---

UNITED
STATESSECURITIES AND EXCHANGE
COMMISSIONWashington, D.C.
20549

Form
10-QSB(Mark One)[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934For the quarterly period endedSeptember 30, 2007[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACTFor 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 November 6, 2007

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

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

2

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Biopack Environmental Solutions, Inc. and
SubsidiariesConsolidated Balance Sheet

|                                                              |   | (Unaudited)   |  
|------------------------------------------------------------- | - | ------------- | -
|                                                              |   | September 30, |  
|                                                              |   | 2007          |  
|                                                              |   |               |  
|Assets                                                        |   |               |  
|Current assets                                                |   |               |  
|Cash and
      equivalents                                    | $ | 6,806         |  
|Accounts receivable                                           |   | 323,952       |  
|Prepaid expenses
      and other assets                       |   | 997,448       |  
|Total
      current assets                                    |   | 1,328,206     |  
|                                                              |   |               |  
|Property plant and equipment,
      net                       |   | 322,783       |  
|Construction in
      process                                 |   | 816,265       |  
|Deposits                                                      |   | 164,464       |  
|Advances to
      related parties                             |   | 2,160,736     |  
|Total
      assets                                            |   | 4,792,454     |  
|                                                              |   |               |  
|Liabilities and stockholders'
      equity                    |   |               |  
|Current
      liabilities                                     |   |               |  
|Accounts payable and accrued
      expenses                   |   | 1,337,665     |  
|Accrued income
      taxes                                    |   | 233,340       |  
|Vehicle obligation
      payable                              |   | 24,793        |  
|Deferred
      taxes                                          |   | 1,892         |  
|Due to related parties                                        |   | 1,213,191     |  
|Total current liabilities                                     |   | 2,810,881     |  
|                                                              |   | (1,482,675    | )
|Stockholders'
      equity                                    |   |               |  
|Preferred stock, 10,000,000
      shares authorized at $.001, |   |               |  
|par value,
      2,000,000 shares issued and outstanding      |   |               |  
|at September 30,
      2007                                   |   | 2,000         |  
|Common stock,
      500,000,000 shares authorized,            |   |               |  
|$.0001 par value;
      173,821,155 issued and                |   |               |  
|outstanding at September 30, 2007                             |   | 17,382        |  
|Additional paid-in
      capital                              |   | 1,465,698     |  
|Stock issued at
      less than par value                     |   | (2,683        | )
|Retained earnings                                             |   | 408,154       |  
|Accumulated
      other comprehensive income                  |   | 91,022        |  
|Total
      stockholders' equity                              |   | 1,981,573     |  
|                                                              |   |               |  
|Total
      liabilities and stockholders' equity              | $ | 4,792,454     |  

3

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|Biopack Environmental Solutions, Inc. and
      Subsidiaries
|------------------------------------------------------------
|Consolidated Statements of Operations                       
|For the Three Months Ended September 30,
      2007 and 2006
|                                                            
|(Unaudited)                                                 

|                                      |   | Three months
      ended |   |   | Nine months
      ended |  
|------------------------------------- | - | ------------------------ | - | - | ----------------------- | -
|                                      |   | September 30,            |   |   | September 30,           |  
|                                      |   | 2007                     |   |   | 2006                    |  
|Revenues,
      net                   | $ | 155,118                  |   | $ | 1,655,803               |  
|                                      |   |                          |   |   |                         |  
|Cost of revenues                      |   | 13,202                   |   |   | 1,312,026               |  
|                                      |   |                          |   |   |                         |  
|Gross profit                          |   | 141,916                  |   |   | 343,777                 |  
|                                      |   |                          |   |   |                         |  
|Expenses                              |   |                          |   |   |                         |  
|                                      |   |                          |   |   |                         |  
|General and
      administrative      |   | 430,989                  |   |   | 386,802                 |  
|                                      |   |                          |   |   |                         |  
|Total operating
      expenses        |   | 430,989                  |   |   | 386,802                 |  
|                                      |   |                          |   |   |                         |  
|Income (loss) from
      operations   |   | (289,073                 | ) |   | (43,026                 | )
|                                      |   |                          |   |   |                         |  
|Interest income                       |   | 31                       |   |   | 2,090                   |  
|                                      |   |                          |   |   |                         |  
|Interest expense                      |   | (10,085                  | ) |   | (454                    | )
|                                      |   |                          |   |   |                         |  
|Income (loss) before
      income tax |   | (299,127                 | ) |   | (41,390                 | )
|                                      |   |                          |   |   |                         |  
|Income tax                            |   | (2,533                   | ) |   | 34,025                  |  
|                                      |   |                          |   |   |                         |  
|Net income
      (loss)               | $ | (296,594                 | ) | $ | (75,415                 | )
|                                      |   |                          |   |   |                         |  
|Earnings (loss) per
      share       | $ | (0.00                    | ) | $ | (0.00                   | )
|                                      |   |                          |   |   |                         |  
|Weighted average
      common         |   |                          |   |   |                         |  
|shares
      outstanding              |   | 159,121,084              |   |   | 39,941,193              |  

