UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 FORM
10-K
 
 (Mark
one)
 [X]
              ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934.
 For the
fiscal year ended December 31, 2008
 or
 [   ]
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES                EXCHANGE
      ACT OF 1934.
 For the
transition period from________________________
to  __________________________
 
 Commission
file number  0-21384
 
 INTERNATIONAL
PACKAGING AND LOGISTICS GROUP, INC.
 ______________________________________________________________________________________
 (Exact
name of registrant as specified in its charter)
 
 
 Delaware
              8980
              13-3367421(State
      or other jurisdiction of
              (Primary
      Standard Industrial
              (I.R.S.
      Employerincorporation
      or organization)
              Classification
      Code Number )
              Identification
      No.)
 
 7700 Irvine Center Drive, Suite 870, Irvine,
      California
              92608(Address
      of principal executive offices)
              (Zip
      code)
 
 (949)
861-3560
 ______________________________________________________________________________________
 Registrant’s
telephone number, including area code
 
 Title of each
class                                                                       Name of each exchange on
which registered
 Common
stock, par value $0.001 per
share                                                                                                                     None
 Convertible
Preferred stock, Series A, par value $0.0001 per
share                                                                                                                                None
 
 Securities
registered pursuant to section 12(g) of the Act:
 
 Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.   [ ]
Yes       [x] No
 Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.   [ ]
Yes       [x] No
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.     [x]
Yes       [ ] No
 
 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not
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-K
or any amendment to this Form
10-K.               [  ]
 
 -1-
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
 
 
 Large
      accelerated filer o
              Accelerated
      filer oNon-accelerated
      filer o
              Smaller
      reporting company x
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).
 [
] Yes           [x]
No
 
  As of
December 31, 2008 (the last business day of the registrant’s most recently
completed second fiscal quarter), the aggregate market value of the shares of
the Registrant’s common stock held by non-affiliates (based upon the closing
price of such shares as quoted on the Electronic Bulletin Board maintained by
the National Association of Securities Dealers, Inc.) was approximately
$589,214. Shares of the Registrant’s common stock held by each executive officer
and director and each by each person who owns 10 percent or more of the
outstanding common stock have been excluded in that such persons may be deemed
to be affiliates of the Registrant. This determination of affiliate status is
not necessarily a conclusive determination for other purposes.
   There
were a total of 4,504,214 shares of the registrant’s common stock outstanding as
of December 31, 2008.
  
 DOCUMENTS
INCORPORATED BY REFERENCE
 
 The
Company’s report on Form 8-K dated March 11, 2009, 2007: Item 2.01
 
 
  -  -
 -2-
  PART
I
 
 ITEM
1. Description of Business
 
 Business
 
 Present
Business
 
 On July
2, 2007, International Packaging and Logistics Group, Inc. (“IPL Group” or “the
Company”) through its wholly-owned subsidiary, YesRx.com (“YesRx”) acquired all
the outstanding shares of H&H Glass, Inc. (“H&H Glass” or “H&H”), in
exchange for 3,915,000 shares of its common stock in a reverse triangular merger
(the “Merger”).  H&H Glass is a glass importer that supplies
custom products such as perfume bottles and food condiment bottles, plus
provides complementary services such as container design and mold
making.  H&H Glass imports glass containers from Asia and
distributes to North America.  H&H Glass acquires its products
mainly from one supplier in China and Taiwan and sells its products through
several distributors in the United States and Canada who service small to medium
sized customers.  H&H imports in excess of 1,000 shipping
containers of glass a year.  Depending on the size of the product, a
container can contain anywhere from 3,000 to 300,000 pieces.
 
 History
 
 International
Packaging and Logistics Group, Inc., a Nevada corporation, was originally
incorporated as Interactive Medical Technologies, Ltd., on June 2, 1986 in the
state of Delaware.  On April 17, 2008, IPL Group converted from a
Delaware corporation to a Nevada Corporation.
 
 Effective
February 3, 1998, Interactive Medical Technologies, Ltd., changed its name to
Kaire Holdings Incorporated, and effective May 28, 2008 its name changed from
Kaire Holdings Incorporated to International Packaging and Logistics Group,
Inc.
 
 On
January 23, 2007, IPL Group and its wholly-owned subsidiary, YesRx.com, executed
a Letter of Intent whereby YesRx.com would acquire all of the outstanding stock
of H&H Glass Corporation, an Illinois corporation.  H&H Glass
was formed in 1989.  As part of this transaction, on February 4, 2007,
IPL Group discontinued its pharmacy business, and Effective Health, Inc., was
shut down.
 
 Acquisition of H&H
Glass
 
 On July
2, 2007, an Agreement and Plan of Merger was executed between IPL Group, its
wholly-owned subsidiary YesRx.com, and H&H Glass, whereby YesRx.com acquired
all of the outstanding stock of H&H Glass Corporation, an Illinois
corporation in exchange for 3,915,000 shares of IPL Group’s common stock
representing 87% of IPL Group’s outstanding stock.  As part of the
merger agreement, 225,000 shares were issued to Naccarato and Associates related
to assistance with the merger.
 
 As a
result of the Merger, there was a change in control of IPL Group.  In
accordance with SFAS No. 141, H&H Glass was defined as the accounting
acquirer.  While the transaction is accounted for using the purchase
method of accounting, in substance the transaction results in a reverse merger
with a recapitalization of IPL Group’s capital structure.
 
 Product Liability
Insurance
 
 We carry
product liability insurance through the Golden Eagle Insurance
Corporation.
 
 Competition
 
 We do not
compete with the large glass manufacturing companies because they require
minimum orders which are very large.  Other importers are our main
competition, which operate on a smaller scale, usually out of their homes and
without name recognition.  However, they do sometimes have a broader
distribution network and warehousing facilities which can cover almost all of
the United States and Canada market area.   H&H Glass feels
its competitive advantage is smaller minimum run requirements, shorter runaround
on mold orders at a lower cost, provides assistance in product
design.  H&H Glass generally also has a longer service history
than its competitors.
 
 Some of
our larger competitors are Owens Illinois, Vitro, Weaton’s and SGB Group
(France).
 
 -3-
 Patents, Licenses and
Trademarks
 
 Not
Applicable
 
 Royalty
Agreements
 
 Not
Applicable
 
 Government
Regulations
 
 Not
Applicable
 
 Research and Development
Plan
 
 Not
Applicable
 
 Employees
 
 H&H
Glass has four (4) full time employees and one (1) part time
employee.
 
 ITEM
2.  Description of Property
 
 International
Packaging and Logistics Group, Inc.’s corporate headquarters are located in the
H&H Glass’s offices located at 7700 Irvine Center Drive, Suite 870, Irvine
California, 92618.   H&H Glass’s lease is approximately 2,900
Square Feet.  The lease was renewed on September 1, 2008 and expires
on 8/31/13.  The monthly base rate per square foot is currently
$2.85.
 
 ITEM
3.  Legal Proceedings
 
 None
 
 
 ITEM
4.                      Submission
of Matters to a Vote of Securities Holders
 
 An
Information Statement was furnished in accordance with the requirements of
Regulation 14C promulgated under the Securities Exchange Act of 1934, as
amended, by KAIRE HOLDINGS INC., in connection with certain actions to be taken
by the written consent by the majority shareholders of Kaire Holdings, Inc.
dated January 7, 2008.  The proxy was mailed on February 26,
2008.
 
 -4-
 The actions to be taken by written
consent were as follows:
 
 1.
              Amendments
      (the “Certificate Amendment”) to our certificate of incorporation, as
      amended (the “Certificate of Incorporation”),
to
 
 a.
              effect
      a reverse stock split of our issued and outstanding common stock at a
      ratio of at least 1-for-100 and up to 1-for-200, the exact ratio subject
      to the definitive action of our Board of Directors (the “Board of
      Directors”) within 120 days after the date of the stockholder approval,
      and retain the current number of authorized shares and the par value of
      common stock reflected in our Certificate of Incorporation;
      and
 
 b.           change
our name to “International Packaging and Logistics Corporation”;
and
 
 c.           authorize
50,000,000 shares of blank check preferred stock.
 
 2.
              Change
      state of incorporation from Delaware to
Nevada.
 
 3.           The
ratification of the appointment of PMB Helin Donovan, LLP as our
independentaccountants for the current fiscal year
 
 
  -  -
 -5-
  PART
II
 
 ITEM
5.                      Market
for Common Equity and Related Shareholder Matters
 
 Our
common stock is quoted on the Over-the Counter Bulletin Board, (“the OTCBB”),
under the trading symbol “IPLO”.  The following table set forth the
quarterly high and low bid prices per share for our common stock.  The
bid prices reflect inter-dealer prices, without retail markup, markdown, or
commission and may not represent actual transactions.  The low prices
are often arbitrary prices put in the system by market makers.
 
 
 High
              LowYear
      ended December 31, 2007First
      quarter
              $  8.00
              $  1.40Second
      quarter
              $  4.00
              $  1.80Third
      quarter
              $  4.00
              $  2.00Fourth
      quarter
              $  4.00
              $  1.60Year
      ended December 31, 2008First
      quarter
              $  6.00
              $  2.00Second
      quarter
              $  5.40
              $  1.50Third
      quarter
              $  2.00
              $  0.55Fourth
      quarter
              $  1.75
              $  0.07
 
 
 As of
December 31, 2008, there were approximately 835 registered shareholders of
IPLO’s Common Stock with 4,504,214 shares issues and outstanding.
 
 Dividends
 
 To date,
the Company has not declared or paid dividends on its Preferred or Common
Stock.
 
 Transfer Agent and
Registrar
 
 IPLO’s
transfer agent is Jersey Transfer and Trust Company, 201 Bloomfield Avenue,
Verona, NJ 07044.
 
 Securities authorized for
issuance under equity compensation plans.
 
 N/A
 
 Recent Sales of Unregistered
Securities
 
 Preferred shares
issued:
 
 At
December 31, 2006 IPLO had $2,646,692 of convertible debt and related accrued
interest.  In conjunction with the letter of intent for the reverse
acquisition, the note holders executed a debt restructure agreement which
modified the agreements as follows:
 a.
              All
      note holders (the Longview Funds and Alpha Capital) agreed to stop
      accruing interest and freeze all conversions and any exercise of
      warrants.
 b.
              All
      penalties and default interest accrued were
  waived.
 c.
              All
      note holders agreed to convert their convertible debt plus accrued
      interest into fixed rate convertible preferred shares, zero coupon rate,
      upon the filing of a 14C proxy by the new entity authorizing such
      shares.  The exercise price was fixed on a post reverse split
      basis of $3.00 per share.
 d.
              The
      Holders agreed to a lock up their share position in IPLO until the market
      cap of KAIH reaches $15,000,000 on a post reverse split basis or $3.33 per
      share.
 
 -6-
 The
Company recorded 882,230 shares at par value of $0.0001 shares for Convertible
Preferred Stock Series A in settlement of these liabilities.
 
 Common Shares
issued:
 
 On
October 19, 2007, pursuant to an “Agreement and Plan of Merger” agreement dated
on or about January 23, 2007 and executed between IPLO, IPLO’s subsidiary
YesRx.com and H&H Glass. The following IPLO shares were issued valued at
$2.00 per share post split:
 
 
 Issued
      to
              
              
              Number
      of SharesStandard
      Resources LTD.   (1)
              3,915,000Naccarato
      & Associates     (2)
              
              225,000Steven
      Westlund                
      (3)
              
              135,000Randall
      Jones                      
      (4)
              
              11,916Total
              
              
              4,286,916
 
 
 (1)
              Standard
      Resources LTD is a related company to Allen Lin the founder and CEO of
      H&H Glass.  Standard Resources was issued 4,140,000 shares
      but assigned 225,000 of those shares to Naccarato and Associates at the
      time of issuance.
 (2)
              See
      (1) above
 (3)
              Mr.
      Westlund, CEO of IPLO, received 3% of the equity of IPLO in the form of
      135,000 shares.
 (4)
              Mr.
      Jones, CFO of IPLO through April 11, 2007, received 0.27% of the equity of
      IPLO in the form of 11,916 shares.
 
