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, 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)
 
 
 (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  November 14 , 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 Nine Months Ended
 
 September
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
Financial Statements
 for
the Three and Nine Months Ended
 
 September
30, 2008 and 2007
  
 September
      30,
              
              December
      31,2008
              
              2007Current
      Assets
              (unaudited)
              
              (audited)Cash
              
              $
              127,356
              
              $
              210,082Short-term
      investments
              
              183,218
              
              
              252,231Accounts
      receivable (net of reserve for doubtfulaccounts
      of $0 and $0, respectively)
              
              3,740,779
              
              
              3,766,186Income
      tax refund receivable
              
              10,897
              
              
              -Prepaid
      taxes
              
              -
              
              
              15,002Consignment
      inventory
              
              21,382
              
              
              25,000Total
      Current Assets
              
              4,083,632
              
              
              4,268,501Property,
      Plant and Equipment (net of accumulateddepreciation
      of $29,830 and $26,019, respectively)
              
              8,174
              
              
              11,985Other
      AssetsDeposits
              
              16,928
              
              
              6,496Deferred
      tax assets
              
              197,029
              
              
              197,029Total
      Other Assets
              
              213,957
              
              
              203,525Total
      Assets
              $
              4,305,763
              
              $
              4,484,011Liabilities
      and Stockholders’ EquityCurrent
      LiabilitiesAccounts
      payable and accrued expenses
              $
              2,461,793
              
              $
              3,136,626Income
      taxes payable
              
              326,903
              
              
              -Loans
      payable
              
              -
              
              
              250,000Accrued
      interest
              
              -
              
              
              16,667Accrued
      liabilities – Kaire Holdings
              
              237,045
              
              
              237,045Total
      Current Liabilities
              
              3,025,741
              
              
              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
              
              3,423
              
              
              72,436Retained
      deficit
              
              (74,234)
              
              
              (302,096)Total
      Stockholders’ Equity
              
              1,280,022
              
              
              843,673Total
      Liabilities and Stockholders’ Equity
              $
              4,305,763
              
              $
              4,484,011
 
 
 -1-
 
 International
Packaging and Logistics Group, Inc.,
 and
Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 
 Consolidated
Financial Statements
 for
the Three and Nine Months Ended
 
 September
30, 2008 and 2007
 
 
 Three
      Months Ended September 30,
              
              Nine
      Months Ended September 30,2008
              
              2007
              
              2008
              
              2007(unaudited)
              
              (unaudited)
              
              (unaudited)
              
              (unaudited)Revenues
              $
              4,693,575
              
              $
              5,226,199
              
              $
              13,497,299
              
              $
              13,613,106Cost
      of goods sold
              
              (4,244,704)
              
              
              (4,804,187)
              
              
              (12,212,930)
              
              
              (12,315,876)Gross
      Profit
              
              448,871
              
              
              422,012
              
              
              1,284,369
              
              
              1,297,230Operating
      ExpensesAdministrative
      expenses
              
              109,850
              
              
              113,588
              
              
              438,113
              
              
              318,004Rent
              
              
              15,122
              
              
              24,944
              
              
              55,861
              
              
              63,052Salaries
      and wages
              
              98,522
              
              
              97,644
              
              
              349,009
              
              
              349,783Total
      Operating Expenses
              
              223,494
              
              
              236,176
              
              
              842,983
              
              
              730,839Income
      from Operations
              
              225,377
              
              
              185,836
              
              
              441,386
              
              
              566,391Other
      Income/(Expenses)Interest
      income
              
              3,413
              
              
              5,932
              
              
              9,442
              
              
              16,207Forgiveness
      of debt
              
              -
              
              
              -
              
              
              26,000
              
              
              -Interest
      expense
              
              -
              
              
              -
              
              
              (10,833)
              
              
              -Total
      Other Income/(Expenses)
              
              3,413
              
              
              5,932
              
              
              24,609
              
              
              16,207Net
      Income before Income Taxes
              
              228,790
              
              
              191,768
              
              
              465,995
              
              
              582,598Income
      tax expense
              
              (115,528)
              