4

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|Biopack Environmental Solutions, Inc. and
      Subsidiaries
|------------------------------------------------------------
|Consolidated Statement of Changes in
      Cash             
|For the Three Months Ended September 30,
      2007         
|(Unaudited)                                                 

|Cash flows from operating activities                                             |   |           |  
|-------------------------------------------------------------------------------- | - | --------- | -
|Net income (loss)                                                                | $ | (711,272  | )
|Adjustments to reconcile net loss to net cash
      used in operating activities |   |           |  
|Depreciation and amortization                                                    |   | 13,156    |  
|Deferred income taxes                                                            |   | 3         |  
|Interest expenses convert to shares                                              |   | 63,427    |  
|Other comprehensive income                                                       |   | (74,349   | )
|Changes in assets and liabilities:                                               |   |           |  
|Accounts receivable                                                              |   | (323,952  | )
|Prepaid expenses and other assets                                                |   | (972,868  | )
|Accounts payable and accruals                                                    |   | 1,595,949 |  
|Accrued income taxes                                                             |   | (11,247   | )
|Net cash (used in) provided by operating activities                              |   | (421,153  | )
|                                                                                 |   |           |  
|Cash flows from investing activities                                             |   |           |  
|Purchase of property and equipment                                               |   | (105,857  | )
|Additions to construction in progress                                            |   | (816,265  | )
|Increase in deposits                                                             |   | 63,454    |  
|Net cash used in investing activities                                            |   | (858,668  | )
|                                                                                 |   |           |  
|Cash flow from financing activities                                              |   |           |  
|Repayment of vehicle lease obligation                                            |   | (2,774    | )
|Repayment of notes payable                                                       |   | 0         |  
|Loan from directors                                                              |   | 521,441   |  
|Increase in due to related parties,
      net                                    |   | (29,862   | )
|Repayment of advances to related parties                                         |   | 0         |  
|Advances to related parties                                                      |   | (3,973    | )
|Proceeds from issuance of common stock                                           |   | 0         |  
|Net cash provided by (used in)financing activities                               |   | 484,832   |  
|                                                                                 |   |           |  
|Net change in cash                                                               |   | (794,989  | )
|                                                                                 |   |           |  
|Cash, beginning of year                                                          |   | 801,795   |  
|                                                                                 |   |           |  
|Cash, end of period                                                              | $ | 6,806     |  
|                                                                                 |   |           |  
|Supplemental disclosure of cash flow information:                                |   |           |  
|Cash paid for income taxes                                                       | $ | 33,806    |  
|Cash paid for interest                                                           |   | 626       |  
|Non-cash investing and financing activities:                                     |   |           |  
|Stock issued to retire debt to related parties                                   | $ | 1,033,742 |  
|Stock issued to retire debt to promissary notes                                  | $ | 1,133,668 |  
|Preferred shares transferred to treasury                                         |   | 1,000     |  

5

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**BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBSIDIARIES
  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. The name
change was effected by merging Biopack Environmental Solutions Inc. with the
Company, Biopack Environmental Solutions Inc. carrying on as the surviving
corporation.

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 intercompany balances and transactions have
been eliminated from the consolidated financial statements.

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

6

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

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 June 30, 2007 due
to no bad debt experience during the period.

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    
|Factory equipment                 | 10   
|Production Mould and Sample Mould | 10   

7

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

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. 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.

Foreign Currency Transactions

The Companys functional currency is Hong Kong
Dollars (HKD), Renminbi (RMB) and Malaysia Ringatt (MYR) and its reporting
currency is U.S. dollars. The Companys consolidated balance sheet accounts are
translated into U.S. dollars at the 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 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.

