5/30/06

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

                                 FORM 10-KSB/A/2

[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934

                  For the Fiscal Year Ended December 31, 2005.

[X]   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)

    Delaware                        000-51449                    20-1686022
---------------                 ------------------          --------------------
(State or other                  (Commission file              (IRS Employer
jurisdiction of                      number)                 Identification No.)
 incorporation)

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 Class               Name of each exchange on which registered
--------------------------------       -----------------------------------------
Common Stock, $0.00001 par value                         None
    (registration) pending)

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. Yes [ X ] No [___]

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 [___] No [ X ]

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 [ X ] No [___]

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: $100,687,790 as of May 25, 2006.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 314,334,100 shares of common stock as
at May 25, 2006.

Transitional Small Business Disclosure Format (Check One). Yes [___] No [ X ]


<PAGE>


                         INTERNATIONAL POWER GROUP, LTD.

                                   FORM 10-KSB

                                December 31, 2005

                                EXPLANATORY NOTE

--------------------------------------------------------------------------------
This amendment is being filed for the purpose of fixing internal
inconsistencies, typographical errors and updating the notes to the financial
statements. This Form 10-KSB/A Amendment 2 amends the Company's Form 10 KSB/A
Amendment 1, filed with the United States Securities and Exchange Commission on
April 26, 2006.
--------------------------------------------------------------------------------


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                         INTERNATIONAL POWER GROUP, LTD.

                                   FORM 10-KSB

                                December 31, 2005

                                TABLE OF CONTENTS

                                                                            Page

PART I.........................................................................1

Item 1    Description of Business..............................................1

Item 2    Description of Property.............................................20

Item 3    Legal Proceedings...................................................20

Item 4    Submission of Matters to a Vote of Securities Holders...............20


PART II.......................................................................20

Item 5    Market for Common Equity, Related Stockholder Matters...............20

Item 6    Management's Discussion and Analysis or Plan of Operation...........25

Item 7    Financial Statements................................................28

Item 8    Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure............................................44

Item 8A   Controls and Procedures.............................................44

Item 8B   Other Information...................................................44

PART III......................................................................47

Item 9    Directors and Executive Officers of the Registrant; Compliance
          with Section 16(a) of the Exchange Act..............................47

Item 10   Executive Compensation..............................................52

Item 11   Security Ownership of Certain Beneficial Owners and Management
          and Related Stockholder Matters.....................................53

Item 12   Certain Relationships and Related Transactions......................55

Item 13   Exhibits............................................................57

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Item 14   Principal Accountant Fees and Services .............................58


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                           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.

Business Development.

            International Power Group, Ltd. ("IPWG" or the "Company") was
incorporated in the State of Delaware on November 30, 1998 as Ednet, Inc. Ednet
changed its name to International Power Group, Ltd. on September 24, 2004.
Commencing on October 5, 2004 and concluding on December 8, 2004, the Company
entered into a series of transactions by which it acquired 100% of the
outstanding shares of International Power, Inc. ("Power"), a closely-held
corporation which had as its primary asset, the shares of Terra Mar
Environmental Systems Incorporated (TMES) which Power acquired on August 20,
2004. TMES, a closely-held venture capital company, was formed in 1994 to
develop and implement strategic systems for the environmentally safe management
and long term disposal of radiological waste. TMES attempted to coordinate an
international consortium of companies and organizations with the requisite
managerial and technical expertise to identify sites, select technology,
establish legal and regulatory structures, and engineer and construct low level
radiological waste treatment and disposal facilities, and manage such facilities
over the long-term. We determined not to pursue that business because of the
time and expense of compliance with government regulation in the field. On
December 2, 2004, IPWG acquired fifty per cent of Tratamientos Ambientales
Tecate, a Mexican corporation (TAT). IPWG has one wholly owned subsidiary
located in Mexico called IPW Group De Mexico SA #1.


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<PAGE>

Business of IPWG.

            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
drinking water in commercially saleable amounts. Collectively, the process is
referred to herein as waste-to-energy ("WTE") technology.

            We think 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.

            The risks are that the technology does not work or is not available
to us, we cannot interest potential contractors or locate, obtain licenses or
permits for appropriate sites or obtain the necessary materials and equipment,
we cannot obtain the necessary financing and others have better technology,
building capabilities or locations.

            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 and
low-level nuclear wastes by incineration. The incinerator will produce
marketable electricity, drinking water and a component in construction materials
including cement and road beds.

            We have assembled 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 drinking 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 drinking water, with little or no
loss of efficiency or environmental friendliness.

            In our first facility planned for construction in the Ensenada,
Mexico area, we plan to construct twelve solid waste modules which are each
capable of combusting one hundred eight (180) tons of solid and hazardous waste
per day or 2,160 tons daily for 12 module plant, 788,400 tons annually. The
incinerators will be designed to reducing the aggregate waste to less than 10%
of its original volume and 20% of its original weight. We expect that each
module will generate, assuming full utilization, six (6) megawatts of
electricity per hour and 240,000 gallons of distilled water per day.

            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.

            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


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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 drinking 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.

            Contemplated Projects. During the last several months we developed
contacts in several countries that we believe may lead to the construction of
WTE facilities. We have identified certain countries and geographic regions
where, due to varying combinations of land fill shortages, energy needs and
potable water scarcity, 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 drinking 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 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. While the components of our WTE
technologies are commercially available, we do not believe that any entity,
other than our partners, have assembled or engineered such facilities. 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 drinking water. As to the production of saleable
by-products, i.e. electricity, drinking 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


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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, tipping fees, power generation fees,
drinking water and ash sales and quality of operations. Our ability to obtain
permits and to locate WTE facilities may be limited in areas where there is
adequate space for landfills, power generation facilities and potable drinking
water. 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 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.

            We believe there are adequate capital markets, assuming the
creditworthiness of the contracting party to the tipping fee contracts, the
power generation agreements and drinking 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, etc. IPWG does not own any patents,
trademarks or licenses. IPWG has contracted or is in negotiation with parties
who will provide, or IPWG believes has available to it on reasonable commercial
terms, adequate technologies to execute its business plan.


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            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. The Company believes that its proposed WTE
modules' regulated emissions will be less than 80% of permissible limits. No
assurance can be given that the proposed WTE facilities will perform as
specified or that applicable regulations will not be strengthened. We do not
believe the Company will sustain any substantial additional costs, other than
the type described the section headed "Planned Ensenada, Mexico WTE Facility",
in complying with government regulations. 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. With
specific reference to Mexico, the Company will be required to prepare and file
with Ministry of Ecology in Mexico a study of ecological impact for the Ensenada
WTE plant, which report must be approved by the ministry.

Number of Employees.

            As of April 14, 2006, we had five employees (three officers and two
clerical 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 two
clerical administrative employees work fulltime for the Company.

Reports to Securities Holders.

            We file annual, quarterly and current reports, proxy statements and
other documents with the United States Securities and Exchange Commission (the
"SEC"), under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). You may read and copy any materials that we file with the SEC at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549.
You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. Our reports, proxy statements and other
documents filed electronically with the SEC are available at the website
maintained by the SEC at http://www.sec.gov. We also make available free of
charge on or through our Internet website, http://www.international-power.com,
our annual, quarterly and current reports, and, if applicable, amendments to
those reports, filed or furnished pursuant to Section 13(a) of the Exchange Act,
as soon as reasonably practicable after we electronically file such reports with
the SEC. Information on our website is not a part of this report.

            Generally, 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.

                                  RISK FACTORS

            AN INVESTMENT IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU
SHOULD CAREFULLY CONSIDER THE FOLLOWING INFORMATION ABOUT CERTAIN OF THE RISKS
OF INVESTING IN OUR COMMON STOCK, TOGETHER WITH OTHER INFORMATION CONTAINED IN
THIS REPORT, BEFORE YOU DECIDE TO PURCHASE OUR COMMON STOCK. INVESTORS MUST
REMEMBER THAT AN INVESTMENT IN A DEVELOPMENT STAGE COMPANY IN A


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RELATIVELY NEW INDUSTRY WITH NO HISTORY OF OPERATIONS SUCH AS OURS INVOLVES AN
UNUSUALLY HIGH AMOUNT OF RISK, BOTH UNKNOWN AND KNOWN, AND PRESENT AND
POTENTIAL, INCLUDING, BUT NOT LIMITED TO THE RISKS DESCRIBED BELOW.

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 INHIBITS OUR
ABILITY TO IMPLEMENT OUR BUSINESS PLAN.

            To date, we have met our working capital requirements through the
private placement of our securities and loans. To support our operations, and
planned expansion we are in need of approximately $3,000,000 of additional
capital over the next 12 months. Since entering the WTE field in November 2004,
we have not generated any significant revenue and have experienced substantial
losses. We also have very limited working capital and, as at December 31, 2005
recorded an accumulated deficit of $3,198,847. For the immediate years preceding
the acquisition of Power, we were an inactive public shell corporation with no
significant revenue and only losses. For the year ended December 31, 2005, we
reported a loss of approximately $3,161,210.

