UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                  For the quarterly period ended June 30, 2010

[ ] 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                     333-149898                  26-1272059
(State or other jurisdiction         (Commission                (IRS Employer
     of incorporation)                 File No.)             Identification No.)

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

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

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

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

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

Large accelerated filer [ ]                        Accelerated filer [ ]

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

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

As of August 13, 2010, 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

                                                                           Page
                                                                          Number
                                                                          ------
PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements                                                3

          Condensed Consolidated Balance Sheets as of June 30, 2010
          (unaudited) and December 31, 2009                                   3

          Condensed Consolidated Statements of Income and Comprehensive
          Income for the three and six months ended June 30, 2010 and
          2009 (unaudited)                                                    4

          Condensed Consolidated  Statements of Cash Flows for the six
          months ended June 30, 2010 and 2009 (unaudited)                     5

          Condense consolidated statements of Stockholder's Equity            7

          Notes to Condensed Consolidated Financial Statements (unaudited)    8

Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations                                              22

Item 3.   Quantitative and Qualitative Disclosures About Market Risk         30

Item 4.   Controls and Procedures                                            30

PART II. OTHER INFORMATION

Item 1.   Legal Proceedings                                                  30

Item 1A.  Risk Factors                                                       30

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds        31

Item 3.   Defaults Upon Senior Securities                                    31

Item 4.   (REMOVED AND RESERVED)                                             31

Item 5.   Other Information                                                  31

Item 6.   Exhibits                                                           31

SIGNATURES                                                                   32

                                       2
<PAGE>
                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                          Pacific Bepure Industry Inc.
                      Condensed Consolidated Balance Sheets
                    As of June 30, 2010 and December 31, 2009
                             (Stated in US Dollars)
<TABLE>
<CAPTION>

                                                               As of              As of
                                                              June 30,          December 31,
                                                                2010               2009
                                                            ------------       ------------
                                                             (Unaudited)         (Audited)
<S>                                                         <C>                <C>
ASSETS

Current assets
  Cash and cash equivalents                                 $  4,818,287       $  4,325,176
  Trade and bills receivables                                  7,989,865          7,274,214
  Prepayments and other receivables - Note 5                     258,047             69,618
  Advances to customers and distributors - Note 6              2,937,461          2,934,000
  Inventories - Note 7                                         1,044,967            698,135
                                                            ------------       ------------
      Total current assets                                    17,048,627         15,301,143

  Properties, plant and equipment, net - Note 8                6,865,370          6,407,851
  Land use rights - Note 9                                     5,893,252          5,949,593
  Intangible asset - Note 10                                     187,998            214,182
                                                            ------------       ------------
TOTAL ASSETS                                                $ 29,995,247       $ 27,872,769
                                                            ============       ============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
  Current liabilities
    Trade and bills payables                                $  2,087,406       $  3,477,541
    Other payables and accrued expenses - Note 11              5,673,642          6,201,508
    Loans payable - Note 12                                    4,156,508          1,467,000
    Dividend payable                                                  --          2,019,252
    Amount due to a director - Note 13                         1,818,992                 --
    Income tax payable                                         1,893,572          1,986,162
                                                            ------------       ------------
      Total current liabilities                               15,630,120         15,151,463
                                                            ------------       ------------
TOTAL LIABILITIES                                             15,630,120         15,151,463
                                                            ------------       ------------
COMMITMENTS AND CONTINGENCIES - Note 14

STOCKHOLDERS' EQUITY
  Common stock: par value of $0.0001 per share
  Authorized 75,000,000 shares; issued and outstanding
    15,000,000 shares in 2010 and 2009 - Note 20                   1,500              1,500
  Additional paid-in capital                                   3,124,213          3,124,213
  Statutory reserve - Note 21                                    309,688            309,688
  Accumulated other comprehensive income                       1,362,241          1,341,306
  Retained earnings                                            9,567,485          7,944,599
                                                            ------------       ------------
TOTAL STOCKHOLDERS' EQUITY                                    14,365,127         12,721,306
                                                            ------------       ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $ 29,995,247       $ 27,872,769
                                                            ============       ============
</TABLE>
         The accompanying notes are an integral part of these condensed
                       consolidated financial statements

                                       3
<PAGE>
                          Pacific Bepure Industry Inc.
      Condensed Consolidated Statements of Income and Comprehensive Income
           For the three and six months ended June 30, 2010 and 2009
                             (Stated in US Dollars)

<TABLE>
<CAPTION>
                                                       Six months ended                  Three months ended
                                                           June 30,                           June 30,
                                                 -----------------------------     -----------------------------
                                                     2010             2009             2010             2009
                                                 ------------     ------------     ------------     ------------
                                                  (Unaudited)      (Unaudited)      (Unaudited)      (Unaudited)
<S>                                              <C>              <C>              <C>              <C>
Sales revenue                                    $  9,287,177     $  7,061,013     $  4,554,762     $  3,451,003
Cost of sales                                       6,212,044        4,655,467        3,162,378        2,151,013
                                                 ------------     ------------     ------------     ------------
Gross profit                                        3,075,133        2,405,546        1,392,384        1,299,990
                                                 ------------     ------------     ------------     ------------
Operating expenses
  Administrative expenses                             581,045          448,962          260,032          243,127
  Selling expenses                                    144,424          118,475           71,448           79,436
                                                 ------------     ------------     ------------     ------------
                                                      725,469          567,437          331,480          322,563
                                                 ------------     ------------     ------------     ------------

Income from operations                              2,349,664        1,838,109        1,060,904          977,427
  Other (expense)/income                              (22,934)          (1,930)           3,783            6,608
  Finance costs - Note 15                            (122,576)         (56,519)         (61,339)         (32,320)
                                                 ------------     ------------     ------------     ------------

Income before income taxes                          2,204,154        1,779,660        1,003,348          951,715
Income taxes - Note 16                               (581,268)        (482,334)        (266,443)        (252,776)
                                                 ------------     ------------     ------------     ------------
Net income                                          1,622,886        1,297,326          736,905          698,939

Other comprehensive income:
  Foreign currency translation adjustments             20,935           14,575           57,168              476
                                                 ------------     ------------     ------------     ------------

Total comprehensive income                       $  1,643,821     $  1,311,901     $    794,073     $    699,415
                                                 ============     ============     ============     ============
Earnings per share:
  Basic and diluted - Note 17                    $      0.108     $      0.124     $      0.049     $      0.067
                                                 ============     ============     ============     ============
Weighted average number of shares outstanding:
  Basic and diluted                                15,000,000       10,500,000       15,000,000       10,500,000
                                                 ============     ============     ============     ============
</TABLE>


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

                                       4
<PAGE>
                          Pacific Bepure Industry Inc.
                 Condensed Consolidated Statements of Cash Flows
                For the six months ended June 30, 2010 and 2009
                             (Stated in US Dollars)

<TABLE>
<CAPTION>
                                                                                   Six months ended
                                                                                       June 30,
                                                                           -------------------------------
                                                                               2010               2009
                                                                           ------------       ------------
                                                                            (Unaudited)        (Unaudited)