8

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

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.

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.

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.

9

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

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.

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 Nonmonetary Assets, an amendment of APB Opinion No. 29, Accounting
for Nonmonetary Transactions." The amendments made by SFAS 153 are based on the
principle that exchanges of nonmonetary assets should be measured based on the
fair value of the assets exchanged. Further, the amendments eliminate the narrow
exception for nonmonetary exchanges of similar productive assets and replace it
with a broader exception for exchanges of nonmonetary assets that do not have
commercial substance. Previously, Opinion 29 required that the accounting for an
exchange of a productive asset for a similar productive asset or an equivalent
interest in the same or similar productive asset should be based on the recorded
amount of the asset relinquished. Opinion 29 provided an exception to its basic
measurement principle (fair value) for exchanges of similar productive assets.
That exception required that some nonmonetary exchanges, although commercially
substantive, to be recorded on a carryover basis. By focusing the exception on
exchanges that lack commercial substance, the FASB believes SFAS No.153 produces
financial reporting that more faithfully represents the

10

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

economics of the transactions. SFAS No.153 is
effective for nonmonetary asset exchanges occurring in fiscal periods beginning
after June 15, 2005. Earlier application is permitted for nonmonetary asset
exchanges occurring in fiscal periods beginning after the date of issuance. The
provisions of SFAS No.153 shall be applied prospectively. The Company has
evaluated the impact of the adoption of SFAS 153, and does not believe the
impact will be significant to the Company's overall results of operations or
financial position.

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

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

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

11

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

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

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

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

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

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

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

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

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

12

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

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

3. Property, Plant and Equipment, net

Cost

|                                              |   |         |  
|--------------------------------------------- | - | ------- | -
|                                              |   |         |  
|Leasehold improvements                        | $ | 5,495   |  
|Motor vehicle                                 |   | 72,661  |  
|Office furniture and
      equipment          |   | 34,133  |  
|Computer equipment                            |   | 31,336  |  
|Factory equipment and
      Production Moulds |   | 55,288  |  
|Construction in
      progress                |   | 154,348 |  
|                                              |   | 353,261 |  
|Accumulated
      depreciation                |   | (30,478 | )
|                                              |   |         |  
|                                              |   |         |  
|                                              | $ | 322,783 |  

Depreciation expense for the nine months ended
September 30, 2007 was $13,156.

Construction in progress

The Company intends to build and operate a
production plant in Malaysia. As of December 31, 2006, the Company had spent
$152,251 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.

4. Going Concern

The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern.
These consolidated financial statements show that the Company has a working
capital deficit of $1,482,675. The future of the Company is dependent upon its
continuing successful operations, or raising 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.

5. Commitments and Contingencies

The Company leases office space under operating
leases. 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
$8,572 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. 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 $4,295. This lease will expire November 14, 2008. Our PRC
subsidiary, Jiangmen Roots Biopack Limited, leases 4 vacant properties at No.3,
Yangjiaokeng Industrial District, Tingyuan Village, Duruan Town, Jiangmen City,
PRC as our PRC office and factory named Roots Biopark for a period of March 1,
2007 to Feb 29, 2022, at progressive increase payments initial in the amount of
$12,993.

13

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BIOPACK ENVIRONMENTAL SOLUTIONS INC. AND SUBSIDIARIESNOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

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 $2,731 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 $12,438 per month.

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

2007
    $
      1,037,5502008
    240,2312009
    197,111$ 1, 474,892


On June 28, 2007, our wholly owned subsidiary,
Jiangmen Roots Biopack Limited, entered into a Boiler Project Contract with
Dongguan Hongyuan Boiler Equipments Co., Ltd. Pursuant to the terms of the
Boiler Project Contract, we have agreed to purchase a boiler from Dongguan
Hongyuan and Dongguan Hongyuan has agreed to sell us the boiler and to install
the boiler on our premises. Total consideration under this agreement is US
$197,000.

On June 11, 2007, our wholly owned subsidiary,
Jiangmen Roots Biopack Limited, entered into a Construction Project Agreement
with Li Baili. Pursuant to the terms of the Construction Project Agreement, Li
Baili has agreed to build certain infrastructure for our factory. Total
consideration under this agreement is US $179,000.