              
              (83,500)
              
              
              (238,133)
              
              
              (138,357)Net
      Income
              
              113,262
              
              
              108,268
              
              
              227,862
              
              
              444,241Comprehensive
      IncomeUnrealized
      gain/(loss) on investments
              
              (49,566)
              
              
              (23,065)
              
              
              (69,013)
              
              
              27,410Comprehensive
      Income
              $
              63,696
              
              $
              85,203
              
              $
              158,849
              
              $
              471,651Earnings
      per weighted average share of common stock - basic
              $
              0.03
              
              $
              0.02
              
              $
              0.05
              
              $
              0.27Earnings
      per weighted average share of common stock - diluted
              $
              0.02
              
              $
              0.02
              
              $
              0.04
              
              $
              0.23Weighted
      average shares outstanding - basic
              
              4,504,214
              
              
              4,457,617
              
              
              4,504,214
              
              
              1,640,262Weighted
      average shares outstanding - diluted
              
              5,478,944
              
              
              5,330,258
              
              
              5,417,502
              
              
              1,933,265
 
 
 -2-
 International
Packaging and Logistics Group, Inc.,
 and
Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 
 Consolidated
Financial Statements
 for
the Three and Nine Months Ended
 
 September
30, 2008 and 2007
  
 2008
              
              2007Increase
      (decrease) in cash and cash equivalents:
              (unaudited)
              
              (unaudited)Net
      income/(loss)
              $
              227,862
              
              $
              444,241Adjustments
      to reconcile net loss to net cash usedin
      operating activities:Depreciation
      expense
              
              3,811
              
              
              3,042Forgiveness
      of debt
              
              (26,000)
              
              
              -Preferred
      shares issued for accrued interest
              
              10,833
              
              
              -Changes
      in operating assets and liabilities:(Increase)
      decrease in accounts receivable
              
              25,407
              
              
              264,045(Increase)
      decrease in inventory
              
              3,618
              
              
              (548,859)(Increase)
      decrease in income tax refund receivable
              
              (10,897)
              
              
              -Decrease
      in prepaid taxes
              
              15,002
              
              
              -Increase
      in deposits
              
              (10,432)
              
              
              -Increase
      (decrease) in income taxes payable
              
              326,903
              
              
              (163,843)Increase
      (decrease) in accounts payable and accrued expenses
              
              (648,833)
              
              
              620,672Net
      cash used in operating activities
              
              (82,726)
              
              
              619,298Cash
      flow from investing activities:Net
      cash used in investing activities
              
              -
              
              
              -Cash
      flow from financing activities:Cash
      acquired from acquisition of Kaire Holdings
              
              -
              
              
              53,918Net
      cash generated by financing activities
              
              -
              
              
              53,918Net
      increase in cash and cash equivalents
              
              (82,726)
              
              
              673,216Cash
      and cash equivalents at beginning of year
              
              210,082
              
              
              589,995Cash
      and cash equivalents at end of period
              $
              127,356
              
              $
              1,263,211Supplementary
      disclosures of cash flow informationCash
      paid during the year forInterest
              $
              -
              
              $
              -Taxes
              $
              3,712
              
              $
              135,200Unrealized
      gain on short-term investments
              $
              (69,013)
              
              $
              27,410
 
 During
the nine months ended September 30, 2008, the Company entered into the following
non-cash transactions:
 •
      Issued 92,500 shares of series A preferred shares in lieu of payment of
      promissory notes valued at $250,000 and related accrued interest valued at
      $27,500.
 
 During
the nine months ended September 30, 2007, the Company entered into the following
non-cash transactions.
 • Issued
4,286,916 shares of common stock in connection with the merger with H&H
Glass.
   -3-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 September
30, 2008
 
 1.           Summary of Significant
Accounting Policies
 
 Nature of
Operations
 
 On July
2, 2007, International Packaging and Logistics Group, Inc. (“IPL Group” or “the
Company”) through its wholly-owned subsidiary, YesRx.com (“YesRx”) acquired all
the outstanding shares of H&H Glass, Inc. (“H&H Glass” or “H&H”), in
exchange for 3,915,000 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.
 
