UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

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

                  For the quarterly period ended June 30, 2011

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

           For the transition period from ____________ to ____________

                       Commission file number: 333-150385


                          PACIFIC BEPURE INDUSTRY INC.
             (Exact name of registrant as specified in its charter)

         Delaware                      333-150385               26-1272059
(State or other jurisdiction          (Commission              (IRS Employer
     of incorporation)                  File No.)            Identification No.)

             No. 78 Kanglong East Road, Yangdaili, Chendai Township
                   Jinjiang City, Fujian Province, P. R. China
                    (Address of principal executive offices)

                             Tel: (86 595) 8677 0999
              (Registrant's telephone number, including area code)

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

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

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

Large accelerated filer [ ]                        Accelerated filer [ ]

Non-accelerated filer [ ]                          Smaller reporting company [X]

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

As of Aug 15, 2011, 15,000,000 shares of the Company's common stock, $0.0001 par
value, were issued and outstanding.
<PAGE>
                          Pacific Bepure Industry Inc.
                                Table of Contents

PART I FINANCIAL INFORMATION

Item 1.  Financial Statements                                                  3

         Condensed  Consolidated Balance Sheets as of June 30, 2011
         (unaudited) and December 31, 2010                                     3

         Condensed Consolidated Statements of Income and Comprehensive
         Income for the six months ended June 30, 2011 and 2010 (unaudited)    4

         Condensed  Consolidated  Statements of Cash Flows for the six
         months ended June 30, 2011 and 2010 (unaudited)                       5

         Condensed Consolidated Statement of Stockholders' Equity              7

         Notes to Condensed Consolidated Financial Statements                  8

Item 2.  Management's  Discussion and Analysis of Financial Condition and
         Results of Operations                                                23

Item 3.  Quantitative and Qualitative Disclosures About Market Risk           32

Item 4.  Controls and Procedures                                              32

Part II OTHER INFORMATION

Item 1.  Legal Proceedings                                                    32

Item 1A. Risk Factors                                                         32

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds          32

Item 3.  Defaults upon Senior Securities                                      32

Item 4.  [Removed or reserved]                                                32

Item 5.  Other Information                                                    33

Item 6.  Exhibits                                                             33

Signatures                                                                    33

                                       2
<PAGE>
Pacific Bepure Industry Inc.
Condensed Consolidated Balance Sheets
As of June 30, 2011 and December 31, 2010
(Stated in US Dollars)

<TABLE>
<CAPTION>
                                                                   As of                 As of
                                                                  June 30,            December 31,
                                                                    2011                  2010
                                                                ------------          ------------
                                                                (Unaudited)            (Audited)
<S>                                                             <C>                   <C>
ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                     $  6,666,263          $  5,815,257
  Trade receivables                                               12,613,775            13,094,012
    Prepayments and other receivables - Note 5                       185,055               249,118
  Advances to customers and distributors - Note 6                  1,536,250             1,293,733
    Inventories - Note 7                                           2,937,379             1,232,557
                                                                ------------          ------------
      TOTAL CURRENT ASSETS                                        23,938,722            21,684,677
                                                                ------------          ------------
Properties, plant and equipment, net - Note 8                      8,869,911             7,592,866
Land use rights - Note 9                                           6,073,949             6,021,489
Intangible asset - Note 10                                           163,784               190,505
                                                                ------------          ------------

      TOTAL ASSETS                                              $ 39,046,366          $ 35,489,537
                                                                ============          ============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

CURRENT LIABILITIES
  Trade payables                                                $  2,267,530          $  2,988,361
  Other payables and accrued expenses - Note 11                    4,403,408             3,524,874
  Loans payable - Note 12                                          6,389,233             4,717,870
  Amount due to a director - Note 13                               2,037,646             1,998,085
  Income tax payable                                               1,672,679             1,248,649
                                                                ------------          ------------
      TOTAL CURRENT LIABILITIES                                   16,770,496            14,477,839
                                                                ------------          ------------
      TOTAL LIABILITIES                                           16,770,496            14,477,839
                                                                ------------          ------------

COMMITMENTS AND CONTINGENCIES - Note 15

STOCKHOLDERS' EQUITY
  Common stock: par value of $0.0001 per share
  Authorized 75,000,000 shares; issued and outstanding
    15,000,000 shares in 2011 and 2010 - Note 22                       1,500                 1,500
  Additional paid-in capital                                       3,366,877             3,234,650
  Statutory reserve - Note 23                                        309,688               309,688
  Accumulated other comprehensive income                           2,414,055             1,987,222
  Retained earnings                                               16,183,750            15,478,638
                                                                ------------          ------------
      TOTAL STOCKHOLDERS' EQUITY                                  22,275,870            21,011,698
                                                                ------------          ------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $ 39,046,366          $ 35,489,537
                                                                ============          ============
</TABLE>


              The accompanying notes are an integral part of these
                  condensed consolidated financial statements

                                       3
<PAGE>
Pacific Bepure Industry Inc.
Condensed Consolidated Statements of Income and Comprehensive Income (Loss)
For the three and six months ended June 30, 2011 and 2010
(Stated in US Dollars)

<TABLE>
<CAPTION>
                                                         Six months ended                   Three months ended
                                                             June 30,                            June 30,
                                                 -------------------------------      -------------------------------
                                                     2011               2010              2011               2010
                                                 ------------       ------------      ------------       ------------
                                                  (Unaudited)        (Unaudited)      (Unaudited)         (Unaudited)
<S>                                              <C>                <C>               <C>                <C>
Sales revenue                                    $  9,193,949       $  9,287,177      $  2,764,437       $  4,554,762
Cost of sales                                       6,660,821          6,212,044         2,295,483          3,162,378
                                                 ------------       ------------      ------------       ------------
Gross profit                                        2,533,128          3,075,133           468,954          1,392,384
                                                 ------------       ------------      ------------       ------------
Operating expenses
  Administrative expenses                             967,970            581,045           540,332            260,032
  Selling expenses                                    220,194            144,424           148,653             71,448
                                                 ------------       ------------      ------------       ------------
                                                    1,188,164            725,469           688,985            331,480
                                                 ------------       ------------      ------------       ------------
Income/(loss) from operations                       1,344,964          2,349,664          (220,031)         1,060,904
  Other income - Note 16                              109,421                 --            69,685              3,783
  Other expense                                            --            (22,934)               --                 --
  Finance costs - Note 17                            (258,456)          (122,576)         (163,703)           (61,339)
                                                 ------------       ------------      ------------       ------------
Income/(loss) before income taxes                   1,195,929          2,204,154          (314,049)         1,003,348
Income taxes - Note 18                               (490,817)          (581,268)          (55,156)          (266,443)
                                                 ------------       ------------      ------------       ------------
Net income/(loss)                                     705,112          1,622,886          (369,205)           736,905

Other comprehensive income:
  Foreign currency translation adjustment             426,833             20,935           288,838             57,168
                                                 ------------       ------------      ------------       ------------

Total comprehensive income/(loss)                $  1,131,945       $  1,643,821      $    (80,367)      $    794,073
                                                 ============       ============      ============       ============
Earnings/(loss) per share:
  Basic and diluted - Note 19                    $      0.047       $      0.108      $     (0.025)      $      0.049
                                                 ============       ============      ============       ============
Weighted average number of shares outstanding
 - Note 19 :
   - Basic                                         15,000,000         15,000,000        15,000,000         15,000,000
   - Diluted                                       15,009,438         15,000,000        15,000,000         15,000,000
                                                 ============       ============      ============       ============
</TABLE>


              The accompanying notes are an integral part of these
                  condensed consolidated financial statements

                                       4
<PAGE>
Pacific Bepure Industry Inc.
Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2011 and 2010
(Stated in US Dollars)

<TABLE>
<CAPTION>
                                                                                       Six months ended
                                                                                            June 30,
                                                                              -----------------------------------
                                                                                  2011                   2010
                                                                              ------------           ------------
                                                                              (Unaudited)             (Unaudited)
<S>                                                                           <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                                  $    705,112           $  1,622,886
  Adjustments to reconcile net income to net cash
   provided by/(used in) operating activities:
     Depreciation                                                                  160,525                 77,973
     Amortization of an intangible asset and land use rights
      recognised as expenses                                                        63,305                 26,850
     Share-based compensation                                                      132,227                     --
  Changes in operating assets and liabilities:
     Trade receivables                                                             729,933               (704,497)
     Prepayments and other receivables                                             100,782               (187,662)
     Advance to customers and distributors                                        (214,119)                    --
     Inventories                                                                (1,658,820)              (344,749)
     Trade payables                                                               (769,960)            (1,389,164)
  Other payables and accrued expenses                                              798,361               (533,234)
     Income tax payable                                                            394,179                (94,588)
                                                                              ------------           ------------
           NET CASH FLOWS PROVIDED BY/(USED IN) OPERATING ACTIVITIES               441,525             (1,526,185)
                                                                              ------------           ------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Payments to acquire property, plant and equipment and
   construction in progress                                                     (1,272,782)              (463,674)
                                                                              ------------           ------------
           NET CASH FLOWS USED IN INVESTING ACTIVITIES                          (1,272,782)              (463,674)
                                                                              ------------           ------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from new loans                                                        3,588,785              4,141,381
  Repayment of loans                                                            (2,031,099)            (1,463,386)
  Repayment of amount due to a director                                                 --               (201,906)
                                                                              ------------           ------------
           NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES                       1,557,686              2,476,089
                                                                              ------------           ------------
Effect of foreign currency translation on cash and cash equivalents                124,577                  6,881
                                                                              ------------           ------------
Net increase in cash and cash equivalents                                          851,006                493,111
Cash and cash equivalents - beginning of period                                  5,815,257              4,325,176
                                                                              ------------           ------------

Cash and cash equivalents - end of period                                     $  6,666,263           $  4,818,287
                                                                              ============           ============
</TABLE>


              The accompanying notes are an integral part of these
                  condensed consolidated financial statements

                                       5
<PAGE>
Pacific Bepure Industry Inc.
Condensed Consolidated Statements of Cash Flows (cont'd)
For the Six months ended June 30, 2011 and 2010
(Stated in US Dollars)

<TABLE>
<CAPTION>
                                                                  Six months ended
                                                                       June 30,
                                                             ----------------------------
                                                                2011              2010
                                                             ----------        ----------
                                                             (Unaudited)       (Unaudited)
<S>                                                          <C>               <C>
Supplemental disclosures for cash flow information:
  Cash paid for:
    Interest                                                 $  188,696        $  123,437
    Income taxes                                             $   96,638        $  675,856
                                                             ==========        ==========
Non-cash financing activities:
  Dividends - Note                                           $       --        $2,019,252
                                                             ==========        ==========
</TABLE>

----------
Note: On January 26, 2009, the Company declared  interim  dividend  amounting to
      $7,299,590 of which  $5,280,338  was settled via a current  account with a
      director in 2009.  In 2010,  the  remaining  balance of  dividend  payable
      amounting  to  $2,019,252  was  transferred  to  current  account  with  a
      director.



