UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





x Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934





For the
quarterly period ended September 30, 2009 or





o 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)





Nevada
            
            13-3367421(State
      or Other Jurisdiction of
            
            (I.R.S.
      EmployerIncorporation
      or Organization)
            
            Identification
      No.)





7700
Irvine Center Drive, Suite 870


Irvine,
California


(Address
of Principal Executive Offices)





92608


(Zip
Code)





(949)
861-3560


(Registrant’s
Telephone Number, Including Area Code)








(Former
name, former address and former fiscal year, if changed since last
report)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.


x Yes       o No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
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 Exchange
Act Rule 12b-2 of the Exchange Act).


o
Yes      x No





The
number of shares outstanding of the Issuer’s common stock as of September 30,
2009 was 4,504,214





International
Packaging and Logistics Group, Inc., and Subsidiaries
 Condensed
Consolidated Balance Sheets
 As
of September 30, 2009, and December 31, 2008





September
      30, 2009
            
            December
      31, 2008Current
      Assets
            (unaudited )
            
            (audited)Cash
            $
            27,584
            
            $
            64,967Short-term
      investments
            
            179,112
            
            
            128,553Accounts
      receivable (net of reserve for doubtfulaccounts
      of $0 and $0, respectively)
            
            2,712,862
            
            
            4,493,107Income
      tax refund receivable
            
            -
            
            
            25,091Prepaid
      taxes
            
            162,838
            
            
            -Total
      Current Assets
            
            3,082,396
            
            
            4,711,718Property,
      plant and equipment (net of accumulateddepreciation
      of $33,146 and $32,096, respectively)
            
            4,858
            
            
            7,041Other
      AssetsDeposits
            
            10,433
            
            
            16,928Deferred
      tax assets
            
            179,997
            
            
            166,709Total
      Other Assets
            
            190,430
            
            
            183,637Total
      Assets
            $
            3,277,684
            
            $
            4,902,396Liabilities
      and Stockholders’ EquityCurrent
      LiabilitiesAccounts
      payable and accrued expenses
            $
            1,567,193
            
            $
            3,022,783Income
      taxes payable
            
            -
            
            
            93,260Related
      party advances
            
            38,400
            
            
            38,400Accrued
      liabilities - Kaire Holdings
            
            237,045
            
            
            237,045Total
      Current Liabilities
            
            1,842,638
            
            
            3,391,488Stockholders’
      EquityConvertible
      preferred stock: $0.0001 par value, 50,000,000 sharesauthorized,
      974,730 issued and outstanding
            
            98
            
            
            98Common
      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
            
            
            1,346,231Accumulated
      other comprehensive income/(loss)
            
            24,651
            
            
            (8,718)Retained
      earnings
            
            59,562
            
            
            168,793Total
      Stockholders’ Equity
            
            1,435,046
            
            
            1,510,908Total
      Liabilities and Stockholders’ Equity
            $
            3,277,684
            
            $
            4,902,396





See
accompanying notes.
 - 1
-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Condensed
Consolidated Statements of Operations
 For
the Three and Nine Months Ended September 30, 2009 and 2008
 (Unaudited)














Three
      Months Ended September 30,
            
            Nine
      Months Ended September 30,2009
            
            2008
            
            2009
            
            2008Revenues
            $
            4,702,489
            
            $
            4,693,575
            
            $
            11,306,358
            
            $
            13,497,299Cost
      of Goods Sold
            
            (4,479,756)
            
            
            (4,244,704)
            
            
            (10,670,113)
            
            
            (12,212,930)Gross
      Profit
            
            222,733
            
            
            448,871
            
            
            636,245
            
            
            1,284,369Operating
      ExpensesAdministrative
      expenses
            
            141,975
            
            
            110,333
            
            
            354,895
            
            
            442,308Rent
            
            
            25,651
            
            
            15,122
            
            
            49,974
            
            
            55,861Salaries
      and wages
            
            104,786
            
            
            98,522
            
            
            371,820
            
            
            349,009Total
      Operating Expenses
            
            272,412
            
            
            223,977
            
            
            776,689
            
            
            847,178Income
      (Loss)from Operations
            
            (49,679)
            
            
            224,894
            
            
            (140,444)
            
            
            437,191Other
      Income/(Expenses)Interest
      income
            
            39
            
            
            3,413
            
            
            735
            
            
            9,442Interest
      expense
            
            -
            
            
            -
            
            
            -
            
            
            (10,833)Forgiveness
      of debt
            
            -
            
            
            -
            
            
            -
            
            
            26,000Total
      Other Income/(Expenses)
            
