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 June 30, 2008 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)





KAIRE
HOLDINGS, INCORPORATED


(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 July 31, 2008
was 4,504,214












































International
Packaging and Logistics Group, Inc.,


and
Subsidiaries


(F/K/A
Kaire Holdings, Inc.)





Consolidated
Financial Statements


for
the Three and Six Months Ended





June
30, 2008 and 2007





International
Packaging and Logistics Group, Inc.,


and
Subsidiaries


(F/K/A
Kaire Holdings, Inc.)





Consolidated
Financial Statements


for
the Three and Six Months Ended





June
30, 2008 and 2007













C  O  N  T  E  N  T  S










Consolidated
      Balance Sheets
            1Consolidated
      Statements of Operations and Comprehensive Income
            2Consolidated
      Statements of Cash Flows
            3Notes
      to Consolidated Financial Statements
            4 –
      18


International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Consolidated
Balance Sheets
 As
of June 30, 2008, and December 31, 2007





2008
            
            2007Current
      Assets
            (unaudited)
            
            (audited)Cash
            $
            845,144
            
            $
            210,082Short-term
      investments
            
            232,784
            
            
            252,231Accounts
      receivable (net of reserve for doubtfulaccounts
      of $0 and $0, respectively)
            
            3,166,493
            
            
            3,766,186Prepaid
      taxes
            
            -
            
            
            15,002Consignment
      inventory
            
            21,382
            
            
            25,000Total
      Current Assets
            
            4,265,803
            
            
            4,268,501Property,
      Plant and Equipment (net of accumulateddepreciation
      of $28,697 and $26,019, respectively)
            
            9,307
            
            
            11,985Other
      AssetsDeposits
            
            16,928
            
            
            6,496Deferred
      tax assets
            
            197,029
            
            
            197,029Total
      Other Assets
            
            213,957
            
            
            203,525Total
      Assets
            $
            4,489,067
            
            $
            4,484,011Liabilities
      and Stockholders’ EquityCurrent
      LiabilitiesAccounts
      payable and accrued expenses
            $
            2,833,761
            
            $
            3,136,626Income
      taxes payable
            
            201,935
            
            
            -Loans
      payable
            
            -
            
            
            250,000Accrued
      interest
            
            -
            
            
            16,667Accrued
      liabilities
            
            237,045
            
            
            237,045Total
      Current Liabilities
            
            3,272,741
            
            
            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
            
            52,989
            
            
            72,436Retained
      deficit
            
            (187,496)
            
            
            (302,096)Total
      Stockholders’ Equity
            
            1,216,326
            
            
            843,673Total
      Liabilities and Stockholders’ Equity
            $
            4,489,067
            
            $
            4,484,011








See
accompanying notes.
 - 1
-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Consolidated
Statements of Operations and Comprehensive Income
 For
the Three and Six Months Ended June 30, 2008 and 2007




















Three
      Months Ended June 30,
            
            Six
      Months Ended June 30,2008
            
            2007
            
            2008
            
            2007(unaudited)
            
            (unaudited)
            
            (unaudited)
            
            (unaudited)Revenues
            $
            4,417,318
            
            $
            5,430,157
            
            $
            8,803,724
            
            $
            8,386,907Cost
      of goods sold
            
            (4,045,294)
            
            
            (4,880,568)
            
            
            (7,968,226)
            
            
            (7,511,689)Gross
      Profit
            
            372,024
            
            
            549,589
            
            
            835,498
            
            
            875,218Operating
      ExpensesAdministrative
      expenses
            
            163,043
            
            
            91,801
            
            
            328,263
            
            
            204,416Rent
            
            
            20,536
            
            
            19,054
            
            
            40,739
            
            
            38,108Salaries
      and wages
            
            101,988
            
            
            139,895
            
            
            250,487
            
            
            252,139Total
      Operating Expenses
            
            285,567
            
            
            250,750
            
            
            619,489
            
            
            494,663Income
      from Operations
            
            86,457
            
            
            298,839
            
            
            216,009
            
            
            380,555Other
      Income/(Expenses)Interest
      income
            
            1,977
            
            
            4,225
            
            
            6,029
            
            
            10,275Forgiveness
      of debt
            
            26,000
            
            
            -
            
            
            26,000
            
            
            -Interest
      expense
            
            (5,833)
            