 
 
 
 ITEM
6.                      Selected
Financial Data
 
 N/A
 
  -  -
 -7-
  ITEM
7.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations
 
 SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS’
 
 This
Annual Report on Form 10-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934.  In some cases, forward-looking statements
are identified by terms such as “may”, “will”, “should”, “could”, “would”,
“expects”, “plans”, “anticipates”, “believes”, “estimates”, “projects”,
“predicts”, “potential”, and similar expressions intended to identify
forward-looking statements.
 
 These
forward-looking statements are only predictions and involve known and unknown
risks, uncertainties, and other factors 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 such forward-looking statements. Also, these forward-looking
statements represent our estimates and assumptions only as of the date of this
Report.  Except as otherwise required by law, we expressly disclaim
any obligation or undertaking to release publicly any updates or revisions to
any forward-looking statement contained in this Report to reflect any change in
our expectations or any change in events, conditions, or circumstances on which
any of our forward-looking statements are based or to conform to actual
results.  We qualify all of our forward-looking statements by these
cautionary statements.
 
 You
should read this section in combination with the section entitled Management’s
Discussion and Analysis of Financial Condition and Results of Operations for the
year ended December 31, 2008 included in our Annual Report on Form 10-K for the
year ended December 31, 2008.
 
 Overview
 
 We import
glass containers from Asia and distribute to the North American market including
Canada. This was a result of International Packaging and Logistic Group, Inc.
(“IPLO”) acquiring H&H Glass in July of 2007.  IPLO closed its
pharmacy business in February 2007.
 
 H&H
Glass is a glass importer that supplies custom products such as perfume bottles
and food condiment bottles, plus provides complementary services such as product
design and the making of product molds.  H&H Glass acquires its
products from 3 to 5 suppliers in China and Taiwan and sells its products
through several distributors in the United States and Canada who service small-
to medium-sized customers.    H&H imports in excess of
1,000 containers of glass a year.  Depending on the size of the
product a containers can contain anywhere from 3,000 to 300,000
pieces.
 
 Plan of
Operation
 
 Short
Term
 
 ·Continue
      growing revenue and profits through the existing
  business;·To
      meet the challenge of the declining world economy while maintaining
      revenue and profitability - our goal will be to  focus closely
      on product mix, improve our gross margin and develop new projects with
      existing clients;·To
      expand the supply network for our products;·Expand
      our current business model to include other areas that fall within our
      distribution expertise such as packaging that uses plastic and acrylic
      material.·Due
      to the turndown of the economy the business environment was very tough in
      2008.  AS a result IPLO will be more aggressive in 2009 to
      achieve upward opportunities in helping customers achieve savings by
      offering cost reductions in product and transportation costs through its
      just –in-time inventory delivery
program.
 
 
 -8-
 
 Long
Term
 
 ·To
      expand our service into other areas such as Europe and Australia through
      the same supplier channel.  Our existing business model copies
      to other markets naturally.
 
 
 
 Results
of Operations
 
 Year Ended December 31, 2008
Compared to December 31, 2007
 
 Revenue:
 
 For the
years ending December 31, 2008 and 2007, revenues were approximately $19,090,538
and $18,852,647 respectively, for an increase of $237,891 (1.3%) over the same
period in 2007.   The growthin revenue was held back mainly due to
a plant capacity shortage in the Glass industry during the last half of the
year.  Recognizing that this issue would be an ongoing one, we have
secured the services and commitment of a Chinese/Japanese JV manufacturer who
will provide for both our existing unmet capacity needs as well as our future
capacity needs.  The necessary molds should be ready for production in
early 2009.  No clients were lost due to this issue.  First
quarter 2009 will also experience little or no growth in the Glass industry due
to the global economic slowdown.
 
 
 Cost of Goods
Sold:
 
 Cost of
goods sold for the years ended December 31, 2008 and 2007 were $17,434,350 and
$18,082,147 respectively, for a decrease of $647,797 (3.6%) over the same period
in 2007. This decrease is a mainly due to an inventory valuation adjustment in
2007 resulting in a decrease of $502,477 (95.9%).  Decreases in ocean
freight of $82,409 (3.4%) and a reduction in pallets used resulting in a
decrease of $45,874 (20.1%) accounted for the majority of the decrease of cost
of goods sold from the same period in 2007.
 
 
 Gross
Profit:
 
 Gross
profit was $1,656,188 and $770,500 years ended December 31, 2008 and 2007, an
increase of $885,688 (115.0%) over the same period in 2007.   The
gross profit margin as a percent of sales for the years ended December 31, 2008
and 2007 was 8.7% and 4.1 % respectively or an increase of 4.6%.  The
increase in gross profit percentage was mainly attributable to the inventory
valuation adjustment during the same period prior year which accounted for 2.6%
of the increase.  The decrease in ocean freight and pallet expense
accounted for 0.7% of the increase in gross profit percentage with the remaining
increase due to a reduction in product costs.
 
 
 Operating
Expenses:
 
 Operating
expenses for the years ended December 31, 2008 and 2007 were $1,192,003 and
$1,024,469 respectively for an increase of $167,534 (16.4%).  The
$167,534 increase in operating expenses was attributable to increases in the
following: 1) salaries and related expenses of $9,311 (2.1%), 2) insurance
expense of $10,278 (15.7%), 3) directors fees of $13,500 (100.0%), 4) legal fees
of $26,247 (3485.7%), 5) accounting fees of $149,381 (332.5%), 6) outside
services of $24,239 (100.0%) and 7) miscellaneous items of $24,405 (3973.61%),
offset by decreases in 1) rent of $14,883 (%), 2) bad debt expense of $15,385
(99.6%) 3) professional service fees of $43,042 (89.5%) and
 
 -9-
 4) travel
expense of $17,300 (6.1%). The decrease in rent is due a new lease that includes
a tenant improvement credit of $45,457.50 which is allocated over the first
eleven months of the lease. For an explanation of the $166,751 increase in
administrative expenses, please see the following table.
 
 Twelve months ending:
                  12/31/2007
                  
                  12/31/2008
                  
                  $
      VAR
                  
                  %
      VARSalaries
      & Related Expense
                  $447,430
                  
                  $456,741
                  
                  $9,311
                  
                  2.1%
                  Salaries
      were flat in 2008Rent
                  83,614
                  
                  68,731
                  
                  -14,883
                  
                  -17.8%
                  New
      lease offset by negotiated rated creditsfor
      the first eleven months of the leaseBad
      Debt Expense
                  15,454
                  
                  69
                  
                  -15,385
                  
                  -99.6%
                  Respresents
      write off of salesInsurance
      Expense
                  65,373
                  
                  75,651
                  
                  10,278
                  
                  15.7%
                  rate
      increaseProfessional
      Service
                  48,087
                  
                  5,045
                  
                  -43,042
                  
                  -89.5%
                  EITF
      19 consulting fees, tax prep and footnote feesDirectors
      Fees
                  0
                  
                  13,500
                  
                  13,500
                  
                  100.0%
                  No
      fees in 2007Legal
                  753
                  
                  27,000
                  
                  26,247
                  
                  3485.7%
                  Miscellaneous
      legal feesAccounting
                  44,925
                  
                  194,306
                  
                  149,381
                  
                  332.5%
                  Includes
      audit fees for 2006, 2007 & 2008plus
      pre-merge EZ Kink audit and review feesTravel
      Expense
                  285,209
                  
                  267,909
                  
                  -17,300
                  
                  -6.1%
                  Less
      travel in 2008Outside
      Services
                  610
                  
                  24,849
                  
                  24,239
                  
                  3973.6%
                  Transfer
      Agent fees and Shareholder meeting feesincluding
      proxy processing feesAll
      others
                  33,014
                  
                  57,419
                  
                  24,405
                  
                  73.9%
                  Miscellaneous
      itemsTotal
      Expenses
                  $1,024,469
                  
                  $1,191,220
                  
                  $166,751
                  
                  16.3%
  -10-
 
 Other
Income (Expenses):
 
 Interest
income for the years ended December 31, 2008 and 2007 was $11,872 and $22,880
respectively for a decrease of $11,008 (48.1%) as a result of less money in the
accounts earning interest.  Interest expense for the years ended
December 31, 2008 and 2007 was $10,850 and $16,667 respectively for a decrease
of $5,817 (35.0%) as a result of a the conversion of two promissory notes into
preferred shares in 2008.
 
 Federal
Income Tax
 
 The
Company utilizes SFAS No. 109, “Accounting for Income Taxes,” which requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial statements or
tax returns.  Under this method, deferred income taxes are recognized
for the tax consequences in future years of differences between the tax bases of
assets and liabilities and their financial reporting amounts at each period end
based on enacted tax laws and statutory tax rates applicable to the periods in
which the differences are expected to affect taxable
income.  Valuation allowances are established, when necessary, to
reduce deferred tax assets to the amount expected to be realized.  The
provision for income taxes represents the tax payable for the period and the
change during the period in deferred tax assets and liabilities
 
 Liquidity
and Capital Resources
 
 Cash flow
used in operations for the year ended December 31, 2008 amounted to
$183,515, which mainly consisted the profit for the year
ended December 31, 2008 of $470,889 plus the following  1)
depreciation expense of $4,944, 2) preferred shares issued for accrued interest
of $10,833, 3) decrease in inventory of $25,000 representing the write-off of
consigned inventory, 4) decrease in prepaid taxes of $15,002 6) $93,260 increase
in taxes payable as a result of the year’s earnings, and 7) decrease in deferred
tax asset of $72,842, offset by 1) the write-off of accrued liabilities of
$64,861, 2) increase in account receivable of $726,990, 3) increase in income
tax refund receivable of $25,091, 4) increase in deposits of $10,432 as a result
of the lease renewal, 5) a decrease in accounts payable and accrued expenses of
$48,980.
 
 -11-
 Net cash
used in investing activities for year ended December 31, 2008 was
$0.
 
 Net cash
generated in financing activities for year ended December 31, 2008 was
$38,400 which represented an advance from a related party for accounting fees
paid on behalf of the Company.  For the year ended December 31, 2007
net cash generated was $51,418, which consisted of $53,918 of cash acquired in
the merger with Kaire, offset by the repayment of a $2,500 shareholder
advance.
 
 On
December 31, 2008 the Company had total assets of $4,902,396 compared to
$4,484,011 on December 31, 2007, an increase of $418,385 or
9.3%.  The Company had retained earnings of $168,793 on December 31,
2008, compared to accumulated deficit of $302,096 on December 31, 2007,
an increase in earnings of $470,889 (155.9%).  As of
December 31, 2008 the Company's working capital position increased by $692,067
(110.2%) from working capital of $628,163 at December 31, 2007 to working
capital of $1,320,230 at December 31, 2008.  The increase was mainly
due to an increase in account receivable of $726,921(19.3%) offset by a decrease
in cash and investments of $268,793(58.1%).
 
 Estimated future cash
requirements
 
 Over the
next twelve months, management is of the opinion that sufficient working capital
will be obtained from operations.
 
