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

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2010

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

For the transition period from __________ to ____________

Commission file number 000-29981

BIOPACK ENVIRONMENTAL SOLUTIONS INC.
(Exact name of registrant as specified in its charter)

Room 1302, 13/F, Enterprise Centre, 4 Hart Avenue, Tsim Sha Tsui, Kowloon, Hong Kong
(Address of principal executive offices) (Zip Code)

852.3586.1383
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes[x]      No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [  ]    No  [  ]

2

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ]    No [x] 

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
42,161,104 common shares issued and outstanding as of August 11, 2010

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Biopack Environmental Solutions Inc.

Unaudited

Consolidated Financial Statements

For the Six Months Ended
June 30, 2010 and 2009

(Stated in US Dollars)

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Biopack Environmental Solutions Inc.

CONSOLIDATED FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

1. The Company

Biopack Environmental Solutions Inc. (formerly Star Metro Corp.) and its subsidiaries develop, manufacture, distribute and market bio-degradable food containers and disposable industrial packaging for consumer products made from natural materials.

2. Summary of Significant Accounting Policies

(a) Basis of Presentation

The consolidated financial statements include the accounts of Biopack Environmental Solutions Inc. and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated from the consolidated financial statements.

The Company evaluates consolidation of entities under FAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (“FAS 167”), which changes the approach to determining the primary beneficiary of a variable interest entity (“VIE”), (Formerly known as Financial Accounting Standards Board (FASB) Interpretation No.46, “Consolidation of Variable Interest Entities” (FIN 46)). FAS 167 replaces the quantitative-based risks and rewards approach with a qualitative approach that focuses on identifying which enterprise has (i) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits of the entity that could potentially be significant to the VIE. FAS 167 also requires ongoing reassessment of whether an enterprise is the primary beneficiary of a VIE, and requires additional disclosures about an enterprise’s involvement in VIEs. FAS 167 is effective for the Company as of the beginning of fiscal year 2011 and its adoption is not expected to have a material effect on the Company’s unaudited condensed consolidated financial statements.

(b) Use of Estimates

In preparing consolidated financial statements in conformity with US GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported periods. Significant estimates include depreciation. Actual results could differ from those estimates.

(c) Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. As of June 30, 2010, the Company had cash and cash equivalents of $115,060.

(d) Short-term Investment

The Company classifies its short-term investment as held-to-maturity debt securities and is measured at amortized cost (which approximates fair value) with interest and realized gains and losses, if any, reported in non-operating income in the income statement.

(e) Accounts Receivable

Accounts receivable are stated at original amounts less an allowance made for doubtful receivables, if any, based on a review of all outstanding amounts at the end of the period. Full allowance for doubtful receivables are made when the receivables are overdue for one year and an allowance is made when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of a receivable. Bad debts are written against the allowance when identified. The Company extends credit to customers on an unsecured basis in the normal course of business and believes that all accounts receivable in excess of the allowance for doubtful accounts are fully collectible. The Company does not accrue interest on trade accounts receivable. The normal credit terms range from 15 to 60 days.

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(f) Allowance for Doubtful Accounts

The Company recognizes an allowance for doubtful accounts to ensure accounts receivable are not overstated due to uncollectibility. An allowance for doubtful accounts is maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when the Company becomes aware of a customer’s inability to meet its financial obligations, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position. If circumstances related to a customer change, estimates of the recoverability of receivables would be further adjusted.

(g) Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is provided principally by use of the straight-line method over the useful lives of the related assets, except for leasehold properties, which are depreciated over the terms of their related leases or their estimated useful lives, whichever is less. Expenditures for maintenance and repairs, which do not improve or extend the expected useful life of the assets, are expensed to operations while major repairs are capitalized.

The estimated useful lives are as follows:

(h) Impairment of Assets

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets", the Company evaluates its long-lived assets to determine whether later events and circumstances warrant revised estimates of useful lives or a reduction in carrying value due to impairment. If indicators of impairment exist and if the value of the assets is impaired, an impairment loss would be recognized. There was no impairment loss made for property and equipment as of June 30, 2010.

(i) Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The FASB issued Accounting Standard Codification Topic 740 (ASC 740) “Income Taxes”, (Formerly known as interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of Statement of Financial Accounting Standards No. 109 (“FIN 48”)). ASC 740 clarifies the accounting for uncertainty in tax positions. This requires that an entity recognized in the consolidated financial statements the impact of a tax position, if that position is more likely than not of being sustained upon examination, based on the technical merits of the position.

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The adoption of ASC 740 did not have any impact on the Group’s results of operations or financial condition for the period ended June 30, 2010. As of the date of the adoption of ASC 740, the Group has no material unrecognized tax benefit which would favourably affect the effective income tax rate in future periods. The Group has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of income tax expense in the consolidated statements of operations.

(j) Foreign Currency Transactions

The Company’s functional currency is Hong Kong Dollars (“HKD”) and Renminbi (“RMB”) and its reporting currency is U.S. dollars. The Company’s consolidated balance sheet accounts are translated into U.S. dollars at the year-end exchange rates and all revenue and expenses are translated into U.S. dollars at the average exchange rates prevailing during the periods in which these items arise. Translation gains and losses are deferred and accumulated as a component of other comprehensive income in stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are included in the statement of operations as incurred.

(k) Fair Value of Financial Instruments

SFAS No. 107, “Disclosures about Fair Values of Financial Instruments”, requires disclosing fair value to the extent practicable for financial instruments that are recognized or unrecognized in the balance sheet. The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement.

For certain financial instruments, including cash, accounts and other receivables, accounts payable, accruals and other payables, it was assumed that the carrying amounts approximate fair value because of the near term maturities of such obligations. The carrying amounts of long-term loans approximate fair value as the interest on these loans is minimal.

(l) Earnings Per Share

The Company computes earnings per share (“EPS’) in accordance with FASB Accounting Standard Codification Topic 260 (ASC 260) “Earnings Per Share” (Formerly known as Statement of Financial Accounting Standards No. 128, “Earnings per Share” (“SFAS No. 128”)), and SEC Staff Accounting Bulletin No. 98 (“SAB 98”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

(m) Accumulated Other Comprehensive Income

Accumulated other comprehensive income represents the change in equity of the Company during the periods presented from foreign currency translation adjustments.