            
            -
            
            
            (10,833)
            
            
            -Total
      Other Income/(Expenses)
            
            22,144
            
            
            4,225
            
            
            21,196
            
            
            10,275Net
      Income before Income Taxes
            
            108,601
            
            
            303,064
            
            
            237,205
            
            
            390,830Income
      tax expense
            
            (63,492)
            
            
            (54,857)
            
            
            (122,605)
            
            
            (54,857)Net
      Income
            
            45,109
            
            
            248,207
            
            
            114,600
            
            
            335,973Comprehensive
      IncomeUnrealized
      gain/(loss) on investments
            
            (19,447)
            
            
            23,205
            
            
            (19,447)
            
            
            50,475Comprehensive
      Income
            $
            25,662
            
            $
            271,412
            
            $
            95,153
            
            $
            386,448Earnings
      per weighted average share of common stock - basic
            $
            0.01
            
            $
            0.06
            
            $
            0.03
            
            $
            0.09Earnings
      per weighted average share of common stock - diluted
            $
            0.01
            
            $
            0.06
            
            $
            0.02
            
            $
            0.09Weighted
      average shares outstanding - basic
            
            4,504,214
            
            
            3,915,000
            
            
            4,504,214
            
            
            3,915,000Weighted
      average shares outstanding - diluted
            
            5,387,460
            
            
            3,915,000
            
            
            5,386,953
            
            
            3,915,000











See
accompanying notes.
 - 2
-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Consolidated
Statements of Cash Flows
 For
the Six Months Ended June 30, 2008 and 2007





2008
            
            2007Increase
      (decrease) in cash and cash equivalents:
            (unaudited)
            
            (unaudited)Net
      income/(loss)
            $
            114,600
            
            $
            335,973Adjustments
      to reconcile net loss to net cash usedin
      operating activities:Depreciation
      expense
            
            2,678
            
            
            2,522Write
      off of accrued liabilities
            
            (26,000)
            
            
            -Preferred
      shares issued for payment of interest
            
            10,833
            
            
            -Changes
      in operating assets and liabilities:(Increase)
      decrease in accounts receivable
            
            599,693
            
            
            (703,941)Decrease
      in inventory
            
            3,618
            
            
            -Decrease
      in prepaid taxes
            
            15,002
            
            
            -Increase
      in deposits
            
            (10,432)
            
            
            -Increase
      (decrease) in income taxes payable
            
            201,935
            
            
            (163,843)Increase
      (decrease) in accounts payable and accrued expenses
            
            (276,865)
            
            
            936,536Net
      cash used in operating activities
            
            635,062
            
            
            407,247Cash
      flow from investing activities:Net
      cash used in investing activities
            
            -
            
            
            -Cash
      flow from financing activities:Net
      cash generated by financing activities
            
            -
            
            
            -Net
      increase in cash and cash equivalents
            
            635,062
            
            
            407,247Cash
      and cash equivalents at beginning of year
            
            210,082
            
            
            589,995Cash
      and cash equivalents at end of period
            $
            845,144
            
            $
            997,242Supplementary
      disclosures of cash flow informationCash
      paid during the year forInterest
            $
            -
            
            $
            -Taxes
            $
            3,712
            
            $
            135,200During
      the six months ended June 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 promissorynotes
      valued at $250,000 and related accrued interest valued at
      $27,500.











See
accompanying notes.
 - 3
-
 
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 June
30, 2008


1.           Summary of Significant
Accounting Policies





Nature of
Operations





On July
2, 2007, International Packaging and Logistics Group, Inc. (“IPLGroup” 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 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, IPLGroup 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, IPLGroup 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,
IPLGroup 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 IPLGroup, 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 IPLGroup’s common stock
representing 87% of IPLGroup’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 IPLGroup.  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 IPLGroup’s capital structure.





-  -
 -4-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 June
30, 2008


1.           Summary of Significant
Accounting Policies (continued)





Merger and Corporate
Structure (continued)





The
historical financial statements presented herein are those of H&H Glass, as
adjusted to give effect to the stock of IPLGroup (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 bases 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 financial statements present the historical financial condition,
results of operations and cash flows of H&H Glass prior to the
Merger.





