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 March 31, 2011

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

           For the transition period from ____________ to ____________

                       Commission file number: 333-150385


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

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

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

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

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

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

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

Large accelerated filer [ ]                        Accelerated filer [ ]

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

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

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

PART I   FINANCIAL INFORMATION

Item 1.  Financial Statements                                                  3

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

         Condensed Consolidated Statements of Income and Comprehensive
         Income for the three months ended March 31, 2011 and 2010
         (unaudited)                                                           4

         Condensed Consolidated Statements of Cash Flows for the three
         months ended March 31, 2011 and 2010 (unaudited)                      5

         Condensed Consolidated Statement of Stockholders' Equity              7

         Notes to Condensed Consolidated Financial Statements                  8

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

Item 3.  Quantitative and Qualitative Disclosures About Market Risk           32

Item 4.  Controls and Procedures                                              32

Part II  OTHER INFORMATION

Item 1.  Legal Proceedings                                                    32

Item 1A. Risk Factors                                                         32

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

Item 3.  Defaults upon Senior Securities                                      32

Item 4.  [Removed or reserved]                                                32

Item 5.  Other Information                                                    33

Item 6.  Exhibits                                                             33

Signatures                                                                    34

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

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

Current assets
  Cash and cash equivalents                                      $  6,325,369          $  5,815,257
  Trade receivables                                                14,588,706            13,094,012
  Prepayments and other receivables - Note 5                          132,895               249,118
  Advances to customers and distributors - Note 6                   1,400,874             1,293,733
  Inventories - Note 7                                              1,232,363             1,232,557
                                                                 ------------          ------------
      Total current assets                                         23,680,207            21,684,677

Properties, plant and equipment, net - Note 8                       8,683,705             7,592,866
Land use rights - Note 9                                            6,027,039             6,021,489
Intangible asset - Note 10                                            176,677               190,505
                                                                 ------------          ------------

TOTAL ASSETS                                                     $ 38,567,628          $ 35,489,537
                                                                 ============          ============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Current liabilities
  Trade and bills payables                                       $  2,265,033          $  2,988,361
  Other payables and accrued expenses - Note 11                     4,038,826             3,524,874
  Loans payable - Note 12                                           6,305,247             4,717,870
  Amount due to a director - Note 14                                2,010,856             1,998,085
  Income tax payable                                                1,646,985             1,248,649
                                                                 ------------          ------------
      Total current liabilities                                    16,266,947            14,477,839
                                                                 ------------          ------------

TOTAL LIABILITIES                                                  16,266,947            14,477,839
                                                                 ------------          ------------

COMMITMENTS AND CONTINGENCIES - Note 15

STOCKHOLDERS' EQUITY
  Common stock : par value of $0.0001 per share
   Authorized 75,000,000 shares; issued and outstanding
   15,000,000 shares in 2011 and 2010 - Note 22                         1,500                 1,500
  Additional paid-in capital                                        3,311,321             3,234,650
  Statutory reserve - Note 23                                         309,688               309,688
  Accumulated other comprehensive income                            2,125,217             1,987,222
  Retained earnings                                                16,552,955            15,478,638
                                                                 ------------          ------------

TOTAL STOCKHOLDERS' EQUITY                                         22,300,681            21,011,698
                                                                 ------------          ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $ 38,567,628          $ 35,489,537
                                                                 ============          ============
</TABLE>

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

                                       3
<PAGE>
Pacific Bepure Industry Inc.
Condensed  Consolidated  Statements of Income and  Comprehensive  Income
For the three months ended March 31, 2011 and 2010
(Stated in US Dollars)

<TABLE>
<CAPTION>
                                                              Three months ended
                                                                   March 31,
                                                      -----------------------------------
                                                          2011                   2010
                                                      ------------           ------------
                                                       (Unaudited)            (Unaudited)
<S>                                                   <C>                    <C>
Sales revenue                                         $  6,429,512           $  4,732,415
Cost of sales                                            4,365,338              3,049,666
                                                      ------------           ------------

Gross profit                                             2,064,174              1,682,749
                                                      ------------           ------------
Operating expenses
  Administrative expenses                                  427,638                321,013
  Selling expenses                                          71,541                 72,976
                                                      ------------           ------------
                                                           499,179                393,989
                                                      ------------           ------------
Income from operations                                   1,564,995              1,288,760
  Other income - Note 16                                    39,736                     --
  Other expenses                                                --                (26,717)
  Finance costs - Note 17                                  (94,753)               (61,237)
                                                      ------------           ------------

Income before income taxes                               1,509,978              1,200,806
Income taxes - Note 18                                    (435,661)              (314,825)
                                                      ------------           ------------

Net income                                            $  1,074,317           $    885,981
                                                      ============           ============
Other comprehensive income/(loss)
  Foreign currency translation adjustments                 137,995                (36,233)
                                                      ------------           ------------

Total comprehensive income                            $  1,212,312           $    849,748
                                                      ============           ============
Earnings per share: - Note 19
  - Basic                                             $      0.072           $      0.059
  - Diluted                                           $      0.071           $      0.059
                                                      ============           ============
Weighted average number of shares: - Note 19
  - Basic                                               15,000,000             15,000,000
  - Diluted                                             15,049,583             15,000,000
                                                      ============           ============
</TABLE>

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

                                       4
<PAGE>
Pacific Bepure Industry Inc.
Condensed Consolidated Statements of Cash Flows
For the three months ended March 31, 2011 and 2010
(Stated in US Dollars)