On June 6, 2007, our wholly owned subsidiary,
Jiangmen Roots Biopack Limited, entered into a Compressor Project Contract with
Sky Blue. Pursuant to the terms of the Compressor Project Contract, we have
agreed to purchase a compressor from Sky Blue and Sky Blue has agreed to sell us
the compressor and to install the compressor on our premises. Total
consideration under this agreement is US $94,000.

6. Income taxes

The provision for income taxes at September 30,
2007 is as follows:

Hong Kong profits tax
$21,974

7. Acquisition

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

Prior to our acquisition of the common shares of
Roots Biopack Group, we had one wholly owned subsidiary, Starmetro Group
Limited, which is incorporated in the British Virgin Islands.

Starmetro Group Limited, in its turn, had two
wholly owned subsidiaries: Biopack Environmental Ltd (formerly named as E-ware
Corporation Limited), a Hong Kong corporation, and Bioplanet Distribution Sdn
Bhd, a Malaysian corporation.

14

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

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.

8. 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.

9. 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 nine months ended September 30, 2007 was $10,603.

10. Advance to Related Parties

The Company has advanced $2,160,736 to a related
company as of September 30, 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.

11. Preferred Stock Issued to Convert
Debt

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

15

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

12. Sales Agreement

On August 19, 2007, our wholly owned subsidiary,
Roots Biopack Group Limited, entered into a Sales and Purchase of Machinery,
Technical Assistance and Factory Management Agreement with Tayna Environmental
Technology Co. Limited. Pursuant to the terms of the agreement we agreed to: (i)
appoint Tayna Environmental as our sole and exclusive manufacturer of our
products, (ii) sell to Tayna Environmental all machinery required for production
of our products, (iii) set up production facilities for Tayna Environmental,
(iv) provide technical assistance to Tayna Environmental, (v) manage
manufacturing operations for Tayna Environmental and (vi) grant manufacturing
licenses to Tayna Environmental to use our technologies and trademarks.

Tayna Environmental is also obligated to pay us US
$2,000,000 for the purchase of the machinery, peripheral and side equipment. In
consideration for us setting up production facilities and rendering technical
assistance to Tayna Environmental, Tayna Environmental has agreed to pay us US
$1,000,000. The initial term of the agreement is for ten years with an option to
renew for an additional five years.

On July 26, 2007, our wholly owned subsidiary,
Roots Biopack Limited, entered into a distribution agreement with Packagegroup
Moonen. Pursuant to the terms of the distribution agreement, Packagegroup Moonen
is the sole sales distributor and exclusive representative for our products in
Europe. All products sold by Packagegroup Moonen will be sold and branded under
the name of Roots Biopack Europe. Under the terms of the agreement, Packagegroup
Moonen will also own an exclusive set of molds which will be used for
manufacturing Packagegroup Moonens unique product designs. We will make the
molds for Packagegroup Moonen based upon their product design specifications and
Packagegroup Moonen will be responsible for all costs associated with the
production of the molds. Packagegroup Moonen will have access to all of our
current products and will solely have the right to products based upon their
molds. The initial term of this agreement will be for a period of thirty-six
months and will automatically be extended for an additional thirty-six month
period unless terminated by either party.

16

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

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

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

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

17

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

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

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

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:

18

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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.

19

---

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 our
quarterly report on Form 10-QSB for the first quarter of 2007 (ended March 31,
2007), which was our first 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.

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. Management of this subsidiary moved into our
principal executive office on May 21, 2007 and the office space at Hopewell
Centre is currently vacant. The lease for this office does not expire until
November 14, 2008 and we are actively attempting to sublease the premises or
assign the lease to a new tenant.

Our Peoples Republic of China (PRC) subsidiary,
Jiangmen Roots Biopack Limited, leases 4 adjacent properties situated at No.3,
Yangjiaokeng Industrial District, Tingyuan Village, Duruan Town, Jiangmen City,
PRC. This area is where our factory, named Roots Biopark, is located.

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

20

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Shunde City as our exclusive OEM manufacturer and
we terminated our relationship with the factory in Guang-Xi. Production from the
Shunde City factory began shipping in mid-September, 2007. These changes in
factories involved production flow and quality control issues which have had an
adverse impact on our sales. As a result, we anticipate that sales this year
will be below our budget. However, our exclusive supplier in Shunde City has
recently increased its production capacity in an effort to accommodate an
anticipated increase in our sales activity.

