~~U.S.~~ SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON~~Washington, D.C. 20549

FORM 10-Q

(Mark One)

X .	Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended September 30, 2010
.	Transition Report under Section 13 or 15(d) of the Exchange Act
	For the Transition Period from ________to __________

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

~~Commission~~For ~~File~~the ~~Number:~~quarterly ~~333-149294~~period ended March 31, 2011

~~CFO CONSULTANTS, INC.~~OR

~~(Exact~~¨ ~~Name~~TRANSITION ofREPORT ~~Registrant~~UNDER asSECTION ~~Specified~~13 inOF ~~its Charter~~15(d) OF THE EXCHANGE ACT OF 1934

NEVADA	42-1749358
(State of other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

From the transition period from ___________ to ____________.

73726 Alessandro Dr. Suite 103
Palm Desert CA	92260
(Address of principal executive offices)	(Zip Code)

Commission File Number 001-34715

~~Registrant's~~KAIBO ~~Phone:~~FOODS ~~(760)~~COMPANY ~~776-8899~~LIMITED

~~Indicate by check mark whether the issuer~~ (1)Exact ~~filed~~name ~~all reports required to be filed by Section13 or 15(d)~~ of ~~the~~small ~~Exchange~~business ~~Act~~issuer ofas ~~1934~~specified ~~during~~in ~~the~~its ~~past 12 months (or such shorter period that the registrant was required to file such reports~~charter)~~, and (2) has been subject to such filing requirements for the past 90 days. Yes X . No .~~

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Nevada		26-3552213
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

~~Large~~Rm ~~accelerated~~2102 ~~filer~~F&G, .Nan ~~Accelerated~~Fung ~~filer~~Centre, ~~. Non~~264-~~accelerated~~298 ~~filer~~Castle .Peak ~~Smaller reporting company X .~~Rd

~~Indicate~~Tsuen byWan, ~~check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)~~N.T., ~~Yes X~~Hong ~~. No .~~Kong

As(Address of ~~October~~principal ~~14,~~executive ~~2010, the issuer had 5,655,000 shares of common stock issued and outstanding.~~offices)

	TABLE OF CONTENTS	Page
PART I – FINANCIAL INFORMATION
Item 1. Item 2.	Financial Statements Significant Financial Transaction	12
Item 3.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	13
Item 4.	Quantitative and Qualitative Disclosures about Market Risk	14
Item 5.	Controls and Procedures	14
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	16
Item 1A.	Risk Factors	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.	Defaults Upon Senior Securities	16
Item 4.	Submission of Matters to a Vote of Security Holders	16
Item 5.	Other Information	16
Item 6.	Exhibits	16

(852) 2412-2208

(Issuer's telephone number)

N/A

(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 ¨

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:

Large accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer ¨

(Do not check if a smaller

reporting company)

Smaller reporting company x

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

As of May 13, 2011, there were 3,285,007 shares of common stock of the issuer outstanding.

TABLE OF CONTENTS

	PART I FINANCIAL STATEMENTS

Item 1	Financial Statements	1

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

Item 3	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4	Controls and Procedures	31

	PART II OTHER INFORMATION

Item 1	Legal Proceedings	32

Item 1A	Risk Factors	32

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

Item 3	Default upon Senior Securities	32

Item 4	[Removed and Reserved]	32

Item 5	Other Information	32

Item 6	Exhibits	32

Signatures		33

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

KAIBO FOODS COMPANY LIMITED

CONSOLIDATED BALANCE SHEETS

(US dollars in thousands, except share data)

	December 31,		March 31,
	2010		2011
			(Unaudited)
ASSETS

Current assets:
Cash	$	27,374	$	42,184
Trade accounts receivable		22,165		13,327
Inventories		1,596		2,323
Prepayments and other receivables		1,296		358

Total current assets		52,431		58,192
Property, plant and equipment, net		7,657		7,490
Deposits on property, plant and equipment		-		3,287

Total assets	$	60,088	$	68,969

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
Trade accounts payable	$	240	$	394
Accruals and other payables		3,530		2,535
Taxes payable		2,949		2,947
Short-term borrowings		2,655		3,440
Convertible note		25		25
Derivative instruments		55		116
Due to shareholders		2,870		4,170

Total liabilities (all current)		12,324		13,627

Commitments and contingencies

Shareholders’ equity:
Preferred stock, no par value; 2,000,000 shares authorized; none issued and outstanding on December 31, 2010 and March 31, 2011		-		-
Common stock, par value $0.001 per share; 600,000,000 shares authorized; issued and outstanding 3,285,007 shares on December 31, 2010 and March 31, 2011		3		3
Additional paid in capital		9,122		9,122
Statutory reserve		5,425		5,425
Retained earnings		28,044		35,154
Accumulated other comprehensive income		5,170		5,638
Total shareholders’ equity		47,764		55,342

Total liabilities and shareholders’ equity	$	60,088	$	68,969

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

KAIBO FOODS COMPANY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2010 AND 2011

(UNAUDITED)

(US dollars in thousands)

	Three Months Ended March 31,
	2010			2011

Sales	$	16,973		$	25,689
Cost of sales		(9,628	)		(17,640	)

Gross margin		7,345			8,049
Operating expenses		(754	)		(864	)
Income from operations		6,591			7,185

Interest expense and other		(39	)		(107	)
Interest income and other		302			32
		263			(75	)

Income before income taxes		6,854			7,110
Income tax expense		(690	)		-

Net income	$	6,164		$	7,110

Net income per share:
Basic	$	0.27		$	0.30

Diluted	$	0.27		$	0.30

Weighted average shares outstanding used in the calculation of net income per share:
Basic		22,493,475			23,416,766

Diluted		22,493,475			24,003,570

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

~~ITEM~~KAIBO 1FOODS ~~FINANCIAL~~COMPANY ~~STATEMENTS~~LIMITED

~~Financial~~CONSOLIDATED ~~Statements~~STATEMENTS ~~for~~OF 9COMPREHENSIVE ~~month period ended September 30, 2010 have been prepared by the Management Group of CFO Consultants, Inc.~~ INCOME

~~CFO~~THREE ~~CONSULTANTS,~~MONTHS ~~INC.~~ENDED (AMARCH ~~DEVELOPMENT STAGE COMPANY) BALANCE SHEET SEPTEMBER 30~~31, 2010 AND 2011

			Sept. 30, 2010		Dec 30, 2009		Jan 17, 2008
ASSETS
Current Assets
	Cash and Cash Equivalents	$	113	$	1135	$	3,990
	Accounts Receivable – Trade		-		-		-
Total Current Assets			113		113		3,990
Fixed Assets
	Machinery and Equipment		-		-		-
	Furniture and Fixtures		-		-		-
	Vehicles		-		-		-
	Leasehold Improvements		-		-		-
	Accumulated Depreciation		-		-		-
Total Fixed Assets			-		-		-
Total Assets		$	113	$	113	$	3,990
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
	Accounts Payable	$	4,230	$	-	$	-
	Accrued Payroll Taxes		-		-		-
	Loans From Shareholders		-		-		-
Total Current Liabilities			4,230		-		-
Long Term Liabilities
	Bank of Blue Valley Notes		-		-		-
	UP Loan		-		-		-
	Sterling Bank Loan Convertible Note - Millenium		25,000		-		-
Total Long Term Liabilities			25,000		-		-
Stockholders’ Equity
	Capital Stock (5,655,000 issued and outstanding)		5,665		5,665		3,450
	Additional Paid In Capital		(58,917)		(33,917)		(2,810)
	Retained Earnings		(29,117)		(4,117)		(3,990)
			-		85		1,935
Total Liabilities and Stockholders’ Equity		$	113	$	113	$	113

(UNAUDITED)

(US dollars in thousands)

	Three Months Ended March 31,
	2010			2011

Net income	$	6,164		$	7,110
Other comprehensive income (loss):
Foreign currency translation adjustments		(142	)		468

Total comprehensive income	$	6,022		$	7,578

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

~~CFO~~KAIBO ~~CONSULTANTS,~~FOODS ~~INC. (A DEVELOPMENT STAGE~~ COMPANY) ~~INCOME STATEMENT FOR THE 9 MONTHS ENDED SEPTEMBER 30, 2010~~LIMITED

			Sept. 30, 2010		From Inception Dec 10 2007 to Dec 31 2009		For Year ended Dec. 31, 2009		From Inception Dec 10, 2007 to Sept 30 2010
Income
	Consulting Fees	$	-	$	-	$	-	$	-
	Discounts Given to Customer		-		-		-		-
Total Income			-		-		-		-
General and Administrative Expenses			-		33,917		5,827		33,917
	Advertising		-		-		-		-
	Bank Charges		-		-		-		-
	Customer Expense		-		-				-
	Consulting		25,000		-		-		25,000
	Depreciation		-		-		-		-
	Dues and Subscriptions		-		-		-		-
	Entertainment		-		-		-		-
	Insurance – Business		-		-		-		-
	Licenses and Permits		-		-		-		-
	Legal and Accounting		-		-		1,150		1,150
	Repair and Maintenance		-		-		-		-
	Miscellaneous		-		-		-		-
	Office Expenses		-		-		-		-
	Rent		-		-		-		-
	Taxes and Licenses		-		-		-		-
	Payroll Taxes		-		-		-		-
	Telephone		-		-		-		-
	Travel		-		-		-		-
	Uniforms – Laundry		-		-		-		-
	Utilities		-		-		-		-
	Meals and Entertainment		-		-		-		-
	Business Taxes		-		-		-		-
	State Disability Employers Ins.		-		-		-		-
	Workman’s Compensation		-		-		-		-
	State Unemployment		-		-		-		-
Total Expenses			25,000		33,917		5,827		33,917
Net Income (Loss)		$	(25,000)	$	(33,917)	$	(5,827)	$	(33,917)
				$

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

THREE MONTHS ENDED MARCH 31, 2011

(UNAUDITED)

(US dollars in thousands, except share data)

	Common Stock				Additional paid in capital		Statutory reserve		Retained earnings		Accumulated other comprehensive income		Total
	Shares		Amount

Balances at January 1, 2011		3,285,007	$	3	$	9,122	$	5,425	$	28,044	$	5,170	$	47,764

Net income		-		-		-		-		7,110		-		7,110

Foreign currency translation adjustments		-		-		-		-		-		468		468

Balances at March 31, 2011		3,285,007	$	3	$	9,122	$	5,425	$	35,154	$	5,638	$	55,342

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

CFO CONSULTANTS, INC. (A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE 9 MONTHS ENDED SEPTEMBER 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net income			$	(25,000)
Adjustments to reconcile net income to net cash provided
	by operating activities
		Depreciation		-
		Amortization		-
		(Increase) decrease in:
		Accounts Receivable		-
		Inventory		-
		Increase (decrease) in:
		Accounts Payable		25,000
		Accrued Payroll Taxes		-
		Net Cash Provided (Used) By Operating Activities		-
CASH FLOWS FROM INVESTING ACTIVITIES
		Fixed Asset Additions		-
		Net Cash (Used) By Investing Activities		-
CASH FLOWS FROM FINANCING ACTIVITIES
		Proceeds Stock Subscriptions		-
		Loans From Shareholders		-
		Capital Contributions		-
		Net Cash (Used) By Financing Activities		-
		NET INCREASE (DECREASE) IN CASH		-
CASH AT BEGINNING OF PERIOD				113
CASH AT END OF PERIOD			$	113

KAIBO FOODS COMPANY LIMITED

~~The~~CONSOLIDATED ~~accompanying~~STATEMENTS ~~notes~~OF ~~are~~CASH ~~an integral part of these FINANCIAL STATEMENTS.~~FLOWS

THREE MONTHS ENDED MARCH 31, 2010 AND 2011

(UNAUDITED)

(US dollars in thousands)