<TABLE>
<CAPTION>
                                                                      Three months ended
                                                                           March 31,
                                                             -----------------------------------
                                                                 2011                   2010
                                                             ------------           ------------
                                                              (Unaudited)            (Unaudited)
<S>                                                          <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                 $  1,074,317           $    885,981
  Adjustments to reconcile net income to net
   cash used in operating activities:
     Depreciation                                                  36,207                 37,905
     Amortization of an intangible asset and
      land use rights recognized as expenses                       15,262                 13,420
     Share-based compensation                                      76,671                     --
  Changes in operating assets and liabilities:-
     Trade receivables                                         (1,406,466)              (947,023)
     Prepayments and other receivables                            117,434                (23,554)
     Advances to customers and distributors                       (98,555)                    --
     Inventories                                                    8,045                 91,993
     Trade and bills payables                                    (740,030)              (400,701)
  Other payables and accrued expenses                             489,840               (259,684)
     Income tax payable                                           389,098               (177,299)
                                                             ------------           ------------

Net cash flows used in operating activities                       (38,177)              (778,962)
                                                             ------------           ------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Payments to acquire property, plant and equipment            (1,042,604)              (186,456)
                                                             ------------           ------------

Net cash flows used in investing activities                    (1,042,604)              (186,456)
                                                             ------------           ------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Repayment of bank loans                                      (2,023,953)              (497,365)
  Proceeds from bank loans                                      3,576,157              2,238,141
  Dividend paid                                                        --               (228,162)
                                                             ------------           ------------

Net cash flows provided by financing activities                 1,552,204              1,512,614
                                                             ------------           ------------
Effect of foreign currency translation on cash
 and cash equivalents                                              38,689                (12,320)
                                                             ------------           ------------

Net increase in cash and cash equivalents                         510,112                534,876

Cash and cash equivalents - beginning of period                 5,815,257              4,325,176
                                                             ------------           ------------

Cash and cash equivalents - end of period                    $  6,325,369           $  4,860,052
                                                             ============           ============
</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 three months ended March 31, 2011 and 2010
(Stated in US Dollars)

<TABLE>
<CAPTION>
                                                                      Three months ended
                                                                           March 31,
                                                             -----------------------------------
                                                                 2011                   2010
                                                             ------------           ------------
                                                              (Unaudited)            (Unaudited)
<S>                                                          <C>                    <C>
Supplemental disclosures for cash flow information:-

Cash paid for:-
  Interest                                                   $     85,888           $     62,111
  Income taxes                                               $     46,563           $    492,124
                                                             ============           ============
</TABLE>


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

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

<TABLE>
<CAPTION>
                                      Common stock                                  Accumulated
                                  -------------------    Additional    Statutory      other                          Total
                                 Number of                paid-in       reserve    comprehensive    Retained     stockholders'
                                  Shares       Amount     capital      (Note 23)      income        earnings        equity
                                  ------       ------     -------      ---------      ------        --------        ------
<S>                           <C>            <C>       <C>           <C>          <C>            <C>            <C>
Balance, December 31, 2010      15,000,000     $ 1,500   $3,234,650    $ 309,688    $1,987,222     $15,478,638    $21,011,698

Net income                              --          --           --           --            --       1,074,317      1,074,317

Foreign currency translation
 adjustment                             --          --           --           --       137,995              --        137,995

Share-based compensation                --          --       76,671           --            --              --         76,671
                               -----------     -------   ----------    ---------    ----------     -----------    -----------

Balance, March 31, 2011         15,000,000     $ 1,500   $3,311,321    $ 309,688    $2,125,217     $16,552,955    $22,300,681
                               ===========     =======   ==========    =========    ==========     ===========    ===========
</TABLE>


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

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


1. CORPORATE INFORMATION AND DESCRIPTION OF BUSINESS

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

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

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

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

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

     Baopiao was established as a wholly  foreign-owned  enterprise  ("WFOE") in
     the PRC on  February  15,  2006 with  registered  capital of  HK$50,000,000
     (which are not divided  into  shares).  As of March 31,  2011,  its paid up
     capital was HK$16,370,478 of which HK$15,401,180 was certified. Baopiao had
     been under development and had not started commercial operations.

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

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


2. BASIS OF PRESENTATION

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

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

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     PRINCIPLES OF CONSOLIDATION

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

     CONCENTRATIONS OF CREDIT RISK

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

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


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

     CONCENTRATIONS OF CREDIT RISK (CONT'D)

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

                                                 Three months ended March 31,
                                                ------------------------------
                                                   2011                2010
                                                ----------          ----------
                                                (Unaudited)         (Unaudited)

     Taiwan Quanyi Xingye Co., Ltd.             $2,411,561          $1,409,290
                                                ==========          ==========

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

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

     Taiwan Quanyi Xingye Co., Ltd.             $3,296,345          $1,839,049
                                                ==========          ==========

     FAIR VALUE OF FINANCIAL INSTRUMENTS

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

                               As of March 31, 2011     As of December, 31, 2010
                             -----------------------    ------------------------
                             Carrying                    Carrying
                              amount      Fair value      amount      Fair value
                            ----------    ----------    ----------    ----------
                            (Unaudited)   (Unaudited)    (Audited)     (Audited)

     Short-term bank loans  $6,305,247    $6,317,830    $4,717,870    $4,713,661
                            ==========    ==========    ==========    ==========

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

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

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


4. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     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 FASB 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 had no material  impact
     on the Company's financial statements.

