UNITED STATES SECURITIES AND EXCHANGE COMMISSION, Washington, D.C. - 20549 FORM 10-KSB   [X ] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2006. [     ] TRANSACTION REPORT UNDER SECTION 13 OR 15(D) OF SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________  INTERNATIONAL POWER GROUP, LTD. (Name of small business issuer in its charter) Delaware000-5144920-1686022(State or other jurisdiction of incorporation)(Commission file number)(IRS Employer Identification No.)950 Celebration Blvd., Suite A, Celebration, FL.34747(Address of principal executive offices)(Zip Code) Issuers telephone number: (407) 566-0318 Securities registered under Section 12(b) of the Exchange Act:   None Securities registered under Section 12(g) of the Exchange Act: Title of ClassName of each exchange on which registeredCommon Stock, $0.00001 par value (registration) pending)None Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Check whether the issuer: (1) filed all reports to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [   ] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  [ X ] Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act.)  Yes [   ]    No [ X] State issuers revenues for its most recent fiscal year:  $ 0 State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked prices of such common equity, as of a specified date within the past 60 days: $40,960,436 as of April 5, 2007.  State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date: 349,684,096 shares of common stock as at April 5, 2007. Transitional Small Business Disclosure Format (Check One).  Yes [    ]     No [ X ]


INTERNATIONAL POWER GROUP, LTD. FORM 10-KSB December 31, 2006   TABLE OF CONTENTS  PART I 3 Item 1 Description of Business. 3 Item 2 Description of Property. 17 Item 3 Legal Proceedings. 17 Item 4 Submission of Matters to a Vote of Securities Holders. 17 Item 5 Market for Common Equity, Related Stockholder Matters. 17 Item 6 Managements Discussion and Analysis or Plan of Operation. 19 Item 7 Financial Statements. 24 Item 8 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 37 PART II 37 Item 9 Directors and Executive Officers of the Registrant; Compliance with Section 16(a)of the Exchange Act. 37 Item 10 Executive Compensation. 41 Item 11 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 43 Item 12 Certain Relationships and Related Transactions. 45 Item 13 Exhibits 46 Item 14 Principal Accountant Fees and Services. 47








Forward-Looking Statements  This Annual Report on Form 10-KSB contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as may, intends, should, expects, plans, anticipates, believes, estimates, predicts, potential or continue or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled Risk Factors beginning on page 7, that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.  While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.  Except as required by applicable law, including the securities laws of the United States, we undertake no obligation to update any of the forward-looking statements whether as a result of new information, future events or otherwise.    PART I   Item 1 Description of Business.  When we use the words we, our, us, the Company or IPWG in this report, we are referring to International Power Group, Ltd. and its subsidiaries. IPWG was incorporated in the State of Delaware on November 30, 1998.  We believe we have technology and contractors available to us to build waste-to-energy disposal facilities that reduce solid waste output to approximately 16% of input, which breaks down as follows: 1.7% fly ash must be treated before it can be placed on a landfill and 14.3% is bottom ash of which 15% is ferrous materials that may be sold as scrap metal, 70% may be sold as construction material for manufacture of concrete, cinder block and road and road beds, and 15% is discarded.  The waste-to energy facilities earn fees from waste disposal (tipping fees) and also produce at the same time electricity and potable water in commercially saleable amounts.  Collectively, the process is referred to herein as waste-to-energy (WTE) technology.  We believe the sum of tipping fees, electrical, water and ash receipts will exceed our financial and operating costs and our facilities will have relatively minimal adverse effects on the environment compared with most other waste disposal methods.  Principal products and services.  IPWG, on its own and through collaboration with strategic partners and others, is marketing and plans to build and operate waste-to-energy facilities to process solid and hazardous wastes by incineration.  The incinerator will produce marketable electricity, potable water and a component in construction materials including cement and road beds.  We have available components and technologies that incinerate solid waste and hazardous waste at high temperatures.  The incinerator produces steam, which drives a turbine which produces electricity and condenses the steam into water.  The electricity and steam drive further processes which scrub smoke-stack air emissions, produce potable water, ash and enough excess electricity to sell.  We believe we can customize the operation of WTE facilities to suit community needs by maximizing electricity or potable water, with little or no loss of efficiency or environmental friendliness.  The WTE technology, customized for each locale in which our facilities are to be deployed, is expected to be the basis for our business operations, though management will continue to be receptive to the acquisition and development of complimentary businesses and technologies.   Page 3 of 48





We believe our WTE facilities will offer financial rewards from start to finish for waste generators and collectors, governments charged with disposal and ourselves.  Waste generators and collectors will not be burdened with potential liabilities for land-fill clean-up; governments need not create land-fills; and we may be able to build a profitable business.  We anticipate three primary income streams: (i) tipping fees, (ii) the sale of electricity and (iii) the sale of potable water.  We also expect to augment revenues by selling up to 70% of the ash produced from the processes as construction material, and thereby reducing our disposal costs.  In October 2006, we purchased proprietary patented technologies, which include waste-to-energy, AddPower, a low temperature turbine (LTT), and ScrubPower, a special emission-to-energy system from three Swedish entities, Anovo AB Angelholm, AddPower AB Angelholm, and SUPE Ltd for a total consideration of $2.8 million.  The Company believes that it will be able to sell these technologies to other companies in the energy space in order to help these companies increase their output of clean electricity. The Company also plans to use these technologies to increase the efficiency of its own planned waste-to-energy facilities.  The Company believes that the acquisition of these technologies will allow it to convert greater quantities of heat, produced from boilers and turbines, and potentially increase the output of salable electricity by 20 to 30% or more over technologies that are currently available. The Company also believes that the LTT technology will provide the Company with an extremely efficient low-temp turbine which is powered by a proprietary fluid to drive the turbine and produce electricity at approximately 200 °  F, whereas most conventional boilers and turbines can only produce electricity at temperatures between 600° - 800 ° F.  In November 2006, the Company entered into a Joint Venture Agreement with Sistemas Ecologicas Para La Proteccion Ambiental S.A. (SEPA) and Mr. Mario Salguero Rossainzz. The agreement provides that the joint venture will build and operate a waste-to-energy plant in the City of Mexicali, North Baja California, Mexico.  Contemplated Projects.  During the last fiscal year we developed contacts in several countries that we believe may lead to the construction of WTE facilities.  Those contacts are located, and WTE facilities are proposed, in the Kingdom of Saudi Arabia, Mexico, Egypt and the United States. The Kingdom of Saudi Arabias Presidency of Metrology and Environment issued to us in July 2006 an environmental license which will enable us to establish waste-to-energy plants in this country. We have identified certain countries and geographic regions where, due to varying combinations of land fill shortages, energy needs and potable water scarcity, we believe WTE technology would be particularly effective.  We believe our managements experience in the waste management industry positions us to address the waste management needs of developed and developing nations.  Distribution methods of the products or services.  Our business plan is to locate, finance, build and operate WTE facilities for governmental entities and others charged with the disposal of municipal, commercial, industrial and certain hazardous wastes.  We intend to focus on municipalities that have significant waste-handling and land fill problems and areas that can benefit from potable water and additional electricity production.  Our primary marketing strategies include direct contact with government officials and large producers and handlers of waste.  We also intend to rely on limited and highly targeted advertising.  Integral to these methods is the development of strong brand identification for the Company coupled with increasing awareness of our target markets in the financial, ecological and tactical advantages of WTE technology.  Competitive business conditions; competitive position in the industry; methods of competition.  Competition for disposal of solid waste is high.  Competition comes from public and private commercial trash haulers, commercial and industrial companies that handle their own waste collection and disposal, public and private waste-to-energy companies and municipalities and regional government authorities.  IPWG is a small, start-up company in a highly competitive industry.  We have  Page 4 of 48





developed a business plan that we believe will maximize our know-how and limited financial assets and minimize the constraints that result from our lack of revenue, limited capital or operating history.  Our business model is untested and no assurance can be given that our business plan can be executed or that even if it is executed, will generate profits.  We believe that the waste-to-energy field, due to its relatively young age in the history of solid waste disposal, presents opportunity because of the disparities in technologies and fragmentation in the industry.  New technologies emerge frequently.  Many have local application only, or insufficient exposure to draw global interest.  The components of our WTE technologies are commercially available.  We do not believe, however, that any entity has assembled or engineered facilities in the same manner as facilities that we plan to construct.  That is not to say that there is not substantial competition for the three primary sources of income from which we expect to receive revenue  tipping fees and sales of electricity and potable water.  As to the production of saleable by-products, i.e. electricity, potable water and usable ash, we believe there will be competitors in the production of each of these products in each locale in which we plan to operate.  Due to the limited production of those products by our process and because they are only by-products, we plan to partner with potential competing vendors in those locales to gain the efficiencies of the established distribution networks.  Governmental agencies may be able to offer lower direct charges to waste producers for waste removal and potentially waste-to-energy incineration by subsidizing costs with tax revenues and tax-exempt financing.  Most municipalities presently operate solid waste disposal facilities, most of them as landfills.  These facilities generally are subsidized by tax revenues and often produce fiscal losses in addition to environmental damage.  We believe we can partner with governmental authorities and provide WTE technologies that can produce profits for IPWG, save our customers substantial amounts and be environmentally responsible.  We expect to compete for business on the basis of geographic location, environmental advantages of waste to energy over landfills, tipping or waste disposal fees, power generation fees, the sale of potable water, and the quality of operations.  Our ability to obtain permits and to locate WTE facilities may be limited in areas where there is adequate space for low cost landfill based disposal of waste, inadequate tipping fees for waste disposal, or abundant and inexpensive sources of electrical power generation and potable water. We expect that operational costs will be offset (with excess revenue for debt service and profits) by a combination of tipping fees and sales of by products (electricity, water and saleable ash products).  If the combination of the revenue streams is estimated to be insufficient to operate a WTE facility, service its debt and produce a profit, we believe that neither local community nor our financial supporters will approve such a facility.  Labor, operating and disposal costs, as well as the value of our by-products, vary widely throughout the areas in which we plan to operate.  The tipping fees we expect to charge will be determined locally, and typically vary by the volume and weight, type of waste, treatment requirements, risk of handling or disposal, and labor costs.  Sources and availability of raw materials.  We believe there is a readily available supply of machinery, materials, equipment and associated vendors to design, fabricate, construct and if necessary operate the waste-to-energy plants that we expect to build.  We believe the worldwide need for waste-to-energy plants continues to expand as energy costs and the need for potable water increases and open space for land-fills declines.  Increasing energy costs coupled with waste generation and fewer landfills provides a growing opportunity for renewable energy solutions.  We do not believe we are dependent on any one source for supply of any of the products used in our planned WTE process.  We also do not believe that there will be a shortage of waste on which to run our proposed facilities.  However, as mentioned above in Competition, others compete for tipping fees to dispose of solid and hazardous wastes.  We anticipate that the government and private agencies for whom we build WTE facilities will be responsible for providing the solid waste which will be processed through the facilities.  We plan to enter into long term tipping arrangements with producers of waste and possibly to securitize or insure the revenues of those contracts to finance construction and operation of our facilities.  Page 5 of 48





We believe there are adequate capital markets, assuming the creditworthiness of the contracting party to the tipping fee contracts, the power generation agreements and potable water sales (or availability of insurance to augment the creditworthiness of such contracting parties), to securitize the cash flow from such agreements.  Patents, Trademarks, Licenses, Vendors, etc.  As of December 31, 2006, IPWG does not own any patents, trademarks or licenses or have any contracts with vendors to provide services other than proprietary patented technologies that IPWG owns through Add-Power AB that IPWG expects will be beneficial to its business of developing waste-to-energy facilities and expanding into other alternative energy businesses.  IPWG is in negotiation with parties who provide, or IPWG believes has available to them on reasonable commercial terms, adequate technologies to execute IPWGs business plan.  IPWGs business plan relies upon the use of existing technology available and commonly applied in various non US countries, as well as proprietary technologies it intends to purchase or license.  IPWG intends to employ WTE technology that has been developed in Sweden and other European countries (over 29 WTE power plants exist in Sweden alone).  WTE solutions are increasingly common in other countries, as well.  Other industrialized nations, such as Japan, emphasize WTE because of their limited landfill space. WTE can reduce the volume of waste disposed in landfills by up to 90 percent, which prolongs the life of available landfill space.  Government Approval and the Effect of Government Regulations.  The United States Environmental Protection Agency (US EPA) has adopted regulations related to several aspects of solid waste management, including but not limited to regulations related to the products of waste combustion, heavy metal disposal and ground water contamination.  We believe that our proposed WTE facilities regulated emissions will be less than permissible limits.  No assurance can be given that the proposed WTE facilities will perform as specified or that applicable regulations will not be strengthened.  In connection with the operation of WTE plants outside the United States, the Company will be required to comply with all regulations, rules and directives imposed by the host governments.  The Company expects to build plants that are comprised of lines or modules.  Initially, each plant will have 2 to 6 lines that will cost in the range of $30,000,000 to $50,000,000 per line to construct, depending on the type of waste we are to receive.  Each line is estimated to consume approximately 100 tons of waste per day per line. This amount does not include land acquisition costs, legal fees or management time.  The Company anticipates that in each country of operation, the Company will face various requirements of independent testing and verification of emissions outputs, water sampling, and other environmental monitoring requirements, in addition to oversight and testing by the various government agencies.  The technology that IPWG plans to utilize is based on WTE facilities already in operation.  The Company has emissions reports of some of those operational facilities.  The Company believes that it can rely on the emissions output of the similar plants in representing the anticipated emissions levels of the plants it intends to build and operate.  It is important to IPWG both as a responsible ecological citizen and to build relationships with the communities it plans to serve, that its emissions are as clean as possible.  The Company believes that a dirty WTE process would threaten IPWGs growth and future.  Number of Employees.  As of December 31, 2006, we had 12 employees (seven officers and five administrative personnel).  Our officers devote as much time to our business as they deem necessary, which presently is in excess of 40 hours per week.  However, each is also involved in other business ventures.  Our administrative employees work fulltime for the Company.  Page 6 of 48