The
significant acquired assets and liabilities are noted as follows:





International
      Packaging and Logistics, Inc., and SubsidiariesSummary
      Statement of Financial PositionAt
      July 1, 2007AssetsCash
            $
            53,918Total
      Assets
            $
            53,918LiabilitiesAccounts
      payable and accrued expenses
            
            120,661Loans
      payable
            
            250,000Accrued
      liabilities
            
            238,219Total
      Liabilities
            $
            608,880Net
      liabilities assumed
            $
            554,962








Principles of
Consolidation





The
consolidated financial statements include the accounts of IPLGroup and its
wholly-owned subsidiaries (collectively the “Company”).  The Company’s
subsidiaries include H&H Glass, Effective Health, Inc., and
YesRx.com.  Intercompany accounts and transactions have been
eliminated upon consolidation.  The balance sheets as of June 30,
2008, and December 31, 2007, contain the balances of H&H Glass, IPLGroup and
its other subsidiaries as of those dates.  The statements of
operations for the three- and six-month periods ending June 30, 2008, contain
the consolidated results of operations of H&H Glass and of IPLGroup
Holdings, Inc., and its other subsidiaries.  The statements of
operations for the three- and six-month periods ending June 30, 2007, contain
the results of operations of only H&H Glass.





As a
result of the application of reverse takeover accounting, the consolidated
financial statements are issued under the name of the legal parent (IPLGroup)
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 IPLGroup, is deemed acquired in consideration for
the issue of additional capital by H&H Glass.





-  -
 -5-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 June
30, 2008


1.           Summary of Significant
Accounting Policies (continued)





Estimates





The
preparation of financial statements in conformity with generally accepted
accounting principles 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.  Significant estimates include allowance for doubtful
accounts.








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.








Concentration of credit
risk





The
Company, at times, maintains cash balances in excess of the federally insured
limit of $100,000 per institution.  The uninsured balance as of June
30, 2008, was $1,024,769.  The uninsured balance as of December 31,
2007, was $28,010.





The
Company had unsecured short-term investments totaling $232,784 and $252,231 at
June 30, 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 June 30, 2008,
92.0% of H&H Glass’s Accounts Receivable were attributable to four
customers.  As of December 31, 2007, 92.5% of H&H Glass’s Accounts
Receivable were attributable to five customers.





H&H
Glass purchased 100% of its glass from one vendor in the three- and six-month
periods ending June 30, 2008 and 2007.  During the three-month period
ending June 30, 2008 and 2007, H&H Glass purchased $3,233,414 and $4,082,345
of products from this vendor, respectively.  During the six-month
period ending June 30, 2008 and 2007, H&H Glass purchased $6,271,770 and
$6,081,848 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.


-  -
 -6-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 June
30, 2008


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 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.








Consignment
Inventory





H&H
Glass’s inventory at June 30, 2008, and December 31, 2007, consists of goods
returned by a customer and is stated at 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.  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,” 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.


-  -
 -7-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 June
30, 2008


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. 107, “Disclosure
about Fair Value of Financial Instruments,” 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.








Stock-Based
Compensation





Effective
January 1, 2006, the Company has adopted the fair-value-based method of
accounting prescribed in Financial Accounting Standards Board Statement No. 123R
(Accounting for Stock-Based Compensation) for its employee stock option
plans.





Specifically,
the Company adopted SFAS No. 123R using the “prospective
method.”  This statement replaced FAS-123, Accounting for Stock-Based
Compensation, supersedes APB Opinion No. 25, Accounting for Stock Issued to
Employees, and amends FAS-95, Statement of Cash
Flows.  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 granted after the
required effective date and for awards modified, repurchased or cancelled after
that date.  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.  All employee stock option grants made since the
beginning of fiscal 2005 have been expensed over the related stock option
vesting period based on the fair value at the date the options are
granted.  Prior to fiscal 2005, the Company applied Accounting
Principles Board Opinion (APB) No. 25, “Accounting for Stock Issued to
Employees,” and related interpretations in accounting for stock
options.  The Company did not have any unvested employee stock options
or warrants outstanding at June 30, 2008 or December 31, 2007.