              The accompanying notes are an integral part of these
                  condensed consolidated financial statements

                                       6
<PAGE>
Pacific Bepure Industry Inc.
Condensed Consolidated Statement of Stockholders' Equity
(Stated in US Dollars)

<TABLE>
<CAPTION>
                                    Common stock                               Accumulated
                                 ------------------    Additional  Statutory     Other                        Total
                                Number of               Paid-in     Reserve   Comprehensive   Retained     Stockholders'
                                 Shares      Amount     Capital    (Note 23)     Income       Earnings        Equity
                                 ------      ------     -------    ---------     ------       --------        ------
<S>                              <C>         <C>        <C>        <C>           <C>          <C>             <C>
Balance, December 31, 2010      15,000,000   $1,500   $ 3,234,650   $309,688    $ 1,987,222    $15,478,638   $21,011,698
                               -----------   ------   -----------   --------    -----------    -----------   -----------

Net income                              --       --            --         --             --        705,112       705,112
Foreign currency translation
 adjustment                             --       --            --         --        426,833             --       426,833
Share-based compensation                --       --       132,227         --             --             --       132,227
                               -----------   ------   -----------   --------    -----------    -----------   -----------

Balance, June 30, 2011          15,000,000   $1,500   $ 3,366,877   $309,688    $ 2,414,055    $16,183,750   $22,275,870
                               ===========   ======   ===========   ========    ===========    ===========   ===========
</TABLE>


              The accompanying notes are an integral part of these
                  condensed consolidated financial statements

                                       7
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


1. CORPORATE INFORMATION AND DESCRIPTION OF BUSINESS

Pacific Bepure Industry Inc. (the "Company") was incorporated on October 9, 2007
under the laws of the State of Delaware with authorized share capital of $7,500,
divided into  75,000,000  common shares of $0.0001 par value each. The Company's
shares are quoted for  trading  on the  Over-the-counter  Bulletin  Board in the
United States of America.

The  Company's  primary  operations  consist of the business and  operations  of
Peakway  Worldwide  Limited  ("Peakway"),  which acts as an  investment  holding
company and currently has three  subsidiaries  namely,  Alberta Holdings Limited
("Alberta"),  Fuijang Jinjiang Pacific Shoes Company Limited  ("Pacific  Shoes")
and Fujian Baopiao Light Industry Company Limited ("Baopiao").

Peakway was  incorporated  in the British Virgin Islands (the "BVI") on November
3, 2006 as a limited liability company with authorized share capital of $50,000,
divided into 50,000 common shares of $1 par value each. The issued share capital
of Peakway is $1,000, divided into 1,000 common shares of $1 par value each.

Alberta was incorporated in Hong Kong on November 4, 2006 as a limited liability
company  with  authorized  share  capital of 10,000 Hong Kong  dollars  ("HK$"),
divided  into  10,000  common  shares of HK$1 par value each.  The issued  share
capital of Alberta is HK$1,  being 1 common share of HK$1 par value.  Alberta is
also a holding company and had no other operation since its incorporation.

Pacific Shoes was  established as a sino-foreign  equity joint venture entity in
the  People's  Republic  of China (the  "PRC") on April 9, 1993 with  registered
capital of 5,000,000  Renminbi  ("RMB")  (which are not divided into shares) and
its registered capital was fully paid up.

Baopiao was established as a wholly foreign-owned enterprise ("WFOE") in the PRC
on February 15, 2006 with  registered  capital of  HK$50,000,000  (which are not
divided  into  shares).   As  of  March  31,  2011,  its  paid  up  capital  was
HK$16,370,478  of  which  HK$15,401,180  was  certified.   Baopiao  acted  as  a
subcontracting factory Pacific Shoes and started operation on April 1, 2011.

The Company, through its subsidiaries,  is engaged in the design,  manufacturing
and  trading of footwear  under the brand  names of  "BEPURE"  through a network
across the PRC. The major target market of the Company's products is the PRC.

                                       8
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


2. BASIS OF PRESENTATION

These unaudited condensed  consolidated  financial statements of the Company and
its subsidiaries have been prepared in accordance with the rules and regulations
of the Securities and Exchange  Commission (the "SEC").  Certain information and
note  disclosures   normally  included  in  financial   statements  prepared  in
accordance with accounting principles generally accepted in the United States of
America (the "US GAAP") have been  condensed  or omitted  from these  statements
pursuant to such rules and regulation and, accordingly,  they do not include all
the  information and notes necessary for  comprehensive  consolidated  financial
statements  and  should be read in  conjunction  with our  audited  consolidated
financial statements for the year ended December 31, 2010.

In the opinion of the management of the Company, all adjustments, which are of a
normal recurring  nature,  necessary for a fair statement of the results for the
three-month and six-month periods have been made. Results for the interim period
presented are not  necessarily  indicative of the results that might be expected
for the entire fiscal year.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The  condensed  consolidated  financial  statements  include the accounts of the
Company  and  its  subsidiaries.  All  significant  inter-company  accounts  and
transactions have been eliminated in consolidation.

Concentrations of credit risk

Financial  instruments  that  potentially  subject  the  Company to  significant
concentrations of credit risk consist  principally of cash and cash equivalents,
trade  receivables  and advances to customers and  distributors.  As of June 30,
2011 and December 31, 2010,  substantially  all of the  Company's  cash and cash
equivalents were held by major financial  institutions located in the PRC, which
management  believes  are  of  high  credit  quality.   With  respect  to  trade
receivables  and advances to customers  and  distributors,  the Company  extends
credit  based on  evaluations  of the  customers'  and  distributors'  financial
positions.  The Company generally does not require  collateral for customers and
distributors.

                                       9
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

Concentrations of credit risk (cont'd)

During the reporting period, customers representing 10% or more of the Company's
sales are as follows:

<TABLE>
<CAPTION>
                                       Six months ended            Three months ended
                                           June 30,                     June 30,
                                  -------------------------     ------------------------
                                     2011           2010           2011          2010
                                  ----------     ----------     ----------    ----------
                                  (Unaudited)    (Unaudited)    (Unaudited)   (Unaudited)
<S>                               <C>            <C>            <C>           <C>
Taiwan Quanyi Xingye Co., Ltd.    $3,925,767     $3,254,077     $1,864,604    $1,844,787
                                  ==========     ==========     ==========    ==========
</TABLE>


Details of customers for 10% or more of the Company's trade receivables are:

                                    As of          As of
                                   June 30,      December 31,
                                     2011           2010
                                  ----------     ----------
                                  (Unaudited)    (Audited)

Taiwan Quanyi Xingye Co., Ltd.    $3,932,356     $1,839,049
                                  ==========     ==========

Fair value of financial instruments

ASC 820 "Fair Value Measurements and Disclosures" requires the disclosure of the
estimated  fair  value  of  financial   instruments  including  those  financial
instruments for which the ASC 323 fair value option was not elected.  Except for
collateralized  borrowings  disclosed  below,  the  carrying  amounts  of  other
financial  assets and  liabilities  approximate  their fair  values due to short
maturities:

<TABLE>
<CAPTION>
                                    As of June 30, 2011         As of December 31, 2010
                                   ------------------------     ------------------------
                                        (Unaudited)                    (Audited)
                                   Carrying        Fair          Carrying       Fair
                                    amount         value          amount        value
                                    ------         -----          ------        -----
<S>                               <C>            <C>            <C>           <C>
Collateralized short-term
 bank loans                       $6,389,233     $6,339,274     $4,717,870    4,713,661
                                  ==========     ==========     ==========    ==========
</TABLE>

The fair values of collateralized  borrowings are based on the Company's current
incremental borrowing rates for similar types of borrowing arrangements.

It is management's  opinion that the Company is not exposed to significant price
or credit risks arising from these financial instruments.

                                       10
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


4. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In July 2010, the FASB issued ASU 2010-20 "Receivables (Topic 310):  Disclosures
about the Credit Quality of Financing  Receivables  and the Allowance for Credit
Losses".  The objective of ASU 2010-20 is to provide  financial  statement users
with greater  transparency about an entity's allowance for credit losses and the
credit  quality of its financing  receivables.  Under ASU 2010-20,  an entity is
required to provide  disclosures so that financial  statement users can evaluate
the nature of the credit risk  inherent in the  entity's  portfolio of financing
receivables,  how that risk is analyzed and assessed to arrive at the  allowance
for  credit  losses,  and the  changes  and  reasons  for those  changes  in the
allowance for credit  losses.  ASU 2010-20 is  applicable to all entities,  both
public and non-public and is effective for interim and annual reporting  periods
ending  on or after  December  15,  2010.  Comparative  disclosure  for  earlier
reporting  periods  that ended before  initial  adoption is  encouraged  but not
required.  However,  comparative  disclosures  are required to be disclosed  for
those reporting periods ending after initial adoption.  The adoption of this ASU
update has no material impact on the Company's financial statements.

