|Accounts receivable
      and other receivables                 |   | -77,738                    | 
|Prepaid expenses                                                |   | -                          | 
|Inventories                                                     |   | -2,654                     | 
|Deposits                                                        |   | -2,373                     | 
|Accounts payable
      and accruals                             |   | 9,411                      | 
|Taxes Payable                                                   |   | -                          | 
|                                                                |   |                            | 
|Net cash used in operating activities                           |   | -263,081                   | 
|                                                                |   |                            | 
|Cash flow from investing activities                             |   |                            | 
|Purchase of property
      and equipment                        |   | -139,297                   | 
|Construction in progress                                        |   | -273,447                   | 
|                                                                |   |                            | 
|Net cash used in investing activities                           |   | -412,744                   | 
|                                                                |   |                            | 
|Cash flow from financing activities                             |   |                            | 
|Repayment of lease
      obligation                             |   | -                          | 
|Amounts due to related parties                                  |   | 72,210                     | 
|Proceeds from issuance
      of debentures                      |   | 660,000                    | 
|Repayment to shareholder for cancellation
      of common stock |   | -234                       | 
|                                                                |   |                            | 
|Net cash provided by financing activities                       |   | 731,976                    | 
|                                                                |   |                            | 
|Net change in cash                                              |   | 56,151                     | 
|                                                                |   |                            | 
|Cash, beginning of year                                         |   | 96,460                     | 
|                                                                |   |                            | 
|Cash, end of year                                               | $ | 152,611                    | 
|                                                                |   |                            | 
|Supplemental disclosure of cash flow information:               |   |                            | 
|Cash paid for income taxes                                      | $ | 0                          | 
|Cash paid for interest                                          | $ | 0                          | 
|                                                                |   |                            | 
|Non-cash investing and financing activities:                    |   |                            | 
|                                                                |   |                            | 
|Stock issued to retire debt                                     | $ | 0                          | 