-  -
 -8-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 June
30, 2008


1.           Summary of Significant
Accounting Policies (continued)





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 costs as they are incurred.  There were
no advertising costs for the three- and six-month periods ending June 30, 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.








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.





-  -
 -9-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 June
30, 2008


1.           Summary of Significant
Accounting Policies (continued)





Recent Accounting
Pronouncements (continued)





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 to its
consolidated financial position or results of operations.





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.





-  -
 -10-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 June
30, 2008


1.           Summary of Significant
Accounting Policies (continued)





Recent Accounting
Pronouncements (continued)





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.





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 IPLGroup’s convertible debt states 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 states that the shares will be
issued after the Company completes a reverse stock split in early fiscal 2008
and changes its state of domicile from Delaware to Nevada.






-11-





2.           Preferred Stock Transactions
(continued)





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 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.











3.           Common Stock
Transactions





Common stock transactions
during the six months ending June 30, 2008:





None





Common stock transactions
during the six months ending June 30, 2007:





None











-  -
 -12-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 June
30, 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 $50,001 and $75,000 for the three-month
periods ended June 30, 2008 and 2007, respectively and $140,002 and $120,000 for
the six-month periods ended June 30, 2008 and 2007, respectively.








Josephine
Lin





Josephine
Lin, Mr. Lin’s wife, is employed by the Company and was paid salary of $12,600
and $12,000 for the three-month periods ended June 30, 2008 and 2007,
respectively and $25,200 and $24,000 for the six-month periods ended June 30,
2008 and 2007, respectively.











5.           Accounts
Receivable





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.  H&H
Glass assumes responsibility for all glass shipments until they are received by
and approved by their customers.  Accounts receivable are
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.  At June 30, 2008 and December 31, 2007, H&H Glass had
no reserves for doubtful accounts, as the Company believes that all of its
accounts receivable are fully collectible.





Accounts
receivable as of June 30, 2008 and December 31, 2007, were $3,166,493 and
$3,766,186, respectively.  At June 30, 2008, four customers accounted
for 92.0% of all accounts receivable.  At December 31, 2007, five
customers accounted for 92.5% of all accounts receivable.











-  -
 -13-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 June
30, 2008


6.           Property and
Equipment





H&H
Glass’s property and equipment at June 30, 2008 and December 31, 2007, consisted
of the following:





2008
            
            2007Furniture
      and fixtures
            $
            14,552
            
            $
            14,552Computers
      and equipment
            
            23,452
            
            
            23,45238,004
            
            
            38,004Less
      accumulated depreciation
            
            (28,697)
            
            
            (26,019)Total
            $
            9,307
            
            $
            11,985








H&H
Glass recorded depreciation expense for the three-month period ending June 30,
2008 and 2007, of $1,319 and $1,329, respectively and for the six-month period
ending June 30, 2008 and 2007, of $2,678 and 2,522 respectively.











7.           Accounts Payable and Accrued
Expenses





Accounts
payable and accrued expenses at June 30, 2007, and December 31, 2007, consisted
of the following:





2008
            
            2007Accounts
      payable
            $
            2,767,684
            
            $
            3,017,709Accrued
      professional and related fees
            
            40,385
            
            
            93,225Accrued
      settlements
            
            25,692
            
            
            25,692Total
            $
            2,833,761
            
            $
            3,136,626











8.           Notes
Payable





In
February 2007, IPLGroup issued two promissory notes for an aggregate of
$250,000, with interest on the unpaid principal balance at eight percent (8%)
per annum.  The notes were originally due October 1, 2007, but were
extended to June 30, 2008.  Interest accrued on these notes at June
30, 2008 and December 31, 2007, was $27,500 and $16,667,
respectively.  During the three months ended June 30, 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.