 Effective
February 3, 1998, Interactive Medical Technologies, Ltd., changed its name to
Kaire Holdings Incorporated, and effective May 28, 2008 its name changed from
Kaire Holdings Incorporated to International Packaging and Logistics Group,
Inc.
 
 On
January 23, 2007, IPL Group and its wholly-owned subsidiary, YesRx, executed a
Letter of Intent whereby YesRx would acquire all of the outstanding stock of
H&H Glass Corporation, an Illinois corporation.  H&H Glass was
formed in 1989.  As part of this transaction, on February 4, 2007, IPL
Group discontinued its pharmacy business, and Effective Health, Inc., was shut
down.
 
 
 Merger and Corporate
Structure
 
 On July
2, 2007, an Agreement and Plan of Merger was executed between IPL Group, its
wholly-owned subsidiary YesRx.com, and H&H Glass, whereby YesRx.com acquired
all of the outstanding stock of H&H Glass Corporation, an Illinois
corporation in exchange for 3,915,000 shares of IPL Group’s common stock
representing 87% of IPL Group’s outstanding stock.  As part of the
merger agreement, 225,000 shares were issued to Naccarato and Associates related
to assistance with the merger.
 
 As a
result of the Merger, there was a change in control of IPL Group.  In
accordance with SFAS No. 141, H&H Glass was defined as the accounting
acquirer.  While the transaction is accounted for using the purchase
method of accounting, in substance the transaction results in a reverse merger
with a recapitalization of IPL Group’s capital structure.
  
 -4-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 September
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 IPL Group (the legal acquirer) since the
Merger.  The retained earnings of the accounting acquirer have been
carried forward after the acquisition, and H&H Glass’s 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 IPL Group 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 September 30,
2008, and December 31, 2007, contain the balances of H&H Glass, IPL Group
and its other subsidiaries as of those dates.  The statements of
operations for the three- and nine-month periods ending September 30, 2008,
contain the consolidated results of operations of H&H Glass and of IPL Group
and its other subsidiaries.  The statements of operations for the
three- and nine-month periods ending September 30, 2007, contain the results of
operations of only H&H Glass for the six month period from January 1, 2007
through June 30, 2007, and contain the consolidated results of operations of
H&H Glass and of IPL Group and its other subsidiaries for the three month
period from July 1, 2007 through September 30, 2007.
 
 As a
result of the application of reverse takeover accounting, the consolidated
financial statements are issued under the name of the legal parent (IPL Group)
but are a continuation of the financial statements of the wholly-owned legal
subsidiary (H&H Glass) and not of the legal parent.  The control
of the assets and business of IPL Group, is deemed acquired in consideration for
the issue of additional capital by H&H Glass.
 
 -5-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 September
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
September 30, 2008, was $85,593.  The uninsured balance as of December
31, 2007, was $28,010.
 
 The
Company had unsecured short-term investments totaling $183,218 and $252,231 at
September 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 September 30,
2008, 93.6% of H&H Glass’s Accounts Receivable were attributable to five
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 nine-month
periods ending September 30, 2008 and 2007.  During the three-month period
ending September 30, 2008 and 2007, H&H Glass purchased $3,557,809 and
$4,130,440 of products from this vendor, respectively.  During the
nine-month period ending September 30, 2008 and 2007, H&H Glass purchased
$9,960,800 and $10,382,764 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.
 
 -6-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 September
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 September 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
 September
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
 September
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 nine-month periods ending September 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
 September
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
 September
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 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.
 
 -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 of Series A Convertible Preferred
Stock to retire two promissory notes and interest totaling
$277,500.
 
 Statement
of Financial Accounting Standards No. 150: Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity (FAS 150)
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and
equity.
 