	Three Months Ended March 31,
	2010			2011

Operating activities:
Net income	$	6,164		$	7,110

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		241			254
Fair value change on derivative instruments		-			61

Changes in operating assets and liabilities:
Trade accounts receivable		5,955			8,956
Inventories		(74	)		(711	)
Prepayments and other receivables		142			960
Taxes payable		(623	)		-
Trade accounts payable		193			152
Accruals and other payables		(109	)		(1,011	)

Net cash provided by operating activities		11,889			15,771

Investing activities:
Deposits for property, plant and equipment		-			(3,287	)
Acquisitions of property, plant and equipment		-			(30	)
Net cash used in investing activities		-			(3,317	)

Financing activities:
Proceeds from short-term debt		-			760
Payment of dividends		(22,775	)		-
Advances from shareholders		2,927			1,303
Repayment of advances from shareholders		(2,073	)		-

Net cash (used in) provided by financing activities		(21,921	)		2,063

(Decrease) increase in cash		(10,032	)		14,517
Effect of exchange rate on changes in cash		(172	)		293
Cash, beginning of period		22,131			27,374

Cash, end of the period	$	11,927		$	42,184

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	39		$	46
Income taxes	$	1,312		$	-

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

~~CFO~~KAIBO ~~Consultants,~~FOODS ~~Inc. (A~~COMPANY ~~Development Stage Company) Notes to Financial Statements For The 9 Months Ended September 30, 2010~~LIMITED

~~NOTE~~NOTES ATO –INTERIM ~~SUMMARY~~CONSOLIDATED OFFINANCIAL ~~SIGNIFICANT ACCOUNTING POLICIES~~STATEMENTS

ATHREE ~~summary~~MONTHS ofENDED ~~significant~~MARCH ~~accounting policies of CFO Consultants~~31, ~~Inc.~~2010 (AAND Development Stage Company) (the Company) is presented to assist in understanding the Company’s financial statements. The accounting policies presented in these footnotes conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the accompanying financial statements. These financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. The Company has not realized revenues from its planned principal business purpose and is considered to be in its development state in accordance with SFAS 7, “Accounting and Reporting by Development State Enterprises.”2011

~~Organization, Nature of Business and Trade Name~~(UNAUDITED)

~~CFO Consultants, Inc.~~ (~~the~~US ~~Company)~~dollars ~~was incorporated~~ in the State of Nevada on December 10, 2007. CFO Consultants, Inc. was established to assist companies in their need for CFO’s and CFO related service. The Company has elected a fiscal year end of December 31st.thousands)

~~Basis~~1. ofORGANIZATION ~~Presentation~~AND BUSINESS OF THE COMPANY

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1a) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented.Organization:

~~Property~~Kaibo Foods Company Limited (the “Company”) was incorporated in the State of Nevada on December 10, 2007 in the former name of CFO Consultants, Inc (“CFO Consultants”). On March 10, 2011, the Company changed its name from “CFO Consultants, Inc.” to “Kaibo Foods Company Limited”. The Company is primarily engaged in the business of processing potatoes and ~~Equipment~~selling potato starch products in the People’s Republic of China (the “PRC”).

~~Property~~(b) ~~and~~Recapitalization ~~equipment are carried at cost. Expenditures for maintenance~~ and repairs are charged against operations. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period. reorganization:

~~Depreciation~~On isOctober ~~computed~~21, ~~for~~2010 ~~financial~~(the ~~statement~~“Closing ~~purposes~~Date”), onCFO Consultants, a ~~straight-line~~U.S. ~~basis~~public ~~over~~shell ~~estimated~~company ~~useful~~(now ~~lives~~known as the Company) completed a stock exchange transaction (the “Share Exchange”) with the stockholders of Hong Kong Waibo International Limited (“Waibo”), whereby 22,493,475 shares of CFO Consultants’ common stock were agreed to be issued to stockholders of Waibo in exchange for 100% of their outstanding capital stock in Waibo, equal to 96% of all of the ~~related~~Company’s ~~assets~~outstanding common stock, after giving effect to the conversion of an outstanding convertible note of the Company held by Millennium Group, Inc. (“Millennium”), in the principal amount of $25,000 (Note 6). The note is convertible into 586,804 shares of the Company’s common stock.

On the Closing Date, CFO Consultants did not have sufficient authorized shares to complete the issuance of the entire amount of these shares, therefore only 2,361,716 shares were issued to the designee of the shareholders of Waibo at the Closing Date, and no shares were issued to Millennium. After the Closing Date, these shares represented approximately 87% of the total issued and outstanding shares of the Company. On March 10, 2011 the Company increased the total number of authorized shares of common stock, and the Company plans to issue the remaining 20,131,759 shares of common stock issuable pursuant to the stock exchange transaction to the designee of the former shareholders of Waibo and issue 586,804 shares of common stock to Millennium during the second quarter of 2011.

On the Closing Date, Waibo became a wholly owned subsidiary of the Company. The Share Exchange has been accounted for as a reverse acquisition and recapitalization whereby Waibo is deemed to be the accounting acquirer (and the legal acquiree) and the Company is deemed to be the accounting acquiree (and the legal acquirer). Accordingly, Waibo’s historical financial statements for the periods prior to the reverse acquisition became those of the Company retroactively restated for, and giving effect to, the number of shares received in the Share Exchange. The assets and liabilities, and revenues and expenses of the Company are included in the accompanying financial statements effective from the Closing Date. The total net liabilities assumed by Waibo as of the Closing Date were $25,000. The Company is deemed to be a continuation of the business of Waibo.

~~CFO~~KAIBO ~~Consultants,~~FOODS ~~Inc. (A~~COMPANY ~~Development Stage Company) Notes to Financial Statements For The 9 Months ended September 30, 2010~~LIMITED

~~NOTE~~NOTES ATO –INTERIM ~~SUMMARY~~CONSOLIDATED OFFINANCIAL ~~SIGNIFICANT ACCOUNTING POLICIES (continued)~~STATEMENTS

~~Property~~THREE ~~and~~MONTHS ~~Equipment~~ENDED ~~(continued)~~MARCH 31, 2010 AND 2011

~~The estimated useful lives of depreciable assets are:~~(UNAUDITED)

	Estimated Useful Lives
Office Equipment	5-10 years
Copier	5-7 years
Vehicles	5-10 years

(US dollars in thousands)

~~For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system~~1. ~~For~~ORGANIZATION ~~audit~~AND ~~purposes,~~BUSINESS ~~depreciation~~OF isTHE ~~computed~~COMPANY ~~under the straight-line method.~~ (Continued)

~~Cash~~(b) Recapitalization and ~~Cash~~reorganization: ~~Equivalents~~(Continued)

~~For~~On ~~purposes~~March 10, 2011, the Company filed a Certificate of Amendment to its Articles of Incorporation (the ~~statement~~“Amendment”) with the Secretary of ~~cash~~State ~~flows~~of the State of Nevada for the purpose affecting a 1 for 16.09 reverse stock split (the “Reverse Stock Split”). In addition to setting forth the terms of the Reverse Stock Split, the Amendment also (i) increased the total number of authorized shares of capital stock of the Company ~~considers~~from ~~all~~75,000,000 ~~short-term~~to ~~debt~~600,000,000 ~~securities~~shares ~~purchased~~of ~~with~~common ~~maturity~~stock; (ii) provided for a class of ~~three~~2,000,000 ~~months~~shares orof ~~less~~blank check preferred stock; (iii) elected not to be ~~cash~~governed ~~equivalents~~by the business combination statute under the Nevada Private Corporations Law for the Company; and (iv) changed the name of the Company to “Kaibo Foods Company Limited”. All shares and per share amounts for periods prior to March 10, 2011 in these financial statements have been given effect to the Reverse Stock Split.

~~Revenue~~On March 23, 2011, the Company was approved to change its stock symbol on the OTC Bulletin Board and ~~Cost~~is ~~Recognition~~now quoted under the stock symbol “KKFC”.

~~The~~(c) Company provides custom solutions for business management needs. The Company reports income and expenses on the accrual basis of accounting, whereby income is recorded when it is earned and expenses recorded when they are incurred. In this specific industry revenue from jobs is recognized as stipulated in each contract for services. The Company currently has not met any contract terms for recognition of revenue.Business:

~~Cost~~The Company mainly focuses on serving the local market in the PRC. Currently, the Company’s products are sold to customers in twelve provinces and four municipalities in the PRC. Sales of ~~Goods~~the ~~Sold~~Company’s products are generated using a combination of direct sales and distributor agreements. The Company created the “Weibao” and “Jiabao” brands with emphasis on high quality, purity, whiteness and consistency. The Weibao brand is targeted at industrial users such as food and pharmaceutical manufacturers, while the Jiabao brand is targeted at food service operators such as restaurants, caterers and the customer retail market.

~~Job costs include all direct materials, and labor costs and those indirect costs related to contracted services~~2. ~~Selling,~~BASIS ~~general~~OF ~~and administrative costs are charged to expense as incurred.~~ PRESENTATION

~~Advertising~~The accompanying interim consolidated financial statements have been prepared by management without audit. Pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s annual audited financial statements for the year ended December 31, 2010, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on March 31, 2011. Amounts as of December 31, 2010 are derived from those audited consolidated financial statements.

Advertising expenses related to specific jobs are allocated and classified as costs of goods sold. Advertising expenses not related to specific jobs are recorded as general and administrative expenses.

~~CFO~~KAIBO ~~Consultants,~~FOODS ~~Inc. (A~~COMPANY ~~Development Stage Company) Notes to Financial Statements For The 9 Months Ended September 30, 2010~~LIMITED

~~NOTE~~NOTES ATO –INTERIM ~~SUMMARY~~CONSOLIDATED OFFINANCIAL ~~SIGNIFICANT ACCOUNTING POLICIES (continued)~~STATEMENTS

~~Use~~THREE ofMONTHS ~~Estimates~~ENDED MARCH 31, 2010 AND 2011

The preparation of financial statements in accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on CFO Consultants, Inc.’s financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. CFO Consultants, Inc.’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.(UNAUDITED)

~~Common~~(US ~~Stock~~dollars in thousands)

~~The~~2. ~~Company~~BASIS ~~has~~OF ~~authorized~~PRESENTATION ~~common stock and has not authorized any other form of stock including preferred stock.~~(Continued)

~~Income~~The ~~Taxes~~preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates.

~~The~~In ~~Company~~the ~~recognizes~~opinion of the ~~tax~~management, ~~effects~~all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position of ~~transactions~~the inCompany as of March 31, 2011, and the ~~year~~results inof ~~which~~its ~~such~~operations ~~transactions~~and ~~enter~~cash ~~into~~flows for the ~~determination~~three months ended March 31, 2010 and 2011, have been made. The Company’s operations are seasonal; therefore, the results of ~~net~~operations ~~income~~for the three months ended March 31, ~~regardless~~2011, are not necessarily indicative of ~~when~~the ~~reported~~operating results for ~~tax~~the ~~purposes~~full year.

~~Recently~~The ~~Issued~~Company ~~Accounting~~generally ~~Pronouncements~~halts its production process from May through July for its production facilities located in the Yunnan and Guizhou provinces. The potato planting season typically begins in March, and potatoes are harvested from early July until the end of December. The harvested potatoes can typically be stored up to four months in cellars by farmers, allowing the facilities in Yunnan and Guizhou to expand their production period through April of each year.

