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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

Form 10-QSB/A

(Mark One)

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

For the quarterly period endedMarch 31,
2007

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

For the transition period from __________ to __________

Commission file number000-29981

BIOPACK ENVIRONMENTAL SOLUTIONS
INC.(Exact name of small business issuer as specified in its
charter)

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

18/F Metroplaza Tower II, 223 Hing Fong Road, Kwai Chung,
New Territories, Hong Kong(Address of principal executive offices)

852.3586.1383(Issuers telephone number)

________________________________________
  (Former name, former address and former fiscal year, if changed since last report)

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date:

173,819,159 common shares issued and outstanding as of May
21, 2007

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

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PART I - FINANCIAL INFORMATION

|Item 1. Financial Statements.
|-----------------------------

Intentionally left blank

2

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Biopack Environmental Solutions, Inc. and Subsidiaries
  Consolidated Balance Sheet

|                                                               |   | Restated     |  
|-------------------------------------------------------------- | - | ------------ | -
|                                                               |   | (Unaudited ) |  
|                                                               |   | March 31,    |  
|                                                               |   | 2007         |  
|Assets                                                         |   |              |  
|Current assets                                                 |   |              |  
|Cash and equivalents                                           | $ | 553,481      |  
|Accounts receivable                                            |   | 64,988       |  
|Prepaid expenses and other assets                              |   | 750,222      |  
|Total current assets                                           |   | 1,368,691    |  
|                                                               |   |              |  
|Property, plant and equipment, net                             |   | 221,616      |  
|Deposits                                                       |   | 238,976      |  
|Advances to related parties                                    |   | 2,146,660    |  
|Total assets                                                   |   | 3,975,943    |  
|                                                               |   |              |  
|Liabilities and stockholders' equity                           |   |              |  
|Current liabilities                                            |   |              |  
|Accounts payable and accrued expenses                          |   | 1,772,850    |  
|Accrued income taxes                                           |   | 271,190      |  
|Vehicle obligation payable                                     |   | 26,721       |  
|Deferred taxes                                                 |   | 1,880        |  
|Due to related parties                                         |   | 623,239      |  
|Total current liabilities                                      |   | 2,695,880    |  
|                                                               |   |              |  
|Stockholders' equity                                           |   |              |  
|                                                               |   |              |  
|                                                               |   |              |  
|Common stock; $.0001 par value; 500,000,000 shares authorized; |   |              |  
|173,819,421
      shares issued and outstanding                |   | 17,382       |  
|Additional paid-in capital                                     |   | 332,868      |  
|Stock issued at less than par value                            |   | (2,683       | )
|Retained earnings                                              |   | 920,181      |  
|Accumulated other comprehensive income                         |   | 12,315       |  
|Total stockholders' equity                                     |   | 1,280,063    |  
|                                                               |   |              |  
|Total liabilities and stockholders' equity                     | $ | 3,975,943    |  

See accompanying notes to consolidated financial statements

3

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Biopack Environmental Solutions, Inc. and Subsidiaries
  Consolidated Statements of Operations
  For the Three Months Ended March 31, 2007 and 2006

(Unaudited)

|                                           |   |            |   |   | Restated  |  
|------------------------------------------ | - | ---------- | - | - | --------- | -
|                                           |   | 2007       |   |   | 2006      |  
|Revenues, net                              | $ | 798,499    |   | $ | 1,655,591 |  
|Cost of revenues                           |   | 521,761    |   |   | 1,312,026 |  
|Gross profit                               |   | 276,738    |   |   | 343,565   |  
|Expenses                                   |   |            |   |   |           |  
|General and administrative                 |   | 449,163    |   |   | 157,806   |  
|Total operating expenses                   |   | 449,163    |   |   | 157,806   |  
|Income (Loss) from operations              |   | (172,425   | ) |   | 185,759   |  
|                                           |   |            |   |   |           |  
|Interest income                            |   | 938        |   |   | 2,089     |  
|Interest expense                           |   |            |   |   | (454      | )
|Income (Loss) before income tax            |   | (171,487   | ) |   | 187,394   |  
|Income tax                                 |   | (27,758    | ) |   | (34,025   | )
|Net income (loss)                          | $ | (199,245   | ) | $ | 153,369   |  
|Earnings per share                         |   | $ (0.00    | ) |   | $ 7.92    |  
|Weighted average common shares outstanding |   | 83,710,795 |   |   | 19,349    |  

See accompanying notes to consolidated financial statements

4

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Biopack Environmental Solutions, Inc. and Subsidiaries
  Consolidated Statement of Changes in Cash
  For the Three Months Ended March 31, 2007
  (Unaudited

|                                                            |   | 2007      |  
|----------------------------------------------------------- | - | --------- | -
|Cash flows from operating activities                        |   |           |  
|Net loss                                                    | $ | (199,245  | )
|Adjustments to reconcile net loss to net cash
      used in |   |           |  
|operating activities:                                       |   |           |  
|Depreciation and amortization                               |   | 4,487     |  
|Deferred income taxes                                       |   | --        |  
|                                                            |   |           |  
|Other comprehensive income (loss)                           |   | (103,563  | )
|Changes in assets and liabilities:                          |   |           |  
|Accounts receivable                                         |   | (64,988   | )
|Prepaid expenses and other assets                           |   | (725,642  | )
|Accounts payable and accruals                               |   | 418,127   |  
|                                                            |   |           |  
|Accrued income taxes                                        |   | 26,603    |  
|Net cash ( used in) provided by operating activities        |   | (644,221  | )
|                                                            |   |           |  
|Cash flow from investing activities                         |   |           |  
|Purchase of property and equipment                          |   | (5,172    | )
|Increase in deposit                                         |   | (110,393  | )
|Net cash used in investing activities                       |   | (115,565  | )
|                                                            |   |           |  
|Cash flow from financing activities                         |   |           |  
|Proceeds from notes payable                                 |   |           |  
|Repayment of notes payable                                  |   | (846      | )
|Increase in due to related parties                          |   | 512,318   |  
|Advances to related parties                                 |   | --        |  
|                                                            |   |           |  
|Net cash provided by financing activities                   |   | 511,472   |  
|                                                            |   |           |  
|Net change in cash                                          |   | (248,314  | )
|                                                            |   |           |  
|Cash, beginning of year                                     |   | 801,795   |  
|Cash, end of period                                         | $ | 553,481   |  
|                                                            |   |           |  
|Supplemental disclosure of cash flow information:           |   |           |  
|Cash paid for income taxes                                  |   | --        |  
|Cash paid for interest                                      | $ | --        |  
|Non-cash investing and financing activities:                |   |           |  
|                                                            |   |           |  
|                                                            |   |           |  
|Stock issued to retire debt to related parties              | $ | 1,143,124 |  