-  -
 -14-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 June
30, 2008


9.           Commitments and
Contingencies





Leases





Operating
leases





H&H
Glass rents 2,887 square feet of office space at 7700 Irvine Center Drive in
Irvine, California.  The lease began on January 1, 2005, and expires
on August 31, 2008 with the current monthly rate at $6,496.  During
the three months ended June 30, 2008, H&H Glass signed an extension to the
lease through August 31, 2013.  Future minimum lease payments are as
follows:





Year
      ended December 31,2008
            $
            46,0522009
            
            100,3372010
            
            103,8492011
            
            107,483Thereafter
            
            187,119$
            544,840





H&H
Glass recorded rent expense of $20,536 and $19,054 for the three months ending
June 30, 2008 and 2007, respectively, and $40,739 and $38,108 for the six months
ending June 30, 2008 and 2007, respectively.








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.











10.           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 as of June 30,
2008.  Earnings per share at June 30, 2007, is calculated using the
number of common shares issued to effect the business combination as being
outstanding during the entire period.


-  -
 -15-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 June
30, 2008


10.           Earnings per Share -
continued





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





For
      the Three Months Ended June 30,2008
            
            2007BASIC
      EARNINGS PER SHARE OF
              COMMON
      STOCK:Net
      earnings available to common stockholders
            $
            45,109
            
            $
            248,207Weighted
      average common shares outstanding
            
            4,504,214
            
            
            3,915,000Basic
      earnings per share of common stock
            $
            0.01
            
            $
            0.06DILUTED
      EARNINGS PER SHARE OF
              COMMON
      STOCK:Net
      earnings available to common stockholders
            $
            45,109
            
            $
            248,207Weighted
      average common shares outstanding
            
            4,504,214
            
            
            3,915,000Effect
      of dilutive securities:Options
            
            -
            
            
            -Convertible
      preferred stock
            
            883,246
            
            
            -Weighted
      average common shares outstanding after effect of dilutive
      securities
            
            5,387,460
            
            
            3,915,000Diluted
      earnings per share of common stock
            $
            0.01
            
            $
            0.06


-  -
 -16-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 June
30, 2008


10.           Earnings per Share -
continued





For
      the Six Months Ended June 30,2008
            
            2007BASIC
      EARNINGS PER SHARE OF
              COMMON
      STOCK:Net
      earnings available to common stockholders
            $
            114,600
            
            $
            335,973Weighted
      average common shares outstanding
            
            4,504,214
            
            
            3,915,000Basic
      earnings per share of common stock
            $
            0.03
            
            $
            0.09DILUTED
      EARNINGS PER SHARE OF
              COMMON
      STOCK:Net
      earnings available to common stockholders
            $
            114,600
            
            $
            335,973Weighted
      average common shares outstanding
            
            4,504,214
            
            
            3,915,000Effect
      of dilutive securities:Options
            
            -
            
            
            -Convertible
      preferred stock
            
            882,739
            
            
            -Weighted
      average common shares outstanding after effect of dilutive
      securities
            
            5,386,953
            
            
            3,915,000Diluted
      earnings per share of common stock
            $
            0.02
            
            $
            0.09











11.           Fair Value
Measurements





In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” (SFAS
157), which is effective for fiscal years beginning after November 15, 2007 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.





In
accordance with SFAS 157, the following table represents the Company’s fair
value hierarchy for its financial assets (cash, cash equivalents and short-term
investments) measured at fair value on a recurring basis as of June 30,
2008:





Securities
      Owned
            Level
      1
            
            Level
      2
            
            Level
      3
            
            TotalShort-term
      investments
            $
            232,784
            
            $
            -
            
            $
            -
            
            $
            232,784Total
            $
            232,784
            
            $
            -
            
            $
            -
            
            $
            232,784





-  -
 -17-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 June
30, 2008


12.           Merger with H&H Glass,
Inc.





On July
2, 2007, IPLGroup 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
IPLGroup (the legal acquirer) since the Merger.





