U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q




QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934





For the
quarterly period ended June 30, 2009





Commission
File Number 333-139910





EATWARE,
INC.


(Name of
small business issuer in its charter)





Nevada
                
                1712
                
                20-2234410(State
      or other jurisdiction
                  of
      incorporation or organization)
                
                (Primary
      SIC Code)
                
                (IRS
      Employer Identification
No.)




23/F,
Westin Center, 26 Hung To Road


Kwun
Tong, Kowloon, Hong Kong


(Address
of principal executive offices)





+852
2295-1818


( Registrant’s telephone number,
including area code )





Check
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 þ     
No o





Large
      Accelerated Filer o
            Accelerated
      Filer o
            Non-Accelerated
      Filer o
            Smaller
      Reporting Company þ





Check
whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o  No þ





There were1,990,759,517sharesof Common Stock outstanding as ofJuly31, 2009.









EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)





INDEX
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





(UNAUDITED)





PageCondensed
      Consolidated Balance Sheets as of June 30, 2009 and March 31,
      2009
                
                F-2Condensed
      Consolidated Statements of Operations And Comprehensive Loss for the three
      months ended June 30, 2009 and 2008
                
                F-3Condensed
      Consolidated Statements
      of Cash Flowsfor the three months ended June 30, 2009 and
      2008
                
                F-4Condensed
      Consolidated Statement of Stockholders’ Deficit for the three months
      ended June 30, 2009
                
                F-5Notes
      to Condensed Consolidated Financial
Statements
                
                F-6 to F-17




F-1




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED BALANCE SHEETS


AS
OF JUNE 30, 2009 AND MARCH 31, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)





June
      30, 2009
                              
                              
                              March
      31, 2009(Unaudited)
                              
                              
                              (Audited)ASSETSCurrent
      assets:Cash
      and cash equivalents
                              
                              $
                              35,498
                              
                              
                              $
                              5,092Accounts
      receivable, trade
                              
                              
                              174,815
                              
                              
                              
                              142,515Inventories
                              
                              
                              12,846
                              
                              
                              
                              3,243Prepayment
      and other receivables
                              
                              
                              54,044
                              
                              
                              
                              56,944Total
      current assets
                              
                              
                              277,203
                              
                              
                              
                              207,794Non-current
      assets:Intangible
      assets, net
                              
                              
                              -
                              
                              
                              
                              -Plant
      and equipment, net
                              
                              
                              3,332
                              
                              
                              
                              3,726TOTAL
      ASSETS
                              
                              $
                              280,535
                              
                              
                              $
                              211,520LIABILITIES
      AND STOCKHOLDERS’ DEFICITCurrent
      liabilities:Bank
      overdraft
                              
                              $
                              167,646
                              
                              
                              $
                              167,553Accounts
      payable, trade
                              
                              
                              171,049
                              
                              
                              
                              218,163Notes
      payable
                              
                              
                              735,528
                              
                              
                              
                              374,169Amount
      due to a director
                              
                              
                              1,137,455
                              
                              
                              
                              1,202,847Other
      payables and accrued liabilities
                              
                              
                              156,080
                              
                              
                              
                              156,138Total
      current liabilities
                              
                              
                              2,367,758
                              
                              
                              
                              2,118,870TOTAL
      LIABILITIES
                              
                              
                              2,367,758
                              
                              
                              
                              2,118,870Stockholders’
      deficit:Common
      stock, $0.001 par value; 2,000,000,000 shares authorized; 1,990,759,517
      shared issued and outstanding as of June 30, and March 31,
      2009
                              
                              
                              1,990,759
                              
                              
                              
                              1,990,759Additional
      paid-in capital
                              
                              
                              550,215
                              
                              
                              
                              550,215Accumulated
      other comprehensive income
                              
                              
                              537
                              
                              
                              
                              579Accumulated
      deficit
                              
                              
                              (4,628,734
                              )
                              
                              
                              (4,448,903
                              )Total
      stockholders’ deficit
                              
                              
                              (2,087,223
                              )
                              
                              
                              (1,907,350
                              )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
                              
                              $
                              280,535
                              
                              
                              $
                              211,520





See
accompanying notes to condensed consolidated financial statements.




F-2




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENTS OF


OPERATIONS
AND COMPREHENSIVE LOSS


FOR
THE THREE MONTHS ENDED JUNE 30, 2009 AND 2008


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)





Three
      months ended June 30,2009
                            
                            
                            2008REVENUES,
      NET
                            
                            $
                            228,526
                            
                            
                            $
                            781,970COST
      OF REVENUES
                            
                            
                            189,966
                            
                            
                            
                            651,645GROSS
      PROFIT
                            
                            
                            38,560
                            
                            
                            
                            130,325Operating
      expenses:Sales
      and marketing
                            
                            
                            99
                            
                            
                            
                            49,014Research
      and development
                            
                            
                            35,071
                            
                            
                            
                            55,856General
      and administrative
                            
                            
                            167,081
                            
                            
                            
                            335,317Total
      operating expenses
                            
                            
                            202,251
                            
                            
                            
                            440,187LOSS
      FROM OPERATIONS
                            
                            
                            (163,691
                            )
                            
                            
                            (309,862
                            )Other
      income (expense):Interest
      income
                            
                            
                            -
                            
                            
                            
                            39Interest
      expense
                            
                            
                            (16,140
                            )
                            
                            
                            (643
                            )LOSS
      BEFORE INCOME TAX
                            
                            
                            (179,831
                            )
                            
                            
                            (310,466
                            )Income
      tax expense
                            
                            
                            -
                            
                            
                            
                            -NET
      LOSS
                            
                            $
                            (179,831
                            )
                            
                            $
                            (310,466
                            )Other
      comprehensive (loss) income:-
      Foreign currency translation (loss) gain
                            
                            
                            (42
                            )
                            
                            
                            6,546COMPREHENSIVE
      LOSS
                            
                            $
                            (179,873
                            )
                            
                            $
                            (303,920
                            )Net
      loss per share – Basic and diluted
                            
                            $
                            (0.00
                            )
                            
                            $
                            (0.00
                            )Weighted
      average common shares outstanding – Basic and diluted
                            
                            
                            1,990,759,517
                            
                            
                            
                            1,871,313,946





See
accompanying notes to condensed consolidated financial statements.




F-3




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR
THE THREE MONTHS ENDED JUNE 30, 2009 AND 2008


(Currency
expressed in United States Dollars (“US$”))


(Unaudited)





Three
      months ended June 30,2009
                                  
                                  
                                  2008Cash
      flows from operating activities:Net
      loss
                                  
                                  $
                                  (179,831
                                  )
                                  
                                  $
                                  (310,466
                                  )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
                                  
                                  
                                  393
                                  
                                  
                                  
                                  395Change
      in operating assets and liabilities:
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Accounts
      receivable, trade
                                  
                                  
                                  (32,295
                                  )
                                  
                                  
                                  (36,906
                                  )Accounts
      receivable, trade – related parties
                                  
                                  
                                  -
                                  
                                  
                                  
                                  52,619Inventories
                                  
                                  
                                  (9,601
                                  )
                                  
                                  
                                  (1,427
                                  )Prepayments
      and other receivables
                                  
                                  
                                  2,900
                                  
                                  
                                  
                                  (5,928
                                  )Accounts
      payable, trade
                                  
                                  
                                  (47,111
                                  )
                                  
                                  
                                  386,213Accounts
      payable, trade – related parties
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (420,407
                                  )Other
      payables and accrued liabilities
                                  
                                  
                                  13,445
                                  
                                  
                                  
                                  (31,990
                                  )Net
      cash used in operating activities
                                  
                                  
                                  (252,100
                                  )
                                  
