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Tristar Wellness Solutions, Inc. – ‘PREM14A’ for 8/30/10

On:  Thursday, 8/5/10, at 1:48pm ET   ·   For:  8/30/10   ·   Accession #:  1062993-10-2529   ·   File #:  0-29981

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 8/05/10  Tristar Wellness Solutions, Inc.  PREM14A     8/30/10    1:1.1M                                   Newsfile Corp/FA

Document/Exhibit                   Description                      Pages   Size 

 1: PREM14A     Preliminary Proxy Statement                         HTML    986K 

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

SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12

BIOPACK ENVIRONMENTAL SOLUTIONS INC.
(Name of Registrant as Specified In Its Charter)

______________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Dear Stockholder:

Our special meeting of stockholders will be held on Monday, August 30, 2010, at 10:00 a.m., local time, at the office of our law firm, Clark Wilson LLP, located at Suite 800, 885 West Georgia Street, Vancouver, British Columbia V6C 3H1, Canada, for the following purposes:

These items of business are more fully described in the proxy statement accompanying this notice.

Our board of directors has fixed the close of business on August 9, 2010 as the record date for the determination of the stockholders entitled to notice of, and to vote at, the special meeting or any adjournment thereof. Only the stockholders of record on the record date are entitled to vote at the special meeting.

Whether or not you plan on attending the special meeting, we ask that you complete, date, sign, and return the enclosed proxy card as promptly as possible. If your shares are held of record by a broker, bank, or other nominee, please follow the voting instruction sent to you by your broker, bank, or other nominee in order to vote your shares.

Even if you have voted by proxy, you may still vote in person if you attend the special meeting. Please note, however, that if your shares are held of record by a broker, bank, or other nominee and you wish to vote at the special meeting, you must obtain a valid proxy issued in your name from that record holder.

Sincerely,

By Order of the Board of Directors

This summary highlights selected information from this proxy statement and may not contain all of the information that is important to you. To understand the proposed transaction fully, and for a more complete description of the legal terms of the share purchase agreement, you should carefully read this entire proxy statement and a copy of the share purchase agreement attached as Schedule “A” hereto. We have included page references in parentheses to direct you to the appropriate place in this proxy statement for a more complete description of the topics presented in this summary.

In this proxy statement and unless otherwise indicated, the terms “we”, “us” and “our” refer to Biopack Environmental Solutions Inc. and our wholly-owned subsidiaries. For your convenience, we have included a company organization chart on page 8, below. References to HK$ means Hong Kong dollars and references to US$ means United States Dollars. Any conversion of HK$ to US$ is done at an exchange rate of US$1 equals HK$7.77, as at July 12, 2010.

This proxy statement and the proxy card are first sent or given to our stockholders on or about <>, 2010.

Summary Term Sheet

Purpose of the Special Meeting

At the special meeting, our stockholders will be asked consider and vote on the resolution (the “Resolution”) to approve the sale (the “Sale”) of all of our shares of Roots Biopark Ltd. (“RBL”) and Roots Biopack (Intellectual Property) Limited (“BPIPL”) and certain shareholder’s loans held by Biopack Environmental Limited (the “Vendor”) to Well Talent Technology Limited (the “Purchaser”) pursuant to a share purchase agreement dated as of July 9, 2010 (the “Share Purchase Agreement”).

Parties to the Share Purchase Agreement (page 7)

• Vendor: Biopack Environmental Limited, a company incorporated in Hong Kong and a wholly-owned subsidiary of Starmetro Group Limited, which is a wholly-owned subsidiary of Biopack Environmental Solutions Inc..

• Purchaser: Well Talent Technology Limited, a company incorporated in the British Virgin Islands.

Subsidiaries Being Sold (page 11)

• Roots Biopark Ltd. (“RBL”) serves as an investment holding company which holds Jiangmen Roots Biopack Ltd. (“Jiangmen”). Jiangmen is an investment holding company for our manufacturing plant located in Jiangmen, China.

• Roots Biopack (Intellectual Property) Limited (“RBIPL”) serves as a vehicle for the patent and trademark registration of our biodegradable food container and industrial packaging products.

• RBL and RBIPL own all of our operating assets.

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Shareholder Loans (page 11)

• The Vendor has loaned HK$26,017,413.91 (approximately US$3,348,444), to RBL and HK$193,442.56 (approximately US$24,896) to RBIPL (collectively, the “Shareholder Loans”). The Vendor has agreed to sell the Shareholder Loans to the Purchaser and at the closing of the Sale, the Vender, Purchaser, RBL, and RBIPL agreed to enter into a deed of assignment, whereby the Vendor will assign the Shareholder Loans to the Purchaser.