 Subsequent
Events
 
 In March
2009 International Packaging and Logistics Group, Inc. (“IPL Group Inc.”)
(Buyer), acquired a majority interest in EZ LINK Corporation (“EZ LINK”)
(Seller) which is a logistics company headquartered in Taiwan. EZ Link was
established in July 2003 under the Company Law of Republic of
China.  EZ LINK is a full service international freight
forwarder, who has current networks to locations in China, Hong Kong, South East
Asia, North East Asia, North America, Latin America and Europe.  In
fiscal year 2007, EZ LINK had net revenues
 of
approximately $6.6 million $US with fiscal year 2008 net revenues expected to be
approximately $8.0 million $US.  EZ LINK will be operated as a
majority owned subsidiary of IPL Group Inc.    We are
waiting for the PRC Taiwan approval.
 The
capital stock of the EZ LINK consists of 1,350,000 authorized shares of common
stock, NT$10 par value , of which 1,350,000 shares are currently issued and
outstanding and held by Seller (“Shares”). Upon the terms and
 conditions
set forth below, Seller desires to assign fifty-one percent (51%) of EZ LINK
shares, or 688,500 shares in the aggregate, to Buyer, such that, following such
transaction, EZ LINK will be a majority owned subsidiary of
Buyer.  The parties agree that 51% ownership of the issued and
outstanding shares of EZ LINK has a present estimated market value of
approximately US$1,600,000 (the “Purchase Price”).
 
 (a) One
half of the Purchase Price amount (US$800,000) shall be paid in common shares of
IPL Group, Inc. as of the closing date based on a per share value of US$1.75, or
457,143 shares.  Such shares shall bear the appropriate
restrictions.
 
 (b) One
half of the Purchase Price amount (US$800,000) shall be paid in Series B
Convertible preferred shares which will be convertible into shares of IPL Group,
Inc. common shares on a one for one basis.  The preferred shares shall
be valued at US$2.00 per share, and will be exercisable pursuant to the terms
and conditions specified in the purchase agreement.
 
 ITEM
7A.                      Quantitative
and Qualitative Disclosures About Market Risk
 
 N/A
 
 ITEM
8.                      Financial
Statements
 
 The
report of independent auditors and financial statements are set forth in this
report beginning on Page F-1.
 
 -12-
 ITEM
9.                      Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
 
 None
 
 
 
 Item
9A(T).                            Controls and
Procedures.
 
 Disclosure
Controls and Procedures
 
 As of
December 31, 2008, under the supervision and with the participation of the
Company's Chief Executive Officer and the Chief Financial Officer, management
has evaluated the effectiveness of the design and operation of the Company's
disclosure controls and procedures (as defined in the Securities Exchange Act of
1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this
Annual Report on Form 10-K (the "Evaluation Date"). Based on that evaluation,
the Chief Executive Officer and the Chief Financial Officer have concluded that
the Company's disclosure controls and procedures were effective as of December
31, 2008.
 
 Changes
in Internal Control over Financial Reporting
 
 There
were no changes in internal control over financial reporting that occurred
during the last fiscal quarter covered by this report that have materially
affected, or are reasonably likely to affect, the Company's internal control
over financial reporting.
 
 
 Management's
Report on Internal Control over Financial Reporting
 
 Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in the Securities
Exchange Act of 1934 Rule 13a-15(f). Our Chief Executive Officer and Chief
Financial Officer conducted an evaluation of the effectiveness of our internal
control over financial reporting based on the framework in Internal Control -
Integrated Framework, issued by the Committee of Sponsoring Organizations of the
Treadway Commission ("COSO Framework").
 
 Based on
this evaluation, management has concluded that our internal control over
financial reporting was  effective as of December 31,
2008.  Prior year our principal Chief Executive Officer and Chief
Financial Officer concluded we had a material weakness due to lack of
segregation of duties. Our size has prevented us from being able to employ
sufficient resources to enable us to have an adequate level of supervision and
segregation of duties within our internal control system. There was one person
involved in processing of transactions. Therefore, it was difficult to
effectively segregate accounting duties.  Additionally, our controls
over the preparation and close of our financial statements was not
effective.  We had posted a material adjustment relating to our
consignment inventory in 2007.
 
 As a
result of this material weakness we  implemented remediation
procedures whereby in December 2007 we  hired an additional
administrative person and  retained an outside professional firm to
assist in the separation of duties on an ongoing basis.  The use of
the outside firm has proven successful in assisting in the separation of
duties.
 
 This
annual report does not include an attestation report of the Company's
independent registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's independent registered public accounting firm pursuant to temporary
rules of the SEC that permit the company to provide only management's report on
internal control in this annual report.
 
 Item
9B.                      Other
Information.
 
 N/A
  -13-
 PART
III
 
 ITEM
10.                      Directors,
Executive Officers, Promoters and Control Persons; Compliance with Section 16(a)
of the Exchange Act
 
 The Company has three directors and a
sole executive officer, and their ages and positions with the Company as of
December 31, 2008 are as follows:
  
 Name
              Age
              Office
              SinceSteven
      R. Westlund
              60
              Chairman,
      CEO  and Acting CFO
              1995William
      Gresher
              61
              Director
              January
      2007Allen
      Lin
              54
              Director
              January
      2007
 
 Steven
Westlund has been the Chief Executive Officer and a director of IPLO (previously
Kaire) since May 1995 and was elected Chairman of the Board in December 1995,
and he has been Acting Chief Financial Officer since April 2007. Mr. Westlund
was Chairman of the Board and Chief Executive Officer of Vitafort International
Corporation from May 1993 through May 1995.  Vitafort manufactured and
sold fat free foods. From January 1991 to May 1993, Mr. Westlund was Chief
Executive Officer of Lorenz/Germaine Incorporated and concurrently from January
1991 to June 1992 he acted as Chairman and Chief Executive Officer of Auto
Giant. Mr. Westlund specializes in corporate restructuring and the development
and marketing of specialized products and services.
 
 Allen Lin
has over 17 years of packaging industry and financial venture investment
experiences which included successful start-ups, H & H Glass Inc., in 1989,
where he is instrumental in global manufacturing outsourcing for rigid packaging
material (including but not limited to glass containers) in packaging
distribution solutions for North America.   Mr. Lin recently
earned a degree of Mater of International Law from a national university in
Germany and also  holds an MBA from  a national university
in Chicago, Illinois, USA (graduated with Honor).   Mr. Lin has
gained international exposure from the tasks involved in identifying merger and
acquisition candidates in the packaging distribution network and promoting his
packaging business in the North American, South American and European
continents.  Born and raised in Taiwan, Mr. Lin is fluent in both
Chinese and English.
 
 William
Gresher is currently the Chief Financial Officer with The Mexmil Company where
he has been for the last 4 years.  Prior to Mexmil, Bill held high
level financial positions in several companies including the Chief Financial
Officer for Distinctive Appliances, Inc. (DACOR), in Pasadena, CA, Vice President of Finance forFadal Engineering in Chatsworth, CA., Vice President Corporate Financial
Planning for Allergan Inc., Irvine, CA., Vice President Controller, Bentley
Laboratories, Inc., Irvine CA, a division of Baxter International, Inc.,
Controller of Bell & Howell Co., Lincolnwood, IL., and several years with
Arthur Andersen & Co., Chicago, IL.  Mr. Gresher has a Bachelors
Degree in Accounting and an MBA from Northern Illinois
University.  Mr. Gresher started his career as a CPA with Arthur
Andersen & Co. Next, Mr. Gresher moved to Bell & Howell for 8 years of
which 4 years were spent in Tokyo, Japan where he was Plant Controller for their
manufacturing operations. The next 10 years were spent with Baxter International
in a variety of managerial positions including Director of Finance – Asia
Pacific, Assistant Corporate Controller and Vice President Finance for Bentley
Laboratories in Irvine California. At Allergan Inc., Bill held Vice President
positions for the Humphrey, International and European divisions, as well a Vice
President Corporate Financial Planning.
 
 Compensation of
Directors:
 
 Directors
received remuneration totaling $13,500 during the year ended December 31,
2008.  Directors receive $500 a month in directors fees with the
exception of Mr. Lin who received a total of $1,500 for the year.
 
 Directors
received no remuneration during the year ended December 31, 2007.  All
IPLO Directors are entitled to reimbursement of funds advanced to pay expenses
in connection with our Company's business.  Our Company has not
established specific committees within the Board of Directors.
 
 -14-
 Compliance
with Section 16(a) of the Securities Exchange Act of 1934
 
 Section
16(a) of the Securities Exchange Act of 1934 requires the Company’s directors
and executive officers, and persons who own more than 10% of a registered class
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% shareholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they
file.
 
 To the
Company’s knowledge, based solely on its review of the copies of such reports
furnished to the company and written representations that no other reports were
required during the fiscal year ended December 31, 2007, all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with.
 
 Code of Ethics for the Chief
Executive Officer and the Principal Financial Officer
 
 On
September 7, 2004, the sole Board of Directors of the Company adopted the Code
of Ethics for Chief Executive Officer and the Principal Financial Officer, which
was included as exhibit 14.1 with the December 31, 2004 Form 10KSB.
 
 ITEM
11.                      Executive
Compensation
 
 The
following table sets forth certain summary information regarding compensation
paid by International Packaging and Logistics Group, Inc. for services rendered
during the fiscal years ended December 31, 2008 and 2007, respectively, to
International Packaging and Logistics Group, Inc. Chief Executive Officer, Chief
Financial Officer and H&H Glass’s President during such period.
 
 Summary
Compensation Table
 Executive
Compensation:
 
 SUMMARY
      COMPENSATION TABLEName
      and principal position
              Year
              Salary
      ($)
              Bonus
      ($)
              Stock
      Awards ($)
              Option
      Awards ($)
              Non-Equity
      Incentive Plan Compensation ($)
              Nonqualified
      Deferred Compensation Earnings ($)
              All
      Other Compensation ($)
              Total
      ($)Steve
      Westlund, CEO and CFO
              2008
              0
              0
              0
              0
              0
              0
              6,000
              6,0002007
              0
              0
              270,000
              0
              0
              0
              0
              270,000Randall
      Jones
                CFO
      *
              2007
              0
              0
              24,000
              0
              0
              0
              0
              24,000Allen
      Lin President H&H Glass
              2008
              240,004
              
              
              
              
              
              1,500
              245,0042007
              210,000
              
              
              
              
              
              
              210,000
 
 
 * Randall
Jones was terminated as Chief Financial Officer as of April 9,
2007.  Mr. Westlund will act as temporary CFO until a replacement is
found.
 
 During
2008, Mr. Westlund received $6,000 in director’s fees.  During 2007,
Mr. Westlund received 3% of the equity of the new entity in the form of 135,000
shares valued at the market price at the time of $2.00 per share.
 
 -15-
 During
2007, Mr. Jones received 0.3% of the equity of the new entity in the form of
11,916 shares valued at the market price at the time of $2.00 per
share.
 
 Outstanding Equity Awards at
Fiscal Year-end
 
 The following table sets forth
certain   summary   information   regarding
outstanding equity awards as of December 31, 2008 to the Company's Chief
Executive Officer and Chief Financial Officer and most highly paid executive
officers during such period.
 
 OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-ENDOPTION
      AWARDS
              STOCK
      AWARDSName
              Number
      of Securities Underlying Unexercised Options
                (#)
                Exercisable
              Number
      of Securities Underlying Unexercised Options
                (#)
                Unexercisable
              Equity
      Incentive Plan Awards: Number of Securities Underlying Unexercised
      Unearned Options
                (#)
              Option
      Exercise Price
                ($)
              Option
      Expiration Date
              Number
      of Shares or Units of Stock That Have Not Vested
                (#)
              Market
      Value of Shares or Units of Stock That Have Not Vested
                ($)
              Equity
      Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
      That Have Not Vested
                (#)
              Equity
      Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
      Other Rights That Have Not Vested
                (#)None
 
 
 Compensation of
Directors
 
  
 DIRECTOR
      COMPENSATIONName
              Fees
      Earned or Paid in Cash
                ($)
              Stock
      Awards ($)
              Option
      Awards ($)
              Non-Equity
      Incentive
                Plan
      Compensation
                ($)
              Non-Qualified
      Deferred Compensation Earnings
                ($)
              All
                Other
      Compensation ($)
              Total
      ($)Steve
      Westlund
              $6,000
              0
              0
              0
              0
              0
              $6,000William
      Gresher
              $6,000
              0
              0
              0
              0
              0
              $6,000Allen
      Lin
              $1,500
              0
              0
              0
              0
              0
              $1,500
 
 
 Options/SAR
Grants in the Last Fiscal Year:
 
 None
 
 -16-
 Employment Agreements
–  N/A
 
 
 
 H&H
Glass offers health insurance to all its employees.   H&H
Glass also has a discretionary post-employment benefit plan available to its
employees.
 