 A
mandatorily redeemable financial instrument shall be classified as a liability
unless the redemption is required to occur only upon the liquidation or
termination of the reporting entity.  A financial instrument issued in
the form of shares is mandatorily redeemable if it embodies an unconditional
obligation requiring the issuer to redeem the instrument by transferring its
assets at a specified or determinable date (or dates) or upon an event certain
to occur.  A financial instrument that embodies a conditional
obligation to redeem the instrument by transferring assets upon an event not
certain to occur becomes mandatorily redeemable—and, therefore, becomes a
liability—if that event occurs, the condition is resolved, or the event becomes
certain to occur.
 
 Based on
the assessment of FAS 150, the Company determined that the preferred shares
are not mandatorily redeemable and are properly classified as equity in the
accompanying financial statements.
 
 
 
 3.           Common Stock
Transactions
 
 Common stock transactions
during the nine months ending September 30, 2008:
 
 None
 
 Common stock transactions
during the nine months ending September 30, 2007:
 
 Issued
      4,286,916 shares of common stock in connection with the merger with
      H&H Glass.
 
 -12-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 September
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 $50,000 and $45,000 for the three-month
periods ended September 30, 2008 and 2007, respectively and $150,000 and
$135,000 for the nine-month periods ended September 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 September 30, 2008 and 2007,
respectively and $37,800 and $36,000 for the nine-month periods ended September
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 September 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 September 30, 2008 and December 31, 2007, were $3,740,779 and
$3,766,186, respectively.  At September 30, 2008, five customers
accounted for 93.6% 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
 September
30, 2008
 
 6.           Property and
Equipment
 
 H&H
Glass’s property and equipment at September 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
              
              (29,830)
              
              
              (26,019)Total
              $
              8,174
              
              $
              11,985
 
 
 H&H
Glass recorded depreciation expense for the three-month period ending September
30, 2008 and 2007, of $1,133 and $520, respectively and for the nine-month
period ending September 30, 2008 and 2007, of $3,811 and $3,042
respectively.
 
 
 
 7.           Accounts Payable and Accrued
Expenses
 
 Accounts
payable and accrued expenses at September 30, 2007, and December 31, 2007,
consisted of the following:
 
 2008
              
              2007Accounts
      payable
              $
              2,397,716
              
              $
              3,017,709Accrued
      professional and related fees
              
              38,385
              
              
              93,225Accrued
      settlements
              
              25,692
              
              
              25,692Total
              $
              2,461,793
              
              $
              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.  During the three months ended June 30,
2008, the total principal and accrued interest of $27,500 on these notes were
converted at $3 a share (market price on the day of the conversion) into 92,500
shares of Series A Convertible Preferred Stock.  Interest accrued on
these notes at December 31, 2007, was $16,667.
 
 
 -14-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 September
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 expired
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
              $
              24,7952009
              
              100,3372010
              
              103,8492011
              
              107,483Thereafter
              
              187,119$
              523,583
 
 H&H
Glass recorded rent expense of $15,122 and $24,944 for the three months ending
September 30, 2008 and 2007, respectively, and $55,861 and $63,052 for the nine
months ending September 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 September 30,
2008.  Earnings per share at September 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
 September
30, 2008
 10.           Earnings per Share -
continued
 
 Earnings
(loss) per share of common stock are calculated as follows:
 
 For
      the Three Months Ended September 30,2008
              
              2007BASIC
      EARNINGS PER SHARE OF
                COMMON
      STOCK:Net
      earnings available to common stockholders
              $
              113,262
              
              $
              108,268Weighted
      average common shares outstanding
              
              4,504,214
              
              
              4,457,617Basic
      earnings per share of common stock
              $
              0.03
              
              $
              0.02DILUTED
      EARNINGS PER SHARE OF
                COMMON
      STOCK:Net
      earnings available to common stockholders
              $
              113,262
              