Consideration (page 12)

• The Purchaser has agreed to deliver HK$2,800,000 (approximately US$360,360) in cash on closing and to set-off two outstanding loans of HK$2,000,000 made on April 22, 2010 and June 3, 2010 for a total of HK$4,000,000 (approximately US$514,800) owed by the Vendor to the Purchaser (the “Loans”) and release Gerald Lau, President and Chief Executive Officer of our company and a director of our company and RBL, from his personal guarantee of the Loans. The total purchase price is HK$6,800,000 (approximately US$875,161).

Reasons for the Sale (page 13)

• The Sale will allow us to focus on promoting and selling biodegradable food container and packaging products. Prior to approving the Sale, our board of directors considered the possible effect each of the various alternative ways would maximize stockholder value. Further, if we do not complete the Sale, it is unlikely that we will be able to continue as a going concern.

Approval of Stockholders (page 13)

• The Resolution requires an affirmative vote from the stockholders holding shares entitled to 45,380,553 votes at the special meeting.

Distributorship Agreement (page 10)

• In connection with the Share Purchase Agreement, we plan to enter into a distributorship agreement (the “Distributorship Agreement”) with the Purchaser. The Distributorship Agreement grants us the exclusive right to sell the bio-degradable food container and packaging product in Europe, North America, Australia, Africa, South America and Hong Kong for a period of 12 months.

Effect of Transaction (page 8)

• After the Sale, we will continue to promote and sell bio-degradable food container and packing products but will not longer be involved in the manufacturing of those products.

Questions and Answers about the Special Meeting of Stockholders

Why am I receiving these materials?

Our board of directors is soliciting proxies for use at the special meeting of stockholders to be held on Monday, August 30, 2010, at 10 a.m., local time, at the office of our law firm, Clark Wilson LLP, located at Suite 800, 885 West Georgia Street, Vancouver, British Columbia V6C 3H1, Canada, or at any adjournment of the special meeting.

What is included in these materials?

These materials include:

• the notice of the special meeting of stockholders;
• this proxy statement for the special meeting of stockholders; and

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• the proxy card.

Important Notice Regarding the Availability of Proxy Materials
for the Stockholder Meeting to be Held on August 30, 2010

The notice of the special meeting of stockholders and this proxy statement for the special meeting of stockholders are also available at http://www.biopackenvironmental.com/investor_relations_sec.php.

What do I need to do now?

We urge you to carefully read and consider the information contained in this proxy statement. We request that you cast your vote on the proposal described in this proxy statement. You are invited to attend the special meeting, but you do not need to attend the special meeting in person to vote your shares. Even if you do not plan to attend the special meeting, please complete, date, sign and return the enclosed proxy card.

Who can vote at the special meeting?

Our board of directors has fixed the close of business on August 9, 2010 as the record date for the determination of the stockholders entitled to notice of, and to vote at, the special meeting or any adjournment. If you were a stockholder of record on the record date, you are entitled to vote at the special meeting.

As of the record date, 42,161,104 shares of our common stock were issued and outstanding and 620,000 shares of our Series A Preferred Stock and 1,000,000 shares of our Series B Preferred Stock were issued and outstanding. 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. Therefore, a total of 90,761,104 votes are entitled to be cast at the special meeting.

How many votes do I have?

On each proposal to be voted upon, you have one vote for each share of our common stock and 30 votes for each share of Series A Preferred Stock and each share of Series B Preferred Stock that you owned on the record date. There is no cumulative voting.

How do I vote my shares?

If you are a stockholder of record and:

• you wish to vote in person, come to the special meeting, and we will give you a ballot when you arrive; or

• you do not wish to vote in person or you will not be attending the special meeting, you may vote by proxy. Please complete, date, sign, and return by mail the enclosed proxy card to Biopack Environmental Solutions Inc., Attention: Secretary, Room 1302, 13/F, Enterprise Centre, 4 Hart Avenue, Tsim Sha Tsui, Kowloon, Hong Kong. To be represented at the special meeting, the enclosed proxy must be received by us before the date of the special meeting or be presented at the special meeting.

If you hold your shares in “street name” and:

• you wish to vote in person, you must obtain a valid proxy from your broker, bank, or other nominee that holds your shares giving you the right to vote the shares at the special meeting; or

• you do not wish to vote in person or you will not be attending the special meeting, you must vote your shares in the manner prescribed by your broker, bank or other nominee. Your broker, bank or other nominee should have enclosed or otherwise provided a voting instruction card for you to use in directing the broker, bank or nominee how to vote your shares.

What is the difference between a stockholder of record and a “street name” holder?

If your shares are registered directly in your name with our transfer agent, Madison Stock Transfer Inc., then you are a stockholder of record with respect to those shares.