The FASB issued  Accounting  Standards  Update (ASU) No.  2011-01,  "Receivables
(Topic 310):  Deferral of the Effective Date of Disclosures  about Troubled Debt
Restructurings in Update No. 2010-20". The amendments in this Update temporarily
delay the effective date of the disclosure about troubled debt restructurings in
ASU 2010-20 for public  entities.  The delay is intended to allow the Board time
to complete its deliberations on what constitutes a troubled debt restructuring.
The effective date of the new disclosures about troubled debt  restructuring for
public  entities and the guidance for  determining  what  constitutes a troubled
debt  restructuring  will  then be  coordinated.  Currently,  that  guidance  is
anticipated to be effective for interim and annual periods ending after June 15,
2011.  The adoption of this ASU update has no material  impact on the  Company's
financial statements.

The  FASB  issued  ASU   2011-02,   "Receivables   (Topic   310):  A  Creditor's
Determination of Whether a Restructuring is a Troubled Debt Restructuring".  The
amendments  to Topic 310 clarify  the  guidance on a  creditor's  evaluation  of
whether a debtor is  experiencing  financial  difficulties.  A  creditor  should
evaluate  whether it is probable that the debtor would be in payment  default on
any of its debts in foreseeable  future without the  modification.  In addition,
the  amendments to Topic 310 clarify that a creditor is precluded from using the
effective  interest  rate test in the  debtor's  guidance  on  restructuring  of
payables  (paragraph  470-60-55-10)  when  evaluating  whether  a  restructuring
constitutes a troubled debt  restructuring.  An entity should disclose the total
amount of  receivables  and the allowance for credit losses as of the end of the
period of  adoption  related  to those  receivables  that are  newly  considered
impaired under Section  310-10-35 for which  impairment was previously  measured
under Subtopic 450-20, Contingencies - Loss Contingencies.  The adoption of this
ASU update has no material impact on the Company's financial statements.

                                       11
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


4. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONT'D)

In April 2011,  the FASB issued ASU 2011-03,  "Transfers  and  Servicing  (Topic
860):  Reconsideration  of Effective  Control for  Repurchase  Agreements".  The
amendments  in this ASU update remove from the  assessment of effective  control
(1) the criterion  requiring the transferor to have the ability to repurchase or
redeem the financial assets on substantially the agreed terms, even in the event
of default by the transferee,  and (2) the collateral maintenance implementation
guidance related to that criterion. The guidance in this ASU update is effective
for the first interim or annual period  beginning on or after December 15, 2011.
The guidance should be applied prospectively to transactions or modifications of
existing  transactions that occur on or after the effective date. Early adoption
is not permitted.  The adoption of this ASU update has no material impact on the
Company's financial statements.

In May 2011, the FASB issued ASU 2011-04,  "Fair Value Measurement  (Topic 820):
Amendments to Achieve Common Fair Value Measurement and Disclosure  Requirements
in U.S.  GAAP and IFRSs".  The FASB and the  International  Accounting  Standard
Board  (IASB)  works  together to ensure that fair value has the same meaning in
U.S.  GAAP and  IFRSs and that  their  respective  fair  value  measurement  and
disclosure  requirements  are the same (except for minor  differences in wording
and style).  The Boards  concluded  that the  amendments in this ASU update will
improve the comparability of fair value measurements  presented and disclosed in
financial  statements  prepared  in  accordance  with U.S.  GAAP and IFRSs.  The
amendments  in this ASU update  explain how to measure  fair value.  They do not
require  additional  fair value  measurements  and are not intended to establish
valuation   standards  or  affect  valuation   practices  outside  of  financial
reporting.  The  amendments in this ASU update are to be applied  prospectively.
For public  entities,  the  amendments  are effective  during interim and annual
periods  beginning after December 15, 2011. Early application by public entities
is not  permitted.  The management is assessing the impact of this ASU update on
the Company's financial statements.

In June 2011,  the FASB issued ASU 2011-05,  "Comprehensive  Income (Topic 220):
Presentation of Comprehensive  Income". In this ASU updated,  the entity has the
option to present  the total of  comprehensive  income,  the  components  of net
income,  and the  components  of other  comprehensive  income either in a single
continuous  statement of comprehensive income or in two separate but consecutive
statements.  In both choices, an entity is required to present each component of
net income along with total net income,  each  component of other  comprehensive
income along with a total for other comprehensive income, and a total amount for
comprehensive   income.  This  Update  eliminates  the  option  to  present  the
components of other comprehensive  income as part of the statement of changes in
stockholders'  equity. The amendments in this ASU update do not change the items
that must be  reported  in other  comprehensive  income or when an item of other
comprehensive  income must be reclassified to net income. The amendments in this
ASU  update  are  to  be  applied  retrospectively.  For  public  entities,  the
amendments  are  effective for fiscal years,  and interim  periods  within those
years,  beginning after December 15, 2011. Early  application by public entities
is permitted.  The  management is assessing the impact of this ASU update on the
Company's financial statements.

                                       12
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


5. PREPAYMENTS AND OTHER RECEIVABLES

                                                   As of              As of
                                                  June 30,          December 31,
                                                    2011               2010
                                                  --------           --------
                                                 (Unaudited)         (Audited)

Prepayments to suppliers                          $ 90,353           $131,846
Advances to staff                                   94,702            117,272
                                                  --------           --------
                                                  $185,055           $249,118
                                                  ========           ========

6. ADVANCES TO CUSTOMERS AND DISTRIBUTORS

                                                    As of             As of
                                                   June 30,         December 31,
                                                     2011              2010
                                                  ----------        ----------
                                                 (Unaudited)         (Audited)
Interest-free loans advanced to customers
 and distributors                                 $1,536,250        $1,293,733
                                                  ==========        ==========

In order to improve  the  market  shares and  increase  the number of  retailing
points in the PRC, the management  advanced cash to the potential  retailers for
them to  increase  the  number of retail  shops and  distribution  points in the
related  provinces  in which they are  located.  The amounts are  interest-free,
unsecured and payable upon demand.

7. INVENTORIES

                                                     As of            As of
                                                   June 30,         December 31,
                                                     2011              2010
                                                  ----------        ----------
                                                  (Unaudited)       (Audited)

Raw materials                                     $  853,002        $  227,572
Work-in-progress                                   1,037,932           445,249
Finished goods                                     1,046,445           559,736
                                                  ----------        ----------
                                                  $2,937,379        $1,232,557
                                                  ==========        ==========

                                       13
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


8. PROPERTIES, PLANT AND EQUIPMENT

                                                    As of             As of
                                                   June 30,        December 31,
                                                     2011              2010
                                                 ------------      ------------
                                                 (Unaudited)        (Audited)

Costs:
  Plant and machinery                            $  1,348,234      $    985,609
  Office equipment                                    192,313           115,060
  Buildings                                         8,640,489         1,337,557
                                                 ------------      ------------
                                                   10,181,036         2,438,226
Accumulated depreciation                           (1,314,880)       (1,261,688)
Construction-in-progress                                3,755         6,416,328
                                                 ------------      ------------
                                                 $  8,869,911      $  7,592,866
                                                 ============      ============


During the reporting period, depreciation is included in:

                                                   Six months ended June 30,
                                                  --------------------------
                                                    2011              2010
                                                  --------          --------
                                                 (Unaudited)      (Unaudited)

Cost of sales and overheads                       $ 94,746          $ 45,487
Administrative expenses                             65,779            32,486
                                                  --------          --------
                                                  $160,525          $ 77,973
                                                  ========          ========

----------
Notes: As of June 30, 2011 and December 31, 2010,  buildings with carrying value
       of   $7,207,053   and   $852,833    respectively,    were    pledged  for
       the collateralized bank loans (Note 12b).

Construction-in-progress  consist  mainly  the  new  manufacturing  plant  under
construction.

9. LAND USE RIGHTS

                                                     As of            As of
                                                    June 30,        December 31,
                                                      2011             2010
                                                   ----------       ----------
                                                   (Unaudited)      (Audited)

Cost                                               $6,540,660       $6,414,392
Accumulated amortization                             (466,711)        (392,903)
                                                   ----------       ----------
                                                   $6,073,949       $6,021,489
                                                   ==========       ==========

The Company  obtained  the rights from the relevant PRC land bureau for a period
of 50 years to use the land on which the office premises,  production facilities
and warehouse of the Company are situated.

As of June 30, 2011 and  December 31,  2010,  the land use rights with  carrying
value of $6,073,949 and $6,021,489 respectively,  was pledged for collateralized
bank loans (Note 12b).

                                       14
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


9. LAND USE RIGHTS (CONT'D)

During the six months  ended June 30, 2011 and 2010,  amortization  for the land
use rights  amounted to $65,879 and  $63,129 of which  $32,674 and $62,620  have
been capitalized in construction-in-progress, respectively.

The estimated  aggregate  amortization  expenses for the land use rights for the
five succeeding years are as follows:

     Year
     ----
     2012                      $133,426
     2013                       133,426
     2014                       133,426
     2015                       133,426
     2016                       133,426
                               --------
                               $667,130
                               ========

10. INTANGIBLE ASSET

                                                As of                 As of
                                               June 30,            December 31,
                                                 2011                  2010
                                              ----------            ----------
                                              (Unaudited)           (Audited)
Softwares
  Cost                                        $  338,799            $  332,223
  Accumulated amortization                      (175,015)             (141,718)
                                              ----------            ----------
                                              $  163,784            $  190,505
                                              ==========            ==========

Softwares  comprised  of  accounting  software  and the  integrated  software in
designing  footwear and purchased by Pacific  Shoes.  Pursuant to the management
experience,  the  softwares  estimated  useful  life  was  5  years.  Since  its
acquisition,  an annual  impairment  review was performed by  management  and no
impairment was identified.

During the six months ended June 30, 2011 and 2010,  amortization for intangible
asset amounted to $30,100 and $26,341, respectively.

The  estimated  aggregate  amortization  expenses  for  softwares  for the  five
succeeding years are as follows:

     Year
     ----
     2012                      $ 59,800
     2013                        59,800
     2014                        44,184
                               --------
                               $163,784
                               ========

                                       15
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


11. OTHER PAYABLES AND ACCRUED EXPENSES

                                                    As of             As of
                                                   June 30,         December 31,
                                                     2011              2010
                                                  ----------        ----------
                                                  (Unaudited)       (Audited)

Value added tax and other tax payable             $2,415,397        $1,712,724
Staff welfare payables (Note (a))                  1,168,583         1,046,724
Accrued expenses and other payables                  402,506           536,147
Salaries payable                                     416,922           229,279
                                                  ----------        ----------
                                                  $4,403,408        $3,524,874
                                                  ==========        ==========

----------
Notes: a) Staff welfare  payable  represents  accrued  staff  medical,  industry
       injury  claims,  labor  and  unemployment  insurances.  All of which  are
       covered by third parties insurance and the insurance  premiums are  based
       on certain  percentage of salaries.  The  obligations of the  Company are
       limited to those premiums contributed by the Company.