See accompanying notes to consolidated financial statements

5

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Biopack Environmental Solutions, Inc. and Subsidiaries 
  Consolidated Statement of Changes in Stockholders Equity (Deficit)

(Unaudited)

|                                |  |             |  |   |        |  |   |            |   |   | Stock Issued |   |   |           |   |   | Accumulated   |   |   |               |  
|------------------------------- |  | ----------- |  | - | ------ |  | - | ---------- | - | - | ------------ | - | - | --------- | - | - | ------------- | - | - | ------------- | -
|                                |  |             |  |   |        |  |   | Additional |   |   | at Less      |   |   | Retained  |   |   | Other         |   |   | Total         |  
|                                |  | Common      |  |   | Common |  |   | Paid-in    |   |   | Than Par     |   |   | Earnings  |   |   | Comprehensive |   |   | Shareholders' |  
|                                |  | Shares      |  |   | Stock  |  |   | Capital    |   |   | Value        |   |   | (Deficit) |   |   | Income        |   |   | Equity        |  
|                                |  |             |  |   |        |  |   |            |   |   |              |   |   |           |   |   |               |   |   |               |  
|Balance at December 31, 2006    |  | 100         |  | $ | 100    |  | $ | --         |   | $ | --           |   | $ | 1,119,426 |   | $ | (787          | ) | $ | 1,118,739     |  
|                                |  |             |  |   |        |  |   |            |   |   |              |   |   |           |   |   |               |   |   |               |  
|Recapitalization as result of   |  |             |  |   |        |  |   |            |   |   |              |   |   |           |   |   |               |   |   |               |  
|reverse merger                  |  | 172,526,096 |  |   | 17,153 |  |   | (701,583   | ) |   | (2,683       | ) |   |           |   |   | 6,599         |   |   | (680,514      | )
|                                |  |             |  |   |        |  |   |            |   |   |              |   |   |           |   |   |               |   |   |               |  
|Net income for the three months |  |             |  |   |        |  |   |            |   |   |              |   |   |           |   |   |               |   |   |               |  
|ended March 31, 2007            |  |             |  |   |        |  |   |            |   |   |              |   |   | (199,245  | ) |   |               |   |   | (199,245      | )
|                                |  |             |  |   |        |  |   |            |   |   |              |   |   |           |   |   |               |   |   |               |  
|Stock issued to convert debt    |  | 1,293,225   |  |   | 129    |  |   | 1,034,451  |   |   |              |   |   |           |   |   |               |   |   | 1,034,580     |  
|                                |  |             |  |   |        |  |   |            |   |   |              |   |   |           |   |   |               |   |   |               |  
|Exchange translation            |  |             |  |   |        |  |   |            |   |   |              |   |   |           |   |   | 6,503         |   |   | 6,503         |  
|                                |  |             |  |   |        |  |   |            |   |   |              |   |   |           |   |   |               |   |   |               |  
|Balance at December 31, 2006    |  | 173,819,421 |  | $ | 17,382 |  | $ | 332,868    |   | $ | (2,683       | ) | $ | 920,181   |   | $ | 12,315        |   | $ | 1,280,063     |  

6

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|Biopack Environmental Solutions, Inc. and Subsidiaries
|------------------------------------------------------
|Consolidated Statements of Operations                 
|For the Three Months Ended March 31, 2007 and 2006    
|                                                      
|(Unaudited)                                           

|                                           |   | 2007       |   |   | 2006      |  
|------------------------------------------ | - | ---------- | - | - | --------- | -
|Revenues, net                              | $ | 798,499    |   | $ | 1,655,591 |  
|Cost of revenues                           |   | 521,761    |   |   | 1,312,026 |  
|Gross profit                               |   | 276,738    |   |   | 343,565   |  
|Expenses                                   |   |            |   |   |           |  
|General and administrative                 |   | 449,163    |   |   | 191,090   |  
|Total operating expenses                   |   | 449,163    |   |   | 191,090   |  
|Loss from continuing operations            |   | (172,425   | ) |   | 152,475   |  
|                                           |   |            |   |   |           |  
|Loss from discontinued operations          |   |            |   |   | (340,637  | )
|Loss from operations                       |   | (172,425   | ) |   | (188,162  | )
|Interest income                            |   | 938        |   |   | 2,089     |  
|Interest expense                           |   |            |   |   | (454      | )
|Loss before income tax                     |   | (171,487   | ) |   | (186,527  | )
|Income tax                                 |   | (27,758    | ) |   | (34,025   | )
|Net income                                 | $ | (199,245   | ) | $ | (220,552  | )
|Earnings per share                         | $ | (0.00      | ) | $ | (3.75     | )
|Weighted average common shares outstanding |   | 83,710,795 |   |   | 58,670    |  

See accompanying notes to consolidated financial statements

7

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|Biopack Environmental Solutions, Inc. and Subsidiaries
|------------------------------------------------------
|Consolidated Statements of Changes in Cash            
|For the Three Months Ended March 31, 2007 and 2006    
|(Unaudited)                                           