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If your shares are held in a stock brokerage account or by a bank, or other nominee, then the broker, bank, or other nominee is the stockholder of record with respect to those shares. However, you still are the beneficial owner of those shares, and your shares are said to be held in “street name.” Street name holders generally cannot vote their shares directly and must instead instruct the broker, bank, or other nominee how to vote their shares. Street name holders are also invited to attend the special meeting.

What does it mean if I receive more than one proxy card?

If you receive more than one proxy card, it means that you hold shares registered in more than one name or in different accounts. To ensure that all of your shares are voted, please complete, date, sign, and return each proxy card. If some of your shares are held in “street name,” you should have received voting instruction with these materials from your broker, bank or other nominee. Please follow the voting instruction provided to ensure that your vote is counted.

What vote is required for the approval of the Sale?

For the Sale to be approved, the Resolution must receive “For” votes from stockholders holding shares of our stock entitling them to exercise at least a majority of the voting power (or stockholders holding shares entitled to 45,380,553 votes at the special meeting).

How are votes counted?

For the approval of the Sale, you may vote “For”, “Against”, or “Abstain” on the Resolution. Votes that are abstained and broker non-votes will have the same effect as “Against” votes.

A “broker non-vote” occurs when a broker, bank, or other nominee holding shares for a beneficial owner in street name does not vote on a particular proposal because it does not have discretionary voting power with respect to that proposal and has not received instructions with respect to that proposal from the beneficial owner of those shares, despite voting on at least one other proposal for which it does have discretionary authority or for which it has received instructions.

What happens if I do not make specific voting choices?

If you are a stockholder of record and you submit your proxy without specifying how you want to vote your shares, then the proxy holder will vote your shares in the manner recommended by our board of directors.

If you hold your shares in the street name and you do not give instructions to your broker, bank or other nominee to vote your shares, under the rules that govern brokers, banks, and other nominees who are the stockholders of record of the shares held in street name, it generally has the discretion to vote uninstructed shares on routine matters but have no discretion to vote them on non-routine matters. The sale of our subsidiaries would not be considered a routine matter and your broker, bank, and other nominees would not have the authority to vote your shares for or against the sale without your instructions.

What is the quorum requirement?

A quorum of stockholders is necessary for the transaction of business at the special meeting. Stockholders holding at least a majority of the shares entitled to vote, represented in person or by proxy, constitute a quorum at the special meeting. Your shares will be counted towards the quorum requirement only if you or the registered holder of your shares, properly vote by proxy or present in person at the special meeting. Votes that are abstained and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the special meeting may be adjourned by the vote of a majority of the shares represented either in person or by proxy.

As of the record date, 42,161,104 shares of our common stock were issued and outstanding and 620,000 shares of our Series A Preferred Stock and 1,000,000 shares of our Series B Preferred Stock were issued and outstanding. 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. Therefore, a total of 90,761,104 votes are entitled to be cast at the special meeting. Therefore, the presence in person or by proxy of the holders of shares entitled to 45,380,553 votes at the special meeting will constitute a quorum for the special meeting.

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Am I entitled to appraisal rights?

Pursuant to Nevada Law, our stockholders are not entitled to appraisal rights in association with any of the matters being considered at the special meeting.

Can I change my vote after submitting my proxy?

Yes. You may revoke your proxy and change your vote at any time before the final vote at the special meeting. If you are a stockholder of record, you may vote again on a later date by signing and returning a new proxy card with a later date, or by attending the special meeting and voting in person. Your attendance at the special meeting will not automatically revoke your proxy unless you vote again at the special meeting or specifically request in writing that your prior proxy be revoked. You may also request that your prior proxy be revoked by delivering a written notice of revocation to us at Biopack Environmental Solutions Inc., Attention: Secretary, Room 1302, 13/F, Enterprise Centre, 4 Hart Avenue, Tsim Sha Tsui, Kowloon, Hong Kong. To be effective, the written notice of revocation must be received by us before the date of the special meeting or be presented at the special meeting.

If you hold your shares in street name, you will need to follow the voting instruction provided by your broker, bank or other nominee regarding how to revoke or change your vote.

How can I attend the special meeting?

You may call us at 852-3586-1383 if you want to obtain information or directions to be able to attend the special meeting and vote in person.

You may be asked to present valid picture identification, such as a driver’s license or passport, before being admitted to the special meeting. If you hold your shares in street name, you also will need proof of ownership to be admitted to the special meeting. A recent brokerage statement or letter from your broker, bank or other nominee is an example of proof of ownership.

Who pays for the cost of proxy preparation and solicitation?

We pay for the cost of proxy preparation and solicitation, including the reasonable charges and expenses of brokers, banks or other nominees for forwarding proxy materials to street name holders.

We are soliciting proxies primarily by mail. In addition, our directors, officers and regular employees may solicit proxies by telephone, facsimile, mail, other means of communication or personally. These individuals will receive no additional compensation for such services.