              $
              108,268Weighted
      average common shares outstanding
              
              4,504,214
              
              
              4,457,617Effect
      of dilutive securities:Options
              
              -
              
              
              -Convertible
      preferred stock
              
              974,730
              
              
              872,641Weighted
      average common shares outstanding after effect of dilutive
      securities
              
              5,478,944
              
              
              5,330,258Diluted
      earnings per share of common stock
              $
              0.02
              
              $
              0.02
  -16-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 September
30, 2008
 10.           Earnings per Share -
continued
 
 For
      the Nine Months Ended September 30,2008
              
              2007BASIC
      EARNINGS PER SHARE OF
                COMMON
      STOCK:Net
      earnings available to common stockholders
              $
              227,862
              
              $
              444,241Weighted
      average common shares outstanding
              
              4,504,214
              
              
              1,640,262Basic
      earnings per share of common stock
              $
              0.05
              
              $
              0.27DILUTED
      EARNINGS PER SHARE OF
                COMMON
      STOCK:Net
      earnings available to common stockholders
              $
              227,862
              
              $
              444,241Weighted
      average common shares outstanding
              
              4,504,214
              
              
              1,640,262Effect
      of dilutive securities:Options
              
              -
              
              
              -Convertible
      preferred stock
              
              913,288
              
              
              293,003Weighted
      average common shares outstanding after effect of dilutive
      securities
              
              5,417,502
              
              
              1,933,265Diluted
      earnings per share of common stock
              $
              0.04
              
              $
              0.23
 
  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 September 30,
2008:
 
 Securities
      Owned
              Level
      1
              
              Level
      2
              
              Level
      3
              
              TotalShort-term
      investments
              $
              183,218
              
              $
              -
              
              $
              -
              
              $
              183,218Total
              $
              183,218
              
              $
              -
              
              $
              -
              
              $
              183,218
 
 -17-
 International
Packaging and Logistics Group, Inc., and Subsidiaries
 (F/K/A
Kaire Holdings, Inc.)
 Notes
to Consolidated Financial Statements
 September
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
              
              9
      months endedSeptember
      30, 2007
              
              September
      30, 2007Sales
              $
              5,226,199
              
              $
              13,613,106Cost
      of goods sold
              
              (4,804,187)
              
              
              (12,315,876)Operating
      expenses
              
              (241,518)
              
              
              (789,062)Net
      other income
              
              5,932
              
              
              16,207Income
      tax expense
              
              (83,500)
              
              
              (138,357)Net
      income
              
              102,926
              
              
              386,018Unrealized
      gain/(loss) on investments
              
              (23,065)
              
              
              27,410Comprehensive
      income
              $
              79,861
              
              $
              413,428Net
      income per share – basic and diluted
              $
              0.03
              
              $
              0.10
 
 
 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.           Income
Taxes
 
 During
the nine months ended September 30, 2008, the Company received an unexpected tax
refund of $97,070.  The Company recorded this refund as an offset to
the current year’s income tax expense.
 
 
 14.           Subsequent
Events
 
 None




-18-
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 (f/k/a
Kaire Holdings, Inc.)
 September
30, 2008


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




-19-
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 (f/k/a
Kaire Holdings, Inc.)
 September
30, 2008





Overview





We import
glass containers from Asia and distribute to the North American market including
Canada. This was a result of International Packaging and Logistic Group, Inc.
(“IPLO”) acquiring H&H Glass in July of 2007.  IPLO closed its
pharmacy business in February 2007.





H&H
Glass is a  glass importer that supplies custom products such as
perfume bottles and food condiment bottles, plus provides complementary services
such as product design and the making of product molds.  H&H Glass
acquires its products from 3 to 5 suppliers in China and Taiwan and sells its
products through several distributors in the United States and Canada who
service small- to medium-sized customers.    H&H imports
in excess of 1,000 containers of glass a year.  Depending on the size
of the product a containers can contain anywhere from 3,000 to 300,000
pieces.