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, 2005, we had an accumulated deficit of approximately
$3,161,210.

THERE IS NO ASSURANCE THAT WE WILL SUCCESSFULLY DEVELOP A COMMERCIALLY VIABLE
PRODUCT.

            We plan to be assemblers of WTE technology. Other than the process
by which we plan to assemble the described WTE facilities, we do not have any
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 July 31, 2008, if at all. There can be
no assurance that our efforts will lead to the construction of WTE facilities 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


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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 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.

            In recent years we were inactive and only entered our current field
of WTE in November 2004. We have generated no revenues and have incurred only
losses since that time, and, thus, have a limited operating history. We are
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
$3,000,000 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 EMPLOYEES

            Development of our business depends to a significant degree on the
continuing contributions of our key management and technical personnel as well
as on the continued cooperation of partners on whom we rely to assist in the
design, development, construction and operation of the proposed WTE facilities.
None of our key personnel or partners have indicated any intention to sever
their relationship with us other than Naanovo USA Energy, Inc. and its


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affiliates. The status of our relationship with Naanovo USA Energy, Inc. and its
affiliates is discussed in Item 8B to this Annual report on Form 10-KSB.

A SUBSTANTIAL PORTION OF OUR PROPRIETARY INTELLECTUAL PROPERTY IS DEVELOPED BY
PERSONS THAT ARE NOT EMPLOYED BY US.

            A substantial portion of our proprietary intellectual property was
developed by individuals employed by others. We do not have control over,
knowledge of, or access to those employment arrangements. Many of our suppliers
and partners have capability and greater resources to compete with us.

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.

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


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and operating results could adversely be affected. One or more of the following
factors could impact the price and supply of waste:

            o  defaults by waste suppliers under their contracts;

            o  a decline in solid waste supply due to increased recovery by
               material recovery facilities;

            o  composting of solid waste;

            o  incineration of solid waste;

            o  legal prohibitions against processing of certain types of solid
               waste in our facilities; or

            o  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 drinking 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


                                       -9-
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substantial liability for environmental damage could have a material adverse
effect on our financial condition, results of operations and cash flows.

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 facility in Mexico. 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 TO GENERATE ANY
MEANINGFUL REVENUES.

            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:

            o  favorable pricing vis a vis other alternatives

            o  the ability to establish the feasibility and reliability of WTE
               technology

            o  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.


                                      -10-
<PAGE>

            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.

WE RELY ON TECHNOLOGY DEVELOPED BY OTHERS AND SHARED WITH COLLABORATORS TO
DEVELOP WTE FACILITIES WHICH PUTS OUR PROPRIETARY INFORMATION AT RISK OF
UNAUTHORIZED DISCLOSURE.

            We rely on trade secrets, know-how and technological advancement to
maintain our competitive position. Although we use confidentiality agreements
and employee proprietary information and invention assignment agreements to
protect our trade secrets and other unpatented know-how, these agreements may be
breached by the other party thereto or may otherwise be of limited effectiveness
or enforceability.

CONFIDENTIALITY AGREEMENTS MAY NOT ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY
WHICH COULD RESULT IN UNAUTHORIZED DISCLOSURE OR USE OF OUR PROPRIETARY
INFORMATION.

            We require our employees, consultants and third parties with whom we
share proprietary 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 proprietary information in the event of
unauthorized use or disclosure of such information. If our unpatented
proprietary information 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 CAN NOT ASSURE YOU
THAT WE WILL BE ABLE TO RETAIN OR


                                      -11-
<PAGE>

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
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 65% 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 OUR 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 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


                                      -12-
<PAGE>

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 resistance 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


                                      -13-
<PAGE>

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 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.


                                      -14-
<PAGE>

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 OF 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 THE 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 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, THAT MAY ADVERSELY AFFECT THE TRADING PRICE
OF OUR COMMON STOCK.

            The bid and ask quotations of our common stock are routinely
reflected on the Unsolicited Pink Sheets market under the symbol "IPWG".
However, there is no sanctioned public market for our common stock at this time.
As a result, there is no assurance that there will be liquidity of an investment
in our common stock. Since our common stock continues to trade 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.


                                      -15-
<PAGE>

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 39,093,202 of our 313,419,100 shares outstanding as of
March 22, 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 March 31, 2006 we had outstanding vested options to purchase
18,000,000 shares of common stock at a weighted-average exercise price of $0.44
and vested warrants to purchase 7,413,000 shares of common stock with a
weighted-average price of $0.31.

            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.

THE EXERCISE OF OUTSTANDING OPTIONS AND WARRANTS WILL CAUSE A DILUTION TO OUR
STOCKHOLDERS AND MAY HAVE A SIGNIFICANT NEGATIVE EFFECT ON THE TRADING PRICE OF
OUR COMMON STOCK.

            If the outstanding Options and Warrants are exercised (which, as of
December 31, 2005 would result in the issuance of an additional 17,400,000 and
7,737,500 shares, respectively, of common stock), we can expect that they would
be exercised when the public trading prices of our securities are higher than
the exercise price, causing a dilution to those of our stockholders


                                      -16-
<PAGE>

who purchased our stock at prices above the exercise price. There can be no
assurance that any of the Options or Warrants will be exercised or that the
public trading price of our securities will increase.

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 April 13
2006, had a low of $0.038 and high of $1.90. 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


                                      -17-
<PAGE>

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 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 aculpable 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


                                      -18-
<PAGE>

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.


                                      -19-
<PAGE>


            PLEASE READ THIS FORM 10-KSB CAREFULLY.  YOU SHOULD RELY ONLY ON THE
INFORMATION CONTAINED HEREIN. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION.

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:

            o  Mexican Office: Culiacan No. 17-105, Colonia Hipodromo Condesa,
               Delegacion Cuauhtemoc, Mexico City. Z. C., Mexico (+52) 55 5564
               2955, month-to-month rental at $747.50 (USD) per month;

            o  London Office: 1 Threadneedle Street, London EC2R8AW, England,
               (+44) 2077 110 5412; month-to-month arrangement requiring 60
               days' notice; monthly rent: $1,304.17 (USD);

            o  Northeast England Office: Royal Albert House, Sheet Street,
               Windsor Royal Berkshire, England, 0207 710 5412; month-to-month
               arrangement requiring 60 days' notice; monthly rent: $1,130.28
               (USD); and

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.

                                     PART II

Item 5      Market for Common Equity, Related Stockholder Matters.

Market Information.

            No Public Market. Though bid and ask quotations for our common stock
are routinely reflected on the Unsolicited Pink Sheets market under the symbol
"IPWG", there is no sanctioned public market for our common stock at this time.
One securities broker-dealer, however, has submitted a Form 211 to the NASD'S
OTC Compliance Unit in an effort to become a market maker in our common stock.
This application is presently being reviewed by the OTC Compliance Unit. No
assurance can be given that the filing will be approved by the


                                      -20-
<PAGE>


NASD. Whether or not approval is received to conduct a market for our common
stock on the Pink Sheets market under the currently pending Form 211, we intend
to assist one or more brokerage firms to make market in our common stock on the
OTC BB if and when our Form 10-SB registration statement, as amended, clears
comments by the SEC and/or our intended filing of a selling stockholder Form
SB-2 registration statement with the SEC becomes effective.

                                            High Bid               Low Bid
                                            --------               -------
2004
  Quarter ended December 31, 2004             $0.65                 $0.06
2005
  Quarter ended March 31, 2005                 0.045                 0.045
  Quarter ended June 30, 2005                  0.40                  0.25
  Quarter ended September 30, 2005             0.72                  0.64
  Quarter ended December 31, 2005              1.86                  1.59
2006
  Quarter ended March 31, 2006                 1.18                  1.00

------------------------

Source: Interdealer prices, without retail mark-up, mark-down or commission and
   may not represent actual transactions.

Holders.

            As of March 22, 2006, there were 201 holders of record of the
Company's Common Stock.

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 March 31, 2006, there are outstanding warrants to purchase
7,413,000 shares of our common stock, and options to purchase 18,000,000 shares
of our common stock.

Restricted Securities.

            As of March 22, 2006 there were 313,419,100 shares of common stock
of the Company outstanding registered to 201 stockholders of record, of which
274,325,898 are carried as restricted securities. Of these, 55,357,091 shares
are held by non-affiliates of the Company, and the balance of 218,968,807 are
held by officers and directors ("affiliates") of the Company, including Peter
Toscano who beneficially owns 102,454,830 shares and Jack Wagenti who
beneficially owns 106,936,840 shares. Under SEC Rule 144 (17 C.F.R. ss.
230.144), stockholders whose restricted stock meet the Rule's one-year holding
provisions, including persons who may be deemed affiliates of the Company, may
resell restricted securities in broker's transactions or


                                      -21-
<PAGE>

directly to market makers, provided the number of shares sold in any three-month
period is not more than the greater of 1% of the total shares of common stock
then outstanding. If the trading circumstances of our common stock changes, this
quantity may change to a number of shares equal to the average weekly trading
volume for the four calendar week period immediately prior to each such sale.
The shares held by Messrs. Toscano and Wagenti have been held by their
registered owners for more than one year and are therefore eligible to be sold
in limited quantities under Rule 144. The remaining restricted common stock has
or will become eligible for resale under Rule 144 as indicated by the last day
of the following months.