We will ask brokers, banks, and other nominees to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. We will reimburse them for their reasonable expenses.

Forward-Looking Statements

This proxy statement contains forward-looking statements. These statements relate to future events. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “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 that may cause our company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

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Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. 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.

Security Ownership of Certain Beneficial Owners and Management

As of August 9, 2010, there were 42,161,104 shares of our common stock outstanding. The following table sets forth certain information known to us with respect to the beneficial ownership of our common stock as of that date by (i) each of our directors, (ii) each of our executive officers, and (iii) all of our directors and executive officers as a group. Except as set forth in the table below, there is no person known to us who beneficially owns more than 5% of our common stock.

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Changes in Control

We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change of control of our company.

Sale of Our Subsidiaries

Parties to the Transaction

The name, complete mailing address and telephone number of the principal executive offices of each of the parties to the Sale is as follows:

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Organization Structure

The following chart shows our current organization structure:

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Business of Biopack Environmental Limited

Biopack Environmental Limited is a wholly-owned subsidiary of Starmetro Group Limited, which is our wholly-owned subsidiary. Biopack Environmental Limited provided corporate administrative services until December 31, 2007 and has served as a vehicle for sales and marketing of our biodegradable food containers and industrial packaging products since December 31, 2007.

Sales and Distribution History

Our sales and marketing team is located in Hong Kong. Through our sales and marketing team and our distributors, we supply our biodegradable food containers and industrial packaging products to multi-national corporations, supermarket chains and restaurants located across North America, Europe and Asia. During calendar year 2008 we were focused primarily on establishing and expanding our production capabilities and servicing existing accounts, primarily located in Europe. During calendar year 2009 we continued to focus on the expansion of our production capabilities and we hoped to expand our marketing efforts, focusing on an expansion of our sales, primarily in North America. During calendar year 2009, we entered the U.S. packaging market through Biopack America (however, our contract with Biopack America has expired subsequently) and we entered into a distribution agreement with Sonray Sales Ltd., a Canadian company that distributes to wholesalers, retailer’s, supermarket chains and food service providers in Canada and abroad. In addition, we have begun to market our products in Asia and achieved entry into the Asian sustainable packaging market, through sales of our green fruit trays to city’super, a high end supermarket chain with stores in Hong Kong and Taiwan.

Our most significant achievement of 2009 was our reaction to a customer order for a water resistant or “coated” tray. We designed, tested, manufactured and shipped this new custom-made coated fish tray upon request to meet the packaging needs of a large international food retailer. Our eco-friendly, 100% biodegradable and compostable coated fish tray was specifically made to complement an existing product within this retailers Sustainable Seafood Program, a 10-point policy which dictates how seafood is purchased and sold based on social, ecological and economic considerations.

Currently, we supply our biodegradable food containers and industrial packaging products to multi-national corporations, supermarket chains and restaurants, located across North America, Europe and Asia. We have distributors in Netherlands, Switzerland, Hong Kong, Sweden, South Africa, the United States, Japan, Taiwan and Israel. Although we have historically concentrated the bulk of our marketing efforts on the European market, we have recently decided to increase our efforts in North America during the next 24 months.

Business of Well Talent Technology Limited

Well Talent Technology Limited is a holding company, which is engaged primarily in investments and acquisitions of technology and environmental related companies.

Past Contacts, Transactions or Negotiations with Well Talent Technology Limited

Biopack Environmental Limited and Will Spring Limited, an affiliate of Well Talent Technology Limited, entered into a memorandum of understanding dated May 11, 2010, pursuant to which we contemplated the sale of all of our shares of Roots Biopark Limited and Roots Biopack (Intellectual Property) Limited held by Biopack Environmental Limited. Pursuant to the cancellation agreement dated July 9, 2010, this memorandum of understanding was cancelled, and Biopack Environmental Limited instead entered into a share purchase agreement dated as of July 9, 2010 with Well Talent Technology Limited, as more particularly disclosed elsewhere in this proxy statement.

Except as disclosed elsewhere in this proxy statement, there has been no negotiations, transactions or material contracts since January 1, 2008 between our company or our affiliates and Well Talent Technology Limited or its affiliates concerning any merger, consolidation, acquisition, tender offer for or other acquisition of any class of our securities, election of our directors, or sale or other transfer of a material amounts of our assets. Furthermore, except as disclosed elsewhere in this proxy statement, there is no present or proposed material agreement, arrangement, understanding or relation between Well Talent or any of its executive officers, directors, controlling persons or subsidiaries and our company or any of our executive officers, directors, controlling persons or subsidiaries.