            39
            
            
            3,413
            
            
            735
            
            
            24,609Net
      Income/(Loss) before Income Taxes
            
            (49,640)
            
            
            228,307
            
            
            (139,709)
            
            
            461,800Income
      tax benefit/(expense)
            
            (145)
            
            
            8,661
            
            
            30,478
            
            
            (110,232)Net
      Income/(Loss) available to common stockholders
            
            (49,785)
            
            
            236,968
            
            
            (109,231)
            
            
            351,568Comprehensive
      IncomeUnrealized
      gain/(loss) on investments
            
            17,627
            
            
            (49,566)
            
            
            33,369
            
            
            (69,013)Comprehensive
      Income/(Loss)
            $
            (32,158)
            
            $
            187,402
            
            $
            (75,862)
            
            $
            282,555Earnings/(loss)
      per weighted average share of common stock - basic
            $
            (0.01)
            
            $
            0.05
            
            $
            (0.02)
            
            $
            0.08Earnings/(loss)
      per weighted average share of common stock - diluted
            $
            (0.01)
            
            $
            0.04
            
            $
            (0.02)
            
            $
            0.06Weighted
      average shares outstanding - basic
            
            4,504,214
            
            
            4,504,214
            
            
            4,504,214
            
            
            4,504,214Weighted
      average shares outstanding - diluted
            
            4,504,214
            
            
            5,478,944
            
            
            4,504,214
            
            
            5,417,502





See
accompanying notes.
 - 2
-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 Condensed
Consolidated Statements of Cash Flows
 For
the Nine Months Ended September 30, 2009 and 2008
 (Unaudited)





Nine
      Months Ended September 30,2009
            
            2008Cash
      flows from operating activities:Net
      income/(loss)
            $
            (109,231)
            
            $
            351,568Adjustments
      to reconcile net income/(loss) to net cash usedin
      operating activities:Depreciation
      expense
            
            2,183
            
            
            3,811Write
      off of accrued liabilities
            
            -
            
            
            (26,000)Preferred
      shares issued for payment of interest
            
            -
            
            
            10,833Changes
      in operating assets and liabilities:Decrease
      in accounts receivable
            
            1,780,245
            
            
            25,407Decrease
      in inventory
            
            -
            
            
            3,618Decrease
      (increase) in income tax refund receivable
            
            25,091
            
            
            (10,897)(Increase)
      decrease in prepaid taxes
            
            (162,838)
            
            
            15,002Decrease
      (increase) in deposits
            
            6,495
            
            
            (10,432)Increase
      in deferred tax asset
            
            (30,478)
            
            
            -(Decrease)
      increase in income taxes payable
            
            (93,260)
            
            
            203,197Decrease
      in accounts payable and accrued expenses
            
            (1,455,590)
            
            
            (648,833)Net
      cash used in operating activities
            
            (37,383)
            
            
            (82,726)Cash
      flow from investing activities:Net
      cash used in investing activities
            
            -
            
            
            -Cash
      flow from financing activities:Net
      cash provided by financing activities
            
            -
            
            
            -Net
      decrease in cash and cash equivalents
            
            (37,383)
            
            
            (82,726)Cash
      and cash equivalents at beginning of period
            
            64,967
            
            
            210,082Cash
      and cash equivalents at end of period
            $
            27,584
            
            $
            127,356Supplementary
      disclosures of cash flow informationCash
      paid during the year forInterest
            $
            -
            
            $
            -Taxes
            $
            256,098
            
            $
            3,712Unrealized
      gain/(loss) on short-term investments, net of tax
            $
            33,369
            
            $
            (69,013)








During
the nine months ended September 30, 2008, the Company entered into the following
non-cash transactions:


•
            Issued
      92,500 shares of Series A Convertible Preferred Shares in lieu of payment
      of promissory notes valued at $250,000 and related accrued interest valued
      at $27,500.





See
accompanying notes.
 - 3
-
 
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 September
30, 2009


1.           Summary of Significant
Accounting Policies





Basis of
Presentation





These
interim consolidated financial statements represent the financial activity of
International Packaging and Logistics Group, Inc., (“IPL Group” or “the
Company”) a publicly traded company listed and traded on the NASDAQ Over the
Counter Bulletin Board (“OTCBB”).  The interim condensed consolidated
financial statements for the three and nine months ended September 30, 2009 and
2008, and the consolidated financial statements for the year ended December 31,
2008, have been prepared in accordance with accounting principles generally
accepted in the United States.  The interim condensed consolidated
financial statements include the accounts of the Company and its
subsidiaries.  All intercompany transactions have been
eliminated.  The Company’s fiscal year ends on December
31.