12. LOANS PAYABLE

                                                    As of              As of
                                                   June 30,         December 31,
                                                     2011              2010
                                                  ----------        ----------
                                                  (Unaudited)        (Audited)


Collateralized short-term bank loans (Note (b))   $4,842,203        $3,079,510
Uncollateralized short-term bank loans             1,547,030         1,638,360
                                                  ----------        ----------
                                                  $6,389,233        $4,717,870
                                                  ==========        ==========

----------
Notes: a) The bank loans are  denominated  in RMB and carried  average  interest
       rate as of June 30,  2011  and  December  31,  2010 at  6.09%  and  5.82%
       respectively.

       During the reporting period,  there was no covenant requirement under the
       banking facilities granted to the Company.

       b) These bank loans were  collateralized  by the land and buildings,  and
       land  use  right  with  carrying  values  of  $7,207,053  (Note  8),  and
       $6,073,949 (Note 9), respectively,  and guaranteed by Mr. Li Haiting, the
       sole director of the Company and his brother and a third party.

                                       16
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


13. AMOUNT DUE TO A DIRECTOR

The amount is  interest-free,  unsecured and repayable on demand.  The directors
consider the carrying amount approximates its fair value.

14. SHARE-BASED COMPENSATION

The Company  granted  share  options to  employees  and a director to reward for
services.

On December 6, 2010,  the  Company has granted 3 tranches of share  option.  The
option granted was designated as Incentive Stock Option.  The Board of Directors
adopted the Pacific Bepure Industry Inc. Stock Option Plan (the "2010 Plan") and
the plan was approved in the Annual  General  Meeting on January 14,  2011.  The
2010 Plan  authorized  the issuance of 560,000  options of the Company's  common
stock.  The exercise  price of the options  granted,  pursuant to the 2010 Plan,
must be at least equal to the market value of the Company's  common stock at the
date of grant.

Pursuant to the Plan, the Company issued 560,000  options with an exercise price
of $1.75 per share on December, 6, 2010. The 3 tranches of options will vest and
become exercisable from the date of January 5, 2011 to January 5, 2013.

A summary of share  option plan  activity  for the period ended June 30, 2011 is
presented below:

                                                   Number of      Exercise price
                                                    shares           per share
                                                    ------           ---------
Outstanding as of January 1, 2011                   560,000          $   1.75
Granted                                                  --                --
Exercised                                                --                --
Forfeited                                                --                --
Cancelled                                                --                --
                                                   --------          --------
Outstanding as of June 30, 2011                     560,000          $   1.75
                                                   ========          ========
Exercisable as of June 30, 2011                     168,000          $   1.75
                                                   ========          ========

The  grant-date  fair values for tranches 1, 2 and 3 of options  granted in 2010
were $0.62,  $0.67 and $0.72 per option  respectively.  Compensation  expense of
$132,227  arising from above  mentioned share options granted was recognized for
the six months ended June 30, 2011.

The fair values of the above option  awards were  estimated on the date of grant
using the Black-Scholes Option Valuation Model with the following assumptions.

                                Tranche 1        Tranche 2        Tranche 3
                                ---------        ---------        ---------
Expected life                  2.583 years      3.083 years      3.583 years
Expected dividends                     Nil              Nil              Nil
Expected volatility                54.743%          54.743%          54.743%
Risk-free interest rate             1.572%           1.572%           1.572%

                                       17
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


15. COMMITMENTS AND CONTINGENCIES

a. Capital commitment

As of June 30, 2011, there was no capital  commitment for the Company  (December
31, 2010 : the Company had capital  commitment in respect of the construction of
properties,  amounting to $47,116,  which was contracted but not provided for in
the financial statements).

b. Operating lease commitment

As of June 30, 2011, there was no operating lease arrangement for the Company.

The rental expense was $12,828 for the six months ended June 30, 2011.

c. Contingencies

In accordance with the PRC tax  regulations,  the Company's sales are subject to
value  added  tax  ("VAT")  at 17%  upon the  issuance  of VAT  invoices  to its
customers.  When preparing these financial  statements,  the Company  recognized
revenue when goods were  delivered,  and made full tax  provision in  accordance
with relevant national and local laws and regulations of the PRC.

The Company  follows the practice of reporting  its revenue for PRC tax purposes
when invoices are issued. In the local statutory  financial  statements prepared
under PRC GAAP, the Company  recognized revenue on an "invoice basis" instead of
when goods are  delivered.  Accordingly,  despite  the fact that the Company has
made full tax provision in the financial statements,  the Company may be subject
to a penalty for the deferred reporting of tax obligations.  The exact amount of
penalty  cannot  be  estimated  with any  reasonable  degree of  certainty.  The
director considers it is very unlikely that the tax penalty will be imposed.

16. OTHER INCOME

<TABLE>
<CAPTION>
                                           Six months ended                  Three months ended
                                               June 30,                           June 30,
                                             (Unaudited)                        (Unaudited)
                                      --------------------------          --------------------------
                                        2011              2010              2011              2010
                                      --------          --------          --------          --------
<S>                                   <C>               <C>               <C>               <C>
Government grant income               $ 54,634          $     --          $ 54,634          $     --
Sales of scrap and materials            51,757                --            12,021                --
Others                                   3,030                --             3,030             3,783
                                      --------          --------          --------          --------
                                      $109,421          $     --          $ 69,685          $  3,783
                                      ========          ========          ========          ========

17. FINANCE COSTS

                                           Six months ended                  Three months ended
                                               June 30,                           June 30,
                                             (Unaudited)                        (Unaudited)
                                      --------------------------          --------------------------
                                        2011              2010              2011              2010
                                      --------          --------          --------          --------
Bank loan interest expenses           $188,700          $123,437          $102,812          $61,326
Interest income                         (2,230)           (2,405)           (1,598)            (900)
Bank charges                            71,986             1,544            62,489              913
                                      --------          --------          --------          --------
                                      $258,456          $122,576          $163,703          $ 61,339
                                      ========          ========          ========          ========
</TABLE>

                                       18
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


18. INCOME TAXES

United States

Pacific Bepure  Industry Inc. is subject to the United States of America Tax law
at tax rate of 34%. No provision  for the US federal  income taxes has been made
as the  Company had no taxable  income in this  jurisdiction  for the  reporting
period.

BVI

Peakway was  incorporated  in the BVI and, under the current laws of the BVI, is
not subject to income taxes.

Hong Kong

Alberta  was  incorporated  in Hong Kong and is subject  to profits  tax rate of
16.5%  (2009:  16.5%).  It is currently  not subject to income taxes  because it
derived no taxable income during the reporting period.

PRC

On March 16, 2007, the National  People's Congress approved the Corporate Income
Tax Law of the People's  Republic of China (the "New CIT Law").  The New CIT Law
reduces the standard  corporate income tax rate from 33% to 25% with effect from
January 1, 2008.  Pursuant to the New CIT Law,  Pacific  Shoes and Baopiao  have
been subjected to EIT at a unified rate of 25% from January 1, 2008 onwards.

According to the PRC tax laws and regulations,  Pacific Shoes and Bapiao being a
sino-foreign equity joint venture entity and a WFOE respectively,  were entitled
to,  starting  from  the  first  profitable  year,  a  two-year  exemption  from
enterprise  income tax followed by a three-year  50% reduction in its enterprise
income tax ("Tax Holiday").

The Tax Holiday of Pacific Shoes commenced in year 1993 and ended in year 1997.

Baopiao has not started commercial operations and had no reportable profit under
China  Accounting  Regulations  since its  incorporation  on February  15, 2006.
Baopiao  had not  applied for such Tax  Holiday to the  relevant  PRC  authority
before the New CIT Law became effective on January 1, 2008. However, pursuant to
the  transitional  provisions  in the New CIT Law,  companies  qualified for Tax
Holiday must make application prior to January 1, 2008 and the Tax Holiday would
be deemed  commence  on January  1, 2008  regardless  of  results of  operation.
Baopiao is therefore not entitled to Tax Holiday.

In July 2006, the FASB issued ASC 740-10-25  (previously  Interpretation No. 48,
"Accounting  for  Uncertainty in Income Taxes").  This  interpretation  requires
recognition  and   measurement  of  uncertain   income  tax  positions  using  a
"more-likely-than-not"  approach.  The Company  adopted  this ASC  740-10-25  on
January  1, 2007.  Under the New CIT Law which  became  effective  on January 1,
2008,  the Company  might be deemed to be a resident  enterprise  by the PRC tax
authorities.  If the Company was deemed to be resident  enterprise,  the Company
might be subject to the CIT at 25% on the worldwide taxable income and dividends
paid from the RPC  subsidiaries  to their overseas  holding  companies  might be
exempted from 10% PRC withholding tax. Given that all of the Company's income is
generated from the PRC and the PRC  subsidiaries  do not intend to pay dividends
for the foreseeable future operation,  the management  considers that the impact
arising from  resident  enterprise on the  Company's  financial  position is not
significant. The management evaluated the Company's tax positions and considered
that no provision  for  uncertainty  in income taxes is necessary as of June 30,
2011.