The
following unaudited pro forma consolidated results of operations have been
prepared as if the merger had occurred at January 1, 2007:





3
      months ended
            
            6
      months endedJune
      30, 2007
            
            June
      30, 2007Sales
            $
            5,430,157
            
            $
            8,386,907Cost
      of goods sold
            
            (4,880,568)
            
            
            (7,511,689)Operating
      expenses
            
            (263,502)
            
            
            (547,544)Net
      other income
            
            4,225
            
            
            10,275Income
      tax expense
            
            (54,857)
            
            
            (54,857)Net
      income
            
            235,455
            
            
            283,092Unrealized
      gain on investments
            
            23,205
            
            
            50,475Comprehensive
      income
            $
            258,660
            
            $
            333,567Net
      income per share – basic and diluted
            $
            0.06
            
            $
            0.07








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.           Subsequent
Events





None








-  -
 -18-








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. Such statements include, without limitation,
statements regarding:





•
      fluctuations in, oil or gas production or in oil or gas
    prices


•
      estimates of required capital
expenditures


•
      fluctuations in the cost of drilling, completion and oil production or
      other costs of production and
operations


•
      our inability to meet growth
projections


•
      our plans and expectations with respect to future acquisitions of oil and
      gas rights leases


•
      the expected benefits and results from our geophysical research and
      development efforts;


•
      our belief that we will have sufficient liquidity to finance operations
      into early 2009;


•
      the amount of cash necessary to operate our
  business;


•
      our ability to raise additional capital when
  needed;


•
      general economic conditions; and


•
      the anticipated future financial performance and business operations of
      our company.





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, 2007 included in our Annual Report on Form 10-KSB for
the year ended December 31, 2007.














-19-























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





Our
general operating plan up is as follows:





Short
Term





·Continue
      growing revenue and profits through the existing
  business;·To
      meet the challenge of the declining US currency while maintaining revenue
      and profitability - our goal will be to  focus closely on
      product mix and improve our gross margin;·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.





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





Three and
six months ending June 30, 2008 and 2007





Revenue:





For the
three months ending June 30, 2008 and 2007, revenues were approximately
$4,417,318 and $5,430,157 respectively, for a decrease of $1,012,839 (18.7%)
over the same period in 2007. The decrease in revenue is a mainly due to a plant
capacity shortage in the Glass industry.  Recognizing that issue would
not only affect us in the second quarter but would be an ongoing issue, 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.  It will take a few months to get the necessary molds
ready for production, so we anticipate being back in full production sometime
during the fourth quarter.  No clients were lost due to this
issue.  Our revenues for the six months ending June 30, 2008 and 2007
were $8,803,724 and $8,386,907 respectively, for an increase of $416,817 (5.0%)
over the same period in 2007.  The increase was due mainly to price
increases which were offset by the plant capacity issue experiences in the
second quarter of 2008.








-20-





Cost of Goods
Sold:





Cost of
goods sold for the three months ending June 30, 2008 and 2007 were $4,045,294
and $4,880,568 respectively, for a decrease of $835,284 (17.1%) over the same
period in 2007. This decrease is a direct result of the decrease in sales. Cost
of goods sold for the six months ending June 30, 2008 and 2007 were $7,968,226
and $7,511,689 respectively, for an increase of $456,537 (6.1%) over the same
period in 2007   This year to date increase is mainly a result of an
increase in sales, the components being:1) an increase in cost of glass $322,000
(4.9% increase over prior year’s cost), 2) increase in ocean freight of $88,000
(8.1%)and 3) mold amortization and supplies of 30,876 (22.9%)





Gross
Profit:





Gross
profit was $372,024 and $549,589 for the three months ending June 30, 2008 and
2007, a decrease of $177,565 (32.3%) over the same period in
2007.   The gross profit margin as a percent of sales for the
three months ending June 30, 2008 and 2007 was 8.4% and 10.1 % respectively for
a decrease of 1.7%.  Gross profit for the six months ending June 30,
2008 and 2007 were $835,498 and $875,218 respectively for a decrease of $39,720
(4.5%).  The gross profit margin as a percent of sales for the six
months ending June 30, 2008 and 2007 was 9.5% and 10.4 % respectively for a
decrease of 0.9%.  The decrease in gross profit percentage was mainly
attributable to 1) an increase in ocean freight, 2) an increase in the cost of
molds, and 3) an increase in the cost of product.