InThe ~~May~~Company’s ~~2008,~~production ~~FASB~~facility ~~issued~~in ~~Financial~~Gansu ~~Accounting~~is ~~Standards~~located ~~No.~~in ~~163,~~a ~~“Accounting~~colder ~~for~~region ~~Financial~~in ~~Guarantee~~the ~~Insurance~~PRC ~~Contracts~~and -typically anhalts ~~interpretation~~production offrom ~~FASB~~January ~~Statement~~to ~~No.~~February ~~60.”~~and ~~Diversity~~resumes ~~exists~~production in ~~practice~~March. The inGansu ~~accounting~~facility ~~for~~also ~~financial~~halts ~~guarantee~~production ~~insurance~~from ~~contracts~~June bythrough ~~insurance~~July ~~enterprises under FASB Statement No. 60, Accounting~~ and ~~Reporting~~resumes byproduction ~~Insurance Enterprises. That diversity results~~ in ~~inconsistencies in the recognition and measurement of claim liabilities because of differing views about when a loss has been incurred under FASB Statement No~~August. ~~5, Accounting for Contingencies.~~

~~This~~During ~~Statement~~the ~~requires~~off that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement also clarifies how Statement 60 applies to financial guarantee insurance contractsseason, ~~including~~ the ~~recognition~~production ~~and~~facilities ~~measurement~~perform toroutine bemaintenance ~~used~~on totheir ~~account~~production ~~for premium revenue and claim liabilities~~lines. Those clarifications will increase comparability in financial reporting of financial guarantee insurance contracts by insurance enterprises. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. This Statement is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years.

~~CFO~~KAIBO ~~Consultants,~~FOODS ~~Inc. (A~~COMPANY ~~Development Stage Company) Notes to Financial Statements For The 9 Months Ended September 30, 2010~~LIMITED

~~NOTE~~NOTES ATO –INTERIM ~~SUMMARY~~CONSOLIDATED OFFINANCIAL ~~SIGNIFICANT ACCOUNTING POLICIES (continued)~~STATEMENTS

~~Recently~~THREE ~~Issued~~MONTHS ~~Accounting~~ENDED ~~Pronouncements~~MARCH ~~(Continued)~~31, 2010 AND 2011

In May 2008, FASB issued Financial Accounting Standards No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (~~GAAP~~UNAUDITED) in the United States (the GAAP hierarchy). This Statement is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. This pronouncement has no effect on this Company’s financial reporting at this time.

~~In March of 2008 the Financial Accounting Standards Board~~ (~~FASB)~~US ~~issued~~dollars ~~SFAS~~in No. 161, “Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133, “Accounting for Derivatives and Hedging Activities.” SFAS No. 161 has the same scope as Statement No. 133 but requires enhanced disclosures about (athousands) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement No. 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. SFAS No. 161 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

~~In December, 2007, the FASB issued SFAS No~~3. ~~160,~~SUMMARY ~~“Non-controlling~~OF ~~interests~~SELECTED inSIGNIFICANT ~~Consolidated~~ACCOUNTING Financial Statements, an amendment of ARB No. 51.” SFAS No. 160 applies to “for-profit” entities that prepare consolidated financial statements where there is an outstanding non-controlling interest in a subsidiary. The Statement requires that the non-controlling interest be reported in the equity section of the consolidated balance sheet but identified separately from the parent. The amount of consolidated net income attributed to the non-controlling interest is required to be presented, clearly labeled for the parent and the non-controlling entity, on the face of the consolidated statement of income. When a subsidiary is de-consolidated, any retained non-controlling interest is to be measured at fair value. Gain or loss on de-consolidation is recognized rather than carried as the value of the retained investment. The Statement is effective for fiscal years and interim periods beginning on or after December 15, 2008. It cannot be adopted earlier but, once adopted, is to be applied retroactively. This pronouncement has no effect on this Company’s financial reporting at this time.POLICIES

InInformation ~~December~~about ~~2007,~~ the ~~FASB~~organization ~~issued~~of ~~SFAS~~the ~~No.141 (revised 2007)~~Company, ~~“Business~~significant ~~Combinations”~~accounting ~~(“SFAS~~policies, ~~141(R)”)~~ and ~~SFAS~~recent ~~No.~~accounting ~~160,~~standards ~~“Noncontrolling~~are ~~Interests~~included in ~~Consolidated~~the ~~Financial~~Company’s ~~Statements”~~December ~~(“SFAS~~31, ~~160”).~~2010 ~~These~~consolidated ~~standards~~financial ~~aim~~statements. ~~to improve~~However, ~~simplify,~~certain ~~and~~selected ~~converge internationally the~~ accounting ~~for~~policies ~~business~~are ~~combinations~~described ~~and the reporting of noncontrolling interests in consolidated financial statements.~~ below:

(a)

Allowance for doubtful accounts

An allowance for doubtful accounts is provided based on an evaluation of the collectability of accounts receivable and other receivables. This evaluation primarily consists of an analysis based on current information available about the customer or borrower. Receivable losses are charged against the allowance when the Company believes the uncollectability of the receivable is confirmed. Subsequent recoveries, if any, are credited to the allowance. No allowance for doubtful accounts was deemed necessary as of December 31, 2010 and March 31, 2011.

(b)

Inventories

Inventory is stated at the lower of cost or market. Inventory is valued using the weighted-average method, which approximates actual cost. Capitalized costs include materials, labor and manufacturing overhead related to the purchase and production of inventories. Excess and obsolete inventory reserves are established based upon the Company’s evaluation of the quantity of inventory on hand relative to demand. No reserve for obsolete inventory was deemed necessary as of December 31, 2010 and March 31, 2011.

~~CFO~~KAIBO ~~Consultants,~~FOODS ~~Inc. (A~~COMPANY ~~Development Stage Company) Notes to Financial Statements For The 9 Months Ended September 30, 2010~~LIMITED

~~NOTE~~NOTES ATO –INTERIM ~~SUMMARY~~CONSOLIDATED OFFINANCIAL ~~SIGNIFICANT ACCOUNTING POLICIES (continued)~~STATEMENTS

~~Recently~~THREE ~~Issued~~MONTHS ~~Accounting~~ENDED ~~Pronouncements~~MARCH ~~(Continued)~~31, 2010 AND 2011

~~The provisions of SFAS 141~~ (RUNAUDITED) ~~and SFAS 160 are effective for the fiscal year beginning April 1, 2010. The adoption of SFAS 141(R) and SFAS 160 has not impacted the Company’s financial statements.~~

~~None~~(US ofdollars ~~the~~in ~~above new pronouncements has current application to the Company, but may be applicable to the Company’s future financial reporting.~~thousands)

~~NOTE~~3. BSUMMARY –OF ~~STOCK-BASED~~SELECTED ~~COMPENSATION~~SIGNIFICANT ACCOUNTING POLICIES (Continued)

~~Stock-based~~(c) ~~compensation is defined as compensation arrangements under which employees receive shares of stock~~Property, ~~stock~~plant ~~options,~~and ~~or other equity instruments, or under which the employer incurs obligations to the employees based on the price of the company’s shares.~~equipment

~~In December 2007~~Property, ~~the~~plant ~~Company issued One Million Four Hundred Fifty Thousand (1,450,000) shares of common stock to its officer~~ and ~~director,~~equipment ~~Norbert~~are ~~LeBoeuf.~~stated ~~This~~at ~~stock~~cost ~~was~~less ~~issued~~accumulated ~~to Mr~~depreciation. ~~LeBoeuf~~Expenditures ~~as compensation~~ for ~~services~~routine ~~rendered~~repairs ~~as the incorporator of the Company. The out of pocket expenses incurred~~ and ~~paid~~maintenance byare ~~Mr.~~expensed LeBoeuf totaled One Thousand Four Hundred Fifty Dollars ($1,450) setting the issue price of the stock-based compensation at .001 per share. The option price of this stock-based compensation is the same as ~~the registered price~~incurred. ~~That is, the option price is equal to the market price, therefore per APB 25 no compensation is to be recognized.~~

~~NOTE~~Depreciation Cis –calculated ~~GOING~~on ~~CONCERN~~the straight-line basis over each asset’s estimated useful life down to the estimated residual value of each asset. Estimated useful lives are as follows:

Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business. Management expects to face strong competition from well-established companies and small independent companies. Accordingly, the Company expects to compete on the basis of price (or the value to the customer of the services performed) and, on the basis of their established reputation among customers as a quality provider of management services and our locality of operation. Without a strong performance in the growth process Management expects to be less able than our larger competitors to handle generally increasing costs and expenses of doing business. Additionally, it is expected that there may be significant technological advances in the future and Management may not have adequate resources without the strong public response anticipated to enable the Company to take advantage of such advances.

Land use rights		52-55 years
Buildings		20 years
Motor vehicles		5 years
Plant and machinery		10 years
Other equipment		5 years

The Company reviews and evaluates its property, plant and equipment for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Recoverability is measured by comparing the total estimated future cash flows on an undiscounted basis to the carrying amount of the assets. If such assets are considered to be impaired, an impairment loss is measured and recorded based on discounted estimated future cash flows. The Company’s estimates of future cash flows are based on numerous assumptions, and it is possible that actual future cash flows will be significantly different than the estimates which are subject to significant risks and uncertainties. Management believes that there is no impairment to property, plant and equipment as of December 31, 2010 and March 31, 2011.

~~CFO~~KAIBO ~~Consultants,~~FOODS ~~Inc. (A~~COMPANY ~~Development Stage Company) Notes to Financial Statements For The 9 Months Ended September 30, 2010~~LIMITED

~~NOTE~~NOTES DTO –INTERIM ~~INCOME~~CONSOLIDATED ~~TAXES~~FINANCIAL STATEMENTS

~~The~~THREE ~~Company~~MONTHS ~~(CFO~~ENDED ~~Consultants,~~MARCH ~~Inc.) filed organization paperwork with the State of Nevada. At the time of filing CFO Consultants~~31, ~~Inc.~~2010 ~~elected~~AND ~~and filed to be Sub Chapter S Corporation. This election allows all income taxes to be the responsibility of the Shareholders of Corporation not the corporation.~~ 2011

Deferred taxes will be provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.(UNAUDITED)

~~Due~~(US todollars ~~the inherent uncertainty~~ in forecasts and future events and operating results, the Company has provided for a valuation allowance in an amount equal to gross deferred tax assets resulting in no net deferred tax assets or liabilities for the periods audited.thousands)

~~NOTE~~3. ESUMMARY –OF ~~NET~~SELECTED ~~LOSS~~SIGNIFICANT ~~PER~~ACCOUNTING ~~COMMON~~POLICIES ~~SHARE~~(Continued)

Net loss per share is calculated in accordance with SFAS No. 128, “Earnings Per Share.” The weighted –average number of common shares outstanding during each period is used to compute basic loss per share. Basic net loss per common share is based on the weighted-average number of share of common stock of Five Million Five Hundred Eighty Thousand (~~5,580,000~~d) ~~outstanding~~Fair invalue ~~the development period ending Sept. 30, 2010. The resulting Net Loss per share is $0.0004 as shown on the bottom of the Income Statement .~~accounting

~~NOTE~~Financial FAccounting –Standards ~~SUBSCRIPTION~~Board ~~AGREEMENT~~(“FASB”) Accounting Standards Codification (“ASC”) No. 820-10 (“FASB ASC 820-10”) establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). As required by FASB ASC 820-10, assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The three levels of the fair value hierarchy under FASB ASC 820-10 are described below:

InLevel ~~December~~1 ~~2007,~~Unadjusted ~~the~~quoted ~~Company~~prices ~~undertook~~in aactive ~~private~~markets offering of Two Million (2,000,000) shares of common stock. The stock was offered with a price of .00315 per share. The private offering was made to Orion Investment Partners through a subscription agreement that ~~the~~are ~~shares~~accessible ~~were~~at ~~purchased with~~ the ~~intention~~measurement ofdate ~~holding the securities~~ for ~~investment purposes~~identical, ~~with~~unrestricted noassets ~~intention of dividing~~ or ~~allowing others to participate in this investment or to sell the securities for at least one year in the event that the company becomes registered with the Securities and Exchange Commission.~~liabilities;

InLevel ~~the~~2 ~~subscription~~Quoted ~~agreement~~prices ~~the~~in ~~purchaser~~markets ~~specifically agrees~~ that ifare ~~the~~not ~~Company~~active, ~~has~~or aninputs ~~initial~~that ~~public~~are ~~offering~~observable, ~~prior~~either todirectly ~~March~~or 15indirectly, ~~2008,~~for ~~and~~substantially the ~~underwriter~~full interm ~~such offering requires the existing shareholders~~ of the ~~Company~~asset ~~to agree to a lock-up period during which such shareholders will not dispose of~~ or ~~pledge their securities, the purchasers agree to the lock-up period prescribed by the underwriter.~~ liability;

OnLevel ~~February~~3 ~~19,~~Prices ~~2008,~~or ~~the~~valuation ~~Company~~techniques ~~filed~~that arequire ~~registration~~inputs ~~statement~~that onare ~~Form~~both ~~S-1~~significant ~~with~~to the ~~Securities~~fair ~~and~~value ~~Exchange~~measurement ~~Commission~~and ~~registering~~unobservable ~~5,000,000~~(supported ~~shares~~by oflittle ~~common stock in a direct public offering, without any involvement of underwriters~~ or ~~broker-dealers~~no ~~with~~market ~~a minimum offering of 2,000,000 shares~~activity). ~~On August 18, 2008 the Company closed its offering after having sold 2,130,000 newly issued common shares.~~

As of March 31, 2011, derivative instruments are measured at fair value on a recurring basis within Level 2 (See Note 10). The Company did not have any assets or liabilities measured on a recurring basis within Level 1 or Level 3.

