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 September 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)

                               (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 [X]

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 November  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 September 30, 2011
         (unaudited) and December 31, 2010                                     4

         Condensed Consolidated Statements of Income and Comprehensive Income
         for the nine months ended September 30, 2011 and 2010 (unaudited)     5

         Condensed Consolidated  Statements of Cash Flows for the nine months
         ended September 30, 2011 and 2010 (unaudited)                         6

         Condensed Consolidated Statement of Stockholders' Equity              8

         Notes to Condensed Consolidated Financial Statements                  9

Item 2.  Management's  Discussion and Analysis of Financial Condition and
         Results of Operations                                                24

Item 3.  Quantitative and Qualitative Disclosures About Market Risk           33

Item 4.  Controls and Procedures                                              33

Part II OTHER INFORMATION

Item 1.  Legal Proceedings                                                    33

Item 1A. Risk Factors                                                         33

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds          34

Item 3.  Defaults upon Senior Securities                                      34

Item 4.  [Removed or reserved]                                                34

Item 5.  Other Information                                                    34

Item 6.  Exhibits                                                             34

Signatures                                                                    35

                                       2
<PAGE>
Pacific Bepure Industry Inc.
Condensed Consolidated Financial Statements
For the three and nine months ended September 30, 2011 and 2010

              Index to Condensed Consolidated Financial Statements

                                                                           Pages
                                                                           -----

Condensed Consolidated Balance Sheets                                         4

Condensed Consolidated Statements of Income and Comprehensive Income          5

Condensed Consolidated Statements of Cash Flows                               6

Condensed Consolidated Statements of Stockholders' Equity                     8

Notes to Condensed Consolidated Financial Statements                          9

                                       3
<PAGE>
Pacific Bepure Industry Inc.
Condensed Consolidated Balance Sheets
As of September 30, 2011 and December 31, 2010
(Stated in US Dollars)

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

CURRENT ASSETS
  Cash and cash equivalents                                      $ 4,687,475          $ 5,815,257
  Trade receivables                                               13,642,032           13,094,012
  Prepayments and other receivables - Note 5                         158,854              249,118
  Advances to customers and distributors - Note 6                  1,582,165            1,293,733
  Inventories - Note 7                                             3,456,382            1,232,557
                                                                 -----------          -----------
      TOTAL CURRENT ASSETS                                        23,526,908           21,684,677

Properties, plant and equipment, net - Note 8                      8,991,158            7,592,866
Land use rights - Note 9                                           6,111,970            6,021,489
Intangible asset - Note 10                                           150,293              190,505
                                                                 -----------          -----------

      TOTAL ASSETS                                               $38,780,329          $35,489,537
                                                                 ===========          ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

CURRENT LIABILITIES
  Trade payables                                                 $ 2,975,826          $ 2,988,361
  Other payables and accrued expenses - Note 11                    3,389,355            3,524,874
  Loans payable - Note 12                                          6,480,394            4,717,870
  Amount due to a director - Note 13                               2,061,731            1,998,085
  Income tax payable                                               1,041,404            1,248,649
                                                                 -----------          -----------
      TOTAL CURRENT LIABILITIES                                   15,948,710           14,477,839
                                                                 -----------          -----------
      TOTAL LIABILITIES                                           15,948,710           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                                       3,422,434            3,234,650
  Statutory reserve - Note 23                                        309,688              309,688
  Accumulated other comprehensive income                           2,674,100            1,987,222
  Retained earnings                                               16,423,897           15,478,638
                                                                 -----------          -----------
      TOTAL STOCKHOLDERS' EQUITY                                  22,831,619           21,011,698
                                                                 -----------          -----------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $38,780,329          $35,489,537
                                                                 ===========          ===========
</TABLE>


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

                                       4
<PAGE>
Pacific Bepure Industry Inc.
Condensed Consolidated Statements of Income and Comprehensive Income
For the three and nine months ended September 30, 2011 and 2010
(Stated in US Dollars)

<TABLE>
<CAPTION>
                                                      Nine months ended                  Three months ended
                                                        September 30,                       September 30,
                                               ------------------------------      ------------------------------
                                                   2011              2010              2011              2010
                                               ------------      ------------      ------------      ------------
                                               (Unaudited)        (Unaudited)       (Unaudited)       (Unaudited)
<S>                                            <C>               <C>               <C>               <C>
Sales revenue                                  $ 14,222,604      $ 20,157,801      $  5,028,655      $ 10,870,624
Cost of sales                                    10,549,817        13,340,291         3,888,996         7,128,247
                                               ------------      ------------      ------------      ------------
Gross profit                                      3,672,787         6,817,510         1,139,659         3,742,377
                                               ------------      ------------      ------------      ------------
OPERATING EXPENSES
  Administrative expenses                         1,480,218           828,225           512,248           247,180
  Selling expenses                                  313,763           190,424            93,569            46,000
                                               ------------      ------------      ------------      ------------
                                                  1,793,981         1,018,649           605,817           293,180
                                               ------------      ------------      ------------      ------------