     CONSOLIDATION OF VARIABLE  INTEREST ENTITIES - AMENDED (INCLUDED IN AMENDED
     TOPIC ASC 810 "CONSOLIDATION",  PREVIOUSLY SFAS NO. 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 had 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  was  required  to apply this  guidance  prospectively  for revenue
     arrangements  entered into or  materially  modified  after January 1, 2011;
     however,  earlier application is permitted. The adoption of this ASU update
     had no material impact on the Company's financial statements.

     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

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


4. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONT'D)

     periods  beginning after December 15, 2010. The adoption of this ASU had no
     material impact on the Company's financial statements.

5. PREPAYMENTS AND OTHER RECEIVABLES

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

     Prepayments to suppliers                   $   68,917           $  131,846
     Advances to staff                              63,978              117,272
                                                ----------           ----------

                                                $  132,895           $  249,118
                                                ==========           ==========

6. ADVANCES TO CUSTOMERS AND DISTRIBUTORS

                                                  As of                As of
                                                 March 31,          December 31,
                                                   2011                2010
                                                ----------          ----------
                                                (Unaudited)          (Audited)
     Interest-free loans advanced to
      customers and distributors                $1,400,874          $1,293,733
                                                ==========          ==========

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

7. INVENTORIES

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

     Raw materials                              $  409,906          $  227,572
     Work-in-progress                              448,963             445,249
     Finished goods                                373,494             559,736
                                                ----------          ----------

                                                $1,232,363          $1,232,557
                                                ==========          ==========

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


8. PROPERTIES, PLANT AND EQUIPMENT

                                                  As of                As of
                                                 March 31,          December 31,
                                                   2011                2010
                                                ----------          ----------
                                                (Unaudited)          (Audited)
     Costs:
       Plant and machinery                      $   992,429         $   985,609
       Office equipment                             115,795             115,060
       Buildings                                  1,346,104           1,337,557
                                                -----------         -----------

                                                  2,454,328           2,438,226
     Accumulated depreciation                    (1,306,074)         (1,261,688)
     Construction-in-progress                     7,535,451           6,416,328
                                                -----------         -----------

                                                $ 8,683,705         $ 7,592,866
                                                ===========         ===========

     During the reporting period, depreciation is included in:-

                                                  Three months ended March 31,
                                                -------------------------------
                                                   2011                2010
                                                -----------         -----------
                                                (Unaudited)         (Unaudited)

     Cost of sales and overheads                $    19,573         $    22,151
     Administrative expenses                         16,634              15,754
                                                -----------         -----------

                                                $    36,207         $    37,905
                                                ===========         ===========

     Notes: -

     As of March 31, 2011 and December 31, 2010,  buildings  with carrying value
     of  $846,976  and  $852,833  respectively,   construction-in-progress  with
     carrying  amount of $4,505,490 and nil  respectively,  were pledged for the
     collateralized bank loans (Note 12b).

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

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


9. LAND USE RIGHTS

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

     Cost                                       $ 6,455,383         $ 6,414,392
     Accumulated amortization                      (428,344)           (392,903)
                                                -----------         -----------

                                                $ 6,027,039         $ 6,021,489
                                                ===========         ===========

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

     As of March 31,  2011 and  December  31,  2010,  the land use  rights  with
     carrying value of $6,027,039 and $6,021,489  respectively,  was pledged for
     collateralized bank loans (Note 12b).

     During the three months ended March 31, 2011 and 2010, amortization for the
     land use rights  amounted  to $32,824  and  $31,552  of which  $32,559  and
     $31,298 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
     ----

     2011                                                            $  127,347
     2012                                                               127,347
     2013                                                               127,347
     2014                                                               127,347
     2015                                                               127,347
                                                                     ----------

                                                                     $  636,735
                                                                     ==========

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


10. INTANGIBLE ASSET

                                                  As of                As of
                                                 March 31,          December 31,
                                                   2011                2010
                                                ----------          ----------
                                                (Unaudited)          (Audited)
     Software
       Cost                                     $   334,346         $   332,223
       Accumulated amortization                    (157,669)           (141,718)
                                                -----------         -----------

                                                $   176,677         $   190,505
                                                ===========         ===========

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

     During the three  months  ended March 31, 2011 and 2010,  amortization  for
     intangible asset amounted to $14,997 and $13,166, respectively.

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

     Year

     2011                                                            $   59,800
     2012                                                                59,800
     2013                                                                57,077
                                                                     -----------

                                                                     $  176,677
                                                                     ==========

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


11. OTHER PAYABLES AND ACCRUED EXPENSES

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

     Value added tax and other tax payable      $2,383,742          $1,712,724
     Staff welfare payables (Note (a))           1,109,548           1,046,724
     Accrued expenses and other payables           267,054             536,147
     Salaries payable                              278,482             229,279
                                                ----------          ----------

                                                $4,038,826          $3,524,874
                                                ==========          ==========

     Notes:-

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

12. LOANS PAYABLE

                                                  As of                As of
                                                 March 31,          December 31,
                                                   2011                2010
                                                ----------          ----------
                                                (Unaudited)          (Audited)
     Collateralized short-term bank
      loans (Note (b))                          $4,778,553          $3,079,510
     Uncollateralized short-term bank
      loans                                      1,526,694           1,638,360
                                                ----------          ----------

                                                $6,305,247          $4,717,870
                                                ==========          ==========

     Notes:-

     (a)  The bank loans are  denominated  in RMB and carried  average  interest
          rate as of March 31,  2011 and  December  31,  2010 at 6.09% and 5.82%
          respectively.