The carrying value of financial instruments including cash, trade accounts receivable and payable, convertible notes and short-term borrowings approximate fair value due to their short maturities. The fair value of amounts due to shareholders is not practicable to estimate, due to the related party nature of the underlying transactions.

(e)

Revenue recognition

The Company generates its revenues from the sale of potato starch products.

Revenues from product sales are recognized only when persuasive evidence of an arrangement exists; delivery has occurred and any necessary customer acceptance has been received; the price to the customer is fixed or determinable, and collectability is reasonably assured. Generally, these criteria are met upon shipment of products and transfer of title to customers.

~~ITEM~~KAIBO 2.FOODS ~~Significant~~COMPANY ~~Financial Transaction~~LIMITED

~~During~~NOTES ~~the~~TO ~~quarter~~INTERIM weCONSOLIDATED ~~engaged~~FINANCIAL ~~Millenium Group Inc. to assist the company with new business development strategies and options.~~STATEMENTS

~~Millenium~~THREE ~~Group~~MONTHS isENDED ~~consulting~~MARCH ~~services firm owned and managed by Jonathan Mork 47. His father Dempsey Mork is one of our shareholders. CFO issued to Millenium Group a $25~~31,~~000~~ ~~convertible~~2010 ~~note~~AND ~~as a non-refundable retainer to pay for Millenium to complete~~2011

~~due diligence on CFO as required by Millenium to secure its assistance with future advice and assistance on new business directions~~(UNAUDITED)

~~including~~(US ~~possible~~dollars ~~acquisitions. Millenium will also receive a $400,000 cash payment if it is envolved~~ in assisting or advising the Company on any acquistion that is completed. The note is due and payable to Millenium in two years, and bears a 5% interest rate which shall accrue annuallyand be payable at maturity. At Millenium 's election, this note and any accrued interest can be retired at any earlier time by conversion into common shares.The note is convertible into 25% of CFO's fully diluted common shares at the time of conversion, with full anti-dilution protection (not adjusted for splits or new issuancesthousands)~~. CFO has also agreed that any shares issued under this note will have piggyback registration rights. The Board of Directors of CFO has approved and ratifiedthe terms of this note.~~

~~Item~~ 3. ~~MANAGEMENT'S~~SUMMARY ~~DISCUSSION AND ANALYSIS~~ OF ~~FINANCIAL~~SELECTED ~~CONDITION~~SIGNIFICANT ~~AND~~ACCOUNTING ~~RESULTS~~POLICIES ~~OF OPERATIONS~~(Continued)

~~FORWARD-LOOKING~~(f) ~~STATEMENTS~~Income taxes

~~This~~Income ~~Form~~tax ~~10-Q~~expense ~~includes~~is ~~"forward-looking~~recognized ~~statements"~~for ~~within~~ the ~~meaning~~amount of ~~Section~~taxes ~~27A~~payable ofor ~~the~~refundable ~~Securities~~for ~~Act of 1933, as amended, and Section 21E of~~ the ~~Securities~~current ~~Exchange Act of 1934, as amended~~year. ~~All~~In ~~statements~~addition, ~~other~~deferred ~~than~~tax ~~statements~~assets ofand ~~historical~~liabilities ~~facts,~~are ~~included~~recognized orfor ~~incorporated~~expected byfuture ~~reference~~tax inconsequences ~~this~~of ~~Form~~temporary ~~10-Q~~differences ~~which~~between ~~address activities, events or developments which~~ the ~~Company~~financial ~~expects~~reporting orand ~~anticipates~~tax ~~will~~bases orof ~~may~~assets ~~occur~~and ~~in the future~~liabilities, ~~including such things as future capital expenditures (including the amount~~ and ~~nature~~for ~~thereof);~~operating ~~finding~~losses ~~suitable merger or acquisition candidates; expansion~~ and ~~growth~~tax ofcredit ~~the~~carry ~~Company's business and operations; and other such matters are forward-looking statements~~forwards. Deferred ~~These~~taxes ~~statements~~ are ~~based~~measured ~~on certain assumptions and analyses made~~ by ~~the~~applying ~~Company~~enacted intax ~~light~~rates ~~of its experience and its perception of historical trends, current conditions and~~ expected ~~future~~to ~~developments,~~apply ~~as well as other factors it believes are appropriate under the circumstances. However, whether actual results or developments will conform with the Company's expectations and predictions is subject~~ to ~~a number of risks and uncertainties, including general economic, market and business conditions;~~ the ~~business~~taxable ~~opportunities~~income ~~(or~~in ~~lack thereof) that may be presented to and pursued by~~ the ~~Company;~~years ~~changes~~ in ~~laws~~which orthose ~~regulation;~~temporary ~~and~~differences ~~other factors, most of which~~ are ~~beyond~~expected ~~the~~to ~~control~~be ofrecovered ~~the~~or ~~Company~~settled.

~~These~~The ~~forward-looking~~Company ~~statements~~recognizes ~~can~~the befinancial ~~identified~~statement byimpact ~~the use~~ of ~~predictive,~~a ~~future-tense~~tax orposition ~~forward-looking~~taken ~~terminology, such as "believes," "anticipates," "expects," "estimates," "plans," "may," "will,"~~ or ~~similar~~expected ~~terms.~~to ~~These~~be ~~statements~~taken ~~appear~~ in a ~~number~~tax ofreturn ~~places~~ in ~~this Filing and include statements regarding the intent, belief or current expectations of the Company, and~~ its ~~directors~~consolidated ~~or its officers with respect to, among other things: (i) trends affecting the Company's~~ financial ~~condition~~statements orwhen ~~results~~it ofis ~~operations~~more-likely-than-not ~~for~~that ~~its limited history; (ii)~~ the ~~Company's~~position ~~business~~will ~~and~~be ~~growth~~sustained ~~strategies;~~upon ~~and,~~examination ~~(iii)~~by ~~the~~tax ~~Company's financing plans~~authorities. ~~Investors~~A ~~are~~recognized ~~cautioned~~tax ~~that~~position ~~any~~is ~~such~~then ~~forward-looking~~measured ~~statements~~at ~~are~~the ~~not~~largest ~~guarantees~~amount of ~~future~~benefit ~~performance and involve significant risks and uncertainties, and~~ that ~~actual~~is ~~results~~greater ~~may~~than ~~differ~~fifty ~~materially~~percent ~~from~~likely ~~those projected in the forward-looking statements as a result~~ of ~~various~~being ~~factors.~~realized ~~Such~~upon ~~factors~~ultimate that could adversely affect actual results and performance include, but are not limited to, the Company's limited operating history, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competitionsettlement.

~~Consequently,~~The ~~all~~Company offiles income tax returns in various foreign jurisdictions. Various foreign jurisdiction tax years remain open to examination; however, the ~~forward-looking~~Company ~~statements~~believes ~~made~~any inadditional ~~this~~assessment, ~~Form~~if ~~10-QSB~~any, ~~are~~will ~~qualified~~be byimmaterial ~~these~~to ~~cautionary~~its consolidated financial statements. The ~~and~~Company does not believe there ~~can~~will be noany ~~assurance~~material ~~that~~changes ~~the~~in ~~actual~~its ~~results~~tax orpositions ~~developments~~over ~~anticipated~~the bynext ~~the~~12 ~~Company~~months. Interest ~~will~~and bepenalties ~~realized~~accrued ~~or,~~on ~~even~~any ifunrecognized ~~substantially~~tax ~~realized~~benefits, ~~that~~if ~~they~~any, will ~~have~~be ~~the~~recognized ~~expected~~as ~~consequence~~a tocomponent orof ~~effects~~income ontax expense. As of March 31, 2011 the Company ordid ~~its~~not ~~business~~have any accrued interest or ~~operations.~~penalties ~~The~~associated ~~Company~~with ~~assumes~~any nounrecognized ~~obligations~~tax tobenefits, ~~update~~nor was any ~~such~~interest ~~forward-looking~~expense ~~statements~~recognized during the three months ended March 31, 2010 and 2011.

~~GENERAL~~(g) ~~DESCRIPTION~~Foreign OFcurrency ~~BUSINESS~~translation

~~Short~~The ~~term~~functional ~~(one~~currency toof ~~three~~Waibo, ~~month~~the Company’s wholly owned subsidiary, is the Hong Kong Dollar (“HK$”). ~~engagements~~The functional currency of ~~retired~~the ~~CFO~~Company’s towholly ~~assist~~owned aPRC ~~company~~subsidiaries is the Chinese Renminbi Yuan, (“RMB”). The RMB is not freely convertible into foreign currencies. The Company’s Hong Kong and PRC subsidiaries’ financial statements are maintained in ~~certain~~their respective functional currencies. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet date. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. Exchange gains or ~~restructurings~~losses ~~such~~arising asfrom aforeign ~~sale~~currency transactions are included in the determination of ~~business,~~net ~~tax~~income ~~situations,~~for ~~reorganizations~~the respective periods, ~~family~~which ~~transfers~~were ofnot ~~business,~~significant ~~estate~~in ~~planning~~2010 ~~etc.~~or 2011.