RISK FACTORS In addition to the other information included in this Report, the following factors should be considered in evaluating our business and future prospects. Any of the following risks, either alone or taken together, could materially and adversely affect our business, financial position or results of operation. If one or more of these or other risks or uncertainties materialize or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we projected. There may be additional risks that we do not presently know or that we currently believe are immaterial which could also impair our business or financial position. Business and Financial Risks  Our accountants have issued a going concern opinion and we have limited working capital, minimal net worth and substantial current losses that inhibit our ability to implement our business plan.  To date, we have met our working capital requirements through the private placement of our securities and through loans.  To support our operations and planned expansion, we are in need of approximately $11,703,000 of additional capital over the next 12 months.  Since entering the WTE field in November 2004, we have not generated any revenue from WTE facilities operations and have experienced substantial losses. As of December 31, 2007, we had a cash balance of $1.7 million and negative working capital of $0.5 million.  We have a history of losses and an accumulated deficit; our future profitability is uncertain.  We have experienced significant operating losses since our inception and we expect to incur additional operating losses as we develop WTE facilities.  As of December 31, 2006, we had an accumulated deficit of approximately $13.8 million. For the year ended December 31, 2006, we reported a loss of approximately $10.5 million.  There is no assurance that we will successfully develop a commercially viable product.  We plan to be assemblers of WTE technology.  As of December 31, 2006, other than the process by which we plan to assemble the described WTE facilities, we do not have any patented intellectual property of our own and we are dependent on our relationships with third-parties for location of sites to build facilities, permits for operation, construction of the facilities, purchase of the parts to assemble the facilities, operation of the facilities and sales of the by-products.  Since our formation in November 30, 1998, we have engaged in various activities and businesses, but we have not produced a profit.  We have generated no revenue from WTE facilities operations, do not have any operational WTE facilities, and none are expected to be completed until after October, 2007, if at all.  There can be no assurance that our efforts will lead to the construction of WTE facilities, or revenues or profits from such facilities if built.  We will need substantial additional funds to construct WTE facilities; if financing is not available, we may be required to reduce or cease operations or pursue other financing alternatives.  Our operations to date have consumed substantial amounts of cash.  Negative cash flow from operations is expected to continue in the foreseeable future.  Without substantial additional financing, we may be required to reduce some or all of our WTE project development plans or cease operations.  Our cash requirements may vary materially from those now planned because of responses to our proposals and permit requests, cost of financing projects, availability and price of materials to construct our proposed WTE plants, changes in tipping fees that we hope to receive, availability and timely delivery of waste to power WTE facilities once built, the amount we can charge for the WTE by products and the costs of environmental compliance, including disposal of residual waste.  We may seek to satisfy future funding requirements through public or private offerings of equity securities, by collaborative or other arrangements with other partners and competitors, issuance of debt or from other sources.  Additional financing may not be available when needed or may not be available on acceptable  Page 7 of 48





terms.  If adequate financing is not available, we may not be able to continue as a going concern or may be required to delay, scale back or eliminate certain programs, forego desired opportunities or license third parties rights to develop locations that we would otherwise seek to develop internally.  To the extent we raise additional capital by issuing equity securities, ownership dilution to existing stockholders will result.  Our chances for success are reduced because we are an early stage company with regard to our new business operation.  We have a limited operating history. We are therefore subject to all the risks and challenges associated with the operation of a new enterprise, including inexperience, lack of a track record, difficulty in entering the targeted market place, competition from more established businesses with greater financial resources and experience, an inability to attract and retain qualified personnel (including, technical, engineering, sales and marketing personnel) and a need for additional capital to finance our efforts and intended growth.  We cannot assure you that we will be successful in overcoming these and other risks and challenges that we face as a new business enterprise.  We need substantial additional financing to execute our business plan which may not be available. If we are unable to raise additional capital, we may not be able to continue operations.  We need substantial additional capital to expand our plant development and construction and sales efforts.  Our current resources are insufficient to fund operations.  We believe that we will need an additional $11.7 million to fund plant development and support operations over the next 12 months.  We have not and cannot assure you that we will be able to secure any such financing.  We may not be able to find financing on terms that are acceptable to us.  If we cannot obtain such financing, we will not be able to execute our business plan or continue operations.  We do not have employment contracts with any of our employees.  Development of our business depends to a significant degree on the continuing contributions of our key management and technical personnel on whom we rely to assist in the design, development, construction and operation of our proposed WTE facilities. We cannot assure you that they will remain with us, especially because we do not have any employment contracts with these persons  We are dependent on third party relationships for critical aspects of our business; problems in these relationships may increase costs and/or diminish our ability to implement our business plan.  We intend to use the expertise and resources of strategic partners and other third parties in a number of key areas, including (i) engineering, (ii) development, including licensing and permitting, (iii) product development and sales and (iv) construction and operation of WTE facilities.  If these third parties do not perform in a timely and satisfactory manner, we may incur costs and delays as we seek alternate sources, if available.  Such costs and delays may have a material adverse effect on our business.  We may seek additional third party relationships in certain areas, particularly in marketing and construction, where collaborators may enable us to enter geographic markets that are otherwise beyond our current resources and/or capabilities.  There is no assurance that we will be able to obtain any such relationships.  Our inability to obtain and maintain relationships with third parties may have a material adverse effect on our business, by slowing our ability to execute our business plan, requiring us to expand our internal capabilities, increasing our overhead expenses, impinging on future growth opportunities or causing us to delay or terminate projects.  Page 8 of 48





We may face delays in the development of our technologies and our technology may not work as expected or be economically viable.  The technologies we intend to use have not yet been widely applied within the solid waste industry and may not work as well as expected or be economically viable.  The successful application of the technologies at the scales we contemplate has yet to occur.  The inability to produce large volumes of energy under our current plan may require investment in capital equipment and operating expenses beyond our business and construction plans.  Unforeseen difficulties in the development or acceptance of energy produced from waste may lead to delays in the implementation of our WTE process and the subsequent generation of revenue.  We will depend on a significant supply of solid waste and timely payment for that solid waste.  If we do not obtain a supply of solid waste at quantities and qualities that are sufficient to operate our proposed facilities at expected operating levels, our financial condition and operating results could adversely be affected.  One or more of the following factors could impact the price and supply of waste:  · defaults by waste suppliers under their contracts; · a decline in solid waste supply due to increased recovery by material recovery facilities; · composting of solid waste; · incineration of solid waste; · legal prohibitions against processing of certain types of solid waste in our facilities; or · increased competition from landfills and recycling facilities.  Environmental regulations and litigation could subject us to fines, penalties, judgments and limitations on our ability to expand.  We are subject to potential liability and restrictions under environmental laws, including those relating to handling, recycling, treatment, storage of wastes, discharges to air and water, and the remediation of contaminated soil, surface water and groundwater.  The waste management industry has been and will continue to be subject to regulation, including permitting and related financial assurance requirements, as well as to attempts to further regulate the industry through new legislation.  Our business is subject to a wide range of federal, state and, in some cases, local environmental, odor and noise and land use restrictions and regulations.  If we are not able to comply with the requirements that apply to a particular facility or if we operate without necessary approvals, we could be subject to civil, and possibly criminal, fines and penalties, and we may be required to spend substantial capital to bring an operation into compliance or to temporarily or permanently discontinue, and/or take corrective actions.  We currently do not have insurance coverage for our environmental liabilities, and we may not be able to obtain sufficient coverage in the future.  Those costs or actions could be significant to us and significantly impact our results of operations, as well as our available capital.  In addition to the costs of complying with environmental laws and regulations, if governmental agencies or private parties brought environmental litigation against us, we would likely incur substantial costs in defending against such actions.  We may in the future be a defendant in lawsuits brought by parties alleging environmental damage, personal injury, and/or property damage.  A judgment against us, or a settlement by us, could harm our business, our prospects and our reputation.  We cannot predict with certainty the extent of future costs under environmental, health and safety laws, and cannot guarantee that they will not be material.  We could be liable if our operations cause environmental damage to our properties or to the property of other landowners, particularly as a result of the contamination of potable water sources or soil.  Under current law, we could even be held liable for damage caused by conditions that existed before we acquired the assets or operations involved.  Any substantial liability for environmental damage could have a material adverse effect on our financial condition, results of operations and cash flows.  Page 9 of 48





We may be exposed to litigation in the ordinary course of our business.  Since our personnel are expected to routinely handle solid waste materials, we may be subject to liability claims by employees, customers and third parties.  We may be unable to obtain required financing or permits.  We plan to construct our initial facilities in Mexico and the Kingdom of Saudi Arabia.  We cannot assure you that we will successfully obtain the necessary financing or environmental permits to build and operate this facility, or retain the permits that are required to operate the facility or obtain financing or permits we require to build and operate our intended additional facilities.  Permits to build and operate waste processing facilities have become increasingly difficult and expensive to obtain and retain as a result of many factors including numerous hearings and compliance with zoning, environmental and other regulatory measures.  The granting of these permits is also often subject to resistance from citizen or other groups and other political pressures.  Our failure to obtain financing or obtain or retain the required permits to build or operate our facilities could have a material adverse effect on our future results of operations.  Waste to energy technology has not yet gained market acceptance, nor do we know whether a market will develop for it in the foreseeable future.  WTE technology has received only limited market acceptance.  This technology is relatively new to the market place and we have not generated any revenues from WTE technology.  Although ever growing concerns and regulation regarding the environment and pollution has increased interest in environmentally friendly products generally, the industry remains in an evolving state.  WTE technology competes with more established companies in the waste and alternative energy fields.  Acceptance of WTE technology to traditional products and/or services depends upon a number of factors including:  · favorable pricing vis a vis other alternatives · the ability to establish the feasibility and reliability of WTE technology · public perception of the product  For these reasons, we are uncertain whether WTE technology will gain acceptance.  Our future success depends upon such acceptance.  WTE technology may be adversely affected by future technological changes and environmental regulatory requirements as well as reduction of traditional energy costs or the establishment of lower priced energy alternatives.  Changes in governmental regulation and technological advances by others in the waste or energy industries may render our technology obsolete.  Research in this area is currently being sponsored by governmental agencies, major utilities, oil companies and other energy suppliers.  If such research successful, the need for our technology could be reduced or eliminated.  Confidentiality agreements may not adequately protect our business information which could result in unauthorized disclosure or unfair competition.  The Company considers its business relationships and process for assembling commercially available equipment to construct waste-to-energy facilities proprietary.  We require our employees, consultants and third parties with whom we share our business plans and confidential information to execute confidentiality agreements upon the commencement of their relationship with us.  The agreements generally provide that trade secrets and all inventions conceived by the individual and all confidential information developed or made known to the individual during the term of the relationship will be our exclusive property and will be kept confidential and not disclosed to third parties except in specified circumstances.  There can be no assurance, however, that these agreements will provide meaningful protection for our business information in the event of unauthorized use or disclosure of such  Page 10 of 48





information.  If our unpatented intellectual property is publicly disclosed before we have been granted patent protection, our competitors could be unjustly enriched and we could lose the ability to profitably develop products from such information.  We face intense competition and may not have the financial and human resources necessary to keep up with rapid technological changes which may result in our technology becoming obsolete.  The energy production and alternate energy businesses and related businesses are subject to rapid technological change, especially due to environmental protection regulations, and subject to intense competition.  We compete with both established companies and a significant number of startup enterprises.  Most of our competitors have substantially greater financial, engineering and marketing resources than we do and may independently develop superior technologies which may result in our technology becoming less competitive or obsolete.  We may not be able to keep pace with this change.  If we cannot keep up with these advances in a timely manner, we will be unable to compete in our chosen markets.  We depend on our executive officers and need additional marketing, engineering, administrative and technical personnel to be successful. We cannot assure you that we will be able to retain or attract such persons; our current officers have other business endeavors in addition to their work for our company.  Since we are a small company, a loss of one or more of our current officers would severely and negatively impact our operations.  To implement our business plan, we will need additional marketing, administrative, engineering and technical personnel.  The market for such persons remains competitive and our limited financial resources may make it more difficult for us to recruit and retain qualified persons.  If any of our officers were to resign or not be able to continue to devote his time to our business, it may have a materially adverse effect upon our business.  Our officers, who are active employees, presently devote in excess of 40 hours per week to our business activities.  However, they also have outside business activities which may cause a conflict regarding the time available to devote to our business.  Our current management has a significant voting majority of our companys outstanding common stock and can prevent changes in management, policy or outside takeover of our business.  Our current officers and directors own over 62% of our issued and outstanding common stock and can control the appointment and/or election of all directors and officers.  RISKS RELATED TO CONSTRUCTION OF WTE PLANTS.  We will depend on third parties to design and build our WTE facilities. However, their failure to perform could force us to abandon business, hinder out ability to operate profitably or decrease the value of your investment.  We will be highly dependent upon third parties to design, build our WTE facilities.  If the third parties do not perform, for any reason, there is no assurance that we would be able to obtain a replacement general contractor.  Any such event may force us to abandon our business.  We do, however, intend to purchase performance bonds to mitigate some of the risk of a contractor terminating its relationship with us after initiation of construction.  We may need to increase cost estimates for construction of our WTE facilities, and such increase could result in devaluation of your investment if plant construction requires additional capital.  We anticipate that our WTE facilities will be built for a fixed contract price, based on the plans and specifications in anticipated design-build agreements.  We have based our preliminarily capital needs for plant construction on certain assumptions after discussions and negotiations with parties with design-build experience.  These price estimates include construction period interest.  The estimated costs are based on preliminary discussions.  There is no assurance that the final cost of the plants will not be  Page 11 of 48