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

     (b)  These   bank   loans   were    collateralized    by   the   buildings,
          construction-in-progress  and land use right with  carrying  values of
          $846,976  (Note  8),  $4,505,490  (Note 8) and  $6,027,039  (Note  9),
          respectively,  and guaranteed by Mr. Li Haiting,  the sole director of
          the Company and his brother and a third party.

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


13. SHARE-BASED COMPENSATION

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

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

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

     A summary of share option plan activity for the period ended March 31, 2011
     is presented below:-

                                                    Number of     Exercise price
                                                      shares         per share
                                                     --------        ---------

     Outstanding as of January 1, 2011                560,000         $   1.75
       Granted                                             --               --
       Exercised                                           --               --
       Forfeited                                           --               --
       Cancelled                                           --               --
                                                     --------         --------

     Outstanding as of March 31, 2011                 560,000         $   1.75
                                                     ========         ========

     Exercisable as of March 31, 2011                 168,000         $   1.75
                                                     ========         ========

     The  grant-date  fair values for tranches 1, 2 and 3 of options  granted in
     2010 were  $0.62,  $0.67 and $0.72 per  option  respectively.  Compensation
     expense of $76,671  arising from above  mentioned share options granted was
     recognized for the three months ended March 31, 2011.

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

                                     Tranche 1        Tranche 2       Tranche 3
                                     ---------        ---------       ---------

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

14. AMOUNT DUE TO A DIRECTOR

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

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


15. COMMITMENTS AND CONTINGENCIES

     a.   CAPITAL COMMITMENT

          As of March 31, 2011 and December  31,  2010,  the Company had capital
          commitment in respect of the construction of properties,  amounting to
          $24,386  and  $47,116  respectively,  which  was  contracted  but  not
          provided for in the financial statements.

     b.   OPERATING LEASE COMMITMENT

          As of March 31, 2011, there was no operating lease arrangement for the
          Company.

          The rental  expense  was $6,087 for the three  months  ended March 31,
          2011.

     c.   CONTINGENCIES

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

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

16. OTHER INCOME

                                                  Three months ended March 31,
                                                -------------------------------
                                                   2011                2010
                                                -----------         -----------
                                                (Unaudited)         (Unaudited)

         Sales of scrap and materials           $    39,736         $        --
                                                ===========         ===========

17. FINANCE COSTS

                                                  Three months ended March 31,
                                                -------------------------------
                                                   2011                2010
                                                -----------         -----------
                                                (Unaudited)         (Unaudited)

     Bank loan interest expenses                $   85,888          $   62,111
     Interest income - net                            (632)             (1,505)
     Bank charges                                    9,497                 631
                                                ----------          ----------

                                                $   94,753          $   61,237
                                                ==========          ==========

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


18. INCOME TAXES

     UNITED STATES

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

     BVI

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

     HONG KONG

     Alberta was incorporated in Hong Kong and is subject to profits tax rate of
     16.5% (2010 : 16.5%).  It is currently  not subject to income taxes because
     it derived no taxable income during the reporting period.

     PRC

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

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

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

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

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


18. INCOME TAXES (CONT'D)

     In July 2006, the FASB issued ASC 740-10-25 (previously  Interpretation No.
     48,  "Accounting  for Uncertainty in Income  Taxes").  This  interpretation
     requires  recognition  and  measurement  of uncertain  income tax positions
     using a  "more-likely-than-not"  approach.  The  Company  adopted  this ASC
     740-10-25 on January 1, 2007.  Under the New CIT Law which became effective
     on January 1, 2008, the Company might be deemed to be a resident enterprise
     by the PRC tax  authorities.  If the  Company  was  deemed  to be  resident
     enterprise, the Company might be subject to the CIT at 25% on the worldwide
     taxable  income  and  dividends  paid  from the RPC  subsidiaries  to their
     overseas holding  companies might be exempted from 10% PRC withholding tax.
     Given that all of the  Company's  income is generated  from the PRC and the
     PRC subsidiaries do not intend to pay dividends for the foreseeable  future
     operation,  the management  considers that the impact arising from resident
     enterprise  on the Company's  financial  position is not  significant.  The
     management  evaluated the Company's  tax positions and  considered  that no
     provision  for  uncertainty  in income  taxes is  necessary as of March 31,
     2011.

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

                                                  Three months ended March 31,
                                                -------------------------------
                                                   2011                2010
                                                -----------         -----------
                                                (Unaudited)         (Unaudited)

     Current taxes - PRC                        $  435,661          $  314,825
     Deferred taxes - PRC                               --                  --
                                                ----------          ----------

                                                $  435,661          $  314,825
                                                ==========          ==========

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

                                                  Three months ended March 31,
                                                -------------------------------
                                                   2011                2010
                                                -----------         -----------
                                                (Unaudited)         (Unaudited)
     Provision for income taxes at PRC
      statutory income tax rate - 25%           $  377,495          $  300,202
     Non-deductible items for tax                   58,166              14,623
                                                ----------          ----------

                                                $  435,661          $  314,825
                                                ==========          ==========

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


19. EARNINGS PER SHARE

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

                                                  Three months ended March 31,
                                                -------------------------------
                                                   2011                2010
                                                -----------         -----------
                                                (Unaudited)         (Unaudited)
     Numerator:-
       Net income                               $ 1,074,317         $   885,981
                                                ===========         ===========
     Denominator:-
       Weighted average common shares used
        to compute basic EPS                     15,000,000          15,000,000
       Dilutive potential from assumed
        exercise of share options                    49,583                  --
                                                -----------         -----------

       Weighted average common shares used
        to compute diluted EPS                   15,049,583          15,000,000
                                                ===========         ===========

     Earnings per share - Basic                 $     0.072         $     0.059

     Earnings per share - Diluted               $     0.071         $     0.059
                                                ===========         ===========

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

20. RELATED PARTIES TRANSACTIONS

     Apart  from the  transactions  as  disclosed  in Note  12(b)  and 14 to the
     financial statements,  the Company had no material transactions carried out
     with related parties during the period.