November 2005                 400,000    June 2006                  5,800,000
December 2005              26,583,690    July 2006                  8,532,100
January 2006                1,800,000    August 2006                  869,250
February 2006               4,470,000    September 2006               765,000
March 2006                  2,980,000    October 2006               2,730,000
April 2006                    900,000    November 2006              3,355,750
May 2006                    4,100,000    December 2006              3,670,000

            After a two-year holding period, a non-affiliated stockholder may
resell restricted securities without regard to most of the above restrictions.
Restricted securities held by affiliates continue, even after the two-year
holding period, to be subject to the resale limitations discussed above.

            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. In fiscal 2004, Mr. Toscano
received 50,000,000 shares of common stock valued as salary compensation for the
period from June 2004 through May 31, 2005. The shares were valued at $0.0001
per share. In fiscal 2004, Mr. Toscano received 75,000,000 shares of common
stock in exchange for his shares in


                                      -22-
<PAGE>


International Power, Inc. The shares were valued at $0.00001 per share. In
fiscal 2004, Mr. Wagenti received 50,000,000 shares of common stock valued as
salary compensation for the period from June 2004 through May 31, 2005. The
shares were valued at $0.0001 per share. In fiscal 2004, Mr. Wagenti received
75,000,000 shares of common stock in 2004 in exchange for his shares in
International Power, Inc. The shares were valued at $0.00001 per share. Mr.
Toscano and Mr. Wagenti, on December 8, 2004, transferred approximately
26,997,040 shares of IPWG common stock to the remaining holders of International
Power, Inc. Each of Mr. Toscano and Mr. Wagenti then contributed the shares of
International Power, Inc. so obtained to IPWG for no consideration.

            Effective as of December 2, 2004, we acquired fifty per cent of
Tratamientos Ambientales Tecate a Mexican Corporation in exchange for 3,400,000
shares of common stock (300,000 of which shares were issued for services). The
core business of Tratamientos Ambientales Tecate (TAT) is procuring waste
contracts to fuel waste energy projects in Mexico. The final stock to complete
this transaction was issued on or about February 21, 2005.

            IPWG entered into the following private placements of its common
stock in reliance on exemptions from registration provided by ss.4(2) of the
Securities Act of 1933, as amended, including Rule 506 of Regulation D
promulgated thereunder, for the purpose of raising operating capital:

            1. During the months of November and December 2004, we sold a total
of 4.95 units to 8 investors for $49,500 in gross proceeds. Each unit consisted
of 400,000 shares of common stock and a warrant to purchase 200,000 shares of
common stock. The purchase price of each unit was $10,000 (or $0.025 per share
of common stock with no value attributed to the warrant). The warrants are
exercisable at $0.25 per full share of common stock and expire eighteen months
from date of issuance.

            2. January through May 2005, we sold 19.25 units to 22 investors for
$192,500 in gross proceeds. Each unit consisted of 400,000 shares of common
stock and a warrant to purchase 200,000 shares of common stock. The purchase
price of each unit was $10,000 (or $0.025 per share of common stock with no
value attributed to the warrant). The warrants are exercisable at $0.25 per full
share of common stock and expire eighteen months from date of issuance.

            3. June 2005, we sold 22.05 units to 20 investors for $441,000 in
gross proceeds. Each unit consisted of 400,000 shares of common stock and a
warrant to purchase 200,000 shares of common stock. The purchase price of each
unit was $20,000 (or $0.05 share of common stock with no value attributed to the
warrant). The warrants are exercisable at $0.25 per full share of common stock
and expire eighteen months from date of issuance.

            4. August through October, 2005, we sold 21.25 units to 26 investors
for $425,000 in gross proceeds. Each unit consisted of 80,000 shares of common
stock and a warrant to purchase 40,000 shares of common stock. The purchase
price of each unit was $20,000 ($0.25 per share of common stock with no value
attributed to the warrant). The warrants are exercisable at $0.75 per full share
of common stock and expire eighteen months from date of issuance.


                                      -23-
<PAGE>

            During 2005, 2,135,000 additional stock was issued upon the exercise
of warrants described above for gross proceeds to us of $538,750 as follows:

                                            Exercise
              Date       Number of Shares     Price      Gross Proceeds
         -------------   ----------------   --------     --------------
         Nov. 01, 2005       200,000          $0.25        $50,000.00
         Nov. 18, 2005       375,000          $0.25        $93,750.00
         Nov. 25, 2005        10,000          $0.75         $7,500.00
         Dec. 12, 2005     1,550,000          $0.25       $387,500.00
                           ---------       --------       -----------

         Totals            2,135,000       $0.25234       $538,750.00
                           =========       ========       ===========

            During 2005, we issued options to purchase a total of 19,000,000
shares of our common stock. Options representing two million shares expired in
February 2006 and are again available to be issued under our 2005 Stock Option
Plan. The remaining options to purchase 17,000,000 shares were issued on June
14, 2005, expire on June 14, 2010, have an exercise price of $0.10 per share and
were issued to the persons listed in the table below. 1,600,000 of the options
remaining were exercised prior to December 31, 2005 and additional options to
purchase 1 million shares have been exercised since December 31, 2005.

   Shares
 Underlying
   Option                                 Recipient
 ----------       ------------------------------------------------------------
  5,000,000       Howard Ash, an independent consultant who acts as our
                    representative in Europe and the Middle East
  2,000,000       Providence Financial Services, LLC, Consultant
  1,000,000       Mr. Peter Toscano, Director, President and Chief Executive
                    Officer
  1,000,000       Mr. Jack Wagenti, Director, Secretary and Chief Financial
                    Officer
  1,000,000       Mr. Jose Garcia, Director and Vice President
  1,000,000       Dr. Georgi Grechko, Director
  1,000,000       Mr. Salvatore J. Arnone, Director
  1,000,000       Robert Astone, Director
  1,000,000       John Malin, Director (Retired)
  1,000,000       Richard Paszyc, Director (Retired)
  1,000,000       Dr. Thomas Morrow, consultant
  1,000,000       Var Growth Corporation, consultant
 ----------
 17,000,000

            Also, during 2005, options to purchase 1,600,000 shares of commons
stock were exercised representing a combination of those exercising for cash and
those who were permitted to exercise for services rendered. The cash proceeds
from the exercise of these options was $105,000.

                                             Exercise        Value
               Date       Number of Shares     Price        Realized
          ------------    ----------------   --------    --------------
          Sep. 1, 2005        425,000           $0.10      $42,500.00
          Oct. 12, 2005       800,000           $0.10      $80,000.00
          Oct. 18, 2005       275,000           $0.10      $27,500.00
          Dec. 16, 2005       100,000           $0.10      $10,000.00
                            ---------           -----     -----------

          Totals            1,600,000           $0.10     $160,000.00
                            =========           =====     ===========

            Between January 1, 2006 and April 13, 2006, we issued options to
purchase 5,000,000 shares of common stock to the individuals listed below. Each
option expires on June 14, 2010. The exercise price of these options is $0.83
per share purchased.


                                      -24-
<PAGE>


                         Recipient         Number of Shares
                  -----------------------  ----------------
                  Walter Salvadore            1,000,000
                  Thomas Mitchell             1,000,000
                  Sheik Hani A. Z. Yamani     1,000,000
                  Christopher A. Duncan       1,000,000
                  Gregory Callageri           1,000,000
                                              ---------

                  Total                       5,000,000
                                              =========

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. We have not had any revenues and only
losses since well before that time. 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.

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 Tera Mar Environmental Systems ("TMES") 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 commence construction of the Ensenada, Mexico WTE project,
get it operational and progress as far as possible into joint testing of the
project in preparation for taking it over and operating it on a commercial
basis, (2) to complete pending negotiations to initiate other WTE projects in
Louisiana, Great Britain, Saudi Arabia and certain Asian countries, and, (3)
pending negotiations to initiate the utilization of our services and WTE
Technology 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:

                                 PROJECTED DATE

                 Goal                                  Projected Date
----------------------------------------   -------------------------------------
1. Processing of site permits in              February through December, 2006
   Ensenada, and other municipalities
   in Mexico
2. Introduction of WTE technology in          February 7 through July 31, 2006
   Great Britain and beginning of WTE
   site location negotiations
3. Introduction of WTE technology in          February through March 31, 2006
   Louisiana and beginning of WTE site
   location negotiations
4. Negotiations for WTE sites in several             Foreseeable future
   foreign countries now identified.
   Form subsidiaries as may be required
   in other countries


                                      -25-
<PAGE>


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.