higher.  There is no assurance that there will not be design changes or cost overruns associated with the construction of the WTE facilities.  In addition, steel prices and shortages of steel could affect the final cost and final completion date of any project.  Any significant increase in the estimated construction cost of the plants could delay our ability to generate revenues and reduce the value of your investment because our expected revenue streams may not be able to adequately support the increased cost and expense attributable to increased construction costs.  The political climate in some of the countries where we intend to build WTE facilities could cause problems in the completion of our plants, negatively affecting our plans.  We may meet resistance to our efforts to build our WTE facilities in certain countries.  The résistance may be caused by political unrest, labor or union issues, environmental problems, shortage of materials, economic conditions or other issues.  There is no assurance that such resistance will not have a material adverse effect on our ability to implement our business plan.  WTE facility construction delays could result in devaluation of your investment if our production and sale of power are similarly delayed.  Construction projects often involve delays in obtaining permits, construction delays due to weather conditions, or other events that delay the construction schedule.  The builder and designer of the plants may be involved in the construction of other projects while constructing our WTE facilities.  This could cause delays in our construction schedules.  Changes in interest rates or the credit environment or changes in political administrations at the federal, state or local level that result in policy changes towards waste to energy or our proposed projects could also cause construction and operation delays.  If it takes longer to construct the WTE facilities than we anticipate, it would delay our ability to generate revenue and make it difficult for us to meet our debt service obligations.  This could reduce the value of your investment.  Defects in construction could result in devaluation of your investment if our plants do not produce power as anticipated.  There is no assurance that defects in materials and/or workmanship in the WTE facilities will not occur.  Under the terms of the anticipated design-build agreements, the designer builder would warrant that the material and equipment furnished to build the plant will be new, of good quality, and free from material defects in material or workmanship at the time of delivery.  Though we expect the design-build agreements to require the contractors to correct all defects in material or workmanship for a period of one year after substantial completion of the plant, material defects in material or workmanship may still occur.  Such defects could delay the commencement of operations of the plants, or, if such defects are discovered after operations have commenced, could cause us to halt or discontinue the plants operation.  Halting or discontinuing plant operations could delay our ability to generate revenues and reduce the value of your investment. Plant sites may have unknown environmental problems that could be expensive and time consuming to correct, which may delay or halt WTE facilities construction and delay our ability to generate revenue.  We intend to build our WTE facilities all over the world.  Accordingly, in areas with which we are not familiar, we will depend on third parties in locating and evaluating the proposed sites for our plants.  As a result, we could encounter unknown environmental problems that will be costly and time consuming to correct, or may not be correctible at all.  These risks of environmental problems could have a material adverse effect on our ability to implement our business plan.  Upon encountering a hazardous environmental condition, we may suspend work in the affected area.  If we receive notice of a hazardous environmental condition, we may be required to correct the condition prior to continuing construction.  The presence of a hazardous environmental condition will likely delay construction of the plant and may require significant expenditure of our resources to correct the condition.  In addition, the designer builder will likely be entitled to an adjustment in price and time of performance if it has been adversely affected by the hazardous environmental condition.  If we encounter any hazardous environmental conditions during  Page 12 of 48





construction that require time or money to correct, such event could delay our ability to generate revenues and reduce the value or your investment.  Changes in environmental regulations or violations of the regulations could be expensive and reduce the value of your investment.  We will be subject to extensive air, water and other environmental regulations and we will need to obtain a number of environmental permits to construct and operate WTE facilities.  In addition, it is likely that our debt financing will be contingent on our ability to obtain the various environmental permits that we will require.  If for any reason, any of these permits are not granted, construction costs for WTE facilities may increase, or the WTE facilities may not be constructed at all.  Additionally, any changes in environmental laws and regulations, both at the federal and state level, could require us to invest or spend considerable resources in order to comply with future environmental regulations.  The expense of compliance could be significant enough to reduce the value of your investment.  The operation of WTE facilities could subject us to claims or liability lawsuits.  The operation of WTE facilities may be considered inherently dangerous and injury to individuals or property may occur, subjecting us to lawsuits.  We do not currently have insurance for such possibilities.  Although we intend to seek insurance coverage, we may not be to do so at a cost we can afford, or the coverage may prove to be insufficient.  The time and cost of defending such suits could have an adverse effect on our ability to implement our business plan.  Similarly, a costly judgment against us could cause us to cease operations.   Changes and advances in production technology could require us to incur costs to update our plans or could otherwise hinder our ability to compete in the industry or operate profitably.  Advances and changes in the technology of WTE facilities are expected to occur.  Such advances and changes may make the technology we plan to install in our WTE facilities less desirable or obsolete.  These advances could also allow our competitors to operate a lower cost than we expect.  If we are unable to adopt or incorporate technological advances, our methods and processes could be less efficient than our competitors, which could cause us to become uncompetitive or our projects obsolete.  If our competitors develop, obtain or license technology that is superior to ours or that makes our technology obsolete, we may be required to incur significant costs to enhance or acquire new technology so that we remain competitive.  Alternatively, we may be required to seek third-party licenses, which could also result in significant expenditures.  We cannot guarantee or assure you that third-party licenses will be available or, if obtained, will continue to be available on commercially reasonable terms, if at all.  These costs could negatively impact our expected financial performance by increasing planned operating costs and reducing expected revenues, which could reduce the value of your investment.  RISKS RELATED TO THE POWER INDUSTRY.  Competition from the advancement of alternative power may lessen the demand for our technology which could negatively impact our potential for profitability and reduce the value or your investment.  Alternative power and energy technologies and production methods are continually under development.  New developments could reduce the demand for our expected power production and technology, which would negatively impact the value of your investment.  Consumer resistance to the concept of converting waste to energy based on the belief that it is expensive to produce, adds to air pollution, is odorous and takes more energy to produce than it contributes may affect our ability to achieve market acceptance and reduce the value of your investment.  Based upon public consumer reports, we believe that certain consumers may resist the concept of converting waste into energy due to the fallacy that WTE facilities add to air pollution and are  Page 13 of 48





odorous.  Still other consumers may believe that the process of producing power from waste takes more energy in the conversion than the power that is actually produced.  If we cannot overcome these misconceptions, market acceptance may be difficult and this could negatively affect the value of your investment.  RISKS RELATED TO OUR COMMON STOCK.  Applicable SEC rules governing the trading of Penny Stocks Limits the trading and liquidity of our common stock.  The bid and ask quotations of our common stock have been reflected on the Over-the-Counter Bulletin Board under the symbol IPWG since March 9, 2007. Prior thereto, the quotations were reflected on the Unsolicited Pink Sheets.  Since our common stock continues to be quoted below $5.00 per share, our common stock is considered a penny stock and is subject to SEC rules and regulations that impose limitations upon the manner in which our stock can be publicly traded.  These regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the associated risks.  Under these regulations, certain brokers who recommend such securities to persons other than established customers or certain accredited investors must make a special written suitability determination for the purchaser and receive the purchasers written agreement to a transaction prior to sale.  These regulations have the effect of limiting the trading activity of our common stock and reducing the liquidity of an investment in our common stock.  The trading price of our common stock may be volatile.  The trading price of our stock has, from time to time, fluctuated widely and in the future may be subject to similar fluctuations.  The trading price may be affected by a number of factors including the risk factors set forth in this report as well as our operating results, financial condition, announcements of innovations or new products by us or our competitors, general conditions in the market place, and other events or factors.  In recent years, stock market indices, in general, and the securities of technology companies, in particular, have experienced substantial price fluctuations.  Such market fluctuations may adversely affect the future trading price of our common stock.  We have sold stock in private placements; the stock sold in those private placements and any others we may conduct may become freely tradable and have a depressive effect on the market price of our stock.  Approximately 53,325,869 of our 345,509,096 shares outstanding as of December 31, 2006 are in the publicly trading float.  Public sale of those shares could have a depressive effect on the public market price of our common stock.   Our outstanding options and warrants may adversely affect our ability to consummate future equity financings due to the dilution potential to future investors.  We have outstanding options and warrants for the purchase of shares of our common stock with exercise prices currently below market which may adversely affect our ability to consummate future equity financings.  To the extent any such options and warrants are exercised, the value of our outstanding shares of our common stock will be diluted.  As of December 31, 2006, we had outstanding vested options to purchase 22,900,000 shares of common stock at a weighted-average exercise price of $0.46 and vested warrants to purchase 11,695,498 shares of common stock with a weighted-average price of $0.49.  Due to the number of shares of common stock we are obligated to sell pursuant to outstanding options and warrants described above, potential investors may not purchase our future equity offerings at market price because of the potential dilution such investors may suffer as a result of the exercise of the outstanding options and warrants.   Page 14 of 48





The market price of our common stock has experienced significant volatility.  The securities markets from time to time experience significant price and volume fluctuations unrelated to the operating performance of particular companies.  In addition, the market prices of the common stock of many publicly traded solid waste companies have been and can be expected to be especially volatile.  Our common stock price in the 52-week period ended December 31, 2006, had a low of $0.30 and high of $1.18.  Announcements of technological innovations or new products by us or our competitors, developments or disputes concerning patents or proprietary rights, publicity regarding actual or potential by us or our competitors, regulatory developments in both the United States and foreign countries, delays in our schedules and economic and other external factors, as well as period-to-period fluctuations in our financial results, may have a significant impact on the market price of our common stock.  The realization of any of the risks described in these Risk Factors may have a significant adverse impact on such market prices.  We may pay vendors in stock as consideration for their services; this may result in stockholder dilution, additional costs and difficulty retaining certain vendors.  In order for us to preserve our cash resources, we have previously and may in the future pay vendors in stock, warrants or options to purchase shares of our common stock rather than cash.  Payments for services in stock may materially and adversely affect our stockholders by diluting the value of outstanding shares of our common stock.  In addition, in situations where we have agreed to register the stock issued to a vendor, this will generally cause us to incur additional expenses associated with such registration.  Paying vendors in stock, warrants or options to purchase shares of common stock may also limit our ability to contract with the vendor of our choice should that vendor decline payment in stock.  We do not intend to pay dividends on our common stock. Until such time as we pay cash dividends our stockholders must rely on increases in our stock price for appreciation.  We have never declared or paid dividends on our common stock.  We intend to retain future earnings to develop and commercialize our products and therefore we do not intend to pay cash dividends in the foreseeable future.  Until such time as we determine to pay cash dividends on our common stock, our stockholders must rely on increases in our common stocks market price for appreciation.  If we do not effectively manage our growth, our resources, systems and controls may be strained and our operating results may suffer.  We plan to add to our workforce and to continue to increase the size of our workforce and scope of our operations as we continue to develop our business plan and move towards construction of WTE facilities.  This growth of our operations will place a significant strain on our management personnel, systems and resources.  We may need to implement new and upgraded operational and financial systems, procedures and controls, including the improvement of our accounting and other internal management systems.  These endeavors will require substantial management effort and skill, and we may require additional personnel and internal processes to manage these efforts.  If we are unable to effectively manage our expanding operations, our revenue and operating results could be materially and adversely affected.  Our obligations as a public company under the laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act) and related regulations, are likely to increase our expenses and administrative burden.  These expenses and burdens are particularly acute on companies of our small size.  Changes in the laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act and related regulations implemented by the Securities and Exchange Commission and the National Association of Securities Dealers, are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming.  These laws, regulations and standards are subject to varying interpretations, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.  This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by  Page 15 of 48





ongoing revisions to disclosure and governance practices.  We have and will continue to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of managements time and attention from commercialization activities to compliance activities.  If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies regulatory authorities may initiate legal proceedings against us and our business may be harmed.  There are limitations on the liability of our directors, and we may have to indemnify our officers and directors in certain instances.  Our certificate of incorporation limits the personal liability of our directors for monetary damages for breach of their fiduciary duties as directors.  Our bylaws provide that we will indemnify our officers and directors and may indemnify our employees and other agents.  These provisions may be in some respects broader than the specific indemnification provisions under Delaware law.  The indemnification provisions may require us, among other things, to indemnify such officers and directors against certain liabilities that may arise by reason of their status or service as directors or officers (other than liabilities arising from willful misconduct of a culpable nature), to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified and to obtain directors and officers insurance.  Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify a director, officer, employee or agent made or threatened to be made a party to an action by reason of the fact that he or she was a director, officer, employee or agent of the corporation or was serving at the request of the corporation, against expenses actually and reasonably incurred in connection with such action if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.  Delaware law does not permit a corporation to eliminate a directors duty of care and the provisions of our certificate of incorporation have no effect on the availability of equitable remedies, such as injunction or rescission, for a directors breach of the duty of care.  We believe that our limitation of officer and director liability assists us to attract and retain qualified employees and directors.  However, in the event an officer, a director or the board of directors commits an act that may legally be indemnified under Delaware law, we will be responsible to pay for such officer(s) or director(s) legal defense and potentially any damages resulting therefrom.  Furthermore, the limitation on director liability may reduce the likelihood of derivative litigation against directors, and may discourage or deter stockholders from instituting litigation against directors for breach of their fiduciary duties, even though such an action, if successful, might benefit us and our stockholders.  Given the difficult environment and potential for incurring liabilities currently facing directors of publicly-held corporations, we believe that director indemnification is in our and our stockholders best interests because it enhances our ability to attract and retain highly qualified directors and reduce a possible deterrent to entrepreneurial decision-making.  Nevertheless, limitations of director liability may be viewed as limiting the rights of stockholders, and the broad scope of the indemnification provisions contained in our certificate of incorporation and bylaws could result in increased expenses.  Our board of directors believes, however, that these provisions will provide a better balancing of the legal obligations of, and protections for, directors and will contribute positively to the quality and stability of our corporate governance.  Our board of directors has concluded that the benefit to stockholders of improved corporate governance outweighs any possible adverse effects on stockholders of reducing the exposure of directors to liability and broadened indemnification rights.    Page 16 of 48