|                                                            |   | 2007      |   |   | 2006     |  
|----------------------------------------------------------- | - | --------- | - | - | -------- | -
|Cash flows from operating activities                        |   |           |   |   |          |  
|Net income                                                  | $ | (199,245  | ) | $ | (220,552 | )
|Adjustments to reconcile net loss to net cash
      used in |   |           |   |   |          |  
|operating activities:                                       |   |           |   |   |          |  
|Depreciation and amortization                               |   | 4,487     |   |   | 948      |  
|Deferred income taxes                                       |   | --        |   |   | 473      |  
|                                                            |   |           |   |   |          |  
|Other comprehensive income (loss)                           |   | (103,563  | ) |   | --       |  
|Changes in assets and liabilities:                          |   |           |   |   |          |  
|Accounts receivable                                         |   | (64,988   | ) |   | 201,625  |  
|Prepaid expenses and other assets                           |   | (725,642  | ) |   | (7,868   | )
|Accounts payable and accruals                               |   | 418,127   |   |   | 236,845  |  
|                                                            |   |           |   |   |          |  
|Accrued income taxes                                        |   | 26,603    |   |   | 33,430   |  
|Net cash ( used in) provided by operating activities        |   | (644,221  | ) |   | 244,901  |  
|                                                            |   |           |   |   |          |  
|Cash flow from investing activities                         |   |           |   |   |          |  
|Purchase of property and equipment                          |   | (5,172    | ) |   | (16,098  | )
|Increase in deposit                                         |   | (110,393  | ) |   | (2,923   | )
|Net cash used in investing activities                       |   | (115,565  | ) |   | (19,021  | )
|                                                            |   |           |   |   |          |  
|Cash flow from financing activities                         |   |           |   |   |          |  
|Proceeds from notes payable                                 |   |           |   |   |          |  
|Repayment of notes payable                                  |   | (846      | ) |   | (123,147 | )
|Increase in due to related parties                          |   | 512,318   |   |   | --       |  
|Advances to related parties                                 |   | --        |   |   | (176,757 | )
|Proceeds from issuance of common stock                      |   | --        |   |   | 220,000  |  
|Net cash provided by financing activities                   |   | 511,472   |   |   | (79,904  | )
|                                                            |   |           |   |   |          |  
|Net change in cash                                          |   | (248,314  | ) |   | 145,976  |  
|                                                            |   |           |   |   |          |  
|Net cash used in discontinued operations                    |   | --        |   |   | (82,152  | )
|                                                            |   |           |   |   |          |  
|Cash, beginning of year                                     |   | 801,795   |   |   | 63,824   |  
|Cash, end of period                                         | $ | 553,481   |   | $ | 127,648  |  
|                                                            |   |           |   |   |          |  
|Supplemental disclosure of cash flow information:           |   |           |   |   |          |  
|Cash paid for income taxes                                  |   | --        |   |   | --       |  
|Cash paid for interest                                      | $ | --        |   | $ | 19,744   |  
|Non-cash investing and financing activities:                |   |           |   |   |          |  
|                                                            |   |           |   |   |          |  
|                                                            |   |           |   |   |          |  
|Stock issued to retire debt to related parties              | $ | 1,143,124 |   |   | --       |  

See accompanying notes to consolidated financial statements

8

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

The accompanying condensed consolidated financial statements
  have been prepared by the Company, without audit, pursuant to the rules and
  regulations of the Securities and Exchange Commission. Certain information and
  disclosures normally included in financial statements prepared in accordance
  with accounting principles generally accepted in the United States have been
  condensed or omitted pursuant to such rules and regulations. These condensed
  financial statements reflect all adjustments (consisting only of normal recurring
  adjustments) that, in the opinion of management, are necessary to present fairly
  the financial position, the results of operations and cash flows of the Company
  for the periods presented. It is suggested that these condensed financial statements
  be read in conjunction with the consolidated financial statements and the notes
  thereto included in the Companys Annual Report on Form 10-K.

The results of operations for the interim periods presented
  are not necessarily indicative of the results to be expected for the full year.

1. The Company

Biopack Environmental Solutions Inc. and Subsidiaries (formerly
  Star Metro Corp.) is principally engaged in the provision of total packaging
  solutions in global green packaging industry, delivering services ranging from
  product design and development, product testing, quality assurance, sales and
  distribution to customer services. The Company markets 100% biodegradable food
  containers and industrial packaging products in Europe, North America and Asia.

The Company was incorporated in the state of Nevada on August
  25, 1999, under the name E.Kidnetwork,com, Inc. On January 23, 2001, subsequent
  to its merger with East Coeur dAlene Silver Mines, Inc. its name was changed
  to ZKid Network Company.

On May 5, 2006, the Company executed a letter of intent with
  StarMetro Group Limited, in which Starmetro Group Limited proposed to exchange
  60,000,000 shares of Eatware Corporation for 100% of the issued and outstanding
  shares of StarMetro Group Limited.

On February 15, 2007 the Company incorporated a new Nevada
  company called Biopack Environmental Solutions Inc. and subscribed for one common
  share in that company. On February 26, 2007, we changed our name from Star
  Metro Corp.) to Biopack Environmental Solutions Inc.

9

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

2. Summary of Significant Accounting Policies Basis of Presentation

The accompanying consolidated financial statements are prepared
  in accordance with the accounting principles generally accepted in the United
  States of America (US GAAP). The consolidated financial statements
  include the accounts of Biopack Environmental Solutions Inc. and its wholly
  owned subsidiaries. All material inter-company balances and transactions have
  been eliminated from the consolidated financial statements.

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

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

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
  the valuation of accounts receivable, the estimation of useful lives of property,
  plant and equipment, and deferred income taxes. Actual results could differ
  from those estimates.

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.

Accounts Receivable

Accounts receivable are stated at original amount less an
  allowance made for doubtful receivables, if any, based on a review of all outstanding
  amounts at the end of the period. Full allowances for doubtful receivables are
  made when the receivables are overdue for one year and an allowance is made
  when there is objective evidence that the Company will not be able to collect
  all amounts due according to original terms of receivables. Bad debts are written
  against the allowance when identified. The Company extends credit to customers
  on an unsecured basis in the normal course of business and believes that all
  accounts receivable in excess of the allowance for doubtful accounts to be fully
  collectible. The Company does not accrue interest on trade accounts receivable.
  The normal credit terms range from 15 to 60 days. The Company did not record
  an allowance for doubtful accounts at March 31, 2007 due to no bad debt experience
  during the period.

10

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

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 and fixtures | 5    
|Vehicles               | 5    
|Computer equipment     | 5    

The gain or loss on disposal of property, plant and equipment
  is the difference between the net sales proceeds and the carrying amount of
  the relevant assets, and, if any, is recognized in the statement of operations.

Impairment of Assets

In accordance with Statement of Financial Accounting Standards
  (SFAS) No. 144, "Accounting for Impairment or Disposal of Long-Lived
  Assets", the Company evaluates its long-lived assets to determine whether later
  events and circumstances warrant revised estimates of useful lives or a reduction
  in carrying value due to impairment. If indicators of impairment exist and if
  the value of the assets is impaired, an impairment loss would be recognized.
  As of March 31, 2007, no impairment loss has been recognized.

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.

11

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

Foreign Currency Transactions

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

It is managements opinion that the Company is not exposed
  to significant interest, price or credit risks arising from these financial
  instruments.