                                  
                                  (367,897
                                  )Cash
      flows from investing activities:Purchase
      of plant and equipment
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (38
                                  )Net
      cash used in investing activities
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (38
                                  )Cash
      flows from financing activities:Net
      increase in bank overdraft
                                  
                                  
                                  91
                                  
                                  
                                  
                                  161,292Advance
      from a related party
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1,471,572Proceeds
      from notes payable
                                  
                                  
                                  347,807
                                  
                                  
                                  
                                  -Repayment
      to a director
                                  
                                  
                                  (65,407
                                  )
                                  
                                  
                                  (1,282,183
                                  )Net
      cash provided by financing activities
                                  
                                  
                                  282,491
                                  
                                  
                                  
                                  350,681Effect
      of exchange rate changes on cash and cash equivalents
                                  
                                  
                                  15
                                  
                                  
                                  
                                  1,756NET
      CHANGE IN CASH AND CASH EQUIVALENTS
                                  
                                  
                                  30,406
                                  
                                  
                                  
                                  (15,498
                                  )CASH
      AND CASH EQUIVALENTS, BEGINNING OF PERIOD
                                  
                                  
                                  5,092
                                  
                                  
                                  
                                  53,863CASH
      AND CASH EQUIVALENTS, END OF PERIOD
                                  
                                  $
                                  35,498
                                  
                                  
                                  $
                                  38,365SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid for income taxes
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  -Cash
      paid for interest
                                  
                                  $
                                  2,636
                                  
                                  
                                  $
                                  643





See
accompanying notes to condensed consolidated financial statements




F-4




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE THREE MONTHS ENDED JUNE 30, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)





Common
      Stock
                        
                        
                        
                        
                        
                        Accumulated
                          other
                        
                        
                        Retained
                          earnings
                        
                        
                        TotalNo.
      of shares
                        
                        
                        Amount
                        
                        
                        Additional
                          paid-in
      capital
                        
                        
                        comprehensive
                          income
                        
                        
                        (accumulated
                          deficit)
                        
                        
                        stockholders’
                          deficitBalance
      as of April 1, 2009
                        
                        
                        1,990,759,517
                        
                        
                        $
                        1,990,759
                        
                        
                        $
                        550,215
                        
                        
                        $
                        579
                        
                        
                        $
                        (4,448,903
                        )
                        
                        $
                        (1,907,350
                        )Net
      loss for the period
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (179,831
                        )
                        
                        
                        (179,831
                        )Foreign
      currency translation adjustment
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (42
                        )
                        
                        
                        -
                        
                        
                        
                        (42
                        )Balance
      as of June 30, 2009
                        
                        
                        1,990,759,517
                        
                        
                        $
                        1,990,759
                        
                        
                        $
                        550,215
                        
                        
                        $
                        537
                        
                        
                        $
                        (4,628,734
                        )
                        
                        $
                        (2,087,223
                        )





See
accompanying notes to condensed consolidated financial statements




F-5




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE THREE MONTHS ENDED JUNE 30, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)





NOTE
      - 1
                BASIS
      OF PRESENTATION





The
accompanying unaudited condensed consolidated financial statements have been
prepared by management in accordance with both accounting principles generally
accepted in the United States (“GAAP”), and the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Certain information and note disclosures normally
included in audited financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to those
rules and regulations, although the Company believes that the disclosures made
are adequate to make the information not misleading.





In the
opinion of management, the consolidated balance sheet as of March 31, 2009 which
has been derived from audited financial statements and these unaudited condensed
consolidated financial statements reflect all normal and recurring adjustments
considered necessary to state fairly the results for the periods presented. The
results for the period ended June 30, 2009 are not necessarily indicative of the
results to be expected for the entire fiscal year ending March 31, 2010 or for
any future period.





These
unaudited condensed consolidated financial statements and notes thereto should
be read in conjunction with the Management’s Discussion and the audited
financial statements and notes thereto included in the Annual Report on Form
10-K for the year ended March 31, 2009.





NOTE
      - 2
            ORGANIZATION
      AND BUSINESS BACKGROUND





Eatware,
Inc. (the “Company” or “CHSH”) was incorporated in the State of Nevada on
January 24, 2005 as Indigo Technologies, Inc. On June 6, 2007, the
Company changed its name to “China Shoe Holdings, Inc.”. As discussed
further below, on July 20, 2009, the Company further changed its current
name to “Eatware, Inc”. The principal activity of CHSH, through its
subsidiaries, is mainly engaged in the development and manufacturing of
proprietary additives and trading of bio-degradable food containers and
packaging products in Hong Kong and the People's Republic of China
("PRC").





On March
31, 2009, the Company entered into a Share Exchange Agreement (the “Exchange
Agreement”) by and among (1) Extra Ease Limited (“Extra Ease”) and (2) Eatware
Intellectual Properties Limited (“EWIP”), and (3) the shareholders of Extra Ease
and EWIP. Pursuant to the Exchange Agreement, the Company agreed to issue a
total of 1,871,313,946 shares of its common stock, of which (i) 121,313,946
shares were issued to the shareholder of Extra Ease in exchange for 10,000
shares of Extra Ease, representing 100% of the issued and outstanding common
stock of Extra Ease, and (ii) 1,750,000,000 shares were issued to the
shareholders of EWIP in exchange for 50,000 shares of EWIP, representing 100% of
the issued and outstanding common stock of EWIP. Immediately following
completion of the share exchange transaction, Extra Ease and EWIP became the
wholly-owned subsidiaries of the Company.





This
stock exchange transaction has been accounted for as a reverse acquisition and
recapitalization of CHSH whereby Extra Ease and EWIP are deemed to be the
accounting acquirers (legal acquirees) and CHSH to be the accounting acquiree
(legal acquirer). The accompanying condensed consolidated financial statements
are in substance those of Extra Ease and EWIP, with the assets and liabilities,
and revenues and expenses of the Company being included effective from the date
of stock exchange transaction.





On July
22, 2009, the Company filed a
Certificate of Change and Certificate of Amendment to its Articles of
Incorporation (the “Amended
Certificate:”) to change the Company’s name to Eatware, Inc., as well as
increase its authorized capital stock to 2,510,000,000 shares, consisting of
10,000,000 shares of preferred stock, par value $.001 per share, and
2,500,000,000 shares of common stock, par value $.001 per share. In addition,
the Amended Certificate further amends the Articles of Incorporation by
effectuating a 1:70 reverse stock split of the shares of common stock issued and
outstanding. The changes reflected by the Amended Certificate are effective as
of July 20, 2009.




F-6




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE THREE MONTHS ENDED JUNE 30, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)





As of
June 30, 2009, details of the Company’s subsidiaries are described
below:





Name of subsidiaries
                
                Place
      and date of
                  incorporation
                
                Particulars
      of
                  issued/
      registered
                  share capital
                
                Principal activitiesExtra
      Ease Limited
                
                British
      Virgin Islands,
                  January
      2, 2008
                
                10,000
      issued share of
                  US$1
      each
                
                Investments
      holdingEatware
      Global Corp. (“EGC”)
                
                British
      Virgin Islands,
                  March
      31, 2006
                
                1
      issued share of
                  US$1
      each
                
                Investments
      holdingEATware
      Intellectual Properties Limited (“EWIP”)
                
                British
      Virgin Islands,
                  December
      15, 2006
                
                1
      issued share of
                  US$1
      each
                
                Development
      of technical know-how and patentsEatware
      Far East Limited (“EFEL”)
                
                Hong
      Kong,
                  January
      26, 2007
                
                1
      issued share of
                  HK$1
      each
                
                Trading
      of foodwares and containersEatware
      International Limited (“EIL”)
                
                British
      Virgin Islands, December 15, 2006
                
                1
      issued share of
                  US$1
      each
                
                Trading
      of foodwares and packaging productsRongbao
      (Nantong) Environmental Co., Ltd (“RBNT”)
                
                The
      People’s Republic of China,
                  June
      22, 2005
                
                US$100,000
                
                Manufacture
      and development of proprietary additivesEatware
      Assets Management Limited
                
                Hong
      Kong,
                  September
      1, 2008
                
                1
      issued share of
                  HK$1
      each
                
                Investments
      holding





The
Company and its subsidiaries are hereinafter referred to as (the
"Company").