21. TRADEMARKS

     Pacific Shoes,  currently owns two trademarks,  namely "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.

22. COMMON STOCK

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

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


23. STATUTORY RESERVE

     The Company's statutory reserve comprise of the following:-

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

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

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

     For the  three  months  ended  March  31,  2011 and 2010  respectively,  no
     appropriation to this statutory reserve was made as the reserve reached 50%
     of the  Pacific  Shoes'  registered  capital  and  Baopiao did not make any
     profit during the periods.

24. DEFINED CONTRIBUTION PLAN

     Pacific Shoes and Baopiao have defined contribution plans for all qualified
     employees in the PRC.  Pacific  Shoes and Baopiao and their  employees  are
     each required to make  contributions to the plans at the rates specified in
     the plans. The only obligation of Pacific Shoes and Baopiao with respect to
     retirement schemes are to make the required  contributions under the plans.
     No forfeited  contribution is available to reduce the contribution  payable
     in the future  years.  The defined  contribution  plan  contributions  were
     charged to the consolidated  statements of income and comprehensive income.
     The Company  contributed  $40,825 and  $29,006 for the three  months  ended
     March 31, 2011 and 2010 respectively.

25. SEGMENT INFORMATION

     The  Company  uses the  "management  approach"  in  determining  reportable
     operating   segments.   The  management  approach  considers  the  internal
     organization  and reporting used by the Company's chief operating  decision
     maker for making  operating  decisions  and  assessing  performance  as the
     source for  determining  the  Company's  reportable  segments.  Management,
     including the chief operating  decision maker,  reviews  operating  results
     solely by monthly  revenue and  operating  results of the  Company  and, as
     such,  the  Company  has  determined  that the  Company  has one  operating
     segments - footwear, as defined by ASC 280, Segments Reporting".

     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:-

                                                  Three months ended March 31,
                                                -------------------------------
                                                   2011                2010
                                                -----------         -----------
                                                (Unaudited)         (Unaudited)

     PRC                                        $4,368,349          $3,279,645
     Taiwan                                      2,061,163           1,452,770
                                                ----------          ----------

                                                $6,429,512          $4,732,415
                                                ==========          ==========

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


26. SUBSEQUENT EVENTS

     The Company  evaluated all events or transactions that occurred after March
     31, 2011 and through the date the financial statements were issued, and has
     determined that there are no material  recognizable  subsequent  events nor
     transactions  which  would  require  recognition  or  disclosure  in  these
     condensed consolidated financial statements other than noted therein.

                                       23
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

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

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

OUR HISTORY AND CORPORATE STRUCTURE

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

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

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

We are now a fully reporting issuer with our common stock publicly quoted on the
OTC  bulletin  board  under the  symbol  "PBEP".  As of May 15th,  2011,  we had
15,000,000 shares of common stock issued and outstanding.

BUSINESS REVIEW

The  Company  is  mainly  engaged  in  professional   design,   manufacture  and
distribution of sports and casual footwear through its Chinese Subsidiaries.  We
target at both  female  and male  customers,  particularly  the 20-35  years old
female  consumers,  among whom our Baopaio (or "Bepure")  label has witnessed an
increasing  recognition.  For three months ended March 31, 2011,  the  Company's
sales  revenues  increased  $1,697,097  or 35.86% to  $6,429,512  compared  with
$4,732,415 in the same period of 2010.

The revenue growth is mainly attributable to the increasing demand for our sport
and casual footwear products in the PRC market where consumers are in transition
to much healthier and more fashion life styles, supported by stronger purchasing
power and higher demand.

According to the market demand and overall  marketing  situation of 2010, in the
first quarter of 2011, we targeted products research and development in business
operation in order to achieve the following objectives:

                                       24
<PAGE>
     *    To improve our R&D capabilities.  We added R&D personnel to expand the
          R&D team.

     *    To refine  the  sophistication  and skill of our R&D team.  During the
          first  quarter  of 2011,  we  retained  some  senior  members  through
          performance appraisal system to enhance our R&D concept to comply with
          the prevailing fashion trends , and

     *    To  improve  the  product   quality.   We  conducted  a  comprehensive
          adjustment  among all  products to adjust  shadesi(cent)materials  and
          techniques.  We improved  overall color palette and we put more limits
          on the  procurement of raw materials to ensure the high quality of the
          products.

We  innovate  because it is  critical  for us to remain in step with  consumers'
tastes, choices and fashions.

BRAND PROMOTION

As of March 31,  2011,  a  classified  promotion  was  implemented  for both the
products  online and in retail shops.  For the Bepure  official online store, we
aimed to improve the brand  recognition  mainly through  advertisement;  for the
retail  shops,  we renewed the unified  shop image in all retail  locations  and
applied  environmentally  conscious  material(such as wood) for products display
shelves.