The Company is exposed to certain foreign currency risk from
  export sales and import purchase transactions and recognized accounts receivable
  and payable as they will affect the future operating results of the Company.
  The Company did not have any hedging activities during the reporting period.

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.

12

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

Accumulated Other Comprehensive Income

The Company has adopted SFAS 130, Reporting Comprehensive
  Income, which establishes standards for reporting and display of comprehensive
  income, its components and accumulated balances. Accumulated other comprehensive
  income represents the change in equity of the Company during the periods presented
  from foreign currency translation adjustments.

Stock-Based Compensation

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

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

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

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

13

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

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.

Concentration of 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.
  New Accounting Pronouncements In March 2004, the FASB approved the consensus
  reached on the Emerging Issues Task Force (EITF) Issue No. 03-1, "The Meaning
  of Other-Than-Temporary Impairment and Its Application to Certain Investments."
  The objective of this Issue is to provide guidance for identifying impaired
  investments. EITF 03-1 also provides new disclosure requirements for investments
  that are deemed to be temporarily impaired. In September 2004, the FASB issued
  a FASB Staff Position (FSP) EITF 03-1-1 that delays the effective date of the
  measurement and recognition guidance in EITF 03-1 until after further deliberations
  by the FASB. The disclosure requirements are effective only for annual periods
  ending after June 15, 2004. The Company has evaluated the impact of the adoption
  of the disclosure requirements of EITF 03-1 and does not believe it will have
  an impact to the Company's overall combined results of operations or combined
  financial position. Once the FASB reaches a final decision on the measurement
  and recognition provisions, the Company will evaluate the impact of the adoption
  of EITF 03-1.

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.

14

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

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.

In December 2004, the FASB issued SFAS No.153, "Exchanges
  of Non-monetary Assets, an amendment of APB Opinion No. 29, Accounting for Non-monetary
  Transactions." The amendments made by SFAS 153 are based on the principle that
  exchanges of non-monetary assets should be measured based on the fair value
  of the assets exchanged. Further, the amendments eliminate the narrow exception
  for non-monetary exchanges of similar productive assets and replace it with
  a broader exception for exchanges of non-monetary 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 non-monetary 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 non-monetary asset exchanges occurring in fiscal
  periods beginning after June 15, 2005. Earlier application is permitted for
  non-monetary 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

15

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

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

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

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

16

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

holding a derivative financial instrument that pertains to
  a beneficial interest other than another derivative financial instrument. This
  statement is effective for all financial instruments acquired or issued after
  the beginning of the Companys first fiscal year that begins after September
  15, 2006. Management believes that this statement will not have a significant
  impact on the financial statements.

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

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

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

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

At its initial adoption, permits a one-time reclassification
  of available-for-sale securities to trading securities by entities with recognized
  servicing rights, without calling into question the treatment of other available-for-sale
  securities under Statement 115, provided that the available-for-sale securities
  are identified in some manner as offsetting the entitys exposure to changes
  in fair value of servicing assets or servicing liabilities that a servicer elects
  to subsequently measure at fair value. Requires separate presentation of servicing
  assets and liabilities subsequently measured at fair value in the statement
  of financial position and additional disclosures for all separately recognized
  servicing assets and servicing liabilities. Management believes that this statement
  will not have a significant impact on the financial statements.

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

17

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

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

18

---

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

3. Property, Plant and Equipment, net

|Cost                           |   |         |  
|------------------------------ | - | ------- | -
|                               |   |         |  
|Leasehold improvements         | $ | 5,414   |  
|Motor vehicle                  |   | 44,528  |  
|Office furniture and equipment |   | 32,335  |  
|Computer equipment             |   | 9,733   |  
|Construction in progress       |   | 152,083 |  
|                               |   | 244,093 |  
|Accumulated depreciation       |   | (22,477 | )
|                               |   |         |  
|                               | $ | 221,616 |  

Depreciation expense for the three months ended March 31, 2007
  was $4,487 Construction in progress

The Company intends to build and operate a production plant in
  Malaysia. As of December 31, 2006, the Company had spent $152,083 on the construction.
  These costs are included on the balance sheet in the property, plant and equipment
  costs. No depreciation will be provided until the plant is completed and operating.

17

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

4. Commitments and Contingencies

The Company leases office space under two operating leases. The
  Hong Kong office lease is for a period of three years beginning June 2, 2006
  and ending June 4, 2009, with monthly payments of $8,572 per month. The Malaysia
  office lease is for a period of one year beginning December 15, 2006 and ending
  December 14, 2007 with monthly payments of $1,243 per month.

The Company leases office equipment and office renovations. The
  lease is for a period of three years beginning June 5, 2006 and ending June
  4, 2009 with monthly payments of $2,731 per month.

The Company has an agreement to pay for corporate management
  services for the period beginning September 1, 2006 and ending May 31, 2009.
  The management fee is in the amount of $12,438 per month.

Future minimum payments under operating leases and corporate
  management service agreements as of March 31, 2006 are as follows:

|2007        | $ | 277,760 | 
|----------- | - | ------- | 
|2008 - 2010 |   | 466,656 | 
|            |   |         | 
|            |   |         | 
|            | $ | 744,416 | 

The Company has a commitment to purchase three tracts of real
  estate totaling $2,633,527 and for contribution to a subsidiary totaling $24,816,448

5. Income taxes

The provision for income taxes at March 31, 2007 is as follows:

|Hong Kong profits tax | $ | 27,758 | 
|--------------------- | - | ------ | 

6. Common Stock Transactions

On March 27, 2007, the Company closed a share exchange agreement
  with Roots Biopack Group Limited and its stockholders. In accordance with the
  terms of the share exchange agreement, the Company acquired all of the one hundred
  shares of issued and outstanding common stock of Roots Biopack Group Limited
  in exchange for 90,000,000 share of the Companys common stock. As additional
  consideration, two of the Companys directors transferred 18,000,000 shares
  of the Companys common stock held by them to the shareholders of Roots
  Biopack Group Limited.

The Company issued1,293,225 shares of common stock to convert
  debt totaling $1,034,580.

18

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

7. Vehicle Obligation Payable

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

8. Pension Plans

The Company participates in a defined contribution pension
  plan under the Mandatory Provident Fund Schemes Ordinance MPF Scheme
  for all its eligible employees in Hong Kong.