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

On August 19, 2007, we entered into an agreement
with Tayna Environmental Technology Co. Limited, an unrelated third party, to
set up phase one of our production facilities in that leased factory. Under this
agreement, we agreed to develop and sell to Tayna Environmental the 20
production machines required for the operation of two production lines to be
installed in the leased Jiangmen factory and we agreed to assist Tayna
Environmental in setting up these production lines for the manufacture of our
products, to train personnel and manage the facility and to assist in sales
after commencement of operation. At the date of this Form 10-QSB, we have
completed the assembly of nine production machines and we are in the process of
installing the required boiler, transformer and compressor units. We have
recently announced the soft opening of our Biopark facility and we hope to begin
initial production by the end of 2007. However, Tayna Environmental has recently
given notice that it desires to renegotiate the terms of our agreement with it.
We are unable to predict the outcome of this negotiation at this time, including
the future terms, if any, and the impact on our production capacity, including
the timing of the completion of phase one of our production plan. Upon
completion of phase one of our production plan, we believe that our Biopark
facility will be capable of producing approximately 320,000,000 pieces per
year.

Once phase one of our production plan is
completed, we intend to begin phase two and three. Our current plans for these
additional phases call for the development of two additional production lines
(with 5 additional machines for each production line). We are targeting an
aggregate production capacity of approximately 480,000,000 pieces during
2008.

Our sales and marketing team is located primarily
in Hong Kong and is supported by a newly-established sales team in our Malaysia
office. Through our sales and marketing team and 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.

Prior to the date that we acquired our
wholly-owned subsidiary Roots Biopack Group Limited, Roots Biopack Group Limited
had entered into an agreement to purchase land in Jiangmen upon which it
intended to build a large new factory facility designed to handle all of its
production requirements. Roots Biopack Group Limited did not complete this
proposed acquisition. We have recently decided not to complete this acquisition
and we anticipate that our deposit will be returned to us in due
course.

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 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 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.

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Result of Operations for the nine months ended
September 30, 2007 as compared to the nine months ended September 30,
2006.

During the nine-month period ended September 30,
2007 we had a net operating loss of $711,272, as compared to net operating
profit of $35,188 for the nine-month period ended September 30, 2006. The
increase in operating loss was due primarily to the costs of marketing, branding
and product development, as well as non-recurring professional fees. Sales for
the period were down primarily as the result of the restructuring of our company
and the changes in our OEM factory relationships due to quality control and
production volume issues with our former facility in Shunde City.

Net Sales and Cost of Sales

Net sales for the nine-month period ended
September 30, 2007 were $1,748,271, compared to net sales of $4,967,155 for the
nine-month period ended September 30, 2006. Sales were low primarily due to our
inability to manufacture our products, which in turn was primarily due to
retooling and changes at our production facility and production and quality
control issues at our former Shunde City facility.

Cost of sales for the nine-month period ended
September 30, 2007 was $989,078, compared to $3,936,078 for the same period in
2006, which provided a gross margin of 43.43%, as compared to 20.76% during the
same period of 2006. The difference in the margin is primarily due to the fact
that we have a different profit margin on our current source of
revenue.

Operating Expenses

Operating expenses for the nine-month period ended
September 30, 2007 were $1,385,407, compared to $898,720 during the same period
in 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 expense for the nine months
ended September 30, 2007 of $64,053. We incurred interest expense for the
nine-month period ended September 30, 2006 of $1,362. The increase in interest
expenditures of $62,691 for the nine-month period ended September 30, 2007 was
primarily due to interest payable on a promissory note.

Liquidity and Capital Resources

Our principal cash requirements are for daily
working capital, manufacturing and installation of plant and machineries and the
cost of infrastructure at our planned production facilities at our leased
factory in Jiangmen City, PRC. On September 30, 2007 we had cash of
$6,806.

Capital Resources

For the nine-month period ended September 30, 2007
we had a working capital deficit of $1,482,675. The decrease in working capital
for the period was primarily due to prepayments and receivables incurred in
connection with the development of our leased factory in Jiangmen, PRC. On
September 30, 2007, we had cash and cash equivalents of $6,806.

Cash Flow Used in Operating
Activities

For the nine months ended September 30, 2007 our
operating activities used net cash of $421,153. The increase in cash used in
operating activities is primarily due to the expansion of our
operations.