~~MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS~~12

~~The~~KAIBO ~~Company~~FOODS ~~has~~COMPANY a limited operating history upon which an evaluation of the Company, its current business and its prospects can be based. The Company's prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies in their early stages of development. Such risks include inadequate funding the company's inability to anticipate and adapt to a developing market, the failure of the company's infrastructure, changes in laws that adversely affect the company's business, the ability of the Company to manage its operations, including the amount and timing of capital expenditures and other costs relating to the expansion of the company's operations, the introduction and development of different or more extensive communities by direct and indirect competitors of the Company, including those with greater financial, technical and marketing resources, the inability of the Company to attract, retain and motivate qualified personnel and general economic conditions.LIMITED

~~The~~NOTES ~~Company~~TO ~~expects~~INTERIM ~~that~~CONSOLIDATED ~~its~~FINANCIAL operating expenses will increase significantly, especially as it implements its business plan. To the extent that increases in its operating expenses precede or are not followed by commensurate increases in revenues, or that the Company is unable to adjust operating expense levels accordingly, the Company's business, results of operations and financial condition would be materially and adversely affected. There can be no assurances that the Company can achieve or sustain profitability or that the Company's operating losses will not increase in the future.STATEMENTS

~~RESULTS~~THREE OFMONTHS ~~OPERATIONS~~ENDED MARCH 31, 2010 AND 2011

The Company has achieved no significant revenue or profits to date, and the Company anticipates that it will continue to incur net losses for the foreseeable future. The Company incurred a net loss of approximately $1,981 for the nine months ended September 30, 2009, compared with a net loss of $1,981 for the six months ended June 30, 2009. (UNAUDITED)

12(US dollars in thousands)

~~LIQUIDITY~~3. ~~AND~~SUMMARY ~~CAPITAL~~OF ~~RESOURCES~~SELECTED SIGNIFICANT ACCOUNTING POLICIES (Continued)

~~Since~~(g) ~~its~~Foreign ~~inception~~currency ~~the~~translation ~~Company has had limited operating capital, and has relied heavily on debt and equity financing.~~ (Continued)

~~The~~For financial ~~statements~~reporting aspurposes, ~~of and for~~ the ~~period~~consolidated ~~ended~~financial onstatements ~~December~~of ~~31, 2008 expressed their substantial doubt as to~~ the Company's ~~ability~~have tobeen ~~continue~~translated asinto aUnited ~~going~~States ~~concern~~dollars (“US$”). ~~Without~~Assets ~~additional~~and ~~capital,~~liabilities itare istranslated ~~unlikely~~at ~~that~~exchange ~~the~~rates ~~Company~~at ~~can~~the ~~continue~~balance assheet adates, ~~going~~revenue ~~concern. The Company plans to raise operating capital via debt~~ and ~~equity~~expenses ~~offerings. However, there~~ are notranslated ~~assurances~~at ~~that~~average ~~such~~exchange ~~offerings~~rates, ~~will~~and beshareholders’ ~~successful~~equity oris ~~sufficient~~translated toat ~~fund~~historical ~~the~~exchange ~~operations of the Company~~rates. InAny ~~the~~resulting ~~event~~translation ~~the~~adjustments ~~offerings~~ are ~~insufficient,~~not ~~the~~included ~~Company~~in ~~has~~determining ~~not~~net ~~formulated~~income abut ~~plan~~are toincluded ~~continue~~ as a ~~going~~foreign ~~concern.~~currency ~~Moreover,~~translation ifadjustment ~~such~~to ~~offerings~~other ~~are~~comprehensive ~~successful~~income, ~~they~~a ~~may~~component ~~result~~of ~~in substantial dilution to the existing~~ shareholders.’ equity.

~~CRITICAL~~The ~~ACCOUNTING~~exchange ~~POLICIES~~rates applied are as follows:

In Financial Reporting release No. 60, "CAUTIONARY ADVICE REGARDING DISCLOSURE ABOUT CRITICAL ACCOUNTING POLICIES" ("FRR 60"), the Securities and Exchange Commission suggested that companies provide additional disclosure and commentary on their most critical accounting policies. In FRR 60, the SEC defined the most critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, our most critical accounting policies include: non-cash compensation valuation that affects the total expenses reported in the current period and the valuation of shares and underlying mineral rights acquired with shares. The methods, estimates and judgments we use in applying these most critical accounting policies have a significant impact on the results we report in our financial statements.

	March 31,		December 31,		March 30,
	2010		2010		2011
Conversion from HK$ into US$:
Period end exchange rate		7.76		7.77		7.78
Average periodic exchange rate		7.76		7.77		7.79

Conversion from RMB into US$:
Period end exchange rate		6.83		6.59		6.54
Average periodic exchange rate		6.83		6.76		6.58

~~ITEM~~(h) 4.Earnings ~~QUANTITATIVE~~per ~~AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~share

~~The~~ASC ~~Company~~260 is“Earnings ~~not~~Per ~~exposed~~Share” requires dual presentation of basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to ~~market~~the ~~risk~~numerator ~~related~~and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to ~~interest~~issue ~~rates~~common stock were exercised or ~~foreign~~converted ~~currencies~~into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company.

~~CONTROLS~~Earnings ~~AND~~per ~~PROCEDURES~~basic share of common stock is based on the weighted average number of shares of common stock outstanding during each respective period. Earnings per diluted share of common stock adds to basic weighted shares the weighted average number of shares issuable under convertible securities and warrants outstanding during each respective period, using the if-converted and treasury-stock methods (See Note 8).

~~ITEM~~(i) 5.Recent ~~CONTROLS~~accounting ~~AND PROCEDURES~~guidance

~~Evaluation~~In January 2010, the FASB issued ASU 2010-06, “Fair Value Measurements and Disclosures.” This guidance is related to implementation of ~~Disclosure~~fair ~~Controls~~value measurement disclosures. This guidance updates ASC topic 820 and ~~Procedures~~specifically addresses: 1) transfers between levels 1, 2 and 3 of the fair value hierarchy; 2) level of disaggregation of derivative contracts for fair value measurement disclosures; and 3) disclosures about fair value measurement inputs and valuation techniques. This guidance became effective for the Company on January 1, 2011, and did not have a material impact on the consolidated financial statements.

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “1934 Act”), as of September 30, 2010, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures4. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer), who concluded, that because of the material weakness in our internal control over financial reporting (“ICFR”) described below, our disclosure controls and procedures were not effective as of September 30, 2010. INVENTORIES

~~Disclosure~~Inventories ~~controls~~consist and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. of:

Internal Control Over Financial Reporting

	December 31,		March 31,
	2010		2011
			(Unaudited)

Raw materials	$	454	$	948
Finished goods		1,142		1,375

	$	1,596	$	2,323

Our management is also responsible for establishing ICFR as defined in Rules 13a-15(f) and 15(d)-15(f) under the 1934 Act. Our ICFR are intended to be designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our ICFR are expected to include those policies and procedures that management believes are necessary that: 13

~~(i)~~KAIBO FOODS COMPANY LIMITED

~~pertain~~NOTES toTO ~~the~~INTERIM ~~maintenance~~CONSOLIDATED ofFINANCIAL ~~records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;~~ STATEMENTS

~~(ii)~~THREE MONTHS ENDED MARCH 31, 2010 AND 2011

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and our directors; and (UNAUDITED)

13(US dollars in thousands)

~~(iii)~~5. PROPERTY, PLANT AND EQUIPMENT

~~provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition~~Property, ~~use~~plant orand ~~disposition~~equipment ofconsist ~~the Company’s assets that could have a material effect on the financial statements.~~ of:

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect of financial statement preparation and may not prevent or detect misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.

	December 31,			March 31,
	2010			2011
				(Unaudited)
At cost:
Land use rights	$	713		$	718
Buildings		2,176			2,193
Motor vehicles		318			323
Plant and machinery		9,481			9,552
Other equipment		75			77
Construction in progress		4			34
		12,767			12,897
Less accumulated depreciation		(5,110	)		(5,407	)

	$	7,657		$	7,490

AsAt ofDecember ~~September 30~~31, 2010, ~~management~~and ~~assessed~~March ~~the~~31, ~~effectiveness~~2011, ofproperty ~~our~~and ~~ICFR~~equipment ~~based~~with oncarrying ~~the~~amounts ~~criteria~~of ~~for~~$5.3 ~~effective~~million ~~ICFR~~and ~~established~~$5.1 inmillion, ~~Internal~~respectively, ~~Control--Integrated~~were ~~Framework~~pledged ~~issued~~as bycollateral ~~the~~for ~~Committee~~bank offacilities ~~Sponsoring~~granted ~~Organizations~~to of the ~~Treadway~~Company ~~Commission~~ (~~COSO~~Note 6). ~~and~~Depreciation ~~SEC~~expense ~~guidance~~for onthe ~~conducting~~three ~~such~~months ~~assessments~~ended byMarch ~~smaller~~31, ~~reporting~~2010 ~~companies~~ and ~~non-accelerated~~2011 ~~filers~~was approximately $0.2 million for each period.

Based on that assessment, management concluded that, during the period covered by this report, such internal controls and procedures were not effective as of September 30, 2010 and that material weaknesses in ICFR existed as more fully described below. 14

AsKAIBO ~~defined~~FOODS byCOMPANY Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements and Related Independence Rule and Conforming Amendments,” established by the Public Company Accounting Oversight Board ("PCAOB"), a material weakness is a deficiency or combination of deficiencies that results more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses as of September 30, 2010: LIMITED

~~(1)~~NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

~~Lack~~THREE ofMONTHS anENDED ~~independent~~MARCH ~~audit~~31, ~~committee.~~2010 ~~Although~~AND we have an audit committee it is not comprised solely of independent directors. We may establish an audit committee comprised solely of independent directors when we have sufficient capital resources and working capital to attract qualified independent directors and to maintain such a committee. 2011

(2UNAUDITED)

~~Inadequate~~(US ~~staffing~~dollars and supervision within our bookkeeping operations. The relatively small number of people who are responsible for bookkeeping functions prevents us from segregating duties within our internal control system. The inadequate segregation of duties is a weakness because it could lead to the ultimate identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews which may result in ~~a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the Securities and Exchange Commission.~~ thousands)

~~(3)~~6. DEBT

~~Insufficient number of independent directors. At the present time, our Board of Directors does not consist of~~ (a) ~~majority~~Short-term ~~of independent directors, a factor that is counter to corporate governance practices as set forth by the rules of various stock exchanges.~~ borrowings:

Our management determined that these deficiencies constituted material weaknesses. Due to a lack of financial and personnel resources, we are not able to, and do not intend to, immediately take any action to remediate these material weaknesses. We will not be able to do so until we acquire sufficient financing and staff to do so. We will implement further controls as circumstances, cash flow, and working capital permit. Notwithstanding the assessment that our ICFR was not effective and that there were material weaknesses as identified in this report, we believe that our consolidated financial statements contained in our Quarterly Report on form 10-Q for the quarter ended September 30, 2010, fairly present our financial position, results of operations and cash flows for the years covered thereby in all material respects.

	December 31,		March 31,
	2010		2011
			(Unaudited)

Secured bank borrowings	$	2,655	$	3,440

~~There~~As ~~were~~of noMarch ~~changes~~31, in2011, ~~our~~the ~~internal~~Company ~~control~~has ~~over~~borrowings ~~financial~~from ~~reporting~~banks, ~~during~~expiring at various dates through November 23, 2011, primarily used to finance working capital requirements. The bank borrowings are in the ~~quarter~~form ~~ended~~of ~~September~~credit 30facilities, ~~2010~~which provide for borrowings of up to $3.4 million as of March 31, ~~that~~2011. ~~have~~All ~~materially~~amounts ~~affected~~available to the Company from the bank are based on the amount of collateral pledged. All banking facilities available to the Company were fully utilized as of March 31, or2011. Each draw on the bank facilities has a fixed term of twelve months for repayment. The interest rates on these borrowings are ~~reasonably~~fixed ~~likely~~at 5.31% to ~~materially~~5.89% ~~affect~~per annum as of March 31, ~~our~~2011. ~~internal~~The ~~control~~weighted ~~over~~average ~~financial~~short-term ~~reporting~~borrowing rate was 5.07% and 5.56% for the three months ended March 31, 2010 and 2011, respectively. These borrowings are collateralized by certain property, plant and equipment of the Company.

~~PART~~(b) IIConvertible ~~OTHER INFORMATION~~note:

~~ITEM~~On 1August 20, 2010, CFO Consultants issued a convertible note with principal amount of $25,000, and maturity date of August 20, 2012, to Millennium Group, Inc. Millennium ~~LEGAL~~Group, ~~PROCEEDINGS~~Inc. is a consulting services firm that is owned and managed by an individual whose father is a shareholder of the Company. The convertible note was issued to Millennium Group, Inc. as a non-refundable retainer to pay for Millennium to complete due diligence on CFO Consultants and to secure its assistance with future advice and assistance on new business directions including possible acquisitions. CFO Consultants also engaged Millennium Group, Inc. pursuant to a consulting agreement to assist them in connection with new business development strategies and options.