The MPF Scheme is available to all employees aged 18 to 64
  with at least 60 days of service in the employment in Hong Kong. Contributions
  are made by the Groups subsidiary operating in Hong Kong at 5% of the
  participants relevant income with a ceiling of HK$20,000. The participants
  are entitled to 100% of the Companys contributions together with accrued
  returns irrespective of their length of service with the Company, but the benefits
  are required by law to be preserved until the retirement age of 65. The only
  obligation of the Company with respect to the MPF is to make the
  required contributions under the Plan.

The assets of the Plan are controlled by the trustees and
  held separately from those of the Company. Total pension cost for the three
  months ended March 31, 2007 was $3,558.

9. Advance to Related Parties

The Company has advanced $2,146,660 to a related company
  as of March 31, 2007. The advances are unsecured, interest free, and have no
  fixed terms of repayment.

Pursuant to a letter of intent entered into with the related
  company on January 8, 2007, the Company intends to purchase property, plant
  and equipment from the related company in consideration of approximately $1,800,000.
  The Company intends to offset this consideration with the advance.

10. Restated Financial Statements

On July 27, 2007, the Company received a comment letter from
  the United States Security and Exchange Commission requesting the Company to
  revise the financial statements as of March 31, 2007 and for the three months
  then ended. The financial statements have been restated to correctly reflect
  certain elements of the reverse merger recapitalization. Note 12 has been prepared
  to reflect the restated financial statements.

19

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|                                      |   |               |   |  |             |   |  |     |  |   |            |  
|------------------------------------- | - | ------------- | - |  | ----------- | - |  | --- |  | - | ---------- | -
|                                      |   | As Originally |   |  | Adjustment  |   |  |     |  |   | As Amended |  
|Consolidated balance sheet            |   |               |   |  |             |   |  |     |  |   |            |  
|as of March 31, 2007                  |   |               |   |  |             |   |  |     |  |   |            |  
|Assets                                |   |               |   |  |             |   |  |     |  |   |            |  
|Current assets                        |   |               |   |  |             |   |  |     |  |   |            |  
|Cash and equivalents                  | $ | 553,481       |   |  |             |   |  |     |  | $ | 553,481    |  
|Accounts receivable                   |   | 64,988        |   |  |             |   |  |     |  |   | 64,988     |  
|Prepaid expenses
      and other      |   |               |   |  |             |   |  |     |  |   |            |  
|assets                                |   | 750,222       |   |  |             |   |  |     |  |   | 750,222    |  
|Total current assets                  | $ | 1,368,691     |   |  |             |   |  |     |  | $ | 1,368,691  |  
|                                      |   |               |   |  |             |   |  |     |  |   |            |  
|Property, plant
      and equipment   |   | 221,616       |   |  |             |   |  |     |  |   | 221,616    |  
|Deposits                              |   | 238,976       |   |  |             |   |  |     |  |   | 238,976    |  
|Advances to related
      parties     |   | 2,146,660     |   |  |             |   |  |     |  |   | 2,146,660  |  
|Total assets                          | $ | 3,975,943     |   |  |             |   |  |     |  | $ | 3,975,943  |  
|                                      |   |               |   |  |             |   |  |     |  |   |            |  
|Liabilities and Stockholders         |   |               |   |  |             |   |  |     |  |   |            |  
|Equity                                |   |               |   |  |             |   |  |     |  |   |            |  
|Current Liabilities                   |   |               |   |  |             |   |  |     |  |   |            |  
|Accounts payable
      and accruals   | $ | 1,772,850     |   |  |             |   |  |     |  | $ | 1,772,850  |  
|Accrued income taxes                  |   | 271,190       |   |  |             |   |  |     |  |   | 271,190    |  
|Vehicle obligation
      payable      |   | 26,721        |   |  |             |   |  |     |  |   | 26,721     |  
|Deferred taxes                        |   | 1,880         |   |  |             |   |  |     |  |   | 1,880      |  
|Due to related parties                |   | 623,239       |   |  |             |   |  |     |  |   | 623,239    |  
|Total current liabilities             |   | 2,695,880     |   |  |             |   |  |     |  |   | 2,695,880  |  
|                                      |   |               |   |  |             |   |  |     |  |   |            |  
|Stockholders equity                  |   |               |   |  |             |   |  |     |  |   |            |  
|Common stock                          |   | 17,382        |   |  |             |   |  |     |  |   | 17,382     |  
|Additional paid-in capital            |   | 12,548,825    |   |  | (12,215,957 | ) |  | (A) |  |   | 332,868    |  
|Stock issued at
      less than par   |   | (2,683        | ) |  |             |   |  |     |  |   | (2,683     | )
|Retained earnings                     |   | (11,186,497   | ) |  | 12,106,678  |   |  | (A) |  |   | 920,181    |  
|Accumulated other
      comprehensive |   |               |   |  |             |   |  |     |  |   |            |  
|income                                |   | (96,964       | ) |  | 109,279     |   |  | (A) |  |   | 12,315     |  
|Total stockholders
      equity      |   | 1,280,063     |   |  | --          |   |  |     |  |   | 1,280,063  |  
|Total liabilities and stockholders   |   |               |   |  |             |   |  |     |  |   |            |  
|equity                                | $ | 3,975,943     |   |  |             |   |  |     |  | $ | 3,975,943  |  

20

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(A) To record the reverse merger and recapitalization

Consolidated Statement of Operations for the three months ended
  March 31, 2006

Revenues, net
      $
      1,655,591
      
      
      
      
      
      
      
      
      $
      1,655,591Cost of revenues
      
      1,312,026
      
      
      
      
      
      
      
      
      
      1,312,026Gross profit
      
      343,565
      
      
      
      
      
      
      
      
      
      343,565General and administrative expenses
      
      191,090
      
      
      
      (33,284
      )
      
      (B)
      
      
      157,806Gain from continuing operations
      
      152,475
      
      
      
      (33,284
      )
      
      
      
      
      185,759Loss from discontinued operations
      
      (340,637
      )
      
      
      340,637
      
      
      (B)
      
      
      -----Loss from operations
      
      (188,162
      )
      
      
      373,921
      
      
      
      
      
      185,759Interest income
      
      2,089
      
      
      
      
      
      
      
      
      
      2,089Interest expense
      
      (454
      )
      
      
      
      
      
      
      
      
      (454
      )Loss before income tax
      
      (186,527
      )
      
      
      373,921
      
      
      
      
      
      187,394Income tax
      
      34,025
      
      
      
      
      
      
      
      
      
      34,025Net income
      $
      (220,552
      )
      
      $
      373,921
      
      
      
      
      $
      153,369Earnings per share
      
      (3.75
      )
      
      
      11.67
      
      
      
      
      
      7.92Weighted average commonshares outstanding
      
      58,670
      
      
      
      
      
      
      
      
      
      19,349


Operations of the shell company, not to be included with those
  of the continuing company in the reverse merger.