NOTE
      - 3
            GOING
      CONCERN UNCERTAINTY





These
consolidated financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates the realization of assets
and the discharge of liabilities in the normal course of business for the
foreseeable future.





For the
period ended June 30, 2009, the Company incurred a net loss
$179,831 with the accumulated deficit of $4,628,734 and suffered from
a negative operating cash flow of $252,100. The continuation of the Company is
dependent upon the continuing financial support of its shareholders and
obtaining short-term financing, generating significant revenue and achieving
profitability. As a result, the consolidated financial statements do not include
any adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the outcome of the Company’s ability to continue as a going
concern.




F-7




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE THREE MONTHS ENDED JUNE 30, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)





NOTE
      - 4
            SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES





l
            Use
      of estimates





In
preparing these condensed consolidated financial statements, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities in the balance sheets and revenues and expenses during the period
reported. Actual results may differ from these estimates.





l
            Basis
      of consolidation





The
condensed consolidated financial statements include the financial statements of
CHSH and its subsidiaries.





All
significant inter-company balances and transactions within the Company have been
eliminated upon consolidation.





l
            Cash
      and cash equivalents





Cash and
cash equivalents are carried at cost and represent cash on hand, demand deposits
placed with banks or other financial institutions and all highly liquid
investments with an original maturity of three months or less as of the purchase
date of such investments.





l
            Accounts
      receivable, trade





Accounts
receivable are recorded at the invoiced amount and do not bear interest. The
Company extends unsecured credit to its customers in the ordinary course of
business but mitigates the associated risks by performing credit checks and
actively pursuing past due accounts. An allowance for doubtful accounts is
established and determined based on managements’ assessment of known
requirements, aging of receivables, payment history, the customers’ current
credit worthiness and the economic environment. As of June 30, 2009, the Company
recorded no allowance for doubtful accounts.





l
            Inventories





Inventories
are stated at the lower of cost or market (net realizable value), cost being
determined on a weighted average method. Costs mainly represent the cost of
raw material of proprietary additives. The Company quarterly reviews historical
sales activity to determine excess, slow moving items and potentially obsolete
items and also evaluates the impact of any anticipated changes in future demand.
The Company provides inventory allowances based on excess and obsolete
inventories determined principally by customer demand. As of June 30, 2009, no
allowance for obsolete inventories was required.





l
            Plant
      and equipment, net





Plant and
equipment are stated at cost less accumulated depreciation and accumulated
impairment losses, if any. Depreciation is calculated on the straight-line basis
over the following expected useful lives from the date on which they become
fully operational:


Depreciable
      lifeLeasehold
      improvement
              
              Term of the lease (2 years)Furniture,
      fixtures and office equipment
              
              4
      to 5 years





Expenditure
for repairs and maintenance is expensed as incurred. When assets have retired or
sold, the cost and related accumulated depreciation are removed from the
accounts and any resulting gain or loss is recognized in the results of
operations.





Depreciation
expense for the three months ended June 30, 2009 and 2008 were $393 and $395,
respectively.




F-8




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE THREE MONTHS ENDED JUNE 30, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)





l
            Valuation
      of long-lived assets





Long-lived
assets primarily include plant and equipment and intangible assets. In
accordance with SFAS No. 144, “Accounting for the Impairment or
Disposal of Long-Lived Assets”, the Company periodically reviews
long-lived assets for impairment whenever events or changes in business
circumstances indicate that the carrying amount of the assets may not be fully
recoverable or that the useful lives are no longer appropriate. Each impairment
test is based on a comparison of the undiscounted cash flows to the recorded
value of the asset. If an impairment is indicated, the asset is written down to
its estimated fair value based on a discounted cash flow analysis. Determining
the fair value of long-lived assets includes significant judgment by management,
and different judgments could yield different results. There has been no
impairment as of June 30, 2009.





l
            Revenue
      recognition





In
accordance with the SEC’s Staff Accounting Bulletin No. 104, “Revenue Recognition”, the
Company recognizes revenue when persuasive evidence of an arrangement exists,
delivery has occurred, the sales price is fixed or determinable, and
collectibility is reasonably assured.





(a)
            Sales
      of products





Revenue
is recognized when products are delivered to customers. Provisions for discounts
and rebates to customers, estimated returns and allowances, and other
adjustments are provided for in the same period the related sales are recorded.
In instances where products are configured to customer requirements, revenue is
recorded upon the successful completion of the Company’s final test procedures
and the customer’s acceptance.





The
Company is subject to valued-added tax ("VAT") under the PRC tax law which is
levied on the majority of the products at the rate of 17% on the invoiced value
of sales. Output VAT is borne by customers in addition to the invoiced value of
sales and input VAT is borne by the subsidiaries in addition to the invoiced
value of purchases to the extent not refunded for export sales.





(b)
            Interest
      income





Interest
income is recognized on a time apportionment basis, taking into account the
principal amounts outstanding and the interest rates applicable.





l
            Comprehensive
      loss





SFAS No.
130, “Reporting Comprehensive
Income”, establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income as defined
includes all changes in equity during a period from non-owner sources.
Accumulated comprehensive income, as presented in the accompanying consolidated
statements of stockholder’s deficit consists of changes in unrealized gains and
losses on foreign currency translation. This comprehensive income is not
included in the computation of income tax expense or benefit.





l
            Income
      taxes





The
Company accounts for income tax using SFAS No. 109 “Accounting for Income Taxes”,
which requires the asset and liability approach for financial accounting and
reporting for income taxes. Under this approach, deferred income taxes are
provided for the estimated future tax effects attributable to temporary
differences between financial statement carrying amounts of assets and
liabilities and their respective tax bases, and for the expected future tax
benefits from loss carry-forwards and provisions, if any. Deferred tax assets
and liabilities are measured using the enacted tax rates expected in the years
of recovery or reversal and the effect from a change in tax rates is recognized
in the statements of operations and comprehensive income in the period of
enactment. A valuation allowance is provided to reduce the amount of deferred
tax assets if it is considered more likely than not that some portion of, or all
of the deferred tax assets will not be realized.




F-9




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE THREE MONTHS ENDED JUNE 30, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)





The
Company also adopts the provisions of the Financial Accounting Standards
Interpretation No. 48, “Accounting for Uncertainty in Income
Taxes” (“FIN 48”). FIN 48 prescribes a recognition threshold and
measurement process for recording in the financial statements uncertain tax
positions taken or expected to be taken in a tax return. FIN 48 also provides
guidance on de-recognition, classification, interest and penalties, accounting
in interim periods, disclosures and transitions. The adoption of FIN 48 did not
have a significant impact on the Company’s consolidated financial
statements.





The
Company conducts major businesses in the PRC and Hong Kong and is subject to
taxes in these jurisdictions. As a result of its business activities, the
Company files tax returns that are subject to examination by the local and
foreign tax authorities.





l
            Foreign
      currencies translation





Transactions
denominated in currencies other than the functional currency are translated into
the functional currency at the exchange rates prevailing at the dates of the
transaction. Monetary assets and liabilities denominated in currencies other
than the functional currency are translated into the functional currency using
the applicable exchange rates at the balance sheet dates. The resulting exchange
differences are recorded in the statement of operations.