            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 significant income from
its business operations. As of December 31, 2005, we had an accumulated loss of
$3,198,847 during the development stage. The expenses that produced this
operating loss included stock based compensation expenses in the sum of
$2,257,819 and other expenses, including cash expenses, of approximately
$941,028. Notwithstanding this loss figure, the Company's cash position improved
from $20,038 at December 31, 2004 to $955,621 at December 31, 2005 as the result
of the receipt of $1,832,250 from the sale of securities.

           With our existing cash reserves, the sale of equity through the
exercise of warrants that are presently outstanding, possible continued private
placements and the possibility of conducting a public offering, and debt or
equity financing, we believe we will be able to satisfy our cash requirements
during the next twelve months, excluding construction of WTE facilities the
financing of which is described in detail below under the heading. However,
there can be no assurance that the Company will be able to raise the amounts of
financing required to complete the next phases of our business plan as outlined
above.

            Purchase of Plant and Equipment. Central to our business plan is the
construction of a twelve module WTE plant in Ensenada, Mexico as discussed
above. We also intend to negotiate for the purchase and construction of
additional WTE plants and modules in several other countries, including Great
Britain, where negotiations have already commenced. 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 and Results of
Operations.

            IPWG and its predecessors have been in business for less than two
years and have conducted active business operations for only eighteen months as
of the date of this filing. The first approximately six months were spent
exploring business prospects. We have spent


                                      -26-

<PAGE>


approximately the last twelve months initiating and developing our WTE
technology business plan. Initial steps in that process were negotiation of
construction of a twelve-module WTE Plant in Ensenada. The second step in
developing our business plan was to find a source that could assist us in
raising the very substantial capital required to build and begin operating WTE
facilities.

            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 drinking water sales. We
believe that we will be successful in securing such financing. 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.

            As indicated above, we have no income from business operations. At
the present time we expect to realize our first operating revenues from the
project in Mexico in approximately two years.

            We believe that the single 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.

Payments Due under Contractual Obligations

            We have future commitments at March 31, 2006 consisting of
obligations as follows:

                       Year Ending      Florida Office Lease
                       December 31,         Obligations
                    ------------------  --------------------
                    2006                      80,477.52
                    2007                      80,477.52
                    2008                      80,477.52
                    2009                      80,477.52
                                             ----------

                    Total                    321,910.08
                                             ==========

Results of Operations

            Year Ended December 31, 2005 comparisons with Year Ended December
31, 2004 are as follows: we had an increase in net (cash and non-cash) losses
from operations from $37,637 for the year ended December 31, 2004 to $3,161,210
for the year ended December 31, 2005, or a total increase in net losses of
$3,123,573. The net non-cash losses increased from $8,891 for the year ended
December 31, 2004 to $2,250,428 for the year ended December 31, 2005, or a total
increase in net non-cash losses of $2,241,537. This increase in net non-cash
losses is primarily attributable to the issuance of common stock and options for
services, and the value of options ($2,140,000) granted to officers, directors
and consultants and finders. The net cash losses increased from $28,746 for the
year ended December 31, 2004 to $910,782 for the year ended December 31, 2005,
or a total increase in net cash losses of $882,036. This increase in net cash
losses is primarily attributable to fees paid to professionals and consultants.


                                      -27-
<PAGE>


Item 7      Financial Statements.

                         INTERNATIONAL POWER GROUP, LTD

                          (A Development Stage Company)

                          AUDITED FINANCIAL STATEMENTS

                 For the years ended December 31, 2005 and 2004






                                      -28-
<PAGE>


                                    CONTENTS

                                                                            PAGE

ACCOUNTANT'S AUDIT OPINION                                                   1A

BALANCE SHEET                                                                2A

STATEMENTS OF OPERATIONS AND DEFICIT ACCUMULATED DURING DEVELOPMENT          3A
STAGE

Statements of Changes in Stockholders' Equity                                4A

Statements of Cash Flows                                                     5A

Notes To Financial Statements                                                6A


                                      -29-
<PAGE>


                                ROBERT G. JEFFREY
                           CERTIFIED PUBLIC ACCOUNTANT
                                61 BERDAN AVENUE
                             WAYNE, NEW JERSEY 07470

LICENSED TO PRACTICE                                           TEL: 973-628-0022
IN NEW YORK AND NEW JERSEY                                     FAX: 973-696-9002
MEMBER OF AICPA                                     E-MAIL: rgjcpa@optonline.com
PRIVATE COMPANIES PRACTICE SECTION
MEMBER CENTER FOR PUBLIC COMPANY
AUDIT FIRMS REGISTERED PUBLIC
ACCOUNTING FIRM WITH PUBLIC COMPANY
ACCOUNTING OVERSIGHT BOARD

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors

International Power Group, Ltd.

            I have audited the accompanying balance sheet of International Power
Group, Ltd. (a development stage company) as of December 31, 2005, and the
related statements of operations and deficit accumulated during development
stage, changes in stockholders' equity, and cash flows for the years ended
December 31, 2005 and 2004 and for the period April 15, 2002 (inception) to
December 31, 2005. These financial statements are the responsibility of the
Company management. My responsibility is to express an opinion on these
financial statements based on my audit.

            I conducted the audit in accordance with the standards of Public
Company Accounting Oversight Board (United States). Those standards require that
I plan and perform the audit 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 audit 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 audit provides a
reasonable basis for my opinion.

            In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of International Power
Group, Ltd. as of December 31, 2005, and the results of its operations and its
cash flows for the years ended December 31, 2005 and 2004, and for the period
April 15, 2002 (inception) to December 31, 2005, in conformity with U.S.
generally accepted accounting principles.

Robert G. Jeffrey
Certified Public Accountant
March 30, 2006


                                      -30-
<PAGE>


                         INTERNATIONAL POWER GROUP, LTD
                         (A Development Stage Company)
                                 BALANCE SHEET

                                                            ASSETS
                                                        ---------------
Current Assets
  Cash                                                      $955,621
  Prepaid expense                                                  -
     Total current assets                                    955,621
                                                          ----------
Other Assets
  Deposit                                                      2,000
  Investment                                                   2,531
  Loans receivable                                            65,000
                                                          ----------
     Total other assets                                      $69,531
                                                          ----------
TOTAL ASSETS                                              $1,025,152
                                                          ==========

                                                        LIABILITIES AND
                                                         STOCKHOLDERS'
                                                            EQUITY
                                                        ---------------
Liabilities
  Accounts payable                                           $82,899
  Liability for unissued stock                                25,000
                                                          ----------
     Total current liabilities                               107,899
                                                          ----------
Stockholders' Equity
  Common stock - authorized, 750,000,000                       3,100
   shares of $.00001 par value; issued and
   outstanding, 309,932,100 shares
  Capital in excess of par value                           1,777,907
  Paid in capital - options                                2,108,000
  Paid in capital - warrants                                 227,093
  Deficit accumulated during development stage            (3,198,847)
     Total stockholders' equity                              917,253
                                                          ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $1,025,152
                                                          ==========

                 See accompanying notes and accountant's report.

                                                                            (2A)


                                      -31-
<PAGE>


                         INTERNATIONAL POWER GROUP, LTD
                          (A Development Stage Company)
             STATEMENTS OF OPERATIONS AND DEFICIT ACCUMULATED DURING
                               DEVELOPMENT STAGE

                                                                  April 15, 200
                                                                    (Date of
                                                                  Inception of
                                                                   Development
                                                                    Stage) to
                                    Year 2005        Year 2004      December 31,
-----------------------            -----------      -----------   --------------
REVENUE                                     $-               $-              $-

OPERATING EXPENSES                   3,161,210           37,637       3,198,847

LOSS ACCUMULATED DURING            $(3,161,210)        $(37,637)    $(3,198,847)
  DEVELOPMENT STAGE                -----------      -----------     -----------

NET LOSS PER SHARE

Basic and diluted                        $(.01)              $-

WEIGHTED AVERAGE SHARES            297,302,546      247,182,404
  OUTSTANDING


                 See accompanying notes and accountant's report.