The ~~Company~~convertible isnote ~~not~~entitles aMillennium ~~party~~Group, Inc. to convert the note into 2.5% of the Company’s fully diluted common shares at their option at any ~~legal~~time ~~proceedings~~before the maturity date. The convertible note bears interest at 5% per annum and is payable in full, including accrued interest at maturity, unless converted earlier.

~~ITEM 1A. RISK FACTORS~~15

~~There~~KAIBO ~~are~~FOODS noCOMPANY ~~material changes in the risk factors set forth in Part I, Item 1A of the Company’s 10KL of December 31, 2009.~~LIMITED

~~ITEM~~NOTES 2.TO ~~UNREGISTERED~~INTERIM ~~SALES~~CONSOLIDATED OFFINANCIAL ~~EQUITY SECURITIES AND USE OF PROCEEDS~~STATEMENTS

~~There~~THREE ~~were~~MONTHS noENDED ~~sales~~MARCH of31, ~~unregistered~~2010 ~~equity~~AND ~~securities during the covered time period.~~2011

14(UNAUDITED)

~~ITEM~~(US 3.dollars ~~DEFAULTS~~in ~~UPON SENIOR SECURITIES~~thousands)

~~None~~6. DEBT (Continued)

~~ITEM~~(b) 4.Convertible ~~SUBMISSION~~note: ~~OF MATTERS TO A VOTE OF SECURITY HOLDERS~~(Continued)

~~None~~Under the consulting agreement, Millennium was to also receive a $400,000 cash payment if it was involved in assisting or advising the Company on any acquisition that was completed. On October 21, 2010, Millennium Group, Inc. elected to convert the entire balance of the convertible note plus accrued interest into 586,804 shares of the Company’s common stock. The fair value of the consideration received by Millennium Group, Inc. (the 586,804 shares of common stock) was determined to be approximately $400,000 at the date Millennium Group, Inc. provided the Company with its notice to convert (October 21, 2010). However, the Company has not issued shares to Millennium Group, Inc. to complete the conversion. Therefore, this amount has been reported as a liability within “Accruals and Other Payables” as of March 31, 2011.

~~ITEM 5~~7. ~~OTHER~~INCOME ~~INFORMATION~~TAXES

~~None.~~Pre-tax income from operations for the three months ended March 31, 2010 and 2011, was taxable in the following jurisdiction:

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

	Three Months Ended March 31,
	2010		2011
	(Unaudited)		(Unaudited)

Current income tax expenses - PRC	$	690	$	-

~~The~~(a) ~~following~~United ~~documents~~States ~~are~~of ~~included or incorporated by reference as exhibits to this report:~~America

Exhibit Number	Description
31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

No U.S. corporate income taxes are provided for in these consolidated financial statements, as the Company did not generate any taxable income in the U.S.

(b) ~~REPORTS~~Hong ~~ON FORM 8-K~~Kong

~~None~~No provision has been made for Hong Kong profits tax as the Company did not earn income subject to Hong Kong profits tax.

1516

~~SIGNATURES~~KAIBO FOODS COMPANY LIMITED

InNOTES ~~accordance~~TO ~~with~~INTERIM ~~Section~~CONSOLIDATED 13FINANCIAL ~~or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: October 14, 2010.~~STATEMENTS

~~CFO~~THREE ~~Consultants,~~MONTHS ~~Inc.~~ENDED ~~Registrant~~MARCH ~~By:~~31, ~~/s/~~2010 ~~Neville~~AND ~~Pearson Neville Pearson Chairman of the Board Chief Executive Officer~~2011

16(UNAUDITED)

(US dollars in thousands)

7.	INCOME TAXES (Continued)

(c)

PRC (Continued)

The Company’s PRC subsidiaries were entitled to enjoy a preferential tax rate of 15% from 2003 to 2007 as they are engaged in agricultural projects encouraged by the government in the western region of China. However, pursuant to the circular entitled Scope of Preliminary Processing of Agricultural Products Entitled to Preferential Enterprise Income Tax Policies (Trial Implementation) published by Ministry of Finance (“MOF”) and State Administrative of Taxation (“SAT”), the Company’s PRC subsidiaries have been entitled to full exemption from PRC corporate income tax beginning January 1, 2008. The exemption currently is not subject to any limitations.

A reconciliation of the PRC tax rate to the actual provision for taxes is as follows:

	Three Months Ended March 31,
	2010			2011
	(Unaudited)			(Unaudited)

PRC tax rate		15	%		15	%

Computed expected income tax expense	$	1,028		$	1,067
Tax exempt income – PRC subsidiaries		(1,035	)		(1,095	)
Hong Kong holding company losses		7			28
PRC withholding tax on dividends		690			-

	$	690		$	-

Pursuant to the New Tax Law, dividends declared by the Company’s PRC subsidiaries to their parent companies incorporated in Hong Kong are subject to withholding tax. In accordance with Caishui (2008) No. 1 (“Circular 1”) issued by State Tax Authorities in February 2008, undistributed profits from the PRC subsidiaries up to December 31, 2007 are exempt from withholding tax when they are distributed in the future. As a result, current income tax for three months ended March 31, 2010 includes a provision for dividend withholding tax for distributable profits that were earned subsequent to January 1, 2008. No provision for dividend withholding tax has been provided since October 1, 2010, as our Board of Directors and management have approved a plan to reserve all profits earned after October 1, 2010 for the Company’s business expansion in future.

No deferred tax assets or liability have been recorded as there were no significant temporary differences that give rise to a deferred tax asset or liability as of December 31, 2010 and March 31, 2011.

KAIBO FOODS COMPANY LIMITED

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2010 AND 2011

(UNAUDITED)

(US dollars in thousands)

8.	NET INCOME PER SHARE

Basic net income per share is calculated using the weighted average number of shares of common stock outstanding during the period. Diluted net income per share assumes the conversion, exercise or issuance of all potential common stock instruments, such as warrants and convertible debt, unless the effect is anti-dilutive.

The following is a reconciliation of the denominators for the weighted average number of shares outstanding used in the calculation of basic net income per share for the three months ended March 31, 2010 and 2011:

	2010		2011
	(Unaudited)		(Unaudited)

Shares issued beginning of period		2,361,716		3,285,007
Effect of reverse merger (1)		20,131,759		20,131,759

Basic weighted average shares – end of period		22,493,475		23,416,766

(1)

Earnings per share for periods prior to the reverse merger have been restated to reflect the equivalent number of shares to be received pursuant to the Share Exchange by the Waibo shareholders.

The following is a reconciliation of the denominators for the weighted average number of shares outstanding used in the calculation of diluted net income per share for the three months ended March 31, 2010 and 2011:

	2010		2011
	(Unaudited)		(Unaudited)

Basic weighted average shares – end of period		22,493,475		23,416,766
Effect of convertible debt		-		586,804

Diluted weighted average shares – end of period		22,493,475		24,003,570

As of March 31, 2011 the Company had warrants outstanding to purchase 171,536 shares of common stock, which were considered anti-dilutive as exercise prices of the warrants exceeded the average market price of the Company’s common stock. As of March 31, 2010, the Company had no potentially dilutive securities outstanding.

KAIBO FOODS COMPANY LIMITED

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2010 AND 2011

(UNAUDITED)

(US dollars in thousands)

9.	RELATED PARTY BALANCES AND TRANSACTIONS

The amounts due to shareholders as of March 31, 2010 and 2011 and transactions during the respective periods are as follows:

	2010			2011
	(Unaudited)			(Unaudited)

Balance at January 1,	$	596		$	2,870
Cash advances from shareholders		2,927			1,300
Repayment of cash advances from shareholders		(2,073	)		-

Balance at March 31,	$	1,450		$	4,170

The amounts due to shareholders are unsecured, non-interest bearing and have no fixed terms of repayment. Cash advances received from shareholders are primarily used by the Company to finance working capital requirements.

10.	DERIVATIVE INSTRUMENTS

The Company has warrants outstanding to purchase an aggregate of 171,536 shares of the Company’s common stock at an exercise price of $5.23 per share or on a cashless exercise basis, which expire on March 10, 2014. If at any time prior to the exercise of the warrants, the Company enters into an agreement to issue shares of its common stock at a price less than that obtained for the common stock and warrants issued in December 2010, the exercise price of the warrants will be adjusted downward as to obtain an equivalent number of shares of common stock at the lower issuance price. As a result, the warrants are not considered to be indexed to the Company’s common stock and are therefore accounted for as a derivative liability instrument in the Company’s consolidated balance sheet. As of December 31, 2010, the Company valued the warrants at approximately $55,000 using a binominal model and has reported the warrants as a liability on its consolidated balance sheet under the caption “Derivative Instruments”. The change in fair value of the derivative instruments during the three months ended March 31, 2011 was approximately $61,000. Changes to the fair value of the derivative instruments are reported in the Company’s statement of operations under the caption “Interest expense and other”.

The assumptions used in the binominal model to estimate the fair value of the warrants as of March 31, 2011 are as follows:

Stock price	$	2.89
Risk free interest rate		1.17	%
Expected life	2.73 years
Expected volatility		63.56	%
Expected dividend yield		0	%

KAIBO FOODS COMPANY LIMITED

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2010 AND 2011

(UNAUDITED)

(US dollars in thousands)

11.	CONCENTRATION OF RISK

Financial instruments that potentially subject the Company to a significant concentration of credit risk consist principally of the following:

(a)

Cash and cash deposits

The Company maintains its cash and cash deposits primarily with various China State-owned banks and Hong Kong-based financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions.

(b)

Trade receivables and revenue

The Company sells potato starch to customers in the PRC. Management considers that the Company’s current customers are generally creditworthy and credit is extended based on an evaluation of the customers’ financial condition. Therefore, collateral is generally not required. The Company evaluates accounts receivable for potential credit losses based on its loss history and aging analysis. Such losses have been within management’s expectations. At December 31, 2010 and March 31, 2011, the five largest customers accounted for 26% and 23% of trade receivables, respectively. No single customer exceeds 10% of trade receivables. For the three months ended March 31, 2010 and 2011, the five largest customers accounted for 25% and 22% net of sales, respectively. No single customer exceeds 10% of revenue for the three months ended 2010 and 2011.

(c)

Commodity risk

The cash flows and profitability of the Company’s current operations are significantly affected by the market price of potato starch and potatoes. These commodity prices can fluctuate widely and are affected by factors beyond the Company’s control.

(d)

Foreign currency risk

The RMB is not freely convertible into foreign currencies. The State Administration for Foreign Exchange, under the authority of People’s Bank of China, controls the conversion of the RMB into foreign currencies. The value of the RMB is subject to changes in China government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. All foreign exchange transactions continue to take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China.

12.	COMMITMENTS AND CONTINGENCIES

(a)

Capital commitments

In August 2010, the Company entered into agreements with the People’s Government of the Zhaoyang District, Yunnan Province to purchase property, plant and equipment totaling approximately $19 million related to the construction of production facilities. As of March 31, 2011, the Company has purchased $0.2 million of property, plant and equipment under these agreements and has made $3.3 million of deposits under these agreements. Therefore, as of March 31, 2011 the commitment has been reduced to $15.5 million.

KAIBO FOODS COMPANY LIMITED

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2010 AND 2011

(UNAUDITED)

(US dollars in thousands)

12.	COMMITMENTS AND CONTINGENCIES (Continued)

(b)

Lease commitments

Operating lease commitments include commitments under non-cancellable lease agreements for the Company’s office premises, as well as a land lease. The leases expire from July 2011 through October 2042. The yearly future minimum rental payments required as of March 31, 2011 were as follows:

	Amount
2011 (nine months)	$	214
2012		81
2013		46
2014		23
2015		23
Thereafter		606

	$	993

Rent expense under operating leases for the three months ended March 31, 2010 and 2011 was approximately $0.1 million for each period.