The
reporting currency of the Company is the United States dollar ("US$"). The
Company’s subsidiaries operating in Hong Kong maintain their books and record in
its local currency, Hong Kong Dollars ("HK$") while one subsidiary operating in
the PRC maintains its books and records in its local currency, Renminbi
Yuan ("RMB"), which are functional currencies as being the primary currency of
the economic environment in which these entities operate.





In
general, assets and liabilities are translated into US$, in accordance with SFAS
No. 52, “Foreign Currency
Translation”, using the exchange rate on the balance sheet date. Revenues
and expenses are translated at average rates prevailing during the period. The
gains and losses resulting from translation of financial statements of foreign
subsidiaries are recorded as a separate component of accumulated other
comprehensive income within the statement of
stockholders’ deficit.





Translation
of amounts from HK$ and RMB into US$1 has been made at the following exchange
rates for the respective period:


June
      30, 2009
                  
                  
                  June
      30, 2008Period-end
      RMB:US$1 exchange rate
                  
                  
                  6.8448
                  
                  
                  
                  6.8718Average
      monthly rates RMB:US$1 exchange rate
                  
                  
                  6.8399
                  
                  
                  
                  6.9696Period
      end HK$:US$1 exchange rate
                  
                  
                  7.7504
                  
                  
                  
                  7.8037Average
      monthly rates HK$:US$1 exchange rate
                  
                  
                  7.7513
                  
                  
                  
                  7.7997





l
            Related
      parties





Parties,
which can be a corporation or individual, are considered to be related if the
Company has the ability, directly or indirectly, to control the other party or
exercise significant influence over the other party in making financial and
operating decisions. Companies are also considered to be related if they are
subject to common control or common significant influence.





l
            Segment
      reporting





SFAS No.
131 “Disclosures about
Segments of an Enterprise and Related Information” (FAS 131) establishes
standards for reporting information about operating segments on a basis
consistent with the Company’s internal organization structure as well as
information about geographical areas, business segments and major customers in
the financial statements. During the period ended June 30, 2009 and 2008, the
Company operates two reportable segments in Hong Kong and the PRC.




F-10




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE THREE MONTHS ENDED JUNE 30, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)





l
            Fair
      value measurement





Effective
April 1, 2008, the Company adopted SFAS No. 157, “Fair Value Measurements”
(“FAS 157”), for all financial instruments and non-financial instruments
accounted for at fair value on a recurring basis. Effective April 1, 2009, the
Company adopted FAS 157 for all non-financial instruments accounted for at fair
value on a non-recurring basis. FAS 157 establishes a new framework for
measuring fair value and expands related disclosures. Effective April 1, 2009,
the Company also adopted FASB FSP FAS 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly. Adoption of
the FSP had an insignificant effect on the Company’s financial
statements.





FAS 157
establishes a new framework for measuring fair value and expands related
disclosures. Broadly, FAS 157 framework requires fair value to be determined
based on the exchange price that would be received for an asset or paid to
transfer a liability (an exit price) in the principal or most advantageous
market for the asset or liability in an orderly transaction between market
participants. FAS 157 establishes a three-level valuation hierarchy based upon
observable and non-observable inputs. These tiers include: Level 1, defined as
observable inputs such as quoted prices in active markets; Level 2, defined as
inputs other than quoted prices in active markets that are either directly or
indirectly observable; and Level 3, defined as unobservable inputs in which
little or no market data exists, therefore requiring an entity to develop its
own assumptions.





For
financial assets and liabilities, fair value is the price the Company would
receive to sell an asset or pay to transfer a liability in an orderly
transaction with a market participant at the measurement date. In the absence of
active markets for the identical assets or liabilities, such measurements
involve developing assumptions based on market observable data and, in the
absence of such data, internal information that is consistent with what market
participants would use in a hypothetical transaction that occurs at the
measurement date.





l
            Recent
      accounting pronouncements





The
Company has reviewed all recently issued, but not yet effective, accounting
pronouncements and do not believe the future adoption of any such pronouncements
may be expected to cause a material impact on its financial condition or the
results of its operations.





In April
2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosuresabout Fair Value of Financial
Instruments.” This FSP amends SFAS No. 107, “Disclosures about Fair Value of
Financial Instruments,” and Accounting Principles Board (“APB”) Opinion
No. 28, “Interim Financial
Reporting.” (“FAS 107”) This FSP requires publicly-traded entities
to disclose in the body or in the accompanying notes of its summarized financial
information for interim reporting periods and in its financial statements for
annual reporting periods, the fair value of all financial instruments for
which it is practicable to estimate that value, whether recognized or not
recognized in the statement of financial position, as required by FAS 107.
This FSP is effective for interim and annual reporting periods ending after
June 15, 2009. The Company adopted FSP FAS 107-1 and APB 28-1 for the
period ended June 30, 2009.





In May
2009, the FASB issued SFAS No. 165, “Subsequent Events” (“FAS
165”), which establishes general standards of accounting for, and requires
disclosure of, events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. The Company
adopted the provisions of FAS 165 for the quarter ended June 30,
2009. The adoption of FAS 165 did not have a material effect on the
consolidated financial statements.





In
June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of
Financial Assets, an amendment to SFAS No.140” (“FAS 166”). FAS 166
eliminates the concept of a “qualifying special-purpose entity,” changes the
requirements for derecognizing financial assets, and requires additional
disclosures in order to enhance information reported to users of financial
statements by providing greater transparency about transfers of financial
assets, including securitization transactions, and an entity’s continuing
involvement in and exposure to the risks related to transferred financial
assets. FAS 166 is effective for fiscal years beginning after November 15,
2009. The Company will adopt FAS 166 in fiscal 2010 and is evaluating
the impact it will have on the consolidated results of the Company.




F-11




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE THREE MONTHS ENDED JUNE 30, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)





In June
2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation
No. 46(R)” (“FAS 167”). The amendments include: (1) the elimination of
the exemption for qualifying special purpose entities, (2) a new approach for
determining who should consolidate a variable-interest entity, and (3) changes
to when it is necessary to reassess who should consolidate a variable-interest
entity. FAS 167 is effective for the first annual reporting period
beginning after November 15, 2009 and for interim periods within that first
annual reporting period. The Company will adopt FAS 167 in fiscal 2010 and is
evaluating the impact it will have on the consolidated results of the
Company.





In June
2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards
Codification TMand the
Hierarchy of Generally Accepted Accounting Principles—areplacement of FASB Statement No.
162” (“FAS 168”). FAS 168 replaces SFAS No. 162, “TheHierarchy of Generally Accepted
Accounting Principles” and establishes the “FASB Accounting Standard
Codification TM ” (“Codification”) as the source of authoritative
accounting principles recognized by the FASB to be applied by nongovernmental
entities in the preparation of financial statements in conformity with generally
accepted accounting principles in the United States. All guidance contained in
the Codification carries an equal level of authority. On the effective date of
FAS 168, the Codification will supersede all then-existing non-SEC accounting
and reporting standards. All other nongrandfathered non-SEC accounting
literature not included in the Codification will become nonauthoritative. FAS
168 will be effective for financial statements issued for interim and annual
periods ending after September 15, 2009. The Company has evaluated this new
statement, and has determined that it will not have a significant impact on the
determination or reporting of the financial results.





NOTE -
      5
            ACCOUNTS
      RECEIVABLE, TRADE





The
majority of the Company’s sales are on open credit terms and in accordance with
terms specified in the contracts governing the relevant transactions. The
Company evaluates the need of an allowance for doubtful accounts based on
specifically identified amounts that management believes to be uncollectible. If
actual collections experience changes, revisions to the allowance may be
required. For the three months ended June 30, 2009 and 2008, the Company
provided the allowance for doubtful accounts of $0 and $7,500
respectively.