INCOME FROM OPERATIONS                            1,878,806         5,798,861           533,842         3,449,197
  Other income - Note 16                            155,554                --            46,134            10,619
  Other expense                                          --           (12,315)               --                --
  Finance costs - Note 17                          (374,752)         (194,678)         (116,296)          (72,102)
                                               ------------      ------------      ------------      ------------
Income before income taxes                        1,659,608         5,591,868           463,680         3,387,714
Income taxes - Note 18                             (714,349)       (1,439,944)         (223,532)         (858,676)
                                               ------------      ------------      ------------      ------------
NET INCOME                                          945,259         4,151,924           240,148         2,529,038

OTHER COMPREHENSIVE INCOME
  Foreign currency translation adjustment           686,878           298,435           260,045           277,500
                                               ------------      ------------      ------------      ------------

TOTAL COMPREHENSIVE INCOME                     $  1,632,137      $  4,450,359      $    500,193      $  2,806,538
                                               ============      ============      ============      ============
Earnings per share
  Basic and diluted - Note 19                  $      0.063      $      0.277      $      0.016      $      0.169
                                               ============      ============      ============      ============
Weighted Average Number of Shares Outstanding
 -Note 19
   -Basic and diluted                            15,000,000        15,000,000        15,000,000        15,000,000
                                               ============      ============      ============      ============
</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
For the nine months ended September 30, 2011 and 2010
(Stated in US Dollars)

<TABLE>
<CAPTION>
                                                                            Nine months ended
                                                                              September 30,
                                                                    --------------------------------
                                                                        2011                2010
                                                                    ------------        ------------
                                                                     (Unaudited)         (Unaudited)
<S>                                                                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                        $    945,259        $  4,151,924
  Adjustments to reconcile net income to net cash
   used in operating activities:
     Depreciation                                                        236,590             118,685
     Amortization of an intangible asset and land
      use rights recognised as expenses                                  112,321              40,376
     Share-based compensation                                            187,784                  --
  Changes in operating assets and liabilities:
     Trade receivables                                                  (128,991)         (2,627,797)
     Prepayments and other receivables                                   129,661            (298,762)
     Advances to customers and distributors                             (243,424)                 --
     Inventories                                                      (2,150,936)           (744,655)
     Trade payables                                                     (106,049)         (1,614,129)
     Other payables and accrued expenses                                (243,962)           (951,471)
     Income tax payable                                                 (243,208)            284,989
                                                                    ------------        ------------
           NET CASH FLOWS USED IN OPERATING ACTIVITIES                (1,504,955)         (1,640,840)
                                                                    ------------        ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Payments to acquire property, plant and equipment
   and construction in progress                                       (1,375,262)           (629,921)
                                                                    ------------        ------------
           NET CASH FLOWS USED IN INVESTING ACTIVITIES                (1,375,262)           (629,921)
                                                                    ------------        ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from new loans                                              5,933,666           4,591,867
  Repayment of loans                                                  (4,346,218)         (1,467,050)
  Repayment of amount due to a director                                       --              (4,360)
                                                                    ------------        ------------
           NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES             1,587,448           3,120,457
                                                                    ------------        ------------
Effect of foreign currency translation on cash and
 cash equivalents                                                        164,987              91,547
                                                                    ------------        ------------
Net (decrease)/increase in cash and cash equivalents                  (1,127,782)            941,243
Cash and cash equivalents - beginning of period                        5,815,257           4,325,176
                                                                    ------------        ------------

Cash and cash equivalents - end of period                           $  4,687,475        $  5,266,419
                                                                    ============        ============
</TABLE>


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

                                       6
<PAGE>
Pacific Bepure Industry Inc.
Condensed Consolidated Statements of Cash Flows (cont'd)
For the nine months ended September 30, 2011 and 2010
(Stated in US Dollars)

<TABLE>
<CAPTION>
                                                                    Nine months ended
                                                                      September 30,
                                                             ------------------------------
                                                                2011                2010
                                                             ----------          ----------
                                                             (Unaudited)         (Unaudited)
<S>                                                          <C>                 <C>
SUPPLEMENTAL DISCLOSURES FOR CASH FLOW INFORMATION:
  Cash paid for:
    Interest                                                 $  302,475          $  190,957
    Income taxes                                             $  957,557          $1,154,955
                                                             ==========          ==========

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

                                       7
<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                            --            --             --             --            --        945,259        945,259

Foreign currency translation
 adjustment                           --            --             --             --       686,878             --        686,878

Share-based compensation              --            --        187,784             --            --             --        187,784
                             -----------   -----------    -----------    -----------   -----------    -----------    -----------

Balance, September 30, 2011   15,000,000   $     1,500    $ 3,422,434    $   309,688   $ 2,674,100    $16,423,897    $22,831,619
                             ===========   ===========    ===========    ===========   ===========    ===========    ===========
</TABLE>


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

                                       8
<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 for 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.