(n) Stock-Based Compensation

In March 2004, the FASB issued a proposed statement, Share-Based Payment, which addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for equity instruments of the enterprise or liabilities that are based on the grant-date fair value of the enterprise's equity instruments or that may be settled by the issuance of such equity instruments. The proposed statement would eliminate the ability to account for share-based compensation transactions using Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and generally would require instead that such transactions be accounted for using a fair-value-based method. In December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment, which is a revision of SFAS No. 123. Generally, the approach in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their grant-date fair values. Pro forma disclosure is no longer an alternative.

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As permitted by SFAS No. 123, for 2005, the Company accounted for share-based payments to employees using APB Opinion No. 25's intrinsic value method and, as such, generally recognized no compensation cost for employee stock options.

Effective January 1, 2006, the Company adopted SFAS No. 123(R)'s fair value method of accounting for share based payments. Accordingly, the adoption of SFAS No. 123(R)'s fair value method may have a significant impact on the Company's results of operations as it is required to recognize the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards. SFAS No. 123(R) permits public companies to adopt its requirements using either the "modified prospective" method or the "modified retrospective" method.

The Company adopted SFAS No. 123(R) using the modified prospective method. In April 2005, the SEC delayed the effective date of SFAS No. 123(R), which is now effective for public companies for annual rather than interim periods that begin after September 15, 2005. The impact of the adoption of SFAS No. 123(R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future.

(o) Revenue Recognition

Revenue is recognized in accordance with SEC Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements”. The Company recognizes revenue when the significant risks and rewards of ownership have been transferred to the customer pursuant to applicable laws and regulations, including factors such as when there has been evidence of a sales arrangement, the performance has occurred, or service have been rendered, the price to the buyer is fixed or determinable, and collectability is reasonably assured.

(p) Recently issued accounting pronouncements

In December 2007, ASC 805, Business Combinations (“ASC 805”) (formerly included under Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations) contains guidance that was issued by the FASB. It requires the acquiring entity in a business combination to recognize all assets acquired and liabilities assumed in a transaction at the acquisition-date fair value, with certain exceptions. Additionally, the guidance requires changes to the accounting treatment of acquisition related items, including, among other items, transaction costs, contingent consideration, restructuring costs, indemnification assets and tax benefits. ASC 805 also provides for a substantial number of new disclosure requirements. ASC 805 also contains guidance that was formerly issued as FSP FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies which was intended to provide additional guidance clarifying application issues regarding initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. ASC 805 was effective for business combinations initiated on or after the first annual reporting period beginning after December 15, 2008. The Company implemented this guidance effective January 1, 2009. Implementing this guidance did not have an effect on the Company’s financial position or results of operations; however it will likely have an impact on the Company’s accounting for future business combinations, but the effect is dependent upon acquisitions, if any, that are made in the future.

In March 2008, the FASB issued ASC 815 (SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133) to amend and expand the disclosures about derivatives and hedging activities. The standard requires enhanced qualitative disclosures about an entity’s objectives and strategies for using derivatives, and tabular quantitative disclosures about the fair value of derivative instruments and gains and losses on derivatives during the reporting period. This standard is effective for both fiscal years and interim periods that begin after November 15, 2008. The adoption of this standard on December 29, 2008, the beginning of the Company’s fiscal year, did not have a material impact on its unaudited condensed consolidated financial statements.

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In December 2007, ASC 810, Consolidation (“ASC 810”) includes new guidance issued by the FASB governing the accounting for and reporting of noncontrolling interests (previously referred to as minority interests). This guidance established reporting requirements which include, among other things, that noncontrolling interests be reflected as a separate component of equity, not as a liability. It also requires that the interests of the parent and the noncontrolling interest be clearly identifiable. Additionally, increases and decreases in a parent’s ownership interest that leave control intact shall be reflected as equity transactions, rather than step acquisitions or dilution gains or losses. This guidance also requires changes to the presentation of information in the financial statements and provides for additional disclosure requirements. ASC 810 was effective for fiscal years beginning on or after December 15, 2008. The Company implemented this guidance as of January 1, 2009. The effect of implementing this guidance was not material to the Company’s financial position or results of operations.

In May 2009, ASC 855, Subsequent Events (“ASC 855”) (formerly Statement of Financial Accounting Standards No. 165, Subsequent Events) includes guidance that was issued by the FASB, and is consistent with current auditing standards in defining a subsequent event. Additionally, the guidance provides for disclosure regarding the existence and timing of a company’s evaluation of its subsequent events. ASC 855 defines two types of subsequent events, “recognized” and “non-recognized”. Recognized subsequent events provide additional evidence about conditions that existed at the date of the balance sheet and are required to be reflected in the financial statements. Non-recognized subsequent events provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date and, therefore; are not required to be reflected in the financial statements. However, certain non-recognized subsequent events may require disclosure to prevent the financial statements from being misleading. This guidance was effective prospectively for interim or annual financial periods ending after June 15, 2009. The Company implemented the guidance included in ASC 855 as of April 1, 2009. The effect of implementing this guidance was not material to the Company’s financial position or results of operations.

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 166, Accounting for Transfers of Financial Assets an amendment of FASB Statement No. 140 (“Statement No. 166”). Statement No. 166 revises FASB Statement of Financial Accounting Standards No.140, Accounting for Transfers and Extinguishment of Liabilities a replacement of FASB Statement 125 (“Statement No. 140”) and requires additional disclosures about transfers of financial assets, including securitization transactions, and any continuing exposure to the risks related to transferred financial assets. It also eliminates the concept of a “qualifying special-purpose entity”, changes the requirements for derecognizing financial assets, and enhances disclosure requirements. Statement No. 166 is effective prospectively, for annual periods beginning after November 15, 2009, and interim and annual periods thereafter. Although Statement No. 166 has not been incorporated into the Codification, in accordance with ASC 105, the standard shall remain authoritative until it is integrated. The Company does not expect the adoption of Statement No. 166 will have a material impact on its financial position or results of operations.