The
foregoing unaudited interim condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions for Form 10-Q and Regulation S-X as
promulgated by the Securities and Exchange Commission
(“SEC”).  Accordingly, these financial statements do not include all
of the disclosures required by generally accepted accounting principles in the
United States of America for complete financial statements.  These
unaudited interim financial statements should be read in conjunction with the
audited financial statements and the notes thereto included on Form 10-K for the
period ended December 31, 2008.  In the opinion of management, the
unaudited interim financial statements furnished herein include all adjustments,
all of which are of a normal recurring nature, necessary for a fair statement of
the results for the interim period presented.





Operating
results for the three- and nine-month periods ended September 30, 2009, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2009.








Nature of
Operations





On July
2, 2007, International Packaging and Logistics Group, Inc., 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
post-split 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.








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.





5
 
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 September
30, 2009


1.           Summary of Significant
Accounting Policies (continued)





Organization and Line of
Business (continued)





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.





In March
2009, IPL Group acquired a majority interest in EZ LINK Corporation (“EZ LINK”),
which is a logistics company headquartered in Taiwan.  The Company
received approval from the People’s Republic of China (“PRC”) in late June 2009
and as a result, the actual acquisition date was scheduled to be completed on
July 1, 2009.  However the acquisition was cancelled when the PRC also
informed the EZ Link selling shareholders that they would be personally assessed
a large tax on the gain from the sale of their share of EZ LINK.  The
sellers withdrew, and the acquisition did not take place.








Principles of
Consolidation





The
interim condensed 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 condensed consolidated
balance sheets as of September 30, 2009, and December 31, 2008, contain the
balances of H&H Glass, IPL Group and its other subsidiaries as of those
dates.  The condensed consolidated statements of operations for the
three and nine-month periods ending September 30, 2009 and 2008, contain the
consolidated results of operations of H&H Glass and of IPL Group and its
other subsidiaries.








Estimates





The
preparation of interim condensed financial statements in accordance with
generally accepted accounting principles in the United States of America
requires the use of estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities known
to exist as of the date the financial statements are published, and the reported
amounts of revenues and expenses during the reporting
period.  Uncertainties with respect to such estimates and assumption
are inherent in the preparation of the Company’s financial statements;
accordingly, it is possible that the actual results could differ from these
estimates and assumptions that could have a material effect on the reported
amounts of the Company’s financial position and results of
operations.








Cash and Cash
Equivalents





The
Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.  Cash equivalents include
amounts invested in a money market account with a financial
institution.  Cash equivalents are carried at cost, which approximates
market.


6
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 September
30, 2009


1.           Summary of Significant
Accounting Policies (continued)





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 per institution.  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 September 30,
2009, or December 31, 2008.





The
Company maintains balances in a money market fund that is not federally
insured.  Balances in this fund were $108,190 and $189,822 at
September 30, 2009, and December 31, 2008, respectively.





The
Company had an unsecured available-for-sale investment with a fair value of
$179,112 and $128,553 at September 30, 2009, and December 31, 2008,
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 September 30,
2009, 77.9% of H&H Glass’s Accounts Receivable were attributable to three
customers.  As of December 31, 2008, 79.7% of H&H Glass’s Accounts
Receivable were attributable to three customers.  At September 30,
2009, and December 31, 2008,  H&H Glass had no reserves for
doubtful accounts, as the Company believed that all of its accounts receivable
are fully collectible at that time.





H&H
Glass purchased 100% of its glass from one vendor in the three- and nine-month
periods ending September 30, 2009 and 2008.  During the three-month periods
ending September 30, 2009 and 2008, H&H Glass purchased $3,972,239 and
$3,658,754 of products from this vendor, respectively.  During the
nine-month periods ending September 30, 2009 and 2008, H&H Glass purchased
$9,239,337 and $10,250,674 of products from this vendor, respectively. 
This concentration is due to the relatively small size of H&H Glass’s
orders.  H&H Glass’s specialized short-run custom orders generally are
not attractive to larger glass manufacturers.  As customer orders have been
growing in size, H&H Glass has begun to seek and use additional
suppliers.








Net Earnings/(Loss) per
Share





Earnings/(loss)
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 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 convertible preferred shares, stock options, warrants and other
convertible securities when the effect would be dilutive.







7


1.           Summary of Significant
Accounting Policies (continued)





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.  The Company uses other depreciation
methods (generally accelerated) for tax purposes.  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 from the accounts, 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” (codified within ASC 272, 740, 805, 830, 942, 958 and 995), 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.