 
 
 ITEM
12.                      Security
Ownership of Certain Beneficial Owners and Management
 
 The
following table sets forth certain information known to the Company with respect
to the beneficial ownership of the Company’s common stock as of December 31,
2008 by (i) each person who is known by the Company to own beneficially more
than 5% of the Company's common stock and (ii) KAIH's directors and executive
officer, and (iii) all officers and directors of KAIH as a group.
 
 
 Shares
      beneficially owned  (1)Number of shares
              Percentage of class (2)Steve
      Westlund
                7700
      Irvine Center Dr.
                Suite
      870
                Irvine,
      CA 92618
              153,500
              3.4%Owen
      Naccarato
              234,375
              5.2%18301
      Von Karman Ave.
                Suite
      430
                Irvine,
      CA 92612Standard
      Resources Ltd. (3)
                8/F
      Hing Wong Court
                21-23
      Tai Wong Street East
                Wanchi,
      Hong Kong
              3,915,000
              86.9%Officers
      and Directors as a group
              4,068,500
              90.3%
 
 
 (1)
Beneficial Ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of common stock subject to options or
warrants currently exercisable or convertible, or exercisable or convertible
within 60 days of December 31, 2008 are deemed outstanding for computing the
percentage of the person holding such option or warrant but are not deemed
outstanding for computing the percentage of any other person.  Except
as pursuant to applicable community property laws, the persons named in the
table have sole voting and investment power with respect to all shares of common
stock beneficially owned.
 
 (2)  Percentage
based on 4,504,214 shares of common stock outstanding as of December 31,
2008.
 
 (3)Standard
Resources LTD is a related company to Allen Lin the founder and CEO of H&H
Glass.
 
 
 -17-
 
 
 
 
 ITEM
13.                      Certain
Relationships and Related Transaction
 
 Allen
Lin
 
 The
Company paid Mr. Allen Lin, President of H&H Glass and a member of the board
of directors of the Company, salary of $240,004 and $210,000 for the years ended
December 31, 2008 and 2007, respectively.
 In
November and December 2008, Mr. Lin paid $38,400 of accounting fees on
behalf of the Company.  This amount is reported in the accompanying
financial statements as “Related Party Advance.”  Additionally, Mr.
Lin received board fees totaling $1,500.
 
 Josephine
Lin
 
 Josephine
Lin, Mr. Lin’s wife, is employed by the company and was paid salary of $50,400
and $48,000 for the year ended December 31, 2008 and 2007,
respectively.
 
 Steven
Westlund
 
 During
2008, Mr. Westlund, the Company’s Chief Executive Officer and acting Chief
Financial Officer, was paid $6,000 in cash for Director fees.
 
 During
2007, Mr. Westlund received 3% of the equity of the new entity in the form of
135,000 shares of common stock valued at the market price at the time of $0.01
per share.
 
 
 William
Gresher
 
 During
2008, Mr. Gresher, a member of the Board of Directors, was paid $6,000 in cash
for Director fees.
 
 
 ITEM
14.                      Principal
Accountant Fees and Services
 
 The
Company paid or accrued the following fees in each of the prior two fiscal years
to its independent certified public accountants, PMB Helin Donovan,
LLP:
 
 For
      the Year Ended December 31,2008
              2007Audit
      Fees
              66,070
              77,619Audit-Related
      Fees
              44,360
              30,835Tax
      Fees
              15,345
              0All
      Other Fees
              
              0Total
      Fees
              125,775
              108,454
 
 "Audit
Fees"  consisted of fees billed for services rendered for the audit
of  the
Company’s  annual  financial  statements  and
audit related fees are for  review of the  financial
statements included in the Company’s quarterly reports on Form
10-Q.
 
 -18-
 
 ITEM
15.                      Exhibits,
List and Reports in Form 8-K
 
 
 (a)
              Exhibits31.1
              Certification
      of the Chief Executive Officer pursuant to Rule 13a-14(a)( Section 302 of
      the Sarbanes-Oxley Act of 2002)31.2
              Certification
      of the Chief Financial Officer pursuant to Rule 13a-14(a) ( Section 302 of
      the Sarbanes-Oxley Act of 2002)32.1
              Certification
      of the Chief Executive Officer pursuant to 18 U.S.C.ss.1350 (Section 906
      of the Sarbanes-Oxley Act of 2002)32.2
              Certification
      of the Chief Financial Officer pursuant to 18 U.S.C.ss.1350 (Section 906
      of the Sarbanes-Oxley Act of 2002)
 
 
 (b)
              Reports
      on Form 8-KMarch
      11, 2009
              Items
      2.01: reporting the acquisition of EZ Link Corp, a logistics
      company.
 
  -  -
 -19-
  
 
 
 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.
 
 Kaire Holdings
Incorporated
 
 By:     /s/Steven R.
Westlund
 Steven R. Westlund
 Chief Executive Officer
 
 Dated:   April
9, 2009
 
 In accordance with the Exchange Act,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
 
 /s/           Steven R.
Westlund                                                      April
9, 2009
 Steven R. Westlund
 Chief Executive Officer,
 Principal Financial Officer and Director
 
 
 /s/           Allen
Lin                                                                      
 April 9, 2009
 Director
 
 
 /s/           William
Gresher                                                                  
   April 9, 2009
 Director
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  -  -
 -20-
  
 
 
 
 
 
 
 
 
 
 
 
 International
Packaging and Logistics Group, Inc.,
 and
Subsidiaries
 
 Consolidated
Financial Statements
 for
the Years Ended
 December
31, 2008 and 2007
  -  -
 -21-
  International
Packaging and Logistics Group, Inc.,
 and
Subsidiaries
 
 Consolidated
Financial Statements
 for
the Years Ended
 December
31, 2008 and 2007
 
 
 
 C  O  N  T  E  N  T  S
 
 
 
 Report
      of Independent Registered Public Accountants
              F1Consolidated
      Balance Sheets
              F2Consolidated
      Statements of Operations and Comprehensive Income/(Loss)
              F3Consolidated
      Statements of Stockholders’ Equity
              F4Consolidated
      Statements of Cash Flows
              F5
      – F6Notes
      to Consolidated Financial Statements
              F7
      – F21
 
 
 
 
 
 
 
 
 
 
  -  -
 -22-
  Report
of Independent Registered Public Accountants
 
 
 To the
stockholders and Board of Directors of
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 
 
 
 We have
audited the accompanying consolidated balance sheets of International Packaging
and Logistics Group, Inc., a Nevada corporation, as of December 31, 2008 and
2007, and the related consolidated statements of operations and comprehensive
income/(loss), stockholders’ equity and cash flows for each of the years then
ended.  These consolidated financial statements are the responsibility
of the Company’s management.  Our responsibility is to express an
opinion on these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the consolidated financial position of International
Packaging and Logistics Group, Inc., as of December 31, 2008 and 2007, and the
consolidated results of its operations and its cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States.
 
 
 
 /s/PMB
Helin Donovan LLP
 San
Francisco, California
 April 8,
2009
 
  -F1-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Consolidated
Balance Sheets
 As
of December 31, 2008 and 2007
  
 2008
              
              2007Current
      AssetsCash
              
              $
              64,967
              
              $
              210,082Investment
      security, available for sale
              
              128,553
              
              
              252,231Accounts
      receivable (net of reserve for doubtfulaccounts
      of $0 and $0, respectively)
              
              4,493,107
              
              
              3,766,186Income
      tax refund receivable
              
              25,091
              
              
              -Prepaid
      taxes
              
              -
              
              
              15,002Consignment
      inventory, net
              
              -
              
              
              25,000Total
      Current Assets
              
              4,711,718
              
              
              4,268,501Property,
      Plant and Equipment (net of accumulateddepreciation
      of $30,963 and $26,019, respectively)
              
              7,041
              
              
              11,985Other
      AssetsDeposits
              
              16,928
              
              
              6,496Deferred
      tax assets, net
              
              166,709
              
              
              197,029Total
      Other Assets
              
              183,637
              
              
              203,525Total
      Assets
              $
              4,902,396
              
              $
              4,484,011Liabilities
      and Stockholders' EquityCurrent
      LiabilitiesAccounts
      payable and accrued expenses
              $
              3,022,783
              
              $
              3,136,626Income
      taxes payable
              
              93,260
              
              
              -Loans
      payable
              
              -
              
              
              250,000Related
      party advances
              
              38,400
              
              
              -Accrued
      interest
              
              -
              
              
              16,667Accrued
      liabilities - Kaire Holdings
              
              237,045
              
              
              237,045Total
      Current Liabilities
              
              3,391,488
              
              
              3,640,338Stockholders'
      EquityConvertible
      preferred shares: $0.0001 par value, 50,000,000 sharesauthorized,
      974,730 and 882,230 issued and outstanding, respectively
              
              98
              
              
              88Common
      stock: $0.001 par value, 900,000,000 shares authorized,4,504,214
      issued and outstanding
              
              4,504
              
              
              4,504Additional
      paid-in capital
              
              1,346,231
              
              
              1,068,741Accumulated
      other comprehensive income/(loss)
              
              (8,718)
              
              
              72,436Retained
      earnings/(deficit)
              
              168,793
              
              
              (302,096)Total
      Stockholders' Equity
              
              1,510,908
              
              
              843,673Total
      Liabilities and Stockholders' Equity
              $
              4,902,396
              
              $
              4,484,011
  The
accompanying notes are an integral part of these financial
statements.
 - F2
-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Consolidated
Statements of Operations and Comprehensive Income/(Loss)
 For
the Years Ended December 31, 2008 and 2007
  
 2008
              
              2007Revenues
              $
              19,090,538
              
              $
              18,852,647Cost
      of Goods SoldCost
      of goods sold
              
              (17,412,968)
              
              
              (17,558,288)Impairment
      of consignment inventory
              
              (21,382)
              
              
              (523,859)Total
      Cost of Goods Sold
              
              (17,434,350)
              
              
              (18,082,147)Gross
      Profit
              
              1,656,188
              
              
              770,500Operating
      ExpensesAdministrative
      expenses
              
              666,531
              
              
              493,425Rent
              
              
              68,731
              
              
              83,614Salaries
      and wages
              
              456,741
              
              
              447,430Total
      Operating Expenses
              
              1,192,003
              
              
              1,024,469Income
      from Operations
              
              464,185
              
              
              (253,969)Other
      Income/(Expenses)Interest
      income
              
              11,872
              
              
              22,880Other
      income
              
              64,861
              
              
              -Interest
      expense
              
              (10,850)
              
              
              (16,667)Total
      Other Income/(Expenses)
              
              65,883
              
              
              6,213Net
      Income/(Loss) before Income Taxes
              
              530,068
              
              
              (247,756)Income
      tax expense
              
              (59,179)
              
              
              (54,466)Net
      Income/(Loss) available to common stockholder,
                basic
      and diluted
              
              470,889
              
              
              (302,222)Comprehensive
      IncomeUnrealized
      gain/(loss) on investments
              
              (81,154)
              
              
              15,542Comprehensive
      Income/(Loss)
              $
              389,735
              
              $
              (286,680)Earnings/(loss)
      per weighted average share of common stock - basic
              $
              0.10
              
              $
              (0.07)Earnings/(loss)
      per weighted average share of common stock - diluted
              $
              0.09
              