                                       9
<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  nine-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 September
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.

                                       10
<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:

                        Nine months ended           Three months ended
                           September 30,               September 30,
                    ------------------------    -------------------------
                       2011          2010          2011           2010
                    ----------    ----------    ----------     ----------
                    (Unaudited)   (Unaudited)   (Unaudited)    (Unaudited)

Taiwan Quanyi
 Xingye Co., Ltd.   $5,171,555    $4,620,681    $1,245,788     $1,366,604
                    ==========    ==========    ==========     ==========

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

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

Taiwan Quanyi Xingye Co., Ltd.                  $3,053,019     $1,839,049
                                                ==========     ==========

Collateralized and uncollateralized short-term bank loans

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:

                    As of September 30, 2011    As of December 31, 2010
                    ------------------------    -----------------------
                          (Unaudited)                   (Audited)
                     Carrying        Fair        Carrying        Fair
                      Amount         Value        Amount         Value
                      ------         -----        ------         -----
Collateralized
 short-term bank
 loans              $6,480,394    $6,445,764    $4,717,870     $4,713,661
                    ==========    ==========    ==========     ==========


The fair values of  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.

                                       11
<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  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.

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 is not  expected to have a
material impact on the Company's financial statements.

                                       12
<PAGE>
4. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONT'D)

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  adoption  of this ASU update is not  expected to have a
material impact 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  adoption of this ASU update has no  material  impact on the
Company's financial statements.

In  September  2011,  the FASB issued ASU 2011-08,  "Intangibles  - Goodwill and
Other (Topic 350)".  The amendments in this update will allow an entity to first
assess  qualitative  factors to determine whether it is necessary to perform the
two-step  quantitative  goodwill  impairment  test. Under these  amendments,  an
entity  would not be required to  calculate  the fair value of a reporting  unit
unless the entity determines, based on a qualitative assessment, that it is more
likely  than not that its fair  value  is less  than its  carrying  amount.  The
amendments  include  a number  of  events  and  circumstances  for an  entity to
consider in  conducting  the  qualitative  assessment.  The adoption of this ASU
update is not  expected  to have a material  impact on the  Company's  financial
statements.

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


5. PREPAYMENTS AND OTHER RECEIVABLES

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

Prepayments to suppliers                         $ 57,572            $131,846
Advances to staff                                 101,282             117,272
                                                 --------            --------

                                                 $158,854            $249,118
                                                 ========            ========

6. ADVANCES TO CUSTOMERS AND DISTRIBUTORS

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

Interest-free loans advanced to
 customers and distributors                     $1,582,165          $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
                                               September 30,        December 31,
                                                   2011                2010
                                                ----------          ----------
                                                (Unaudited)          (Audited)

Raw materials                                   $1,028,147          $  227,572
Work-in-progress                                 1,721,254             445,249
Finished goods                                     706,981             559,736
                                                ----------          ----------


                                                $3,456,382          $1,232,557
                                                ==========          ==========

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


8. PROPERTIES, PLANT AND EQUIPMENT

                                              As of                    As of
                                          September 30,            December 31,
                                              2011                     2010
                                          ------------             ------------
                                           (Unaudited)               (Audited)
Costs:
  Plant and machinery                     $  1,462,141             $    985,609
  Office equipment                             219,053                  115,060
  Buildings                                  8,742,604                1,337,557
                                          ------------             ------------
                                            10,423,798                2,438,226
Accumulated depreciation                    (1,436,439)              (1,261,688)
Construction-in-progress                         3,799                6,416,328
                                          ------------             ------------

                                          $  8,991,158             $  7,592,866
                                          ============             ============

During the reporting period, depreciation is included in:

                                             Nine months ended September 30,
                                            ---------------------------------
                                              2011                     2010
                                            --------                 --------
                                           (Unaudited)              (Unaudited)

Cost of sales and overheads                 $133,654                 $ 68,799
Administrative expenses                     102,936                    49,886
                                            --------                 --------

                                            $236,590                 $118,685
                                            ========                 ========


----------
Notes:
As of September 30, 2011 and December 31, 2010, buildings with carrying value of
$7,280,065 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
                                          September 30,            December 31,
                                              2011                     2010
                                          ------------             ------------
                                           (Unaudited)              (Audited)

Cost                                      $  6,618,675             $  6,414,392
Accumulated amortization                      (506,705)                (392,903)
                                          ------------             ------------
                                          $  6,111,970             $  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  September  30,  2011 and  December  31,  2010,  the land use rights  with
carrying  value of  $6,111,970  and  $6,021,489  respectively,  was  pledged for
collateralized bank loans (Note 12b).