21

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|Item 2. Managements Discussion and Analysis or Plan of
      Operation.
|------------------------------------------------------------------------

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements as
that term is defined in Section 27A of the United States Securities Act of 1933
and section 21E of the United States Securities Exchange Act of 1934. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as may,
should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors, that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

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

Our financial statements are stated in United States dollars
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 the common shares in our capital
stock.

Corporate History

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

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

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

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

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

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

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

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

When we acquired Roots Biopack Group Limited, we also acquired
its subsidiaries. The following table shows our corporate structure following
the acquisition of Roots Biopack Group Limited:



Since the completion of our share exchange with the former
shareholders of Roots Biopack Group Limited, we have begun the process of
integrating our existing business, being the development of a line of
biodegradable, single use, food and beverage containers, with the Roots Biopack
Group business, which consists of the development, manufacture, distribution and
sale of biodegradable food container and industrial packaging products made from
natural materials. Because we are the successor business to Roots Biopack Group
and because the operations and assets of Roots Biopack Group represents our
entire business and operations from the date of completion of the share
exchange, our management's discussion and analysis is based on Roots Biopack
Group financial results for the relevant periods.

For accounting purposes, Roots Biopack Group Limited is
considered the acquirer in our transaction and is therefore treated as our
predecessor entity as of March 27, 2007. Therefore, beginning with this
quarterly report on Form 10-QSB, which is our periodic report for the quarter in
which the acquisition was consummated, we will file annual and quarterly reports
based on the December 31 fiscal year-end of Roots Biopack Group Limited. The
financial statements included in these periodic reports will depict the
operating results of Roots Biopack Group Limited, including the acquisition of
our company, from March 27, 2007.

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General Overview

The address of our principal executive office is 18/F
Metroplaza Tower II, 223 Hing Fong Road, Kwai Chung, New Territories, Hong Kong.
Our telephone number is 852.3586.1383.

Our Malaysia subsidiary, Bioplanet Distribution Sdn Bhd,
maintains an office located at Suite E-09-07, Level 9, Block E, Plaza Mont'
Kiara, No. 2, Jalan Kiara, Mont' Kiara, 50480 Kuala Lumpur, Wilayah Persekutuan,
Malaysia. Our telephone number at this office is 603.6203.9899.

Our newly acquired subsidiary, Roots Biopack Limited, leases
office space at Unit 2009, Hopewell Centre, 183 Queens Road East, Wan Chai,
Hong Kong. However, management of this subsidiary has recently decided to move
into our principal executive office.

Our common stock is quoted on the OTC Bulletin Board under the
symbol BPEV.

Note Regarding Forward-Looking Statements

This quarterly report on Form 10-QSB 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 11 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-QSB. 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 and distribute bio-degradable food
containers and disposable industrial packaging. Our products are currently
manufactured by an independent factory located in Shunde City, China but we are
in the pre-development stage of setting up our own production facilities. To
date land has been identified, and a deposit has been made. In addition we have
recently negotiated the lease of a factory that will come on line in the second
quarter. Based on the increasing demand for the products, the company is
planning to install 4 production lines at this new factory within this year
(Phase 1). Production is expected to commence during the fourth quarter this
year, with an annual production capacity of about 450 million pieces. During
Phase 1 development, we expect to achieve approximately 300 million pieces in
2007. Based on the preliminary estimates for Phase 2 & 3, we believe that we
can achieve a much higher production capacity targeting 700 million pieces in
2008 and 1.4 billion pieces in 2009.

Our sales and marketing team is located primarily 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.

Industry Overview

Currently, the majority of disposable packaging products are
made from plastic, paper or polystyrene, which are typically non-recyclable and
non-biodegradable. As a result, the only method to dispose of plastic, paper, or
polystyrene disposable packaging products is to discard them in landfills.
Consequently, millions of tons of plastic, paper, or polystyrene disposable
packaging products are discarded in landfills across the world each year. In the
last

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decade there has been increasing public concern over the
harmful impact that plastic, paper, or polystyrene disposable packaging products
have on the environment. Because of this public concern (i) governments located
across the world have begun to adopt regulations intended to restrict and in
some cases even ban the use of plastic, paper, or polystyrene disposable
packaging products and (ii) multi-national corporations have begun to seek an
alternative to plastic, paper, or polystyrene disposable packaging products that
is less harmful to the environment. As these trends continue, we believe that
market for biodegradable food containers and industrial packaging products will
face rapid growth in the future.

Result of Operations for the three months ended March 31,
2007 as compared to the three months ended March 31, 2006.

During the three-month period ended March 31, 2007 we had a net
operating loss of $177,425 ($188,162 Q1-2006). We incurred significant costs in
the areas of marketing, branding and product development. Sales for the period
were down marginally due to seasonal demand and the restructuring of our company
and gross profit margins improved significantly.

Net Sales and Cost of Sales

Net sales for the three-month period ended March 31, 2007 were
$798,498 ($1,655,591  Q1 2006). Sales were seasonally low due in part to the
long Chinese New Year holiday and in part to retooling and changes at our
production facility. These changes at our production facility were completed
shortly after the period end and, on May 17, 2007 we signed a letter of intent
to secure additional production facilities.

Cost of sales for the period was $521,761 ($1,312,026  Q1
2006), which provided a gross margin of 34.66% (20.75% - Q1 2006). The
improvement in the margin is the result of as an increase of the unit selling
price reflecting the change in the sales mix to higher priced and more
sophisticated pieces. Raw materials unit cost remains unchanged for this
quarter.

Operating Expenses

Operating expenses for the three-month period ended March 31,
2007 were $449,163 ($191,090  Q1 2006). The increase in operating expenses was
due primarily to marketing and other costs associated with the business
combination. Many of these costs are expected to be non-recurring.

Other Income and Expenses

We incurred interest expenses for the three months ended March
31, 2007 of $Nil. We incurred interest expenses for the three months ended March
31, 2006 of $454. The decrease in interest expenditures of $454 for the three
months ended March 31, 2007 was primarily due to an due to advance from the
third party.