Cash Flow Used in Investing
Activities

For the nine months ended September 30, 2007
investing activities used net cash of $858,668. The increase in net cash used in
investing activities was primarily due to an increase in prepayments and the
purchase of equipment for our new Biopark production facility.

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Cash Flow Provided by Financing
Activities

For the nine months ended September 30, 2007 cash
flow provided by financing activities provided cash of $404,832. The increase in
cash flow provided by financing activities was primarily due to advances from a
third party, Begonia Participation Corp.

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

Capital Expenditures

We incurred capital expenditures in factory
equipment, production moulds, vehicle and computer equipment. As of September
30, 2007, we had the following material commitments for capital
expenditures:

For Phase I:

3 Parcels of Land totalling
      198.9 acres
    $2,709,861Machinery &
      Equipment
    147,927Ancillary equipment &
      Installation
    444,115Infrastructure
      construction
    183,644Production moulds
    25,446


Over the next twelve months, we expect to spend an
additional $5,000,000 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 $8,572 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 Group Limited, leases an office at Unit 2009,
Hopewell Centre, 183 Queens Road East, Wan Chai, Hong Kong, for a monthly rent
of $4,295. This lease will expire November 14, 2008 and we are currently
attempting to sublease or assign these premises as they are superfluous to our
present needs. Our PRC subsidiary, Jiangmen Roots Biopack Limited, leases 4
vacant properties at No.3, Yangjiaokeng Industrial District, Tingyuan Village,
Duruan Town, Jiangmen City, PRC. This leased property will serve as our PRC
office and factory. The term of this lease began March 1, 2007 and expires Feb
29, 2022, with monthly rental payments progressively increasing from an initial
monthly payment of $12,993.

We lease office equipment and office renovations
in Hong Kong. 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.

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 $12,438 per month.

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

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2007
    $
    369,0932008
    
    240,2312009
    
    197,111$
    805,435


Going Concern

The accompanying consolidated financial statements
have been prepared assuming that we will continue as a going concern. Our
consolidated financial statements show that we have a working capital deficit of
$1,494,326. The future of our company is dependent upon our continuing to
maintain and grow our operations and raising the capital that this growth will
require through revenue, the issuance of equity securities, borrowings or a
combination thereof. The consolidated financial statements do not include any
adjustments relating to recoverability and classification of recorded assets, or
the amounts or classifications of liabilities that might be necessary in the
event our company cannot continue in existence.

Off-Balance Sheet Arrangements

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

Significant Accounting Policies

Use of Estimates

In preparing 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

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

Accounts receivable

Accounts receivable are stated at original amount
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%Production equipment
    10%Production and Sample Mould
    10%


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Impairment of long-lived assets

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, manufacture
license, machinery and royalty 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
expense 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.

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Basic and diluted earnings per
share

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

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
$1,494,326 and that we have retained profit totalling $408,154 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 our company cannot continue in
existence.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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revenues and damage to our customer relationships,
which could materially adversely effect our business, results of operations or
financial condition.

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

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

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

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claims against us, with or without merit, could be
time consuming and costly to defend or litigate, divert our attention and
resources, result in the loss of goodwill associated with our business or
require us to make changes to our disposable food container and industrial
packaging products.

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

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

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

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

30

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

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

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

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

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

Item 3. Controls and Procedures.

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

As of September 30, 2007, the end of the third
quarter covered by this report, we carried out an evaluation, under the
supervision and with the participation of our president (also our principal
executive officer) and our secretary, treasurer and chief financial officer
(also our principal financial and accounting officer), of the effectiveness of
the design and operation of our disclosure controls and procedures. Based on the
foregoing, our president (also our principal executive officer) and our
secretary, treasurer and chief financial officer (also our principal financial
and accounting officer) concluded that our disclosure controls and procedures
were effective as of the end of the period covered by this quarterly report.