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

Disclaimer Regarding Forward-Looking Statements

This Quarterly Report contains forward-looking statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,” “believes,” “management believes” and similar language. Except for the historical information contained herein, the matters discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this report are forward-looking statements that involve risks and uncertainties. The factors listed in the section captioned “Risk Factors,” as well as any cautionary language in this report provide examples of risks, uncertainties and events that may cause our actual results to differ materially from those projected. Except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events after the date of this Quarterly Report.

OVERVIEW

We are a premium native potato starch manufacturer in the PRC. Our corporate headquarters is based in Hong Kong and our operational headquarters is based in Kunming city, Yunnan province. We began operations in 2004 and have factories located in Yunnan, Guizhou and Gansu provinces of China.

We primarily sell our products to distributors and food processing companies in the PRC.

Our products are currently sold under the “Wei Bao” and “Jiabao” brand names. The Wei Bao brand is targeted primarily to food processors and our Jiabao brand is targeted to food service operators. We believe that our company is one of the top 5 premium starch potato processors in the PRC, with a production capacity of 111,500 metric tons per year. In 2008, we received the “China’s Potato Starch Industry Top Ten Best Selling Products”, “China’s Potato Starch Industry Top Ten Customer Satisfaction Product” and “China’s Potato Starch Industry Top Ten Best Brands” awards. Our Jiabao brand created in 2007 is gaining the acceptance of our target customers.

Reverse acquisition and reorganization

On October 21, 2010, we completed a reverse acquisition transaction with Kaibo Foods Holdings Limited (f/k/a CFO Consultants, Inc.) through a share exchange with former shareholders of Kaibo Foods Holdings Limited.

Pursuant to the Exchange Agreement by and among the Company, Waibo, the holders of all outstanding shares of Waibo (the “Waibo Shareholders”) and Orion Investment Inc. (the “Company’s Principal Shareholder”), we acquired all of the outstanding shares of Waibo (the “Waibo Shares”) from the Waibo Shareholders and the Waibo Shareholders transferred all of the Waibo Shares to us. In exchange, we agreed to issue to the Waibo Shareholders or their designee, an aggregate of 22,493,475 shares of common stock (the “Exchange Shares”), equal to 96% of all of our outstanding common stock, after giving effect to the conversion of an outstanding convertible note of the Company held by Millennium Group, Inc., in the principal amount of $25,000 (the “Convertible Note”). The Convertible Note is convertible into 586,804 shares of common stock. On the Closing Date, we did not have sufficient authorized shares to complete the issuance of the entire amount of Exchange Shares and shares issuable pursuant to the Convertible Note, so only 2,361,716 shares of common stock were issued to the designee of the Waibo Shareholders at the closing, and no shares were issued to the holder of the Convertible Note.

The business combination was accounted for as a reverse acquisition and recapitalization, whereby we were the surviving and continuing entity for financial reporting purposes and are deemed to be the acquirer of Waibo. The business combination is accounted for as a reverse acquisition and recapitalization because (i) after the business combination the Waibo Shareholders held approximately 96% of our issued and outstanding shares of common stock (87% based on the actual number of shares issued on the Closing Date) and (ii) we had no prior operations.

Sales

We normally enter into six-month agreements with our customers. The agreement specifies the quantity that the customer believes they will buy during the forthcoming nine months and the negotiated price per metric ton. Our customers are not charged a penalty for failing to purchase the quantities set forth in our contracts. However, historically our customers have purchased the set amount in the contracts. In the event the market price exceeds the 10% of the price stipulated in the contract, the agreed price stated on the agreement will be adjusted to the reflect the current market price.

We sell premium quality native potato starch, which is usually sold for 5-10% more than the average market price.

We have established an extensive distribution network in the PRC. During the three months ended March 31, 2011, 50.1% and 49.9% of our products, respectively, were sold to manufacturers and distributors.

Revenue from sales of our native potato starch is recognized upon delivery of our products to the railway station nearest to our respective factories at which time the significant risks and rewards of ownership of our products are transferred to the customers.

The main factors that affect our revenue include the following:

(a)	Competition

We expect to face competition from potato starch producers with more than 20,000 metric tons of annual production capacity and new entrants. Our future revenue growth depends on our ability to compete effectively against such competitors and on key considerations including the price and quality of our products. If we are unable to retain existing customers and secure new ones, or fail to develop new products to meet the needs of our customers, our revenue and profitability may be adversely affected.

(b)	Stable supply of raw materials

Profitability in the potato starch industry is materially affected by the need to maintain a sufficient supply of potatoes at stable prices from farmers. These commodity prices are determined by supply and demand. While the potato starch industry has historically not been subject to wide fluctuations and cycles, we cannot eliminate the risk of increased operating costs from potato price increases, and it is very difficult to predict when and if price spiral cycles will occur.

(c)	Alternative raw materials or production technology

If a new source of starch is discovered as a substitute to native potato starch or new production technologies are developed that render our production facilities obsolete, our revenue and profitability may be adversely affected.

(d)	Our production capacity

We currently have a production capacity of 111,500 metric tons per year for native potato starch. As of March 31, 2011, our production capacity utilization was 88%. We plan to establish new production lines for native potato starch, modified potato starch and whole potato starch. We plan to increase our production capacity to 184,500 metric tons by 2012. Should we able to increase our production capacity in time to meet any increase in demand, future growth of our revenue will be significantly improved.

(e)	Growth of native potato starch industry

The PRC continues to experience exponential economic and population growth. The per capita usage of potato starch in the PRC is mere 0.8kg per annum, compared to 10kg in developed regions such as Europe and Japan. With the increase in disposable income of the population and the per capita usage of potato starch, we believe that the demand for our products will continue to rise and improve our revenue and profitability.

Cost of sales

Our cost of sales comprises cost of raw material, direct labor and production overhead, which accounted for 82.5%, 1.3% and 16.2% of our cost of sales respectively for the three months ended March 31, 2011.

Potatoes are a key raw material and we source them from farmers in Yunnan, Gansu and Guizhou provinces in the PRC.

Direct labor includes salaries, wages and staff related costs of plant operators and those who are directly involved in the production of our products. Overhead consists mainly of depreciation charges on machinery, utilities (water and electricity) and other factory related costs.

In addition to the volume of production, our costs of sales are affected by (i) factors affecting the costs of raw materials, such as, market demand and supply conditions for potatoes, and harvesting conditions; (ii) factors affecting labor costs, such as demand and supply of labor, general wage levels, and government regulations; as well as (iii) factors affecting general manufacturing overhead, such as our depreciation expense resulting from capital expenditures and general prices of utilities charges.

Operating expenses

Our operating expenses consist of selling and distribution costs and administrative expenses.

Our selling and distribution costs consisted of transportation costs, salaries and staff welfare expenses of sales personnel, entertainment expenses and telecommunication expenses incurred by our sales personnel. Our facilities are strategically located near railways, which we use as the main method of transporting our products. We pay for shipment of our products to the railway station, while our customers pay for the railway transfer fee. Transportation costs accounted for an average of 73.0% of our selling and distribution costs incurred for the three months ended March 31, 2011.

Our administrative and other expenses consisted of salaries and staff related expenses for administrative personnel, depreciation charges, entertainment expenses and other office related expenses. The major components of administrative and other expenses include salaries and depreciation, which accounted for an average of 25.5% and 2.4% of our administrative expenses incurred for the three months ended March 31, 2011.

Other non-operating income

Other non-operating income consists of government subsidies, bank interest income and other items. All of our PRC subsidiaries are accredited with “Leading Enterprise” status, which has entitled them to receive various forms of preferential treatment from the local and state governments including government subsidies and infrastructural assistance. The subsidies received related to agriculture land development fund contributions, commitment to produce high quality native potato starch and our contribution to rural agriculture development.

Interest expense and other

Our interest expense and other consists mainly of interest on bank borrowings, which were incurred for working capital purposes as well as changes in the fair value of our derivative instruments (warrants).

Income tax expenses

The PRC has enacted a tax policy that entitles a foreign corporation to a full exemption from both PRC state and local corporate income tax for the first two profitable calendar years of its operations and thereafter a 50% relief from the PRC state corporate income tax and full exemption from local corporate income tax for the following three calendar years. Our PRC subsidiaries, Yunnan Zhaoyang Weili Starch Co, Guizhou Province Weining Weili Starch Co. Ltd., Gansu Weibao Starch Co., Ltd. and Yunnan WeiBao Modified Starch Limited, qualify for such tax exemptions. The circular entitled “Scope of Preliminary Processing of Agricultural Products Entitled to Preferential Enterprise Income Tax Policies (Trial Implementation)” published by Ministry of Finance and State Administrative of Taxation, entitled us to a full exemption from PRC corporate income tax since January 1, 2008. Our native potato starch qualifies for this exemption and as a result none of our subsidiaries are subject to PRC corporate income tax.

Pursuant to the New Tax Law, dividends declared by our PRC subsidiaries to their parent company incorporated in Hong Kong are subject to withholding tax of 5% or 10%. In accordance with Caishui (2008) No. 1 issued by State Tax Authorities, undistributed profits from our PRC subsidiaries up to December 31, 2007 will be exempt from withholding tax when they are distributed in the future. As a result, a provision for dividend withholding tax has been made starting January 1, 2008. No provision for dividend withholding tax has been provided since October 1, 2010, as our Board of Directors and management have adopted a plan to reserve all profits earned after October 1, 2010 for our business expansion in the future. As a United States public company, we do not intend to pay such dividends.

Seasonality

From May through July, we typically halt our production process at our facilities located in Yunnan and Guizhou provinces. The potato-planting season typically begins in March and the potatoes are delivered to our facilities from August until December. The farmers store remaining unsold potatoes in cellars for up to four months, which allows us to expand our production period until April.

Our Gansu factory is in one of the colder regions in China and typically halts production during January and February and resumes production from March to May. It typically shuts down again during June and July and resumes production in August. During the off-season, we spend time performing routine maintenance.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We have identified certain accounting policies that are significant to the preparation of the financial statements. Critical accounting policies are those that are both most important to the portrayal of our results of operations and financial condition and require management’s most difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of the financial statements.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Expenditures for routine repairs and maintenance are expensed as incurred.

Depreciation is calculated on the straight-line basis over each asset’s estimated useful life down to the estimated residual value of each asset. Estimated useful lives are as follows:

Land use rights		52-55 years
Buildings		20 years
Motor vehicles		5 years
Plant and machinery		10 years
Other equipment		5 years

We review and evaluate property, plant and equipment for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets. An impairment loss is measured and recorded based on discounted estimated future cash flows. Our estimates of future cash flows are based on numerous assumptions, and it is possible that actual future cash flows will be significantly different than the estimates which are subject to significant risks and uncertainties. Management believes that there is no impairment to property, plant and equipment as of March 31, 2011.

Revenue recognition

We generate our revenues from the sale of native potato starch products. Revenues from product sales are recognized only when persuasive evidence of an arrangement exists; delivery has occurred and the customers' acceptance has been received; the price to the customer is fixed or determinable; and collectability is reasonably assured. Generally, these criteria are met upon shipment of products and transfer of title to customers.

Inventories

Inventory is stated at the lower of cost or market. Inventory is valued using the weighted average method, which approximates actual cost. Capitalized costs include materials, labor and manufacturing overhead related to the purchase and production of inventories. Excess and obsolete inventory reserves are established based upon our evaluation of the quantity of inventory on hand relative to demand. The total reserve for obsolete inventory was zero as of March 31, 2011.