In September 2009, the FASB has published ASU 2009-12, “Fair Value Measurements and Disclosures (Topic 820) - Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)”. This ASU amends Subtopic 820-10, “Fair Value Measurements and Disclosures – Overall”, to permit a reporting entity to measure the fair value of certain investments on the basis of the net asset value per share of the investment (or its equivalent). This ASU also requires new disclosures, by major category of investments including the attributes of investments within the scope of this amendment to the Codification. The guidance in this update is effective for interim and annual periods ending after December 15, 2009. Early application is permitted. The Company is in the process of evaluating the impact of this standard on its consolidated financial position and results of operations.

In October 2009, the FASB has published ASU 2009-13, “Revenue Recognition (Topic 605)-Multiple Deliverable Revenue Arrangements”, which addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than as a combined unit. Specifically, this guidance amends the criteria in Subtopic 605-25, “Revenue Recognition-Multiple-Element Arrangements”, for separating consideration in multiple-deliverable arrangements. This guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) estimates. This guidance also eliminates the residual method of allocation and requires that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method and also requires expanded disclosures. The guidance in this update is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position and results of operations.

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ASC 105, Generally Accepted Accounting Principles (“ASC 105”) (formerly SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No. 162), reorganized by topic existing accounting and reporting guidance issued by the Financial Accounting Standards Board (“FASB”) into a single source of authoritative generally accepted accounting principles (“GAAP”) to be applied by nongovernmental entities. All guidance contained in the Accounting Standards Codification (“ASC”) carries an equal level of authority. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. Accordingly, all other accounting literature will be deemed “non-authoritative”. ASC 105 is effective on a prospective basis for financial statements issued for interim and annual periods ending after September 15, 2009. The Company has implemented the guidance included in ASC 105 as of July 1, 2009. The implementation of this guidance changed the Company’s references to GAAP authoritative guidance but did not impact the Company’s financial position or results of operations.

In January 2010, the FASB issued Accounting Standards Update No. 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures which amends ASC Topic 820, adding new requirements for disclosures for Levels 1 and 2, separate disclosures of purchases, sales, issuances, and settlements relating to Level 3 measurements and clarification of existing fair value disclosures. ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for the requirement to provide Level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which will be effective for fiscal years beginning after December 15, 2010 (the Company’s fiscal year 2012); early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2009-14 on its financial statements.

3. Property, Plant and Equipment, net

Depreciation expense for the six month ended June 30, 2010 was $99,864.

(b) Construction in progress

Construction in progress represents the expenditure incurred in the development project of a manufacturing plant by a subsidiary in Jiangmen, PRC. As of June 30, 2010, the Company had a balance of $112,885 on the construction. These costs are included on the balance sheet as property, plant and equipment costs. No depreciation will be provided until the plant is completed and operating. No interest has been capitalized in construction in progress for the year.

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The Company believes that the carrying amount of construction in progress is approximate to its fair value.

4. Inventories

The Company’s inventory consists of raw materials held for production. As of June 30, 2010, the Company’s subsidiary in Jiangmen, PRC held inventory of $156,057.

5. Accounts receivable

Accounts receivable consists of receivables on trade as follows:

As of June 30, 2010, the Company’s subsidiaries had total receivables of $121,533. The Company believes that there is no issue of recoverability and the balances receivable are indicative of fair value.

6. Prepaid expenses and other receivables

7. Accounts payable and accrued expenses

8. Due to Shareholders & Directors

Directors of the Company have advanced $539,284 in the form of unsecured, non-interest bearing advances with no due date.

9. Loans payable

As at June 30, 2010, the Company has short term loans on demand of $815,569. The loans bear interest at the rate of 0.5% to 6% per annum.

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Long Term Loan

Convertible Debts

The embedded beneficial conversion features present in the convertible debenture is valued separately at issuance and recognized and measured by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. That amount is calculated as the difference between the conversion price and the fair value of the common stock into which the debenture is convertible, multiplied by the no. of shares. The intrinsic value cannot exceed the proceeds.

10. Going Concern

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), which contemplate the continuation of the Company as a going concern. The Company had a loss for the six month period ended June 30, 2010 of $243,070 and, on June 30, 2010 it had an accumulated deficit of $5,135,003 and a working capital deficit of $1,850,498. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

The future of the Company is dependent upon its attaining profitable operations and raising the capital it will require in order to achieve profitable operations through the issuance of equity securities, borrowings or a combination thereof.

11. Concentrations and Credit Risk

Concentration of credit risk is limited to accounts receivable and is subject to the financial condition of major customers. The Company does not require collateral or other security to support accounts receivable. The Company conducts periodic reviews of its clients’ financial condition and customers’ payment practices to minimize collection risk on accounts receivable.

12. Commitments and Contingencies

(a) Operating Lease Arrangements

Minimum lease payments recognized as an expense under operating leases in respect of the premises and land use right in Hong Kong and PRC during the Six Months Ended June 30, 2010:

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At June 30, 2010, the Company had outstanding commitments for future minimum lease payments under non-cancellable operating leases in respect of premises and land use rights in PRC, which fall due as follows:

Operating leases relate to the Company’s manufacturing premises in PRC with a lease term of 15 years from 1 March 2007, with an option to extend the term. The Company does not have an option to purchase the leased asset at the expiry of the lease period.

(b) Capital Commitments

13. Related Party Transactions

The advances are unsecured, interest free and have no fixed terms of repayment. The respective parties are or were directors of the company.

14. INCOME TAXES

No provision for HK Profits tax has been made in consolidated financial statements as the subsidiaries sustained loss for the year. The current year amount represented under provision of taxation in previous years.

No provision for PRC income tax has been made in the consolidated financial statements as the PRC subsidiary sustained loss during the year. No provision for deferred taxation has been recognized in the financial statements as the amount involved is insignificant.

No provision for US tax has been made for any of the period presented as the Group does not have any assessable profits during the period.

No deferred tax is recognized in the consolidated balance sheets as of June 30, 2010.

15. Share Capital

On January 15, 2010, the Company issued 500,000 shares of our common stock to the holder of a convertible debenture dated May 15, 2009 upon conversion of the principal and interest due under that convertible debenture, at a conversion price of $0.10 per share.

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On February 2, 2010, the Company issued an aggregate of 2,331,955 shares of our common stock to two investors in consideration of the debt owed by our company to the investors of an aggregate principal amount of $857,000 and an aggregate amount of accrued interest in the amount of $56,893, at a price of $0.3919 per share.