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


9. LAND USE RIGHTS (CONT'D)

During the nine months ended September 30, 2011 and 2010,  amortization  for the
land use rights  amounted to $99,730  and  $94,932 of which  $32,975 and $94,166
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
                                               September 30,        December 31,
                                                   2011                2010
                                                ----------          ----------
                                               (Unaudited)           (Audited)
Software
  Cost                                          $  342,803          $  332,223
  Accumulated amortization                        (192,510)           (141,718)
                                                ----------          ----------

                                                $  150,293          $  190,505
                                                ==========          ==========

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

During the nine  months  ended  September  30, 2011 and 2010,  amortization  for
intangible asset amounted to $45,566 and $39,610, respectively.

The  estimated  aggregate  amortization  expenses  for  software  for the  three
succeeding years are as follows:

     Year
     ----
     2012                                           $ 59,800
     2013                                             59,800
     2014                                             30,693
                                                    --------

                                                    $150,293
                                                    ========

                                       16
<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
                                                 September 30,      December 31,
                                                     2011              2010
                                                  ----------        ----------
                                                  (Unaudited)        (Audited)

Value added tax and other tax payable             $1,063,300        $1,712,724
Staff welfare payables (Note (a))                  1,209,244         1,046,724
Accrued expenses and other payables                  558,532           536,147
Salaries payable                                     558,279           229,279
                                                  ----------        ----------

                                                  $3,389,355        $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
                                                 September 30,      December 31,
                                                     2011              2010
                                                  ----------        ----------
                                                  (Unaudited)        (Audited)

Collateralized short-term bank loans (Note (b))   $4,915,082        $3,079,510
Uncollateralized short-term bank loans             1,565,312         1,638,360
                                                  ----------        ----------

                                                  $6,480,394        $4,717,870
                                                  ==========        ==========

----------
Notes:
a)   The bank loans are denominated in RMB and carried average  interest rate as
     of   September   30,  2011  and  December  31,  2010  at  6.16%  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  buildings and land use right
     with  carrying  values of  $7,280,065  (Note 8), and  $6,111,970  (Note 9),
     respectively,  and  guaranteed by Mr. Li Haiting,  the sole director of the
     Company and his brother and a third party.

                                       17
<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  September 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 September 30, 2011              560,000          $   1.75
                                                 ========          ========

Exercisable as of September 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
$187,784  arising from above  mentioned share options granted was recognized for
the nine months ended September 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%

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


15. COMMITMENTS AND CONTINGENCIES

a.   Capital commitment

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

The rental expense was $18,456 for the nine months ended September 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

                                Nine months ended        Three months ended
                                  September 30,             September 30,
                              ---------------------     ---------------------
                                2011         2010         2011         2010
                              --------     --------     --------     --------
                                   (Unaudited)               (Unaudited)

Government grant income       $ 70,549     $     --     $ 15,915     $     --
Sales of scrap materials        81,946           --       30,189           --
Others                           3,059           --           30       10,619
                              --------     --------     --------     --------

                              $155,554     $     --     $ 46,134     $ 10,619
                              ========     ========     ========     ========

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


17. FINANCE COSTS

                                Nine months ended      Three months ended
                                  September 30,           September 30,
                              --------------------    --------------------
                                2011        2010        2011        2010
                              --------    --------    --------    --------
                                 (Unaudited)              (Unaudited)

Bank loan interest expenses   $302,475    $190,957    $113,775    $ 67,520
Interest income                 (3,484)     (3,066)     (1,254)       (661)
Bank charges                    75,761       6,787       3,775       5,243
                              --------    --------    --------    --------

                              $374,752    $194,678    $116,296    $ 72,102
                              ========    ========    ========    ========

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% (2010 : 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.

                                       20
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


18. INCOME TAXES (CONT'D)

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 September
30, 2011.

The components of the provision for income taxes from continuing operation are:

                             Nine months ended         Three months ended
                               September 30,              September 30,
                        -------------------------   ------------------------
                           2011           2010         2011          2010
                        ----------     ----------   ----------    ----------
                        (Unaudited)    (Unaudited)  (Unaudited)   (Unaudited)

Current taxes - PRC     $  714,349     $1,439,944   $  223,532    $  858,676
Deferred taxes - PRC            --             --           --            --
                        ----------     ----------   ----------    ----------

                        $  714,349     $1,439,944   $  223,532    $  858,676
                        ==========     ==========   ==========    ==========

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

                             Nine months ended         Three months ended
                               September 30,              September 30,
                        -------------------------   ------------------------
                           2011           2010         2011          2010
                        ----------     ----------   ----------    ----------
                        (Unaudited)    (Unaudited)  (Unaudited)   (Unaudited)

Provision for income
 taxes at PRC statutory
 income tax rate - 25%  $  414,902     $1,397,967   $  115,920    $  846,929
Non-deductible items       299,447         41,977      107,612        11,747
                        ----------     ----------   ----------    ----------

                        $  714,349     $1,439,944   $  223,532    $  858,676
                        ==========     ==========   ==========    ==========

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


19. EARNINGS PER SHARE

The basic and diluted  earnings per share is calculated using the net income and
the weighted average number of shares outstanding during the reporting periods.