SALES NETWORK

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

In the domestic (PRC) market,  we adopted the sales mode of "four-prong  sales",
which is a combination of four retail approaches, including distributor-operated
stores,  retailer-operated  stores,  franchise stores and online stores.  At the
distributor-operated  stores,  distributors sell our product exclusively. At the
retailer  operated  stores,  distributor  appointed  retailers sell our products
exclusively.  We have certain control over these distributor appointed retailers
because when we enter into distribution  agreements with  distributors,  we have
the right to  approve  or reject the  distributor's  request to appoint  certain
retailers.  The  franchise  stores refer to stores  operated by our  franchisees
pursuant to franchise agreements with us. As of March 31, 2011, retail locations
increased  from 98 to 102,  and 1,523  counters  in the  shopping  malls are now
authorized to sell our products and they are under the direct  management of our
distributors.  We continue to refresh our brand image with in-store  advertising
and decorations, so that consumers will enjoy a much happier purchase experience
at the retail outlets.

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

PRODUCT R&D

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

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

                                       25
<PAGE>
CHAIN SUPPLY MANAGEMENT

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

INFORMATION MANAGEMENT

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

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

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

SUMMARY OF CRITICAL ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

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

USE OF ESTIMATES

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

INVENTORIES

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

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

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

PROPERTIES, PLANT AND EQUIPMENT

Properties,   plant  and   equipment   are  stated  at  cost  less   accumulated
depreciation.  Cost  represents  the purchase price of the asset and other costs
incurred to bring the asset into its existing use.

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

                                       26
<PAGE>
                                                                     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
disposal, the applicable amounts of asset cost and accumulated  depreciation are
removed  from the  accounts and the net amount less  proceeds  from  disposal is
charged or credited to income.

CONSTRUCTION-IN-PROGRESS

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

INTANGIBLE ASSET

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

LAND USE RIGHTS

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

IMPAIRMENT OF LONG-LIVED ASSETS

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

REVENUE RECOGNITION

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

COST OF SALES

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

SHARE-BASED COMPENSATION

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

Fair value of share options granted is determined using the Black-Scholes Option
Valuation Model. Under this model, certain assumptions,  including the risk-free
interest  rate, the expected life of the options and the estimated fair value of
the  Company's  common  stock  and the  expected  volatility,  are  required  to
determine the fair value of the options. If different assumptions had been used,

                                       27
<PAGE>
the fair  value of the  options  would have been  different  from the amount the
Company  computed and recorded,  which would have resulted in either an increase
or decrease in the compensation expense.

INCOME TAXES

The Company uses the asset and liability  method of accounting  for income taxes
pursuant  to SFAS No. 109  "Accounting  for Income  Taxes".  Under the asset and
liability  method of SFAS No.  109,  deferred  tax  assets and  liabilities  are
recognized for the future tax consequences attributable to temporary differences
between  the  financial  statements  carrying  amounts  of  existing  assets and
liabilities  and loss carried forward and their  respective tax bases.  Deferred
tax assets and  liabilities  are measured  using  enacted tax rates  expected to
apply to taxable income in the years in which those  temporary  differences  are
expected to be recovered or settled.

RESULTS OF  OPERATIONS  FOR THE THREE  MONTHS ENDED MARCH 31, 2011 AND MARCH 31,
2010

The following table  summarizes our operating  results and key financial  ratios
for three months ended March 31, 2011 and March 31, 2010, respectively:

<TABLE>
<CAPTION>
                                    Three months ended March 31,                Comparison
                                    ----------------------------        --------------------------
                                      2011               2010             Amount              %
                                    ---------          ---------        ---------         --------
<S>                                 <C>                <C>              <C>                 <C>
Sales revenue                       6,429,512          4,732,415        1,697,097           35.86%
Cost of sales                       4,365,338          3,049,666        1,315,672           43.14%
Gross profit                        2,064,174          1,682,749          381,425           22.67%
Gross profit margin                     32.10%             35.56%                           -3.46%
Total operating expenses              499,179            393,989          105,190           26.70%
Income from operations              1,564,995          1,288,760          276,235           21.43%
Other expense (income)                -39,736             26,717          -66,453         -248.73%
Finance costs                          94,753             61,237           33,516           54.73%
Income before income taxes          1,509,978          1,200,806          309,172           25.75%
Income taxes                          435,661            314,825          120,836           38.38%
Net income                          1,074,317            885,981          188,336           21.26%
</TABLE>

This table below illustrates our key operating results and financial  indicators
for the three months ended March 31, 2011 and March 31,2010, respectively:

<TABLE>
<CAPTION>
                                    Three months ended March 31,                Comparison
                                    ----------------------------        --------------------------
                                      2011               2010             Amount              %
                                    ---------          ---------        ---------         --------
<S>                                 <C>                <C>              <C>                 <C>
Sale revenue                        6,429,512          4,732,415        1,697,097           35.86%
Gross profit                        2,064,174          1,682,749          381,425           22.67%
Income from operations              1,564,995          1,288,760          276,235           21.43%
Net income                          1,074,317            885,981          188,336           21.26%
Gross profit margin                     32.10%            35.56%                            -3.46%
Operating profit margin                 24.34%            27.23%                            -2.89%
Net profit margin                       16.71%            18.72%                            -2.01%
Ratio of general administrative
 expenses to revenue                     6.65%              6.78%                            0.13%
Ratio of selling expenses to
 revenue                                 1.11%              1.54%                           -0.43%
Average inventory turnover days            25                 19                6           31.58%
Turnover days of trade receivable         194                147               47           31.97%
Turnover days of trade payable             54                 97              -43          -44.33%
</TABLE>

                                       28
<PAGE>
REVENUE

For three months  ended March 31, 2011,  our  revenues  were  $6,429,512,  which
represented an increase of $1,697,097 or 35.86%, as compared with $4,732,415 for
the same period in 2010. We attribute  this increase  mainly to (i) the capacity
increases and the overall improvement of our manufacturing system; (ii) increase
of our sales network;  (iii)  increase of our foreign  market  access;  and (iv)
effectiveness of our marketing policies in different regions.