See accompanying notes to financial statements

F-3

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

|                                          |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   | Stock Issued  |  |   |               |  |   | Accumulated |  |   |            | 
|----------------------------------------- |  | --------------- |  | - | ------------ |  |  | ------------ |  | - | -------- |  | - | ----------- |  | - | ------------- |  | - | ------------- |  | - | ----------- |  | - | ---------- | 
|                                          |  |                 |  |   |              |  |  |              |  |   |          |  |   | Additional  |  |   | at Less       |  |   | Retained      |  |   | Other       |  |   | Total      | 
|                                          |  | Preferred Stock |  |   | Common Stock |  |  | Paid-in      |  |   | Than Par |  |   | Earnings    |  |   | Comprehensive |  |   | Shareholders' | 
|                                          |  | Shares          |  |   | Amount       |  |  | Shares       |  |   | Amount   |  |   | Capital     |  |   | Value         |  |   | (Deficit)     |  |   | Income      |  |   | Equity     | 
|Balance at December 31, 2005              |  | 1,000,000       |  |   | 1,000        |  |  | 202,869,709  |  |   | 20,287   |  |   | 9,173,440   |  |   | -2,683        |  |   | -9,837,473    |  |   |             |  |   | -645,429   | 
|Common stock issued to repay debt         |  |                 |  |   |              |  |  | 34,100,000   |  |   | 3,410    |  |   | 491,029     |  |   |               |  |   |               |  |   |             |  |   | 494,439    | 
|Common stock sold for cash                |  | --              |  | $ | --           |  |  | 260,000,000  |  |   | 26,000   |  |   | 194,000     |  |   | --            |  |   | --            |  |   |             |  |   | 220,000    | 
|Common stock issued to                    |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|acquire StarMetro Group                   |  | --              |  |   | --           |  |  | 60,000,000   |  |   | 6,000    |  |   | -234,713    |  |   | --            |  |   | --            |  |   |             |  |   | -228,713   | 
|Private placement                         |  | --              |  |   | --           |  |  | 800,000      |  |   | 80       |  |   | 384,812     |  |   | --            |  |   | --            |  |   |             |  |   | 384,892    | 
|Common stock issued for                   |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|services                                  |  | --              |  |   | --           |  |  | 30,500,000   |  |   | 3,050    |  |   | 236,950     |  |   | --            |  |   | --            |  |   |             |  |   | 240,000    | 
|Cancellation of GTI shares                |  | --              |  |   | --           |  |  | -12,000,000  |  |   | -1,200   |  |   | 1,200       |  |   | --            |  |   | --            |  |   |             |  |   | --         | 
|Reverse split 4,000 to 1                  |  | --              |  |   | --           |  |  | -493,743,513 |  |   | -49,374  |  |   | 49,374      |  |   | --            |  |   | --            |  |   |             |  |   | --         | 
|Accumulated translation                   |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|adjustment                                |  | --              |  |   | --           |  |  | --           |  |   | --       |  |   | --          |  |   | --            |  |   | --            |  |   | 6,599       |  |   | 6,599      | 
|Net loss for the year ended               |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|December 31, 2006                         |  | --              |  |   | --           |  |  | --           |  |   | --       |  |   | --          |  |   | --            |  |   | -1,149,781    |  |   | --          |  |   | -1,149,781 | 
|Restructuring for Reverse Merger          |  | -1,000,000      |  |   | -1,000       |  |  | 25,473,804   |  |   | 2,547    |  |   | -10,296,092 |  |   |               |  |   | 12,106,679    |  |   | -7,386      |  |   | 1,804,748  | 
|                                          |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|Balance at December 31, 2006              |  | --              |  |   | --           |  |  | 108,000,000  |  | $ | 10,800   |  | $ | --          |  | $ | -2,683        |  | $ | 1,119,425     |  | $ | -787        |  | $ | 1,126,755  | 
|Recapitalization as result of             |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|reverse merger Mar 27, 2007               |  | --              |  |   | --           |  |  | 64,526,196   |  |   | 6,453    |  |   | -800,824    |  |   |               |  |   |               |  |   | 6,599       |  |   | -787,772   | 
|Stock issued to convert debt Mar 27, 2007 |  | --              |  |   | --           |  |  | 1,293,225    |  |   | 129      |  |   | 1,034,451   |  |   |               |  |   |               |  |   |             |  |   | 1,034,580  | 
|Preferred share issued for repay debt     |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|owned by a subsidiiary on Aug 17, 2007    |  | 2,000,000       |  |   | 2,000        |  |  |              |  |   |          |  |   | 1,232,795   |  |   |               |  |   |               |  |   |             |  |   | 1,234,795  | 
|Translation adjustment                    |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   | 130,262     |  |   | 130,262    | 
|Net income for the year                   |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|ended Dec 31, 2007                        |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   | -5,011,575    |  |   |             |  |   | -5,011,575 | 
|Balance at Dec 31, 2007                   |  | 2,000,000       |  | $ | 2,000        |  |  | 173,819,421  |  | $ | 17,382   |  | $ | 1,466,422   |  | $ | -2,683        |  | $ | -3,892,150    |  | $ | 136,074     |  |   | -2,272,955 | 
|Share cancellation                        |  |                 |  |   |              |  |  | -11,000,000  |  |   | -1,100   |  |   | 866         |  |   |               |  |   |               |  |   |             |  |   | -234       | 
|Net income for the three months           |  |                 |  |   |              |  |  |              |  |   |          |  |   |             |  |   |               |  |   |               |  |   |             |  |   |            | 
|ended Mar 31, 2008                        |  |                 |  |   |              |  |  |              |  |   |          |  |   | 650,000     |  |   |               |  |   | -875,039      |  |   | 29,293      |  |   | -195,746   | 
|Balance at Mar 31,
      2008             |  | 2,000,000       |  | $ | 2,000        |  |  | 162,819,421  |  | $ | 16,282   |  | $ | 2,117,288   |  | $ | -2,683        |  | $ | -4,767,189    |  | $ | 165,367     |  |   | -2,468,935 | 

F-4

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|BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBIDIARIES
|----------------------------------------------------
|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.