On February 22, 2010, the Company issued 3,651,672 shares of our common stock to one person upon the conversion of the remaining principal ($204,940) and accrued interest ($38,626.57) due under a convertible debenture previously issued by us dated March 3, 2008, at a conversion price of $0.0667 per share.

On April 28, 2010, the Company issued 160,872 shares of our common stock to the holder of a convertible debenture dated July 31, 2009 upon conversion of the principal and interest due under that convertible debenture, at a conversion price of $0.10 per share.

16. Legal proceedings

The Company is involved in various unresolved legal actions, administrative proceedings and claims in the ordinary course of business. Although it is not possible to predict with certainty the outcome of these unresolved actions, the Company believes these unresolved legal actions will not have a material effect on its financial position or results of operation.

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

This report contains forward-looking statements. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “intend”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our company’s or our industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

In this report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

As used in this report and unless otherwise indicated, the terms “we”, “us” and “our” refer to Biopack Environmental Solutions Inc. and our wholly-owned subsidiaries.

The following discussion and analysis of financial condition and results of operations provide a narrative about our financial performance and condition that should be read in conjunction with the unaudited consolidated financial statements and related notes thereto included in this report.

Our Business

We develop, manufacture, distribute and market bio-degradable food containers and disposable industrial packaging for consumer products. We supply our biodegradable food containers and industrial packaging products to multinational corporations, supermarket chains and restaurants located across North America, Europe and Asia.

We manufacture our products in our own factory, known as Biopark, which is located in Jiangmen City in the PRC.

Proposed Sale of Our Subsidiaries

On July 9, 2010, Biopack Environmental Limited, a wholly-owned subsidiary of Starmetro Group Limited, which is our wholly-owned subsidiary, entered into a share purchase agreement with Well Talent Technology Limited, a company incorporated in the British Virgin Islands, whereby Well Talent agreed to purchase:

• all of the issued and outstanding shares of Roots Biopark Limited (which wholly owns Jiangmen Roots Biopack Ltd.) and Roots Biopack (Intellectual Property) Limited; and

• the shareholder’s loan in the amount of HK$26,017,413.91 (approximately US$3,348,444) advanced by Biopack Environmental Limited to Roots Biopark Limited and the shareholder’s loan of HK$193,442.56 (approximately US$24,896) advanced by Biopack Environmental Limited to Roots Biopack (Intellectual Property) Limited.

The total consideration payable to Biopack Environmental Limited for the sale of these shares and the shareholder’s loans is HK$6,800,000 (approximately US$875,161). The consideration of HK$6,800,000 is payable on the completion of the sale:

• by way of cash payment of HK$2,800,000 (approximately US$360,360); and

• by way of set-off of the loans in the amount of HK$4,000,000 (approximately US$514,800) advanced by Well Talent to Biopack Environmental Limited.

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At the completion of the sale, Well Talent also agreed to release Gerald Lau, our president and director, from his obligations as a guarantor over the HK$4,000,000 loans advanced by Well Talent to Biopack Environmental Limited.

The sale of these shares and the shareholder’s loans is conditional upon, among other things,:

• obtaining approval from our stockholders of the sale;

• Biopack Environmental Limited, Well Talent, Roots Biopark Limited, and Roots Biopack (Intellectual Property) Limited entering into a deed of assignment, whereby Biopack Environmental Limited will assign the shareholder’s loans to Well Talent; and

• Biopack Environmental Limited entering into a distributorship agreement with Well Talent. The distributorship agreement grants Biopack Environmental Limited the exclusive right to sell bio-degradable food container and packaging product produced by Roots Biopark Limited and Roots Biopack (Intellectual Property) Limited in Europe, North America, Australia, Africa, South America and Hong Kong for a period of 12 months.

The sale of all of the issued and outstanding shares of Roots Biopark Limited and Roots Biopack (Intellectual Property) Limited will constitute the sale of all of our operating assets.

Result of Operations for the three months ended June 30, 2010 as compared to the three months ended June 30, 2009.

During the three months ended June 30, 2010 we had a net loss of $272,036, compared to net loss of $565,266 for the three months ended June 30, 2009. The decrease in net loss for the three months ended June 30, 2010 was primarily due to decreased interest expense compare to the same period in 2009.

Our loss from operation was $276,727 for the three months ended June 30, 2010 compared to $377,697 for the three months ended June 30, 2009. The decrease in the amount of our operating loss was due primarily to decreased gross loss from selling our products.

Net Sales and Cost of Sales

Net sales for the three months ended June 30, 2010 were $166,088, compared to net sales of $463,101 for the three months ended June 30, 2009. The decrease in sales is primarily attributable to the end of fruit season for the second quarter as well as the slowing down of the European economy.

Cost of sales for the three months ended June 30, 2010 was $183,203, which provided a gross loss of $77,115, compared to cost of sales of $523,334 for the three months ended June 30, 2009, which provided a gross loss of $120,233 for the three months ended June 30, 2009. The gross loss is primarily due to the increasing raw material price in China as a result of the draught happened in 2009, as well as increasing labour cost in China due to the stimulation package China government has injected into the infrastructure projects which created a shortage of labour force for 2010.

Operating Expenses

Operating expenses for the three months ended June 30, 2010 were $199,612, compared to $257,464 for the three months ended June 30, 2009. The decrease in operating expenses was due to the decrease in general and administrative expenses as a result of less sales and marketing expenses.

Our general and administrative expenses for the three months ended June 30, 2010 were $149,931 compared to $251,476 for the three months ended June 30 2009. The decrease in general and administrative expenses in 2010 was primarily due to decreased sales and marketing expenditures compare to the same period in 2009, even though we expanded our sales and marketing efforts to include the North America market in addition to the European market during the three months ended June 30, 2010.

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Our depreciation expenses for the three months ended June 30, 2010 were $49,681 compare to $5,988 for the three months ended June 30 2009. The increase in depreciation expenses was due to the fact that we have now manufactured most of our product by our own factory facility rather than by OEM during the three months ended June 30, 2009.

Our legal and professional expenses for the three months ended June 30, 2010 were $12,788, compared to $10,078 for the three months ended June 30, 2009. Legal expenses incurred are related to U.S. regulatory compliance and raising capital.