Operating
Expenses:





Operating
expenses for the three and six month period ended June 30, 2008 were $285,567
and $619,489 respectively for an increase of $34,817 (13.9%) and $124,826
(25.2%) respectively from the same period prior year.  The $34,817 and
$124,826 increase in operating expenses were mostly attributable to the
following:





Three months ending:
            6/30/2007
            
            6/30/2008
            
            $
      VAR
            
            %
      VARSalaries
      and Related Expense
            $139,895
            
            $101,988
            
            -37,907
            
            -27.1%
            2007
      bonus paid in 2008 less than  paid in 2007Rent
            19,054
            
            20,536
            
            1,482
            
            7.8%
            Increase
      per terms of leaseSubcontractor
      Expense
            1,900
            
            9,000
            
            7,100
            
            373.7%
            New
      legal Fees of $3k per monthAccounting
            -
            
            54,071
            
            54,071
            
            100.00%
            $34K
      2007 audit fees, $20K Qtrly review feesOutside
      Services
            -
            
            12,175
            
            12,175
            
            100.00%
            Proxy
      printing cost, tax footnote feeAll
      others
            89,901
            
            87,797
            
            -2,104
            
            -2.3%
            Miscellaneous
      items$250,750
            
            $285,567
            
            34,817
            
            13.9%








Operating Expenses -
continued:





Six months ending:
            6/30/2007
            
            6/30/2008
            
            $
      VAR
            
            %
      VARSalaries
      and Related Expense
            $252,139
            
            $250,487
            
            -1,652
            
            -0.7%
            Increases
      to base salariesRent
            38,108
            
            40,739
            
            2,631
            
            6.9%
            Increase
      per terms of leaseInsurance
      Expense
            41,092
            
            54,236
            
            13,144
            
            32.0%
            Increase
      in ratesAccounting
            -
            
            64,071
            
            64,071
            
            100.00%
            Quarter
      one accounting review expensesTravel
      Expense
            120,301
            
            130,721
            
            10,420
            
            8.7%
            Cost
      of Traveling is higher than last yearOutside
      Services
            -
            
            20,234
            
            20,234
            
            100.00%
            Proxy
      printing cost, tax footnote feeAll
      others
            43,023
            
            59,001
            
            15,978
            
            37.1%
            Miscellaneous
      items$494,663
            
            $619,489
            
            124,826
            
            25.2%







-21-





Other Income
(Expenses):





Interest
income for the three and six months ended June 30, 2008 and 2007 was $1,977 and
$6,029 respectively for a decrease of $2,248 (53.2%) and $4,246 (41.3%)
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 six
months ended June 30, 2008 and 2007 was $5,833 and $10,833 respectively for an
increase of $5,833 (100.0%) and $10,833 (100.0%) respectively from the same
period prior year representing the interest on two promissory notes issued in
February 2007 that total $250,000 in the aggregate.  There was no
equivalent expense in the previous year.





Other
income for the three and six month period ended June 30, 2008 was $26,000 and
$26,000 respectively for an increase of $26,000 (100.0%) 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 previous year.





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 six months ending June 30, 2008 amounted to $635,062,
which mainly consisted the income for the six months ending June 30, 2008 of
$212,644 plus the following; 1) depreciation expense of $2,678, 2)
preferred shares issued for accrued interest of $10,833, 3) decrease in account
receivable of $599,693, 3) decrease in inventories of $3,618, 4) decrease in
prepaid taxes of $15,002 and 5) an increase in taxes payable of $103,891, offset
by 1) a write-off of accrued liabilities of $26,000, 2) an increase in deposits
of $10,432 and a decrease in accounts payable and accrued expenses of
$276,865.






-22-





The
decrease in accounts receivable is a result of more timely receipt of payments
in 2008.  The decrease in accounts payable and accrued expenses
consisted mainly of a decrease in accounts payable for products of $250,000, and
payment of accrued professional fees of $52,840.  The increase in
taxes payable is a result of the prior year’s estimated tax payments being in
excess of the income tax accruals.