NOTE
      - 6
            BANK
      OVERDRAFT





In July
2009, the Company renewed its overdraft facility with Dah Sing Bank
with the additional corporate guarantee from a related company. Under this
facility, the Company may borrow up to $167,733 (equivalent to HK$1,300,000) at
a rate of 0.5% per annum over Hong Kong prime rate, payable monthly. Weighted
average interest rate approximated 5.75% per annum for the three months ended
June 30, 2009. This facility is personally guaranteed by Mr. Jonathan W L So,
the director of the Company and also guaranteed by a related company which
is controlled by Mr. Jonathan W L So, the director of the Company. The
overdraft facility will be extended or renewed at the option of the
bank.





NOTE
      - 7
            NOTES
      PAYABLE, UNSECURED





During
the first quarter of 2009, the Company received an unsecured non-interest
bearing note payable of $38,707 from an unrelated party, with no fixed repayment
term. The amount of the imputed interest is insignificant.





Also, the
Company obtained the additional unsecured advance of $309,137 from unrelated
parties, which carries interest rate of 7% per annum and repayable on
demand.





As of
June 30, 2009, the aggregate balance of notes payable was amounted to
$735,528.




F-12




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE THREE MONTHS ENDED JUNE 30, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)





NOTE
      - 8
            AMOUNT
      DUE TO A DIRECTOR





As of
June 30, 2009, $1,137,455 due to a director, Mr. Jonathan W L So represented
temporary advances to the Company which was unsecured, interest-free and has no
fixed repayment term. The amount of imputed interest is
insignificant.





NOTE
      - 9
            INCOME
      TAXES





For the
three months ended June 30, 2009 and 2008, the local (“United States of
America”) and foreign components of loss before income taxes were comprised of
the following:





Three
      months ended June 30,2009
                      
                      
                      2008Tax
      jurisdictions from:Local
                      
                      $
                      61,517
                      
                      
                      $
                      12,952Foreign
                      
                      
                      118,314
                      
                      
                      
                      297,514Loss
      before income tax
                      
                      $
                      179,831
                      
                      
                      $
                      310,466





The
effective tax rate in the years presented is the result of the mix of income
earned in various tax jurisdictions that apply a broad range of income tax
rates. The Company and its subsidiaries that operate in various countries:
United States of America, British Virgin Islands, Hong Kong and the PRC that are
subject to tax in the jurisdictions in which they operate, as
follows:





United
States of America





CHSH is
registered in the State of Nevada and is subjected to United States of America
tax law. As of June 30, 2009, the operation in the United States of America did
not incur net operating losses available for federal tax purposes, which are
available to offset future taxable income.





British
Virgin Islands





Under the
current laws of the BVI, Extra Ease, EGC, EWIP and EIL are not subject to tax on
income.





Hong
Kong





EFEL is
subject to Hong Kong Profits Tax at the statutory rate of 16.5% and 16.5% on the
assessable income for the three months ended June 30, 2009 and 2008,
respectively. For the three months ended June 30, 2009 and 2008, its operating
subsidiaries in Hong Kong incurred an operating loss for income tax purposes and
were exempted from Hong Kong Profits Tax.





The
PRC





The
Company’s subsidiary, RBNT operating in the PRC is subject to the Corporate
Income Tax governed by the Income Tax Law of the People’s Republic of China, at
a unified statutory rate of 25%. Under the PRC Income Tax, RBNT is qualified as
a foreign investment enterprise and is exempted from income tax for the first
two profit making years with a 50% exemption of income tax (that is 30%) for the
next three years. For the three months ended June 30, 2009 and 2008, RBNT was
exempted from the PRC Income Tax due to the cumulative operating
losses.




F-13




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE THREE MONTHS ENDED JUNE 30, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)


The
following table sets forth the significant components of the aggregate net
deferred tax assets and liabilities of the Company as of June 30, 2009 and March
31, 2009:





June
      30, 2009
                      
                      
                      March
      31, 2009Deferred
      tax liabilities:Depreciation
                      
                      $
                      250
                      
                      
                      $
                      294Deferred
      tax assets:Net
      operating loss carryforwards
                      
                      
                      344,956
                      
                      
                      
                      329,222Total
      net deferred tax assets
                      
                      
                      344,706
                      
                      
                      
                      328,928Less:
      valuation allowance
                      
                      
                      (344,706
                      )
                      
                      
                      (328,928
                      )Net
      deferred tax assets
                      
                      $
                      -
                      
                      
                      $
                      -





As of
June 30, 2009 and March 31, 2009, the Company had approximately $2,073,017 and
$1,978,796 of the cumulative tax losses which can be carried forward
indefinitely to offset future taxable income.





Management
believes that it is more likely than not that the deferred tax assets from net
operating loss carryforwards will not be fully realizable in the future.
Accordingly, the Company provided for a full valuation allowance against its
deferred tax assets of $344,706 and $328,928 as of June 30, 2009 and March 31,
2009, respectively. During the quarter, the valuation allowance increased by
$15,778, primarily relating to net operating loss carryforwards from the foreign
tax regimes.





NOTE
      - 10
            RELATED
      PARTY TRANSACTIONS





Three
      months ended June 30,2009
                      
                      2008Rental
      charge reimbursed by a related company
                      (a)
                      
                      $
                      40,746
                      
                      
                      $
                      39,907Consultancy
      fees paid to a related company
                      (b)
                      
                      $
                      -
                      
                      
                      $
                      19,747





(a)
            For
      the three months ended June 30, 2009 and 2008, the Company leased out some
      portion of the office premises to and partially reimbursed rental charge
      by a related company, which is controlled by the director of the Company,
      at the market price in accordance with the lease agreement in a normal
      course of business.





(b)
            For
      the three months ended June 30, 2008, the Company paid consultancy service
      to a related company which is controlled by the director of the Company,
      at its fair value in a normal course of
  business.





NOTE
      - 11
            SEGMENT
      INFORMATION





(a)
            Business
      segment reporting





The
Company’s business units have been aggregated into two reportable segments, as
defined by FAS 131:





l
            Additive
      Business – sales and manufacture of proprietary additives in the
      PRC





l
            Foodware
      Business – trading of food containers and packaging products in Hong Kong
      and overseas




F-14




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE THREE MONTHS ENDED JUNE 30, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)


The
accounting policies of the segments are the same as those described in the
summary of significant accounting policies (see Note 4). The Company had no
inter-segment sales for the period ended June 30, 2009 and 2008. The Company’s
reportable segments are strategic business units that offer different products
and services. They are managed separately based on the different technology and
marketing strategies of each business unit for making internal operating
decisions.