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 recognition of
tax benefits recorded in the financial statements must be based on the amount
most likely to be realized assuming a review by tax authorities having all
relevant information.








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” (codified within ASC 820-10), 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.


8
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 September
30, 2009


1.           Summary of Significant
Accounting Policies (continued)





Fair Value of Financial
Instruments (continued)





In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” (SFAS
157, codified within ASC 820-10)), 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.








Stock-Based
Compensation





The
Company has utilizes the fair-value-based method of accounting for its employee
stock option plans.





The
Company to applies a fair-value-based measurement method in accounting for
shared-based payment transactions with employees and to record compensation cost
for all stock awards.  Share-based compensation arrangements, include
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
September 30, 2009, or December 31, 2008.








Comprehensive Income
(Loss)





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.


9
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 September
30, 2009


1.           Summary of Significant
Accounting Policies (continued)





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.








Recent Accounting
Pronouncements





In April
2009, the FASB issued three FSPs intended to provide additional application
guidance and enhance disclosures regarding fair value measurements and
impairments of securities:





•
            
            FSP
      No. FAS 157-4, “Determining Fair Value When the Volume and Level of
      Activity for the Asset or Liability Have Significantly Decreased and
      Identifying Transactions That Are Not Orderly” (ASC Topic
      820-10-65-4);





•
            
            FSP
      No. FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of
      Financial Instruments” (ASC Topic 825-10-65-1);
  and





•
            
            FSP
      No. FAS 115-2 and FAS 124-2, “Recognition and Presentation of
      Other-Than-Temporary Impairments” (ASC Topic
  320-10-65-1).





ASC Topic
820-10-65-4 provides additional guidance for estimating fair value in accordance
with SFAS No. 157, “Fair Value Measurements” (ASC Topic 820), when the
volume and level of activity for the asset or liability have significantly
decreased in relation to normal market activity. ASC Topic 820-10-65-4 also
includes guidance on identifying circumstances that indicate a transaction is
not orderly. The Company adopted ASC Topic 820-10-65-4 as of March 30,
2009. As the new standard only clarified existing guidance, there was no
material effect on the Company’s consolidated financial statements and
notes.





ASC Topic
825-10-65-1 amends FASB Statement No. 107, “Disclosures about Fair Value of
Financial Instruments” (ASC Topic 825), to require disclosures about fair value
of financial instruments for interim reporting periods of publicly traded
companies as well as in annual financial statements. This new standard also
amends Accounting Principles Board (APB) Opinion No. 28, “Interim Financial
Reporting” (ASC Topic 270), to require those disclosures in summarized financial
information at interim reporting periods. The Company adopted ASC Topic
825-10-65-1 as of March 30, 2009.  The implementation of this
standard did not have a material effect on the Company’s financial
statements.





10
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 September
30, 2009


1.           Summary of Significant
Accounting Policies (continued)





Recent Accounting
Pronouncements (continued)





ASC Topic
320-10-65-1 amends the other-than-temporary impairment guidance for debt
securities to make the guidance more operational and to improve the presentation
and disclosure of other-than-temporary impairments on debt and equity securities
in the financial statements. This new standard does not amend existing
recognition and measurement guidance related to other-than-temporary impairments
of equity securities. The Company adopted ASC Topic 320-10-65-1 as of
March 30, 2009.  The implementation of this standard did not have
a material effect on the Company’s financial statements.





In June
2009, the FASB issued SFAS No. 165, “Subsequent Events” (ASC Topic 855).
ASC Topic 855 establishes the criteria for subsequent events, including:
(a) the period after the balance sheet date during which management of a
reporting entity shall evaluate events or transactions that may occur for
potential recognition or disclosure in the financial statements; (b) the
circumstances under which an entity shall recognize events or transactions
occurring after the balance sheet date in its financial statements; and
(c) the disclosures that an entity shall make about events or transactions
that occurred after the balance sheet date.  The Company has evaluated
all subsequent events through November 7, 2009, the date of this filing, and
determined there are no material recognized or unrecognized subsequent
events.





In
November of 2008, the SEC released a proposed roadmap regarding the potential
use by U.S. issuers of financial statements prepared in accordance with
International Financial Reporting Standards (“IFRS”).  IFRS is a
comprehensive series of accounting standards published by the International
Accounting Standards Board (“IASB”).  Under the proposed roadmap, the
Company may be required in fiscal 2015 to prepare financial statements in
accordance with IFRS.  However, the SEC will make a determination in
2011 regarding the mandatory adoption of IFRS.  The Company is
currently assessing the impact that this potential change would have on its
consolidated financial statements, and the Company will continue to monitor the
development of the potential implementation of IFRS.