              $
              (0.07)Weighted
      average shares outstanding - basic
              
              4,504,214
              
              
              4,212,515Weighted
      average shares outstanding - diluted
              
              5,432,947
              
              
              4,212,515
 
  The
accompanying notes are an integral part of these financial
statements.
 - F3
-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Consolidated
Statements of Stockholders’ Equity
 For
the Years Ended December 31, 2008 and 2007
  
 
 Convertible
                Preferred
      Stock
              
              Common
      Stock
              
              Additional
                Paid-In
                Capital
              
              Accumulated
      Other  Comprehensive
                Income/(Loss)
              
              Retained
                Earnings/
                (Deficit)
              
              Total
                Stockholders’
                EquityShares
              
              Amount
              
              Shares
              
              AmountBalance,
      December 31, 2006
              -
              
              $
              -
              
              1
              
              $
              1,000
              
              $
              -
              
              
              56,894
              
              $
              1,627,421
              
              $
              1,685,315Effect
      of reverse merger:Net
      effect of assumption of Kaire assets and liabilities
              882,230
              
              
              88
              
              217,298
              
              
              217
              
              
              42,752,146
              
              
              -
              
              
              (43,307,413)
              
              
              (554,962)Issuance
      of shares to H&H Glass owners in connection with the
      merger
              -
              
              
              -
              
              3,915,000
              
              
              3,915
              
              
              (3,915)
              
              
              -
              
              
              -
              
              
              -Issuance
      of other shares in connection with the merger
              -
              
              
              -
              
              371,916
              
              
              372
              
              
              (372)
              
              
              -
              
              
              -
              
              
              -Reclassifications
      due to reverse merger
              -
              
              
              -
              
              (1)
              
              
              (1,000)
              
              
              1,000
              
              
              -
              
              
              -
              
              
              -Elimination
      of accumulated deficit of Kaire
              -
              
              
              -
              
              -
              
              
              -
              
              
              (41,680,118)
              
              
              -
              
              
              41,680,118
              
              
              -Unrealized
      gain on investment, net of tax
              -
              
              
              -
              
              -
              
              
              -
              
              
              -
              
              
              15,542
              
              
              -
              
              
              15,542Net
      income
              -
              
              
              -
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (302,222)
              
              
              (302,222)Balance,
      December 31, 2007
              882,230
              
              $
              88
              
              4,504,214
              
              $
              4,504
              
              $
              1,068,741
              
              $
              72,436
              
              $
              (302,096)
              
              $
              843,673Issuance
      of preferred shares in settlement of debt and interest
              92,500
              
              
              10
              
              -
              
              
              -
              
              
              277,490
              
              
              -
              
              
              -
              
              
              277,500Unrealized
      loss on investment, net of tax
              -
              
              
              -
              
              -
              
              
              -
              
              
              -
              
              
              (81,154)
              
              
              -
              
              
              (81,154)Net
      income
              -
              
              
              -
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              470,889
              
              
              470,889Balance,
      December 31, 2008
              974,730
              
              $
              98
              
              4,504,214
              
              $
              4,504
              
              $
              1,346,231
              
              $
              (8,718)
              
              $
              168,793
              
              $
              1,510,908
 
  The
accompanying notes are an integral part of these financial
statements.
 - F4
-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Consolidated
Statements of Cash Flows
 For
the Years Ended December 31, 2008 and 2007
  
 2008
              
              2007Cash
      flows from operating activities:Net
      income/(loss)
              $
              470,889
              
              $
              (302,222)Adjustments
      to reconcile net income/(loss) to net cash usedin
      operating activities:Depreciation
      expense
              
              4,944
              
              
              3,562Bad
      debt
              
              69
              
              
              15,454Preferred
      shares issued for accrued interest
              
              10,833
              
              
              -Other
      income
              
              (64,861)
              
              
              -Changes
      in operating assets and liabilities:Increase
      in accounts receivable
              
              (726,990)
              
              
              (4,797)(Increase)
      decrease in consignment inventory
              
              25,000
              
              
              (25,000)Increase
      in income tax refund receivable
              
              (25,091)
              
              
              -(Increase)
      decrease in deferred tax asset
              
              72,842
              
              
              (74,457)(Increase)
      decrease in prepaid taxes
              
              15,002
              
              
              (15,002)Increase
      in deposits
              
              (10,432)
              
              
              -Increase
      (decrease) in income taxes payable
              
              93,260
              
              
              (163,843)Increase
      in interest payable
              
              -
              
              
              16,667Decrease
      in accrued liabilities
              
              -
              
              
              (1,174)Increase
      (decrease) in accounts payable and accrued expenses
              
              (48,980)
              
              
              119,481Net
      cash used in operating activities
              
              (183,515)
              
              
              (431,331)Cash
      flow from investing activities:Net
      cash used in investing activities
              
              -
              
              
              -Cash
      flow from financing activities:Cash
      acquired from acquisition of Kaire Holdings
              
              -
              
              
              53,918Proceeds
      from stockholder advance
              
              38,400
              
              
              -Payments
      on stockholder advance
              
              -
              
              
              (2,500)Net
      cash provided by financing activities
              
              38,400
              
              
              51,418Net
      decrease in cash and cash equivalents
              
              (145,115)
              
              
              (379,913)Cash
      and cash equivalents at beginning of year
              
              210,082
              
              
              589,995Cash
      and cash equivalents at end of year
              $
              64,967
              
              $
              210,082
 
 
 
 (continued)
  The
accompanying notes are an integral part of these financial
statements.
 - F5
-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Consolidated
Statements of Cash Flows
 For
the Years Ended December 31, 2008 and 2007
  
 Supplementary
disclosures of cash flow information
 
 Cash
      paid during the year forInterest
              $
              -
              
              $
              -Taxes
              $
              3,712
              
              $
              307,768Unrealized
      gain/(loss) on investment security available for sale, net of
      tax
              $
              (81,154)
              
              $
              15,542
 
 During
the year ended December 31, 2008, the Company entered into the following
non-cash transactions:
 ·
              Issued
      92,500 shares of series A preferred shares in lieu of payment of
      promissory notes valued at $250,000 and related accrued interest valued at
      $27,500.
 
 During
the year ended December 31, 2007, the Company entered into the following
non-cash transactions.
 ·
              Issued
      866,667 shares of preferred stock for settlement of $2,624,170 of
      convertible debt and interest of
Kaire
 ·
              Issued
      4,286,916 shares of common stock in association with the merger with
      H&H Glass, Inc.
 
 
 Merger
      of Kaire Holdings, Incorporated, and H&H Glass, Inc.Cash
              $
              -
              
              $
              53,918Accounts
      payable and accrued expenses
              
              -
              
              
              (120,661)Loans
      payable
              
              -
              
              
              (250,000)Accrued
      liabilities
              
              -
              
              
              (238,219)Net
      liabilities assumed
              $
              -
              
              $
              (554,962)
 
  The
accompanying notes are an integral part of these financial
statements.
 - F6
-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  1.                          Summary of Significant
Accounting Policies
 
 Nature of
Operations
 
 On July
2, 2007, International Packaging and Logistics Group, Inc. (“IPL Group” or “the
Company”) through its wholly-owned subsidiary, YesRx.com (“YesRx”) acquired all
the outstanding shares of H&H Glass, Inc. (“H&H Glass” or “H&H”), in
exchange for 3,915,000 shares of its common stock in a reverse triangular merger
(the “Merger”).  H&H Glass is a glass importer that supplies
custom products such as perfume bottles and food condiment bottles, plus
provides complementary services such as container design and mold
making.  H&H Glass imports glass containers from Asia and
distributes to North America.  H&H Glass acquires its products
mainly from one supplier in China and Taiwan and sells its products through
several distributors in the United States and Canada who service small to medium
sized customers.  H&H imports in excess of 1,000 shipping
containers of glass a year.
 
 
 Organization and Line of
Business
 
 International
Packaging and Logistics Group, Inc., a Nevada corporation, was originally
incorporated as Interactive Medical Technologies, Ltd., on June 2, 1986 in the
state of Delaware.  On April 17, 2008, IPL Group converted from a
Delaware corporation to a Nevada Corporation.
 
 Effective
February 3, 1998, Interactive Medical Technologies, Ltd., changed its name to
Kaire Holdings Incorporated, and effective May 28, 2008, its name changed from
Kaire Holdings Incorporated to International Packaging and Logistics Group,
Inc.
 
 On
January 23, 2007, IPL Group and its wholly-owned subsidiary, YesRx, executed a
Letter of Intent whereby YesRx would acquire all of the outstanding stock of
H&H Glass Corporation, an Illinois corporation.  H&H Glass was
formed in 1989.  As part of this transaction, on February 4, 2007, IPL
Group discontinued its pharmacy business, and Effective Health, Inc., was shut
down.
 
 
 Merger and Corporate
Structure
 
 On July
2, 2007, an Agreement and Plan of Merger was executed between IPL Group, its
wholly-owned subsidiary YesRx.com, and H&H Glass, whereby YesRx.com acquired
all of the outstanding stock of H&H Glass Corporation, an Illinois
corporation in exchange for 3,915,000 shares of IPL Group’s common stock
representing 87% of IPL Group’s outstanding stock.  As part of the
merger agreement, 225,000 shares were issued to Naccarato and Associates related
to assistance with the merger.
 
 As a
result of the Merger, there was a change in control of IPL Group.  In
accordance with SFAS No. 141, H&H Glass was defined as the accounting
acquirer.  While the transaction is accounted for using the purchase
method of accounting, in substance the transaction results in a reverse merger
with a recapitalization of IPL Group’s capital structure.
 
 The
historical financial statements presented herein are those of H&H Glass, as
adjusted to give effect to the stock of IPL Group (the legal acquirer) since the
Merger.  The retained earnings of the accounting acquirer have been
carried forward after the acquisition, and H&H Glass’s basis in its assets
and liabilities were carried over in the recapitalization.  Operations
prior to the business combination are those of H&H Glass.
  The
accompanying notes are an integral part of these financial
statements.
 -
F7-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  1.               Summary of Significant
Accounting Policies (continued)
 
 Merger and Corporate
Structure (continued)
 
 The
accompanying financial statements present the historical financial condition,
results of operations and cash flows of H&H Glass prior to the
Merger.
 
 
 Principles of
Consolidation
 
 The
consolidated financial statements include the accounts of IPL Group and its
wholly-owned subsidiaries (collectively the “Company”).  The Company’s
subsidiaries include H&H Glass and Effective Health,
Inc.  Intercompany accounts and transactions have been eliminated upon
consolidation.  The financial statements for the fiscal year ending
December 31, 2008, contain a full year of consolidated activity.  The
financial statements for the fiscal year ending December 31, 2007, contain a
full year of H&H Glass, plus the financial statements of Kaire Holdings,
Inc., and its other subsidiaries from July 2, 2007 (date of
merger).
 As a
result of the application of reverse merger accounting, the consolidated
financial statements are issued under the name of the legal parent (IPL Group)
but are a continuation of the financial statements of the wholly-owned legal
subsidiary (H&H Glass) and not of the legal parent.  The control
of the assets and business of IPL Group is deemed acquired in consideration for
the issue of additional capital by H&H Glass.
 
 
 Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the US requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, and the
disclosures of contingent assets and liabilities at the date of the financial
statements.  The Company has made significant estimates in determining
the allowance for doubtful accounts as discussed in Note 1 and the valuation
allowance on deferred tax assets as discussed in Note 8.  Actual
results could differ from those estimates.
  The
accompanying notes are an integral part of these financial
statements.
 -
F8-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  1.               Summary of Significant
Accounting Policies (continued)
 
 Cash and Cash
Equivalents
 
 For
purposes of the statements of cash flows, cash equivalents include amounts
invested in a money market account with a financial institution.  The
Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.  Cash equivalents are
carried at cost, which approximates market.
 