Plan of
Operation





Our
general operating plan 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
nine months ending September 30, 2008 and 2007





Revenue:





For the
three months ending September 30, 2008 and 2007, revenues were approximately
$4,693,573 and $5,226,199  respectively, for a decrease of $532,624
(10.2%) 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 several 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 nine months ending September
30, 2008 and 2007 were $13,497,299 and $13,613,106 respectively, for a decrease
of $115,807 (0.9%) over the same period in 2007.  The decrease was due
mainly to the plant capacity issue partially offset by price
increases.







-20-
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 (f/k/a
Kaire Holdings, Inc.)
 September
30, 2008


Cost of Goods
Sold:





Cost of
goods sold for the three months ending September 30, 2008 and 2007 were
$4,244,704 and $4,804,187 respectively, for a decrease of $559,483 (11.7%) over
the same period in 2007. This decrease is a direct result of the decrease in
sales. Cost of goods sold for the nine months ending September 30, 2008 and 2007
were $12,212,930 and $12,315,876 respectively, for a decrease of $102,946 (0.8%)
over the same period in 2007   This year to date decrease is mainly a
result of a decrease in sales, the component being a decrease in cost of glass
$104,363 or 1.0% decrease from prior year’s cost.





Gross
Profit:





Gross
profit was $448,871 and $422,012 for the three months ending September 30, 2008
and 2007, an increase of $26,859 (6.4%) over the same period in
2007.   The gross profit margin as a percent of sales for the
three months ending September 30, 2008 and 2007 was 9.6% and 8.1 % respectively
for an increase of 1.5%.  Gross profit for the nine months ending
September 30, 2008 and 2007 were $1,284,369 and $1,297,230 respectively for a
decrease of $12,861 (1.0%).  The gross profit margin as a percent of
sales for the nine months ending September 30, 2008 and 2007 was 9.5% and 9.5%
respectively for no (0.0%) change in percentage over the prior year.
  The flat change in gross profit percentage from prior period was
mainly attributable to keeping the relationship level between the price of glass
plus freight and the sales price of product to customers.





Operating
Expenses:





Operating
expenses for the three and nine month period ended September 30, 2008 were
$223,494 and $842,983 respectively for a decrease of $12,682 (5.4%) and an
increase of $112,144 (15.3%) respectively from the same period prior
year.  These differences in operating expenses were mostly
attributable to the following:




Operating Expense AnalysisThree months ending:
                9/30/2007
                
                9/30/2008
                
                $
      VAR
                
                %
      VARSalaries
      and Related Expense
                $97,644
                
                $98,522
                
                878
                
                0.90%
                Increase
      in salariesRent
                24,944
                
                15,122
                
                -9,822
                
                -39.38%
                2006
      CAM(common area fee) was paid in July 2007Professional
      Services
                15,979
                
                725
                
                -15,254
                
                -95.46%
                Accrued
      partial audit fee in Q3 in 2007Directors
      Fees
                -
                
                3,000
                
                3,000
                
                100.00%
                No
      director fees in 2007Subcontractor
      Expense
                899
                
                9,975
                
                9,076
                
                1009.57%
                New
      legal Fees of $3k per monthAccounting
                3,000
                
                20,740
                
                17,740
                
                591.33%
                $10K
      tax prep fee, $10K third Qtr review feeTravel
                77,690
                
                57,860
                
                -19,830
                
                -25.52%
                Travel
      to fewer countries in 2008Other
                16,020
                
                17,550
                
                1,530
                
                9.55%
                Miscellaneous
      items$236,176
                
                $223,494
                
                -12,682
                
                -5.37%


-21-
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 (f/k/a
Kaire Holdings, Inc.)
 September
30, 2008




Operating Expenses -
continued:




Nine months ending:
              6/30/2007
              
              6/30/2008
              
              $
      VAR
              
              %
      VARSalaries
      and Related Expense
              $349,783
              
              $349,009
              
              -774
              
              -0.22%
              Increases
      to base salariesRent
              63,052
              
              55,861
              
              -7,191
              
              -11.40%
              Increase
      per terms of leaseInsurance
      Expense
              51,235
              