Summarized
financial information concerning the Company’s reportable segments is shown in
the following table for the three months ended June 30, 2009 and
2008:





Three
      months ended June 30, 2009Additive
                  Business
                
                
                Foodware
                  Business
                
                
                TotalOperating
      revenues
                
                $
                16,035
                
                
                $
                212,491
                
                
                $
                228,526Cost
      of revenues
                
                
                (13,626
                )
                
                
                (176,340
                )
                
                
                (189,966
                )Gross
      profit
                
                
                2,409
                
                
                
                36,151
                
                
                
                38,560Depreciation
                
                
                40
                
                
                
                353
                
                
                
                393Net
      loss
                
                $
                (2,183
                )
                
                $
                (177,648
                )
                
                $
                (179,831
                )Expenditure
      for long-lived assets
                
                $
                -
                
                
                $
                -
                
                
                $
                -





Three
      months ended June 30, 2008Additive
                  Business
                
                
                Foodware
                  Business
                
                
                TotalOperating
      revenues
                
                $
                66,670
                
                
                $
                715,300
                
                
                $
                781,970Cost
      of revenues
                
                
                (63,717
                )
                
                
                (587,928
                )
                
                
                (651,645
                )Gross
      profit
                
                
                2,953
                
                
                
                127,372
                
                
                
                130,325Depreciation
                
                
                39
                
                
                
                356
                
                
                
                395Net
      loss
                
                $
                (1,493
                )
                
                $
                (308,973
                )
                
                $
                (310,466
                )Expenditure
      for long-lived assets
                
                $
                -
                
                
                $
                38
                
                
                $
                38





(b)
            Geographic
      segment reporting





In
respect of geographical segment reporting, sales are based on the country in
which the customer is located, as follows:





Three
      months ended June 30,2009
                        
                        
                        2008By
      regions:North
      America
                        
                        $
                        168,151
                        
                        
                        $
                        554,419Asia
                        
                        
                        42,160
                        
                        
                        
                        152,192Europe
                        
                        
                        11,069
                        
                        
                        
                        75,359Others
                        
                        
                        7,146
                        
                        
                        
                        -Total
      revenue, net
                        
                        $
                        228,526
                        
                        
                        $
                        781,970




F-15




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE THREE MONTHS ENDED JUNE 30, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)


NOTE
      - 12
            CONCENTRATIONS
      OF RISK





The
Company is exposed to the following concentrations of risk:





(a)
            Major
      customers





The
following is a table summarizing the revenue from customers that individually
represent greater than 10% of the total revenue for the three months ended June
30, 2009 and 2008 and their outstanding balances at period-end
date:





Three
      months ended June 30, 2009
                                              
                                              
                                              
                                              
                                              June
      30, 2009Revenues
                                              
                                              Percentage
                                                of
      revenues
                                              
                                              
                                              
                                              
                                              Accounts
                                                receivable,
      tradeCustomer
      A
                                              
                                              
                                              $
                                              115,566
                                              
                                              51
                                              %
                                              
                                              
                                              
                                              $
                                              46,553Customer
      B
                                              
                                              
                                              
                                              34,527
                                              
                                              15
                                              %
                                              
                                              
                                              
                                              
                                              34,631Customer
      C
                                              
                                              
                                              
                                              26,125
                                              
                                              11
                                              %
                                              
                                              
                                              
                                              
                                              -Total:
                                              
                                              $
                                              176,218
                                              
                                              77
                                              %
                                              
                                              Total:
                                              
                                              $
                                              81,184





Three
      months ended June 30, 2008
                              
                              
                              
                              
                              June
      30, 2008Revenues
                              
                              Percentage
                                of
      revenues
                              
                              
                              
                              
                              Accounts
                                receivable,
      tradeCustomer
      D
                              
                              
                              $
                              447,177
                              
                              57
                              %
                              
                              
                              
                              $
                              190,651





(b)
            Major
      vendors





The
following is a table summarizing the purchase from vendors that individually
represent greater than 10% of the total purchase for the three months ended June
30, 2009 and 2008 and their outstanding balances at period-end
date:





Three
      months ended June 30, 2009
                            
                            
                            
                            
                            June
      30, 2009Purchases
                            
                            Percentage
                              of
      purchases
                            
                            
                            
                            
                            Accounts
                              payable,
      tradeVendor
      A
                            
                            
                            $
                            115,596
                            
                            59
                            %
                            
                            
                            
                            $
                            60,925Vendor
      B
                            
                            
                            
                            60,745
                            
                            31
                            %
                            
                            
                            
                            
                            47,257Total:
                            
                            $
                            176,341
                            
                            90
                            %
                            
                            Total:
                            
                            $
                            108,182





Three
      months ended June 30, 2008
                            
                            
                            
                            
                            June
      30, 2008Purchases
                            
                            Percentage
                              of
      purchases
                            
                            
                            
                            
                            Accounts
                              payable,
      tradeVendor
      A
                            
                            
                            $
                            397,776
                            
                            61
                            %
                            
                            
                            
                            $
                            354,327Vendor
      B
                            
                            
                            
                            190,152
                            
                            29
                            %
                            
                            
                            
                            
                            76,144Total:
                            
                            $
                            587,928
                            
                            90
                            %
                            
                            Total:
                            
                            $
                            430,471





(c)
            Credit
      risk





Financial
instruments that potentially subject the Company to significant concentrations
of credit risk consist principally of cash and trade accounts receivable. The
Company performs ongoing credit evaluations of its customers' financial
condition, but does not require collateral to support such
receivables.




F-16




EATWARE,
INC.


(Formerly
China Shoe Holdings, Inc.)


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE THREE MONTHS ENDED JUNE 30, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)


(d)
            Exchange
      rate risk





The
Company cannot guarantee that the current exchange rate will remain steady;
therefore there is a possibility that the Company could post the same amount of
net income for two comparable periods and because of the fluctuating exchange
rate actually post higher or lower profit depending on exchange rate of HK$
converted to US$ on that date. The exchange rate could fluctuate depending on
changes in political and economic environments without notice.





(e)
            Interest
      rate risk





As the
Company has no significant interest-bearing assets, the Company’s income and
operating cash flows are substantially independent of changes in market interest
rates.





The
Company’s interest-rate risk arises from bank overdraft. Bank overdraft at
variable rates exposes the Company to cash flow interest rate risk. The Company
manages interest rate risk by varying the issuance and maturity dates variable
rate debt, limiting the amount of variable rate debt, and continually monitoring
the effects of market changes in interest rates. As of June 30, 2009, borrowings
under overdraft facility were at variable rates. The interest rates of bank
facility are disclosed in Note 6.





NOTE
      - 13
            COMMITMENTS
      AND CONTINGENCIES





The
Company was committed under various non-cancelable operating leases with fixed
monthly rentals, due September 2010. Costs incurred under these operating leases
are recorded as rent expense and totaled approximately $7,752 and $7,697 for the
period ended June 30, 2009 and 2008.





As of
June 30, 2009, the Company has future minimum rental payments of $39,255 due
under non-cancelable operating leases in the next 12 months.





NOTE
      - 14
            SUBSEQUENT
      EVENT





On July
20, 2009, the Company further changed its current name to “Eatware,
Inc.”





On July
22, 2009, the Company filed a Certificate of Change and Certificate of Amendment
to its Articles of Incorporation (the “Amended Certificate:”) to change the
Company’s name to Eatware, Inc., as well as increase its authorized capital
stock to 2,510,000,000 shares, consisting of 10,000,000 shares of preferred
stock, par value $.001 per share, and 2,500,000,000 shares of common stock, par
value $.001 per share. In addition, the Amended Certificate further amends
the Articles of Incorporation by effectuating a 1:70 reverse stock split of the
shares of common stock issued and outstanding. The changes reflected by the
Amended Certificate are effective as of July 20, 2009.




F-17




ITEM
      2.
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS




SPECIAL
NOTE REGARDING FORWARD LOOKING STATEMENTS




The
following discussion should be read in conjunction with the Financial Statements
and Notes thereto. This document contains certain forward-looking statements
including, among others, anticipated trends in our financial condition and
results of operations and our business strategy. (See Part I, Item 1A, "Risk
Factors "). These forward-looking statements are based largely on our current
expectations and are subject to a number of risks and uncertainties. Actual
results could differ materially from these forward-looking statements. Important
factors to consider in evaluating such forward-looking statements include (i)
changes in external factors or in our internal budgeting process which might
impact trends in our results of operations; (ii) unanticipated working capital
or other cash requirements; (iii) changes in our business strategy or an
inability to execute our strategy due to unanticipated changes in the industries
in which we operate; and (iv) various competitive market factors that may
prevent us from competing successfully in the marketplace. The Company assumes
no obligation and does not intend to update any forward-looking statements,
except as required by law.