                                       19
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


18. INCOME TAXES (CONT'D)

The components of the provision for income taxes are:

<TABLE>
<CAPTION>
                                   Six months ended                   Three months ended
                                       June 30,                            June 30,
                              --------------------------          --------------------------
                                2011              2010              2011              2010
                              --------          --------          --------          --------
                             (Unaudited)       (Unaudited)       (Unaudited)       (Unaudited)
<S>                           <C>               <C>               <C>               <C>
Current taxes - PRC           $490,817          $581,268          $ 55,156          $266,443
Deferred taxes - PRC                --                --                --                --
                              --------          --------          --------          --------
                              $490,817          $581,268          $ 55,156          $266,443
                              ========          ========          ========          ========

The effective  income tax expenses differ from the PRC statutory income tax rate
in the PRC as follows:

                                   Six months ended                   Three months ended
                                       June 30,                            June 30,
                              --------------------------          --------------------------
                                2011              2010              2011              2010
                              --------          --------          --------          --------
                             (Unaudited)       (Unaudited)       (Unaudited)       (Unaudited)
Provision for income taxes
 at PRC statutory income tax
 rate - 25%                   $298,982          $551,039          $(78,512)         $250,837
Non-deductible items for tax   191,835            30,229           133,668            15,606
                              --------          --------          --------          --------
                              $490,817          $581,268          $55,156           $266,443
                              ========          ========          ========          ========

19. EARNINGS (LOSS) PER SHARE

The following  table sets forth the  computation  of basic and diluted  earnings
(loss) per share ("EPS") for the periods indicated:

                                    Six months ended                  Three months ended
                                        June 30,                           June 30,
                              ----------------------------        ----------------------------
                                 2011              2010              2011              2010
                              ----------        ----------        ----------        ----------
                              (Unaudited)       (Unaudited)       (Unaudited)       (Unaudited)
Numerator:
  Net income (loss)           $  705,112        $1,622,886        $(369,205)        $  736,905
                              ==========        ==========        ==========        ==========
Denominator:
  Weighted average common
   shares used to compute
   basic EPS                  15,000,000        15,000,000        15,000,000        15,000,000
  Dilutive potential from
   assumed exercise of
   share options                   9,438                --                --                --
                              ----------        ----------        ----------        ----------
  Weighted average common
   shares used to compute
   diluted EPS                15,009,438        15,000,000        15,000,000        15,000,000
                              ==========        ==========        ==========        ==========
Earnings (loss) per share
  - Basic                         $0.047            $0.108           $(0.025)           $0.049
  - Diluted                       $0.047            $0.108           $(0.025)           $0.049
                              ==========        ==========        ==========        ==========
</TABLE>
                                       20
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


20. RELATED PARTIES TRANSACTIONS

Apart from the  transactions as disclosed in Notes 12(b) and 13 to the financial
statements,  the Company had no material  transactions  carried out with related
parties during the period.

21. TRADEMARKS

Pacific Shoes, currently owns two trademarks,  namely "??" ("Bepure"), and "???"
("Dilks") which were registered in the PRC. These trademarks were transferred to
the subsidiary  from a major  stockholder  of the Company for nil  consideration
during 2008.

22. COMMON STOCK

The Company was incorporated on October 9, 2007 with authorized share capital of
$7,500 divided into 75,000,000 common shares of $0.0001 per value each.

23. STATUTORY RESERVE

The Company's statutory reserve comprise of the following:

                                          As of           As of
                                         June 30,       December 31,
                                           2011            2010
                                         --------        --------
                                        (Unaudited)      (Audited)

Statutory reserve                        $309,688        $309,688
                                         ========        ========

Under PRC  regulations,  Pacific Shoes and Baopiao may pay dividends only out of
their accumulated  profits,  if any,  determined in accordance with PRC GAAP. In
addition,  these  companies  are  required  to set  aside at least  10% of their
after-tax net profits each year, if any, to fund the  statutory  reserves  until
the  individual  balance  of the  reserve  reaches  50% of  their  corresponding
individual  registered capital.  The statutory reserves are not distributable in
the form of cash  dividends to the Company and can be used to make up cumulative
prior year losses.

For the six months ended June 30, 2011 and 2010  respectively,  no appropriation
to this  statutory  reserve was made as the  reserve  reached 50% of the Pacific
Shoes' registered capital and Baopiao did not make any profit during the period.

24. DEFINED CONTRIBUTION PLAN

Pacific  Shoes and Baopiao have  defined  contribution  plans for all  qualified
employees in the PRC.  Pacific  Shoes and Baopiao and their  employees  are each
required to make contributions to the plans at the rates specified in the plans.
The only  obligation  of Pacific  Shoes and Baopiao with  respect to  retirement
schemes are to make the  required  contributions  under the plans.  No forfeited
contribution  is  available  to reduce  the  contribution  payable in the future
years.  The  defined   contribution  plan  contributions  were  charged  to  the
consolidated   statements  of  income  and  comprehensive  income.  The  Company
contributed  $81,650 and $29,017 for the six months ended June 30, 2011 and 2010
respectively.

                                       21
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


25. SEGMENT INFORMATION

The Company uses the "management  approach" in determining  reportable operating
segments.  The  management  approach  considers  the internal  organization  and
reporting  used by the  Company's  chief  operating  decision  maker for  making
operating decisions and assessing  performance as the source for determining the
Company's  reportable  segments.  Management,   including  the  chief  operating
decision  maker,  reviews  operating  results  solely  by  monthly  revenue  and
operating  results of the Company and, as such, the Company has determined  that
the  Company  has one  operating  segments  -  footwear,  as defined by ASC 280,
Segments Reporting" (previously SFAS No. 131).

All of the  Company's  long-lived  assets  are  located  in the PRC.  Geographic
information about the revenues,  which are classified based on the customers, is
set out as follows:

<TABLE>
<CAPTION>
                       Six months ended                      Three months ended
                           June 30,                                June 30,
                ------------------------------          ------------------------------
                   2011                2010                2011                2010
                ----------          ----------          ----------          ----------
                (Unaudited)         (Unaudited)         (Unaudited)         (Unaudited)
<S>             <C>                 <C>                 <C>                 <C>
PRC             $5,268,182          $5,989,076          $  899,833          $2,709,431
Taiwan           3,925,767           3,298,101           1,864,604           1,845,331
                ----------          ----------          ----------          ----------
                $9,193,949          $9,287,177          $2,764,437          $4,554,762
                ==========          ==========          ==========          ==========
</TABLE>

26. SUBSEQUENT EVENTS

The company  evaluated all events or  transactions  that occurred after June 30,
2011  and  through  the date  the  financial  statements  were  issued,  and has
determined  that  there  are no  material  recognizable  subsequent  events  nor
transactions  which would require  recognition or disclosure in these  condensed
consolidated financial statements.

                                       22
<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

This Quarterly Report on Form 10-Q contains both historical and "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended,  and Section 21E of the  Securities  Exchange Act of 1934,  as amended.
Forward-looking  statements,  written,  oral or otherwise  made,  represent  the
Company's expectation or belief concerning future events. All statements,  other
than statements of historical  fact, are or may be  forward-looking  statements.
For  example,  statements  concerning  projections,  predictions,  expectations,
estimates or forecasts,  and  statements  that describe our  objectives,  future
performance,  plans or goals are, or may be, forward-looking  statements.  These
forward-looking  statements reflect management's current expectations concerning
future  results and events and can  generally be  identified by the use of words
such  as  "may,"  "will,"  "should,"  "could,"  "would,"  "likely,"   "predict,"
"potential,"    "continue,"   "future,"    "estimate,"    "believe,"   "expect,"
"anticipate," "intend," "plan," "foresee" and other similar words or phrases, as
well as statements in the future tense.

Forward-looking  statements  involve  known and  unknown  risks,  uncertainties,
assumptions,  and other  important  factors  that may cause our actual  results,
performance or achievements to be different from any future results, performance
and  achievements  expressed  or  implied  by these  statements.  The  following
discussion  and analysis  should be read in  conjunction  with our  consolidated
financial   statements  and  the  related  notes  thereto  and  other  financial
information  contained elsewhere in this Form 10-Q. Readers are cautioned not to
place  undue  reliance  on  these  forward-looking  statements,   which  reflect
management's  opinions only as of the date hereof. We undertake no obligation to
revise or publicly release the results of any revision to these  forward-looking
statements. Readers should carefully review the factors described in the Section
entitled  "Risk  Factors" on Form 10-K and other  documents we file from time to
time with the Securities and Exchange Commission ("SEC").

OUR HISTORY AND CORPORATE STRUCTURE

We are a Delaware  corporation  that was incorporated on October 9, 2007. We are
headquartered  in Fujian  Province,  China. On November 11, 2009, we completed a
reverse  acquisition  transaction  ("Reverse  Merger")  with  Peakway  Worldwide
Limited ("Peakway"), a company incorporated under the laws of the British Virgin
Islands pursuant to the terms of a Share Exchange Agreement dated as of November
5, 2009 ("Share  Exchange  Agreement").  Alberta Holdings Limited is a Hong Kong
company incorporated on November 4, 2006 and was acquired by Peakway on November
1, 2007.  Alberta presently has two wholly-owned  subsidiaries:  Fujian Jinjiang
Pacific Shoes Co., Limited and Fujian Baopiao Light Industry Co., Limited.

Fujian Jinjiang Pacific Shoes Co., Limited  ("Pacific Shoes") was established as
a  sino-foreign  equity  joint  venture  entity in the PRC on April 9, 1993.  On
January  12,  2009,  Alberta  acquired  100% equity  interest in Pacific  Shoes.
Currently, all of our revenues have been generated from Pacific Shoes.

Fujian Baopiao Light  Industry Co.,  Limited  ("Baopiao ") was  established as a
wholly  foreign-owned  enterprise  ("WFOE") in the PRC on February 15, 2006.  On
February 26, 2009, Alberta acquired 100% equity interest in Baopiao Shoes. As of
the date of this report,  Baopiao is still in its development  stage and has not
yet generated any revenue.

We are now a fully reporting issuer with our common stock publicly quoted on the
OTC  bulletin  board  under  the  symbol  "PBEP".  To the best of the  Company's
knowledge and  information,  as of August 15, 2011, we had 15,000,000  shares of
common stock issued and outstanding.

BUSINESS REVIEW

The  Company  is  mainly  engaged  in  professional   design,   manufacture  and
distribution of sports and casual footwear through its Chinese Subsidiaries.  We
target at both  female  and male  customers,  particularly  the 20-35  years old
female  consumers,  among whom our Baopaio (or "Bepure")  label has witnessed an
increasing recognition.  For six months ended June 30, 2011, the Company's sales
revenues decreased by $93,228 or 1.00% to $9,193,949 compared with $9,287,177 in
the same period of 2010.