31

---

There have been no significant changes in our
internal controls over financial reporting that occurred during the quarter
ended September 30, 2007 that have materially or are reasonably likely to
materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

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

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

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

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

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

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

In his statement of claim, Mr. Lau alleges that in
or about January 2007, upon him learning of a severe medical condition that he
developed, he agreed to execute a declaration of trust in favour of Mr. Oung
Cheng Hai which was to take effect upon the completion of a number of
conditions. Mr. Lau alleges that he signed a declaration of trust, an instrument
of transfer in respect of the one (1) issued share in Good Value Galaxy Limited,
a notice of resignation of Good Value Galaxy Limited, a written resolution of
the sole director of Good Value Galaxy Limited

32

---

approving the transfer of the share, the
resignation of the sole director and the appointment of Mr. Oung Cheng Hai. Mr.
Lau further alleges that all the executed documents were to remain undated and
were not to take effect until the following conditions were met:

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

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

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

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

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

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

33

---

Also on June 4, 2007, the court ordered that all
materials, including all business information such as accounting records,
information registered under the name of Foshan City Green Machiney Factory and
placed at the factory area of our wholly owned subsidiary plus our subsidiarys
production equipment, products and business records seized, detained,
photographed, video-taped, copied, investigated, and listed, in order to
preserve the evidence.

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

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

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

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

We issued the Series A and Series B Preferred
Shares to one person that is not a U.S. person (as that term is defined in
Regulation S of the Securities Act of 1933) in an offshore transaction relying
on Regulation S and/or Section 4(2) of the Securities Act of 1933.

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.

34

---

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

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

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

Please refer to the discussion of our claims
against Albert Oung and Patrick Oung, and their claims against some of our
subsidiaries, in the section of this quarterly report on Form 10-QSB titled
Legal Proceedings,
above.

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

On, July 24, 2007, Mr. Eddie Chou resigned as our
Chief Financial Officer. Concurrently, with Mr. Chous resignation, Mr. Edwin
Chan was appointed as our Chief Financial Officer. Mr. Chou is continuing to
serve as our Chief Technical Officer, Secretary, Treasurer and
director.

On May 18, 2007, we entered into a letter of
intent with Svena Floor Factory. Under the terms of the letter of intent, Svena
Floor Factory will set up a production facility to handle our increased
production requirements. Svena Floor Factory has agreed to pay us approximately
$3,000,000 for the production rights. In return, we will handle all customer
sales for Svena Floor Factory and purchase for resale all units produced by
Svena Floor Factory.

On July 13, 2007, we received final approval from
the United States Patent and Trademark Office for the exclusive use of the Roots
Biopack branding and logo in the United States.

On October 2, 2007, Edwin Chan resigned as our
Treasurer and Chief Financial Officer and we re-appointed Eddie Chou as our
Treasurer and Chief Financial Officer. Mr. Chan remains a member of our board of
directors.

35

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Item 6. Exhibits.

Exhibits required by Item 601 of Regulation
S-B

|Exhibit |                                                                                                                                                                                                                                                                                                                                                     
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                                     
|(2)     | Plan of Purchase, Sale,
      Reorganization, Arrangement, Liquidation or Succession                                                                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                     
|2.1     | Share exchange agreement dated
      February 8, 2007 between our company, Roots Biopack Group, Good
      Value Galaxy Limited, Joyful Services Ltd., Legend View
      Holdings Ltd, Erich Muller Holding AG, and Eddie Chou
      and Ricky Chiu (incorporated by reference from our Current Report on Form
      8-K filed on January 11, 2007).
|        |                                                                                                                                                                                                                                                                                                                                                     
|(3)     | Articles of Incorporation and
      Bylaws                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                     
|3.1     | Articles of Incorporation
      (incorporated by reference from our Current Report on Form 8-K filed on
      May 9, 2001).                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                                     
|3.2     | Bylaws (incorporated by reference
      from our Current Report on Form 8-K filed on May 9, 2001).                                                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                                     
|3.3     | Certificate of Amendment of
      Articles of Incorporation (incorporated by reference from our
      Current Report on Form 8-K filed on May 9,
      2001).                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                                     
|3.4     | Articles of Merger (incorporated
      by reference from our Current Report on Form 8-K filed on May 9,
      2001).                                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                     
|3.5     | Certificate of Designation
      (incorporated by reference from our Current Report on Form 8-K filed
      on May 9, 2001).                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                                                                                                     
|3.6     | Articles of Merger filed with the
      Secretary of State of Nevada on November 21, 2006 effective on
      November 26, 2006 (incorporated by reference from our Current
      Report on Form 8-K filed on November 28, 2006).                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                     
|3.7     | Articles of Merger filed with the
      Secretary of State of Nevada on February 21, 2007 effective on
      February 26, 2007 (incorporated by reference from our Current
      Report on Form 8-K filed on February 27, 2007).                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                     
|(10)    | Material Contracts                                                                                                                                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                                     
|10.1    | Technology License and Materials
      Purchase Agreement with Glory Team Industrial Ltd., Starmetro Group Limited dated December 7, 2005 (incorporated by reference
      from our quarterly report on Form 10-QSB filed on
      November 20, 2006).                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                                     
|10.2    | Agreement dated effective November
      13, 2006 with Glory Team Industrial Ltd. and Eddie Chou S. Hou
      (incorporated by reference from our Current Report on Form
      8-K filed on November 17, 2006).                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                                                     
|10.3    | Share Exchange Agreement dated
      January 5, 2007 among our company, Roots, the Stockholders, Chou
      and Chiu (incorporated by reference from our Current Report
      on Form 8-K filed on January 10, 2007).                                                                                                                               
|        |                                                                                                                                                                                                                                                                                                                                                     
|10.4    | Agreement for Transfer of
      State-Owned Land Usage Right (incorporated by reference from our
      Current Report on Form 8-K filed on April 2,
      2007)                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                                                     
|10.5    | Factory Leasing Agreement
      (incorporated by reference from our Current Report on Form 8-K filed
      on April 2, 2007)                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                                                                                                     
|10.6    | Factory Leasing Agreement 
      Translation (incorporated by reference from our Current Report on
      Form 8-K filed on April 2, 2007)                                                                                                                                                                                                          