USE
OF TERMS





Except as
otherwise indicated by the context, references in this Form 10-Q to “CHSH,”
“we,” “us,” “our,” “our Company,” or “the Company” are to Eatware, Inc., a
Nevada corporation, and its consolidated subsidiaries. Unless the context
otherwise requires, all references to (i)“Extra Ease” are to Extra Ease Limited,
a limited liability company incorporated in the British Virgin Islands;
(ii)“EGC” are to Eatware Global Corp., a limited liability company incorporated
in the British Virgin Islands; (iii)“EWIP” are to Eatware Intellectual
Properties Limited, a limited liability company incorporated in the British
Virgin Islands; (iv)“EFEL” are to Eatware Far East Limited, a limited liability
company incorporated in the British Virgin Islands;  (v)“EIL” are to
Eatware International Limited, a limited liability company incorporated in the
British Virgin Islands;  (vi)“RBNT” are to Rongbao (Nantong) Environmental
Co., Ltd., a limited liability company incorporated in the People's Republic of
China; (vii)“EAML” are to Eatware Assets Management Limited, a limited liability
company incorporated in Hong Kong (viii) “BVI” are to British Virgin
Islands; (ix) “PRC” and “China” are to the People's Republic of China; (x) “U.S.
dollar,” “$” and “US$” are to United States dollars; (xi) “RMB” are to Yuan
of China; (xii) “Securities Act” are to the Securities Act of 1933, as amended;
and “Exchange Act” are to the Securities Exchange Act of 1934, as
amended.









OVERVIEW




We
conduct our operations through our wholly owned subsidiaries, EWIP and Extra
Ease and its subsidiaries – EGC, Eatware Asset Management Ltd., Eatware Far East
Ltd., Eatware International Ltd., and Rongbao (Nantong) Environmental Co. Ltd.
(collectively referred to as “EGC”). Extra Ease, EGC and EWIP are collectively
referred to as “Eatware” or the “Group”.  We primarily engage in the
marketing and trading of environmentally safe food packaging products and
additives. Our objective is to establish ourselves as a leading brand
of high quality bio-based food packaging products. We are also
looking into opportunities of licensing our technology, intellectual properties
and trademarks to licensed factories for producing Eatware products and collect
royalty for additional income source.




Prior to
Eatware products launching to the market, we have performed extensive research
on pulp technology. Throughout the process, EWIP has involved experts both from
the industry and the universities. Management believes that Eatware’s
technological application in this area is far advanced of its competitors. Our
research and development strategy is to create innovative, value-added products
and market opportunities and thus enhance Eatware’s market
position.




Our
patented technology, combined with the unique additive serve as a high barrier
to entry for the Company’s competitors.





The
Company relies on a combination of trade secrets, confidentiality agreements,
patent, trademark, copyright, licenses, unfair competition and other
intellectual property laws to protect its intellectual property and other
proprietary rights.





The
Company’s products are 100% organic, chemical-free biodegradable foodservice
packaging product in the industry.  Features of the products include
being oil, water, heat resistant, microwave and oven safe. EWIP also invented
what management believes to be the world’s first 100% organic additive -
Eatplus®,
comprised of a modified starch. While other food packaging competitive products
can take over 200 years to decompose and have contributed to massive landfills
across the globe, Eatware products are designed to decompose in the soil within
180 days and can disperse in water within two weeks.  Eatplus® enhances
the products making them sturdy, yet 100% biodegradable.





In
contrast, traditional foodservice disposables, wraps, and paperboard are
currently manufactured from a variety of materials, including paper and plastic.
Management believes that none of these materials fully addresses three of the
principal challenges facing the foodservice industry; namely performance, price,
and environmental impact. Management believes that Eatware products address the
combination of these challenges better than traditional alternatives and
therefore will be able to achieve a significant share of the foodservice
disposable packaging market.





The
Company’s products can be categorized into five types: (1) plates; (2) bowls;
(3) trays; (4) lunch boxes; and (5) mini containers. To date, The Company’s
technology has been used to produce limited commercial quantities of plates,
bowls, and hinged-lid containers intended for use by all segments of the
foodservice disposable packaging market, including quick-service restaurants,
food and facilities management companies, Governments, universities/colleges,
and retail operations. These products were developed using detailed
environmental assessments and carefully selected raw materials and processes to
minimize the harmful impact on the environment without sacrificing competitive
price or performance.




RESULTS
OF OPERATIONS





The
following table summarizes the results of our operations during the
three months ended June, 30 2009 and 2008, and provides information
regarding the dollar and percentage increase or (decrease) from the
three months ended June 30, 2009 to the three months ended June 30,
2008.





All
amounts, other than percentages, are in U.S dollars.




Three months ended June 30,Item
                
                2009
                
                
                2008
                
                
                Increase
                  (Decrease)
                
                
                %
      Increase
                  (%
      Decrease)RevenuesSales
                
                $
                228,526
                
                
                $
                781,970
                
                
                $
                (553,444
                )
                
                
                -70.8
                %Cost
      of Goods Sold
                
                
                189,966
                
                
                
                651,645
                
                
                
                (461,679
                )
                
                
                -70.8
                %Gross
      profit
                
                
                38,560
                
                
                
                130,325
                
                
                
                (91,765
                )
                
                
                -70.4
                %Operating
      ExpensesSales
      and marketing
                
                
                99
                
                
                
                49,014
                
                
                
                (48,915
                )
                
                
                -99.8
                %Research
      and development
                
                
                35,071
                
                
                
                55,856
                
                
                
                (20,785
                )
                
                
                -37.2
                %General
      and administrative
                
                
                167,081
                
                
                
                335,317
                
                
                
                (168,236
                )
                
                
                -50.2
                %Loss
      from operations
                
                
                (163,691
                )
                
                
                (309,862
                )
                
                
                146,171
                
                
                
                47.2
                %Other
      income (expense):Interest
      income
                
                
                0
                
                
                
                39
                
                
                
                (39
                )
                
                
                -100.0
                %Interest
      expense
                
                
                (16,140
                )
                
                
                (643
                )
                
                
                15,497
                
                
                
                2410.1
                %Loss
      before income tax
                
                
                (179,831
                )
                
                
                (310,466
                )
                
                
                130,635
                
                
                
                42.1
                %Income
      tax expense
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                %Net
      loss
                
                $
                (179,831
                )
                
                $
                (303,920
                )
                
                
                124,089
                
                
                
                40.8
                %









Three
Months Ended June 30, 2009 Compared to Three Months Ended June 30,
2008





Revenue





Revenue
was $0.23 million for the three months ended June 30, 2009 as compared to
$0.78 million for the three months ended June 30, 2008, representing a
decreased by 70.8%. The dramatic decrease in revenue was mainly attributable to
the discontinuance of a distributor agreement with a major customer due to
unfavorable business term. Management believes that the termination of the
distributor agreement would eventually bring the Company a higher
profitability in the long run. Moreover, management has already taken
appropriate actions with some degree of success in securing new customers and
increasing the Company’s revenue in the future.





Cost
of Revenue and Gross Profit





Cost of
revenue and gross profit were respectively $0.19 million and $0.04 million for
the three months ended June 30, 2009 as compared to $0.65 million and $0.13
million for the three months ended June 30, 2008, representing a decrease by
70.8% and 70.4% respectively. The decrease in gross profit was mainly due to the
discontinuance of a distributor agreement with a major customer as
discussed above when comparing with the corresponding period of June 30,
2008.




Research
and Development Expenses





For the
three months ended June 30, 2009, research and development expenses decreased by
$0.02 million, or 37.2% over the prior year period.  The decrease was
due primarily to a lesser expense in machine testing, research and
development.