The share options in issue are considered anti-dilative.  Accordingly, the basic
and diluted earnings per share are the same.

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 par value each.

23. STATUTORY RESERVE

The Company's statutory reserve comprise of the following:

                                                  As of               As of
                                              September 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  nine  months  ended  September  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.

                                       22
<PAGE>
Pacific Bepure Industry Inc.
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)


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  $124,039 and $86,124 for the nine months ended  September  30, 2011
and 2010 respectively.

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:

                   Nine months ended                   Three months ended
                     September 30,                        September 30,
            ------------------------------      -------------------------------
                2011              2010              2011               2010
            ------------      ------------      ------------       ------------
             (Unaudited)       (Unaudited)       (Unaudited)        (Unaudited)

PRC         $  9,051,049      $ 15,493,515      $  3,782,867       $  9,504,439
Taiwan         5,171,555         4,664,286         1,245,788          1,366,185
            ------------      ------------      ------------       ------------

            $ 14,222,604      $ 20,157,801      $  5,028,655       $ 10,870,624
            ============      ============      ============       ============

26. SUBSEQUENT EVENTS

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

                                       23
<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 November 15, 2011, we had 15,000,000 shares of
common stock issued and outstanding.

BUSINESS REVIEW

No  matter  how was the  global  economic  condition,  China  economy  was still
increasing at a steady growth.  Yet it took longer to achieve the same growth as
compared  with the same period in 2010.  Influenced  by macro  control  economic
policies imposed on real estate, investments conducted less contributions to the
increase of GDP. In general,  the global economy was  retrieving  growth in slow
paces,   and  China  met   continuous   decreases  of  growth  rate  in  export.
Simultaneously CPI in China made a breakthrough in historical  records,  and the
actual  consumption was growing at a lower rate as compared with the same period
in last year.

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 nine months ended September 30, 2011, the Company's
sales revenues  decreased by $5,935,197 or 29.44% to  $14,222,604  compared with
$20,157,801 in the same period of 2010.

                                       24
<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 "" ("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.

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.  As of
September 30, 2011,  retail locations are 98, 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.

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.

                                       25
<PAGE>
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.

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.

                                       26
<PAGE>
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.

                                       27
<PAGE>
RESULTS OF OPERATIONS  FOR THE NINE MONTHS AND THREE MONTHS ENDED  SEPTEMBER 30,
2011 AND SEPTEMBER 30, 2010

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

<TABLE>
<CAPTION>
                                Nine months ended September 30                Comparison
                                -------------------------------      ---------------------------
                                    2011               2010             Amount             %
                                ------------       ------------      ------------      ---------
<S>                             <C>                <C>               <C>               <C>
Sales revenue                   $ 14,222,604       $ 20,157,801      $ (5,935,197)       (29.44%)
Cost of sales                     10,549,817         13,340,291        (2,790,474)       (20.92%)
Gross profit                       3,672,787          6,817,510        (3,144,723)       (46.13%)
Gross profit margin                    25.82%             33.82%
Total operating expenses           1,793,981          1,018,649           775,332         76.11%
Income from operations             1,878,806          5,798,861        (3,920,055)       (67.60%)
Other expense                       (155,554)            12,315          (167,869)     (1363.13%)
Finance costs                        374,752            194,678           180,074        (92.50%)
Income before income taxes         1,659,608          5,591,868        (3,932,260)       (70.32%)
Income taxes                         714,349          1,439,944          (725,595)       (50.39%)
Net income                      $    945,259       $  4,151,924      $ (3,206,665)       (77.23%)

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

                                Three months ended September 30                Comparison
                                -------------------------------      -------------------------
                                    2011               2010             Amount            %
                                ------------       ------------      ------------      -------
Sales revenue                   $  5,028,655       $ 10,870,624      $ (5,841,969)     (53.74%)
Cost of sales                      3,888,996          7,128,247        (3,239,251)     (45.44%)
Gross profit                       1,139,659          3,742,377        (2,602,718)     (69.55%)
Gross profit margin                    22.66%             34.43%
Total operating expenses             605,817            293,180           312,637      106.64%
Income from operations               533,842          3,449,197        (2,915,355)     (84.52%)
Other income                         (46,134)           (10,619)          (35,515)     334.45%
Finance costs                        116,296             72,102            44,194       61.29%
Income before income taxes           463,680          3,387,714        (2,924,034)     (86.31%)
Income taxes                         223,532            858,676          (635,144)     (73.97%)
Net income                      $    240,148       $  2,529,038       $(2,288,890)     (90.50%)
</TABLE>

This table below illustrates our key operating results and financial  indicators
for  the  nine  months  ended   September  30,  2011  and  September  30,  2010,
respectively:

                                       28
<PAGE>
<TABLE>
<CAPTION>
                                  Nine months ended September 30                 Comparison
                                  -------------------------------       ---------------------------
                                      2011               2010              Amount             %
                                  ------------       ------------       ------------       --------
<S>                               <C>                <C>                <C>                <C>
MAIN OPERATING RESULTS
  Sale revenue                    $ 14,222,604       $ 20,157,801       $ (5,935,197)      (29.44%)
  Gross profit                       3,672,787          6,817,510         (3,144,723)      (46.13%)
  Income from operations             1,878,806          5,798,861         (3,920,055)      (67.60%)
  Net income                      $    945,259       $  4,151,924       $ (3,206,665)      (77.23%)

MAIN FINANCIAL RATIOS
PROFITABILITY RATIO
  Gross profit margin                    25.82%            33.82%                           (8.00%)
  Operating profit margin                13.21%            28.77%                          (15.56%)
  Net profit margin                       6.65%            20.60%                          (13.95%)
  Ratio of general administrative
   expenses to revenue                   10.41%             4.11%                            6.30%
  Ratio of sales and marketing
   expenses to revenue                    2.21%             0.94%                            1.26%

ASSET-EFFICIENCY RATIO
  Average inventory turnover days           60                22
  Turnover days of accounts receivable     254               116
  Turnover days of accounts payable         76                54

REVENUE

For the nine months ended  September 30, 2011,  our revenues  were  $14,222,604,
which  represented  a  decrease  of  $5,935,197  or  29.44%,  as  compared  with
$20,157,801  for the same period in 2010.  It is mainly  because the  purchasing
power declines due to the higher price of  merchandise.  Moreover,  the sales of
winter products was shortened as the temperature stayed relatively high.

For the third  quarter of 2011,  our  revenues  were  5,028,655,  a decrease  of
5,841,969 or 53.74%,  as compared with  $10,870,624 for the same period in 2010.
It is mainly attributed to the higher temperature .

GEOGRAPHIC  SEGMENTS OF REVENUES IN THE NINE MONTHS ENDED SEPTEMBER30,  2011 AND
2010:

                             Nine months ended           Nine months ended
                             September 30, 2011          September 30, 2010              Comparison
                            ---------------------      ----------------------      ---------------------
                                 $            %             $             %            $            %
                            ----------     ------      ----------      ------      ----------     ------
Foreign markets              5,171,555      36.36       4,664,286       23.14         507,269      10.88
PRC market                   9,051,049      63.64      15,493,515       76.86      (6,442,466)    (41.58)
The eastern section (1)      2,367,459      16.65       3,256,803       16.16        (889,344)    (27.31)
The northern section (2)     3,936,934      27.68       6,824,213       33.85      (2,887,279)    (42.31)
The southern section (3)     2,746,656      19.31       5,412,499       26.85      (2,665,843)    (49.25)
                            ----------     ------      ----------      ------      ----------     ------

Total revenues              14,222,604     100.00      20,157,801      100.00      (5,935,197)    (29.44)
                            ==========     ======      ==========      ======      ==========     ======
</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.

                                       29
<PAGE>
For the nine months ended  September 30, 2011,  $5,171,555 of our sales revenues
were generated from the foreign (non PRC) markets,  representing  an increase of
10.88% when compared to $4,664,286 from the same period in 2010.

For the nine months ended  September  30,  2011,  the  domestic  Eastern  market
contributed $2,367,459 to the Company's sales revenue,  representing an decrease
of 27.31%,  when compared to $3,256,803  earned in the same period of 2010.  The
Northern market  generated sales revenue of $3,936,934,  representing a decrease
of 42.31%, when compared to $6,824,213 for the same period in 2010. The Southern
market achieved sales revenue of $2,746,656,  representing a decrease of 49.25%,
when compared to $5,412,499 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 third quarter of 2011,  the sales in Eastern  market  decreased.  We
     believe  this was due to the  decreased  sales in  provinces  of  Zhejiang,
     Jiangsu and Shangdong.
*    In the third  quarter  of 2011,  the  sales in  Northern  market  decreased
     because of the relative high temperature.
*    In the third  quarter  of 2011,  the  sales in  Southern  market  decreased
     because of the sales in provinces of Sichuan and Guizhou dropped.

GEOGRAPHIC SEGMENTS OF REVENUES IN THE THIRD 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               1,245,788        24.77         1,366,185       12.57          (120,397)      (8.81)
PRC market                    3,782,867        75.23         9,504,439       87.43        (5,721,572)     (60.20)
The eastern section (1)         844,231        16.79         2,062,288       18.97        (1,218,057)     (59.06)
The northern section (2)      1,662,045        33.05         4,019,357       36.97        (2,357,312)     (58.65)
The southern section (3)      1,276,591        25.39         3,422,794       31.49        (2,146,203)     (62.70)
                              ---------       ------        ----------      ------        ----------      ------

Total revenues                5,028,655       100.00        10,870,624      100.00        (5,841,969)     (53.74)
                              =========       ======        ==========      ======        ==========      ======
</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 September 30, 2011,  $1,245,788 of our sales revenues
were  generated  from the  foreign  markets,  representing  an decrease of 8.81%
compared to $1,366,185 for the same period in 2010.