<S>                                                                        <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                               $  1,622,886       $  1,297,326
  Adjustments to reconcile net income to net cash
   (used in)/provided by operating activities:
     Depreciation                                                                77,973             77,875
     Amortization of an intangible asset and land use rights
      recognised as expenses                                                     26,850             26,769
  Changes in operating assets and liabilities:
      Restricted cash                                                                --             74,576
      Trade and bills receivables                                              (704,497)          (966,097)
      Prepayments and other receivables                                        (187,662)           263,997
      Inventories                                                              (344,749)          (109,571)
      Trade and bills payables                                               (1,389,164)           838,927
  Other payables and accrued expenses                                          (533,234)          (452,517)
      Income tax payable                                                        (94,588)          (479,971)
                                                                           ------------       ------------
           Net cash flows (used in)/provided by operating activities         (1,526,185)           571,314
                                                                           ------------       ------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Advance to a director                                                              --           (699,509)
  Payments to acquire property, plant and equipment and
   construction in progress                                                    (463,674)          (606,722)
                                                                           ------------       ------------

           Net cash flows used in investing activities                         (463,674)        (1,306,231)
                                                                           ------------       ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from new loans                                                     4,141,381            586,564
  Repayment of loans                                                         (1,463,386)        (1,447,825)
  Repayment of amount due to a director                                        (201,906)                --
                                                                           ------------       ------------

           Net cash flows provided by/(used in) financing activities          2,476,089           (861,261)
                                                                           ------------       ------------

Effect of foreign currency translation on cash and cash equivalents               6,881             11,595
                                                                           ------------       ------------

Net increase/(decrease) in cash and cash equivalents                            493,111         (1,584,583)

Cash and cash equivalents - beginning of period                               4,325,176          3,633,929
                                                                           ------------       ------------

Cash and cash equivalents - end of period                                  $  4,818,287       $  2,049,346
                                                                           ============       ============
</TABLE>


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

                                       5
<PAGE>
                          Pacific Bepure Industry Inc.
            Condensed Consolidated Statements of Cash Flows (cont'd)
                 For the Six months ended June 30, 2010and 2009
                             (Stated in US Dollars)

<TABLE>
<CAPTION>
                                                                                   Six months ended
                                                                                       June 30,
                                                                           -------------------------------
                                                                               2010               2009
                                                                           ------------       ------------
                                                                            (Unaudited)        (Unaudited)
<S>                                                                        <C>                <C>
Supplemental disclosures for cash flow information:

Cash paid for:
  Interest                                                                 $    123,437       $     62,759
  Income taxes                                                             $    675,855       $    955,810
                                                                           ============       ============
Non-cash financing activities:
  Dividends - Note                                                         $  2,019,252       $  5,280,338
                                                                           ============       ============
</TABLE>


Note:

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

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

                                       6
<PAGE>
                          PACIFIC BEPURE INDUSTRY INC.
           CONDENSED CONSOLIDATED STATEMENTS 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 21)     income       earnings        equity
                                  ------       ------     -------     ---------     ------       --------        ------

<S>                             <C>           <C>         <C>          <C>         <C>           <C>          <C>
Balance, December 31, 2009      15,000,000    $  1,500    $3,124,213   $309,688    $1,341,306    $7,944,599   $ 12,721,306

Net income                              --          --            --         --            --       885,981        885,981

Foreign currency translation
 adjustment                             --          --            --         --       (36,233)           --        (36,233)
                                ----------    --------    ----------   --------    ----------    ----------   ------------

Balance, March 31, 2010         15,000,000    $  1,500    $3,124,213   $309,688    $1,305,073    $8,830,580   $ 13,571,054

Net income                              --          --            --         --            --       736,905        736,905

Foreign currency translation
 adjustment                             --          --            --         --        57,168            --         57,168
                                ----------    --------    ----------   --------    ----------    ----------   ------------

Balance, June 30, 2010          15,000,000    $  1,500    $3,124,213   $309,688    $1,362,241    $9,567,485   $ 14,365,127
                                ==========    ========    ==========   ========    ==========    ==========   ============
</TABLE>



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

                                       7
<PAGE>
                          Pacific Bepure Industry Inc.
            Notes to the Condensed Consolidated Financial Statements
                            June 30, 2010 (unaudited)

1. CORPORATE INFORMATION

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. On December 17,
2009,  the Company  changed its name from Wollemi Mining Corp. to Pacific Bepure
Industry   Inc.   The   Company's   shares  are   quoted  for   trading  on  the
Over-the-counter Bullentin Board in the United States of America.

On November 5, 2009, the Company entered a share exchange  agreement (the "Share
Exchange  Agreement")  with Peakway  Worldwide  Limited  ("Peakway"),  a British
Virgin Islands  ("BVI")  company,  and its sole  stockholder,  Cabo  Development
Limited ("Cabo"), a BVI company.  Pursuant to the Share Exchange Agreement,  the
Company acquired 100% of the issued and outstanding  capital stock of Peakway in
exchange for 10,500,000 of the Company's  newly issued common stock at par value
of $0.0001 each,  which  constitute 70% of the Company's  issued and outstanding
capital stock as of and immediately  after the  consummation of the transactions
contemplating by Share Exchange Agreement (the "RTO").

As a result of the RTO completed on November 11, 2009, the Company acquired 100%
of the capital  stock of Peakway and  consequently,  control of the business and
operations  of  Peakway.  From and  after  the  closing  of the  Share  Exchange
Agreement,  the  Company's  primary  operations  consist  of  the  business  and
operations of 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 Worldwide Limited ("Peakway") was incorporated in the BVI on November 3,
2006 as a limited  liability  company with authorized  share capital of $50,000,
dividend  into  50,000  common  shares of $1 par value  each.  The issued  share
capital of Peakway is $1,000,  dividend 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,  2010,  its  paid  up  capital  was
HK$16,370,478  of which  HK$15,401,180  was  certified.  Baopiao  had been under
development and had not started commercial operations.

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

                                       8
<PAGE>
2. GROUP REORGANIZATION AND BASIS OF PRESENTATION

Pursuant to the Share Exchange  Agreement dated on November 5, 2009, the Company
issued  10,500,000  shares,  par value $0.0001 per share,  to the stockholder of
Peakway,  representing approximately 70% of the Company post-exchange issued and
outstanding common stock, in exchange for 100% of the outstanding  capital stock
of Peakway.

The RTO is accounted  for as a  recapitalization  effected by a share  exchange,
wherein  Peakway  is  considered  the  acquirer  for  accounting  and  financial
reporting purposes. Peakway's assets and liabilities would be brought forward at
their  book  value  and no  goodwill  would be  recognized.  These  consolidated
financial  statements  are issued under the name of the Company,  represent  the
continuation of the financial statements of Peakway.

3. 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, 2009.