 
 Revenue
Recognition
 
 The
Company recognizes product revenue provided that (1) persuasive evidence of an
arrangement exists, (2) delivery to the customer has occurred, (3) the selling
price is fixed or determinable and (4) collection is reasonably assured. 
Delivery is considered to have occurred when title and risk of loss have
transferred to the customer.  The price is considered fixed or
determinable when it is not subject to refund or
adjustments.  Outbound shipping and handling charges are included in
net sales.
 
 
 Concentration of credit
risk
 
 The
Company, at times, maintains cash balances in excess of the federally insured
limit of $250,000 and $100,000 per institution in 2008 and 2007,
respectively.  In December 2008, the
Company's bank entered into the FDICTemporary Liquidity Guarantee
Program, which eliminated the ceiling on federally insured
deposits.  The Company had no uninsured balance as of December 31,
2008 or 2007.
 
 The
Company maintains balances in a Money Market Fund that is not federally
insured.  Balances in this fund were $182,218 and $128,553 at December
31, 2008 and 2007, respectively.
 
 The
Company had unsecured investment, available for sale, with a fair value of
$128,553 and $252,231 at December 31, 2008 and December 31, 2007
respectively.
 
 Accounts
receivable are typically unsecured.  The Company performs ongoing
credit evaluations of its customers’ financial condition.  It
generally requires no collateral and maintains reserves for potential credit
losses on customer accounts, when necessary.  As of December 31, 2008,
79.7% of H&H Glass’s Accounts Receivable were attributable to three
customers.  As of December 31, 2007, 86.5% of H&H Glass’s Accounts
Receivable were attributable to three customers.  At December 31, 2008
and 2007, H&H Glass had no reserves for doubtful accounts, as the Company
believes that all of its accounts receivable are fully collectible.
 
 H&H
Glass purchased 100% of its glass from one vendor in 2008 and 2007.  During
the years ended December 31, 2008 and 2007, H&H Glass purchased $14,615,980
and $13,813,347 of products from this vendor, respectively.  This
concentration is due to the relatively small size of H&H Glass’s
orders.  As customer orders have been growing in size, H&H Glass has
begun to seek additional suppliers.
 
 
  The
accompanying notes are an integral part of these financial
statements.
 -
F9-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  1.               Summary of Significant
Accounting Policies (continued)
 
 Net Earnings per
Share
 
 Earnings
per common share is computed on the weighted average number of common shares
outstanding during each year.  Basic earnings per share is computed as
net income/loss applicable to common stockholders divided by the weighted
average number of common shares outstanding for the period.  Diluted
earnings per share reflects the potential dilution that could occur from common
shares issuable through stock options, warrants and other convertible securities
when the effect would be dilutive.
 
 
 Consignment
Inventory
 
 H&H
Glass’s inventory as of December 31, 2008 and 2007, consisted of goods returned
by a customer.  Ordinarily, customers do not have any right of
return.  Included in consignment inventory at December 31, 2008 and
2007, were valuation allowances of $21,382 and $523,859, respectively, to reduce
carrying values to the lower of cost or estimated net realizable
value.
 
 
 Property and
Equipment
 
 Property
and equipment are stated at cost.  Depreciation is computed for
financial reporting purposes using the straight-line method over the estimated
useful lives of the assets.  Repairs and maintenance that do not
extend the useful life of property and equipment are charged to expense as
incurred.  When property and equipment are retired or otherwise
disposed of, the asset and its accumulated depreciation are removed, and the
resulting profit or loss is reflected in income.
 
 The
estimated service lives of property and equipment are principally as
follows:
 
 Computers
      and equipment
              3-5
      yearsFurniture
      & Fixtures
              5-7
      years
 
 
 Income
Taxes
 
 The
Company accounts for its income taxes using the Financial Accounting Standards
Board Statements of Financial Accounting Standards No. 109, “Accounting for
Income Taxes,” which requires the establishment of a deferred tax asset or
liability for the recognition of future deductible or taxable amounts and
operating loss and tax credit carryforwards.  Deferred tax expense or
benefit is recognized as a result of timing differences between the recognition
of assets and liabilities for book and tax purposes during the
year.
 
 Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled.  Deferred tax assets are
recognized for deductible temporary differences and operating loss, and tax
credit carryforwards.  A valuation allowance is established to reduce
the deferred tax asset if it is “more likely than not” that the related tax
benefits will not be realized.
  The
accompanying notes are an integral part of these financial
statements.
 -
F10-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  1.               Summary of Significant
Accounting Policies (continued)
 
 Income Taxes
(continued)
 
 In July
2006, the Financial Accounting Standards Board issued FASB Interpretation No.
48, “Accounting for Uncertainty in Income Taxes.”  The Interpretation
requires that realization of an uncertain income tax position must be estimated
as “more likely than not” (i.e., greater than 50% likelihood of receiving a
benefit) before it can be recognized in the financial
statements.  Further, the Interpretation requires the recognition of
tax benefits recorded in the financial statements to be based on the amount most
likely to be realized assuming a review by tax authorities having all relevant
information.  The Interpretation also clarifies the financial
statement classification of tax-related penalties and interest and sets forth
new disclosures regarding unrecognized tax benefits.  The Company
adopted the Interpretation in the first quarter 2007.  The Company had
minimal impact from adoption of this Interpretation.
 
 
 Fair Value of Financial
Instruments
 
 The
Company measures its financial assets and liabilities in accordance with
generally accepted accounting principles.  SFAS No. 157, “Fair Value
Measurements,” requires certain disclosures regarding the fair value of
financial instruments.  For certain of the Company’s financial
instruments, including cash and cash equivalents, accounts receivable, accounts
payable and accrued liabilities, the carrying amounts approximate fair value due
to their short maturities.
 
 In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” (SFAS
157), which is effective for fiscal years beginning after November 15, 2008, and
for interim periods within those years.  This statement defines fair
value, establishes a framework for measuring fair value and expands the related
disclosure requirements.  The statement indicates, among other things,
that a fair value measurement assumes that the transaction to sell an asset or
transfer a liability occurs in the principal market for the asset or liability
or, in the absence of a principal market, the most advantageous market for the
asset or liability based upon an exit price model.
 
 SFAS
No. 157 prescribes a fair value hierarchy in order to increase consistency
and comparability in fair value measurements and related
disclosures.  The hierarchy is broken down into three levels based on
the reliability of inputs as follows:
 
 •
              Level 1—Valuations
      based on quoted prices in active markets for identical
      assets.  Since valuations are based on quoted prices that are
      readily and regularly available in an active market, valuation of these
      products does not entail a significant degree of
  judgment.
 •
              Level 2—Valuations
      based on quoted prices in markets that are not active or for which all
      significant inputs are observable, directly or
      indirectly.  Quoted prices for similar instruments in active
      markets, quoted prices for identical or similar instruments in markets
      that are not active, or other inputs that are observable or can be
      corroborated by observable market data for substantially the full term of
      the assets or liabilities.
 •
              Level 3—Valuations
      based on inputs that are unobservable and significant to the overall fair
      value measurement.
  The
accompanying notes are an integral part of these financial
statements.
 -
F11-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  1.               Summary of Significant
Accounting Policies (continued)
 
 Stock-Based
Compensation
 
 The
Company has utilizes the fair-value-based method of accounting prescribed in
Financial Accounting Standards Board Statement No. 123R, “Accounting for
Stock-Based Compensation” (“FAS-123R”) for its employee stock option
plans.
 
 FAS-123R
requires companies to apply a fair-value-based measurement method in accounting
for shared-based payment transactions with employees and to record compensation
cost for all stock awards.  The scope of FAS-123R encompasses a wide
range of share-based compensation arrangements, including share options,
restricted share plans, performance-based awards, share appreciation rights, and
employee share purchase plans.  The Company did not have any unvested
employee stock options or warrants outstanding at December 31, 2008 or
2007.
 
 
 Comprehensive Income
(Loss)
 
 Statement
of Financial Accounting Standards No. 130, “Reporting Comprehensive Income”
(SFAS 130) established standards for reporting and display of comprehensive
income (loss) and its components in a full set of general-purpose financial
statements.  Comprehensive income consists of net income and
unrealized gains (losses) on available-for-sale securities.  The
Company does not incur currency translation adjustments because all transactions
with foreign companies are denominated in US Dollars.  The Statement
requires only additional disclosures in the consolidated financial statements
and does not affect the Company’s financial position or results of
operations.
 
 Reclassifications
 
 Certain
amounts in the 2007 financial statements have been reclassified to conform to
the 2008 presentations.  These reclassifications had no effect on
previously reported results of operations or accumulated deficit.
 
 
 Advertising
Costs
 
 The
Company expenses advertising and marketing costs as they are
incurred.  There were no advertising and marketing costs for the years
ended December 31, 2008 and 2007.
 
 Long–Lived
Assets
 
 In
accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144,
“Accounting for the Impairment or Disposal of Long-Lived Assets” the Company
periodically evaluates the carrying value of long-lived assets to be held and
used, including intangible assets, when events and circumstances warrant such a
review.  The carrying value of a long-lived asset is considered
impaired when the anticipated discounted cash flow from such asset is separately
identifiable and is less than its carrying value.  In that event, a
loss is recognized based on the amount by which the carrying value exceeds the
fair market value of the long-lived asset.  Fair market value is
determined primarily using the anticipated cash flows discounted at a rate
commensurate with the risk involved.  Losses on long-lived assets to
be disposed of are determined in a similar manner, except that fair market
values are reduced for the cost to dispose.
 
 1.               Summary of Significant
Accounting Policies (continued)
 
 Recent Accounting
Pronouncements
 
 In
December 2007, the FASB issued FAS No. 141(R), “Applying the
Acquisition Method.”  FAS No. 141(R) provides guidance for the
recognition of the fair values of the assets acquired upon initially obtaining
control, including the elimination of the step acquisition model.  The
standard is effective for acquisitions made in fiscal years beginning after
December 15, 2008, and is not expected to have a significant impact on the
Company’s results of operations, financial condition or
liquidity.  Early adoption is prohibited.
 
 In
December 2007, the FASB issued FAS No. 160, “Accounting for
Noncontrolling Interests.”  FAS No. 160 clarifies the classification
of noncontrolling interests in consolidated statements of financial position and
the accounting for and reporting of transactions between the reporting entity
and holders of such noncontrolling interests.  Under the standard,
noncontrolling interests are considered equity and should be reported as an
element of consolidated equity, and net income will encompass the total income
of all consolidated subsidiaries and there will be separate disclosure on the
face of the income statement of the attribution of that income between the
controlling and noncontrolling interests.  FAS No. 160 is
effective prospectively for fiscal years beginning after December 15, 2008,
and is not expected to have a significant impact on the Company’s results of
operations, financial condition or liquidity.
 
 The
Company also adopted EITF Issue No. 06-11, “Accounting for Income Tax
Benefits on Dividends on Share-Based Payment Awards” as of January 1,
2008.  This EITF indicates that tax benefits of dividends on unvested
restricted stock are to be recognized in equity as an increase in the pool of
excess tax benefits.  Should the related awards forfeit or no longer
become expected to vest, the benefits are to be reclassified from equity to the
income statement.  The adoption of this EITF does not have a
significant impact on the Company’s results of operations, financial condition
or liquidity.
 
 In
September 2006, the FASB issued FAS No. 157, “Fair Value Measurements”
(“FAS 157”) which provides guidance for using fair value to measure assets
and liabilities.  It also responds to investors’ requests for expanded
information about the extent to which companies measure assets and liabilities
at fair value, the information used to measure fair value, and the effect of
fair value measurements on earnings.  FAS 157 applies whenever other
standards require (or permit) assets or liabilities to be measured at fair
value, and does not expand the use of fair value in any new circumstances. 
FAS 157, as originally issued, was effective for fiscal years beginning
after November 15, 2007.  In February 2008, the FASB issued FASB
Staff Position No. FAS 157-2, “Effective Date of FASB Statement
No. 157” (“FSP 157-2”), to partially defer FASB Statement
No. 157, “Fair Value Measurements” (“FAS 157”).  FSP 157-2
defers the effective date of FAS 157 for nonfinancial assets and
nonfinancial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis (at least annually), to
fiscal years, and interim periods within those fiscal years, beginning after
November 15, 2008.  The Company adopted FAS 157 effective
January 1, 2008, and the adoption of FAS 157 had no material impact on the
Company’s results of operations, financial condition or liquidity.
 