Item 2 Description of Property.  The Companys executive offices are located at 950 Celebration Blvd., Suite A, Celebration, Florida 34747.  The premises are leased to the Company at approximately $6,000 per month.  The lease is for four years.  At this time the Company does not have any tangible assets.  Specifically, we do not own any substantial real or personal property.  We also maintain satellite offices as follows:  · Mexican Office: Culiacan No. 17-105, Colonia Hipodromo Condesa, Delegacion Cuauhtémoc, Mexico City. Z. C., Mexico, month-to-month rental at $747.50 (USD) per month; · London Office: 1 Threadneedle Street, London EC2R8AW, England, month-to-month arrangement requiring 60 days notice; monthly rent: $1,304.17 (USD); · Northeast England Office: Royal Albert House, Sheet Street, Windsor Royal Berkshire, England, month-to-month arrangement requiring 60 days notice; monthly rent: $1,130.28 (USD); and · Sweden Office:  Florettgatan 29B. 25467 Helsingborg, Sweden; one year lease with option to renew monthly rent: $1,455.00 (USD)   Item 3 Legal Proceedings. We are not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.   Item 4 Submission of Matters to a Vote of Securities Holders. None.   Item 5 Market for Common Equity, Related Stockholder Matters.  Our shares of common stock have been quoted on the Over-the-Counter Bulletin Board operated by the National Association of Securities Dealers, Inc. under the symbol IPWG beginning on March 9, 2007. Prior thereto, bid and ask quotations for our common stock were reflected on the Unsolicited Pink Sheets under the symbol IPWG. A summary of the quotations by quarter for our 2006 and 2005 fiscal year is as follows:  Market Information. HighLowFiscal Year 2006Quarter ended March 31, 2006$1.18$1.00Quarter ended June 30, 20060.880.81Quarter ended September 30, 20060.920.50Quarter ended December 31, 20060.700.30Fiscal Year 2005Quarter ended March 31, 2005$.045$.045Quarter ended June 30, 20050.400.25Quarter ended September 30, 20050.720.64Quarter ended December 31, 20051.861.59  Source: Interdealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions .  Page 17 of 48


Dividends We have not paid any cash dividend to date, and we have no intention of paying any cash dividends on our common stock in the foreseeable future.  The declaration and payment of dividends is subject to the discretion of our Board of Directors and to certain limitations imposed under the General Corporation Law of the State of Delaware, as amended.  The timing, amount and form of dividends, if any, will depend on, among other things, our results of operation, financial condition, cash requirements and other factors deemed relevant by our Board of Directors.  Outstanding Warrants and Options  As of December 31, 2006, there are outstanding warrants to purchase 11,695,498 shares of our common stock, and options to purchase 22,900,000 shares of our common stock.  Restricted Securities.  As of April 5, 2007 there were 349,684,096 shares of common stock of the Company outstanding registered to 275 stockholders of record, of which 284,900,396 are carried as restricted securities as that term is defined in Rule 144 under the Securities Act of 1933.  Of restricted securities, 71,751,086 shares are held by non-affiliates of the Company and the balance of 213,149,310 are held by officers and directors (affiliates) of the Company, including Peter Toscano who beneficially owns 100,954,830 shares and Jack Wagenti who beneficially owns 106,194,480 shares.  Application of the Penny Stock Rules.  If and when the Companys securities are traded, the securities may likely be deemed a penny stock.  The Securities and Exchange Commission has adopted Rule 15g-9, which defines a penny stock, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions.  For any transaction involving a penny stock, unless exempt, the rules require: (i) that a broker or dealer approve a persons account for transactions in penny stocks and (ii) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.  In order to approve a persons account for transactions in penny stocks, the broker or dealer must: (i) obtain financial information and investment experience and objectives of the person and (ii) make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.  The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form, (i) sets forth the basis on which the broker or dealer made the suitability determination and (ii) that the broker or dealer received a signed, written agreement from the investor prior to the transaction.  Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading, and about commissions payable to both the broker-dealer and the registered representative, current quotations for the securities, and the rights and remedies available to an investor in cases of fraud in penny stock transactions.  Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.  Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities.  In December 2006, we sold 11.7 million shares of our common stock at $.20 per share to Armada Asset Management LLC. and five individual investors and issued those same investors 5.4 million warrants exercisable at $.40 per warrant. In December 2006, we sold 10 million shares of our common stock to Armando Ruiz, the Manager of Armada Asset Management LLC, for services. In both instances, the offering and sale qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance did not involve a public offering. The offering was not a public offering as defined in Section 4(2) because the offer and sale was made to an insubstantial number of persons and because of the manner of the offering. This offering was done with no general solicitation or advertising by the Registrant. Each investor made representations regarding his or her financial sophistication and had an opportunity to ask questions of our management. In addition, these investors had the necessary investment intent as required by Section 4(2) since they agreed to, and received, share certificates bearing a legend stating that such shares are restricted. This restriction ensures that these shares will not be immediately redistributed into the market and therefore not be part of a public offering. Based


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on an analysis of the above factors, the Registrant has met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for this transaction.    Item 6 Managements Discussion and Analysis or Plan of Operation.  Overview.  We commenced our development stage in November 2004 upon our acquisition of International Power, Inc.  The first approximately six months were spent exploring business prospects.  The Company has spent approximately the last two years initiating and developing our WTE technology business plan.  Initial steps in that process were negotiation of construction WTE Plants in Mexico and Saudi Arabia. In July 2006, the Kingdom of Saudi Arabias Presidency of Metrology and Environment issued to us an environmental license which will enable us to establish waste-to-energy plants in the country.  The second step in developing our business plan was to find sources that could assist the Company to raise the capital required to build and begin operating WTE facilities.  IPWG has not had any revenues and cumulative losses of $16.1 million since inception.  Accordingly, a comparison of our financial information for accounting periods would likely not be meaningful or helpful in making an investment decision regarding our Company.  We expect to begin realizing operating revenues in the fourth quarter of 2007 from the receipt of tipping fees associated with one or more of our WTE facilities.  We are expecting to store waste on our property during the construction of a facility.  We are expecting revenue from our WTE energy plants to commence in 2009 after the completion of the construction of the plant.  In October 2006, we purchased proprietary patented technologies, which include waste-to-energy, AddPower, a low temperature turbine (LTT), and ScrubPower, a special emission-to-energy system from three Swedish entities, Anovo AB Angelholm, AddPower AB Angelholm, and SUPE Ltd for a total consideration of $2.8 million.  The Company believes that it will be able to sell these technologies to other companies in the energy space in order to help these companies increase their output of clean electricity. The Company also plans to use these technologies to increase the efficiency of its own planned waste-to-energy facilities.  The Company believes that the acquisition of these technologies will allow it to convert greater quantities of heat, produced from boilers and turbines, and potentially increase the output of salable electricity by 20 to 30% or more over technologies that are currently available. The Company also believes that the LTT technology will provide the Company with an extremely efficient low-temp turbine which is powered by a proprietary fluid to drive the turbine and produce electricity at approximately 200°  F, whereas most conventional boilers and turbines can only produce electricity at temperatures between 600° - 800 °F.  Plan of Operation.  Prior to the adoption of our present business plan, we investigated the option of engaging in the management of low level radioactive waste as a result of our acquisition of TMESs assets.  We determined not to pursue that business because of the time and expense of compliance with government regulation in the field.  Our operating plan for the next 12 months and thereafter has three components: (1) to complete pending negotiations to initiate construction of WTE projects in Mexicali, Mexico, Saudi Arabia and Egypt, (2) complete the research and development of our AddPower electrical generating unit to make it a commercially viable product, and (3) to continue our existing program of introducing WTE technology to governments and others charged with responsibility to manage solid waste and/or provide potable water and electricity to various population segments.  In furtherance of this general plan we have self-imposed the following goals:


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PROJECTED DATE   GoalProjected Date1. Processing of site permits in MexicoPresent through July 20072. Complete R&D of AddPowerPresent through September 20073. Introduction of WTE technology in the Kingdom of Saudi Arabia and Egypt beginning of WTE site location negotiationsPresent through October 20074. Negotiations for WTE sites in several foreign countries now identified.  Form subsidiaries as may be required in other countriesForeseeable future  Research and Development.  We do not expect to establish a discrete program of research or development as part of our business plan.  We expect to expend our research and development efforts towards on the job training.  We intend to cooperate with our development partners to develop efficient WTE technology customized to each customers needs.  We intend to share the learning from each project and application to improve all areas of existing WTE technology from air scrubbing to waste disposal.  Purchase of Plant and Equipment.  The development and construction of each proposed WTE facility will be dependent on: (i) locating appropriate land and obtaining permits for a WTE facility, (ii) obtaining financing (including related financial guaranty and risk insurance) for purchase of materials and equipment and construction of facilities and (iii) securing contracts for delivery of waste and sales of byproducts which will produce revenues sufficient to cover debt service and operation costs.  In the event we are not able to finance one or more proposed WTE facilities, we would be forced to abandon any such projects.  Changes in the Number of Employees.  We expect a substantial increase in full and part time employees in the foreseeable future to bolster our technical and marketing departments.  We expect that plant construction projects will be completed by third parties who will be engaged pursuant to contractual agreements.  Managements Discussion and Analysis of Financial Condition.  WTE Facility Finance.  We intend to finance the construction and operation of WTE facilities through a combination of loans and securitization of income from long-term contracts for tipping fees, power and potable water sales.  We believe that we will be successful in securing such financing although no assurance can be given.  We have entered into an agreement with Marsh USA, Inc., an international insurance broker with the ability to provide financial guaranty insurance and risk management, to locate insurance for our projects.  Trends.  We believe that the trend that is most likely to affect our business is the burgeoning need of local governments at all levels in most countries to manage sold waste, significant quantities of which are hazardous.  We believe this trend will generate demand for the technology we offer although no assurance can be given.  We also believe the trend of global warming will affect our business.  The trend to reduce the output of greenhouse gases has caused a trend to find ways of generating cleaner electricity from cleaner


Page 20 of 48





renewable energy sources.  We believe the trend will generate a demand for our technology and services we offer although no assurance can be given.  Ability to Meet Cash Requirements.  Our Company is considered to be in the development stage as defined in the Statement of Financial Accounting Standards (FASB) No. 7.  To date, it has received no income from its business operations.  As of December 31, 2006, we had an accumulated loss of $16.1 million during the development stage.  The expenses that produced this operating loss included stock based compensation expenses in the sum of $10.4 million and other expenses, including cash expenses, of approximately $5.7 million.  Notwithstanding this loss figure, the Companys cash position improved from approximately $1.0 million at December 31, 2005 to $1.7 million at December 31, 2006 as the result of the receipt of $5.1 million from the sale of securities.  At March 31, 2007 our cash balance has been reduced to approximately $0.5 million as a result of normal operating expenses and the payment obligations for the purchase of AddPower.  Without additional equity or debt financing, we believe we will not be able to satisfy our cash requirements for the next twelve months.  We have developed a two-year timeline and cash forecast of our cash needs to execute our business plan and we are in the process of raising the funds required to fund our operations for the next 24 months until the time we estimate that our first WTE facility will come online and revenues are expected to commence.  There can be no assurance, however, that we will be able to raise the amounts of financing required to operate our business until revenues commence, that we will be able to timely commence revenue generating operations of WTE facility(ies) or that if such facility(ies) commence operation, that we will generate sufficient revenue to be profitable.  IPWG is in the process of raising capital to address approximately $26.4 MM of financing needs for the next twenty-four months, outside of construction/project financing for specific waste to energy projects. Uses of the capital to be raised include:  1) Working capital to cover overhead and execution costs during construction of waste to energy plants (approximately $16.0 million), additional details provided in the chart below.  2) Working capital to cover the recently completed acquisition of Ad-Power AB and the commercialization of AddPower units (a patented low temperature turbine used for converting waste heat into electricity) of approximately $1.6 million.  3) Additional development funding to apply AddPower technology to low cost solar power generation, as well as to test the feasibility of integrating the AddPower technology into small scale solar units for office parks, malls, and residential projects ($8.8 million).