36

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|10.7  | Roots Tenancy Agreement
      (incorporated by reference from our Current Report on Form 8-K filed
      on April 2, 2007)                                                                                                                                                                       
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                   
|10.8  | Sales and Purchase of Machinery,
      Technical Assistance and Factory Management Agreement dated August
      19, 2007 between our company and Tayna Environmental Technology Co.
      Limited (incorporated by reference from our Quarterly Report on Form 8-K
      filed on August 21, 2007)
|      |                                                                                                                                                                                                                                                                                                   
|10.9  | Distribution Agreement dated July
      26, 2007 between our wholly owned subsidiary, Roots Biopack Limited and Packagegroup Moonen (incorporated by reference from our
      Current Report on Form 8-K filed on August 27,
      2007)                                                          
|      |                                                                                                                                                                                                                                                                                                   
|10.10 | Boiler Project Contract dated June
      28, 2007 between our wholly owned subsidiary, Jiangmen Roots Biopack Limited and Dongguan Hongyuan Boiler Equipments Co., Ltd.
      (incorporated by reference from our Current Report on
      Form 8-K filed on August 27, 2007)                      
|      |                                                                                                                                                                                                                                                                                                   
|10.11 | Construction Project Agreement
      dated June 11, 2007 between our wholly owned subsidiary, Jiangmen
      Roots Biopack Limited and Li Bailia (incorporated by
      reference from our Current Report on Form 8-K filed on
      August 27, 2007)                                             
|      |                                                                                                                                                                                                                                                                                                   
|10.12 | Compressor Project Contract dated
      June 6, 2007 between our wholly owned subsidiary, Jiangmen Roots
      Biopack Limited and Sky Blue (incorporated by reference from
      our Current Report on Form 8-K filed on August 27,
      2007)                                                  
|      |                                                                                                                                                                                                                                                                                                   
|10.13 | Debt Settlement and Subscription
      Agreement dated August 1, 2007 between our company and Begonia
      Participation Corp. (incorporated by reference from our
      Quarterly Report on Form 8-K filed on August 20,
      2007)                                                            
|      |                                                                                                                                                                                                                                                                                                   
|(14)  | Code of Ethics                                                                                                                                                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                                   
|14.1  | Code of Business Conduct and
      Ethics (incorporated by reference from our Annual Report on Form
      10- KSB filed on April 15, 2003).                                                                                                                                                       

37

---

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

* Filed herewith

38

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SIGNATURES

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

BIOOPACK ENVIRONMENTAL SOLUTIONS
INC.

By: /s/ Gerald Lau Gerald LauPresident, Principal Executive Officer and Director(Principal
Executive Officer)Date: November 19, 2007

By: /s/ Eddie ChouEddie ChouSecretary, Treasurer and Director(Principal
Financial Officer and Principal Accounting Officer)Date: November 19,
2007

39

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