In June
2009, the Financial Accounting Standards Board (“FASB”) established the FASB
Accounting Standards Codification (the “Codification”) to become the source of
authoritative U.S. GAAP recognized by the FASB to be applied by
nongovernmental entities. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative
U.S. GAAP for SEC registrants. The Codification was effective for financial
statements issued for interim and annual periods ending after September 15,
2009. The Codification superseded all then-existing non-SEC accounting and
reporting standards on July 1, 2009, and all other non-grandfathered
non-SEC accounting literature not included in the Codification became
non-authoritative. The adoption of the Codification did not have a material
impact on the Company’s consolidated financial statements and results of
operations.





Effective
at the start of a reporting entity’s first fiscal year beginning after
November 15, 2009, or January 1, 2010, for a calendar year-end entity,
the Codification will require more information about transfers of financial
assets, including securitization transactions, and transactions where entities
have continuing exposure to the risks related to transferred financial assets.
The Codification eliminates the concept of a “qualifying special-purpose
entity,” changes the requirements for derecognizing financial assets, and
requires additional disclosures about an entity’s involvement with variable
interest entities and any significant changes in risk exposure due to that
involvement. A reporting entity will be required to disclose how its involvement
with a variable interest entity affects the reporting entity’s financial
statements. The Company does not expect the adoption of these Codification
updates to have a material impact on its consolidated financial statements and
results of operations.


11
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 September
30, 2009


1.           Summary of Significant
Accounting Policies (continued)





Recent Accounting
Pronouncements (continued)





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.











2.           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 recorded 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,” codified within ASC 480-10) 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.





The
Company determined that the preferred shares are not mandatorily redeemable and
are properly classified as equity in the accompanying financial
statements.


12
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 September
30, 2009








3.           Common Stock
Transactions





Common stock transactions
during the nine months ending September 30, 2009:





None.








Common stock transactions
during the nine months ending September 30, 2008:





None.











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 $52,500 and $50,000 for the three-month
periods ended September 30, 2009 and 2008, respectively and $197,500 and
$150,000 for the nine-month periods ended September 30, 2009 and 2008,
respectively.








Josephine
Lin





Josephine
Lin, Mr. Lin’s wife, is employed by the Company and was paid salary of $13,375
and $12,600 for the three-month periods ended September 30, 2009 and 2008,
respectively and $40,125 and $37,800 for the nine-month periods ended September
30, 2009 and 2008, respectively.








Steven
Westlund





For the
three-month periods ending September 30, 2009 and 2008, Mr. Westlund, the
Company’s Chief Executive Officer and acting Chief Financial Officer, was paid
$1,500 and $1,500 respectively in cash for Director fees.





For the
nine-month periods ending September 30, 2009 and 2008, Mr. Westlund, the
Company’s Chief Executive Officer and acting Chief Financial Officer, was paid
$4,500 and $4,500 respectively in cash for Director fees.








William
Gresher





For the
three-month periods ending September 30, 2009 and 2008, Mr. Gresher, a member of
the Board of Directors, was paid $1,500 and $1,500 respectively in cash for
Director fees.





For the
nine-month periods ending September 30, 2009 and 2008, Mr. Gresher, a member of
the Board of Directors, was paid $4,500 and $4,500 respectively in cash for
Director fees.








13


5.           Property and
Equipment





H&H
Glass’s property and equipment at September 30, 2009 and December 31, 2008,
consisted of the following:





2009
            
            2008Furniture
      and fixtures
            $
            14,552
            
            $
            14,552Computers
      and equipment
            
            23,452
            
            
            23,45238,004
            
            
            38,004Less
      accumulated depreciation
            
            (33,146)
            
            
            (30,963)Total
            $
            4,858
            
            $
            7,041








H&H
Glass recorded depreciation expense for the three-month period ending September
30, 2009 and 2008, of $0 and $1,133, respectively and for the nine-month period
ending September 30, 2009 and 2008, of $2,183 and 3,811
respectively.








14





6.           Commitments and
Contingencies





Leases





Operating
leases





H&H
Glass rents 2,887 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 September 30, 2009, 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.  Future minimum payments on this lease for fiscal years
following September 30, 2009, are:





Year
      ended December 31,2009
            $
            25,6632010
            
            103,8492011
            
            107,4832012
            
            111,2452013
            
            75,874$
            424,114








H&H
Glass recorded rent expense of $25,651 and $15,122 for the three months ending
September 30, 2009 and 2008, respectively, and $49,974 and $55,861 for the nine
months ending September 30, 2009 and 2008, respectively.