Liquidity and Capital Resources

Our principal cash requirements are for daily working capital
and purchase of machinery for developing our planned Roots Biopark.

Capital Resources

For the three-month period ended March 31, 2007 we had a
working capital deficiency of $1,327,189 compared to a working capital deficit
of $2,164,868 during the three-month period ended March 31, 2006. The
improvement in working capital of $837,679 for the period was primarily due to
improving results of operations and funding from related parties. Capital was
used for the deposit on the pending the acquisition of real estate for the
development of production facilities in Jiangmen, China. Currently we have
placed a deposit for $127,980.34 and have the options to purchase 3 vacant
adjacent properties, appropriately zoned for factories. For the three months
ended March 31, 2007, we had cash and cash equivalents of $553,481. For the
three months ended March 31, 2006, we had cash and cash equivalents of $801,795.
The decrease in cash equivalents of $248,314 for the three months ended March
31, 2007 was primarily due to a requirement for cash in the retooling of the
manufacturing as well as the deposit on the

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purchase of land required for future development. The deposit
required for lease for additional factory space signed in the quarter required a
deposit of $39,545.

Cash Flow Used in Operating Activities

For the three months ended March 31, 2007 our operating
activities used cash of $644,221. For the three months ended March 31, 2006 our
operating activities provided cash of $244,901. The increase in cash used in
operating expenses of $889,122 for the three months ended March 31, 2007 was
primarily due to prepaids and deposits in the expansion of the manufacturing
operations.

Cash Flow Used in Investing Activities

For the three months ended March 31, 2007 investing activities
used cash of $115,565. For the three months ended March 31, 2006 investing
activities used cash of $19,021. The decrease in cash used in investing
activities of $96,544 for the three months ended March 31, 2007, was primarily
due to a decrease in deposits.

Cash Flow Provided by Financing Activities

For the three months ended March 31, 2007 cash flow provided by
financing activities provided cash of $511,472. For the three months ended March
31, 2006 cash flow provided by financing activities used cash of $79,904. The
increase in was primarily due to advances from a third party, Begonia
Participation Corp.

Capital Expenditures

We incurred capital expenditures in vehicle and computer
equipment. As of March 31, 2007, we had the following material commitments for
capital expenditures:

| | 3 Parcels of Land totalling 198.9 acres | $ | 2,709,861 | 
| | --------------------------------------- | - | --------- | 
| | Machinery & Equipment                   |   | 7,000,000 | 
| | Ancillary equipment & Installation      |   | 400,000   | 
| | Production moulds                       |   | 400,000   | 
| | Phase I of the construction             |   |           | 

Over the next twelve months, we expect to spend approximately
$18 million USD on capital expenditures.

Commitments and Contingencies

We lease three offices. We lease our Hong Kong office pursuant
to a lease for a period of three years beginning June 2, 2006 and ending June 4,
2009, with monthly payments of $9,212 per month. We lease our Malaysia office
pursuant to a lease for a period of one year beginning December 15, 2006 and
ending December 14, 2007 with monthly payments of $1,243 per month. Our new
subsidiary, Roots Biopack Limited, leases an office at Unit 2009, Hopewell
Centre, 183 Queens Road East, Wan Chai, Hong Kong, for a monthly rent of
$4,276. This lease will expire November 14, 2008.

We lease office equipment and office renovations. The lease is
for a period of three years beginning June 5, 2006 and ending June 4, 2009 with
monthly payments of $2,892 per month.

We have an agreement to pay for corporate management services
for the period beginning September 1, 2006 and ending May 31, 2009. The
management fee is in the amount of $12,727 per month.

We have a lease agreement for the Roots Biopark factory complex
in Jiangmun, commencing March 1, 2007 and ending Feb 29, 2022, the monthly
payments are $12,993.

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The following table shows a projection of future minimum
payments under operating leases and corporate management service agreements as
of December 31, 2006:

| | 2007 | $ | 526,317   | 
| | ---- | - | --------- | 
| | 2008 |   | 498,921   | 
| | 2009 |   | 274,664   | 
| |      | $ | 1,299,902 | 

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

Basis of presentation

Use of estimates

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

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.

Accounts receivable

Accounts receivable are stated at original amounts less
allowance made for doubtful receivables, if any, based on a review of all
outstanding amounts at the year end. Full allowances for doubtful receivables
are made when the receivables are overdue for 1 year and an allowance is also
made when there is objective evidence that we will not be able to collect all
amounts due according to original terms of receivables. Bad debts are written
off when identified.

Plant and equipment

Plant and equipment are stated at cost less accumulated
depreciation. Cost represents the purchase price of the asset and other costs
incurred to bring the asset into its existing use. Maintenance, repairs and
betterments, including replacement of minor items, are charged to expense; major
additions to physical properties are capitalized.

Depreciation of plant and equipment is provided using the
straight-line method over their estimated useful lives at the following annual
rates:

|Furniture, fixtures and office equipment | 20%
|---------------------------------------- | ---
|Motor vehicles                           | 20%

Impairment of long-lived assets

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Long-lived assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of the assets may
not be recoverable. We recognize impairment of long-lived assets in the event
that the net book values of such assets exceed the future undiscounted cash
flows attributable to such assets.

No impairment & long-lived assets was recognized for any of
the periods presented.

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.

Advertising and promotion expenses

Advertising and promotion expenses are charged to expenses as
incurred.

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.

Comprehensive income

We have adopted SFAS 130, Reporting Comprehensive Income,
which establishes standards for reporting and display of comprehensive income,
its components and accumulated balances. Accumulated other comprehensive income
represents the accumulated balance of our foreign currency translation
adjustments.

Foreign currency translation

We maintain our financial statements in U.S. dollars. Monetary
assets, liabilities and transactions denominated in currencies other than in
U.S. dollars are translated into U.S. dollars at rates of exchange prevailing at
the balance sheet dates. Exchange gains or losses arising from foreign currency
transactions are included in the determination of net income for the respective
periods.

Foreign currency assets and liabilities are translated at the
exchange rates at the balance sheet dates and foreign currency revenue and
expenses are translated at the average exchange rates and stockholders equity
is translated at historical exchange rates. Any translation adjustments
resulting are not included in determining net income but are included in foreign
exchange adjustment to other comprehensive income, a component of stockholders
equity.

Fair value & financial instruments

The carrying values of our financial instruments, including
cash and cash equivalents, trade and other receivables, deposits, trade and
other payables approximate their fair values due to the short-term maturity of
such instruments.