(b) Use of Estimates

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

(c) Cash and Cash Equivalents

The Company considers all highly liquid investments with original
  maturities of three months or less at the time of purchase to be cash equivalents.
  As of March 31, 2008, the Company had cash and equivalents of of $152,611.

(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.

F-5

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

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

The estimated useful lives are as follows:YearsLeasehold improvements
      5Furniture, fixtures and office equipment
      5 to 10Motor Vehicles
      5Computer equipment
      5Plant and Machinery
      10


(h) Impairment of Assets

In accordance with Statement of Financial Accounting Standards
  (SFAS) No. 144, "Accounting for Impairment or Disposal of Long-Lived
  Assets", the Company evaluates its long-lived assets to determine whether later
  events and circumstances warrant revised estimates of useful lives or a reduction
  in carrying value due to impairment. If indicators of impairment exist and if
  the value of the assets is impaired, an impairment loss would be recognized.
  There was no impairment loss made for property and equipment as of March 31,
  2008.

(i) Income Taxes

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

(j) Foreign Currency Transactions

F-6

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

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

(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

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

(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

F-7

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

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 it is are required to recognize the cost of
  employee services received in exchange for awards of equity instruments based
  on the grant-date fair value of those awards. SFAS No. 123(R) permits public
  companies to adopt its requirements using either the "modified prospective"
  method or the "modified retrospective" method.

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

(o) Revenue Recognition

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

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

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

F-8

---

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

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

In December 2004, the FASB issued SFAS No.123 (revised 2004),
  "Share-Based Payment" ("SFAS 123(R)"). SFAS 123(R) will
  provide investors and other users of financial statements with more complete
  and neutral financial information by requiring that the compensation cost relating
  to share-based payment transactions be recognized in financial statements. That
  cost will be measured based on the fair value of the equity or liability instruments
  issued. SFAS 123(R) covers a wide range of share-based compensation arrangements
  including share options, restricted share plans, performance-based awards, share
  appreciation rights, and employee share purchase plans. SFAS 123(R) replaces
  SFAS No. 123, "Accounting for Stock-Based Compensation", and supersedes
  APB Opinion No. 25, "Accounting for Stock Issued to Employees". SFAS
  123, as originally issued in 1995, established as preferable a fair-value-based
  method of accounting for share-based payment transactions with employees. However,
  that statement permitted entities the option of continuing to apply the guidance
  in Opinion 25, as long as the footnotes to financial statements disclosed what
  net income would have been had the preferable fair-value-based method been used.
  Public entities (other than those filing as small business issuers) were required
  to apply SFAS 123(R) as of the first interim or annual reporting period that
  began after June 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.

F-9

---

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

In February, 2006, FASB issued SFAS No. 155, “Accounting
  for Certain Hybrid Financial Statements”. SFAS No. 155 amends SFAS No.
  133, “Accounting for Derivative Instruments and Hedging Activities”
  and SFAS No. 140, “Accounting for Transfers and Servicing of Financial
  Assets and Extinguishments of Liabilities”. SFAS No. 155, permits fair
  value measurement for any hybrid financial instrument that contains an embedded
  derivative that otherwise would require bifurcation, clarifies which interest-only
  strips and principal-only strips are not subject to the requirements of SFAS
  No. 133, establishes a requirement to evaluate interest in securitized financial
  assets to identify interests that are freestanding derivatives or that are hybrid
  financial statements that contain an embedded derivative requiring bifurcation,
  clarifies that concentrations of credit risk in the form of subordination are
  not embedded derivatives, and amends SFAS No. 140 to eliminate the prohibition
  on the qualifying special-purpose entity from holding a derivative financial
  instrument that pertains to a beneficial interest other than another derivative
  financial instrument. This statement 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 all separately recognized servicing assets and servicing
    liabilities to be initially measured at fair value, if practicable. Permits an entity to choose “amortization method”
    or “fair value measurement method” for each class of separately
    recognized servicing assets and servicing liabilities. At its initial adoption, permits a one-time reclassification
    of available-for-sale securities to trading securities by entities with recognized
    servicing rights, without calling into question the treatment of other available-for-sale
    securities under Statement 115, provided that the available-for-sale securities
    are identified in some manner as offsetting the entitys exposure to
    changes in fair value of servicing assets or servicing liabilities that a
    servicer elects to subsequently measure at fair value. Requires separate presentation of servicing assets and liabilities
    subsequently measured at fair value in the statement of financial position
    and additional disclosures for all separately recognized servicing assets
    and servicing liabilities.