GEOGRAPHIC  SEGMENTS OF  REVENUES  IN THE NINE  MONTHS  ENDED MARCH 31, 2011 AND
2010:

<TABLE>
<CAPTION>
                              Three months ended           Three months ended
                                 March 31, 2011               March 31, 2010                Comparison
                             -----------------------     -----------------------      ----------------------
                                  $              %            $              %             $            %
                             ----------       ------     ----------       ------      ----------      ------
<S>                           <C>              <C>        <C>              <C>           <C>           <C>
Foreign markets               2,061,163        32.06%     1,452,770        30.70%        608,393       41.88%
PRC market                    4,368,349        67.94%     3,279,645        69.30%      1,088,704       33.20%
The eastern section (1)       1,071,132        16.66%       571,281        12.07%        499,851       87.50%
The northern section (2)      1,992,966        31.00%     1,705,257        36.03%        287,709       16.87%
The southern section (3)      1,304,251        20.29%     1,003,107        21.20%        301,144       30.02%
Total revenues                6,429,512       100.00%     4,732,415       100.00%      1,697,097       35.86%
</TABLE>

Note:

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

For the three months ended March 31, 2011,  $2,061,163 of our sales revenue were
generated  from the  foreign  (non PRC)  markets,  representing  an  increase of
41.88% when compared to $1,452,770 from the same period in 2010.

For the  three  months  ended  March  31,  2011,  the  domestic  eastern  market
contributed $1,071,132 to the Company's sales revenue,  representing an increase
of 87.50%,  when  compared  to $571,281  earned in the same period of 2010.  The
northern market generated sales revenue of $1,992,966,  representing an increase
of 16.87%, when compared to $1,705,257 for the same period in 2010. The southern
market achieved sales revenue of $1,304,251, representing an increase of 30.02%,
when compared to $1,003,107 for the same period in 2010. Such changes are mainly
due to the following:

*    The further expanded sales network in Eastern section helps our products to
     cover  all the  markets  in  cities,  towns  and  villages.  In  fact,  the
     purchasing power in relatively more economically  developed Eastern section
     is stronger than that of other domestic sections, which, we believe, is the
     key factor to the revenue increase in this section.

*    In the first quarter of 2011, the sales growth in Northern  section did not
     meet  our  expectations.  We  believe  this  was due to  current  marketing
     approach in that section  which we believe  needs to be revamped as well as
     due to the seasonal varieties.

*    The higher sales result in Southern  section are mainly because we launched
     canvas shoes  series and board shoes  series  which are  preferred by young
     consumers.  To improve our brand  recognition,  we held  various  promotion
     activities to attract more consumers in this group.

                                       29
<PAGE>
GROSS PROFIT AND GROSS  PROFIT  MARGIN FOR THE THREE MONTHS ENDED MARCH 31, 2011
AND 2010:

<TABLE>
<CAPTION>
                           Three months ended March 31,              Comparison
                          -----------------------------      ----------------------------
                             2011               2010           Amount               %
                          ----------         ----------      ----------        ----------
<S>                       <C>                <C>             <C>               <C>
Sales revenue             $6,429,512         $4,732,415      $1,697,097           35.86%
Cost of sales              4,365,338          3,049,666       1,315,672           43.14%
Gross profit               2,064,174          1,682,749         381,425           22.67%
Gross profit margin            32.10%             35.56%                          -3.46%
</TABLE>

For the three  months ended March 31,  2011,  our gross  profit was  $2,064,174,
representing  an increase of $381,425 or 22.67%,  compared to $1,682,749 for the
same period of 2010.

For the three months ended March 31, 2011,  our gross profit  margin was 32.10%,
representing  a decrease  of 3.46%  compared  with  35.56% in the same period of
2010. Such decrease is mainly due to the increase of employee salaries.

OPERATING AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

For the three  months ended March 31, 2011,  our selling  expenses  were $71,541
representing  a decrease  of $1,435 or 1.97%,  compared  to $72,976 for the same
period in 2010. The decrease was mainly because we effectively cut down the cost
of free gifts offered in promotion activities.

For the three months  ended March 31, 2011,  the  administrative  expenses  were
$427,638,  representing  an increase of 33.22% compared to $$321,013 of the same
period in 2010.  The increase  was mainly due to the  issuance of stock  options
granted to key employees.

FINANCING COST

For the three  months  ended  March 31,  2011,  the  finance  cost was  $94,753,
representing an increase of $33,516 or 54.73%  comparing to $61,237 for the same
period in 2010.  The increase  primarily  relates to increase in debt  servicing
cost on the huge  increase  in bank loans  which were  applied to the  marketing
expansion, cosolidated construction of retails and the new factory.