6.           Commitments and
Contingencies (continued)





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.











7.           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 for the three and nine months ended September 30, 2009, would have made
these securities anti-dilutive.  Therefore, basic and fully diluted
loss per share for the three and nine months ended September 30, 2009, are the
same.





Earnings
(loss) per share of common stock are calculated as follows:





For
      the Three Months Ended September 30,2009
            
            2008BASIC
      EARNINGS PER SHARE OF COMMON STOCK:Net
      earnings (loss) available to common stockholders
            $
            (49,785)
            
            $
            236,968Weighted
      average common shares outstanding
            
            4,504,214
            
            
            4,504,214Basic
      earnings/(loss) per share of common stock
            $
            (0.01)
            
            $
            0.05DILUTED
      EARNINGS PER SHARE OF COMMON STOCK:Net
      earnings (loss) available to common stockholders
            $
            (49,785)
            
            $
            236,968Weighted
      average common shares outstanding
            
            4,504,214
            
            
            4,504,214Effect
      of dilutive securities:Convertible
      preferred stock
            
            -
            
            
            974,730Weighted
      average common shares outstanding after effect of dilutive
      securities
            
            4,504,214
            
            
            5,478,944Diluted
      earnings/(loss) per share of common stock
            $
            (0.01)
            
            $
            0.04





15
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 September
30, 2009


7.           Earnings per Share
(continued)





For
      the Nine Months Ended September, 302009
            
            2008BASIC
      EARNINGS PER SHARE OF COMMON STOCK:Net
      earnings (loss) available to common stockholders
            $
            (109,231)
            
            $
            351,568Weighted
      average common shares outstanding
            
            4,504,214
            
            
            4,504,214Basic
      earnings/(loss) per share of common stock
            $
            (0.02)
            
            $
            0.08DILUTED
      EARNINGS PER SHARE OF COMMON STOCK:Net
      earnings (loss) available to common stockholders
            $
            (109,231)
            
            $
            351,568Weighted
      average common shares outstanding
            
            4,504,214
            
            
            4,504,214Effect
      of dilutive securities:Convertible
      preferred stock
            
            -
            
            
            913,288Weighted
      average common shares outstanding after effect of dilutive
      securities
            
            4,504,214
            
            
            5,417,502Diluted
      earnings/(loss) per share of common stock
            $
            (0.02)
            
            $
            0.06











8.           Fair Value
Measurements





The
Company designates cash equivalents (consisting of money market funds) and
investments in securities of publicly traded companies as Level
1.  The total amount of the Company’s investment classified as Level 3
is $179,112.





In
January 2009, the Company adopted SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities, including an amendment of FASB
Statement No. 115” (codified within ASC 470-20, 825-10 and
954-825).  SFAS No. 159 permits the Company to elect fair value as the
initial and subsequent measurement attribute for certain financial assets and
liabilities that are not otherwise required to be measured at fair value on an
instrument-by-instrument basis.  If the Company elects the fair value
option, it would be required to recognize subsequent changes in fair value in
the Company’s earnings.  This standard also establishes presentation
and disclosure requirements designed to improve comparisons between entities
that choose different measurement attributes for similar types of assets and
liabilities.  While SFAS No. 159 became effective for the Company in
2009, the Company did not elect the fair value measurement option for any of its
existing assets and liabilities and accordingly SFAS No. 159 did not have any
impact on the Company’s consolidated financial statements.  The
Company could elect this option for new or substantially modified assets and
liabilities in the future.





Fair
value of financial instruments:  The carrying amounts of financial
instruments, including cash and cash equivalents, short-term investments,
accounts payable, accrued expenses approximated fair value as of September 30,
2009, and December 31, 2008, because of the relative short-term nature of these
instruments.  The fair value of the Company’s available-for-sale
securities was $179,112 at September 30, 2009, and these securities are
classified as Level 3.






16





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








SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS’








This
Quarterly Report on Form 10-Q 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 container can contain anywhere from 3,000 to 300,000
pieces.





The acquisition of EZ Link Corporation
has been cancelled.  The Company was waiting for the People’s Republic
of China (“PRC”) approval in order to confirm the acquisition.  The
Company received the approval from the PRC Taiwan however, the acquisition was
cancelled when the EZ Link selling shareholders were informed by the PRC Taiwan
that they would be personally assessed a large tax on the gain from the sale of
their share of EZ Link if it was consummated.