BRAND PROMOTION

As of June  30,  2011,  a  classified  promotion  was  implemented  for both the
products  online and in retail shops.  For the Bepure  official online store, we
aimed to improve the brand  recognition  mainly through  advertisement;  for the
retail  shops,  we renewed the unified  shop image in all retail  locations  and
applied  environmentally  conscious  material(such as wood) for products display
shelves.

                                       23
<PAGE>
SALES NETWORK

We design,  develop,  manufacture  and distribute  sports and casual footwear in
China and South America through our indirectly owned Chinese  subsidiaries.  All
of our products are sold under the brand  "[Chinese  Character]"  ("Baopiao"  in
English).  We sell our products to  consumers in the People's  Republic of China
(for  purpose  of this Form  10-Q,  excludes  Hong Kong  Special  Administration
Region, Macau Special  Administration Region and Taiwan), or so-called "domestic
market"  and  South  America.  In the  domestic  market,  we sell  our  products
substantially  on a wholesale basis to our  distributors who are responsible for
distribution  to retail  outlets.  Through our  distributors,  our sales network
covers 24  provinces  and  administrative  regions in various  modes,  including
retail outlets, counters in department stores and shopping malls, and wall racks
in large  supermarkets.  Our products,  including  our branded  products and ODM
(Original Design  Manufacture)  products,  are sold in the South America through
our distributors.

In the domestic (PRC) market,  we adopted the sales mode of "four-prong  sales",
which is a combination of four retail approaches, including distributor-operated
stores,  retailer-operated  stores,  franchise stores and online stores.  At the
distributor-operated  stores,  distributors sell our product exclusively. At the
retailer  operated  stores,  distributor  appointed  retailers sell our products
exclusively.  We have certain control over these distributor appointed retailers
because when we enter into distribution  agreements with  distributors,  we have
the right to  approve  or reject the  distributor's  request to appoint  certain
retailers.  The  franchise  stores refer to stores  operated by our  franchisees
pursuant to franchise  agreements with us. As of June 30, 2011, retail locations
increased  from 98 to 102,  and 1,523  counters  in the  shopping  malls are now
authorized to sell our products and they are under the direct  management of our
distributors.  We continue to refresh our brand image with in-store  advertising
and decorations, so that consumers will enjoy a much happier purchase experience
at the retail outlets.

Through years of effort in expanding the market share, the Company now maintains
a solid  distribution  base with a retail management system is under development
as well. This enables us to monitor the overall retail  situation and respond to
the market changes in a more timely manner.  As part of our online marketing and
distribution  strategy,  we improved our online  shopping  portal and registered
Bepure official  online store with Taobao,  a leading  Internet  destination for
shopping, socializing and information sharing in China.

PRODUCT R&D

The Company consistently aims to develop attractive footwear products to satisfy
the  demand of its  target  market  and to  interpret  fashion  trends.  To help
accomplish  this, the Company has been focused on the R&D and application of new
craftsmanship,  new materials and new technologies,  to streamline the Company's
innovative brand concept and international  sports fashion. We increased the R&D
cost,  updated  the  equipment  and  introduced  additional  talents  to develop
fashionable and practical  products.  In addition,  the Company keeps adding new
elements  into the  product  designs to earn more  selling  points and  consumer
recognition  on the Baopiao  brand,  thus  constantly  striving  for the fashion
leader position of "Baopiao" in the female sports and casual footwear market.

In order to build an appropriate,  scalable and multiple product structure,  the
Company has  increased the  percentage of men's  products to the total sales and
divided its  products  into four  categories,  namely,  the "Free  Travel,"  the
"Business Travel," the "Outdoor Travel" and the "Urban Travel".

CHAIN SUPPLY MANAGEMENT

We have adopted a cost control system in its business operation. Our procurement
team works closely with engaged  suppliers and  outsourcing  companies to shares
the cost trend of main materials.  Meanwhile, we are able to decrease both costs
and  pollutants  by  implementing  strict  production  standards at our existing
facilities while outsourcing certain low margin products.  We also try to reduce
the cost of raw  materials  through  bulk  purchases,  in which our  outsourcing
partners are co-buyers.

INFORMATION MANAGEMENT

The  Company  has set up an  information  management  system  which  consists of
financial  management,  sales management,  supply chain  management,  production
management,  decision-making  support  and  database  service  functions,  which
contributes significantly to the operation development.

This is an  integrated  IT  system  that is able to handle  the  ever-increasing
requirements  of business  development.  The Company will continue to extend the
new system to its sales channels, especially retail outlets.

                                       24
<PAGE>
The  Enterprise  Resource  Planning  (ERP)  System  of the  Company  was in full
operation  at the end of  2010.  The  system  (i)  comprehensively  records  the
information of sales and goods allotment  which is the basis for  implementation
of sales policies; (ii) provides exact and thorough analysis data for management
of production;  (iii) assists the management in planning and  decision-making by
providing access to close domination each department.

SUMMARY OF CRITICAL ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated  financial  statements  include the accounts of the Company and
its subsidiaries.  All significant  inter-company accounts and transactions have
been eliminated in consolidation.

USE OF ESTIMATES

In preparing  financial  statements in  conformity  with  accounting  principles
generally  accepted in the United States of America,  management makes estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure  of  contingent  assets  and  liabilities  at the  date of  financial
statements,  as well as the reported  amounts of revenue and expenses during the
reported period.  These amounts and estimates  include,  but are not limited to,
the  valuation of trade and bills  receivables,  inventories  and  estimation on
useful  lives  and  residual  values of  properties,  plant  and  equipment  and
intangible asset. Actual results could differ from these estimates.

INVENTORIES

Inventories are stated at the lower of cost or market value.  Cost is determined
on a weighted average basis and includes all  expenditures  incurred in bringing
the goods to the point of sale and putting them in a saleable condition.

In addition,  the Company  estimates net realizable value based on intended use,
current market value and inventory ageing analyses.  The Company writes down the
inventories for estimated  obsolescence  or unmarketable  inventory equal to the
difference  between the cost of inventories and the estimated market value based
upon assumptions about future demand and market conditions.

There were no  provision  of  obsolete  inventories  made  during the  reporting
period. Historically, the actual net realizable value is close to the management
estimation.

PROPERTIES, PLANT AND EQUIPMENT

Properties,   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.

Depreciation  is provided on a  straight-line  basis over the assets'  estimated
useful lives. The useful lives are as follows:

                                     Estimated
                                    useful lives
                                    ------------
Plant and machinery                  3 to 8 years
Office equipment                     3 to 5 years
Buildings                          30 to 40 years

Maintenance  or  repairs  are  charged  to  expense  as  incurred.  Upon sale or
disposal, the applicable amounts of asset cost and accumulated  depreciation are
removed  from the  accounts and the net amount less  proceeds  from  disposal is
charged or credited to income.

CONSTRUCTION-IN-PROGRESS

Construction-in-progress  represents assets under  construction and is stated at
cost.  This includes cost of  construction  of buildings and other direct costs.
Construction-in-progress  is not depreciated until such time the relevant assets
are completed and put into use.

                                       25
<PAGE>
INTANGIBLE ASSET

The  intangible  asset of the Company is  comprised of  accounting  software and
shoes  designing  software.  The software is determined to have useful life of 5
years pursuant to the management  experience.  The software is stated at cost of
purchase less accumulated  amortization and any identified  impairment losses in
the annual impairment review.

LAND USE RIGHTS

Land use rights are stated at cost less accumulated  amortization.  Amortization
is  provided  using the  straight-line  method over the terms of the lease of 50
years obtained from the relevant PRC land bureau.

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived  assets  are  tested  for  impairment  whenever  events or changes in
circumstances  indicate  that  the  carrying  amount  of the  assets  may not be
recoverable. The Company recognizes 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.  During the reporting period, the Company has
not identified any indicators that would require testing for impairment.

REVENUE RECOGNITION

Revenue from sales of the Company's  products is recognized when the significant
risks and rewards of ownership have been transferred to the buyer at the time of
delivery,  the sales price is fixed or determinable and collection is reasonably
assured. Returns and exchange require approval from management and discounts are
based on trade terms.  The Company reviews and estimates the rates of return and
exchange  monthly  and  made  provision  for  return  based  on  customers'  and
distributors' past records.  From the past records,  the return and exchange are
insignificant.

COST OF SALES

Cost of sales  consists  primarily of material  costs,  purchasing and receiving
costs,  inspection  costs,  wages,  employees'  compensation,  depreciation  and
related costs,  which are directly  attributable  to the production of products.
Write down of  inventory  to lower of cost or market  value is also  recorded in
cost of sales.

SHARE-BASED COMPENSATION

The Company  adopted the  provisions of ASC 718,  which  requires the use of the
fair value method of accounting  for  share-based  compensation.  Under the fair
value based  method,  compensation  cost  related to employee  stock  options or
similar equity  instruments which are  equity-classified  awards, is measured at
the  grant  date  based on the value of the  award  and is  recognized  over the
requisite  service  period,  which is usually the vesting  period.  ASC 718 also
requires  measurement  of  cost of a  liability-classified  award  based  on its
current fair value.

Fair value of share options granted is determined using the Black-Scholes Option
Valuation Model. Under this model, certain assumptions,  including the risk-free
interest  rate, the expected life of the options and the estimated fair value of
the  Company's  common  stock  and the  expected  volatility,  are  required  to
determine the fair value of the options. If different assumptions had been used,
the fair  value of the  options  would have been  different  from the amount the
Company  computed and recorded,  which would have resulted in either an increase
or decrease in the compensation expense.

INCOME TAXES

The Company uses 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  No.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 carried forward 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.