Interest Expenses

We incurred interest expense of $11,333 during the three months ended June 30, 2010, compared to $188,220 during the three months ended June 30, 2009. Interest expense was incurred primarily due to interest expenses accrued on long term and short term debt. The decrease in interest expense was due primarily to the decrease in the principal amount of our debt for the three month period ended June 30, 2010, compared to the three month period ended June 30, 2009.

Result of Operations for the six months ended June 30, 2010 as compared to the six months ended June 30, 2009

During the six months ended June 30, 2010 we had a net loss of $243,070, compared to net loss of $804,453 for the six months ended June 30, 2009. The decrease in net loss for the six months ended June 30, 2010, was contributed by other income of $347,807 which was primarily due to over accrued interest expense in previous period being written back.

Our loss from operation was $573,239 for the six months ended June 30, 2010 compared to $579,829 for the six months ended June 30, 2009. The decrease in the amount of our operating loss was due primarily to decreased gross loss from selling our products.

Net Sales and Cost of Sales

Net sales for the six months ended June 30, 2010 were $174,727, compared to net sales of $663,498 for the six months ended June 30, 2009. The decrease in sales is primarily attributable to the end of fruit season for the second quarter as well as the slowing down of the European economy.

Cost of sales for the six months ended June 30, 2010 was $251,406, which provided a gross loss of $76,679, compared to cost of sales of $847,148 for the six months ended June 30, 2009, which provided a gross loss of $183,650 for the six months ended June 30, 2009. The gross loss is primarily due to the increasing raw material price in China as a result of the draught happened in 2009, as well as increasing labour cost in China due to the stimulation package China government has injected into the infrastructure projects which created a shortage of labour force for 2010.

Operating Expenses

Operating expenses for the six months ended June 30, 2010 were $496,560, compared to $396,179 for the six months ended June 30, 2009. The increase in operating expenses was due to the increase in general and administrative expenses as well as depreciation expenses.

Our general and administrative expenses for the six months ended June 30, 2010 were $396,696 compared to $385,140 for the six months ended June 30 2009. The general and administrative expenses in 2010 was consistent with the same period in 2009, primarily contributed by our sales and marketing expenditures as the result of our having expanded our sales and marketing efforts to include the North America market in addition to the European market.

Our depreciation expenses for the six months ended June 30, 2010 were $99,864 compare to $11,039 for the six months ended June 30 2009. The increase in depreciation expenses was due to the fact that we have now manufactured most of our product by our own factory facility rather than by OEM during the six months ended June 30, 2009.

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Our legal and professional expenses for the six months ended June 30, 2010 were $21,244, compared to $20,088 for the six months ended June 30, 2009. Legal expenses incurred are related to U.S. regulatory compliance and raising capital.

Interest Expenses

We incurred interest expense of $22,756 during the six months ended June 30, 2010, compared to $225,275 during the six months ended June 30, 2009. Interest expense was incurred primarily due to interest expenses accrued on long term and short term debt. The decrease in interest expense was due primarily to the decrease in the principal amount of our debt for the six month period ended June 30, 2010, compared to the six month period ended June 30, 2009.

Liquidity and Capital Resources

Our principal cash requirements are for daily working capital, manufacturing and installation of plant and machinery at our leased factory in Jiangmen City, PRC. On June 30, 2010 we had cash and cash equivalents of $115,066, compared to $3,997 at December 31, 2009. We estimate that our operating expenses over the next 12 months will be approximately $75,000 per month. Therefore, we estimate that we will need approximately $900,000 over the next 12 months in order to continue our operations. We hope to be able to source most of this money from our sales revenue during the next 12 months.

As at June 30, 2010 we had a working capital deficit of $1,850,498, compared to a working capital deficit of $2,250,368 at December 31, 2009. The increase in working capital for the period was primarily financed by the issuance of shares for debts redemption and loans in the amount of HK$4,000,000 (approximately US$514,800) from Well Talent Technology Limited.

Cash Flow Used in Operating Activities

For the six months ended June 30, 2010 our operating activities provided net cash of $76,736, compared to $318,305 used for the six months ended June 30, 2009. The increase in cash outflow was primarily due to a reduction in trade deposits, decreases in receivables and increases in payables and accrual expense which were primarily due to better credit terms negotiated with suppliers.

Cash Flow Used in Investing Activities

For the six months ended June 30, 2010 investing activities used net cash of $30,645 compared to $39,245 for the six months ended June 30, 2009. The net cash used in investing activities was primarily due to the purchase of additional equipment for our factory.

Cash Flow Provided by Financing Activities

For the six months ended June 30, 2010, financing activities provided cash of $64,972 compared to $158,000 cash used for the six months ended June 30, 2009. The cash flow provided in financing activities was primarily from debt notes issuance.

During the six month period ended June 30, 2010, we engaged in the following financing transactions:

On January 15, 2010, we issued 500,000 shares of our common stock to the holder of a convertible debenture dated May 15, 2010 upon conversion of the principal and interest due under that convertible debenture, at a conversion price of $0.10 per share.

On February 2, 2010, we issued an aggregate of 2,331,955 shares of our common stock to two investors in consideration of the debt owed by our company to these investors, which had an aggregate principal amount of $857,000, and an aggregate amount of accrued interest in the amount of $56,893, at a price of $0.3919 per share.

On February 22, 2010, we issued 3,651,672 shares of our common stock to one person upon the conversion of the remaining principal ($204,940) and accrued interest ($38,626.57) due under a convertible debenture previously issued by us dated March 3, 2009, at a conversion price of $0.0667 per share.

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On April 28, 2010, we issued 160,872 shares of our common stock to the holder of a convertible debenture dated July 31, 2009 upon conversion of the principal and interest due under that convertible debenture, at a conversion price of $0.10 per share.

On April 22, 2010, we entered into a loan agreement with Well Talent Technology Limited, whereby Well Talent loaned HK$2,000,000 (approximately US$257,400) to us. Well Talent has the right to terminate or demand repayment at any time upon giving written notice to us. Notwithstanding this right, we must repay the loan within 6 months from the date of the loan, subject to the parties agreeing to a 3 month extension. There is no interest on the loan for the first six months and if the parties agree to the 3 month extension, the loan is subject to interest at a rate of 1% per month.

On June 3, 2010, we entered into another loan agreement with Well Talent, whereby Well Talent loaned additional HK$2,000,000 (approximately US$257,400) to us. The terms of this loan agreement are substantially the same as the loan agreement dated April 22, 2010.