17





Plan of
Operation





Our
general operating plan is as follows:





Short
Term





·Continue
      growing revenue and profits through the existing
  business;·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;·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 and continued through the third quarter of 2009.  As a
      result IPLO has had to 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.








Long
Term





·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





Three and
nine months ending September 30, 2009 and 2008





Revenue:





For the
three months ending September 30, 2009 and 2008, revenues were $4,702,489 and
$4,693,575 respectively, for an increase of $8,914 (0.2%) over the same period
in 2008.  The increase in revenue during the third quarter is a mainly
due the recovery of our worldwide run-rate.  Our fourth quarter should
be comparable to last prior year’s fourth quarter as well.  Our
revenues for the nine months ending September 30, 2009 and 2008 were $11,306,358
and $13,497,299 respectively, for a decrease of $2,190,941 (16.2%) over the same
period in 2008.  The year-to-date decrease in revenue is a mainly due
to two factors, the first being the slowdown in the worldwide economy and
second, most of our customers placed large inventory orders in the final quarter
of 2008 which resulted in fewer orders in the quarters ending March 31, 2009 and
June 30, 2009.  As mentioned above the run rate was back on track for
the third quarter and it is anticipated that the fourth quarter will be on track
with prior year as well.





18





Cost of Goods
Sold:





Cost of
goods sold for the three months ending September 30, 2009 and 2008 were
$4,479,756 and $4,244,704 respectively, for an increase of $235,052 (5.5%) over
the same period in 2008. This increase is a direct result of the increase in
sales. Cost of goods sold for the nine months ending September 30, 2009 and 2008
were $10,670,113 and $12,212,930 respectively, for a decrease of $1,542,817
(12.6%) over the same period in 2008   This year to date decrease is
mainly a result of a decrease in sales, the components being: 1) a decrease in
cost of glass $1,011,337 (9.9%) from prior year’s cost, 2) decrease in ocean
freight of $435,402 (26.4%), and 3) a decrease in other cost of goods sold items
of $96,078 (30.6%).








Gross
Profit:





Gross
profit was $222,733 and $448,871for the three months ending September 30, 2009
and 2008, a decrease of $226,138 (50.4%) over the same period in
2008.  The gross profit margin as a percent of sales for the three
months ending September 30, 2009 and 2008 was 4.7% and 8.9 % respectively for a
decrease of 4.8%. Gross profit for the nine months ending September 30,
2009 and 2008 were $636,245 and $1,284,369respectively for a decrease of
$648,124 (50.5%).  The gross profit margin as a percent of sales for
the nine months ending September 30, 2009 and 2008 was 5.6% and 9.5 %
respectively, for a decrease of 3.9 %.  The decrease in gross profit
percentage was mainly attributable the worldwide economic downturn. Gross
margins will continue to be depressed in 2009 due to the pushing of lower margin
products in order to generate revenue combined with pricing pressures on
products as a result of competition in this depressed economy.  Our
strategy is to maintain market share and as the economy recovers so will the
product margins.








Operating
Expenses:





Operating
expenses for the three and nine month period ended September 30, 2009 were
$272,412 and $776,689 respectively for an increase of $48,435
(21.6%)  for the three month period and a decrease of $70,489 (8.3%)
for the nine month period from the same period prior year.  The
$48,435 increase and the $70,489 decrease in operating expenses were mostly
attributable to the following:









Three months ending:
            9/30/2008
            
            9/30/2009
            
            $
      VAR
            
            %
      VARSalaries
      & Related Expense
            $98,522
            
            $104,786
            
            $6,264
            
            6.4%
            Increase
      in Salary plus 2008 bonus paid in 2009Rent
            15,122
            
            25,651
            
            10,529
            
            69.6%
            New
      leaseBad
      Debt Allowance
            0
            
            44,786
            
            44,786
            
            100.0%
            Rejected
      product - trying to resellTravel
      Expense
            57,860
            
            86,656
            
            28,796
            
            49.8%
            More
      travel in 3rd quarter 2009All
      others
            52,473
            
            55,319
            
            2,846
            
            5.4%
            Miscellaneous
      itemsTotal
      Expenses
            $223,977
            
            $317,198
            
            $93,221
            
            41.6%





19





Nine months ending:
              9/30/2008
              
              9/30/2009
              
              $
      VAR
              
              %
      VARSalaries
      & Related Expense
              $349,009
              
              $371,820
              
              $22,811
              
              6.5%
              Increase
      in Salary plus 2008 bonus paid in 2009Rent
              55,861
              