                                                                            (3A)


                                      -32-
<PAGE>


                         INTERNATIONAL POWER GROUP, LTD
                          (A Development Stage Company)
                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                 For the Years Ended December 31, 2005 and 2004

<TABLE>
<CAPTION>
                             Common Stock                         Warrants                Options            Deficit
                         --------------------                -------------------   ----------------------  Accumulated
                                                Capital in                                                   During
                                                Excess of                                                  Development
                            Shares     Amount    Par Value     Number    Amount      Number      Amount        Stage        Total
                         -----------   ------   ----------   ---------  --------   ----------  ----------  -----------    ---------
<S>                      <C>           <C>      <C>          <C>         <C>       <C>          <C>         <C>          <C>
Balance, December
  31, 2003                       500       $-           $           $-        $-           $-          $-           $-
Stock split -
  330,000 to 1           164,999,500
Shares cancelled        (132,000,000)
  Adjustment                       -      330        (330)                                                                        -
Shares issued for
  acquisition            150,000,000    1,500                                                                                 1,500
Shares issued for
  services               100,000,000    1,000       9,000                                                                    10,000
Sales of common
  stock                    1,980,000       20      49,480      990,000         -                                             49,500
Net loss for the
  year                                                                                                         (37,637)     (37,637)

                        ------------   ------   ---------    ---------   -------   ----------   ---------   ----------   ----------
Balance, December
  31, 2004               284,980,000    2,850      58,150      990,000         -                        -      (37,637)      23,363
Shares issued for
  cash                    17,765,000      178     933,090    8,882,500   247,732                                          1,181,000
Options granted                                                                    19,000,000   2,140,000                 2,140,000
Options exercised
  for services
  rendered                   675,000        7      67,493                            (675,000)                               67,500
Proceeds from
  option exercises           925,000        9      92,491                            (925,000)                               92,500
Transfer re.
  options exercised                -               32,000                                         (32,000)                        -
Shares for warrants
  exercised                2,135,000       21     538,729   (2,135,000)                                                     538,750
Transfer re.
  warrants exercised               -               20,639                (20,639)                                                 -
Shares for
  acquisition of equity
  interest                 3,100,000       31                                                                                    31
Shares issued for
  services                   352,100        4      35,315                                                                    35,319
Net loss                                                                                                    (3,161,210)  (3,161,210)
                        ------------   ------   ---------    ---------   -------   ----------   ---------   ----------   ----------
Balance, December
  31, 2005               309,932,100   $3,100   1,777,907    7,737,500   227,093   17,400,000   2,108,000   (3,198,847)    $917,253
                        ============   ======   =========    =========   =======   ==========   =========   ==========   ==========
</TABLE>

                     See accompanying notes and accountant's report.

                                                                            (4A)


                                      -33-
<PAGE>


                         INTERNATIONAL POWER GROUP, LTD.
                          A Development Stage Company)
                            STATEMENTS OF CASH FLOWS

                                                                April 15, 2002
                                                              (Date of Inception
                                                                of Development
                                                                     Stage)
                                                                to December 31,
                                      Year 2005    Year 2004         2005
                                     -----------  -----------  -----------------
Cash Flows From Operations:
Net loss from operations             $(3,161,210)  $(37,637)     $(3,198,847)
Adjustments to reconcile net loss
  to net cash consumed by
  operating  activities:
Charges not requiring cash outlay:
      Common stock issued for            37,928       7,391           45,319
      services
      Asset write-off                                 1,500            1,500
      Options exercised for services     72,500           -           72,500
      Value of options granted        2,140,000           -        2,140,000
Changes in assets and liabilities:
      Increase in accounts payable       79,115       3,784           82,899
                                      ---------    --------        ---------
   Net cash consumed by operating
      activities                       (831,667)    (24,962)        (856,629)
                                      ---------    --------        ---------
Cash Flows From Investing
  Activities:
   Acquisition of waste disposal              -      (2,000)          (2,000)
     permit
   Investment in Mexican company              -      (2,500)          (2,500)
   Investment in demand loans           (70,000)          -          (70,000)
   Loan repaid                            5,000           -            5,000
                                      ---------    --------        ---------
  Net cash consumed by investing
   activities                           (65,000)     (4,500)         (69,500)
                                      ---------    --------        ---------
Cash Flows From Financing
  Activities:
  Proceeds of sales of common stock   1,188,500      49,500        1,238,000
   and warrants
  Proceeds from exercise of options     105,000           -          105,000
  Proceed from exercise of warrants     538,750           -          538,750
                                      ---------    --------        ---------
  Net cash provided by financing
   activities                         1,832,250      49,500        1,881,750
Net increase in cash                    935,583      20,038          955,621

Cash balance, beginning of period        20,038           -                -

Cash balance, end of period           $ 955,621    $ 20,038        $ 955,621
                                      =========    ========        =========


                 See accompanying notes and accountant's report.

                                                                            (5A)


                                      -34-
<PAGE>


                         INTERNATIONAL POWER GROUP, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005

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, 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.

                                                                            (6A)


                                      -35-
<PAGE>

                         INTERNATIONAL POWER GROUP, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005

            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, 300,000 of which were deemed to be
for services.

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 and, in some cases,
drinking water. 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 and drinking water.

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.

                                                                            (7A)


                                      -36-
<PAGE>

                         INTERNATIONAL POWER GROUP, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005


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 will be recorded at cost and depreciated over their
useful lives using an appropriate method.

            d.    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.

            e.    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.

                                                                            (8A)


                                      -37-
<PAGE>

                         INTERNATIONAL POWER GROUP, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005


            f.    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, 2005.

            g.    Net Loss Per Share

            The Company computes net income (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 income
(loss) available to common shareholders 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
income (loss) per share are presented for basic and diluted calculations for all
periods reflected in the accompanying financial statements.

            h.    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 services received
or the market value of the common stock, whichever is most clearly evident.

            i.    Warrants Outstanding

            Warrants to purchase capital stock of the Company are valued in
accordance with the provisions of SFAS No. 123, "Accounting for Stock Based
Compensation".

            j.    Options Issued

            Options issued were valued in accordance with the provisions of SFAS
#123, "Accounting for Stock Based Compensation". Certain options exercised for
services were valued at their exercise price.

                                                                            (9A)


                                      -38-
<PAGE>

                         INTERNATIONAL POWER GROUP, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005


            k.    Advertising Cost

            The Company expenses advertising cost when the advertisement occurs.
There were no advertising costs during the years 2005 and 2004.

            l.    Segment Reporting

            Management treats the operations of the Company as one segment.

Note 4.  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.

            As more fully described in Note 7, concerning the Company Stock
Option Plan, the Company awarded options to purchase 3,000,000 shares of common
stock to officers during 2005.


                                                                           (10A)


                                      -39-
<PAGE>

                         INTERNATIONAL POWER GROUP, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005


Note 5.  INCOME TAXES

            The Company experienced losses during 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,
2005, the Company had an NOL carry forward of $3,198,847 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             $ 37,637
                            2025            3,161,210

            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, 2005, $479,827 of deferred tax asset has been fully offset by a
valuation allowance.

Note 6.  CAPITAL STOCK AND WARRANTS

            During the months of November and December of 2004, the Company sold
stock units, each unit comprised of four hundred thousand shares of common stock
and two hundred thousand warrants to purchase common stock at a price of $.25
per share. The warrants are exercisable within an eighteen month period of the
date of issuance. A total of 1,980,000 shares and 990,000 warrants were sold,
yielding proceeds of $49,500.

            During the year 2005, the Company sold stock units. Certain of these
units were comprised of 400,000 shares of stock with 200,000 warrants
exercisable at $.25 for eighteen months. Other units were comprised of 80,000
shares with 40,000 warrants exercisable at $.75 for eighteen months. Total
proceeds from these sales was $1,188,500. Of these sales, 300,000 shares were
unissued at December 31, 2005, representing proceeds of $7,500. Warrant activity
during the year ended December 31, 2005 is recapped below:


            Balance December 31, 2004                 990,000

            Warrants granted during 2005            8,882,500
            Warrants exercised during 2005         (2,135,000)
                                                    ---------
            Balance December 31, 2005               7,737,500
                                                    =========
            These warrants are exercisable as
              follows:

            $.25                                    6,637,500
            $.75                                    1,100,000
                                                    ---------
                      Total exercisable             7,737,500
                                                    =========


                                                                           (11A)


                                      -40-
<PAGE>

                         INTERNATIONAL POWER GROUP, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005


Note 7.  STOCK OPTIONS

            During 2005, the Company adopted and the shareholders 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. 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 fair value of option grants are estimated using a Black-Sholes
option pricing model. The following weighted assumptions were used for options
granted during the year ended December 31, 2005: dividend yield 0.0%; expected
stock volatility 156.24%; risk free rate of 3.75%; and expected option life of
0.75 years.

A summary of options outstanding as at December 31, 2005 and changes during the
year are presented below:

                                                        Weighted Average
                                                   -------------------------
                                                                    Exercise
                                                      Shares          Price
                                                   ------------    ---------
Options outstanding at beginning of year                    --         $ --
Options granted during the year                     19,000,000          .13
Options exercised during the year                    1,600,000          .10
Options voided during the year                              --           --
Outstanding options at end of year                  17,400,000         $.14

The following table summarizes information about stock options outstanding at
December 31, 2005.

                    Remaining       Weighted           Options Exercisable
    Options        Contractual       Average     -------------------------------
  Outstanding         Life       Exercise Price      Number      Weighted Price
---------------   -------------  --------------  -------------  ----------------
  17,400,000        4.15 yrs          $.14        17,400,000           $.14


                                                                           (12A)


                                      -41-
<PAGE>

                         INTERNATIONAL POWER GROUP, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005


Note 8.  OPERATING EXPENSES

Major categories of operating expenses are presented below.