Gerald Lau, our president and director, personally guaranteed to Well Talent on these two loans.

On June 25, 2010, a lender unrelated to our company loaned us a total of $400,000. As evidence of the loan, we have executed and delivered a promissory note in the principal amount of $400,000, to be paid on demand with interest at 0.5% per annum.

Capital Expenditures

During the three month period ended June 30, 2010, we spent $32,872 developing tailor made moulds for our production machines in order to manufacture our client’s products. As of June 30, 2010, we did not have any material commitments for capital expenditures.

Going Concern

The accompanying consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”), which contemplate the continuation of our company as a going concern. We had a net loss for the six months ended June 30, 2010 of $243,070 and, on June 30, 2010 we had an accumulated deficit of $5,135,003 and a working capital deficit of $1,850,498. These conditions raise substantial doubt as to our company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should our company be unable to continue as a going concern.

The future of our company is dependent upon its attaining profitable operations and raising the capital it will require in order to achieve profitable operations through the issuance of equity securities, borrowings or a combination thereof.

Off-Balance Sheet Arrangements

Other than as disclosed below, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

On April 22, 2010, we entered into a loan agreement with Well Talent Technology Limited, whereby Well Talent loaned HK$2,000,000 (approximately US$257,400) to us. Well Talent has the right to terminate or demand repayment at any time upon giving written notice to us. Notwithstanding this right, we must repay the loan within 6 months from the date of the loan, subject to the parties agreeing to a 3 month extension. There is no interest on the loan for the first six months and if the parties agree to the 3 month extension, the loan is subject to interest at a rate of 1% per month.

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On June 3, 2010, we entered into another loan agreement with Well Talent, whereby Well Talent loaned additional HK$2,000,000 (approximately US$257,400) to us. The terms of this loan agreement are substantially the same as the loan agreement dated April 22, 2010.

Gerald Lau, our president and director, personally guaranteed to Well Talent on these two loans.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable.

Item 4T. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president and chief executive officer (also our principal executive officer) and our secretary, treasurer and chief financial officer (also our principal financial and accounting officer) to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of June 30, 2010, the end of the three-month period covered by this quarterly report, our president and chief executive officer (also our principal executive officer) and our secretary, treasurer and chief financial officer (also our principal financial and accounting officer) carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president and chief executive officer (also our principal executive officer) and our secretary, treasurer and chief financial officer (also our principal financial and accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

There have been no changes in our internal control over financial reporting that occurred during the three-month period ended June 30, 2010 that have materially or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Other than as disclosed in our annual reports on Form 10-K for the years ended 2007, 2008 and 2009, we know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder are an adverse party or has a material interest adverse to us. There have been no material changes to the litigation described in our annual reports on Form 10-K for the years ended 2007, 2008 and 2009 during the six month period ended June 30, 2010 or from July 1, 2010 until the date of this quarterly report on Form 10-Q.

Item 1A. Risk Factors.

Our common shares are considered speculative during the development of our business operations. Prospective investors should consider carefully the risk factors set out below.

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Risks Related to Our Business

Our consolidated financial statements have been prepared assuming that we will continue as a going concern.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), which contemplate the continuation of our company as a going concern. We made a net loss for the six months ended June 30, 2010 of $243,070 and, on June 30, 2010 we had an accumulated deficit of $5,135,003 and a working capital deficit of $1,850,498. We anticipate that we will continue to incur operating expenses that will only partially be offset by sales revenues. On June 30, 2010, we had cash of $115,060. Our average operating expenses is $75,000 per month. We estimate that our operating expenses over the next twelve months will be approximately $900,000. We are uncertain these expenses can be offset by our sales revenues. As we cannot assure a lender that our operation will become profitable, we will probably find it difficult to raise debt financing from traditional lending sources. We have traditionally raised our operating capital from sales of equity and, more recently, convertible debt securities but there can be no assurance that we will be able to continue to do so. If we cannot raise the money that we need in order to continue to operate, we may be forced to delay, scale back or even eliminate some or all of our activities. If any of these were to occur, our business could fail. These circumstances raise substantial doubt about our ability to continue as a going concern, as described in the consolidated financial statements for the three-month period ended June 30, 2010, which are included in our quarterly report on Form 10-Q. Although our consolidated financial statements raise substantial doubt about our ability to continue as a going concern, they do not include any adjustments relating to recoverability and classification of recorded assets, or the amounts or classifications of liabilities that might be necessary in the event our company cannot continue in existence.

We operate in a competitive industry and our failure to compete effectively may adversely affect our ability to generate revenue.

The disposable packaging industry is competitive and subject to frequent product introductions with improved price and or performance characteristics. Many companies, including those who manufacture their disposable packaging products out of plastic, paper or polystyrene, have greater financial, research and development, marketing and sales resources, offer a broader product line, have better brand recognition and have a larger customer base than we do. Increased competition in the disposable packaging industry could result in significant price competition, reduced profit margins or loss of market share, any one of which could have a material adverse effect on our ability to generate revenues and successfully operate our business.

Established manufacturers in the disposable packaging industry could reduce their prices or engage in advertising or marketing campaigns designed to protect their respective market shares, improve their ability to recycle their existing products or they could develop new environmentally friendly products, which could render our products obsolete and could negatively impact our ability to compete.

Our competitors may reduce their prices or engage in advertising or marketing campaigns designed to protect their respective market shares and impede the market acceptance of our disposable packaging products. We expect that many of our competitors may actively seek competitive alternatives to our disposable packaging products. The development of competitive disposable packaging products could render our disposable packaging products obsolete and could impair our ability to compete, which would have an adverse effect on our business, financial condition and results of operations.

We may suffer significant losses resulting from general product liability, which may harm our financial condition and result of operations.

As a manufacturer of disposable packaging products we are at risk for potentially significant product liability and associated losses. We cannot predict or protect against all potential losses or liabilities that may arise relating to our disposable food container and industrial packaging products. We maintain insurance against many, but not all, potential losses and liabilities, in accordance with customary industry practice and in amounts we believe to be necessary. If any losses or liabilities are not covered by insurance, or if the insurance is insufficient, we would be required to satisfy these losses and liabilities and our financial condition and results of operations may be adversely affected.