              49,974
              
              -5,887
              
              -10.5%
              New
      lease offset by negotiated rated creditsBad
      Debt Allowance
              0
              
              44,786
              
              44,786
              
              100.0%
              Rejected
      product - trying to resellProfessional
      Service Expense
              20,295
              
              1,255
              
              -19,040
              
              -93.8%
              EITF
      19 consulting fees, tax prep and footnote feesAccounting
              84,811
              
              56,508
              
              -28,303
              
              -33.4%
              2007
      audit fees paid in 2008Legal
              18,000
              
              27,000
              
              9,000
              
              50.0%
              Legal
      fees started 2nd Qtr 2008Travel
      Expense
              188,581
              
              159,464
              
              -29,117
              
              -15.4%
              Less
      travel in 2009Outside
      Services
              21,109
              
              8,455
              
              -12,654
              
              -59.9%
              2008
      - Proxy and public filing costsAll
      others
              109,512
              
              102,213
              
              -7,299
              
              -6.7%
              Miscellaneous
      itemsTotal
      Expenses
              $847,178
              
              $821,475
              
              -$25,703
              
              -3.0%





Other Income
(Expenses):





Interest
income for the three and nine months ended September 30, 2009 was $39 and $735
respectively for a decrease of $3,374 (98.9%) and $8,707 (92.2%) respectively
from the same period prior year as a result of a smaller sum of money being left
in the bank to earn interest.





Interestexpensefor the three and nine
months ended September 30, 2009 $0 and $0 respectively for a decrease of $0
(0.0%) and $10,833 (100.0%) respectively from the same period prior year
representing the interest on two promissory notes issued in February 2007 that
totaled $250,000 in the aggregate.  There was no equivalent expense in
the current year.





Other
income for the three and nine months ended September 30, 2009 was $0 and $0
respectively for a decrease of $0 (0.0%) and $26,000 (100.0%) respectively from
the same period prior year.  The income is a result of forgiveness of
debt from a consultant.  There was no equivalent income item in the
current year.








Federal Income
Tax





The
Company records 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











20


Liquidity and Capital
Resources







Cash flow
used in operations for the nine months ending September 30, 2009 amounted to
$37,383which mainly consisted the following: 1) the net loss for the nine
month period ending September 30, 2009 of $109,23, 2)1 increase in prepaid taxes
of $162,838, 3) decrease in income taxes payable of $93,260, 4) increase in
deferred tax assets of $30,478 and 5) a decrease in accounts payable of
$1,455,590 due to the decrease in sales resulting in less inventory purchases,
offset by 1) decrease in account receivable or $1,780,245 – mainly due to the
decrease in sales, 2) decrease in income tax refund receivable of
$25,091,  3) depreciation expense of  $2,183, and 4)
decrease in deposits of $6,495.





On
September 30, 2009 the Company had total assets of $3,277,684 compared to
$4,902,396 on December 31, 2008, a decrease of $1,624,712 or
33.1%.  The Company had total stockholder’s equity of $1,435,046 on
September 30, 2009, compared to a stockholder’s equity of $1,510,908 on December
31, 2008, a decrease of $75,862 (5.0%).  As of September 30, 2009 the
Company's working capital position decreased by $80,472 (6.1%) from working
capital of $1,320,230 at December 31, 2008 to working capital of $1,239,758 at
September 30, 2009.





Capital
Resources





Over the
next twelve months, management is of the opinion that sufficient working capital
will be obtained from operations and from existing working capital.










ITEM 4T.
CONTROLS AND PROCEDURES




Disclosure
Controls and Procedures





As of
September 30, 2009, 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 September
30, 2009.





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.








21


PART
II.  OTHER INFORMATION





Item
1.                      Legal
Proceedings





None





ITEM
2                             Unregistered
Sales of Equity Securities and Use of Proceeds





None





ITEM
3.                  Defaults
Upon Senior Securities





None





ITEM
4.                  Submission
of Matters of a Vote to Security Holders





None





ITEM
5.                  Other
Information





None





ITEM
6.                  Exhibits








a)
Exhibits





31.1  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)








22











SIGNATURES











Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.








International Packaging and
Logistics Group, Inc.


(Registrant)











Dated:  November
12,
2009                       By:
/s/Steven  R.Westlund


Steven
Westlund


Chief
Executive Officer


Principal Financial
Officer and Director








By: /s/Allen
Lin_________


Allen
Lin, Director


President H&H Glass








By: /s/William
Gresher_________


William
Gresher, Director





23