For the three months ended  September 30, 2011,  the Eastern  section  generated
sales  revenues of  $844,231,  representing  a decrease  of 59.06%,  compared to
$2,062,288  for the same period in 2010.  The Northern  section  achieved  sales
revenues  of  $1,662,045,   representing  a  decrease  of  58.65%,  compared  to
$4,019,357  for the same period in 2010.  The Southern  section  achieved  sales
revenues  of  $1,276,591,   representing  a  decrease  of  62.70%,  compared  to
$3,422,794 for the same period in 2010.

GROSS PROFIT AND GROSS PROFIT  MARGIN FOR THE NINE MONTHS  ENDED  SEPTEMBER  30,
2011 AND 2010:

                            Nine months ended
                               September 30                    Comparison
                        ---------------------------    ------------------------
                             2011          2010           Amount           %
                        ------------   ------------    ------------    --------
Sales revenue           $ 14,222,604   $ 20,157,801    $ (5,935,197)    (29.44%)
Cost of sales             10,549,817     13,340,291      (2,790,474)    (20.92%)
Gross profit            $  3,672,787   $  6,817,510    $ (3,144,723)    (46.13%)
Gross profit margin            25.82%         33.82%                     (8.00%)

                                       30
<PAGE>
For the nine months ended  September 30, 2011, our gross profit was  $3,672,787,
representing a decrease of $3,144,723 or 46.13%,  compared to $6,817,510 for the
same period of 2010. We mainly attribute this to the decreased sales.

For the nine months  ended  September  30,  2011,  our gross  profit  margin was
25.82%, representing a decrease of 8.00% compared with 33.82% in the same period
of 2010.  Such  decrease is mainly due to the  increased  employee  salaries and
materials cost(collectively increased by around 10%).

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

                             Three months ended
                                September 30                   Comparison
                        ---------------------------    ------------------------
                            2011           2010           Amount           %
                        ------------   ------------    ------------    --------
Sales revenue           $  5,028,655   $ 10,870,624    $ (5,841,969)    (53.74%)
Cost of sales              3,888,996      7,128,247      (3,239,251)    (45.44%)
Gross profit            $  1,139,659   $  3,742,377    $ (2,602,718)    (69.55%)
Gross profit margin            22.66%         34.43%                    (11.77%)

For the three months ended  September 30, 2011, our gross profit was $1,139,659,
representing a decrease of $2,602,718 or 69.55%,  compared to $3,742,377for  the
same period of 2010.

For the three  months ended  September  30,  2011,  our gross profit  margin was
22.66%,  representing a decrease of 11.77% as compared to the 34.43% in the same
period of 2010. The decrease was mainly  resulted from increased labor costs and
raw material costs.

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

     *    Conducting the  procurements  on a wholesale basis so as to reduce the
          cost of the materials; and
     *    Releasing  more  products  into the market at a higher price which has
          been properly adjusted.

OPERATING AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

For the nine  months  ended  September  30,  2011,  the  selling  expenses  were
$313,763,  representing an increase of $123,339 or 64.77%,  compared to $190,424
for the same period in 2010. The reasons were mainly as following:

     *    The salaries of sales workers were adjusted to a higher level;
     *    The  advertisement  expense  increased  as  the  Company  renewed  the
          advertising policies.

For the nine months ended September 30, 2011, the  administrative  expenses were
$1,408,218,  representing an increase of 70.03% compared to $828,225 of the same
period in 2010. It was mainly due to as following:

     *    The increase of R&D expenses in improving new products;
     *    The  increased  administrative  expenses in  management of new factory
          located in Hui'an County;
     *    The additional  administrative  expenses in implementing  stock option
          plan.

FINANCING COST

For the nine months ended  September  30, 2011,  the finance cost was  $374,752,
representing  an increase of $180,074 or 92.50%  comparing  to $194,678  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 nine months  ended  September  30,  2011,  the net profit was  $945,259,
representing  a decrease of $3,206,665 or 77.23%  compared to $4,151,924 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.

                                       31
<PAGE>
NET PROFIT MARGIN

For the nine months ended  September  30, 2011,  the net profit margin is 6.65%,
representing  a decrease  of 13.95%  compared  to 20.60% for the same  period in
2010.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2011,  our total assets were  $33,780,329,  which consist of
cash and cash  equivalents of  $4,687,475,  trade  receivables  of  $13,642,032,
inventories  of  $3,456,382,  prepayments  and other  receivable of  $1,741,019,
properties, plant and equipment of $8,991,158,  intangible asset of $150,293 and
land use rights of $6,111,970.