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.

F-10

---

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

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

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

3. Property, Plant and Equipment, net

|Cost                           |   |           |  
|------------------------------ | - | --------- | -
|Leasehold improvements         | $ | 5,121     |  
|Motor Vehicles                 |   | 8,762     |  
|Office furniture and equipment |   | 40,356    |  
|Computer equipment             |   | 59,265    |  
|Plant and Machinery            |   | 239,776   |  
|Construction in progress       |   | 1,540,050 |  
|                               |   | 1,893,330 |  
|Accumulated depreciation       |   | (18,768   | )
|                               | $ | 1,874,562 |  

Depreciation expense for the year ended March 31, 2008 was $18,768.

(b) Construction in progress

Represents the expenditure incurred in the development project
  of a manufacturing plant by a subsidiary in Jiangmen, PRC. As of March 31, 2008,
  the Company had spent $1,540,050 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.

F-11

---

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

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 March 31, 2008, the Company’s subsidiary in Jiangmen,
  PRC held inventory of $61,494.

5. Accounts receivable

Accounts receivable consists of receivables on trade as follows:

|Ageing of trade and other receivables |   |        | 
|------------------------------------- | - | ------ | 
|0 30 days                            | $ | -      | 
|31 60 days                           |   | 31,488 | 
|                                      | $ | 31,488 | 

As of March 31, 2008, the Company’s subsidiaries had receivables
  totaling $31,488. The Company believes that there is no issue of recoverability
  and the balances receivable are indicative of fair value.

6. Deposits and prepayment and other receivable

|Prepayment                 | $ | 42,931  | 
|-------------------------- | - | ------- | 
|Rental and utility deposit |   | 54,004  | 
|Other receivable           |   | 235,337 | 
|                           | $ | 332,272 | 

7. Accrued and other payables

|Accrued and other payables  | $ | 260,298 | 
|--------------------------- | - | ------- | 
|Customers deposits received |   | 125,808 | 
|Other payables              |   | 53,780  | 
|                            | $ | 439,886 | 

8. Provision for litigation

|Provision for contractual agreement | $ | 59,851 | 
|----------------------------------- | - | ------ | 

9. Amount due to a Shareholder

The amount due to a shareholder, Good Value Galaxy Limited in
  the amount of $623,075 is unsecured, interest free and has no fixed terms of
  repayment.

F-12

---

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

10. Due to Related Parties

Three directors and two shareholders of the Company have advanced
  $718,780 in the form of unsecured, non-interest bearing advances with no due
  date.

11. Loans Payable

|Tayna Environmental Technology Co Limited | $ | 1,144,538 | 
|----------------------------------------- | - | --------- | 
|Advanced from a related party             |   | 339,440   | 
|                                          | $ | 1,483,978 | 

The advance from the third party is unsecured. Repayment is due
  within three years from the date of signing of this agreement with an option
  to renew for a term of two calendar years upon written notice sent no later
  than three months prior to the due date of the loan. Interest rate is 12% per
  annum at default.

The advance from a related party is unsecured, interest free and has no fixed
  term of repayment.

12. Going Concern

The accompanying consolidated financial statements have been
  prepared in accordance with the accounting principles generally accepted in
  the United States of America (US GAAP), which contemplate the continuation
  of the Company as a going concern. The Company incurred a net loss for the period
  ended March 31, 2008 of $2206,143, had an accumulated deficit of $4,098,293
  and a working capital deficit of $1,681,235. 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.