Page 21 of 48





IPWG "Core" Use of Cash January 2007  December 2008 Forecast (24 Months) WTE Overhead, Infrastructure Ramp-up (People, Contractors) Swedish Acquisition of AddPower et al, Working Capital, Solar R&D Scale Reduction    20072008TotalEmployee Costs$2,463,000$3,687,000$6,150,000Travel1,040,0001,040,0002,080,000Construction/Project Management300,000720,0001,020,000Legal Fees852,000840,0001,692,000Outsourced Engineering275,000600,000875,000Contractors/Consultants826,000818,0001,644,000External & Internal Audit124,000300,000424,000Corporate Insurance250,000450,000700,000Accounting Services (Outsourced)75,000300,000375,000Marketing155,000300,000455,000Rental /Office Expenses279,000300,000579,000Total Operating Costs6,639,0009,355,00015,994,000Additional Investment/Commercialization
Other Proprietary TechnologyAcquisition (Cash) for AddPower Acquisition1,564,000-1,564,000Commercialization/Working Capital for AddPower
Unit for Immediate Sale3,500,000-3,500,000R&D of Solar/AddPower for Commercialization
Small Scale Solar-5,300,0005,300,000Total Forecasted Cash Usage ExcludingProject Specific Financing$11,703,000$14,655,000$26,358,000


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In addition to the above, as the Company develops and executes contracts for its waste to energy facilities in Saudi Arabia, Egypt, Mexico and elsewhere (these contracts may include long term, ie.7-10 year, commitments for waste disposal, electric and water sales), the Company will use these contracts, and the revenue sources they represent, to secure project specific financing.  The Company expects to have multiple financing sources for project/construction financing on a project by project basis outside of this specific equity raise.  Payments Due under Contractual Obligations  We have future commitments at December 31, 2006 consisting of office lease obligations as follows:   Year Ending December 31,Office Lease Obligations2007$  100,497200889,959200991,603201091,44320117,639Total381,141   In addition, in 2007 we are obligated to pay the remaining $1,564,329 for the purchase of AddPower.       Page 23 of 48





Item 7 Financial Statements.  INTERNATIONAL POWER GROUP, LTD (A Development Stage Company) AUDITED FINANCIAL STATEMENTS For the years ended December 31, 2006 and 2005     CONTENTS PAGE Accountants Audit Opinion25Balance Sheet26Statement of Operations and Deficit Accumulated During Development Stage27Statements of Changes in Stockholders Equity28Statements of Cash Flows29Notes to Financial Statements30    Page 24 of 48     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  To The Board of Directors International Power Group, Ltd.  I have audited the accompanying consolidated balance sheet of International Power Group, Ltd. and its subsidiary (the "Company") as of December 31, 2006 and the related consolidated statements of operations, changes in shareholders' deficit and cash flows for the years ended December 31, 2006 and 2005.  These consolidated financial statements are the responsibility of the Company's management.  My responsibility is to express an opinion on these consolidated financial statements based on my audits.  I conducted the audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that I plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting.  My audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate under the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.  Accordingly, I express no such opinion.   An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  I believe that my audits provide a reasonable basis for my opinion.  In my opinion, based on the audits, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of International Power Group, Ltd. and its subsidiary as of December 31, 2006, and the results of their operations and cash flows for the years ended December 31, 2006 and 2005 in accordance with U.S. generally accepted accounting principles.  The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As shown in the accompanying consolidated financial statements, at December 31, 2006, the Company had a working capital deficiency of $477,832 as well as an accumulated deficit of $16,136,663.  In addition, the Company has had a continuing record of losses.  These factors among other things, also discussed in Note 13 to the financial statements, raise substantial doubt about the ability of the Company to continue as a going concern.  The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts or classification of liabilities that might be necessary should the Company be unable to continue in operation. /s/ Robert G. Jeffrey, Certified Public Accountant Wayne, NJ  April 16, 2007     Page 25 of 48     INTERNATIONAL POWER GROUP, LTD (A Development Stage Company) CONSOLIDATED BALANCE SHEETS December 31, 2006   ASSETSDecember 31, 2006Current AssetsCash$1,652,940Prepaid Expenses12,361Note receivable-Total current assets1,665,301Equipment3,870Other AssetsIntangible assets2,702,404Deposit17,134Total other assets2,719,538TOTAL ASSETS$4,388,709  LIABILITIES AND STOCKHOLDERS EQUITYDecember 31, 2006LiabilitiesAccounts payable$      524,593Accrued expenses33,006Loan payable21,205Acquisition payable1,564,329Total current liabilities2,143,133Stockholders EquityCommon stock  authorized, 750,000,000 shares of $.00001 par value; issued and outstanding, 345,509,096 shares3,455Capital in excess of par value18,378,114Foreign Currency Translation670Deficit accumulated during development stage(16,136,663)Total stockholders equity2,245,576TOTAL LIABILITIES AND STOCKHOLDERS EQUITY$ 4,388,709 The accompanying notes are integral part of these consolidated financial statements.  Page 26 of 48     INTERNATIONAL POWER GROUP, LTD (A Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE      Year 2006Year 2005April 15, 2002
(Date of Inception of Development Stage) to December 31, 2006REVENUE$                   -$                -$                   -OPERATING EXPENSES12,829,7753,267,71016,135,122OPERATING LOSS(12,829,775)(3,267,710)$(16,135,122)OTHER INCOME (EXPENSE)Interest Income4,637-4,637Interest Expense(6,178)(6,178)LOSS ACCUMULATED DURING DEVELOPMENT STAGE$(12,831,316)$(3,267,710)$(16,136,663)NET LOSS PER SHARE$           (0.04)$         (0.01)WEIGHTED AVERAGE SHARES OUTSTANDING316,165,397297,465,012                 The accompanying notes are integral part of these consolidated financial statements.  Page 27 of 48





INTERNATIONAL POWER GROUP, LTD (A Development Stage Company) CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY For the Years Ended December 31, 2006 and 2005   Common StockCapital in Excess of Par ValueOther Comprehensive
IncomeDeficit Accumulated During Development StageTotalSharesAmountBalance, December 31, 2004284,980,000$                2,850$               58,150$                      -$             (37,637)$       23,363Shares issued for cash18,065,0001811,188,3191,188,500Shares issued for services52,100120,31820,319Shares for acquisition3,400,00034118,966119,000Shares for warrants exercised2,135,00021538,729538,750Options granted2,140,0002,140,000Options exercised for services rendered725,000772,49372,500Proceeds from option exercises1,050,00010104,990105,000Net loss for the year----(3,267,710)(3,267,710)Balance, December 31, 2005310,407,1003,1044,241,965-(3,305,347)939,722Shares issued for cash14,889,9961494,268,8514,269,000Shares issued for services11,800,0001185,281,1325,281,250Shares cancelled for acquisition(1,350,000)(13)13-Shares for acquisition2,000,00020799,980800,000Shares for warrants exercised2,437,00024609,226609,250Options granted2,644,5002,644,500Options exercised for services rendered2,625,00027269,973270,000Proceeds from option exercises2,700,00026262,474262,500Foreign currency translation670670Net loss for the year----(12,831,316)(12,831,316)Balance, December 31, 2006345,509,096$                 3,455$          18,378,114$                  670$       (16,136,663)$   2,245,576   The accompanying notes are integral part of these consolidated financial statements.