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 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.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

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

CONCENTRATIONS OF CREDIT RISK

Financial  instruments  that  potentially  subject  the  Company to  significant
concentrations of credit risk consist  principally of cash and cash equivalents,
trade  receivables  and advances to customers and  distributors.  As of June 30,
2010 and December 31, 2009,  substantially  all of the  Company's  cash and cash
equivalents were held by major financial  institutions located in the PRC, which
management  believes  are  of  high  credit  quality.   With  respect  to  trade
receivables  and advances to customers  and  distributors,  the Company  extends
credit  based on  evaluations  of the  customers'  and  distributors'  financial
positions.  The Company generally does not require  collateral for customers and
distributors.

                                       9
<PAGE>
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

CONCENTRATIONS OF CREDIT RISK (CONT'D)

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

<TABLE>
<CAPTION>
                                           Six months ended             Three months ended
                                               June 30,                      June 30,
                                      -------------------------     -------------------------
                                         2010           2009           2010           2009
                                      ----------     ----------     ----------     ----------
                                      (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)
<S>                                   <C>            <C>            <C>            <C>
Taiwan Quanyi Xingye Co., Ltd.        $3,254,077     $       --     $1,844,787     $       --
Jinjiang Import Export Co., Ltd.              --      2,347,552             --      1,240,336
                                      ----------     ----------     ----------     ----------

                                      $3,254,077     $2,347,552     $1,844,787     $1,240,336
                                      ==========     ==========     ==========     ==========
</TABLE>

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

                                                       As of           As of
                                                      June 30,      December 31,
                                                        2010           2009
                                                     ----------     ----------
                                                     (Unaudited)     (Audited)

Taiwan Quanyi Xingye Co., Ltd.                       $2,916,498     $1,009,848
                                                     ==========     ==========

Fair value of financial instruments

ASC 820 "Fair Value  Measurements  and  Disclosures"  (previously  SFAS No. 107)
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 June 30, 2010          As of December 31, 2009
                          ---------------------        -------------------------
                                (Unaudited)                    (Audited)
                          Carrying        Fair         Carrying         Fair
                           amount         value         amount          value
                           ------         -----         ------          -----
Collateralized
 short-term bank
 loans                   $4,156,508    $4,159,438     $1,467,000     $1,464,258
                         ==========    ==========     ==========     ==========

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

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

                                       10
<PAGE>
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONT'D)

Accounting for Transfers of Financial  Assets (Included in amended Topic ASC 860
"Transfers  and  Servicing",   previously   Statement  of  Financial  Accounting
Standards  ("SFAS") No. 166,  "Accounting for Transfers of Financial Assets - an
Amendment of Financial  Accounting Standard Board ("FASB") Statement No. 140.").
The amended  topic  addresses  information  a reporting  entity  provides in its
financial  statements about the transfer of financial  assets;  the effects of a
transfer on its financial position, financial performance, and cash flows; and a
transferor's  continuing  involvement in transferred financial assets. Also, the
amended topic removes the concept of a qualifying special purpose entity, limits
the circumstances in which a transferor derecognizes a portion or component of a
financial  asset,  defines  participating  interest and enhances the information
provided to  financial  statement  users to provide  greater  transparency.  The
amended topic is effective for the first annual reporting period beginning after
November 15, 2009 and was effective  for us as of January 1, 2010.  The adoption
of  this  amended  topic  has no  material  impact  on the  Company's  financial
statements.

Consolidation of Variable Interest Entities - Amended (Included in amended Topic
ASC 810 "Consolidation",  previously SFAS 167 "Amendments to FASB Interpretation
No. 46(R)").  The amended topic requires an enterprise to perform an analysis to
determine the primary  beneficiary  of a variable  interest  entity;  to require
ongoing  reassessments of whether an enterprise is the primary  beneficiary of a
variable interest entity and to eliminate the quantitative  approach  previously
required for determining the primary  beneficiary of a variable interest entity.
The amended topic also requires enhanced  disclosures that will provide users of
financial  statements with more  transparent  information  about an enterprise's
involvement in a variable  interest  entity.  The amended topic is effective for
the first annual  reporting  period  beginning  after  November 15, 2009 and was
effective  for us as of January 1, 2010.  The adoption of this amended topic has
no material impact on the Company's financial statements.

The  FASB  issued  Accounting  Standards  Update  (ASU)  No.  2009-13,   Revenue
Recognition (Topic 605): Multiple Deliverable Revenue Arrangements - A Consensus
of the FASB  Emerging  Issues  Task  Force."  This update  provides  application
guidance on whether multiple  deliverables exist, how the deliverables should be
separated and how the consideration  should be allocated to one or more units of
accounting.  This update  establishes a selling price  hierarchy for determining
the selling price of a deliverable.  The selling price used for each deliverable
will be based on vendor-specific  objective evidence, if available,  third-party
evidence if vendor-specific  objective  evidence is not available,  or estimated
selling price if neither  vendor-specific or third-party  evidence is available.
The Company will be required to apply this  guidance  prospectively  for revenue
arrangements entered into or materially modified after January 1, 2011; however,
earlier application is permitted. The management is in the process of evaluating
the impact of adopting this ASU update on the Company's financial statements.

                                       11
<PAGE>
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONT'D)

The  FASB  issued  ASU   2010-06,   Improving   Disclosures   about  Fair  Value
Measurements.  ASU  2010-06  amends  ASC  Topic  820 to  require  the  following
additional  disclosures  regarding fair value  measurements:  (i) the amounts of
transfers between Level 1 and Level 2 of the fair value hierarchy;  (ii) reasons
for any transfers in or out of Level 3 of the fair value hierarchy and (iii) the
inclusion of information  about purchases,  sales,  issuances and settlements in
the  reconciliation  of recurring Level 3 measurements.  ASU 2010-06 also amends
ASC Topic 820 to clarify existing disclosure requirements,  requiring fair value
disclosures by class of assets and liabilities rather than by major category and
the  disclosure  of valuation  techniques  and inputs used to determine the fair
value of Level 2 and  Level 3 assets  and  liabilities.  With the  exception  of
disclosures relating to purchases, sales, issuances and settlements of recurring
Level 3 measurements, ASU 2010-06 was effective for interim and annual reporting
periods beginning after December 15, 2009. The disclosure  requirements  related
to purchases, sales, issuances and settlements of recurring Level 3 measurements
will  be  effective  for  financial  statements  for  annual  reporting  periods
beginning  after  December  15,  2010.  The  adoption  of this ASU update has no
material impact on the Company's financial statements.

The FASB  issued ASU No.  2010-02,  "Consolidation  (Topic 810)  Accounting  and
Reporting for  Decreases in Ownership of a Subsidiary - a Scope  Clarification".
This  amendment  affects  entities  that have  previously  adopted  Topic 810-10
(formally  SFAS 160).  It  clarifies  the decrease in  ownership  provisions  of
Subtopic  810-10 and removes the  potential  conflict  between  guidance in that
Subtopic and asset derecognition and gain or loss recognition  guidance that may
exist in other US GAAP.  An  entity  will be  required  to  follow  the  amended
guidance  beginning in the period that it first adopts FAS 160 (now  included in
Subtopic  810-10).  For those  entities  that have already  adopted FAS 160, the
amendments  are  effective  at the  beginning  of the  first  interim  or annual
reporting period ending on or after December 15, 2009. The amendments  should be
applied  retrospectively to the first period that an entity adopted FAS 160. The
adoption of this ASU update has no material  impact on the  Company's  financial
statements.