As of September 30, 2011, total liabilities were $15,948,710.  Total liabilities
are composed of trade  payables of $2,975,826,  short-term  loans of $6,480,394,
income tax payable of  $1,041,404,  and other  payables  and accrued  expense of
$5,451,086.  As of September 30, 2011, stockholders' equity was $22,831,619.  As
of September 30, 2011, the gearing ratio is 41.13%.

We offer  reasonable  credit  limits to our  customers at credit terms of 60-180
days to maintain  control of trade  receivable.  As of September  30, 2011,  the
average trade receivables  turnover was 254 days which was 116 days for the same
period of 2010.

As of September 30, 2011, the average  inventory  trade turnover was 60 days for
our inventories which was 22 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.

CASH FLOW

As of  September  30,  2011,  our  cash and cash  equivalents  were  $4,687,475,
representing  a decrease  of  $1,127,782,  compared to  $5,266,419  for the same
period of 2010.

As of September 30, 2011, net cash used in operating  activities was $1,504,955.
Net cash used in investing activities was $1,375,262.  Such cash was mainly used
in the construction of the new production  facility and acquisition of plant and
machinery.

As of  September  30,  2011,  net cash  provided  by  financing  activities  was
$1,587,448.

                                       32
<PAGE>
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 September 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 third 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  September  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

Except as set forth below,  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.

WE MAY NOT BE ABLE TO ACCURATELY  REPORT OUR FINANCIAL  RESULTS OR PREVENT FRAUD
DUE TO THE FACT THAT OUR BOOKS AND RECORDS ARE  MAINTAINED  AND  PREPARED IN PRC
GAAP AND OUR  EMPLOYEES  WHO HAVE  PRIMARY  RESPONSIBILITIES  OF  PREPARING  AND
SUPERVISING THE PREPARATION OF THE FINANCIAL  STATEMENTS  UNDER U.S. GAAP DO NOT
HAVE KNOWLEDGE OF AND PROFESSIONAL EXPERIENCE WITH U.S. GAAP AND SEC RULES. AS A
RESULT,  CURRENT  AND  POTENTIAL  SHAREHOLDERS  COULD  LOSE  CONFIDENCE  IN  OUR
FINANCIAL REPORTING, WHICH WOULD HARM THE VALUE OF OUR SECURITIES.

Our CFO is tasked with the primary  responsibility  of preparing and supervising
the  preparation  of the  Company's  financial  statements  and  evaluating  the
effectiveness of the Company's internal control over financial reporting. He has
not had prior or ongoing  training in the  application  of the U.S.  GAAP or SEC
rules.  This  individual  has spent  approximately  5 years in the  capacity  of
financial  manager at a U.S. public company where he was involved in preparation
of financial  statements in  accordance  with the U.S.  GAAP.  In addition,  our
management is responsible for  establishing  and maintaining  adequate  internal
control over financial reporting.  Our internal control over financial reporting
is a process  designed  to  provide  reasonable  assurance  regarding  financial
reporting and the preparation of financial  statements for external  purposes in
accordance with United States Generally Accepted Accounting  Principles.  All of
the business  operations of the Company are located in Mainland  China.  For the
purposes of maintaining  controls and addressing  financial  reporting risks, we
are using  assignment of  responsibility,  authorization  controls,  reviews and
approvals, budget controls, property protections,  accounting controls, internal
reporting,  analysis of operations,  performance assessment and other methods to
address the risks of financial reporting. In addition,  currently, our books and
records  are  maintained  and  prepared in PRC GAAP and the  employees  who have
primary  responsibilities  of preparing and  supervising  the preparation of the
financial  statements  under U.S. GAAP do not have knowledge of and professional
experience with U.S. GAAP and SEC rules and regulations.  If we fail to maintain
an effective system of internal control over financial reporting,  we may not be
able to accurately  report our financial  results or prevent fraud. As a result,
current  and  potential  shareholders  could lose  confidence  in our  financial
reporting, which would harm the value of our shares.

                                       33
<PAGE>
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended  September 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]

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are filed herewith:


Exhibit No.                       Description
-----------                       -----------

10.5          Purchase Contract, dated January 11, 2008, between Fujian Jinjiang
              Pacific Shoe Co.,Ltd and Huachang Footwear Materials Company.

10.6          Distribution  Agreement,  dated April 30, 2009, of Fujian Jinjiang
              Pacific Shoes Co., Ltd.

10.7*         Zhong Zhao Employment Agreement.

21.1          List of Subsidiaries.

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.

----------
*    Compensatory or management employment contract

                                       34
<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: November 14, 2011
                                        By: /s/ Haiting Li
                                            ------------------------------------
                                            Haiting Li
                                            Chief Executive Officer
                                            (Principal Executive Officer)

Date: November 14, 2011
                                        By: /s/ Zhong Zhao
                                            ------------------------------------
                                            Zhong Zhao
                                            Chief Financial Officer
                                            (Principal Accounting and Financial
                                            Officer)

                                       35