13. Concentrations and Credit Risk

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

14. Commitments and Contingencies

(a) Operating Lease Arrangements

F-13

---

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

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
  period:

|Premises | $ | 44,277 | 
|-------- | - | ------ | 

At 31 March 2008, 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:

|Within one year                         | $ | 127,001   | 
|--------------------------------------- | - | --------- | 
|In the second to fifth years, inclusive |   | 692,250   | 
|After five years                        |   | 1,749,265 | 
|                                        | $ | 2,568,516 | 

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

(b) Capital Commitments

|Contracted for but not provided for           | $ |         | 
|--------------------------------------------- | - | ------- | 
|Capital injection for a subsidiary in PRC     |   | -       | 
|Purchase of three pieces of land
      in PRC |   | -       | 
|Construction projects in PRC                  |   | 118,881 | 
|                                              | $ | 118,881 | 

15. Related Party Transactions

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

|                     | Nature of      | Connected   | 2008  
|-------------------- | -------------- | ----------- | ------
|Name of the company  | transaction    | party (ies) | $     
|                     |                |             |       
|InterPacific Capital | Consultant fee | Spouse of   | 12,792
|Limited              |                | Mr. Ricky   |       
|                     |                | Chiu Tong   |       
|                     |                |             |       
|                     |                |             | 12,792

16. INCOME TAXES

Tax liabilities of $239,089 is for the year of 07/08 and no tax
  was incurred or paid during the current quarter.

F-14

---

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

17. Preferred Stock Issued to Convert Debt

Tax liabilities of $239,089 is for the year of 07/08 and no tax
  was incurred or paid during the current quarter.

18. Share Capital

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

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

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

19. Long Term Liabilities

In December, 2007, the Company sold two convertible debentures,
  each for gross proceeds of $300,000. These convertible debentures have a term
  of three years and are convertible, at the option of the holder with 60 days
  prior notice, into Series C Preferred Stock at a price of $0.50 per preferred
  share.

On January 31, 2008, the Company sold a convertible debenture with a face value
  of $150,000. This convertible debenture has a two year term and is convertible,
  at the option of the holder with 90 days prior notice, into common stock at
  a price of six and two-thirds cents per share.

On February 4, 2008, the Company sold a convertible debenture for gross proceeds
  of $100,000. This convertible debenture has a three year term and is convertible,
  at the option of the holder with 90 days prior notice, into common stock at
  a price of six and two-thirds cents per share.

On March 3, 2008, the Company sold a convertible debenture for gross proceeds
  of $400,000. This convertible debenture has a three year term and is convertible,
  at the option of the holder with 90 days prior notice, into common stock at
  a price of six and two-thirds cents per share.

F-15

---

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 14 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 quarterly 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 our products in two factories. One of these factories,
located in Shunde City, PRC, is an independent facility (owned and operated by a
third party) that manufactures product for us on an open order basis. Our second
factory is located in our Biopark facility but it is currently only capable of
limited production. We are in the process of increasing the production capacity
of our Biopark factory.

Until recently, we were also developing a facility in Malaysia
in order to source raw materials for our Biopark manufacturing facility. We
discontinued this operation effective January 31, 2008.

The Shunde City factory currently manufactures approximately
90% of our biodegradable food container and industrial packaging products. This
factory is contained in a three-storey building with a total area of 5,000
square feet and currently operates two semi-automated production lines and one
fully-automated production line.

We currently use our Biopark factory primarily for the production
  of customer samples and limited production runs. To date, 10 production machines,
  together with the boiler, transformer and compressor units necessary for their
  operation, have been installed in this facility. We plan to install one additional
  machine within the next month. Four additional production machines are stored
  in our Biopark facility pending resolution of a dispute with one of the former
  directors of Roots Biopack Group Limited (see discussion beginning at page 12).

After installation in our factory, each production machine must
be fitted with a set of customer/product specific molds. These molds are
designed by our customers to suit their specific product specifications (e.g.,
shape and size). Six of the 10 currently installed production machines are
fitted with molds and are fully operational. Molds for the other five machines
(the four that are already installed and the new machine to be installed within
the month) have

4

---

been ordered and we hope to install them during the month of
June, 2008. The machines currently capable of production have been producing
samples and limited production runs since we announced our soft opening last
December.

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.