  The
accompanying notes are an integral part of these financial
statements.
 -
F12-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  1.               Summary of Significant
Accounting Policies (continued)
 
 Recent Accounting
Pronouncements (continued)
 
 In March
2008, the FASB issued Statement of Financial Accounting Standards No. 161,
“Disclosures about Derivative Instruments and Hedging Activities” (“FAS
161”).  FAS 161 requires entities to provide enhanced disclosures
about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under
Statement of Financial Accounting Standards No. 133, “Accounting for
Derivative Instruments and Hedging Activities” (“FAS 133”) and its related
interpretations, and (c) how derivative instruments and related hedged
items affect an entity’s financial position, financial performance, and cash
flows.  FAS 161 is effective for fiscal years and interim periods
beginning after November 15, 2008, and early adoption is
permitted.  The Company is in the process of reviewing the potential
impact of FAS 161.
 
 In April
2008, the FASB issued FASB Staff Position (“FSP”) No. FAS 142-3, “Determination
of the Useful Life of Intangible Assets,” (“FSP No. 142-3”).  The
intent of this FSP is to improve consistency between the useful life of a
recognized intangible asset under SFAS No. 142, “Goodwill and Other
Intangible Assets” (“SFAS No. 142”), and the period of expected cash flows
used to measure the fair value of the intangible asset under SFAS
No. 141R.  FSP No. 142-3 will require that the determination
of the useful life of intangible assets acquired after the effective date of
this FSP shall include assumptions regarding renewal or extension, regardless of
whether such arrangements have explicit renewal or extension provisions, based
on an entity’s historical experience in renewing or extending such arrangements.
 In addition, FSP No. 142-3 requires expanded disclosures regarding
intangible assets existing as of each reporting period.  FSP 142-3 is
effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those years.  Early
adoption is prohibited.  The Company is currently evaluating the impact
that FSP No. 142-3 will have on its financial statements.
  In
May 2008, the FASB issued Financial Accounting Standard
(FAS) No. 162, “The Hierarchy of Generally Accepted Accounting
Principles.”  The statement is intended to improve financial reporting
by identifying a consistent hierarchy for selecting accounting principles to be
used in preparing financial statements that are prepared in conformance with
generally accepted accounting principles.  Unlike Statement on
Auditing Standards (SAS) No. 69, “The Meaning of Present in Conformity
With GAAP,” FAS No. 162 is directed to the entity rather than the
auditor.  The statement is effective 60 days following the SEC’s
approval of the Public Company Accounting Oversight Board
(PCAOB) amendments to AU Section 411, “The Meaning of Present Fairly
in Conformity with GAAP,” and is not expected to have any impact on the
Company’s results of operations, financial condition or liquidity.
 
 In
June 2008, the Financial Accounting Standards Board (FASB) issued FASB
Staff Position (FSP) Emerging Issues Task Force (EITF) No. 03-6-1,
“Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities.”  Under the FSP, unvested share-based
payment awards that contain rights to receive non-forfeitable dividends (whether
paid or unpaid) are participating securities, and should be included in the
two-class method of computing EPS.  The FSP is effective for fiscal
years beginning after December 15, 2008, and interim periods within those
years, and is not expected to have a significant impact on the Company’s results
of operations, financial condition or liquidity.
 
  The
accompanying notes are an integral part of these financial
statements.
 -
F13-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  1.               Summary of Significant
Accounting Policies (continued)
 
 Recent Accounting
Pronouncements (continued)
 
 In
September 2006, the FASB issued SFAS No. 158, Employer’s Accounting for Defined
Benefit Pension and Other Postretirement Plans, an Amendment of FASB Statements
No. 87, 88, 106 and 132(R), which applies to all plan sponsors who offer defined
benefit postretirement plans.  SFAS No. 158 requires recognition of
the funded status of a defined benefit postretirement plan in the statement of
financial position and expanded disclosures in the notes to financial
statements.  The Company adopted this provision for the year ended
December 31, 2006 and the adoption did not have a material impact on its
consolidated financial position.
 In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities—Including an amendment of FASB
Statement No. 115” (“SFAS 159”).  SFAS 159 expands the use of fair
value accounting but does not affect existing standards, which require assets or
liabilities to be carried at fair value.  Under SFAS 159, a company
may elect to use fair value to measure accounts and loans receivable,
available-for-sale and held-to-maturity securities, equity method investments,
accounts payable, guarantees and issued debt.  The Company did not
elect to use the fair value option for any assets and liabilities that were not
already recorded at fair value.  The adoption of SFAS 159 did not have
a material impact on the Company’s financial statements.
 
 
 Other
recent accounting pronouncements issued by the FASB (including its EITF), the
American Institute of Certified Public Accountants (“AICPA”) and the SEC did not
or are not believed by management to have a material impact on the Company’s
present or future financial statements.
 
 
 
  The
accompanying notes are an integral part of these financial
statements.
 -
F14-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  2.           Convertible Preferred Stock
Transactions
 
 The
agreement with the former holders of IPL Group’s convertible debt stated that
all debt and related convertible interest would be converted into fixed rate
convertible preferred shares at an exercise price fixed on a post-reverse split
basis of $3 per share, and that 882,230 shares would have to be issued in order
to retire the debt.  The agreement stated that the shares would be
issued after the Company completed a reverse stock split in early fiscal 2008
and changed its state of domicile from Delaware to Nevada.
 
 These
shares were issued in June 2008, but the Company has deemed these shares to have
been issued concurrent with the merger.  The Company recorded 882,230
shares at $0.0001 par value to retire debt and interest totaling
$2,646,692.  Preferred shares are convertible into common shares on a
1:1 ratio at a fixed rate of $3 per share.  Preferred shares have no
voting rights, have no redemption rights and earn no
dividends.  Holders of Series A Convertible Preferred Stock are not
permitted to convert their stock into common shares until the Company’s market
capital reaches $15,000,000.  Upon dissolution, liquidation or winding
up of the Company, whether voluntary or involuntary, the holders of the then
outstanding shares of Series A Convertible Preferred Stock shall be entitled to
receive out of the assets of the Company the sum of $0.0001 per share (the
“Liquidation Rate”) before any payment or distribution shall be made on any
other class of capital stock of the Company ranking junior to the Series A
Convertible Preferred Stock.
 
 In
addition, the Company issued 92,500 shares of Series A Convertible Preferred
Stock to retire two promissory notes and interest totaling
$277,500.
 
 Statement
of Financial Accounting Standards No. 150: Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity (FAS 150)
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and
equity.
 
 A
mandatorily redeemable financial instrument shall be classified as a liability
unless the redemption is required to occur only upon the liquidation or
termination of the reporting entity.  A financial instrument issued in
the form of shares is mandatorily redeemable if it embodies an unconditional
obligation requiring the issuer to redeem the instrument by transferring its
assets at a specified or determinable date (or dates) or upon an event certain
to occur.  A financial instrument that embodies a conditional
obligation to redeem the instrument by transferring assets upon an event not
certain to occur becomes mandatorily redeemable—and, therefore, becomes a
liability—if that event occurs, the condition is resolved, or the event becomes
certain to occur.
 
 Based on
the assessment of FAS 150, the Company determined that the preferred shares
are not mandatorily redeemable and are properly classified as equity in the
accompanying financial statements.  This stock has no redemption value
requirement and as such is properly classified as equity for EITF
D-98.
 
 
 3.           Common Stock
Transactions
 
 On
October 19, 2007, the Company issued 4,286,916 shares of its common stock in
connection with the merger with H&H Glass.  3,915,000 shares were
issued to the owners of H&H Glass, 146,916 were issued to the former
officers of Kaire, and 225,000 were issued to Naccarato and Associates for
assistance with the merger.
 
 There
were no issuances of common stock in the year ended December 31,
2008.
 
 
 
 4.           Related Party
Transactions
 
 Allen
Lin
 
 The
Company paid Mr. Allen Lin, President of H&H Glass and a member of the board
of directors of the Company, salary of $240,004 and $210,000 for the years ended
December 31, 2008 and 2007, respectively.
 
 In
November and December 2008, Mr. Lin paid $38,400 of accounting fees on
behalf of the Company.  This amount is reported in the accompanying
financial statements as “Related Party Advances.”  Additionally, Mr.
Lin received Director fees totaling $1,500.
 
 
 Josephine
Lin
 
 Josephine
Lin, Mr. Lin’s wife, is employed by the company and was paid salary of $50,400
and $48,000 for the year ended December 31, 2008 and 2007,
respectively.
 
 
 Steven
Westlund
 
 During
2008, Mr. Westlund, the Company’s Chief Executive Officer and acting Chief
Financial Officer, was paid $6,000 in cash for Director fees.
 
 During
2007, Mr. Westlund received 3% of the equity of the new entity in the form of
315,000 shares of the Company’s common stock, valued at the market price at the
time of $0.01 per share.
 
 
 William
Gresher
 
 During
2008, Mr. Gresher, a member of the Board of Directors, was paid $6,000 in cash
for Director fees.
 
 
 
 5.           Other
Income
 
 During
the year ended December 31, 2008, the Company recorded $64,861 in Other Income
as follows:
 
 Write-offs
      of Accounts Payable and Accrued Expenses:Forgiveness
      of debt by consultants
                  $
                  26,000Expired
      liabilities
                  
                  38,861$
                  64,861
 
 
 
 
  The
accompanying notes are an integral part of these financial
statements.
 -
F15-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  6.           Property and
Equipment
 
 H&H
Glass’s property and equipment at December 31, 2008 and 2007, consisted of the
following:
 
 2008
              
              2007Furniture
      and fixtures
              $
              14,552
              
              $
              14,552Computers
      and equipment
              
              23,452
              
              
              23,45238,004
              
              
              38,004Less
      accumulated depreciation
              
              (30,963)
              
              
              (26,019)Total
              $
              7,041
              
              $
              11,985
 
 
 H&H
Glass recorded depreciation expense for the year ended December 31, 2008 and
2007, of $4,944 and $3,562 respectively.
 
 
 
 7.           Accounts Payable and Accrued
Expenses
 
 Accounts
payable and accrued expenses at December 31, 2008 and 2007, consisted of the
following:
 
 2008
              
              2007Accounts
      payable
              $
              2,925,600
              
              $
              3,017,709Accrued
      professional and related fees
              
              97,183
              
              
              93,225Accrued
      settlements
              
              -
              
              
              25,692Total
              $
              3,022,783
              
              $
              3,136,626
 
 
 
 8.           Income
Taxes
 
 Significant
components of the provision for taxes based on income are as follows for the
years ended December 31:
 
 2008
                      
                      2007Current
                      $
                      129,062
                      
                      $
                      128,923Refunds
                      
                      (142,727)
                      
                      
                      -Deferred
                      
                      72,884
                      
                      
                      (74,457)Total
      provision for income taxes
                      $
                      59,179
                      
                      $
                      54,466
 
 
 During
the year ended December 31, 2008, the Company received a Federal tax refund of
$97,070.  In January 2009, the Company received State tax refunds
totaling $45,657.  The Company recorded these refunds as an offset to
the current year’s income tax expense.
  The
accompanying notes are an integral part of these financial
statements.
 -
F16-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  8.           Income Taxes
(continued)
 
 Significant
temporary differences that give rise to the deferred tax assets as of December
31, 2008 and 2007, follow:
 
 2008
              
              2007Deferred
      tax assets/(liabilities):Inventory
      valuation adjustment
              $
              165,235
              
              $
              224,421California
      franchise tax
              
              -
              
              
              11,822Unrealized
      (gain)/loss on investments
              
              4,491
              
              
              (38,033)Other
              
              (3,016)
              
              
              (1,181)Net
      deferred tax assets
              $
              166,709
              
              $
              197,029
 
 
 The
Company has recorded deferred tax assets of $166,709 and $197,029 at December
31, 2008 and 2007, respectively.  These arise principally from
inventory reserves deductible in the years after the period in which they were
accrued.  The Company has not recorded any valuation allowance against
these deferred tax assets.
 