On June
30, 2008 the Company had total assets of $4,489,067 compared to $4,484,011 on
December 31, 2007, an increase of $5,056 or 0.1%.  The Company had a
total stockholder's equity of $1,314,370 on June 30, 2008, compared to a
stockholder’s equity of $843,673 on December 31, 2007, an increase of $470,697
(55.8%).  As of June 30, 2008 the Company's working capital position
increased by $364,899 (58.1%) from working capital of $628,163 at December 31,
2007 to working capital of $993,062 at June 30, 2008.  This increase
is mainly a result of an increase in assets of $5,056 plus a decrease in
accounts payable and accrued expenses of $276,865, forgiveness of debt of
$26,000, loans and interest payable of $277,500 converted into preferred shares
offset by an increase in income taxes payable of $201,935.





Capital
Resources





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





Subsequent
Events:





None




ITEM 4T.
CONTROLS AND PROCEDURES




Disclosure
Controls and Procedures





As
of June 30, 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. Based on that evaluation, the Chief
Executive Officer and the Chief Financial Officer have concluded that the
Company's disclosure controls and procedures were not effective as of June 30,
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 not effective as of June 30, 2008.  Our
principal Chief Executive Officer and Chief Financial Officer concluded we have
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 is one person involved in processing of transactions.
Therefore, it is difficult to effectively segregate accounting
duties.


As
a result of this material weakness we had implemented remediation procedures
whereby in December 2007 we have hired an additional administrative person and
will retain an outside professional firm to assist in the separation of duties
on an ongoing basis.  We will continue to monitor and assess the costs
and benefits of additional staffing.





This
quarterly 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.






-23-




CONTROLS
AND PROCEDURES




After
evaluating the effectiveness of our "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 Quarterly Report on Form 10-Q (the
"Evaluation Date"), were unable to conclude that as of the Evaluation Date, our
disclosure controls and procedures are effective to provide reasonable assurance
that information we are required to disclose in reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission rules and
forms. We believe that we will have effective internal controls to meet this
requirement prior to the filing of our annual report for the year ended December
31, 2008.





(b)
Changes in internal control over financial reporting. There were no changes in
our internal control over financial reporting during our most recent fiscal
quarter that materially affected, or were reasonably likely to materially
affect, our internal control over financial reporting.




Limitations
on the Effectiveness of Internal Controls







Disclosure
controls and procedures, no matter how well designed and implemented, can
provide only reasonable assurance of achieving an entity's disclosure
objectives. The likelihood of achieving such objectives is affected by
limitations inherent in disclosure controls and procedures. These include the
fact that human judgment in decision-making can be faulty and that breakdowns in
internal control can occur because of human failures such as simple errors or
mistakes or intentional circumvention of the established process.













PART
II.  OTHER INFORMATION







Item
1.                      Legal
Proceedings







Litigation







H.D. Smith Wholesale Drug
Company – Action for breach of contact and other various causes of
action





On
December 30, 2004 a settlement was reached where IPLO was obligated to pay the
plaintiff $50,000 on behalf of its subsidiary, Classic Care
Pharmacy.  The balance owed as of June 30, 2008 was $25,692, and IPLO
is in breach of this settlement.





Except as
otherwise specifically indicated above, management believes that the Company
does not have any material liability for any lawsuits, settlements, judgments,
or fees of defense counsel which have not been paid or accrued as of June 30,
2008.








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





The
following two actions were taken by written consent by the majority shareholders
of International Packaging and Logistic Group, Inc. dated January 7,
2008.  (The proxy was mailed on February 26, 2008).





First the
Company filed Amendments (the “Certificate Amendment”) to the Company’s
certificate of incorporation, as amended (the “Certificate of Incorporation”) to
effect the following: a) to effect a reverse stock split of issued and
outstanding common stock at a ratio of 1-for-200, and retain the current number
of authorized shares and the par value of common stock reflected in the
Company’s Certificate of Incorporation, b) to change the Company’s name to
“International Packaging and Logistics Group, Inc.”, and c) to authorize
50,000,000 shares of blank-check preferred stock at a par value of
$0.0001.  The Certificate of Amendment was certified by the state of
Nevada on April 28, 2008.   The reverse split and name change
took effect on May 12, 2008.





The
second action changed the state of incorporation from Delaware to Nevada via
conversion.  This took effect on April 17, 2008.








ITEM
5.                  Other
Information





None






-24-







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)















































-25-








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:  August
12,
2008            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














-26-