Result of Operations for the three months ended March 31,
2008 as compared to the three months ended March 31, 2007.

During the three-month period ended March 31, 2008 we had a net
operating loss of $208,998, as compared to net operating loss of $199,245 for
the three-month period ended March 31, 2007. 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 office personnel.

Net Sales and Cost of Sales

Net sales for the three-month period ended March 31, 2008 were
$41,238, compared to net sales of $798,499 for the three-month period ended
March 31, 2007. This decline in sales is primarily attributable to a reduction
in the amount of business we could send to our OEM factory, which began to
experience quality issues. The reduction in production from this source
coincided with the anticipated production from our new manufacturing facility
which has been delayed beyond our original projections. We expect that future
production from our new factory will enable us to increase our sales on a
going-forward basis.

Cost of sales for the three-month period ended March 31, 2008
was $38,805, compared to $521,761 for the same period in 2007, which provided a
gross margin of 6%, as compared to 35% during the same period of 2007. The
difference in the margin is primarily due to the fact that the margins we
realized on OEM supplied product was much lower than that on product supplied by
our former Shunde City factory.

Operating Expenses

Operating expenses for the three-month period ended March 31,
2008 were $274,235, compared to $449,163 during the same period in 2007. The
decline in operating expenses was due primarily to the absence of marketing and
other costs associated with the business combination that had been incurred in
the prior year. Many of these costs were non-recurring. In addition significant
costs were reduced due to reductions in staff in our Hong Kong administration
offices.

Other Income and Expenses

Other income of $66,059 was generated in the current period
compared to $938 for the three months ended March 31, 2007. The current period
earnings are attributable to exchange rate gains on foreign currency.

Liquidity and Capital Resources

Our principal cash requirements are for daily working capital,
manufacturing and installation of plant and machineries and the cost of
infrastructure at our planned production facilities at our leased factory in
Jiangmen City, PRC. On March 31, 2008 we had cash and equivalents of $152,611,
compared to $96,460 at March 31, 2007.

For the three-month period ended March 31, 2008 we had a
working capital deficit of $1,681,235, compared to a deficiency of $1,717,380 at
March 31, 2007. The increase in working capital for the period was primarily due
to advances from related parties and the issuance of debentures.

Cash Flow Used in Operating Activities

For the three months ended March 31, 2008 our operating
activities used net cash of $254,432, compared to $540,658 for the three months
ended March 31, 2007. The decrease in cash used in operating activities is
primarily due to a reduction of prepaids.

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Cash Flow Used in Investing Activities

For the three months ended March 31, 2008 investing activities
used net cash of $412,744. The increase in net cash used in investing activities
was primarily due to the purchase of equipment in the amount of $134, 297 and
$273,447 in construction for our new Biopark production facility.

Cash Flow Provided by Financing Activities

For the three months ended March 31, 2008 cash flow provided by
financing activities provided cash of $731,976 compared to $511,318 in 2007. The
increase in cash flow provided by financing activities was primarily due to
advances from related parties of $72,210 and debenture proceeds in the amount of
$660,000 compared to advances from related parties of $512,718 in the prior
year.

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

On March 30, 2008, our subsidiary, Roots Biopack Group Limited,
entered into a loan agreement with Tayna Environmental Technology Co. Limited,
whereby Tayna Environmental agreed to advance to Roots Biopack the sum of
$1,144,538 for a three-year initial term expiring March 30, 2011. Our subsidiary
has an option to extend this three-year initial term for an additional two
calendar years by sending written notice to Tayna Environmental no later than
three months prior to the original maturity date (i.e., no later than December
30, 2010). Principal due under the loan bears interest at the rate of 12% per
annum.

Capital Expenditures

During the three-month period ended March 31, 2008, the bulk of
our capital expenditure was focused on the development of our Roots Biopark
production facility. As of May 14, 2008, we do not have any material commitments
for capital expenditures. Over the next twelve months, we plan to spend
approximately $1,850,000 on the completion of the second and third production
phases at our Roots Biopark production facility.