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INTERNATIONAL POWER GROUP, LTD. (A Development Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS  Year 2006Year 2005April 15, 2002
(Date of Inception of Development Stage) to December 31, 2005Cash Flows From Operating Activities:Net loss from operations$(12,831,316)$(3,267,710)$(16,136,663)Adjustments to reconcile net loss to net cash used by operating  activities:Charges not requiring cash outlay:Value of options granted2,644,5002,140,0004,784,500Common stock issued for services5,281,25022,9285,312,169Options exercised for services262,50072,500335,000Depreciation and amortization100,000-100,000Impairment charge-121,500123,000Changes in assets and liabilities:Prepaid expenses(12,361)-(12,361)Accounts payable441,69479,115524,593Accrued expenses33,007-33,007Deposits(15,134)-(17,134)Net cash consumed by operating activities(4,095,860)(831,667)(4,954,489)Cash Flows From Investing Activities:Acquisition of Addpower(435,671)-(435,671)Investment in Mexican company--(2,500)Capital additions(6,275)-(6,275)Note receivable65,000(65,000)-Net cash consumed by investing activities(376,946)(65,000)(444,446)Cash Flows From Financing Activities:Proceeds from loans521,205-521,205Repayment of loans(500,000)-(500,000)Proceeds of sales of stock units4,269,0001,188,5005,507,000Proceeds from exercise of options270,000105,000375,000Proceed from exercise of warrants609,250538,7501,148,000Net cash provided by financing activities5,169,4551,832,2507,051,205Effect of foreign currency exchange rate on  cash670-670Net increase in cash697,319935,5831,652,940Cash balance, beginning of period955,62120,038-Cash balance, end of period$ 1,652,940$ 955,621$ 1,652,940  The accompanying notes are integral part of these consolidated financial statements.   Page 29 of 48     INTERNATIONAL POWER GROUP, LTD. (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2006 Note 1. ORGANIZATION AND BUSINESS Organization International Power Group, Ltd., (the Company) was incorporated November 30, 1998 in the state of Delaware as Ednet, Inc.  Its name was changed to International Power Group, Ltd. on September 23, 2004. The Company acquired 66% of the stock of International Power, Inc. (Power) in return for 150,000,000 shares of its common stock, which represented 82% of the number of shares of the Company outstanding after this transaction.  Subsequently, Messrs. Toscano and Wagenti transferred a total of 26,997,040 shares of Company stock held by them to the remaining holders of Power stock.  Each of Mr. Toscano and Mr. Wagenti contributed the stock of Power so acquired to the Company for no consideration.  In two stages, therefore, the Company acquired 100% of the outstanding stock of Power for 150,000,000 shares of IPWG common stock.  The acquisition has been accounted for as a reverse merger with the Company being treated as the acquired company and Power being treated as the acquirer.  Historic financial and other information of Power will be presented in all public filings.  Under the accounting for a reverse merger, the assets and liabilities of the Company were recorded on the books of the continuing company at their market values which approximate net realizable value and the stockholders equity accounts of Power were reorganized to reflect the shares issued in this transaction.  The financial statements include the effect of the acquisition on the financial position of the Company and the results of its operations.  The statements of operations for the years ended December 31, 2006, 2005 and 2004 are based on the historical statements of income of the Company and Power for those periods and assume the acquisition took place on January 1, 2003. Power is a Delaware corporation organized April 15, 2002.  During 2004, it acquired the assets of Terra Mar Environmental Systems, Inc. (TMES) in return for 2,281,040 shares of its capital stock.  The assets of TMES consisted principally of two contracts and proposals for the construction of waste disposal plants in countries of the former Soviet Union; neither of the contracts had been implemented; they expired December 31, 2005 and were not implemented.  The shares of Power that were issued for the assets of TMES were redeemed from a portion of the shares that were acquired from the Company in the acquisition of Power.  Power was later dissolved. The Company and TMES had each previously operated in central Asia with contracts for the disposal of waste material; these companies, and Power, had been inactive in recent years. Ordinarily audited financial statements of Power would be included with this filing.  Since Power has been inactive in recent years, however, and has no assets or liabilities except the two contracts referred to above which were deemed to have no value, such audited financial statements have been omitted.  In June 2006, the Company formed a wholly-owned subsidiary IPWG-Sweden AB.  In October 2006, IPWG-Sweden AB purchased proprietary patented technologies, which include waste-to-energy, AddPower, a low temperature turbine (LTT), and ScrubPower, a special emission-to-energy system from three Swedish entities, Anovo AB Angelholm, AddPower AB Angelholm, and SUPE Ltd for a total consideration of $2.8 million. On November 11, 2004 the Board of Directors authorized the acquisition of a 50% interest in Tratamientos Ambientales de Tecate, S.A. de C.V. (TAT), a Mexican corporation involved in the waste disposal business.  This acquisition was concluded on February 21, 2005 by the issuance of 3,400,000 shares of the capital stock of the Company.  On May 23, 2006, the principal of TAT returned to IPWG 1,200,000 of the 3,400,000 shares paid as part of IPWGs investment in TAT, and agreed to cancel an additional 900,000 of the 3,400,000 shares.  150,000 shares were cancelled in December 2006.  Page 30 of 48     Nature of Operations The business of the Company will be the coordination of construction and management of waste disposal plants.  These plants will reduce solid waste to a fraction of its original mass, thus reducing landfill requirements; they will also treat the waste so that it can be used as construction material and for other uses.  Burning of the waste will produce energy.  The Company is currently negotiating with strategic partners in Mexico and elsewhere for the construction of facilities for the treatment of waste material and the production of electricity. Note 2.  DEVELOPMENT STAGE The Company is a development stage company, as defined in Statement of Financial Accounting Standards (SFAS) No.7.  Generally accepted accounting principles that apply to established operating enterprises govern the recognition of revenue by a development stage enterprise and the accounting for costs and expenses.  The Company has been in the development stage since April 15, 2002, the date of its inception. Note 3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Cash For purposes of the Statement of Cash Flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents. b. Income Taxes The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, which requires the use of the liability method.  Accordingly, deferred tax liabilities and assets are determined based on differences between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse.  Current income taxes are based on the income that is currently taxable. c. Fixed Assets Fixed assets are recorded at cost and depreciated over their useful lives using the straight-line basis. d. Intangible Assets Intangible assets represent the estimated fair value of acquired intangible assets used in our business. The patent asset represents the patented technology associated with our AddPower unit that was acquired in the fourth quarter of 2006. We amortize our patent on a straight-line basis over its life of 7 years. See Note 4 for additional information about our intangible asset. e. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures.  Accordingly, actual results could differ from those estimated. f. Recognition of Revenue Revenue will be realized from the sales of product and services.  Recognition will occur upon delivery of product or performance of services.  In determining recognition, the following criteria will be considered: persuasive evidence that an arrangement exists; delivery has occurred; the sales price is fixed or determinable; and collectability is reasonably assured.  Page 31 of 48     g. Fair Value of Financial Instruments The carrying amounts of the Companys financial instruments, which include cash equivalents and accounts payable, approximate their value at December 31, 2006 and 2005. h. Net Loss Per Share The Company computes net loss per common share in accordance with SFAS No. 128, Earnings Per Share, and SEC Staff Accounting Bulletin (SAB) No. 98.  Under the provisions of SFAS No. 128 and SAB 98, basic and diluted net loss per common share are computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period.  Accordingly, the number of weighted average shares outstanding, as well as the amount of net loss per share, is presented for basic and diluted calculations for all periods reflected in the accompanying financial statements. i. Common Stock Common stock of the Company has been issued in return for services.  Values are assigned to these issuances equal to the value of the market value of the common stock. j. Warrants Outstanding Warrants to purchase common stock of the Company are valued at fair value using a Black-Scholes valuation model, in accordance with the provisions of SFAS No. 123R, Shared-Based Payments (SFAS 123R). k. Stock Options Stock options issued were valued at fair value using a Black Scholes valuation model, in accordance with the provisions of SFAS No. 123R.  Certain options exercised for services were valued at their exercise price. l. Recent Accounting Pronouncements The Company does not anticipate the adoption of recently issued accounting pronouncements to have a significant effect on the Companys results of operations, financial position, or cash flows. Note 4.  ASSET ACQUISITION On October 3, 2006 the Company completed the asset acquisition of AddPower AB, a Swedish company for $2.8 million.  The purchase price was as follows:  Cash$   2,000,000Stock800,000$   2,800,000  IPWG paid approximately $436,000 upon execution of the contract and the remaining purchase price will be paid in nine monthly installments beginning January 2007.  The Company issued 2,000,000 shares of common stock to the owner of AddPower in October 2006. AddPower is a patented turbine technology for the generation of electricity using low heat.  We purchased all the assets including the intellectual property and patents.  Since these entities did not have any customers or any employees, it did not qualify as an acquisition of a business in accordance with EITF 98-3.  Therefore, the entire $2.8 million purchase price was allocated to the patents:  Page 32 of 48       Note 5.  RELATED PARTY TRANSACTIONS  Until late in 2005, the Company made its headquarters in premises owned by the Company vice president, which was rent free until that date.  The market value of these rental facilities was negligible. Shares of common stock were issued to the officers of the Company for their services during the period August 1, 2003 to June 30, 2005.  These issuances totaled 100,000,000 shares.  They were valued at $10,000 which has been charged to expense during the periods benefited.  These officers also received 150,000,000 shares of Company stock in exchange for their two thirds interest in the capital stock of Power.  Subsequently, these officers acquired the remaining 1/3 of the capital stock of Power by transferring to the remaining stockholders of Power shares of the Company owned by them.  The officers then contributed the shares of Power so acquired to the Company.  Both the Company and Power had only nominal assets at the time of the acquisition, so these shares were assigned a nominal value.  During the year ended December 31, 2005, IPWG loaned $65,000 to a company with a similar group of officers, this loan was repaid in 2006.  This same organization made a $250,000 loan to the Company during the fourth quarter of 2006.  This loan was also repaid in the fourth quarter of 2006.  During the fourth quarter of 2006, an officer of the IPWG loaned the company $50,000.  This loan was repaid in December 2006.  In the fourth quarter of 2006, the director of our Swedish subsidiary loaned the company $21,205 for the office start-up costs in Sweden.  This loan was repaid during the first quarter of 2007. Note 6.  INCOME TAXES The Company experienced losses during 2006, 2005 and 2004.  The Internal Revenue Code allows net operating losses (NOLs) to be carried forward and applied against future profit for a period of twenty years.  At December 31, 2006, the Company had an NOL carry forward of $16,136,663 available for Federal taxes and state taxes.  The potential tax benefit of both the state and Federal NOL has been offset by a valuation allowance.  If not used, the carry forward will expire as follows: 2024$       37,63720253,267,710202612,831,316  Under SFAS No. 109, deferred tax assets are not recognized unless it is more likely than not that the benefits will be realized.  If realization is not likely, the amounts are offset by a valuation allowance.  Accordingly, at December 31, 2006, $16,136,663 of deferred tax asset has been fully offset by a valuation allowance. Note 7.  CAPITAL STOCK AND WARRANTS  During 2005, the Company sold stock units.  Certain of these units were comprised of 400,000 shares of stock with 200,000 warrants exercisable at $0.25 for eighteen months.  Other units were comprised of 80,000 shares with 40,000 warrants exercisable at $0.75 for eighteen months.  Total proceeds from these sales were $1,188,500.  During 2006, the Company sold stock units comprised of 50,000 shares of stock with 25,000 warrants exercisable at $1.00 for eighteen months and units that were comprised of 250,000 shares with 125,000 warrants exercisable at $0.40 for eighteen months.  Total proceeds from these sales were $4,269,000.   Page 33 of 48     Warrant activity for the two years ended December 31, 2006 is as follows:  Balance December 31, 2004990,000Warrants granted during 20059,032,500Warrants exercised during 2005(2,135,000)Balance December 31, 20057,887,500Warrants granted during 20067,444,998Warrants exercised during 2006(2,437,000)Warrants expired during 2006(1,200,000)Balance December 31, 200611,695,498  Exercise PriceWeighted-Average Remaining
Contractual Term (months)Warrants$0.250.42,788,000$0.4018.05,850,000$0.752.71,450,000$1.0013.51,607,498Total exercisable11,695,498  Note 8.  STOCK OPTIONS  On January 1, 2005, we adopted SFAS No. 123R, Share-Based Payment, (SFAS 123R), which replaced SFAS No. 123, Accounting for Stock-Based Compensation (SFAS 123), and superseded APB Opinion No. 25, Accounting for Stock Issued to Employees (APB 25). SFAS 123R requires that the cost relating to share-based payment transactions in which an entity exchanges its equity instruments for goods or services from either employees or non-employees be recognized in the financial statements as the goods are received or services are rendered. That cost is measured based on the fair value of the equity or liability instruments issued.  During 2005, the Company adopted and the stockholders approved a stock option plan (the 2005 Stock Option Plan).  The Plan permits the Board of Directors to grant options to purchase up to 30,000,000 shares of common stock to officers, employees, and key individuals deemed important to the success of the Company.  All options are vested upon issuance and immediately exercisable.  The Plan has a term that runs through June 15, 2010.  The exercise price shall not be less than the market value as determined at date of grant.  The following table summarizes changes in outstanding stock options during the twelve months ended December 31, 2006 and 2005:   December 31,20062005Weighted-Weighted-SharesAverage PriceSharesAverage Price(Shares in thousands)Outstanding at the beginning of the year17,225$0.13-$-Granted (all at market price)13,000$0.7419,000$0.13Cancelled(2,000)$0.40-$-Exercised(5,325)$0.10(1,775 )$0.10Outstanding at the end of the year22,900$0.4617,225$0.13  The weighted-average remaining contractual life of the options outstanding as of December 31, 2006 was 2.9 years.  The aggregate intrinsic value of the options outstanding as of December 31, 2006 was $4.2 million.  The aggregate intrinsic value represents the difference between the closing price of IPWGs common stock on December 31, 2006 and the exercise price, multiplied by the  Page 34 of 48     number of in-the-money stock options as of December 31, 2006.  This represents the amount that would have been received by the stock option holders if they had all exercised their stock options on December 31, 2006.  In future periods, this amount will change depending on fluctuations in IPWGs stock price.  The total intrinsic value of stock options exercised during the years ending December 31, 2006 and 2005 was $5.0 million and $1.7 million, respectively. The fair value of option grants are estimated using a Black-Sholes option pricing model.  The following weighted-average assumptions were used for options granted during the year ended December 31, 2006 and 2005:  20062005Dividend yield0.0%0.0%Expected volatility100.85%156.24%Risk-free interest rate4.96%3.75%Expected term (in years)1.390.75Weighted-average fair value of stock options granted$0.20$0.11  Note 9.  OPERATING EXPENSES  Major categories of operating expenses are presented below. 20062005April 15, 2002 (Date of Inception of Development Stage) to December 31, 2005Stock Based Compensation$2,644,500$2,140,000$4,784,500Consulting expense6,437,147439,5946,876,741Professional fees1,325,888108,6181,434,506Impairment-121,500123,000Office expenses136,30874,069221,780Travel & Meals793,716203,8041,003,968Public relations243,36329,960273,323Salaries and other employee expenses776,29658,801842,488Insurance42,24813,47855,726Automobile expenses45,61517,59563,210Telecommunications89,36819,500108,868Rent127,45510,547138,002Depreciation and amortization100,000-100,000Other expenses67,87130,244109,010$12,829,775$3,267,710$16,135,122  Note 10.  IMPAIRMENT  Following the acquisition of TAT, the Company determined that the entity would not provide the expected benefits and the investment was abandoned.  Early in 2006, the Company began to use a Mexican subsidiary to pursue its business interests in Mexico.  The Mexican subsidiary had previously been inactive.  The value of the TAT investment was written off during 2005.  Page 35 of 48     Note 11.  RENTS UNDER OPERATING LEASES Rent expense for the years ended December 31, 2006 and 2005 was $127,455 and $10,547, respectively.  At December 31, 2006, the company had the following minimum lease commitments for the next 5 years:  YearCommitment2007100,497200889,959200991,603201091,44320117,639 Note 12.  SUPPLEMENTAL CASH FLOWS There was no cash paid for interest or income taxes during the years ended December 31, 2006 and 2005.  The following non-cash investing and financing activity took place during 2005:  a. The Company issued 3,400,000 shares of its common stock for its equity interest in Tratamientos Ambientales Tecate (TAT).  b. The Company issued 52,100 shares for services valued at $20,319.  For additional services, it granted option holders the right to exercise without payment options to purchase 725,000 shares of common stock.  The additional rights were $72,500.  The following non-cash investing and financing activity took place during 2006:  a. The Company issued 2,000,000 shares of common stock for the acquisition of AddPower valued at $800,000.  b. The Company issued 11,800,000 shares of common stock for services valued at $5,281,250.  For additional services, it granted option holders the right to exercise without payment options to purchase 2,625,000 shares of common stock.  The additional rights were $262,500.  NOTE 13. GOING CONCERN  The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As shown in the financial statements, the Company had a material working capital deficiency and an accumulated deficit as of December 31, 2006 and has experienced continuing losses.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  The financial statements do not include adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.  The Companys present plans, the realization of which cannot be assured, to overcome these difficulties include but are not limited to the continuing effort to raise capital in the public and private markets.     Page 36 of 48     Item 8 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.  None Item 8A. Controls and Procedures.  The Companys Chief Executive Officer and Principal Financial Officer have reviewed the Companys disclosure controls and procedures as of the end of the period covered by this report.  Based upon this review, such officers believe that the Companys disclosure, controls and procedures are effective (i) in timely alerting them to material information required to be included in this report and (ii) to ensure that we are able to record, process and summarize and report the information we are required to disclose in the reports we file with the SEC within the required time periods.  There have been no significant changes in internal control over financial reporting that occurred during the year covered by this report that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.    PART II   Item 9 Directors and Executive Officers of the Registrant; Compliance with Section 16(a)of the Exchange Act.  The directors and executive officers of the Company, their ages, and the positions they hold are set forth below.  The directors of the Company hold office until the next annual meeting of stockholders of the Company and until their successors in office are elected and qualified.  All officers serve at the discretion of the Board of Directors. (A) Directors and Executive Officers. NameAgeTitlePeter Toscano57Chairman of the Board, Chief Executive Officer/PresidentJack Wagenti69Vice President, Secretary, and DirectorJose Garcia50Vice President and DirectorLouis D. Garcia55Vice President, FinanceJames W. FitzGibbons38Controller and Chief Accounting OfficerSheik Hani A. Z. Yamani45DirectorGeorgi Grechko74DirectorSalvatore Arnone45DirectorRobert Astore69DirectorWalter J. Salvadore50Director  Mr. Peter Toscano.  Mr. Toscano has been Director, President and Chief Executive Officer of International Power Group since October of 2004.  Mr. Toscano also is President, Chief Executive Officer and Director of U.S. Precious Metals, Inc., positions he has held since May 9, 2002.  Mr. Toscano was an officer of Material Waste Recycling, Inc. from February 2001 through May 9, 2002.  Material Waste Recycling, Inc. was in the business of recycling wools, cottons and acrylics both in the United States and Mexico. Mr. Toscano over the past five years has been involved in materials reprocessing, export, and importation in Mexico.  In addition, Mr. Toscano has had experience in the development of systems for the management of hazardous wastes in Russia and Central Asia.  Also, Mr. Toscano has been involved in various low-level radioactive waste management projects within the Pacific Rim.  Within those arenas, Mr. Toscano has spearheaded projects that utilized strategic alliances with major companies such as Westinghouse Electric Company and Waste Management, Inc.  Among his responsibilities, Mr. Toscano has acted as a liaison bridging the gap between Russian and US corporations.  Page 37 of 48     U.S. Precious Metals, Inc. is a venture owned by, among others, Messrs. Toscano, Wagenti and J. Garcia.  U.S. Precious Metals, Inc.s principal activity is to acquire, explore and develop mineral properties in Mexico.  It is in its exploration stage and is focused on acquiring prospective mineral properties, principally gold and silver.  U.S. Precious Metals, Inc. acquired exploration concessions to certain mineral properties known as Solidaridad I, Solidaridad II, Solidaridad III, Solidaridad IV and Solidaridad V located in Michoacan, Mexico.  Material Waste Recycling, Inc., which ceased operations in May 2002, was in the business of collecting and recycling fabric remnants.  The remnants were collected primarily from domestic U.S clothing manufacturers and sold to overseas processors.  Mr. Jack Wagenti.  Mr. Wagenti has been Director and Secretary of International Power Group since October of 2004.  He has also served as Chief Financial Officer of the Company from its inception to October 2006.  Mr. Wagenti is also a Director and the Secretary and Chief Financial Officer of U.S. Precious Metals Inc., a company which is traded on the Over The Counter Bulletin Board.  Mr. Wagenti has held positions with U.S. Precious Metals since May 2002.  From 1996 to the present, Mr. Wagenti has served in varying capacities of American International Ventures, Inc., a company which is traded on the Over the Counter Bulletin Board and Pink Sheets Market.  Presently, Mr. Wagenti is a Director of American International Ventures, Inc.  American International Ventures, Inc. is in the mineral exploration business in the State of Nevada and its assets include the Brunner Property located in Nye County, Nevada.  Mr. Jose Garcia. Mr. Garcia has been a Director and Vice President of International Power Group since October of 2004.  Mr. Garcia was employed by La Carvella Restaurant from February 2001 to May 9, 2002.  Mr. Garcia has been Vice President of U.S. Precious Metals, Inc. since May 2002, a company trading on the Over The Counter Bulletin Board and President of U.S. Precious Metals de Mexico since March 2003.  Mr. Garcia is from Morelia, Mexico and is President of IPW Group de Mexico, which is a wholly owned subsidiary of International Power Group, Ltd.  Mr. Louis D. Garcia.  Mr. Garcia has been the Companys Vice President, Finance since May 15, 2006.  From 1997 through March 2006, Mr. Garcia was the Managing Director of Providence Financial Services, LLC. Prior to Providence, Mr. Garcia was a Senior Managing Director with GCR Highland LLC and Senior Managing Director (Real Estate) with Jesup, Josenthal and Co., Inc.  Mr. Garcia received a Bachelor of Science in Finance from Saint Johns University in New York.  James W. FitzGibbons. Mr. FitzGibbons has served as Controller and Chief Accounting Officer of the Company since October 2006. He previously served as Vice President  Finance and Chief Accounting Officer of NDC-Health Corporation, a NYSE traded healthcare services company from January 2004 through January 2006. Prior to NDCHealth, beginning in January 1999, Mr. FitzGibbons was Vice President  Controller of McKesson Corporations Information Solutions business unit. Mr. FitzGibbons received his Bachelor of Science degree in accounting from the University of Alabama. He is a certified public accountant in the State of Georgia.  Sheik Hani A. Z. Yamani.  Sheik Yamani has been a Director of International Power Group, Ltd. since March 2006.  He is also the Executive Chairman of Hazy Trading Establishment and its affiliated companies, an organization he founded in 1988.  Hazy Trading Establishment has completed energy and development projects in Africa and Middle East valued at over 5 billion US.  He has been an advisor to a number of multi-national companies including Asea Brown Boveri (ABB) (1991 to 1998), Astaldi spA.  (1991 to 1998), Interbeton BV (1992 to 1999) and Avia Mineral (1994 to 1998).  He has also been a member of World Travel & Tourism Council and the Young Presidents Organization.  He is a member of the Board and the Executive Committee of the International Islamic Relief Organization.  Sheik Yamani attended Oxford University and the Wharton School of Business at the University of Pennsylvania and, from 1983 to 1984, trained at Citibank in New York City and Geneva, and at MKS Finance in Geneva, one of the worlds leading integrated precious metals and foreign exchange trading houses.  Sheik Yamani is also the author of To Be a Saudi, a book that received positive reviews in the international media during the late 1990s.  Sheik Yamani is often an editorial contributor in the Saudi Arabian media on economic, political and social issues.  Page 38 of 48      Dr. Georgi Grechko.  Dr. Grechko has been a Director since October 2004.  He brings extensive technical expertise in the field of applied sciences.  He will also help foster the international cooperation that is required for International Powers operation.  He qualifies as an independent director as defined under the Sarbanes Oxley Act of 2002.  Dr. Grechko, a Russian cosmonaut, flew on three space flights and at one time held the space endurance record.  He graduated from the Leningrad Institute of Mechanics with a doctorate in mathematics.  He went on to work at Sergei Korolevs design bureau and from there was selected for cosmonaut training in the Soviet moon program.  He went on to work on the Salyut space stations.  After leaving the space program in 1992, Dr. Grechko became a lecturer in atmospheric physics at the Soviet Academy of Sciences.  Dr. Grechko from November 1997 to September 2004 was the Chief Advisor to the Chairman of the Board of Investsberbank, Pokrovka Street 47A, Moscow, 105062, Russian Federation, from September 2004 to present he is a member of the Board of Directors of Investsberbank.  Mr. Salvatore J. Arnone.  Mr. Arnone has been a director of International Power Group, Ltd. since December 2004.  He is a Senior Account Executive with KMBS, Inc. (a/k/a Konica-Minolta Business Systems, Inc.), a company that manufactures, sells and services photocopiers and other office equipment.  Mr. Arnone has been with KMBS, Inc. since May of 1998.  Mr. Arnone has received many exceptional achievement awards in management and sales.  Mr. Robert Astore.  Mr. Astore has been a director of International Power Group, Ltd. since January 2005.  He was President and owner of Bergen Film Laboratories, Inc., Lodi New Jersey from 1960 to 1981.  From 1981 to 1990 Mr. Astore was a self employed builder.  Mr. Astore from 1990 to present he has been employed as an independent consultant in seafood sales and brokerage.  Mr. Astore received a Bachelors Degree in Business Administration from the University of Miami.  Mr. Walter Salvadore.  Mr. Salvadore has been a director of International Power Group, Ltd. since January 2006.  Since 1982, Mr. Salvadore, a ceramic engineer, has been the president of R&S Enterprises, a business consulting firm located in Medford, New Jersey.  In addition, since 2000, he has maintained a junior partnership position in Draseena Funds Group, an asset management firm located in Stateline, Nevada.  From 1982 to 1999, Mr. Salvadore was the President and CEO of Risco, an/engineering and distribution firm specializing in high temperature refractory and industrial insulation materials.  From 1977 to 1982, he held various engineering and marketing positions with the Carborundum Company (Niagara Falls, New York).  He was a former president of the American Ceramic Society and has a B.S. degree in Ceramic Engineering from Rutgers University.  Mr. Thomas J. Mitchell resigned as a director of the Company on February 3, 2007. He had served as a director of the Company since January 2006.  The officers of the Company are not full time employees and are involved in other business endeavors, the Company does not have a formal conflicts of interest policy governing its officers and directors.  The Company does not have written employment agreements with any of its officers.  Its officers intend to devote sufficient business time and attention to the affairs of the Company to develop the Companys business in a prudent and business-like manner.  Other Officers (non-executive) and Significant Personnel.  Dr. Kenny Tang.  In March 2006, the Company appointed Dr. Tang, 47, to its newly created Environmental Advisory Board.  Currently, he is the first and, to date, the only member of this board.  Since June 2000, Dr. Kenny Tang has been the CEO of Oxbridge Capital, an investment and advisory firm which he founded at that time, specializing in environmental clean technologies and renewable energy.  Prior to June 2000, he was employed in corporate finance with the Union Bank of Switzerland in London and as a strategy consultant with KPMG Consultants and Stern Stewart, the later two being pioneers in corporate governance and shareholder value creation.  Dr. Tang also serves (since 2005) as the European Managing Partner at Enhancement Partners LP which is a global consortium that is developing Gigawatt-size wind farms in China.  Prior to 2000, he was the President and CEO of  Page 39 of 48     SUSTAIN, an Asian research institute focusing on economic and environmental sustainability from an Asian perspective, which he founded.  Dr. Tang earned his doctorate at Judge Business School, Cambridge Universitys business school and he is a member of the Board of Governors of Middlesex University, London.  He is also a Chartered Financial Analyst (CFA).  Gregory J. Callageri.  In April 2006, the Company appointed Gregory J. Callageri, 47, as Chairman of its newly formed Finance Advisory Committee.  He is the first and, to date, the only member of this board.  Mr. Callageri is the CEO of REGF, LLC, a private investment manager and consulting firm that he founded in April 2005.  From 1999 to April 2005, Mr. Callageri owned and operated an asset management and consulting firm named MAP Fund LLC, which he had founded.  Mr. Callageri sold MAP Fund LLC in April 2005.  Mr. Callageri has over 23 years experience working with global banks, asset managers and hedge funds.  Throughout his career, he has had prominent roles and high level responsibilities in international capital markets and has worked in the major financial centers.  His experience in hedge funds and derivatives operations has given him a broad range of exposure and experience in dealing with international banking institutions.  He has visited, analyzed and completed due diligence on over 200 hedge funds throughout his career.  He received an MBA from Pace University in New York and lives in Chicago, Illinois.  (C) Involvement in Certain Legal Proceedings.  To the knowledge of the Company, none of its officers or directors has been personally involved in any bankruptcy or insolvency proceedings within the last five years.  Similarly, to the knowledge of the Company, none of the directors or officers, within the last five years, have been convicted in any criminal proceedings (excluding traffic violations and other minor offenses) or are the subject of a criminal proceeding which is presently pending, nor have such persons been the subject of any order, judgment, or decree of any court of competent jurisdiction, permanently or temporarily enjoining them from acting as an investment advisor, underwriter, broker or dealer in securities, or as an affiliated person, director or insurance company, or from engaging in or continuing in any conduct or practice in connection with any such activity or in connection with the purchase or sale of any security, nor were any of such persons the subject of a federal or state authority barring or suspending, for more than 60 days, the right of such person to be engaged in any such activity, which order has not been reversed or suspended.  (D) Audit Committee Financial Expert.  The Company does not have an audit committee or an audit committee financial expert, as such term is defined in Item 401(e) of Regulation S-B.  The Company is not required at this time to have an audit committee because it is not a listed issuer as described in Rule 10A-3(c)(2) promulgated under the Exchange Act.  The Board is considering current and potential independent board members for this committee when the appropriate time arrives.  (E) Compliance with Section 16(A) of the Exchange Act.  Section 16(a) of the Exchange Act requires the Companys directors, executive officers, and persons who own more than 10% of the Companys equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company.  Officers, Directors and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.  During the fiscal year ended December 31, 2006, the period covered by this Form 10K-SB, there were 10 such individuals who were subject to the reporting requirements of the Exchange Act.  To the best of the Companys knowledge, all our executive officers, directors and persons who beneficially own more than ten percent of our common stock are current in their Section 16 filings.  (F) Code of Ethics.  The Companys Board of Directors has been considering adoption of a Code of Ethics to be applicable to its Chief Executive Officer and senior financial executives.  The Code of Ethics will be designed to deter wrong-doing and promote honest and ethical  Page 40 of 48     behavior, full, fair, timely, accurate and understandable disclosure, and compliance with applicable laws.  The Board anticipates it will adopt the Code of Ethics during the current fiscal year.    Item 10 Executive Compensation.  The following table sets forth certain information regarding the compensation of our Chief Executive Officer and our three Vice Presidents for the fiscal years ended December 31, 2006 and 2005.  Except as set forth below, no other compensation was paid to these individuals during the years indicated. SUMMARY COMPENSATION  Annual Compensation Name and
Principal PositionYearSalaryBonusOption AwardsAll Other CompensationTotalPeter Toscano2006$46,231$          -$           -$              -$46,231President, Chief Executive200519,558-20,000(1)-39,558Officer and DirectorJack Wagenti200646,231---46,231Vice President and Director200517,058-20,000(1)-37,058Chris Duncan (2)2006130,769-307,000-437,769Former Chief Operating Officer2005-----John Mack (4)200680,769---80,769Former Chief Financial Officer2005----- 1)  The financial value of each option is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted average assumptions used for the valuation of these option awards are as follows: Expected dividends 0%; Expected volatility 156.24%; Risk free interest rate 3.75%; expected life of options .75 years. The assumptions are also disclosed in Note 8 in the Notes to the Consolidated Financial Statements included in this Form 10-KSB. 2) Mr. Duncan resigned as the Companys Chief Operating Officer on January 2, 2007.  3) The financial value of each option is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted average assumptions used for the valuation of these option awards are as follows: Expected dividends 0%; Expected volatility 100.85%; Risk free interest rate 4.96%; expected life of options 1.39 years. The assumptions are also disclosed in Note 8 in the Notes to the Consolidated Financial Statements included in this Form 10-KSB.  4) Mr. Mack resigned as the Companys Chief Financial Officer on January 5, 2007.  We have no employment contracts with any our officers.  Page 41 of 48     The following table discloses information regarding outstanding equity awards as of December 31, 2006 for each of our senior executive officers. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END  Name and Principal PositionNumber of Securities
Underlying Unexercised Options/Exercisable (1)Number of Securities
Underlying Unexercised
Options/Un-exercisable (1)Option
Exercise PriceOption
Expiration datePeter Toscano, President, CEO and Director1,000,000-$0.106/14/2010Jack Wagenti
Vice President and Director1,000,000-$0.106/14/2010Chris Duncan(1)1,000,000-$0.836/14/2010Former Chief Operating200,000-$0.677/17/2010Officer300,000-$0.676/14/2010John Mack(2)
Former Chief Financial Officer----  (1) Mr. Duncan resigned as the Companys Chief Operating Officer on January 2, 2007. (2) Mr. Mack resigned as the Companys Chief Financial Officer on January 5, 2007.   Directors Compensation.  Directors receive no monetary compensation for their service as directors.  Directors are reimbursed for expenses incurred in connection with the Companys business.  The following table documents the compensation of our directors for the fiscal years ended December 31, 2006.NameFees Earned or Paid in CashStock
AwardsOption
Awards (1)Non-Equity
Incentive Plan
CompensationNonqualified
Compensation
EarningsAll Other
CompensationTotalSalvatore Arnone$          -$         -$          -$                    -$                  -$                 -$          -Robert AstoreJose GarciaDr. Georgi GreckoThomas Mitchell210,000210,000Walter Salvatore210,000210,000Hani A. Z. Yamani1,210,0001,210,000(1) The financial value of each option was estimated using the Black-Scholes option-pricing model and the assumptions disclosed in Note 8 in the Notes to the Consolidated Financial Statements included in this Form 10-KSB. The following is a list of the outstanding option held by each director as of December 31, 2006:Salvatore Arnone(1,000,000)Robert Astore(1,000,000)Jose Garcia(1,000,000)Georgi Crechko(1,000,000)Thomas Mitchell(1,000,000)Walter Salvatore(1,000,000)Sheik Hani A. Z. Yamani(1,000,000) (2) Mr. Mitchell resigned as a director of the Company on February 3, 2007.  All Directors have been granted stock options for their board service.  All such options were granted at or above fair market value determined on the date of grant.  Stock Incentive Plans.  On September 13, 2005, our Board adopted and our shareholders approved the Companys 2005 Stock Option Plan, effective June 15, 2005, a copy of which  Page 42 of 48     is attached as Exhibit 4.1 to the Companys Form 10-QSB filed with the SEC on November 21, 2005.  This plan authorizes the granting of options representing up to 30,000,000 shares of common stock to Officers, Directors, and consultants.  As of December 31, 2006, options to purchase 30,000,000 shares of common stock had been granted pursuant to this plan to individuals at an exercise prices ranging from $0.10 to $0.83 per share.  The options vested upon grant, including options to purchase 11,800,000 shares of common stock that were granted to directors 7,100,000 options have been exercised.  The options issued pursuant to this plan have been deemed by the Company to have a value ranging from $0.11 to $0.20 per share.   Item 11 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Security Ownership of Certain Beneficial Owners and Management  The following table sets forth, as of April 5, 2007, the number of shares of Common Stock owned of record and beneficially by our current directors, executive officers, and persons who hold 5.0% or more of the outstanding common stock of IPWG based upon the 349,684,096 shares of our common stock that were issued and outstanding on April 5, 2007.  Also included are the shares held by all directors and executive officers as a group.  The address for each executive officer and director is that of the Company.  The securities listed below as being beneficially owned by the security holder also include securities owned by his spouse or minor children, or securities held jointly, if any.  Page 43 of 48      Name and Address of Beneficial OwnerShares of Common Stock Beneficially OwnedCommon Stock Underlying Vested Options or WarrantsPercentage of Class*Peter Toscano(a)(1)
950 Celebration Blvd., Suite A,
Celebration, FL 34747100,954,830027.91%Jack Wagenti(a)(1)
950 Celebration Blvd., Suite A,
Celebration, FL 34747106,194,480029.35%Jose Garcia(a)(1)
950 Celebration Blvd., Suite A,
Celebration, FL 347471,500,0001,000,000**Louis D. Garcia(b)(4)
950 Celebration Blvd., Suite A,
Celebration, FL 347472,000,0000**James W. FitzGibbons
950 Celebration Blvd. Suite A,
Celebration, FL 347470200,000**Salvatore Arnone(c)(1)
950 Celebration Blvd., Suite A,
Celebration, FL 347471,300,0001,000,000**Dr. Georgi Grechko(c)(1)
950 Celebration Blvd., Suite A,
Celebration, FL 3474740,0001,000,000**Robert Astore(c)(1)
950 Celebration Blvd., Suite A,
Celebration, FL 347471,000,0001,300,000**Walter Salvadore(c)(2)(3)
950 Celebration Blvd., Suite A,
Celebration, FL 34747160,0001,500,000**Sheik Hani A. Z. Yamani(c)(2)
950 Celebration Blvd., Suite A,
Celebration, FL 3474706,000,0001.66%All  directors and executive officers as a group213,149,31012,800,00062.26% * The percentages listed for each shareholder assume the exercise by that shareholder only, of his options or warrants and thus include the shares underlying said option and/or warrant.  However, the percentages do not assume the exercise of all options and/or warrants by all the shareholders holding options and/or warrants except for the total percentage for all directors and executive officers as a group. ** Less than one (1%) percent. (a) Officer and Director (b) Director only (1) On June 15, 2005, this shareholder was issued immediately exercisable options to purchase 1,000,000 shares with an exercise price of $0.10 per share.  These options expire on June 14, 2010. (2) On March 14, 2006, this shareholder was issued immediately exercisable options to purchase 1,000,000 shares with an exercise price of $0.83 per share.  These options expire on June 14, 2010. (3) On October 6, 2005, this shareholder purchased immediately exercisable warrants to purchase 80,000 shares with an exercise price of $0.75 per share.  The warrants expire on April 6, 2007.  The warrant purchase was made as part of a private placement before this shareholder became a director. (4) Mr. Louis Garcia, Providence was granted an option to purchase 2,000,000 shares of IPWG stock at an exercise price of $0.10 per share.  Mr. Garcia used $15,000 of its compensation to exercise options for 150,000 shares.   Page 44 of 48     Beneficial ownership means having or sharing, directly or indirectly (i) voting power, which includes the power to vote or to direct the voting, or (ii) investment power, which includes the power to dispose or to direct the disposition, of shares of the common stock of an issuer.  The definition of beneficial ownership includes shares underlying options or warrants to purchase common stock, or other securities convertible into common stock, that currently are exercisable or convertible or that will become exercisable or convertible within 60 days.  Securities Authorized for Issuance under Equity Compensation Plans  The following table provides information as of December 31, 2006, regarding compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance. Plan category (in thousands)Number of securities to be issued upon exercise of outstanding options
(a)Weighted average exercise price of outstanding options
(b)Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a))
(c)Equity compensation plans approved by security holders22,900,000$0.460Equity compensation plans not approved by security holdersn/an/an/aTotal22,900,000$0.460    Item 12 Certain Relationships and Related Transactions.  Until late in 2005, the Company made its headquarters in premises owned by the Company vice president, which was rent free until that date.  The market value of these rental facilities was negligible. Shares of common stock were issued to the officers of the Company for their services during the period August 1, 2003 to June 30, 2005.  These issuances totaled 100,000,000 shares.  They were valued at $10,000 which has been charged to expense during the periods benefited.  These officers also received 150,000,000 shares of Company stock in exchange for their two thirds interest in the capital stock of Power.  Subsequently, these officers acquired the remaining 1/3 of the capital stock of Power by transferring to the remaining stockholders of Power shares of the Company owned by them.  The officers then contributed the shares of Power so acquired to the Company.  Both the Company and Power had only nominal assets at the time of the acquisition, so these shares were assigned a nominal value.  During the year ended December 31, 2005, IPWG loaned $65,000 to a company with a similar group of officers, this loan was repaid in 2006.  This same organization made a $250,000 loan to the Company during the fourth quarter of 2006.  This loan was also repaid in the fourth quarter of 2006.  During the fourth quarter of 2006, an officer of the IPWG loaned the company $50,000.  This loan was repaid in December 2006.  In the fourth quarter of 2006, the director of our Swedish subsidiary loaned the company $21,205 for the office start-up costs in Sweden.  This loan was repaid during the first quarter of 2007.  On October 3, 2006, the Company purchased from Leonard Strand, an employee of the Company, all outstanding shares in the limited liability company Newpower I Hoganas AB, incorporated in Sweden, for a purchase price of SEK 100,000 (approximately $13,550).    Page 45 of 48