                                                               April 15, 2002
                                                             (Date of Inception
                                                               of Development
                                                             Stage) to December
                                      2005         2004           31, 2005
-------------------------------  -------------  ----------   -------------------
Expense of options grants          $2,140,000                   $2,140,000
Consulting expense                    454,594                      454,594
Legal fees                            108,618                      108,618
Office expenses                        74,069    $11,403            85,472
Travel & Meals                        203,804      6,448           210,252
Public relations                       29,960                       29,960
Officers' payroll                      56,192                       56,192
Insurance                              13,478                       13,478
Automobile expenses                    17,595                       17,595
Web development expense                19,500                       19,500
Rent                                   10,547                       10,547
Other officer compensation              2,609      7,391            10,000
Other expenses                         30,244     12,395            42,639
                                 -----------------------------------------------
                                   $3,161,210    $37,637        $3,198,847
                                 ===============================================

                                                                           (13A)


                                      -42-
<PAGE>

                         INTERNATIONAL POWER GROUP, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005


Note 9.  RENTS UNDER OPERATING LEASES

            Rent expense for the period was $10,547. At December 31, 2005, there
were no operating leases with a noncancellable period in excess of one year.

Note 10. SUPPLEMENTAL CASH FLOWS

            There was no cash paid for interest or income taxes during the years
ended December 31, 2005 and 2004.

            The following non-cash investing and financing activity took place
during 2004:

            a.    The Company acquired two thirds of the capital stock of Power
                  on October 1, 2004 in exchange for 150,000,000 shares of
                  common stock.

            b.    On October 19, 2004, 100,000,000 shares of common stock were
                  issued to the officers of the Company in exchange for their
                  services.

            c.    On August 20, 2004, Power acquired the assets of TMES in
                  exchange for 2,281,040 shares of its common stock. These
                  shares were later redeemed by officers of the Company, and
                  cancelled.

            The following non-cash investing and financing activity took place
during 2005:

            a.    The Company issued 3,100,000 shares of its common stock for
                  its equity interest in Tratamentios Ambientales Tecate (TAT).

            b.    The Company issued options to purchase 19,000,000 shares of
                  common stock under the 2005 Stock Option Plan.

            c.    The Company issued 352,100 shares for services valued at
                  $35,319. For additional services, it granted option holders
                  the right to exercise without payment options to purchase
                  725,000 shares of common stock. The value of these additional
                  rights was $72,500. At year end, 50,000 of these shares,
                  valued at $5,000, which had been exercised.

Note 11. 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.

                                                                           (14A)


                                      -43-
<PAGE>


Item 8      Changes in and Disagreements with Accountants on Accounting and
            Financial Disclosure.

            No disclosure necessary.

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 in
timely alerting them to material information required to be included in this
report. 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.

Item 8B.    Other Information.

A.    Form 8-K Item 1.01 Disclosure (Entry Into Materially Definitive Agreement)

TAT Agreement

            IPWG had disclosed in its reports filed with the SEC that
Tratamientos Ambientales Tecate (TAT) a Mexican corporation which is 50% owned
by IPWG, has rights to collect solid waste from several municipalities in
Mexico. The tipping fees from TAT's rights would have assisted IPWG to finance
the waste-to-energy (WTE) facility that IPWG plans to construct in Ensenada,
Mexico. IPWG has not been able to confirm TAT's rights to collect solid waste or
the tipping fees that TAT would provide to assist IPWG in the construction of
the Ensenada, Mexico WTE facility. IPWG acquired fifty per cent of TAT in
December 2004.

            IPWG, through its subsidiary IPW Group de Mexico SA #1, has sought
approvals from Mexican officials to secure land permits and trash collection
rights in Mexico to continue the project. As reported in IPWG's recent press
releases, negotiations with Mexican officials to advance the development of the
Ensenada WTE facility have been favorable, however, no assurance can be given
that the appropriate permits and contracts to finance the construction of the
Ensenada WTE facility can be given. To date, IPWG has received favorable
indications of interest from certain Mexican municipalities and business in the
Ensenada Mexico area to provide waste (and tipping fees) in support of IPWG's
proposed WTE facility. IPWG is negotiating with TAT and its principals the value
of TAT's rights to collect waste.

Amendment to Disclosure of Joint Venture Agreement and Warrant Agreement with
Naanovo International Free Zone, N.V., an Aruba corporation and Naanovo Energy
USA, Inc. dated November 7, 2005 ("JV Agreement")

            IPWG reported in a Current Report on Form 8-K filed with the SEC on
October 24, 2005 and November 7, 2005, that Naanovo International Free Zone,
N.V. ("Naanovo Aruba") was to pay to a subsidiary of IPWG, IPW Group de Mexico
SA #1 ("IPWG Mexico



                                      -44-
<PAGE>


#1"), $60 million to be used to commence construction of one WTE plant
consisting of 12 WTE modules in Ensenada, Mexico under the Build, Operate and
Transfer contract between Naanovo USA and IPWG dated May 18, 2005 (the "BOT
Contract"). In exchange for the $60 million fee payment, IPWG was to grant to
Naanovo Aruba a 20% interest in IPWG Mexico #1 and a one-year warrant to
purchase up to 1.5 million shares of IPWG common stock at the exercise price of
$2.00 per share. Naanovo Aruba was also to receive a 20% interest in a to be
formed IPWG subsidiary which was to be used to hold IPWG's next 12 module WTE
project in Mexico if such project occurred within three years of the effective
date of the JV Agreement. IPWG's obligations to Naanovo Aruba were conditioned
upon: (a) ratification of the above agreement by the boards IPWG and Naanovo
Aruba within 10 business days, (b) payment of the $60,000,000 to Naanovo USA and
(iii) issuance of income protection insurance in favor of Naanovo USA.

            IPWG inadvertently reported in the Form 8-K that it was to receive
the $60 million fee under the JV Agreement. However, the JV Agreement required
Naanovo Aruba to pay the $60 million fee to Naanovo USA to commence construction
of the BOT Facility. IPWG would receive benefit from the $60 million fee because
its Mexican subsidiary would not be required to finance that portion of the
construction until the facility was transferred. Moreover, the compensation set
forth in the JV Agreement repeated, but was not in addition to, the similar
compensation to be paid to Naanovo USA under the BOT Contract. IPWG's board
ratified the JV Agreement, but, Naanovo Aruba did not fund the $60,000,000;
therefore IPWG's obligation to Naanovo Aruba did not vest.

B.    Form 8-K Item 1.02 Disclosure (Termination of a Material Definitive
      Agreement)

License Agreement with Naanovo USA Energy Group, Inc.

            We have recently determined that Naanovo Energy USA, Inc. ("Naanovo
USA") has repudiated the exclusive license ("License") that would have granted
to our company rights to Naanovo USA's technologies. We have commenced
negotiations with Naanovo to resolve their differences and to reinstate the
License. Loss of this License may be detrimental to our business. IPWG had
disclosed in its reports filed with the SEC and elsewhere that IPWG had entered
into an exclusive license with Naanovo USA in October 2005.

            Furthermore, IPWG had contracted with Naanovo USA and certain of its
affiliates for Naanovo USA to build, operate and transfer to IPWG, one 12 module
WTE plant which, pursuant to the contract, was to be sold upon completion and
commencement of operations to a subsidiary of IPWG (the "BOT Agreement"). The
BOT Agreement expired by its terms without completion. A copy of the BOT
Agreement was filed as Exhibit 10.1 to IPWG's Form 10-SB/A/4 filed with the SEC
on February 23, 2006.

            We believe that we can find an adequate replacement of Naanovo USA's
technologies and abilities. In this regard, we are in negotiations with other
vendors with technologies similar to those offered by Naanovo USA and expect to
finalize arrangements to meet IPWG's sales needs in the near future. However, no
assurance can be given when or if such arrangements will be obtained, on terms
acceptable to us, if at all.


                                      -45-
<PAGE>

Providence Financial Services, LLC

            On April 14, 2006, International Power Group, Ltd. ("IPWG") and
Providence Financial Services, LLC ("Providence"), mutually agreed to terminate
the Letter of Engagement between the two parties dated April 5, 2005 (the
"Engagement"). Pursuant to the terms of the Engagement, Providence had agreed to
introduce and/or supply, a lender and/or investor to loan and/or invest up to
four hundred million ($400,000,000.00) dollars for the construction of up to 17
WTE modules to be constructed in Republic of Mexico and, if required, to aid
IPWG to raise seed capital of up to five million dollars ($5,000,000.00) to be
used for working capital and capital to commence construction of IPWG's planned
Ensenada, Mexico WTE plant. For its services, Providence was to be paid $500,000
per WTE module financed and 10% of the amount of seed capital raised, plus
reimbursement for pre-approved travel expenses.

            Mr. Louis Garcia, the sole stockholder of Providence, joined IPWG as
its Vice President, Finance. In his role as Vice President, Finance, Mr. Garcia
will provide the services otherwise contracted from Providence as part of his
employment with IPWG. IPWG is negotiating to purchase Providence from Mr. Garcia
for a nominal fee. IPWG does not owe Providence any fees under the Engagement.