Going Concern

The accompanying consolidated financial statements have been
prepared assuming that we will continue as a going concern. Our consolidated
financial statements show that we have a working capital deficit of $1,681,235.
The future of our company is dependent upon our continuing to maintain and grow
our operations and raising the capital that this growth will require through
revenue, the issuance of equity securities, borrowings or a combination thereof.
The consolidated financial statements 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.

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

Use of estimates

In preparing financial statements in conformity with accounting
principles generally accepted in the United States of America, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities and

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disclosures of contingent assets and liabilities at the dates
of the financial statements, as well as the reported amounts of revenues and
expenses during the reporting years. These accounts and estimates include, but
are not limited to, the valuation and accounts receivable, deferred income taxes
and the estimation on useful lives of plant and equipment. Actual results could
differ from those estimates.

Cash and cash equivalents

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

Allowance for Doubtful Accounts

Our company recognizes an allowance for doubtful accounts to
ensure accounts receivable are not overstated due to uncollectibility. An
allowance for doubtful accounts is maintained for all customers based on a
variety of factors, including the length of time the receivables are past due,
significant one-time events and historical experience. An additional reserve for
individual accounts is recorded when our company becomes aware of a customers
inability to meet its financial obligations, such as in the case of bankruptcy
filings or deterioration in the customers operating results or financial
position. If circumstances related to customers change, estimates of the
recoverability of receivables would be further adjusted. There was no accounts
receivable and no allowance for doubtful accounts as of March 31, 2008.

Accounts receivable

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

Property, Plant and equipment

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

The estimated useful lives are as follows:

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

Impairment of assets

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

As of March 31, 2008, we impaired property and equipment in the
amount of $Nil, which amount is reflected in the operating expenses section of
the operating statement.

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Revenue recognition

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

Income taxes

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

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.

Foreign currency translation

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

Fair value of financial instruments

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

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

Earnings per share

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

Recent Accounting Pronouncements

In November 2004, the FASB issued SFAS No. 151 Inventory
Costs, an amendment of ARB No. 43, Chapter 4, (SFAS No. 151). The amendments
made by SFAS 151 clarify that abnormal amounts of idle facility expense,
freight, handling costs, and wasted materials (spoilage) should be recognized as
current-period charges and require the allocation of fixed production overheads
to inventory based on the normal capacity of the production facilities. The
guidance is effective for inventory costs incurred during fiscal years beginning
after June 15, 2005. Earlier application is permitted for inventory costs
incurred during fiscal years beginning after November 23, 2004. Our

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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 TimeSharing Transactions. SFAS 152 also
amends SFAS No. 67, Accounting for Costs and Initial Rental Operations of Real
Estate Projects, to state that the guidance for (a) incidental operations and
(b) costs incurred to sell real estate projects does not apply to real estate
time-sharing transactions. The accounting for those operations and costs is
subject to the guidance in SOP 04-2. SFAS 152 is effective for financial
statements for fiscal years beginning after June 15, 2005, with earlier
application encouraged. We have evaluated the impact of the adoption of SFAS
152, and do not believe the impact will be significant if any, to our companys
overall results of operations or financial position since we do not enter into
such transactions.

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

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

In May, 2005, The FASB issued SFAS No. 154, entitled
Accounting Changes and Error Corrections  a replacement of APB Opinion No. 20
and FASB Statement No. 3. This Statement replaces APB Opinion No. 20, Accounting
Changes and FASB Statement No. 3, Reporting Accounting Changes in Interim
Financial Statements, and changes the requirements for the accounting for and
reporting of a change in accounting principle. This statement applies to all
voluntary changes in accounting principle. It also applies to changes required
by an accounting pronouncement in the unusual instance that the pronouncement
does not include specific transition provisions. Opinion 20 previously required
that most voluntary changes in accounting principle be recognized by including
in net income of the period of the change the cumulative effect of changing to
the new accounting principle. This Statement requires retrospective application
to prior periods financial statements of changes in

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accounting principle, unless it is impracticable to determine
either the period-specific effects or the cumulative effect of the change. This
Statement defines as the application of a different accounting principle to
prior accounting periods as if that principle had always been used or as the
adjustment of previously issued financial statements to reflect a change in the
reporting entity. This statement also redefines restatement as the revising of
previously issued financial statements to reflect the correction of an error.
The adoption of SFAS 154 did not impact the financial statements.