In February 2010, the FASB issued ASU 2010-09,  Subsequent Events: Amendments to
Certain  Recognition  and Disclosure  Requirements,  which amends FASB ASC Topic
855,  Subsequent  Events. The update provides that SEC filers, as defined in ASU
2010-09,  are no longer  required to disclose the date through which  subsequent
events  have  been  evaluated  in  originally   issued  and  revised   financial
statements.  The update also requires SEC filers to evaluate  subsequent  events
through the date the  financial  statements  are issued rather than the date the
financial statements are available to be issued. The Company adopted ASU 2010-09
upon  issuance.  This update had no material  impact on the financial  position,
results of operations or cash flows of the Company.

                                       12
<PAGE>
5. PREPAYMENTS AND OTHER RECEIVABLES

                                                As of                  As of
                                               June 30,             December 31,
                                                 2010                  2009
                                               --------              --------
                                             (Unaudited)             (Audited)

Prepayments to suppliers                       $169,582              $     --
Advances to staff                                88,465                69,618
                                               --------              --------

                                               $258,047              $ 69,618
                                               ========              ========

6. ADVANCES TO CUSTOMERS AND DISTRIBUTORS

                                                As of                  As of
                                               June 30,             December 31,
                                                 2010                  2009
                                               --------              --------
                                             (Unaudited)             (Audited)
Interest-free loans advanced to
 customers and distributors                   $2,937,461            $2,934,000
                                              ==========            ==========

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

7. INVENTORIES

                                                As of                  As of
                                               June 30,             December 31,
                                                 2010                  2009
                                               --------              --------
                                             (Unaudited)             (Audited)

Raw materials                                $  376,686             $  307,077
Work-in-progress                                317,980                161,297
Finished goods                                  350,301                229,761
                                             ----------             ----------

                                             $1,044,967             $  698,135
                                             ==========             ==========

                                       13
<PAGE>
8. PROPERTIES, PLANT AND EQUIPMENT

                                                As of                  As of
                                               June 30,             December 31,
                                                 2010                  2009
                                               --------              --------
                                             (Unaudited)             (Audited)
Costs:
  Plant and machinery                        $   941,407           $   904,816
  Office equipment                                90,777                71,995
  Buildings                                    1,294,997             1,293,472
  Motor vehicle                                   20,092                    --
                                             -----------           -----------
                                               2,347,273             2,270,283

Accumulated depreciation                      (1,145,784)           (1,066,269)
Construction-in-progress                       5,663,881             5,203,837
                                             -----------           -----------

                                             $ 6,865,370           $ 6,407,851
                                             ===========           ===========

During the reporting period, depreciation is included in:-

                                                 Six months ended June 30,
                                              ------------------------------
                                                2010                  2009
                                              --------              --------
                                             (Unaudited)           (Unaudited)

Cost of sales and overheads                   $ 45,487              $ 57,581
Administrative expenses                         32,486                20,294
                                              --------              --------

                                              $ 77,973              $ 77,875
                                              ========              ========

Notes:-

As of June 30, 2010 and December  31, 2009,  buildings  with  carrying  value of
$846,385 and $868,185  respectively,  were pledged for the  collateralized  bank
loans (Note 12a).

Construction-in-progress  consist  mainly the new  factory and  warehouse  under
construction.

9. LAND USE RIGHTS

                                                As of                  As of
                                               June 30,             December 31,
                                                 2010                  2009
                                               --------              --------
                                             (Unaudited)             (Audited)

Cost                                         $ 6,210,294           $ 6,202,975
Accumulated amortization                        (317,042)             (253,382)
                                             -----------           -----------

                                             $ 5,893,252           $ 5,949,593
                                             ===========           ===========

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

As of June 30, 2010 and  December 31,  2009,  the land use rights with  carrying
value of $5,893,252 and $48,734  respectively,  were pledged for  collateralized
bank loans (Note 12a).

                                       14
<PAGE>
9. LAND USE RIGHTS (CONT'D)

During the six months  ended June 30, 2010 and 2009,  amortization  for the land
use rights  amounted to $63,129 and  $61,782 of which  $62,620 and $61,274  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
     ----

     2010                     $ 65,952
     2011                      129,082
     2012                      129,082
     2013                      129,082
     2014                      129,082
                              --------

                              $582,280
                              ========

10. INTANGIBLE ASSET

                                                As of                  As of
                                               June 30,             December 31,
                                                 2010                  2009
                                               --------              --------
                                             (Unaudited)             (Audited)
Software
  Cost                                        $ 293,746              $ 293,400
  Accumulated amortization                     (105,748)               (79,218)
                                              ---------              ---------

                                              $ 187,998              $ 214,182
                                              =========              =========

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

During the six months ended June 30, 2010 and 2009,  amortization for intangible
asset amounted to $26,341 and $26,261, respectively.

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

     Year
     ----

     2010                     $ 26,596
     2011                       52,780
     2012                       52,780
     2013                       52,780
     2014                        3,062
                              --------

                              $187,998
                              ========

                                       15
<PAGE>
11. OTHER PAYABLES AND ACCRUED EXPENSES

                                                   As of               As of
                                                  June 30,          December 31,
                                                    2010               2009
                                                  --------           --------
                                                (Unaudited)          (Audited)

Value added tax and other tax payable            $4,205,345         $4,417,015
Staff welfare payables (Note 11a)                   945,325          1,163,898
Accrued expenses and other payables                 247,107            211,386
Salaries payable                                    189,210            409,209
Receipt in advance from customers                    86,655                 --
                                                 ----------         ----------

                                                 $5,673,642         $6,201,508
                                                 ==========         ==========

Notes:-

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

12. LOANS PAYABLE

                                                   As of               As of
                                                  June 30,          December 31,
                                                    2010               2009
                                                  --------           --------
                                                (Unaudited)          (Audited)

Collateralized short-term bank loans (Note 12a)  $4,156,508         $1,467,000
                                                 ==========         ==========

Notes:-

a)   The bank loans are denominated in RMB and carried an average  interest rate
     as of June 30, 2010 and December 31, 2009 of 6.19% and 6.02% respectively.

     The bank loans were collateralized by the buildings and land use right with
     carrying values of $846,385 (Note 8) and $5,893,252 (Note 9), respectively,
     and  guaranteed  by Mr. Li Haiting,  the sole director of the Company and a
     third party.