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We rely on a number of different suppliers to supply us with the materials that we require to manufacture our disposable packaging products. We could be adversely affected by an increase in our suppliers prices or a significant decline in our suppliers financial condition. As a result, our business may fail and investors may lose their entire investment.

We rely on a number of different suppliers to supply our company with the materials that we require to manufacture our disposable packaging products. We could be adversely affected by an increase in any one of our suppliers prices or a significant decline in any one of our suppliers financial condition. If the relationship with anyone one of our suppliers is terminated and we are unsuccessful in establishing a relationship with an alternative supplier who offers similar products at similar prices, our results of operations could be adversely affected. As a result, our business may fail and investors may lose their entire investment.

We rely on a number of distributors to distribute our disposable packaging products to customers. We could be adversely affected by an increase in our suppliers prices or a significant decline in our suppliers financial condition. As a result, our business may fail and investors may lose their entire investment.

We rely on a number of distributors to distribute our disposable packaging products to our customers. We could be adversely affected by an increase in our distributors prices of distribution services or a significant decline in our distributors financial condition. If the relationships with any one of our distributors is terminated and we are not successful in establishing a relationship with an alternative distributor who offers similar services at similar prices, our results of operations could be adversely affected, our business may fail and investors may lose their entire investment.

We rely on certain strategic raw materials for our operations. If the raw materials we use to manufacture our disposable packaging products increase substantially in price or for whatever reason becomes unavailable to us our business could fail and investors could lose their entire investment.

Although we believe that there are sufficient quantities of the raw materials we use to manufacture our disposable packaging products, the continuous existence and availability and price of these raw materials may be affected by natural disasters, domestic and world markets, political conditions, changes in government regulation and war or other outbreak of hostilities. If the raw materials we use to manufacture our disposable packaging products increase substantially in price or for any reason become unavailable to us our business could fail and investors could lose their entire investment.

Substantially all of our assets, all of our directors and all of our executive officers reside outside the United States. As a result it may be difficult for investors to enforce within the United States any judgments obtained against us or any of our directors or executive officers.

Substantially all of our assets are located outside the United States and we do not currently maintain a permanent place of business within the United States. In addition, all of our directors and executive officers are nationals and residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against us or our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Consequently, investors may be effectively prevented from pursuing remedies under United States federal securities laws against us or any of our directors or executive officers.

Our ability to hire and retain qualified personnel will be an important factor in the success of our business and a failure to hire and retain key personnel may result in our inability to manage and implement our business plan.

Our ability to hire and retain qualified personnel will be an important factor in the success of our business. The competition for qualified personnel in the disposable packaging industry in which we operate is high. In addition, in order to manage growth effectively, we must implement management systems and continue to recruit and train new employees. We may not be able to attract and retain the necessary qualified personnel. If we are unable to retain or to hire qualified personnel as required, we may not be able to adequately manage and implement our business plan.

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Our international operations subject us to a number of risks, including unfavorable political, regulatory, labor and tax conditions in foreign countries. We may not be able to develop and implement policies and strategies that will be effective in each location where we do business and as a result our business could fail and investors could lose their entire investment.

Our international operations subject us to the legal, political, social and regulatory requirements and economic conditions of many jurisdictions. Risks inherent to international operations include the following:

• difficulty in enforcing agreements in foreign legal systems;

• foreign countries may impose additional withholding taxes or otherwise tax our foreign income, impose tariffs or adopt other restrictions on foreign trade and investment, including currency exchange controls;

• fluctuations in exchange rates may affect product demand and may adversely affect our profitability in United States dollars to the extent the price of our products and cost of raw materials is denominated in a foreign currency;

• Inability to obtain, maintain or enforce intellectual property rights;

• Changes in general economic and political conditions in the countries in which we operate;

• unexpected adverse changes in foreign laws or regulatory requirements, including those with respect to export duties and quotas;

• difficulty with staffing and managing widespread operations;

• trade barriers such as export requirements, tariffs, taxes and other restrictions and expenses, which could increase the prices of our products and make us less competitive in some countries; and,

• difficulty of and costs relating to compliance with the different commercial and legal requirements of the overseas markets in which we offer and sell our products.

Our international operations require us to respond to rapid changes in market conditions in these countries. The success of our international operations depends, in part, on our ability to succeed in differing legal, regulatory, economic, social and political conditions. We may not be able to develop and implement policies and strategies that will be effective in each location where we do business and as a result our business could fail and investors could lose their entire investment.

In addition, we source all of our manufacturing in China. China is experiencing very rapid economic growth which could have a negative impact on our business activities there. These include worsening inflation, fluctuations in the yuan, and challenges to the nation's electric power supply capacity. In addition, developments in China's financial system and current legislative trends could pose future business risks, including changes to its laws that might prohibit or restrict foreign ownership.

The limitation of our available manufacturing capacity due to significant disruption in our manufacturing operation could have a material adverse effect on sales revenue and results of operations and financial condition.

We manufacture our disposable packaging products using complex processes that require technologically advanced equipment and continuous modification to improve yields and performance. From time to time, we have experienced minor disruptions in our manufacturing process as a result of power outages or equipment failures. If production at our manufacturing plant is disrupted for any number of reasons, manufacturing yields may be adversely affected and we may be unable to meet our customers requirements. Consequently, our customers may purchase disposable food packaging products from our competitors. This could result in a significant loss of revenues and damage to our customer relationships, which could materially adversely effect our business, results of operations or financial condition.

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Our disposable packaging products may be perceived poorly by environmental groups, customers and government regulators, which could have an adverse effect on our business, causing us to cease operations.

Our success depends substantially on our ability to manufacture disposable packaging products that are less harmful to the environment than disposable packaging products, which are made from plastic, paper or polystyrene. Although we believe that our disposable packaging products are less harmful to the environment than other disposable packaging products, which are made from paper, plastic and polystyrene, our disposable packaging products may also possess characteristics that environmental groups could perceive as negative for the environment. When biodegradable waste is disposed of in landfills, it breaks down under uncontrolled anaerobic conditions. This produces landfill gas which, if not harnessed, escapes into the atmosphere. Landfill gas contains methane, a more harmful greenhouse gas than carbon dioxide. The European Union Landfill Directive puts key requirements on member states for the management of biodegradable waste in order to stop global warming. Whether, on balance, our disposable packaging products are better for the environment than other disposable packaging products, which are made from either plastic, paper or polystyrene is a somewhat subjective judgment. Environmental groups, customers, and governmental regulators may not agree that our disposable packaging products have an advantage over other disposable packaging products, which are made from plastic, paper or polystyrene. If our disposable packaging products are perceived as being harmful to the environment, our revenues will likely suffer and as a result we could go out of business.