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

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

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

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

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

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

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

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

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

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

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

Item 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 March 31, 2008, the end of the three-month period covered
by this report, our president and chief executive officer (also our principal
executive officer) and our secretary, treasurer and chief financial officer
(also our principal financial and accounting officer) carried out an evaluation
of the effectiveness of the design and operation of our disclosure controls and
procedures. Based on the foregoing, our president and chief executive officer
(also our principal executive officer) and our secretary, treasurer and chief
financial officer (also our principal financial and accounting officer)
concluded that our disclosure controls and procedures were 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 three-month period ended March
31, 2008 that have materially or are reasonably likely to materially affect, our
internal controls over financial reporting.

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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 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:

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

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

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

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

13

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

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

Item 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 assuming that we will continue as a going concern. We incurred a net
  loss of $208,998 for the three-month period ended March 31, 2008 and a net loss
  since inception of $4,101,148. At March 31, 2008, we had a working capital deficit
  of $1,168,235. 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 March 31, 2008, we had cash of $152,611. We estimate that our
  monthly operating expenses over the next 12 months will be approximately $32,000
  and that we will need to spend approximately $1,850,000 to complete the next
  two production phases at our Biopark facility. Therefore, we estimate that we
  will need approximately $2,234,000 over the next 12 months in order to continue
  our operations and complete construction of the Biopark facility. As a result,
  we believe that we will have to raise additional funds to meet our currently
  budgeted operating requirements for the next 12 months. As we cannot assure
  a lender that we will be able to successfully complete our Biopark facility
  and begin profitable operations, we will probably find it difficult to raise
  debt financing from traditional lending sources. We have traditionally raised
  our operating capital from sales of equity and, more recently, convertible debt
  securities but there can be no assurance that we will be able to continue to
  do so. If we cannot raise the money that we need in order to continue to operate
  and complete our Biopark facility, we may be forced to delay, scale back or
  even eliminate some or all of our activities. If any of these were to occur,
  our business could fail. These circumstances raise substantial doubt about our
  ability to continue as a going concern, as described in the explanatory paragraph
  to our independent auditors report on our consolidated financial statements
  for the year ended December 31, 2007, which are included in our annual report
  on Form 10-KSB. Although our consolidated financial statements raise substantial
  doubt about our ability to continue as a going concern, they do not include
  any adjustments relating to recoverability and classification of recorded assets,
  or the amounts or classifications of liabilities that might be necessary in
  the event our company cannot continue in existence.

14

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

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

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

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

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

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

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

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

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.

15

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

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

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

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

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

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

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

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

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

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.

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

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

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

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

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

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

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

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

18

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RISKS RELATED TO OUR COMMON STOCK

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

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

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

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

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

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

The Securities and Exchange Commission has adopted regulations
which generally define "penny stock" to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are covered by
the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
"accredited investors". The term "accredited investor" refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission, which provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

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

In addition to the "penny stock" rules described above, FINRA
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is

19

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

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

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

Item 3. Defaults Upon Senior Securities.

None.

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

None.

Item 5. Other Information.

None.

20

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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)                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                              
|(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)                                                                                                                               
|        |                                                                                                                                                                                                                                                                                                                                              
|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)                                                                                                                                                                                                             

21

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|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)                                                                    
|      |                                                                                                                                                                                                                                                                                                           
|(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)                                                                                                                                                            

22

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

* Filed herewith

23

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SIGNATURES

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

BIOOPACK ENVIRONMENTAL SOLUTIONS INC.

By: /s/ Gerald Lau Gerald Lau President, Chief
Executive Officer and Director (Principal Executive Officer) Date: May
15, 2008

By: /s/ Eddie Chou Eddie Chou Chief Financial Officer,
Chief Technology Officer, Secretary, Treasurer and Director (Principal
Financial Officer and Principal Accounting Officer) Date: May 15, 2008

24

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