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Our Business to be Conducted after the Sale

The Distribution Agreement

Upon consummation of the proposed Sale, we anticipated that our core focus will be on promoting and selling biodegradable food container and packaging products (the “Products”) through the Distribution Agreement, a copy of which is attached as Schedule 11 to the Share Purchase Agreement, which is attached as Schedule A to this proxy statement. Under the Distribution Agreement, the Purchaser will grant us the exclusive right to sell the Products in Europe, North America, Australia, Africa, South America and Hong Kong for a period of 12 months. We must procure the Products exclusively from the Purchaser. We will be responsible for registration of the Products but the Purchaser will reimburse us for our costs. We will be required to maintain enough stock to quickly fulfill our customers’ needs. We will agree on the pricing of the Products as soon as practicable after the signing of the Distribution Agreement. The Purchaser will grant us the right to use certain trade-marks over the life of the Distribution Agreement.

Products

The Products include plates, bowls, boxes, trays, shoe supporters and cases for electronic devices. The Products can be customized to meet customer-specific requirements, including shape, size, color, density and the degree to which they are impervious to oil and water.

The Products are:

• biodegradable;

• made from natural materials (primarily sugarcane fiber, or bagasse, which is a renewable resource that is a by-product of the sugar refining process);

• refrigerator, freezer, microwave and oven friendly in temperatures ranging from -25°C to 220°C; and

• sterilized by an ultraviolet light process.

Industry Overview

Currently, the majority of disposable packaging products are made from plastic, paper or polystyrene, which are typically non-recyclable and non-biodegradable. Consequently, millions of tons of plastic, paper, or polystyrene disposable packaging products are discarded in landfills across the world each year. In the last decade, there has been increasing public concern over the harmful impact that plastic, paper, or polystyrene disposable packaging products have on the environment. Because of this public concern, governments have begun to adopt regulations intended to restrict and in some cases even ban the use of plastic, paper, or polystyrene disposable packaging products and multi-national corporations, acknowledging the need for environmentally sound solutions, have begun to seek alternatives to plastic, paper, or polystyrene disposable packaging products that are less harmful to the environment. As these trends continue, we believe that market for biodegradable food containers and industrial packaging products will face rapid growth.

Competition

The market for disposable packaging products is competitive and subject to frequent product introductions with improved price and/or performance characteristics. We face competition from companies who provide disposable packaging products which are made from plastic, paper or polystyrene. Many of these companies 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. Examples of these companies include: Eastman Chemical Company, BASF Corporation - Apack AG, SK Chemicals, Showa and Highpolymer. We also face competition from companies who provide disposable packaging products which are made from bioplastics and other types of natural materials. Example of these companies include: Earthshell Corp, Starch Tech Incorporated, Biocorp NA, KTM Industries Incorporated, Eco-Products Incorporated, Insulair, Incorporated, Novamont SPA, Green Shell Company Limited, Far East Green World Corporation, Sanshi Green Packaging Company and Green Eternity Company Limited.

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The Sale

Structure of the Sale

Pursuant to the Share Purchase Agreement, the Vendor agreed to sell and the Purchaser agreed to purchase all of the issued and outstanding shares of Roots Biopark Ltd. (“RBL”) and Roots Biopack (Intellectual Property) Limited (“RBIPL”) and the shareholder’s loan in the amount of HK$26,017,413.91 (approximately US$3,348,444) advanced by the Vendor to RBL and the shareholder’s loan of HK$193,442.56 (approximately US$24,896) advanced by the Vendor to RBIPL (collectively, the “Shareholder Loans”). In exchange, the Purchaser has agreed to deliver HK$2,800,000 (approximately US$360,360) in cash on closing and to set-off two outstanding loans of HK$2,000,000 made on April 22, 2010 and June 3, 2010 for a total of HK$4,000,000 (approximately US$514,800) owed by the Vendor to the Purchaser (the “Loans”) and release Gerald Lau, President and Chief Executive Officer of our company and a director of our company and RBL, from his personal guarantee of the Loans. At the closing of the Sale, the Vender, Purchaser, RBL, and RBIPL agreed to enter into a deed of assignment, whereby the Vendor will assign the Shareholder Loans to the Purchaser. The total purchase price is HK$6,800,000 (approximately US$875,161).

As a condition of closing of the Sale, we are required to entered into a deed of indemnity (the “Deed”) with RBL, RBIPL, JRBL (the “Target Group”) and the Purchaser, a copy of which is attached as Schedule 8 to the Share Purchase Agreement, which is attached as Schedule A to this proxy statement. In the Deed, we agree to indemnify the Purchaser for certain tax liabilities.

RBL

RBL was incorporated on February 16, 2006 under the laws of Hong Kong. Its authorized share capital is HK$10,000 divided into 10,000 common shares. RBL serves as an investment holding company which holds Jiangmen Roots Biopack Ltd. (“Jiangmen”). Jiangmen was incorporated on June 30, 2006 under the laws of Hong Kong.