              65,466
              
              14,231
              
              27.78%
              Increase
      in ratesProfessional
      Services
              39,018
              
              20,295
              
              -18,723
              
              -47.99%
              Accrued
      partial audit fee in Q3 in 2007Directors
      Fees
              -
              
              10,500
              
              10,500
              
              100.00%
              No
      director fees in 2007Subcontractor
      Expense
              4,462
              
              19,875
              
              15,413
              
              345.43%
              New
      legal Fees of $3k per monthAccounting
              3,000
              
              84,811
              
              81,811
              
              100.00%
              Fees
      -$10K tax prep, $44K audit, $30K Qtrly reviewTravel
      Expense
              197,991
              
              188,581
              
              -9,410
              
              -4.75%
              Travel
      to fewer countries in 2008Outside
      Services
              -
              
              21,109
              
              21,109
              
              100.00%
              Proxy
      printing cost, tax footnote feeAll
      others
              21,298
              
              27,476
              
              6,178
              
              29.01%
              Miscellaneous
      items$729,839
              
              $842,983
              
              113,144
              
              15.50%





Other Income
(Expenses):





Interest
income for the three and nine months ended September 30, 2008 and 2007 was
$3,413 and $9,442 respectively for a decrease of $2,519 (42.5%) and $6,765
(41.7%) 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, 2008 and 2007 was $0 and $10,833 respectively for an
increase 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.  These notes were converted
into preferred shares on June 30, 2008.  There was no equivalent expense in
the previous year.





-22-
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 (f/k/a
Kaire Holdings, Inc.)
 September
30, 2008


Other
income for the three and nine month period ended September 30, 2008 was $0 and
$26,000 respectively for an increase 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 during the second quarter ending June
30, 2008.  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 nine months ending September 30, 2008 amounted to
$82,726, which mainly consisted the income for the nine months ending September
30, 2008 of $227,862 plus the following; 1) depreciation expense of $3,811,
2) preferred shares issued for accrued interest of $10,833, 3) decrease in
account receivable of $25,407, 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, 3) increase in income tax refund receivable of
$10,897,  and 4) a decrease in accounts payable and accrued expenses
of $648,833.





The
decrease in accounts receivable of $25,407 is a result of more timely receipt of
payments in 2008.  The decrease in accounts payable and accrued
expenses of $648,833 consisted mainly of a decrease in accounts payable for
products of $694,320, which was primarily attributable to lower sales volume and
to payments being made near the end of the reporting period.  The
increase in taxes payable of $326,903  is a result of the prior year’s
income tax expense plus a overpayment of taxes discovered and included in income
taxes payable..





On
September 30, 2008 the Company had total assets of $4,305,763 compared to
$4,484,011 on December 31, 2007, a decrease of $178,248 or 4.0%.  The
Company had a total stockholder's equity of $1,280,022 on September 30, 2008,
compared to a stockholder’s equity of $843,673 on December 31, 2007, an increase
of $436,349 (51.7%).  As of September 30, 2008 the Company's working
capital position increased by $429,728 (68.4%) from working capital of $628,163
at December 31, 2007 to working capital of $1,057,891 at September 30,
2008.  This increase is mainly a result of a net income for the nine
months ended September 30, 2008 and conversion of loan payable and accrued
interest to preferred stock..





Capital
Resources





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





Subsequent
Events:





None




-23-
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 (f/k/a
Kaire Holdings, Inc.)
 September
30, 2008


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 September 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.




-24-
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 (f/k/a
Kaire Holdings, Inc.)
 September
30, 2008


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 contract 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 September 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 September
30, 2008.








ITEM
2                   Unregistered
Sales of Equity Securities and Use of Proceeds





None





-25-
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 (f/k/a
Kaire Holdings, Inc.)
 September
30, 2008


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)























-26-
 International
Packaging and Logistics Group, Inc.
 and
Subsidiaries
 (f/k/a
Kaire Holdings, Inc.)
 September
30, 2008











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
19,
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, Director





-27-