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

13. AMOUNT DUE TO A DIRECTOR

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

                                       16
<PAGE>
14. COMMITMENTS AND CONTINGENCIES

a.   Capital commitment

     As of June 30, 2010, the Company had an capital  commitment for its payment
     of  registered   capital  for  Baopiao  in  the  amounts  of  HK$33,629,522
     (approximately $4,321,394).

b.   Operating lease commitment

     As of June 30, 2010, the Company had one non-cancelable operating lease for
     its office. The lease will expire in March 2011 and the expected payment is
     $11,750.

     The rental expense  relating to the operating  lease was $2,927 for the six
     months ended June 30, 2010.

c.   Contingencies

     In accordance with the PRC tax regulations, the Company's sales are subject
     to value added tax ("VAT") of 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.

15. FINANCE COSTS

<TABLE>
<CAPTION>
                                        Six months ended                   Three months ended
                                            June 30,                            June 30,
                                 -----------------------------       -----------------------------
                                          (Unaudited)                         (Unaudited)
                                   2010                2009            2010                2009
                                 ---------           ---------       ---------           ---------
<S>                              <C>                 <C>             <C>                 <C>
Bank loan interest expenses      $ 123,437           $  62,759       $  61,326           $  36,373
Interest income                     (2,405)             (6,240)           (900)             (4,053)
Bank charges                         1,544                  --             913                  --
                                 ---------           ---------       ---------           ---------

                                 $ 122,576           $  56,519       $  61,339           $  32,320
                                 =========           =========       =========           =========
</TABLE>

                                       17
<PAGE>
16. INCOME TAXES

United States

Pacific  Bepure  Industry  Inc. is subject to the United States of America's tax
rate of 34%.  No  provision  for 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 a profits tax rate of
16.5%  (2009:  16.5%).  It is currently  not subject to income taxes  because it
derived no taxable income during the reporting period.

PRC

On March 16, 2007, the National  People's Congress approved the Corporate Income
Tax Law of the People's  Republic of China (the "New CIT Law").  The New CIT Law
reduces the standard  corporate  income tax rate from 33% to 25% effective  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 the Tax
Holiday must apply for it 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 any Tax Holiday.

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

<TABLE>
<CAPTION>
                                        Six months ended                   Three months ended
                                            June 30,                            June 30,
                                 -----------------------------       -----------------------------
                                   2010                2009            2010                2009
                                 ---------           ---------       ---------           ---------
                                (Unaudited)         (Unaudited)     (Unaudited)         (Unaudited)
<S>                              <C>                 <C>             <C>                 <C>
Current taxes - PRC              $581,268            $482,334        $266,443            $252,776
Deferred taxes - PRC                   --                  --              --                  --
                                 --------            --------        --------            --------

                                 $581,268            $482,334        $266,443            $252,776
                                 ========            ========        ========            ========
</TABLE>

                                       18
<PAGE>
16. INCOME TAXES (CONT'D)

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

<TABLE>
<CAPTION>
                                             Six months ended                   Three months ended
                                                 June 30,                            June 30,
                                      -----------------------------       -----------------------------
                                        2010                2009            2010                2009
                                      ---------           ---------       ---------           ---------
                                     (Unaudited)         (Unaudited)     (Unaudited)         (Unaudited)
<S>                                   <C>                 <C>             <C>                  <C>
Provision for income taxes at PRC
 statutory income tax rate - 25%      $551,039            $449,915        $250,837             $237,929
Non-deductible items for tax            30,229              32,419          15,606               14,847
                                      --------            --------        --------             --------

                                      $581,268            $482,334        $266,443             $252,776
                                      ========            ========        ========             ========
</TABLE>

17. 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.
All share and per share data have been adjusted to reflect the  recapitalization
of the Company in the RTO.

During the period,  the Company had no dilutive  instruments.  Accordingly,  the
basic and diluted earnings per share are the same.

18. RELATED PARTIES TRANSACTIONS

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

19. TRADEMARKS

Pacific  Shoes,  currently  owns  two  trademarks,  namely  "Chinese  character"
("Bepure"),  and "Chinese character" ("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.

                                       19
<PAGE>
20. COMMON STOCK

The Company was incorporated on October 9, 2007 with authorized share capital of
$7,500  divided  into  75,000,000  common  shares of  $0.0001  per  value  each.
Following  the RTO as  described  in  Notes 1 and 2,  the  financial  statements
represent the continuation of Peakway. Hence, the 10,500,000 shares of par value
$0.0001  per  share,  totaling  $1,050  is  presented  as if they  were in issue
throughout the periods presented. The 4,500,000 shares of $0.0001 par value each
totaling $450 in issue prior to the RTO was presented as a  recapitalization  to
effect the RTO.

21. STATUTORY RESERVE

The Company's statutory reserve is comprised of the following:-

                                                   As of               As of
                                                  June 30,          December 31,
                                                    2010               2009
                                                  --------           --------
                                                (Unaudited)          (Audited)

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

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

For the six months ended June 30, 2010 and 2009  respectively,  no appropriation
to this  statutory  reserve were made as the reserve  reached 50% of the Pacific
Shoes' registered capital and Baopiao did not make any profit during the period.

22. 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  $29,017 and $8,766 for the six months  ended June 30, 2010 and 2009
respectively.

                                       20
<PAGE>
23. SEGMENT INFORMATION

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

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

<TABLE>
<CAPTION>
                                 Six months ended                   Three months ended
                                     June 30,                            June 30,
                          -----------------------------       -----------------------------
                            2010                2009            2010                2009
                          ---------           ---------       ---------           ---------
                         (Unaudited)         (Unaudited)     (Unaudited)         (Unaudited)
<S>                       <C>                 <C>             <C>                  <C>
PRC                      $5,989,076           $4,558,664     $2,709,431          $2,096,601
Taiwan                    3,298,101            2,502,349      1,845,331           1,354,402
                         ----------           ----------     ----------          ----------

                         $9,287,177           $7,061,013     $4,554,762          $3,451,003
                         ==========           ==========     ==========          ==========
</TABLE>

24. SUBSEQUENT EVENTS

The company  evaluated all events or  transactions  that occurred after June 30,
2010 and has determined that,  other than the matter described below,  there are
no material recognizable  subsequent events nor transactions which would require
recognition or disclosure in the  consolidated  financial  statements other than
noted therein.

To attract  and  retain  the best  available  personnel,  to provide  additional
incentives to employees, directors and consultants and to promote the success of
the Company's  business,  the Company  unanimously adopted the 2010 Stock Option
Plan on July 6, 2010.

Under the 2010 Stock Option Plan, the maximum  aggregate  number of shares which
may be issued pursuant to Incentive Share Options is 560,000 shares. Each option
shall be  designated in an Option  Agreement.  The option shall be designated as
either an Incentive  Share Option or a Non-Qualified  Share Option.  The term of
each option shall be the term stated in the Option Agreement, provided, however,
that the term of an  Incentive  Share  Option  shall be no more than three years
from the date of grant thereof.

                                       21
<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').

OVERVIEW

OUR BUSINESS

We design,  develop,  manufacture  and distribute  sports and casual footwear in
China and South America through our indirectly owned Chinese  subsidiaries.  All
of our  products are sold under the brand " Chinese  characters"  ( "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
(Outsourced Design Manufacture?) products, are sold in the South America through
our distributors.