Allowance for Doubtful Accounts

An allowance for doubtful accounts is provided based on an evaluation of the collectability of accounts receivable, and other receivables. An allowance for doubtful accounts is provided, when considered necessary, primarily consisting of an analysis based on current information available about the customer or borrower. Receivable losses are charged against the allowance when our management believes the uncollectability of the receivable is confirmed. Subsequent recoveries, if any, are credited to the allowance. Total allowance for doubtful accounts was zero as of March 31, 2011.

RECENTLY ISSUED ACCOUNTING GUIDANCE

In January 2010, the FASB issued ASU 2010-06, “Fair Value Measurements and Disclosures.” This guidance is related to implementation of fair value measurement disclosures. This guidance updates ASC topic 820 and specifically addresses: 1) transfers between levels 1, 2 and 3 of the fair value hierarchy; 2) level of disaggregation of derivative contracts for fair value measurement disclosures; and 3) disclosures about fair value measurement inputs and valuation techniques. This guidance became effective for the Company on January 1, 2011, and did not have a material impact on the consolidated financial statements.

Results of Operations

Comparison of the three months ended March 31, 2011 and 2010.

Sales

Our sales increased by 51.4% from $17.0 million for the first quarter of 2010 to $25.7 million for the first quarter of 2011 as a result of the increase in our average selling prices by 56.3% in the first quarter of 2011 compared to that of 2010.

Cost of sales

Our cost of sales increased by 83.2% from $9.6 million for the first quarter of 2010 to $17.6 million for the first quarter of 2011, primarily due to corresponding increases in the average purchase price of potatoes.

Gross profit and gross profit margin

	Three Months Ended March 31,
	2010			2011
	(Dollars in thousands except units and per unit data)
Revenue	$	16,973		$	25,689
Gross profit	$	7,345		$	8,049
Unit sales (metric tons)		22,740			22,020
Gross profit per unit	$	323.0		$	365.5
Gross profit as a percent of revenue		43.3	%		31.3	%

The price of agricultural products has increased significantly since third quarter of 2010 and became relatively stable during the first quarter of 2011. The average purchase price of potatoes increased by 94.0% from $61 (RMB 399) per metric ton for the three months ended March 31, 2010 to $118 (RMB 774) per metric ton for the three months ended March 31, 2011. The increase in the average purchase price of potatoes in the third quarter of 2010 resulted in an increase in the ratio of our cost of sales as a percentage to our sales in 2011.

Though our gross profit margin decreased from 43.3% in 2010 to 31.3% in 2011, we have successfully passed through the increase in the purchase price of potatoes to our customers and improved our gross profit per unit by 13.2% from $323.0 per metric ton in 2010 to $365.5 per metric ton in 2011. Our customers are well informed regarding potato prices and the fact that potatoes are our major cost of sales. Since our sales people are able to explain the price changes, we did not experience difficulty in gaining full customer acceptance on our price adjustments. We did not lose any anticipated orders and were able to maintain our overall gross profit levels.

We believe that we have the ability to transfer incremental cost to our customers by making timely adjustments to our selling price. As a result, our total gross profit still increased by 9.6% from $7.3 million in 2010 to $8.0 million in 2011.

Operating expenses

Operating expenses increased by 14.6% from $0.8 million for the first quarter of 2010 to $0.9 million for the first quarter of 2011. The increase was due to professional services and additional costs of being a publicly reporting company that we incurred during the first quarter of 2011. We were not a publicly reporting company in the first quarter of 2010.

Income tax expense

The PRC subsidiaries have been entitled to full exemption on enterprise income tax in the PRC since January 1, 2008. The income tax expense recorded during the first quarter of 2010 was provided for the dividend withholding tax of 10% on dividends declared by the PRC subsidiaries to their parent company incorporated in Hong Kong.

Our Board of Directors and management decided to reserve all profits earned after October 1, 2010 for our business expansion in the future and therefore no provision for dividend withholding tax has been provided for since October 1, 2010.

LIQUIDITY AND CAPITAL RESOURCES

We have historically financed operations primarily through internally generated cash, loans borrowed from banks and advances from shareholders. Going forward, we believe our sources of liquidity will be satisfied by using a combination of cash provided by our operating activities and proceeds from future offerings.

The following table sets out a summary of our cash flow during the three months ended March 31, 2010 and 2011:

	Three Months Ended March 31,
	2010		2011

	(Dollars in thousands)
Net cash provided by operating activities	$	11,889	$	15,771
Net cash used in investing activities		-		(3,317)
Net cash (used in) provided by financing activities		(21,921)		2,063
Net (decrease) increase in cash and cash equivalents		(10,032)		14,517
Effect of foreign exchange rate on changes in cash and cash equivalents		(172)		293
Cash and cash equivalents at beginning of year		22,131		27,374
Cash and cash equivalents at end of year	$	11,927	$	42,184

Cash flow from operating activities

We derive our cash flow from operating activities principally from receipt of payments for sales of our products. Our cash outflow from operating activities is principally from purchases of raw materials.

For the three months ended March 31, 2011, we had net cash generated from operating activities of $15.8 million, which was primarily contributed by net income before working capital changes of $7.2 million and a decrease, representing customer repayments, in trade accounts receivable of $9.0 million. The decrease in trade accounts receivable was primarily due to seasonality of sales which peak in the fourth quarter of the year.

For the three months ended March 31, 2010, we had net cash generated from operating activities of $11.9 million, which was primarily contributed by net income before working capital changes of $6.2 million and a decrease, representing customer repayments, in trade accounts receivable of $6.0 million. The decrease in trade accounts receivable was primarily due to seasonality of sales which peak in the fourth quarter of the year.

Cash flow from investing activities

Our cash outflow from investing activities is principally for purchases of and deposits made for property, plant and equipment during the three months ended March 31, 2010 and 2011.

Cash flow from financing activities

We derive our cash inflow from financing activities principally from bank borrowings and advances from shareholders. Our cash outflow from financing activities relates primarily to repayment of bank borrowings, advances to shareholders and the payment of dividends.

For the three months ended March 31, 2011, we had net cash provided by financing activities of $2.1 million, which was due to advances received from shareholders of $1.3 million and proceeds from short term debt of $0.8 million.

For the three months ended March 31, 2010, we had net cash used in financing activities of $21.9 million, which was primarily due to the cash outflow used to pay dividends of $22.8 million.

NET CURRENT ASSETS

The following table sets out our current assets and current liabilities as at the dates indicated:

	December 31,		March 31,
	2010		2011
Current assets:
Cash	$	27,374	$	42,184
Trade accounts receivable		22,165		13,327
Inventories		1,596		2,323
Prepayments and other receivables		1,296		358
	$	52,431	$	58,192

Current liabilities:
Trade accounts payable		240		394
Accruals and other payables		3,530		2,535
Income taxes payable		2,949		2,947
Short term borrowings		2,655		3,440
Convertible note		25		25
Derivative instruments		55		116
Due to shareholders		2,870		4,170
		12,324		13,627
Net current assets	$	40,107	$	44,565

We had net current assets of $44.6 million as of March 31, 2011. The improvement in net current assets as of March 31, 2011 from December 31, 2010 of $4.5 million was primarily due to increase in cash as a result of the cash inflow from operating activities.

Trade accounts receivable

Our trade accounts receivable represent receivables from customers for sales of products. We had trade accounts receivable of $22.2 million and $13.3 million as of December 31, 2010 and March 31, 2011, respectively. The decrease in trade receivables as of March 31, 2011 was due primarily to seasonality of sales.

The table below sets out our trade accounts receivable turnover days for the period indicated:

	Year Ended		Three Months Ended
	December 31,		March 31,
	2010		2011

Trade accounts receivable turnover days (note)		80		62

Note:

Trade accounts receivable turnover days is equal to the average trade accounts receivable divided by sales and multiplied by 365 days (90 days for the March 31, 2011 period). Average trade accounts receivable are equal to trade accounts receivable at the beginning of the year plus trade accounts receivable at the end of the year and divided by two.

The reduction in trade accounts receivable turnover days in 2011 to 62 days was as a result of low trade accounts receivable being outstanding as of March 31, 2011 due to seasonality of sales.

Inventories

Our inventories increased to $2.3 million as of March 31, 2011 from $1.6 million as of December 31, 2010. The increase was due to increase in purchase prices for potatoes as of March 31, 2011 compared with that of December 31, 2010.

The following table sets out the summary of balance of our inventories as of the dates indicated:

	December 31,		March 31,
	2010		2011

Raw materials	$	454	$	948
Finished goods		1,142		1,375
	$	1,596	$	2,323

The following table sets out the inventory turnover days as of the dates indicated:

	Year Ended December 31,		Three Months Ended March 31
	2010		2011

Inventory turnover days		9		10

Note:

The calculation of inventory turnover days is based on the average inventory balances divided by cost of goods sold and multiplied by 365 days for the year (90 days for the March 31, 2011 period). Average inventory balances are equal to inventory balance at the beginning of the year plus inventory balances at the end of the year and divided by two.

The inventory turnover days remained stable for December 31, 2010 and March 31, 2011.

Trade accounts payable

Our trade accounts payable primarily represented the amount we owed to our suppliers for the purchase of raw materials, mainly potatoes, packaging materials and coal.

Due to shareholders

The balances of amount due to shareholders of $2.9 million and $4.2 million as of December 31, 2010 and March 31, 2011 are unsecured, interest free and have no fixed terms of repayment.

Property, plant and equipment

Net plant and machinery and other office equipment, amounted to $7.7 million and $7.5 million as of December 31, 2010 and March 31, 2011, respectively. We had no significant additions to property, plant and equipment during the periods presented. Deposits of $3.3 million were made to purchase additional property, plant and equipment during the three months ended March 31, 2011.

Capital Expenditures

The following table sets out the historical capital expenditures during the period indicated:

	Year Ended December 31,		Three Months Ended March 31,
	2010		2011

Furniture, fixtures and office equipment	$	153	$	30

The following table sets out our projected capital expenditures for the three years ending December 31, 2013:

	December 31,
	2011		2012		2013
	(Dollars in thousands)
Land use rights	$	13,761	$	35,627	$	-
Buildings		9,940		5,852		12,895
Plant and machinery		7,951		20,234		10,805
	$	31,652	$	61,713	$	23,700

We expect that the capital expenditures for the three years ending December 2013 will be primarily used for land use rights, buildings, and plant and machinery to establish new production lines for native potato starch, modified potato starch and whole potato starch.

We expect to finance our projected capital expenditures mainly by the net proceeds from any future equity offerings after the and cash generated from operating activities.

COMMITMENT AND CONTINGENCIES

(a)	Capital commitments

(b)	Lease commitments

Operating lease commitments include commitments under non-cancellable lease agreements for our office premises, as well as a land lease. The leases expire from July 2011 through October 2042. The yearly future minimum rental payments required as of March 31, 2011 were as follows:

	(Dollars in thousands)
2011 (nine months)	$	214
2012		81
2013		46
2014		23
2015		23
Thereafter		606
	$	993

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness, as of March 31, 2011, of the design and operation of our disclosure controls and procedures, as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of such date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Not applicable to smaller reporting companies.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. [Removed and Reserved]

Item 5. Other Information

None.

Item 6. Exhibits.

(b) Exhibits

Exhibit No.		Description
31.1	*	Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	*	Certification of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	*	Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*	Filed herewith.

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.

	KAIBO FOODS COMPANY LIMITED

Date: May 13, 2011	By:	/s/ Joanny Kwok
	Joanny Kwok, Chief Executive Officer and President
	(Principal Executive Officer)

Date: May 13, 2011	By:	/s/ Ken Tsang
	Ken Tsang, Chief Financial Officer
	(Principal Financial and Accounting Officer)

EXHIBIT INDEX

Exhibit No.		Description
31.1	*	Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	*	Certification of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	*	Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*	Filed herewith.

Filing Compare · KAIBO FOODS Co Ltd