 Tax
      rate reconciliation2008
              
              2007Federal
      tax rate
              34.0
              %
              
              34.0
              %State
      taxes, net of benefit
              5.8
              %
              
              5.8
              %Non-deductible
      tax expenses
              (28.6)
              %
              
              (61.8)
              %Other
              0.0
              %
              
              0.2
              %Effective
      tax rate
              11.2
              %
              
              (22.0)
              %
 
 
 
 9.                                                              Notes
Payable
 
 In
February 2007, IPL Group issued two promissory notes for an aggregate of
$250,000, with interest on the unpaid principal balance at eight percent (8%)
per annum.  In June 2008, the total principal and accrued interest on
these notes were converted at $3 a share into 92,500 shares of Series A
Convertible Preferred Stock.  Interest accrued on these notes at
December 31, 2008 and 2007, was $0 and $16,667, respectively.
 
 
 
 10.                                             Commitments and
Contingencies
 
 Litigation
 
 The
Company is periodically involved in legal actions and claims that arise as a
result of events that occur in the normal course of operations.  The
Company is not currently aware of any formal legal proceedings or claims that
the Company believes will have, individually or in the aggregate, a material
adverse effect on the Company’s financial position or results of
operations.
 
 
  The
accompanying notes are an integral part of these financial
statements.
 -
F17-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  10.                                   Commitments and
Contingencies (continued)
 
 Leases
 
 Operating
leases
 
 H&H
Glass rents 2,900 square feet of office space for its
headquarters.  The lease began on January 1, 2005, and expired on
August 31, 2008.  It was renewed on September 1, 2008 and expires on
August 31, 2013.  As of December 31, 2008, total monthly base rent is
$8,265.  The Landlord provided H&H a tenant improvement allowance
equal to $45,458 to be allocated equally over the first eleven months of the
lease ($4,133 per month).  Future minimum payments on this lease for
fiscal years following December 31, 2008, are:
 
 Year
      ended December 31,2009
              
              71,4102010
              
              103,8492011
              
              107,4832012
              
              111,245Thereafter
              
              75,874$
              469,861
 
 
 H&H
Glass recorded rent expense for the years ended December 31, 2008 and 2007, of
$68,731 and $83,614, respectively.
 
 
 
 11.           Earnings per
Share
 
 Earnings
per share have been calculated using the weighted average number of shares
outstanding during each period.  The Company’s Convertible Preferred
Shares constituted potentially dilutive securities.  However, the net
loss at December 31, 2007, would have made these securities
anti-dilutive.  Therefore, basic and fully diluted loss per share at
December 31, 2007, are the same.
 
 The
weighted average share at December 31, 2007 was calculated as
follows:  (1) from January 1 through July 2 (the merger date), the
number of common shares issued to effect the merger; and (2) from the merger
date through December 31, 2007, the number of common shares are the actual
number of shares issued by the legal acquirer during that
period.
  The
accompanying notes are an integral part of these financial
statements.
 -
F18-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  11.           Earnings per Share
(continued)
 
 Earnings
(loss) per share of common stock are calculated as follows:
 
 For
      the Years Ended December 31,2008
              
              2007BASIC
      EARNINGS PER SHARE OF
                COMMON
      STOCK:Net
      earnings/(loss) available to common stockholders
              $
              470,889
              
              $
              (302,222)Weighted
      average common shares outstanding
              
              4,504,214
              
              
              4,212,515Basic
      earnings/(loss) per share of common stock
              $
              0.10
              
              $
              (0.07)DILUTED
      EARNINGS PER SHARE OF
                COMMON
      STOCK:Net
      earnings/(loss) available to common stockholders
              $
              470,889
              
              $
              (302,222)Weighted
      average common shares outstanding
              
              4,504,214
              
              
              4,212,515Effect
      of dilutive securities:Options
              
              -
              
              
              -Convertible
      preferred stock
              
              928,733
              
              
              -Weighted
      average common shares outstanding after effect of dilutive
      securities
              
              5,432,947
              
              
              4,212,515Diluted
      earnings/(loss) per share of common stock
              $
              0.09
              
              $
              (0.07)
 
 
 
 12.           Merger with H&H Glass,
Inc.
 
 On July
2, 2007, Kaire completed the merger with H&H Glass, Inc., a privately held
company.  The acquisition has been accounted for as a reverse merger
(recapitalization), with H&H Glass deemed to be the accounting
acquirer.  Accordingly, the historical financial statements presented
herein are those of H&H Glass, as adjusted to give effect to the stock of
Kaire (the legal acquirer) since the Merger.
 
 The
following unaudited pro forma condensed consolidated results of operations have
been prepared as if the merger had occurred at January 1, 2007.
 
 December
      31, 2007Sales
              $
              18,852,647Cost
      of goods sold
              
              (18,082,147)Operating
      expenses
              
              (1,077,350)Net
      other income
              
              6,213Provision
      for income taxes
              
              (54,466)Unrealized
      gain on investments
              
              15,542Net
      income/(loss)
              $
              (339,561)Net
      loss per share – basic and diluted
              $
              (0.08)
 
 
 
 12.           Merger with H&H Glass,
Inc. (continued)
 
 The pro
forma information is presented for informational purposes only and is not
necessarily indicative of the results of operations that actually would have
been achieved had the merger been consummated as of that time, nor is it
intended to be a projection of future results.
 
 
 
 13.           Fair Value
Measurements
 
 In
accordance with SFAS 157, the following table represents the Company’s fair
value hierarchy for its short-term investments measured at fair value on a
recurring basis as of December 31, 2008:
 
 Securities
      Owned
              Level
      1
              
              Level
      2
              
              Level
      3
              
              TotalInvestment
      security, available for sale
              $
              -
              
              $
              -
              
              $
              128,553
              
              $
              128,553Total
              $
              -
              
              $
              -
              
              $
              128,553
              
              $
              128,553
 
 
 The
following table summarizes the Company’s available-for-sale securities by the
contractual maturity date as of December 31, 2008:
 
 EstimatedCost
              
              Fair
      ValueDue
      within one year
              $
              -
              
              $
              -Due
      within one to two years
              
              -
              
              
              -No
      single maturity date
              
              141,762
              
              
              128,553Total
      available-for-sale securities
              $
              141,762
              
              $
              128,553
 
 
 At
December 31, 2008, the Company had the following available-for-sale
securities that were in an unrealized loss position but were not deemed to be
other-than-temporarily impaired, adjusted in connection with the Company’s
provision for income taxes.  At December 31, 2007, the Company had the
following available-for-sale securities that were in an unrealized gain
position, adjusted in connection with the Company’s provision for income
taxes:
 
 Years
      Ended December 31,2008
                      
                      2007Unrealized
      gainsGross
      accumulated unrealized gains
                      $
                      -
                      
                      $
                      110,469Adjustment
      from deferred tax assets
                      
                      -
                      
                      
                      (38,033)Net
      accumulated unrealized gains
                      
                      -
                      
                      
                      72,436Unrealized
      lossesGross
      accumulated unrealized losses
                      
                      (13,209)
                      
                      
                      -Adjustment
      from deferred tax assets
                      
                      4,491
                      
                      
                      -Net
      accumulated unrealized gains/(losses)
                      $
                      (8,718)
                      
                      $
                      72,436
 
  The
accompanying notes are an integral part of these financial
statements.
 -
F19-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  13.           Fair Value Measurements
(continued)
 
 These
Level 3 securities were valued by the investing agent, Kayne Anderson
Capital Advisors, using independent pricing sources that used proprietary
models.  The changes in Level 3 assets measured at fair value on
a recurring basis for the year ended December 31, 2008 were:
 
 Fair
      ValueMeasurementsUsing
      SignificantUnobservableInputs
      (Level 3)Balance
      at December 31, 2007
                  $
                  252,231Total
      unrealized gains included in other comprehensive loss
                  
                  (123,678)Total
      (realized/unrealized) losses included in net loss
                  
                  -Purchases,
      sales, issuances and settlements, net
                  
                  -Transfers
      in and/or out of Level 3
                  
                  -Balance
      at December 31, 2008
                  $
                  128,553
 
 
 
 14.           Securities Available for
Sale
 
 In 2004,
the Company invested $141,762 in a real estate partnership managed by Kayne
Anderson Capital Advisors, which it classified as available for
sale.  The net fair value of the securities at December 31, 2008 and
2007, were $128,553 and $252,231, respectively.  A Federal tax rate of
34% is assumed.
 
 Amounts
      Reported in Net Income and Other Comprehensive Incomefor
      the Years Ended December 31, 2008 and 20072008
              
              2007Net
      income:Gain
      on sale of securities
              $
              -
              
              $
              -Income
      tax expense
              
              -
              
              
              -Net
      gain realized in net income
              
              -
              
              
              -Other
      comprehensive income:Holding
      gain/(loss) arising during period, net of tax
              
              (81,154)
              
              
              15,542Reclassification
      adjustment, net of tax
              
              -
              
              
              -Net
      gain (loss) recognized in other comprehensive income
              
              (81,154)
              
              
              15,542Total
      impact on comprehensive income
              $
              (81,154)
              
              $
              15,542
 
 
 
  The
accompanying notes are an integral part of these financial
statements.
 -
F20-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  15.           Subsequent
Events
 
 In March
2009, International Packaging and Logistics Group, Inc. (“IPL Group Inc.”)
(Buyer), acquired a majority interest in EZ LINK Corporation (“EZ LINK”)
(Seller) which is a logistics company headquartered in Taiwan.  EZ
Link was established in July 2003 under the Company Law of Republic of
China.  EZ LINK is a full service international freight forwarder, who
has current networks to locations in China, Hong Kong, South East Asia, North
East Asia, North America, Latin America and Europe.  In fiscal year
2007, EZ LINK had audited net revenues of approximately $6.6 million $US with
fiscal year 2008 net revenues expected to be approximately $8.0 million
$US.  EZ LINK will be operated as a majority owned subsidiary of IPL
Group Inc.    We are waiting for the PRC Taiwan
approval.
 The
capital stock of the EZ LINK consists of 1,350,000 authorized shares of common
stock, NT$10 par value, of which 1,350,000 shares are currently issued and
outstanding and held by Seller (“Shares”).  Upon the terms and
conditions set forth below, Seller desires to assign fifty-one percent (51%) of
EZ LINK shares, or 688,500 shares in the aggregate, to Buyer, such that,
following such transaction, EZ KINK will be a majority owned subsidiary of
Buyer.  The parties agree that 51% ownership of the issued and
outstanding shares of EZ LINK has a present estimated market value of
approximately US$1,600,000 (the “Purchase Price”).
 
 (a)
              One
      half of the Purchase Price amount (US$800,000) shall be paid in common
      shares of IPL Group, Inc. as of the closing date based on a per share
      value of US$1.75, or 457,143 shares.  Such shares shall bear the
      appropriate restrictions.
 
 (b)
              One
      half of the Purchase Price amount (US$800,000) shall be paid in Series B
      Convertible preferred shares which will be convertible into shares of IPL
      Group, Inc. common shares on a one for one basis.  The preferred
      shares shall be valued at US$2.00 per share, and will be exercisable
      pursuant to the terms and conditions specified in the purchase
      agreement.
 
 
 
 
 
 
  The
accompanying notes are an integral part of these financial
statements.
 -
F21-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007