Item 13 Exhibits  Exhibit No.Description of Document3(i)(a)Articles of Incorporation of the Registrant(1)3(i)(b)Certificate of Amendment to Articles of Incorporation of the Registrant(1)3(i)(c)Articles of Incorporation of International Power Group de Mexico (1)3(ii)By-Laws of the Registrant (1)4.12005 Stock option Plan(2)10.1Contract with NAANOVO Energy USA(1)10.2Contract with Providence Financial(1)10.3Contract with Anthony Crisci, Esq.(3)10.4Letter of Engagement with Fran Tech International Licensing(3)10.5Contract with CVI(3)10.6October 24, 2005 Insurance, Brokerage and related Consulting Services Agreement with Marsh USA, Inc.(4)10.7November 7, 2005 Conditional Joint Venture and Warrant Agreement with NAANOVO International Free Zone, N.V.(5)10.8Kingdom of Saudi Arabia license (6)10.9Asset Purchase Agreement between the Company and Anovo AB Argelholm and Supe Ltd. (7)10.10Joint Venture Agreement among the Company, Sistemas Ecologicos Para La Proteccion Ambiental S.A. DE C.V. and Mario Salguero Rossainzz dated as of November 9, 2006 (8)31.1Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act)(7)31.2Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act)(7)32.1Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)(7)32.2Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)(7)  (1) Incorporated by reference to the Companys Form 10-SB as filed with the Securities Exchange Commission on July 19, 2005. (2) Incorporated by reference to the Companys Form 10-QSB as filed with the Securities Exchange Commission on November 21, 2005. (3) Incorporated by reference to the Companys Form 10- SB/A as filed with the Securities Exchange Commission on August 24, 2005. (4) Incorporated by reference to Exhibit 10.1 to the Companys Form 8-K as filed with the Securities Exchange Commission on October 27, 2005. (5) Incorporated by reference to Exhibit 10.1 to the Companys Form 8-K as filed with the Securities Exchange Commission on November 7, 2005. (6) Incorporated by reference to Exhibit 10.8 to the Companys Form 10-SB/A6 as filed with the Securities and Exchange Commissions on September 18, 2006. (7) Filed herewith (8)  Incorporated by reference to Exhibit 10.1 in the Company Form 8-K filed with the Securities and Exchange Commission on November 17, 2006.