We have a stable customer base; however, loss of, or material financial weakness of, our largest distributor could adversely affect our financial condition and results of operations until such business is replaced and no assurances can be made that we would be able to regain or replace any lost customers. This could cause us to go out of business and investors could lose their entire investment.

We rely on one distributor for approximately 80% of our sales. The loss of this distributor would adversely affect revenues and results of operations, and the loss of any other significant customers could adversely affect revenues and results of operations unless and until the lost business is replaced. We believe that it is unlikely that we could replace this one distributor. If we were to lose this distributor and we did not replace it, we could be forced to cease operations and investors in our company could lose their entire investment.

Our business is subject to complex health, safety and environmental laws and industry regulations, which require and will continue to require significant expenditures to remain in compliance with such laws and regulations currently and in the future. Costs of such compliance will likely reduce our probability.

Our business is subject to complex health, safety and environmental laws and industry regulations, which require and will continue to require significant expenditures to remain in compliance with such laws and regulations currently and in the future. Unanticipated government enforcement action, or changes in health, safety and environmental laws and industrial regulations could result in higher costs which may negatively affect our profitability.

Because our executive officers, directors and certain shareholder control a high percentage of our voting stock, such insiders may have the ability to influence matters affecting our shareholders.

Our executive officers and directors, in the aggregate, beneficially own 25.52% of the issued and outstanding shares of our common stock. In addition, Begonia Participation Corp. owns 1,900,000 shares of our common stock, 620,000 shares of our Series A Preferred Stock and 1,000,000 shares of our Series B Preferred Stock. Each share of Series A Preferred Stock and each share of Series B Preferred Stock is entitled to 30 votes at any meeting of our stockholders and is convertible, at any time at the option of the holder, into 5 shares of our common stock. Therefore, Begonia Participation Corp. has approximately 55.64% of the voting power of our shareholders. As a result, they have the ability to influence matters affecting our shareholders, including the election of our directors, the acquisition or disposition of our assets, and the future issuance of our shares. Because our executive officers, directors and Begonia Participation Corp. control such shares, investors may find it difficult to replace our management if they disagree with the way our business is being operated. Because the influence by these insiders could result in management making decisions that are in the best interest of those insiders and not in the best interest of the investors, you may lose some or all of the value of your investment in our common stock.

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Risks Related to Our Common Stock

A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our ability to continue operations.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because a portion of our continued operations will be financed through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our operations. Such reductions may force us to reallocate funds from other planned uses and may have a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. If our stock price declines, we can offer no assurance that we will be able to raise additional capital or generate funds from operations sufficient to meet our obligations. If we are unable to raise sufficient capital in the future, we may not be able to have the resources to continue our normal operations.

The market price for our common stock may also be affected by our ability to meet or exceed expectations of analysts or investors. Any failure to meet these expectations, even if minor, may have a material adverse effect on the market price of our common stock.

If we issue additional shares in the future, it will result in the dilution of our existing shareholders.

Our certificate of incorporation, as amended, authorizes the issuance of up to 50,000,000 shares of common stock with a par value of $0.0001 and 10,000,000 shares of preferred stock with a par value of $0.001. Our board of directors may choose to issue some or all of such shares to provide additional financing in the future. The issuance of any such shares will result in a reduction of the book value and market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will cause a reduction in the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our company.

Trading of our stock may be restricted by the Securities Exchange Commission's penny stock regulations, which may limit a stockholder's ability to buy and sell our stock.

The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a stockholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

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Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations.

Our common stock currently trades on a limited basis on the OTC Bulletin Board. Trading of our stock through the OTC Bulletin Board is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in our stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

Risk Factors Related to the Proposed Sale of Our Subsidiaries

We will incur certain costs in connection with the proposed sale of our subsidiaries, whether or not we complete it.

We expect to incur certain costs related to the proposed sale of our subsidiaries. These expenses include financial advisory, legal and accounting fees and expenses, filing fees, and other related charges. We may also incur additional unanticipated expenses in connection with the transaction. A portion of the costs related to the proposed sale, such as legal and accounting fees, will be incurred regardless of whether the transaction is completed. These expenses may affect our business operations going forward.

Failure to complete the proposed sale of our subsidiaries could negatively impact our stock price and future business and operations.

If the proposed sale of our subsidiaries is not completed for any reason, we may be subject to a number of material risks, including the following:

• we may be required to pay the liabilities of our subsidiaries and not have the funds to do so;

• the price of our common stock may decline to the extent that the current market price of our common stock reflects an assumption that the proposed sale will be completed; and

• we must pay our accrued costs related to the proposed sale, such as legal and accounting fees, even if the proposed sale is not completed.

We expect that we will be dependant on Well Talent Technology Limited to obtain our products.

If the transactions contemplated under the share purchase agreement dated July 9, 2010 with Well Talent Technology Limited are completed, we expect that we will be dependant on Well Talent to supply our products under the distribution agreement contemplated by the share purchase agreement. Failure by Well Talent to supply products, for whatever reason, would adversely affect our profit margins and our ability to deliver our products to our customers. We will have no control over Well Talent and hence the quality of our product. Further, the proposed distribution agreement will be terminated 12 months after the entry. If Well Talent does not renew the proposed distribution agreement, we may be unable to obtain any products for resale.

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

None.

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Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Removed and Reserved).

Item 5. Other Information.

None.

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Item 6. Exhibits.

32

33

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*Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BIOOPACK ENVIRONMENTAL SOLUTIONS INC.

By: /s/ Gerald Lau
Gerald Lau
President, Chief Executive Officer and Director
(Principal Executive Officer)
Date: August 12, 2010

By: /s/ Sean Webster
Sean Webster
Chief Financial Officer,
Secretary, Treasurer and Director
(Principal Financial Officer and Principal Accounting Officer)
Date: August 12, 2010