                                       26
<PAGE>
RESULTS OF  OPERATIONS  FOR THE SIX MONTHS AND THREE  MONTHS ENDED JUNE 30, 2011
AND JUNE 30, 2010

The following table  summarizes our operating  results and key financial  ratios
for the six months ended June 30, 2011 and June 30, 2010, respectively:

<TABLE>
<CAPTION>
                                      Six months ended June 30                  Comparison
                                    ----------------------------        ---------------------------
                                       2011              2010             Amount              %
                                    ----------        ----------        ----------        ---------
<S>                                 <C>               <C>               <C>               <C>
Sales revenue                       $9,193,949        $9,287,177        $  (93,228)          (1.00%)
Cost of sales                        6,660,821         6,212,044           448,777            7.22%
Gross profit                         2,533,128         3,075,133          (542,005)         (17.63%)
Gross profit margin                      27.55%            33.11%
Total operating expenses             1,188,164           725,469           462,695           63.78%
Income from operations               1,344,964         2,349,664         1,004,700          (42.76%)
Other (income)/expense                (109,421)           22,934          (132,355)        (577.11%)
Finance costs                          258,456           122,576           135,880          110.85%
Income before income taxes           1,195,929         2,204,154         (1,008,225)         (45.74%)
Income taxes                           490,817           581,268           (90,451)         (15.56%)
Net income                          $  705,112        $1,622,886        $ (917,774)         (56.55%)

The following table  summarizes our operating  results and key financial  ratios
for three months ended June 30, 2011 and June 30, 2010, respectively:

                                     Three months ended June 30                 Comparison
                                    ----------------------------        ---------------------------
                                       2011              2010             Amount              %
                                    ----------        ----------        ----------        ---------
Sales revenue                       $2,764,437        $4,554,762        $(1,790,325)        (39.31%)
Cost of sales                        2,295,483         3,162,378           (866,895)        (27.41%)
Gross profit                           468,954         1,392,384           (923,430)        (66.32%)
Gross profit margin                     16.96%            30.57%
Total operating expenses               688,985           331,480            357,505          107.85%
(Loss)/income from operations         (220,030)        1,060,904         (1,280,935)       (120.74%)
Other income                            69,685             3,783             65,902         1742.06%
Finance costs                          163,703            61,339            102,364          166.88%
(Loss)/income / before income taxes   (314,049)        1,003,348         (1,317,397)       (131.30%)
Income taxes                            55,156           266,443           (211,287)        (79.30%)
Net (loss)/ income                  $ (369,205)       $   36,905        $(1,106,110)       (150.10%)
</TABLE>

                                       27
<PAGE>
This table below illustrates our key operating results and financial  indicators
for the six months ended June 30, 2011 and June 30, 2010, respectively:

<TABLE>
<CAPTION>
                                      Six months ended June 30                  Comparison
                                    ----------------------------        ---------------------------
                                       2011              2010             Amount              %
                                    ----------        ----------        ----------        ---------
<S>                                 <C>               <C>               <C>                  <C>
MAIN OPERATING RESULTS
  Sale revenue                      $9,193,949        $9,287,177        $  (93,228)          (1.00%)
  Gross profit                       2,533,128         3,075,133          (542,005)         (17.63%)
  Income from operations             1,344,964         2,349,664        (1,004,700)         (42.76%)
  Net income                          $705,112        $1,622,886        $ (917,774)         (56.55%)

MAIN FINANCIAL RATIOS
PROFITABILITY RATIO
  Gross profit margin                   27.55%            33.11%                              (5.56%)
  Operating profit margin               14.63%            25.30%                             (10.67%)

  Net profit margin                      7.67%            17.47%                              (9.80%)
  Ratio of general administrative
   expenses to revenue                  10.53%             6.26%                               4.27%
  Ratio of sales and marketing
   expenses to revenue                   2.39%             1.56%                               0.83%

ASSET-EFFICIENCY RATIO
  Average inventory turnover
   days                                    56                25
  Turnover days of accounts
   receivable                             252               148
  Turnover days of accounts payable        71                81
</TABLE>

REVENUE

For the six months ended June 30,  2011,  our revenues  were  $9,193,949,  which
represented a decrease of $93,228 or 1.00%,  as compared with $9,287,177 for the
same period in 2010. It is mainly  because the Company  believes the PRC markets
sustained  substantial  decreases in demand which, in turn, prompted the Company
to decrease its  production of  spring-summer  products as the  production  cost
increased.  However,  based  on the  purchase  agreements  we  signed  with  our
distributors  at the  Autumn-Winter  Fair held in Ma2011  of 2011,  the  Company
anticipates  that the demand will return to its prior  levels and the sales will
recover in the second half of this year.

For the second  quarter of 2011,  our  revenues  were  2,764,437,  a decrease of
1,790,325 or 39.31%,  as compared with  $4,554,762  for the same period in 2010.
During the transition  period, in order not to discourage our customers,  we did
not raise the price,  but,  instead,  decreased our output of the  spring-summer
product  line to offset the  higher  production  cost.  Thus,  our sales  amount
decreased accordingly.

GEOGRAPHIC SEGMENTS OF REVENUES IN THE SIX MONTHS ENDED JUNE 30, 2011 AND 2010:

<TABLE>
<CAPTION>
                                     Six months ended             Six months ended
                                       June 30, 2011                June 30, 2010                 Comparison
                                  ----------------------       ----------------------       ----------------------
                                      $             %              $             %              $             %
                                  ---------      -------       ---------      -------       ---------      -------
<S>                               <C>              <C>         <C>              <C>           <C>            <C>
Foreign markets                   3,925,767        42.70       3,298,101        35.51         627,666        19.03
PRC market                        5,268,182        57.30       5,989,076        64.49        (720,894)      (12.04)
The eastern section (1)           1,523,228        16.57       1,194,515        12.86         328,713        27.52
The northern section (2)          2,274,889        24.74       2,804,856        30.20        (529,967)      (18.89)
The southern section (3)          1,470,065        15.99       1,989,705        21.42        (519,640)      (26.12)
Total revenues                    9,193,949       100.00       9,287,177       100.00         (93,228)       (1.00)
</TABLE>

                                       28
<PAGE>
----------
Note:  1  The eastern  section  refers to the city of Shanghai and the provinces
       of Zhejiang,  Jiangsu,  Anhui, Hubei, Hunan,  Jiangxi and Shandong in the
       PRC;
       2. The northern  section  refers to the city of Beijing and the provinces
       of  Xinjiang,  Gansu,  Ningxia,  Hebei,  Henan,  Tianjin,  Shanxi,  Inner
       Mongolia, Liaoning, Jilin and Heilongjiang in the PRC;
       3. The southern  section refers to the city of Chongqing and provinces of
       Guangdong, Guangxi, Fujian, Hainan, Sichuan, Guizhou, Yunnan and Tibet in
       the PRC.

For the six months ended June 30, 2011,  $3,925,767  of our sales  revenues were
generated from the foreign (non PRC) markets, representing an increase of 19.03%
when compared to $3,298,101 from the same period in 2010.

For the six months ended June 30, 2011, the domestic Eastern market  contributed
$1,523,228 to the Company's  sales revenue,  representing an increase of 27.52%,
when  compared to  $1,194,515  earned in the same period of 2010.  The  Northern
market generated sales revenue of $2,274,889, representing a decrease of 18.89%,
when compared to  $2,804,856  for the same period in 2010.  The Southern  market
achieved  sales revenue of $1,470,065,  representing a decrease of 26.12%,  when
compared to $1,989,705 for the same period in 2010.  Such changes are mainly due
to the following:

?We witnessed an increase in sales revenues in the foreign  markets in the first
half of 2011, which was due to the competitive  pricing of our products compared
with other similar  products.  On the other hand, more  diversified  products we
sold in the foreign  markets also led to the increase in sales  revenues  during
the first half of 2011. This increase in sales revenue reflects  improving brand
awareness and a bigger market share as well as great  potentials of our products
in the foreign markets.
..
?In the second  quarter of 2011,  the sales in  Northern  and  Southern  markets
decreased. We believe this was due to the higher cost of spring-summer products.

?The higher sales results in Eastern market are mainly because the  distributors
in Zhejiang and Jiangsu provinces and the Company invested  significant  amounts
in advertising.

GEOGRAPHIC SEGMENTS OF REVENUES IN THE SECOND QUARTER OF 2011 & 2010:

<TABLE>
<CAPTION>
                                    Three months ended           Three months ended
                                       June 30, 2011                June 30, 2010                 Comparison
                                  ----------------------       ----------------------      -----------------------
                                      $             %              $             %              $             %
                                  ---------      -------       ---------      -------      ----------      -------
<S>                               <C>              <C>         <C>              <C>            <C>            <C>
Foreign markets                   1,864,604        67.45       1,845,331        40.51          19,273         1.04
PRC market                          899,833        32.55       2,709,431        59.49      (1,809,598)      (66.79)
The eastern section (1)             452,096        16.35         623,234        13.68        (171,138)      (27.46)
The northern section (2)            281,923        10.20       1,099,599        24.14        (817,676)      (74.36)
The southern section (3)            165,814         6.00         986,598        21.66        (820,784)      (83.19)
Total revenues                    2,764,437       100.00       4,554,762       100.00      (1,790,325)      (39.31)
</TABLE>

----------
Note:  1. The eastern  section  refers to the city of Shanghai and the provinces
       of Zhejiang,  Jiangsu,  Anhui, Hubei, Hunan,  Jiangxi and Shandong in the
       PRC;
       2. The northern  section  refers to the city of Beijing and the provinces
       of  Xinjiang,  Gansu,  Ningxia,  Hebei,  Henan,  Tianjin,  Shanxi,  Inner
       Mongolia, Liaoning, Jilin and Heilongjiang in the PRC;
       3. The southern  section refers to the city of Chongqing and provinces of
       Guangdong, Guangxi, Fujian, Hainan, Sichuan, Guizhou, Yunnan and Tibet in
       the PRC.

For the three months ended June 30, 2011,  $1,864,604 of our sales revenues were
generated from the foreign  markets,  representing an increase of 1.04% compared
to $1,845,331 for the same period in 2010.

For the three months ended June 30, 2011, the Eastern  section  generated  sales
revenues of $452,096,  representing  a decrease of 27.46%,  compared to $623,234
for the same period in 2010.  The Northern  section  achieved  sales revenues of
$281,923, representing a decrease of 74.36%, compared to $1,099,599 for the same
period in 2010.  The  Southern  section  achieved  sales  revenues of  $165,814,
representing  a decrease of 83.19%,  compared to $986,598 for the same period in
2010.