Jiangmen is an investment holding company for our manufacturing plant located in Jiangmen, China. Jiangmen leases 4 adjacent properties situated at No.3, Yangjiaokeng Industrial District, Tingyuan Village, Duruan Town, Jiangmen City, PRC. We call this area “Biopark”. Biopark includes a factory, dormitories, a shop on the first floor, an office on the second floor, toilets, a garage, a storage shelter and land, a substation and an electricity transformer (315kW). The premises are equipped with kitchen appliances, water, electricity and fire prevention and fire fighting equipment. Biopark has a total area of 10,440 square meters, including a 2,700 square meter dormitory.

The lease term is 15 years from March 1, 2007, with an option to renew the term. RBL has a right of first refusal to purchase the premises in the event that the landlord desires to sell.

RBL paid the sum of approximately Renminbi 390,000.00 (US$56,448) as a rental deposit. Pursuant to the terms of RBL’s rental agreement, the rental deposit is to be refunded to RBL without interest upon the expiration of the lease.

From the first to the fifth year, RBL’s monthly rent is Renminbi 103,000 (approximately US$13,720), or Renminbi 1,236,000 (approximately US$164,646 per annum). From the sixth year onward, its rent will increase by 5% every 3 years.

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RBIPL

RBIPL was incorporated on April 27, 2005 under the laws of Hong Kong. Its authorized share capital is HK$10,000 divided into 10,000 common shares.

RBIPL serves as a vehicle for the patent and trademark registration of our biodegradable food container and industrial packaging products.

RBIPL has not registered any patent or proprietary technology.

RBIPL holds the “Roots Biodegradable” trademark, which is currently registered in Switzerland, Hong Kong, India and the United States and it is also registered through the Community Trademark Registration, giving RBIPL rights in all 25 member states of the enlarged European single market, including Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. RBIPL is currently applying for trademark registration in Canada, Japan, India and China. RBIPL plans to apply for trademark registrations in Australia, New Zealand, Malaysia, Israel, Saudi Arabia, Turkey. Details of its registered trademarks are below:

RBIPL owns and operates the following registered internet domain name: www.biopackenvironmental.com. The information contained on this website does not form part of this proxy statement.

Consideration

In exchange, the Purchaser has agreed to deliver HK$2,800,000 (approximately US$360,360) in cash on closing and to set-off two outstanding loans of HK$2,000,000 made on April 22, 2010 and June 3, 2010 for a total of HK$4,000,000 (approximately US$514,800) owed by the Vendor to the Purchaser (the “Loans”) and release Gerald Lau, President and Chief Executive Officer of our company and a director of our company and RBL, from his personal guarantee of the Loans. The total purchase price is HK$6,800,000 (approximately US$872,913).

We did not consider obtaining an independent evaluation of the fairness of the consideration being paid by the Purchaser for RBL and RBIPL. Instead, the price was determined through negotiations between the Purchaser and us.

The total consideration to be paid was primarily based on the liquidity concerns of the Vendor.

Conditions to Closing the Share Purchase Agreement

Before we can complete the transactions contemplated by the Share Purchase Agreement, a number of conditions must be satisfied. These include:

• the approval from our stockholders and our board of directors must be obtained;

• the Purchaser and our company must enter into the Distribution Agreement;

• the Purchaser, our company, RBL, RBIPL, and JRBL must enter into a deed of indemnity;

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• the Purchaser must be satisfied with the results of the due diligence reviews on the RBL, RBIPL and JRBL; and

• certain key employees signing employment agreements.

The Share Purchase Agreement is also subject to other customary terms and conditions, including regulatory and third party approvals.

Consideration to Stockholders

Our stockholders will not receive any direct consideration.

Reasons for the Sale

Our board of directors has determined that the Sale will allow us to focus on promoting and selling the Products. Prior to approving the Sale, our board of directors considered the possible effect each of the various alternative ways would maximize stockholder value. After considerable discussion and due consideration, our board of directors concluded that the Sale presented the best course of action for us at this time. As at March 31, 2010, we had current assets of $319,743 and current liabilities of $1,955,175. If we do not complete the Sale, it is likely that we will not be able to continue as a going concern. The material factors considered by our board of directors in making its determination to pursue the Sale included the following:

• the amount and form of the consideration to be paid in the transaction;

• the belief that, after conducting an extensive review of our financial condition, results of operations and business and earning prospects, the Sale and the focus on promoting and selling the Products was likely to create greater value for our stockholders as compared to continuing to manufacture and develop the Products; and

• the grant of the exclusive right to promote and distribute the Products in certain territories.

We did not seek or receive any offers to purchase RBL and RBIPL other than by the Purchaser.