C.    Form 8-K Item 5.02 Disclosure (Departure of Directors or Principal
      Officers; Election of Directors; Appointment of Principal Officers)

Mr. Louis D. Garcia, Vice President, Finance of IPWG

            Mr. Louis Garcia, age 55, IPWG's Vice President of Finance. Mr.
Garcia is currently compensated on any hourly basis. 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. There are no family relationships between Mr.
Garcia and any other officer or director of IPWG.

D.    Form 8-K Item 8.01 Disclosure (Other Events)

IPWG Press Releases.

            To remove any ambiguity, IPWG hereby restates the description of its
business which is typically appended to the Company's press releases in the
section headed "About International Power Group, Ltd".

            "International Power Group (IPWG) is a waste-to-energy company
developing and marketing a technology to handle waste management in an
environmentally friendly manner. IPWG's plans include construction and operation
of waste-to-energy (WTE) incineration plants that burn refuse at high
temperatures and produce as by-products (i) smoke-stack air cleaner than its
intake, (ii) meaningful amounts of competitively priced electricity, (iii)
substantial amounts of drinking water and (iv) ash, which can be sold as a
construction material component.


                                      -46-
<PAGE>

            The Company intends to target construction of these
plants--estimated at $250 million per 2,000 daily metric ton capacity--in areas
that can most benefit from environmentally friendly waste disposal with the
added benefit of electricity and drinking water by-products.

            The Company anticipates financing the construction and operation of
the WTE plants by revenues from tipping fees, power purchase agreements and
sales of drinking water and other by-products. The Company believes its WTE
design is novel because of the wide assortment of solid, hazardous and low-level
radioactive wastes the plants can be designed to handle and the flexibility to
vary the out-put of electricity and drinking water, depending upon community
needs."

                                    PART III

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.

          Name              Age                       Title
----------------------    -------  ---------------------------------------------
Peter Toscano                57    Chairman of the Board, Chief Executive
                                     Officer and President
Jack Wagenti                 68    Vice President, Secretary, and Director
Jose Garcia                  50    Vice President, and Director
Louis D. Garcia              55    Vice President, Finance
Sheik Hani A. Z. Yamani      45    Director
Georgi Grechko               74    Director
Thomas J. Mitchell           63    Director
Salvatore Arnone             45    Director
Robert Astore                69    Director
Walter J. Salvadore          50    Director

            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 from February 2001 through May 9, 2002. Mr.
Toscano over the past five years has been heavily involved in materials
reprocessing, export, and importation in Mexico. In addition, Mr. Toscano has
had extensive 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.


                                      -47-
<PAGE>

            Mr. Jack Wagenti. Mr. Wagenti has been Director, Secretary and Chief
Financial Officer of International Power Group since October of 2004. 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.

            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, 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, Vice President, Finance. 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.

            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.

            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


                                      -48-
<PAGE>


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. Thomas J. Mitchell. Mr. Mitchell has been a Director of the
Company since January 2006. He retired as a Colonel with the United States Air
Force in 1989 after 25 years of service. During his Air Force career, he held
many positions, including Air Force Director for the Department of Defense
(Reorganization Act, and roles as a Senior Level Negotiator with the North
American Treaty Organization (NATO) in Brussels, Belgium and Chairman of and a
Professor in the Aerospace Studies Department of San Francisco State University.
From 1991 to 2000 Mr. Mitchell was Senior Vice President of Federal Programs for
Marketing and Sales with Metcalf & Eddy, Inc., a Wakefield, Massachusetts firm
which is an international environmental and engineering company specializing in
municipal water and waste water systems. Mr. Mitchell has a B.A. in social
science and a M.A. in history from Chapman College in California.

            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 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.

            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


                                      -49-
<PAGE>


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. There are periods when the Company's business
requires full time attention from Messrs. Toscano and/or Wagenti, particularly
periods where travel is required. There are other periods when the time
requirements are far less extensive. Do to the nature of our business, no more
particularity can be provided at this time.

            The officers of IPWG may engage in other businesses related and
unrelated to the business of the Company. As a result, the officers of the
Company may have a conflict of interest in allocating their respective time,
services, and future resources, and in exercising independent business judgment
with respect to their other businesses and that of the Company. However, each
officer of IPWG has committed to giving priority to IPWG matters to the extent
reasonably possible.

            Each director's term concludes at the Company's next annual meeting
of stockholders or until his successor is elected and qualified. Each officer is
elected to serve at the pleasure of the Board of Directors and until his
successor has been elected and qualified.

            It should be noted that we accepted the resignation of Mr. John
Malin as a director of the Company on December 16, 2005. Mr. Malin resigned for
personal reasons. We also accepted the resignation for personal reasons of Mr.
Richard Paszyc as a director of the Company on March 7, 2006.

            (B)   Other (Non Executive) Officers 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 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


                                      -50-
<PAGE>


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 post when the appropriate time
arrives.

            (E)   Compliance with Section 16(A) of the Exchange Act. Section
16(a) of the Securities Exchange Act of 1934 (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, 2005, the period covered by this Form 10K-SB, there were
eight such individuals who were subject to the reporting requirements of the
Exchange Act. To the best of the Company's knowledge, none of those directors,
executive officers or 10% stockholders had complied with all Section 16(a)
filing requirements applicable to them during the Company's fiscal year end
December 31, 2005. However, such filings for seven of those individuals were
completed subsequent thereto but prior to filing this Form 10-KSB. With regard
to the other individual, Director Robert Astore, the Company understands that he
intends to prepare such reports and intends to make all requisite Exchange Act
filings as promptly as possible.


                                      -51-
<PAGE>



            (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 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, 2004 and 2005. Except as set forth below, no
other compensation was paid to these individuals during the years indicated.


                              SUMMARY COMPENSATION

                                                                    Compensation
                                                                       in the
Annual Compensation Name and                                          form of
Principal Position                   Year      Salary       Bonus      equity
----------------------------------   ----   ------------  ---------  ----------
Peter Toscano                        2004         $0           0      $5,000(1)
President, Chief Executive Officer   2005    $19,558.00(2)     0           0(3)
  and Director

Jack Wagenti                         2004         $0           0      $5,000(1)
Vice President and Director          2005    $17,058(2)        0           0(3)

Jose Garcia                          2004         $0           0           0
Vice President and Director          2005    $17,058          $0           0(3)

Louis D. Garcia                      2004         $0                       0
Vice President, Finance              2005   $122,353(4)       $0           0(4)

------------------------

(1)   The $5,000 in compensation received by Messrs. Toscano and Wagenti in 2004
      was paid in the form of 50,000,000 shares each which was valued as salary
      compensation at $0.0001 per share.

(2)   The $19,558 and $17,058, respectively, received as salary compensation in
      fiscal 2005 was paid in cash.

(3)   On June 15, 2005, all of the then directors, including these individuals,
      were each issued options to purchase 1,000,000 shares of our common stock
      at $.10 per share which price was above the trading price of our stock on
      the date of the grant (June 15, 2005). Accordingly, we deemed the options
      to have a value $.02 per share at that time.

(4)   Mr. Louis Garcia earned the above fee as a consultant providing services
      as Providence Financial Services, LLC. Providence was also granted an
      option to purchase 2,000,000 shares of IPWG stock at an exercise price of
      $0.10 per share. Providence used $15,000 of its compensation to exercise
      options for 150,000 shares.

            No other form of compensation was paid to any officer or director
during fiscal 2004 or 2005.

            We did not have any form of compensation payable to its officers or
directors, including any stock option plans, stock appreciation rights, or long
term incentive plan awards for the periods during the fiscal years 2002 and
2003.

            We have no employment contracts with any our officers.


                                      -52-
<PAGE>

            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.

            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. (See Part III, Item 12. "Certain Relationships and Related
Transactions", below, and "Stock Incentive Plans", immediately below.

            Stock Incentive Plans. On September 13, 2005, our Board adopted the
Company's 2005 Stock Option Plan, effective June 15, 2005, a copy of which 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, 2005, options to purchase 19,000,000 shares of common stock had
been granted pursuant to this plan to individuals at an exercise price of $0.10
per share. The options vested upon grant, including options to purchase
8,000,000 shares of common stock that were granted to eight directors (1,000,000
each). Options to purchase 2,000,000 shares that were granted to non directors
have expired unexercised. The options issued pursuant to this plan have been
deemed by the Company to have a value of $.12 per share. See Part III, Item 12,
"Certain Relationships and Related Transactions", below.

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 the date of this registration
statement, the number of shares of Common Stock owned of record and beneficially
by our current Directors, Officers, and persons who hold 5.0% or more of the
outstanding common stock of IPWG based upon the 313,419,100 shares of our common
stock that were issued and outstanding on March 22, 2006. Also included are the
shares held by all Directors and Officers as a group. The address for each
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.