                                       29
<PAGE>
In the second  quarter of 2011,  the  foreign  sales  revenue  increased  as the
Company  launched more products  types into the  international  market which are
normally reserved and sold for domestic sales.  Consequently,  the growth margin
of the second quarter increased when compared with that of the first quarter.

In the second quarter of 2011, the sales decrease of domestic  market was mainly
due to the higher cost of the products for spring and summer.

GROSS  PROFIT AND GROSS  PROFIT  MARGIN FOR THE THREE MONTHS ENDED JUNE 30, 2011
AND 2010:

<TABLE>
<CAPTION>
                                Six months ended June 30                       Comparison
                             -------------------------------           --------------------------
                                2011                 2010                Amount              %
                             ----------           ----------           ----------         -------
<S>                          <C>                  <C>                  <C>                 <C>
Sales revenue                $9,193,949           $9,287,177           $  (93,228)         (1.00%)
Cost of sales                 6,660,821            6,212,044              448,777           7.22%
Gross profit                 $2,533,128           $3,075,133           $ (542,005)        (17.63%)
Gross profit margin               27.55%               33.11%                              (5.56%)

For the six  months  ended  June 30,  2011,  our gross  profit  was  $2,533,128,
representing  a decrease of $542,005 or 17.63%,  compared to $3,075,133  for the
same  period of 2010.  We mainly  attribute  this to the  higher  labor cost and
materials' cost.

For the six months  ended June 30,  2011,  our gross  profit  margin was 27.55%,
representing  a decrease  of 5.56%  compared  with  33.11% in the same period of
2010. Such decrease is mainly due to the increase of employee salaries.

GROSS PROFIT AND GROSS PROFIT MARGIN FOR THE SECOND QUARTER OF 2011& 2010:

                               Three months ended June 30                       Comparison
                             -------------------------------           --------------------------
                                2011                 2010                Amount              %
                             ----------           ----------           ----------         -------
Sales revenue                $2,764,437           $4,554,762           $(1,790,325)       (39.31%)
Cost of sales                 2,295,483            3,162,378              (866,895)       (27.41%)
Gross profit                 $  468,954           $1,392,384           $  (923,430)       (66.32%)
Gross profit margin               16.96%               30.57%
</TABLE>

For the three  months  ended  June 30,  2011,  our gross  profit  was  $468,954,
representing  a decrease of $923,430 or 66.32%,  compared to $1,392,384  for the
same period of 2010.

For the three months ended June 30,  2011,  our gross profit  margin was 16.96%,
representing  a decrease  of 13.61% as compared to the 30.57% in the same period
of 2010.  The decrease was mainly  resulted from  increased  labor costs and raw
material costs after the Chinese New Year.

In  future,  we intend to achieve  the  targeted  gross  profit  margin  through
adoption of following measures:

     *    in Lowering the percentage of the labor cost by optimizing the product
          manufacturing;
     *    in  Decreasing  the  amortization  of  the  public-used  materials  by
          improving the management;
     *    in Conducting the  procurements  on a wholesale  basis so as to reduce
          the cost of the materials;
     *    and in Releasing more products into the market at a higher price which
          has been properly adjusted.

                                       30
<PAGE>
OPERATING AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

For the six months  ended June 30, 2011,  the selling  expenses  were  $220,194,
representing an increase of $75,770 or 52.46%, compared to $144,424 for the same
period in 2010. The increase was mainly as a result of the subsidies provided to
our distributors to assist them with the rental payments.

For the six  months  ended  June 30,  2011,  the  administrative  expenses  were
$967,970,  representing  an increase of 66.49%  compared to $581,405 of the same
period  in  2010.  It was  mainly  due  to the  increase  of  the  research  and
development  expenses in  improving  the four "Travel  Series"  products and the
additional  administrative expenses of new factory in Quanzhou,  which commenced
its operations in April 1, 2011.

FINANCING COST

For the six  months  ended  June  30,  2011,  the  finance  cost  was  $258,456,
representing  an increase of $135,880 or 110.85%  comparing  to $122,576 for the
same  period  in 2010.  The  increase  primarily  relates  to  increase  in debt
servicing  cost on the  increase in bank loans which were applied to finance our
marketing expansion and consolidated construction of retails.

NET PROFIT

For  the  six  months  ended  June  30,  2011,  the  net  profit  was  $705,113,
representing  a decrease of $917,773 or 56.55%  compared to  $1,622,886  for the
same period in 2010,  primarily as a result of the decrease in revenues,  higher
cost and huge  increase  of  administrative  expenses  from the new  factory  in
Quanzhou.

NET PROFIT MARGIN

For the six  months  ended  June 30,  2011,  the net  profit  margin  is  7.67%,
representing a decrease of 9.80% compared to 17.47% for the same period in 2010.
This is  mainly  attributable  to the sharp  increase  of the  production  cost,
selling expenses and administrative expenses.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2011,  our total assets were  $39,046,366,  which consist of cash
and  cash   equivalents  of  $6,666,263,   trade   receivables  of  $12,613,775,
inventories  of  $2,937,379,  prepayments  and other  receivable of  $1,536,250,
advances to  customers  and  distributors  of  $185,055,  properties,  plant and
equipment  of  $8,869,911,  intangible  asset of $163,784 and land use rights of
$6,073,949.

As of June 30, 2011, total liabilities were  $16,770,496.  Total liabilities are
composed of trade payables of $2,267,530, short-term loans of $6,389,233, income
tax  payable of  $1,672,679,  amount due to a director of  $2,037,646  and other
payables and accrued expense of $4,403,408.  As of June 30, 2011,  stockholders'
equity was $22,275,870. As of June 30, 2011, the gearing ratio is 42.95%.

We offer what we believe to be  reasonable  credit  limits to our  customers  at
credit terms of 180 days to maintain control of trade receivable. As of June 30,
2011, the average inventory trade turnover was 56 days for our inventories which
was 25 days for the same period of 2010.

Our cash and bank  deposits are mainly  denominated  in RMB,  while the revenue,
expense,  assets and liabilities are denominated in RMB and US dollars.  The PRC
currency  is  exchanged  to US dollars at a floating  rate.  It did not have any
substantial  impact  on  our  financial  condition  because  we own  few  assets
denominated in US dollars.

Based on our current plans for the next 12 months,  we anticipate  that revenues
earned from our  operations  and bank  borrowings  will be the primary source of
funds for  future  operating  activities  in 2011.  However,  to fund  continued
expansion  of our  operation  and extend our reach to  broader  markets,  and to
acquire additional entities, we may rely on additional bank borrowings,  and, if
and to the extent  available,  on capital  raises.  There is no  assurance  that
either the additional  bank borrowings or capital raises will be available to us
or, if they are, on the terms that are acceptable.

CASH FLOW

As of June 30, 2011, our cash and cash equivalents were $6,666,263, representing
an increase of $851,006, compared to $5,815,257 for the same period of 2010.

                                       31
<PAGE>
As of June 30, 2011, net cash provided by operating activities was $441,525. Net
cash used in investing  activities was $1,272,782.  Such cash was mainly used in
the  construction  of the new production  facility and  acquisition of plant and
machinery.

As of June 30, 2011, net cash provided by financing activities was $1,557,686.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller  reporting company as defined by Rule 12b-2 of the Exchange Act
and are not required to provide the information required under this item.

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain  disclosure controls and procedures that are designed to ensure that
information  required  to be  disclosed  in our  reports  under  the  Securities
Exchange Act of 1934, as amended (the  "Exchange  Act") is recorded,  processed,
summarized and reported within the time periods specified in the SEC's rules and
forms,  and  that  such  information  is  accumulated  and  communicated  to our
management,  including our Chief Executive  Officer and Chief Financial  Officer
(the "Certifying officers"), as appropriate, to allow timely decisions regarding
required disclosure.

As of June 30, 2011,  the end of the fiscal quarter  covered by this report,  we
carried out an evaluation,  under the supervision and with the  participation of
our management,  including our Certifying officers,  of the effectiveness of the
design and operation of our  disclosure  controls and  procedures.  Based on the
foregoing,  the Certifying  Officers concluded that our disclosure  controls and
procedures were effective as of the end of the second fiscal quarter of 2011.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our internal  control over financial  reporting  during
the quarter ended June 30, 2011 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no  pending  legal  proceedings  to  which we are a party  which  are
material or potentially  material,  either individually or in the aggregate.  We
are from time to time,  during the  normal  course of our  business  operations,
subject to various litigation claims and legal disputes.  We do not believe that
the ultimate  disposition  of any of these matters will have a material  adverse
effect on our financial position, results of operations or liquidity.

ITEM 1A. RISK FACTORS

There were no material changes from the risk factors as previously  described in
our Annual Report on Form 10-K filed with the SEC on March 31, 2011.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months  ended June 30,  2011,  the Company did not (i) sell any
unregistered securities, or (ii) repurchase any of its equity securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. [REMOVED OR RESERVED]

                                       32
<PAGE>
ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are filed herewith:

Exhibit No.                         Description
-----------                         -----------
31.1          Certifications  pursuant to Rule 13a-14(a) or 15d-14(a)  under the
              Securities  Exchange Act of 1934, as amended,  as adopted pursuant
              to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2          Certifications  pursuant to Rule 13a-14(a) or 15d-14(a)  under the
              Securities  Exchange Act of 1934, as amended,  as adopted pursuant
              to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1          Certifications  pursuant  to 18 U.S.C.  Section  1350,  as adopted
              pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2          Certifications  pursuant  to 18 U.S.C.  Section  1350,  as adopted
              pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

                                       33
<PAGE>
                                   SIGNATURES

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

Date: August 19, 2011
                                By: /s/ Haiting Li
                                    --------------------------------------------
                                    Haiting Li
                                    Chief Executive Officer
                                    (Principal Executive Officer)


Date: August 19, 2011
                                By: /s/ Zhong Zhao
                                    --------------------------------------------
                                    Zhong Zhao
                                    Chief Financial Officer
                                    (Principal Accounting and Financial Officer)

                                       34