Vote Required for Approval

Section 78.565 of the Nevada Revised Statutes allows us to sell all or substantially all of our assets by obtaining the approval of the holders of a majority of the shares of outstanding stock entitled to vote. As of the record date, 42,161,104 shares of our common stock were issued and outstanding and 620,000 shares of our Series A Preferred Stock and 1,000,000 shares of our Series B Preferred Stock were issued and outstanding. 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. Therefore, a total of 90,761,104 votes are entitled to be cast at the special meeting. Therefore, we require an affirmative vote from the stockholders holding shares entitled to 45,380,553 votes at the special meeting.

No dissenters’ or appraisal rights are available to our stockholders under the Nevada Revised Statutes or our articles of incorporation or bylaws in connection with the Share Purchase Agreement or transactions contemplated thereby.

Regulatory Approval

To our knowledge, no approvals by any governmental authority are required in order to complete the Sale.

14

Risk Factors Related to the Sale

We will incur certain costs in connection with the Sale, whether or not we complete it.

We expect to incur certain costs related to the Sale. 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 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 Sale could negatively impact our stock price and future business and operations.

If the Sale 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 the RBL and RBIPL 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 Sale will be completed; and

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

We will be dependant on the Purchaser to obtain the Products.

Initially, and for the foreseeable future, we will be dependant on the Purchaser to supply our products under the Distribution Agreement. Failure by the Purchaser 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 the Purchaser and hence the quality of our product. Further, the Distribution Agreement will be terminated after 12 months. If the Purchaser does not renew the Distribution Agreement, we may be unable to obtain any products for resale.

15

Financial Statements

18

BIOPACK ENVIRONMENTAL SOLUTIONS INC.

(INCORPORATED IN THE UNITED STATES OF AMERICA)

CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED 31 DECEMBER 2009

C O N T E N T S

(All Amounts in United States Dollars unless otherwise stated)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF

BIOPACK ENVIRONMENTAL SOLUTIONS INC.
(INCORPORATED IN THE UNITED STATES OF AMERICA WITH LIMITED LIABILITY)

We have audited the accompanying consolidated balance sheets of Biopack Environmental Solutions Inc. and its subsidiaries, as of 31 December 2009, and the related consolidated statements of operations, change in shareholders’ equity and cash flows for the year ended 31 December 2009. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. The financial statements of Biopack Environmental Solutions Inc. as of December 31, 2008, were audited by other auditors whose report dated March 31, 2009, expressed an unqualified opinion on those statements.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States of America). The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audit provide a reasonable basis for our opinion.

In our opinion, the 2009 consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Biopack Environmental Solutions Inc. and its subsidiaries as of 31 December 2009, and the results of its consolidated operations and its consolidated cash flows for each of the year then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 10 to the financial statements conditions exist which raise substantial doubt about the company’s ability to continue as a going concern unless it is able to generate sufficient cash flows to meet its obligations and sustain its operations. Those conditions raise substantial doubt about its ability to continue as a going concern. Managements' plans regarding those matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Hong Kong, 29 March 2010

/S/ WONG LAM LEUNG & KWOK CPA LIMITED

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
Biopack Environmental Solutions Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of Biopack Environmental Solutions Inc. and Subsidiaries as of December 31, 2008, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2008. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Biopack Environmental Solutions Inc. and Subsidiaries as of December 31, 2008 and the results of its consolidated operations and its consolidated cash flows for the year ended December 31, 2008 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 10 to the financial statements conditions exist which raise substantial doubt about the company’s ability to continue as a going concern unless it is able to generate sufficient cash flows to meet its obligations and sustain its operations. Those conditions raise substantial doubt about its ability to continue as a going concern. Managements’ plans regarding those matters are also described in Note 10. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Gruber & Company, LLC

Gruber & Company, LLC
Lake Saint Louis, Missouri
March 30, 2009

The notes on pages 6 to 26 are an integral part of these consolidated financial statements

The notes on pages 6 to 26 are an integral part of these consolidated financial statements

The notes on pages 6 to 26 are an integral part of these consolidated financial statements

The notes on pages 6 to 26 are an integral part of these consolidated financial statements

The notes on pages 6 to 26 are an integral part of these consolidated financial statements

Depreciation expense for the years ended December 31, 2009 and 2008 was $218,322 and $65,305.

Construction in progress represents the expenditure incurred in the development project of a manufacturing plant by a subsidiary in Jiangmen, PRC. As of December 31, 2009, the Company had a balance of $111,747 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.

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

As at December 31, 2009, the Company¡¯s subsidiaries had receivables total $103,375. The Company believes that there is no issue of recoverability and the balances receivable are indicative of fair value.

Directors of the Company have advanced $21,761 in the form of unsecured, non-interest bearing advances with no due date.

9. LOAN PAYABLE

As at December 31, 2009, the Company has short term loans on demand of $1,336,596 including accrued interest of $204,833. The loans bear interest at the rate of 1% to 6% per annum.