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 Shoes") 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 Shoes is still in its development stage and has
not yet generated any revenue.

BRAND PROMOTION AND MARKETING

We aim to build  our  distinctive  brand  image in the  casual  footwear  market
through celebrity endorsement and events sponsorship.

                                       22
<PAGE>
In the first and second  quarter of 2010,  we launched  new  products  under the
"Free Travel"  series in the domestic  market.  Our "Free Travel"  series mainly
consists of canvas shoes and sneakers. We believe with the addition of the "Free
Travel"  series we have a better  product  structure that will help us to tackle
the changing domestic market. In May 2010, we held a three-day Autumn and Winter
New Products Show.  Distributors  from more than 20 provinces  attended the show
and some of them placed orders with us at the show.

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.

TRADEMARK

We have two  trademarks  registered in four classes and eight pending  trademark
applications in China.

WHOLESALE DISTRIBUTION NETWORK

In the domestic market,  through our  distributors,  our sales network covers 24
provinces and  administrative  region in various modes,  such as retail outlets,
counters  in  department  stores  and  shopping  malls,  and wall racks in large
supermarkets.  In South  America,  we sell our  products,  including our branded
products and ODM (original design manufacturer)  products, on a whole-sale basis
through a Taiwanese distributor.

SALES NETWORK IN THE DOMESTIC MARKET

In the domestic market, we adopted the sales mode of "four-prong  sales",  which
is a  combination  of four  retail  approaches,  including  distributor-operated
stores,  retailer-operated  stores,  franchise  stores  and  online  stores.  In
distributor-operated  stores,  distributors sell our product exclusively. In the
retailer  operated  stores,  distributor  appointed  retailers sell our products
exclusively  in such  stores.  We have certain  control  over these  distributor
appointed  retailers  because when we enter into  distribution  agreements  with
distributors,  we have the right to approve or reject the distributor's  request
to appoint certain  retailers.  The franchise stores refer to stores operated by
our franchisee  pursuant to franchise  agreements with us. In the second quarter
of 2010,  we extended our  coverage and control of sales  terminals by approving
the addition of retail outlets in major cities.

We continue to make efforts to attract distributors and expand our sales network
throughout  the  provinces  and regions in China where we  currently do not have
distribution.  We will also continue to promote the online sales and enhance the
Internet marketing in cooperation with selected Internet websites operators.

RESEARCH AND DEVELOPMENT

We consistently  strive to develop  attractive  footwear products in response to
the demand of our target  consumer  and the  ever-changing  fashion  trends.  We
increased our investment in research and  development by recruiting more skilled
talents to utilize new craftsmanship, new technologies and new materials.

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 revenues and expenses during the
reported period.  These amounts and estimates  include,  but are not limited to,
the valuation of accounts receivable, inventories and estimation on useful lives
and residual  values of properties,  plant and equipment and  intangible  asset.
Actual results could differ from these estimates.

                                       23
<PAGE>
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.

PROPERTY, PLANT AND EQUIPMENT

Property, 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 years

Maintenance  or  repairs  are  charged  to  expense  as  incurred.  Upon sale or
disposition,  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 operational use.

INTANGIBLE ASSET

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

LAND USE RIGHTS

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

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived  assets  are  tested  for  impairment  whenever  events or changes in
circumstances  indicate  that  the  carrying  amount  of the  assets  may not be
recoverable. The Company recognizes impairment of long-lived assets in the event
that the net book  values of such  assets  exceed the future  undiscounted  cash
flows attributable to such assets.  During the reporting period, the Company has
not identified any indicators that would require testing for impairment.

REVENUE RECOGNITION

Revenue from sales of the Company's  products is recognized when the significant
risks and rewards of ownership have been transferred to the buyer at the time of
delivery,  the sales price is fixed or determinable and collection is reasonably
assured. Returns and exchange require approval from management and discounts are

                                       24
<PAGE>
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, employee 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.

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 carry 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.

RESULTS OF OPERATIONS FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2010
AND JUNE 30,2009

The following table  summarizes our operating  results and key financial  ratios
for the six months ended June 30, 2010 and June 30, 2009, respectively:

<TABLE>
<CAPTION>
                                          Six months ended June 30,               Comparison
                                        ----------------------------      --------------------------
                                           2010             2009            Amount             %
                                        ----------       ----------       ----------      ----------
<S>                                     <C>              <C>              <C>                <C>
Sales revenue                           9,287,177         7,061,013       2,226,164         31.53%
Cost of sales                           6,212,044         4,655,467       1,556,577         33.44%
Gross profit                            3,075,133         2,405,546         669,587         27.84%
Gross profit margin                         33.11%            34.07%
Total operating expenses                  725,469           567,437         158,032         27.85%
Income from operations                  2,349,664         1,838,109         511,555         27.83%
Other expense                              22,934             1,930          21,004       1088.29%
Finance costs                             122,576            56,519          66,057        116.88%
Income before income taxes              2,204,154         1,779,660         424,494         23.85%
Income taxes                              581,268           482,334          98,934         20.51%
Net income                              1,622,886         1,297,326         325,560         25.09%
</TABLE>

The following table  summarizes our operating  results and key financial  ratios
for three months ended June 30, 2010 and June 30, 2009, respectively:

<TABLE>
<CAPTION>
                                         Three months ended June 30,               Comparison
                                        ----------------------------      --------------------------
                                           2010             2009            Amount             %
                                        ----------       ----------       ----------      ----------
<S>                                     <C>              <C>              <C>                <C>
Sales revenue                           4,554,762        3,451,003        1,103,759         31.98%
Cost of sales                           3,162,378        2,151,013        1,011,365         47.02%
Gross profit                            1,392,384        1,299,990           92,394          7.11%
Gross profit margin                         30.57%           37.67%
Total operating expenses                  331,480          322,563            8,917          2.76%
Income from operations                  1,060,904          977,427           83,477          8.54%
Other income                                 3783            6,608           (2,825)       (42.75)%
Finance costs                              61,339           32,320           29,019         89.79%
Income before income taxes              1,003,348          951,715           51,633          5.43%
Income taxes                              266,443          252,776           13,667          5.41%
Net income                                736,905          698,939           37,966          5.43%
</TABLE>

                                       25
<PAGE>
This table below illustrates our key operating results and financial  indicators
for the six months ended June 30, 2010 and June 30, 2009, respectively:

<TABLE>
<CAPTION>
                                          Six months ended June 30,               Comparison
                                        ----------------------------      --------------------------
                                           2010             2009            Amount             %
                                        ----------       ----------       ----------      ----------
<S>                                     <C>              <C>              <C>               <C>
MAIN OPERATING RESULTS
Sale revenues                           9,287,177        7,061,013        2,226,164         31.53%
Gross profit                            3,075,133        2,405,546          669,587         27.84%
Income from operations                  2,349,664        1,838,109          511,555         27.83%
Net income                              1,622,886        1,297,326          325,560         25.09%