NET PROFIT

For the three  months  ended  March 31,  2011,  the net profit  was  $1,074,317,
representing an increase of $188,336 or 21.26% compared to $885,981 for the same
period in 2010,  primarily  as a result of the  growth in  revenues  and  profit
margin.

NET PROFIT MARGIN

For the three  months  ended March 31,  2011,  the net profit  margin is 16.71%,
representing a decrease of 2.01% compared to 18.72% for the same period in 2010.
This is mainly attributes to the decrease of gross profit margin and the increse
of administrative expenses.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2011, our total assets were  $38,567,628,  which consist of cash
and  cash   equivalents  of  $6,325,369,   trade   receivables  of  $14,588,706,
inventories  of  $1,232,363,  prepayments  and  other  receivable  of  $132,895,
advances to customers and  distributors  of  $1,400,874,  properties,  plant and
equipment  of  $8,683,705,  intangible  asset of $176,677 and land use rights of
$6,027,039.

                                       30
<PAGE>
As of March 31, 2011, total liabilities were $16,266,947.  Total liabilities are
composed of trade payables of $2,265,033, short-term loans of $6,305,247, income
tax payable of $  1,646,985,  amount due to a director of  $2,010,856  and other
payables and accrued expense of $4,038,826.  As of March 31, 2011, stockholders'
equity was $22,300,681. As of March 31, 2011, the gearing ratio is 42.18%.

We offer what we believe to be  reasonable  credit  limits to our  customers  at
credit terms of 180 days to maintain  control of trade  receivable.  The average
turnover was 194 days for our trade  receivable for the three months ended March
31, 2011,  while the average  turnover was 147 days for our trade  receivable in
the same period of 2010.

As of March 31, 2011, the average  inventory  trade turnover was 25 days for our
inventories which was 19 days for the same period of 2010.

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

CASH FLOW

As  of  March  31,  2011,  our  cash  and  cash   equivalents  were  $6,325,369,
representing an increase of $510,112, compared to $5,815,257 for the same period
of 2010.  We believe our ability to generate cash from  operating  activities is
one of our fundamental  financial strengths.  In addition to cash from operating
activities,  we also maintain loan  arrangements  with  state-owned  banks (e.g.
Agricultural Bank of China,  Construction  Bank of China,  etc.) for our capital
requirements.   Our  future  capital  expenditures  will  include  building  new
manufacturing  facilities,  improving  and  upgrading  our  existing  production
facilities,  expanding product lines, research and development capabilities, and
making  acquisitions  as we deem  appropriate.  We believe that we have adequate
cash to fund our operations and to meet our anticipated  cash  requirements  for
the next 12 months.  If we need  additional  cash,  we may seek to raise capital
either  through the issuance of stock or increase our  borrowing  level with our
lender.

Liquidity  is the ability of a company to generate  funds to support its current
and future  operations,  satisfy its  obligations  and  otherwise  operate on an
ongoing  basis.  On an on-going  basis,  we take steps to identify  and plan our
needs for liquidity and capital resources, to fund our operations and day to day
business operations. Our future capital expenditures will include, among others,
expanding  product  lines,  research and  development  capabilities,  and making
acquisitions as deemed appropriate.

Our  operating  and capital  requirements  in  connection  with  supporting  our
expanding  operations  and  introducing  our products to the expanded areas have
been and will continue to be  significant to us. We estimate $15 million will be
needed in the fiscal 2011 to fund the foregoing activities and operations. Based
on our  current  plans for the next 12 months,  we  anticipate  that the revenue
generated  from our  sales  will be the  primary  organic  source  of funds  for
operating  activities  in 2011.  However,  to fund  continued  expansion  of our
operation  and extend our reach to broader  markets,  and to acquire  additional
entities, we may rely on bank borrowing, if available as well as capital raises.

As of March 31, 2011,  net cash used in operating  activities  was $38,177.  Net
cash used in investing  activities was $1,042,604.  Such cash was mainly used in
the construction of the new production facility.

As of March 31, 2011, net cash provided by financing activities was $1,552,204.

                                       31
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

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

As of March 31, 2011, the end of the fiscal quarter  covered by this report,  we
carried out an evaluation,  under the supervision and with the  participation of
our management,  including our Certifying officers,  of the effectiveness of the
design and operation of our  disclosure  controls and  procedures.  Based on the
foregoing,  the Certifying  Officers concluded that our disclosure  controls and
procedures were effective as of the end of the first fiscal quarter of 2011.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our internal  control over financial  reporting  during
the  quarter  ended  March  31,  2011  that  have  materially  affected,  or are
reasonably  likely to materially  affect,  our internal  control over  financial
reporting.

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

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

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

During the three months  ended March 31, 2011,  the Company did not (i) sell any
unregistered securities, or (ii) repurchase any of its equity securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. [REMOVED OR RESERVED]

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ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are filed herewith:

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

10.1          Amendment No.1 to Employment  Agreement by and between the Company
              and Haiting Li, dated as of December 4, 2010*

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.

----------
*    Management or compensatory plan, contract or arrangement.

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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.


Date: May 20, 2011              By: /s/ Haiting Li
                                    --------------------------------------------
                                    Haiting Li
                                    Chief Executive Officer
                                    (Principal Executive Officer)



Date: May 20, 2011              By: /s/ Zhong Zhao
                                    --------------------------------------------
                                    Zhong Zhao
                                    Chief Financial Officer
                                    (Principal Accounting and Financial Officer)

                                       34