It is managements opinion that we are not exposed to
significant interest, price or credit risks arising from these financial
instruments,

We are exposed to certain foreign currency risk from export
sales and import purchase transactions and recognized accounts receivable and
payable as they will affect our future operating results. We did not have any
hedging activities during the reporting period.

Basic and diluted earnings per share

We report basic earnings or loss per share in accordance with
SFAS No. 128.

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Basic earnings per share is computed using the weighted average
number of shares outstanding during the periods presented. The weighted average
number of our shares represents the common stock outstanding during the years.

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 the we will continue as a going concern. These
consolidated financial statements show that we have a working capital deficit of
$1,327,189 and that the we have sustained losses totalling $11,186,497 since
inception. The future of our Company is dependent upon its continuing successful
operations, or raise the capital it will require through 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 the Company cannot continue in
existence.

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

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

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

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

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

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

We rely on a number of different suppliers to supply us with
the materials that we require to manufacture our disposable packaging products.
We could be adversely affected by an increase in our suppliers prices or a

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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 conditions. 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 suppliers prices or a significant decline in our suppliers
financial condition. As a result, our business may fail and investors may lose
their entire investment.

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

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

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

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

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

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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.

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

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

Although we have a stable customer base, we relied on our
largest five customers for approximately 98 % of our sales in 2006. The loss 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. This could cause us
to go out of business and investors could lose their entire investment.

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

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

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

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

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

Our executive officers and directors, in the aggregate,
beneficially own 78.30% of the issued and outstanding shares of our common
stock. As a result, they have the ability to influence matters affecting our
shareholders, including the election of our directors, the acquisition or
disposition of our assets, and the future issuance of our shares. Because our
executive officers, directors and principal shareholders control such shares,
investors may find it difficult to replace our management if they disagree with
the way our business is being operated. Because the influence by these insiders
could result in management making decisions that are in the best interest of
those insiders and not in the best interest of the investors, you may lose some
or all of the value of your investment in our common stock.

RISKS RELATED TO OUR COMMON STOCK

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

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

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

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

Our certificate of incorporation, as amended, authorizes the
issuance of up to 50,000,000 shares of common stock with a par value of $0.0001
and 10,000,000 shares of preferred stock with a par value of $0.001. Our board
of directors may choose to issue some or all of such shares to provide
additional financing in the future. The issuance of any such shares will result
in a reduction of the book value and market price of the outstanding shares of
our common stock. If we issue any such additional shares, such issuance will
cause a reduction in the proportionate ownership and voting power of all current
shareholders. Further, such issuance may result in a change of control of our
company.

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

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

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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.

NASD sales practice requirements may also limit a
stockholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, the
National Association of Securities Dealers (NASD) has adopted rules that require
that in recommending an investment to a customer, a broker-dealer must have
reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status, investment
objectives and other information. Under interpretations of these rules, the NASD
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. The NASD 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 3. Controls and Procedures.

As required by Rule 13a-15 under the Exchange Act, we have evaluated
  the effectiveness of the design and operation of our disclosure controls and
  procedures at March 31, 2007, which is the end of the period covered by this
  report. This evaluation was carried out under the supervision and with the participation
  of our principal executive officer and principal financial officer. Based on
  this evaluation, we have concluded that the design and operation of our disclosure
  controls and procedures are effective as at the end of the period covered by
  this report. There were no changes in our internal control over financial reporting
  or in other factors that have materially affected, or are reasonably likely
  to materially affect, our internal control over financial reporting in our most
  recent fiscal quarter.

Disclosure controls and procedures are controls and other procedures
  that are designed to ensure that information required to be disclosed by our
  company in the reports that we file or submit under the Exchange Act is recorded,
  processed, summarized and reported, within the time periods specified in the
  SEC's rules and forms. Disclosure controls and procedures include, without limitation,
  controls and procedures designed to ensure that information required to be disclosed
  by our company in the reports that we file or submit under the Exchange Act
  is accumulated and communicated to our management, including our principal executive
  officer and principal financial officer, as appropriate, to allow timely decisions
  regarding required disclosure.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

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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 is an adverse
party or has a material interest adverse to us.

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

On March 27, 2007, in connection with the closing of a share
exchange agreement, we issued 90,000,000 shares of our common stock to the
former shareholders of Roots Biopack Group Limited. We issued the common shares
in an offshore transaction in reliance upon Regulation S and/or Section 4(2) of
the Securities Act of 1933 to non-U.S. Persons (as that term is defined in
Regulation S under the Securities Act of 1933).

On March 27, 2007, in connection with the closing of a share
exchange agreement, we issued 987,733 and 305,492 of our common stock to Ricky
Chiu and Eddie Chou, two non U.S. persons who are also directors and officers of
our company, in conversion of debt owed by us to them. We issued the common
shares in an offshore transaction in reliance upon Regulation S and/or Section
4(2) of the Securities Act of 1933 to non-U.S. Persons (as that term is defined
in Regulation S under the Securities Act of 1933).

Item 3. Defaults Upon Senior Securities.

None.

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

None.

Item 5. Other Information.

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 14, 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

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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.

Item 6. Exhibits.

Exhibits required by Item 601 of Regulation S-B

|Exhibit | Description                                                                                                                                                                                             
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                         
|(31)    | Section 302 Certifications                                                                                                                                                                              
|        |                                                                                                                                                                                                         
|31.1*   | Certification of Principal
      Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act
      of 2002.                                                                               
|        |                                                                                                                                                                                                         
|31.2*   | Certification of Principal Financial
      Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                     
|        |                                                                                                                                                                                                         
|(32)    | Section 906 Certifications                                                                                                                                                                              
|        |                                                                                                                                                                                                         
|32.1*   | Certification of Principal
      Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.
      Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002.

|* | Filed herewith.
|- | ---------------

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.

BIOPACK ENVIRONMENTAL SOLUTIONS INC.

|By:*/s/ Gerald
      Lau*                           | 
|--------------------------------------------------- | 
|Gerald Lau                                          | 
|President, Principal Executive Officer and Director | 
|(Principal Executive Officer)                       | 
|Date: September 17, 2007                            | 
|                                                    | 
|By: */s/ Edwin
      Chan*                          | 
|Edwin Chan                                          | 
|Chief Financial Officer                             | 
|(Principal Financial Officer)                       | 
|Date: September 17, 2007                            | 

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