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Item 14 Principal Accountant Fees and Services. The following is a summary of the fees billed to us by the principal accountants to the Company for professional services rendered for the fiscal years ended December 31, 2006 and 2005: Fee CategoryFiscal 2005 FeesFiscal 2006 FeesAudit Fees$5,850$12,225Audit Related Fees--Tax Fees-$  1,120All Other Fees--Total Fees$5,850$13,325  Audit Fees.  Consists of fees billed for professional services rendered for the audit of our financial statements and review of interim consolidated financial statements included in quarterly reports and services that are normally provided by the principal accountants in connection with statutory and regulatory filings or engagements.  Audit Related Fees.  Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under Audit Fees.  Tax Fees.  Consists of fees billed for professional services for tax compliance, tax advice and tax planning.  These services include preparation of federal and state income tax returns. All Other Fees.  Consists of fees for product and services other than the services reported above.  Pre-Approval Policies and Procedures.  Prior to engaging its accountants to perform a particular service, the Companys Board of Directors obtains an estimate for the service to be performed.  All of the services described above were approved by the Board of Directors in accordance with its procedures.


Page 47 of 48     SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 14 day of April.    International Power Group, Ltd.     /s/Peter ToscanoName: Peter ToscanoTitle: Chief Executive OfficerNameDate/s/ Peter ToscanoMonday, April 16, 2007Name: Peter ToscanoTitle: Chairman and Chief Executive Officer
(Principal Executive Officer)/s/James W. FitzGibbonsMonday, April 16, 2007Name: James  W. FitzGibbonsTitle: (Controller and Chief Accounting Officer and Principal Financial Officer)/s/ Jack WagentiMonday, April 16, 2007Name: Jack WagentiTitle:(Director)/s/Jose GarciaMonday, April 16, 2007Name: Jose GarciaTitle:(Director)/s/ Salvatore ArnoneMonday, April 16, 2007Name: Salvatore ArnoneTitle: (Director)/s/ Robert AstoreMonday, April 16, 2007Name: Robert AstoreTitle:(Director)/s/Walter J. SalvadoreMonday, April 16, 2007Name: Walter J. SalvadoreTitle:(Director)   Page 48 of 48