Sales
and Marketing Expenses





Sales and
marketing expenses decreased by $0.05 million, or 99.8% for the three months
ended June 30, 2009 compared to the prior year period.  The decrease
in sales and marketing expenses was mainly attributable to a reduction of
exhibition costs.  During the three months ended June 30, 2009, we
have adjusted our marketing strategy to co-hosting exhibitions with our
distributors instead of attending on our own.  This new strategy
reduces our sales and marketing expenses when compared to the same period of
year 2008.





General
and Administrative Expenses





General
and administrative expenses decreased by $0.17 million, or 50.2% for the three
months ended June 30, 2009 compared to the three months ended June 30, 2008. The
decrease in general and administrative expenses can be attributed to a reduction
in salary expenses and our strengthened cost control, which resulted in
reduction of general and administrative expenses such as travel expenses,
entertainment expenses etc..





Income
Tax Expenses





Eatware,
Inc. is subject to United States federal income tax rate. No provision for
income taxes in the United States has been made as the Company had no United
States taxable income during the three months ended June 30, 2009.





Our
subsidiaries, Extra Ease Limited (“Extra Ease”), Eatware Global Corp. (“EGC”),
Eatware Intellectual Properties Limited (“EWIP”), and Eatware International
Limited (“EIL”) was incorporated in the British Virgin Islands and, under the
current laws of the BVI, is not subject to income taxes.





Eatware
Far East Limited (“EFEL”) and Eatware Assets Management Limited (“EAML”),
subsidiaries of the Company which operate in Hong Kong, are subject to Hong Kong
corporate income tax.  However, EFEL and EAML had no Hong Kong
taxable income during the three months ended June 30, 2009.





Rongbao
(Nantong) Environmental Co., Ltd. (“RBNT”), a subsidiary of the Company, which
operates in the PRC, is subject to the PRC state and local enterprise income
tax.  However, RBNT had no PRC taxable income during the three months
ended June 30, 2009.









Net
Loss





Net loss
was $0.18 million for the three months ended June 30, 2009 as compared to a net
loss of $0.31 million for the three months ended June 30, 2008. The
decrease in net loss was mainly attributable to reduction of our sales and
marketing expenses and general and administrative expenses.




Liquidity
and Capital Resources





Cash
Flows





All
      amounts in U.S. dollars
                          
                          Three Months Ended
      June 30,2009
                          
                          
                          2008Net
      cash used in operating activities
                          
                          $
                          (252,100
                          )
                          
                          $
                          (367,897
                          )Net
      cash used in investing activities
                          
                          
                          -
                          
                          
                          
                          (38
                          )Net
      cash provided by financing activities
                          
                          
                          282,491
                          
                          
                          
                          350,681Foreign
      currency translation adjustments
                          
                          
                          15
                          
                          
                          
                          1,756Net
      increase (decrease) in cash and cash equivalents
                          
                          $
                          30,406
                          
                          
                          $
                          (15,498
                          )





Operating
Activities:





Net cash
used in operating activities was $0.25 million for the three months ended June
30, 2009, as compared with net cash provided by operating activities of $0.37
million for the corresponding period in 2008. The change of net cash used in
operating activities was mainly due to the decrease of net loss of approximately
$0.13 million.





Investing
Activities:





Net cash
used in investing activities for the three months ended June 30, 2009 was
$0.  The net cash used in investing activities for the same period in
2008 was $38.




Financing
Activities:





Net cash
provided by financing activities in the three months ended June 30, 2009 totaled
$0.28 million due mainly to proceeds from notes payable of $0.35 million offset
by repayment to a director of $0.07 million. Net cash provided by financing
activities in the three months ended June 30, 2008 was $0.35 million due mainly
to advance from a related party of $1.47 million offset by repayment to a
director of $1.28 million.





Short
Term Bank Borrowings:





None.




Going
Concern




The
financial statements have been prepared assuming that the Group will continue as
a going concern, which contemplates the realization of assets and the discharge
of liabilities in the normal course of business for the foreseeable
future.




For the
six months ended June 30, 2009, the Group had incurred a net loss of $0.18
million and the Company has incurred losses over the past several quarters.
Management has taken certain action and continues to implement changes designed
to improve the Group’s financial results and operating cash flows. The actions
involve certain cost-saving initiatives and growing strategies on sales and
marketing expansion.  Management believes that these actions will
enable the Company to improve future profitability and cash flow in its
continuing operations.









ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK




Not
applicable.




ITEM
4T. CONTROLS AND PROCEDURES





Evaluation
of Disclosure Controls and Procedures




Our
management is responsible for establishing and maintaining a system of
disclosure controls and procedures (as defined in Rule 13a-15(e)) under the
Exchange Act) that is designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time
specified in the Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an issuer in the reports
that it files or submits under the Securities Exchange Act of 1934 (the
“Exchange Act”), as amended, is accumulated and communicated to the issuer's
management, including its principal executive officer or officers and principal
financial officer or officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required
disclosure.




Pursuant
to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation
with the participation of the Company’s management, including Mr. Wu, Man-Shing,
the Company’s Chief Executive Officer, of the effectiveness of the Company’s
disclosure controls and procedures (as defined under Rule 13a-15(e) under the
Exchange Act) as of June 30, 2009.  Based upon that evaluation, the
Company’s  Chief Executive Officer concluded that the Company’s
disclosure controls and procedures were effective to ensure that information
required to be disclosed by the Company in the reports that the Company files or
submits under the Exchange Act, is recorded, processed, summarized and reported,
within the time periods specified in the SEC’s rules and forms, and that such
information is accumulated and communicated to the Company’s management,
including the Company’s Chief Executive Officer, to allow timely decisions
regarding required disclosure.





Changes
in internal controls




Our
management, with the participation our Chief Executive Officer, performed an
evaluation as to whether any change in our internal controls over financial
reporting occurred during the quarter ended June 30, 2009.  Based on
that evaluation, our Chief Executive Officer concluded that no change occurred
in the Company's internal controls over financial reporting during the quarter
ended June 30, 2009 that has materially affected, or is reasonably likely to
materially affect, the Company's internal controls over financial
reporting




PART
II OTHER INFORMATION




ITEM
1 LEGAL PROCEEDINGS





From time
to time, we may become involved in various lawsuits and legal proceedings which
arise in the ordinary course of business. However, litigation is subject to
inherent uncertainties, and an adverse result in these or other matters may
arise from time to time that may harm our business. We are currently not aware
of any such legal proceedings or claims that we believe will have, individually
or in the aggregate, a material adverse affect on our business, financial
condition or operating results.




ITEM
1A RISKS FACTORS




Not
applicable.




ITEM
2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS




None.




ITEM
3 DEFAULTS UPON SENIOR SECURITIES




None.




ITEM
4 SUBMISSION OF MATTER TO A VOTE OF SECURITIES HOLDERS




None.









ITEM
5 OTHER INFORMATION




None.




ITEM
6 EXHIBITS




Exhibit Number
                    
                    Description31.1
                    
                    Certification
      by Principal Executive Officer pursuant to Sarbanes Oxley Section
      302(1)31.2
                    
                    Certification
      by Principal Financial Officer pursuant to Sarbanes Oxley Section
      302(1)32.1
                    
                    Certification
      by Principal Executive Officer a pursuant to 18 U.S.C. Section
      1350(1)32.2
                    
                    Certification
      by Principal Financial Officer a pursuant to 18 U.S.C. Section
      1350(1)





(1) Filed
herewith.









SIGNATURES





In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized on this 14 day of August, 2009.





EATWARE,
      INC.By:
                  /s/ Wu, Man ShingWu,
      Man ShingChief
      Executive OfficerPrincipal
      Executive Officer




By:
                  /s/ So, Jonathan
W.LSo,
      Jonathan W.LChief
      Financial OfficerPrincipal
      Accounting and Financial
Officer