                                      -53-
<PAGE>


                                                 Shares
                                               Underlying
                                               Options or
                                   Shares       Warrants    Class of
                                Beneficially  Beneficially    Shares  Percentage
       Name and Address             Owned        Owned        Owned   of Class*
-----------------------------  -------------  ------------  --------  ----------
Peter Toscano(a)(1)..........   100,954,830   1,000,000      Common      32.43%
  950 Celebration Blvd.,
  Suite A,
  Celebration, FL 34747

Jack Wagenti(a)(1)...........   106,936,480   1,000,000      Common      34.33%
  950 Celebration Blvd.,
  Suite A,
  Celebration, FL 34747

Jose Garcia(a)(1)............     1,650,000   1,000,000      Common      **
  950 Celebration Blvd.,
  Suite A,
  Celebration, FL 34747

Louis D. Garcia..............       150,000   1,850,000      Common      **
  950 Celebration Blvd.,
  Suite A,
  Celebration, FL 34747

Salvatore  Arnone(b)(1)(3)(4)     1,000,000   1,300,000      Common      **
  950 Celebration Blvd.,
  Suite A,
  Celebration, FL 34747

Dr. Georgi Grechko(b)(1).....        80,000   1,000,000      Common      **
  950 Celebration Blvd.,
  Suite A,
  Celebration, FL 34747

Robert Astore(b)(1)..........     2,700,000   1,000,000      Common      **
  950 Celebration Blvd.,
  Suite A,
  Celebration, FL 34747

Thomas Mitchell(b)(2)........             0   1,000,000      Common      **
  950 Celebration Blvd.,
  Suite A,
  Celebration, FL 34747

Walter Salvadore(b)(2)(5)....       175,000   1,080,000      Common      **
  950 Celebration Blvd.,
  Suite A,
  Celebration, FL 34747

Sheik Hani A. Z. Yamani(b)(2)             0   1,000,000      Common
  950 Celebration Blvd.,        -----------   ---------      ------      -----
  Suite A,
  Celebration, FL 34747


All 9 Directors and Officers
  as a group.................   213,496,310   9,380,000      Common      69.04%
                                ===========   =========      ======      =====

------------------------
*     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 9
      Directors 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.



                                      -54-
<PAGE>


(3)   On November 23, 2004, this shareholder purchased immediately exercisable
      warrants to purchase 100,000 shares with an exercise price of $0.25 per
      share. The warrants expire on May 23, 2006. The warrant purchase was made
      as part of a private placement before this shareholder became a director.

(4)   On November 28, 2004, this shareholder purchased immediately exercisable
      warrants to purchase 200,000 shares with an exercise price of $0.25 per
      share. The warrants expire on May 28, 2006. The warrant purchase was made
      as part of a private placement before this shareholder became a director.

(5)   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.

(6)   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. Providence 9
      Mr. Garcia) used $15,000 of its compensation to exercise options for
      150,000 shares.

            "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, 2005,
regarding compensation plans (including individual compensation arrangements)
under which our equity securities are authorized for issuance.

                                                                    Number of
                                                                   securities
                                                                    remaining
                                                                  available for
                                                                 future issuance
                                                                   under equity
                              Number of                            compensation
                           securities to be                          plans
                             issued upon      Weighted average     (excluding
                             exercise of     exercise price of      securities
                             outstanding         outstanding      reflected in
   Plan category (in           options            options           column(a))
       thousands)                (a)                (b)                (c)
-----------------------   -----------------  -----------------   ---------------
Equity compensation
  plans approved by
  security holders           17,400,000          $  0.10            11,000,000
Equity compensation
  plans not approved by
  security holders               n/a                n/a               n/a
                          -----------------  -----------------   ---------------
Total                        17,400,000          $  0.10            11,000,000


Item 12     Certain Relationships and Related Transactions.

            The only transactions in which any director or executive officer or
any holder of more than 5% of the outstanding common shares of the Company or
any member of his or her family, or any nominee for a position as an officer or
director of the Company has been, or is expected to be a party, are the
following:


                                      -55-
<PAGE>


            1. The Company acquired International Power, Inc. ("Power") on
October 5, 2004 in exchange for 75,000,000 common shares issued to Peter Toscano
and 75,000,000 common shares issued to Jack Wagenti who were the owners of most
of the outstanding shares of International Power, Inc. The transaction was
completed when Toscano and Wagenti each caused approximately 27,600,000 common
shares previously registered to them to be transferred to other persons who had
previously held shares in International Power, Inc. and contributed to the
Company for no compensation the shares of Power they received in the exchanges.
When all the transactions had been completed, IPWG acquired 100% of the issued
and outstanding shares of Power, Inc. in exchange for a total of 150,000,000
common shares of International Power Group, Ltd. and Power was dissolved.

            2. In fiscal 2004, Peter Toscano received 50,000,000 shares of
common stock valued as salary compensation for the period from June 2004 through
May 31, 2005. The shares are valued at $0.0001 per share. In fiscal 2004, Jack
Wagenti received 50,000,000 shares of common stock valued as salary compensation
for the period from June 2004 through May 31, 2005. The shares are valued at
$0.0001 per share.

            3. The following officers and directors were part of a group of
shareholders of Power, who exchanged their shares of Power for shares of the
Company which were formerly owned by Messrs. Toscano and Wagenti. The number of
Company shares received by each in that transaction is presented below. Certain
of the directors own additional shares which are reported in paragraph 2,
immediately above, and Item 11 of Part III, above.

                                                Number of
                     Name                         Shares         Date Issued
----------------------------------------------  ----------   -------------------
Jose Garcia                                     1,500,000      December 8, 2004
Richard C. Paszyc (retired)                     7,320,000      December 8, 2004
Georgi Grechko                                     40,000      December 8, 2004
Robert Astore                                   1,000,000      December 8, 2004
John Malin (retired)                              250,000      December 8, 2004

            4. Options expiring on June 14, 2010 to purchase an equal number of
common shares at $.10 per share have been granted to directors and officers of
the corporation in the following numbers on the dates indicated, except that the
options issued to directors Mitchell, Salvadore and Yamani have an exercise
price of $.83 per share.

                                                Number of
                     Name                        Options         Date Issued
----------------------------------------------  ----------   -------------------
Peter Toscano                                   1,000,000       June 15, 2005
Jack Wagenti                                    1,000,000       June 15, 2005
Richard C. Paszyc (now resigned)                1,000,000       June 15, 2005
Georgi Grechko                                  1,000,000       June 15, 2005
Salvatore Arnone                                1,000,000       June 15, 2005
Jose Garcia                                     1,000,000       June 15, 2005
Robert Astore                                   1,000,000       June 15, 2005
John Malin (now resigned)*                      1,000,000       June 15, 2005
Thomas Mitchell                                 1,000,000      March 14, 2006
Walter Salvadore**                              1,000,000      March 14, 2006
Sheik Hani A. Z. Yamani                         1,000,000      March 14, 2006


------------------------

*  Mr. Malin converted his million share option on January 9, 2006 by check of
   $100,000 issued to the Company.

                                      -56-
<PAGE>


** Mr. Salvadore, prior to his appointment as a director in January 2006,
   participated in a private placement offering of our securities. Specifically,
   on October 6, 2005, he purchased 160,000 of our restricted common stock and
   80,000 of our 18 month warrants to purchase 80,000 additional shares of our
   common stock at $.75 per share.

Item 13     Exhibits

 Exhibit No.                      Description of Document
------------  ------------------------------------------------------------------
   3(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)
   4.1        2005 Stock option Plan(2)
  10.1        Contract with NAANOVO Energy USA(1)
  10.2        Contract with Providence Financial(1)
  10.3        Contract with Anthony Crisci, Esq.(3)
  10.4        Letter of Engagement with Fran Tech International Licensing(3)
  10.5        Contract with CVI(3)
  10.6        October 24, 2005 Insurance, Brokerage and related Consulting
                 Services Agreement with Marsh USA, Inc.(4)
  10.7        November 7, 2005 Conditional Joint Venture and Warrant Agreement
                 with NAANOVO International Free Zone, N.V.(5)
  31.1        Certification 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)(6)
  31.2        Certification 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)(6)
  32.1        Certification of Chief Executive Officer pursuant to Section 906
                 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)(6)
  32.2        Certification of Chief Financial Officer pursuant to Section 906
                 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)(6)

------------------------

(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)   Filed herewith.


                                      -57-
<PAGE>


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 September 30, 2005 and 2004:

            Fee Category           Fiscal 2005 Fees      Fiscal 2004 Fees
      ------------------------   --------------------   ------------------
      Audit Fees                      $5,850                    $0
      Audit Related Fees                  $0                    $0
      Tax Fees                            $0                    $0
      All Other Fees                      $0                    $0
                                 --------------------   ------------------
      Total Fees                      $5,850                    $0

            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.


                                      -58-
<PAGE>


                                   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.

                                      International Power Group, Ltd.


                                                   /s/ Peter Toscano
                                      ------------------------------------------
                                                     Peter Toscano

                                          (Chief Executive Officer, Principal
                                         Operating Officer and Chairman of the
                                                  Board of Directors)

Date: May 31, 2006