MAIN FINANCIAL RATIOS
PROFITABILITY RATIO
Gross profit margin                         33.11%           34.07%                         (0.96)%
Operating profit margin                     25.30%           26.03%                         (0.73)%
Net profit margin                           17.47%           18.37%                         (0.90)%
Ratio of general administrative
 expenses to revenues                        6.26%            6.36%                         (0.10)%
Ratio of sales and marketing
 expenses to revenue                         1.56%            1.68%                         (0.12)%

ASSET-EFFICIENCY RATIO
Average inventory turnover days                 25               26
Turnover days of accounts receivable           148              168
Turnover days of accounts payable               81               61
</TABLE>

REVENUES

For  the  six  months  ended  June  30,  2010,  our  revenues  were  $9,287,177,
representing an increase of $2,226,164 or 31.53%, compared to $7,061,013 for the
same  period in 2009.  The  increase  is mainly  attributable  to the  increased
consumer  demand.  In the first half of 2010, we improved sales strategy to make
up for the reduced  sales  revenue  incurred in the first halves of the past few
years. We launched new products under the "Free Travel" series in the first half
of this year, which resulted in a significant increase of our revenues.

For the three  months  ended June 30, 2010,  our sales  revenue was  $4,554,762,
representing an increase of $1,103,759 or 31.98%,  compared to $3,451,003 in the
same period of 2009. This is mainly due to the continued  launch of new products
in the "Free Travel" series in this quarter.

GEOGRAPHIC SEGMENTS OF REVENUES IN THE SIX MONTHS ENDED JUNE 30,2010 AND 2009:

<TABLE>
<CAPTION>
                                    Six months ended            Six months ended
                                     June 30, 2010               June 30, 2009           Comparison
                                ------------------------     ---------------------       ----------
                                    $               %            $             %             %
<S>                             <C>               <C>        <C>            <C>            <C>
Foreign markets                 3,298,101         35.51%     2,502,349      35.44%         31.80%
PRC market                      5,989,076         64.49%     4,558,664      64.56%         31.38%
The eastern section (1)         1,194,515         12.86%       699,143       9.90%         70.85%
The northern section (2)        2,804,856         30.20%     2,281,581      32.31%         22.93%
The southern section (3)        1,989,705         21.42%     1,577,940      22.35%         26.10%
Total revenues                  9,287,177        100.00%     7,061,013     100.00%         31.53%
</TABLE>

                                       26
<PAGE>

NOTE:

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

For the six months ended June 30, 2010,  $3,298,101  of our sales  revenues were
generated from the foreign markets,  representing an increase of 31.80% compared
to $2,502,349 for the same period in 2009.

For the six months  ended June 30,  2010,  the  eastern  section in the  Chinese
domestic  market  contributed  $1,195,515 to our sales revenue,  representing an
increase  of  70.85%,  compared  to  $699,143  in the same  period of 2009.  The
northern  section  generated  sales  revenues  of  $2,804,856,  representing  an
increase of 22.93%,  compared  to  $2,281,581  for the same period in 2009.  The
southern section achieved sales revenues of $1,989,705, representing an increase
of 26.10%, compared to $1,577,940 for the same period in 2009.

We witnessed an increase in sales  revenues in the foreign  markets in the first
half of 2010, which is due to the competitive  pricing of our products  compared
with  other  similar  competitor's  products.  In  addition,  the  sale  of more
diversified  products we sold in the foreign markets also led to the increase in
sales  revenues  during the first half of 2010.  This  increase in sales revenue
reflects improvement of our brand awareness and a bigger market share as well as
what  management  believes is the great potential of our products in the foreign
markets.

For  the   domestic   market,   revenues  in  the  eastern   section   increased
significantly,  due to the  larger  investments  made  by  the  distributors  in
Zhejiang and Jiangsu in the second quarter of 2010.

The sales in the southern section also increased,  mainly because we switched to
a new distributor.  The new  distributor,  who is more competent than the former
one, has broader sales channels and implemented effective promotional activities

The sales revenue remains stable in the northern  section.  The  distributors in
this section will continue to get access to more retail  opportunities  in order
to improve business results in the subsequent quarters.

GEOGRAPHIC SEGMENTS OF REVENUES IN THE THREE MONTHS ENDED JUNE 30, 2010 & 2009:

<TABLE>
<CAPTION>
                                  Three months ended          Three months ended
                                     June 30, 2010               June 30, 2009           Comparison
                                ------------------------     ---------------------       ----------
                                    $               %            $             %             %
<S>                             <C>               <C>        <C>            <C>            <C>
Foreign markets                1,845,331          40.51%     1,354,402       39.25%        36.25%
PRC market                     2,709,431          59.49%     2,096,601       60.75%        29.23%
The eastern section (1)          623,234          13.68%       226,465        6.56%       175.20%
The northern section (2)       1,099,599          24.14%     1,031,098       29.88%         6.64%
The southern section (3)         986,598          21.66%       839,038       24.31%        17.59%
Total revenues                 4,554,762         100.00%     3,451,003      100.00%        31.98%
</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.

                                       27
<PAGE>
For the three months ended June 30, 2010,  $1,845,311 of our sales revenues were
generated from the foreign markets,  representing an increase of 36.25% compared
to $1,354,402 for the same period in 2009.

For the three months ended June 30, 2010, the eastern  section  generated  sales
revenues of $623,234,  representing an increase of 175.20%, compared to $226,465
for the same period in 2009.  The northern  section  achieved  sales revenues of
$1,099,599,  representing  an increase of 6.64%,  compared to $1,031,098 for the
same period in 2009. The southern  section  achieved sales revenues of $986,598,
representing an increase of 17.59%,  compared to $839,038 for the same period in
2009.

The  foreign  sales  revenue  increased  in the second  quarter  of 2010,  as we
launched more products  types into the  international  market which are normally
for  domestic  sales.  Consequently,  the growth  margin of the  second  quarter
increased when compared with that of the first quarter.

In the second  quarter of 2010,  the  increase  of the sales  revenue in eastern
section is mainly due to the larger investments conducted by the distributors in
Zhejiang and Jiangsu provinces.

In the second quarter of 2010, the sales in the southern section also increased,
mainly because we switched to a new distributor.  The new  distributor,  who the
management  believes is more  competent  than the former one, has broader  sales
channels and has implemented effective promotional activities.

GROSS PROFIT

GROSS PROFIT AND GROSS  PROFIT  MARGIN FOR THE SIX MONTH ENDED JUNE 30, 2010 AND
2009

<TABLE>
<CAPTION>
                                          Six months ended June 30,               Comparison
                                        ----------------------------      --------------------------
                                           2010             2009            Amount             %
                                        ----------       ----------       ----------      ----------
<S>                                     <C>              <C>              <C>               <C>
Sales revenue                           9,287,177          7,061,013      $2,226,164         31.53%
Cost of sales                           6,212,044          4,655,467       1,556,577         33.44%
Gross profit                            3,075,133          2,405,546        $669,587         27.84%
Gross profit margin                         33.11%             34.07%
</TABLE>

For the six  months  ended  June 30,  2010,  our gross  profit  was  $3,075,133,
representing  an increase of $669,587 or 27.84%,  compared to $2,405,546 for the
same period of 2009.