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.

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.

On February 17, 2008, pursuant to a Share Cancellation Agreement with Ricky Chiu, an ex-director of the Company, 1,800,000 shares of the Company’s common stock held by Mr. Chiu were cancelled and returned to treasury.

On February 17, 2008, pursuant to a Share Cancellation Agreement with Legend View Limited, 8,000,000 shares of the Company’s common stock were cancelled and returned to treasury. The Company’s President and the chairman of its Board of Directors, Mr. Gerald Lau, owns a controlling interest in Legend View Limited.

On May 14, 2008, the Company entered into a subscription agreement with four investors, whereby we agreed to issue 4,758,212 shares of our common stock at a price of $0.14 per share to the four investors in consideration of the debt owned by our company to them in the aggregate amount of $666,140. Two of these investors are ex-directors of our company, one of these investors is a director of two of our subsidiaries and the fourth investor is our President and Chairman of our Board of Directors.

On July 4, 2008, the Company issued 1,900,000 shares of common stock to Begonia Participation Corp. pursuant to the conversion of 380,000 Series A Preferred Shares.

On September 5, 2008, the Company issued 1,492,537 shares of common stock pursuant to the conversion of a convertible debenture in the amount of $100,000.

On September 19, 2008, the Company issued 1,800,000 shares of common stock pursuant to the conversion of a convertible debenture in the amount of $120,000.

On October 1, 2008, we entered into a consulting agreement with San Diego Torrey Hills Capital, Inc., whereby San Diego Torrey Hills has agreed to provide consulting services to our company in consideration for, among other things: (i) a monthly cash fee of US$10,000, the first payment of which is due on October 1, 2008, with subsequent monthly payments due on the monthly anniversary dates of the consulting agreement; and (ii) the issuance of 125,000 shares of restricted common stock of the company. 125,000 shares of which are issued on October 1, 2008.

On October 15, 2008, the Company issued 500,000 shares of the Company’s common stock to Ma Cheng Ji pursuant to the conversion of a convertible debenture in the amount of $250,000.

On April 8, 2009, the Company sold one convertible debenture to one investor for gross proceeds of $60,000. This convertible debenture has a three year term and is convertible, at the option of the holder upon 90 days prior notice, into shares of our common stock at a price of six and two-thirds cents per share.

On May 15, 2009, the Company sold one convertible debenture to one investor for gross proceeds of $50,000. This convertible debenture has a face amount of $50,000, a three year term, earns interest at a rate of 1% per annum and is convertible, at the option of the holder upon not less than 61 days prior notice, into shares of our common stock at a price of ten cents per share.

On May 15, 2009, the Company sold one convertible debenture to one investor for gross proceeds of $48,000. This convertible debenture has a face amount of $48,000, a three year term, earns interest at a rate of 12% per annum and is convertible, at the option of the holder upon not less than 61 days prior notice, into shares of our common stock at a price of six and two-thirds cents per share.

On June 12, 2009, the Company issued 225,000 shares of our common stock to San Diego Torrey Hills Capital, Inc. pursuant to the consulting agreement.

On July 28, 2009, the Company issued 1,124,438 shares of our common stock to the holder of a convertible debenture dated March 3, 2008 pursuant to the conversion of a portion of the principal balance of that convertible debenture.

On July 28, 2009, the Company issued 1,125,001 shares of our common stock to the holder of a convertible debenture dated December 29, 2008 pursuant to the conversion of a portion of the principal balance of that convertible debenture.

On July 29, 2009, the Company issued 1,250,000 shares of our common stock to the holder of a convertible debenture dated December 27, 2007 pursuant to the conversion of a portion of the principal balance of that convertible debenture.

On July 31, 2009, the Company sold one convertible debenture to one investor for gross proceeds of $16,000. This convertible debenture has a face amount of $16,000, a three year term, earns interest at a rate of 1% per annum and is convertible, at the option of the holder upon not less than 61 days prior notice, into shares of our common stock at a price of ten cents per share.

On December 7, 2009, the Company issued 400,000 shares of our common stock to Dragon Gate Asia Ltd. pursuant to the consulting agreement.

On December 7, 2009, the Company issued 20,000 shares of our common stock to The Long Island Investment Banking Group pursuant to the consulting agreement.

19

Biopack Environmental Solutions Inc.

Unaudited

Consolidated Financial Statements

For the Three Months Ended
March 31, 2010 and 2009

(Stated in US Dollars)

Biopack Environmental Solutions Inc.

CONSOLIDATED FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Biopack Environmental Solutions, Inc. and Subsidiaries

Consolidated Balance Sheets

Biopack Environmental Solutions, Inc. and Subsidiaries

Consolidated Statement of Operations

March 31, 2010 and 2009