For the six months  ended June 30,  2010,  our gross  profit  margin was 33.11%,
representing a slight decrease  compared with 34.07% in the same period of 2009.
Such  decrease  is mainly  due to the  decrease  in gross  margin in the  second
quarter  of this year  which  partially  related  to the  increase  of  employee
salaries.  To overcome the difficulty in indentifying and recruiting  additional
workers in the second quarter,  especially after the Chinese New Year, we had to
increase workers' salaries by 20% to attract more qualified workers.

GROSS PROFIT AND GROSS PROFIT MARGIN FOR THE THREE MONTH ENDED JUNE 30, 2010 AND
2009:

<TABLE>
<CAPTION>
                                         Three months ended June 30,             Comparison
                                        ----------------------------      --------------------------
                                           2010             2009            Amount             %
                                        ----------       ----------       ----------      ----------
<S>                                     <C>              <C>              <C>               <C>
Sales revenue                            4,554,762        3,451,003       1,103,759         31.98%
Cost of sales                            3,162,378        2,151,013       1,011,365         47.02%
Gross profit                             1,392,384        1,299,990          92,394          7.11%
Gross profit margin                          30.57%           37.67%
</TABLE>

For the three  months  ended June 30,  2010,  our gross  profit was  $1,392,384,
representing  an increase of $92,394 or 7.11%,  compared to  $1,299,990  for the
same period of 2009.

For the three months ended June 30,  2010,  our gross profit  margin was 30.57%,
representing  a decrease of 7.1% as compared to the 37.67% in the same period of
2009.  The  decrease  was mainly  resulted  from  increased  labor costs and raw
material costs after the Chinese New Year.

                                       28
<PAGE>
OPERATING AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

For the six months  ended June 30, 2010,  our selling  expenses  were  $144,424,
representing an increase of $25,949 or 21.90%, compared to $118,475 for the same
period in 2009. The increase was mainly  attributable to the following  reasons:
To further  implementing the four-prong sales mode, we provided larger subsidies
to distributors  to subsidize the store rental  payment.  As a result of the new
sales strategies, we spent more money on promotion and advertising.  For the six
months  ended  June  30,  2010,  the  administrative   expenses  were  $581,045,
representing  an increase  of 29.42%  compared to $448,962 of the same period in
2009. The increase was mainly because of the following reasons:

     1)   The research and development expenses increased due to the improvement
          of the four "Travel Series" products.

     2)   The salaries to our executive officers increased by 10%.

FINANCE COST

For the six  months  ended  June  30,  2010,  the  finance  cost  was  $122,576,
representing an increase of $66,057 or116.88%  comparing to $56,519 for the same
period in 2009.  The  increase  primarily  relates to the huge  increase in bank
loans which were applied to the retail consolidated construction..

NET PROFIT

For  the six  months  ended  June  30,  2010,  the net  profit  was  $1,622,886,
representing  an increase of $325,560 or 25.09%  compared to $1,297,326  for the
same period in 2009, primarily as a result of the growth in revenues.

NET PROFIT MARGIN

For the six  months  ended  June 30,  2010,  the net  profit  margin is  17.47%,
representing a decrease of 0.90% compared to 18.37% for the same period in 2009.
Although  we attained a stable  increase  in sales  revenue,  and  adjusted  the
ex-factory  price of the new products to a higher level, the net profit incurred
a minor decrease due to a decrease in our gross profit in the second quarter.

In the  second  half of 2010,  we  managed to lower the  operating  expenses  by
implementing  stricter  control.  We intend to decrease  the cost of  production
mainly through the lower use of shared  materials and decreased  amortization of
production expenditure.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2010, our total assets were $29,995,247.  Total assets consist of
current assets of $17,048,627, cash and cash equivalents of $4,818,287, accounts
receivable of $7,989,865,  inventories of $1,044,967,  other accounts receivable
and advance payments of $3,195,508, property, plant and equipment of $6,865,370,
intangible assets of $187,998 and land use rights of $5,893,252.

As of June 30, 2010, total liabilities were  $15,630,120.  Total liabilities are
composed of accounts payable of $2,087,406,  short-term loans of $4,156,508, tax
payable  of $  1,893,572,  amount  due to a  director  of  $1,893,572  and other
accounts  payable and related  provision  of  $5,673,642.  As of June 30,  2010,
stockholders' equity was $14,365,127.  As of June 30, 2010, the gearing ratio is
52.11%.

We offer what we believe to be  reasonable  credit  limits to our  customers  at
credit terms of 180 days to maintain control of account receivables. The average
turnover  was 148 days for our  accounts  receivable  in the first half of 2010,
while the average turnover was 168 days for our accounts  receivable in the same
period of 2009.

During the six months ended on June 30, 2010,  the average  turnover was 25 days
for our inventories while it was 26 days for the same period of 2009.

Our cash and bank deposits are  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 very few assets dominated in US
dollars.

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<PAGE>
As of June 30, 2010, our cash and cash equivalents were $4,818,287  representing
an increase of $493,111, compared to $4,325,176 for the same period of 2009.

As of June 30, 2010, net cash used in operating  activities was $1,526,185.  Net
cash used in investing activities was $463,674. Such cash was mainly used in the
construction of the new production facility.

As of June 30, 2010, net cash provided by financing activities was $2,476,089.

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,
as appropriate,  to allow timely decisions  regarding  required  disclosure.  In
designing and  evaluating  the disclosure  controls and  procedures,  management
recognizes  that any controls and  procedures,  no matter how well  designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives,  and  management  necessarily  is required to apply its  judgment in
evaluating the cost-benefit relationship of possible controls and procedures.

As of June 30, 2010,  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 chief  executive  officer and our chief financial
officer,  of the  effectiveness  of the design and  operation of our  disclosure
controls and procedures. Based on the foregoing, our chief executive officer and
chief financial  officer  concluded that our disclosure  controls and procedures
(as  defined in Rules  13a-15(e)  and  15d-15(e)  under the  Exchange  Act) were
effective at the reasonable  assurance level to ensure that information required
to be  disclosed in our reports  under 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,
as appropriate, to allow timely decisions regarding required disclosure.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our  internal  control  over  financial  reporting  (as
defined in Rule  13a-15(f)  of the  Securities  Exchange Act of 1934) during the
quarter ended June 30, 2010 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

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.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. (REMOVED AND RESERVED).


ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are filed herewith:

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

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

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

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

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

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<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.

August 16, 2010

                                By: /s/ Haiting Li
                                    --------------------------------------------
                                    Haiting Li
                                    Chief Executive Officer
                                    (Principal Executive Officer)


                                By: /s/ Zhong Zhao
                                    --------------------------------------------
                                    Zhong Zhao
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)


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