Annual report [Section 13 and 15(d), not S-K Item 405]

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended December 31, 2015

or

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from________________________ to __________________________

Commission file number 0-21384

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC .

______________________________________________________________________________________

(Exact name of registrant as specified in its charter)

Delaware 8980 13-3367421
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number ) Identification No.)

7700 Irvine Center Drive, Suite 870, Irvine, California 92608
(Address of principal executive offices) (Zip code)

(949) 861-3560

____________________________________________________________________________________________

Registrant’s telephone number, including area code

Title of each class Name of each exchange on which registered
Common stock, par value $0.001 per share None
Convertible Preferred stock, Series A, par value $0.0001 per share None

Securities registered pursuant to section 12(g) of the Act:

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.      [_] Yes     [x] No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.     [_] Yes     [x] No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     [x] Yes     [_] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.      [_]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes [x]     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 ☐ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     [_] Yes     [x] No

As of June 30, 2015 the aggregate market value of the shares of the Registrant’s common stock held by non-affiliates was $109,264 based upon the closing price ($.30) of such shares as quoted on the OTC Markets as of February 29, 2016. Shares of the Registrant’s common stock held by each executive officer and director and each by each person who owns 10 percent or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates of the Registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

There were a total of 4,504,214 shares of the registrant’s common stock outstanding as of March 31, 2016.

DOCUMENTS INCORPORATED BY REFERENCE

PART I

ITEM 1.         Description of Business

Business

Present Business

On July 2, 2007, International Packaging and Logistics Group, Inc. (“IPL Group” or “the Company”) through its wholly-owned subsidiary, YesRx.com (“YesRx”) acquired all the outstanding shares of H&H Glass, Inc. (“H&H Glass” or “H&H”). 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 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 shipping containers of glass a year. Depending on the size of the product, a container can contain anywhere from 3,000 to 300,000 pieces.

History

International Packaging and Logistics Group, Inc., a Nevada corporation, was originally incorporated as Interactive Medical Technologies, Ltd., on June 2, 1986 in the state of Delaware. On April 17, 2008, IPL Group converted from a Delaware corporation to a Nevada Corporation.

Effective February 3, 1998, Interactive Medical Technologies, Ltd., changed its name to Kaire Holdings Incorporated, and effective May 28, 2008 its name changed from Kaire Holdings Incorporated to International Packaging and Logistics Group, Inc.

On January 23, 2007, IPL Group and its wholly-owned subsidiary, YesRx.com, executed a Letter of Intent whereby YesRx.com would acquire all of the outstanding stock of H&H Glass Corporation, an Illinois corporation. H&H Glass was formed in 1989. As part of this transaction, on February 4, 2007, IPL Group discontinued its pharmacy business, and Effective Health, Inc., was shut down.

Acquisition of H&H Glass

On July 2, 2007, an Agreement and Plan of Merger was executed between IPL Group, its wholly-owned subsidiary YesRx.com, and H&H Glass, whereby YesRx.com acquired all of the outstanding stock of H&H Glass Corporation, an Illinois corporation in exchange for 3,915,000 shares of IPL Group’s common stock representing 87% of IPL Group’s outstanding stock. As part of the merger agreement, 225,000 shares were issued to Naccarato and Associates related to assistance with the merger.

As a result of the Merger, there was a change in control of IPL Group. In accordance with ASC Topic 805, 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.

Acquisition of EZ Link Corporation

On January 1, 2010, International Packaging and Logistics Group, Inc., (“IPL Group Inc.”), acquired a majority interest in EZ Link Holdings, Ltd., a company organized under the laws of the British Virgin Islands on December 18, 2009, which controls EZ Link Corporation (“EZ Link”), a logistics company headquartered in Taiwan. EZ Link was established in July 2003 under the laws of Taiwan, Republic of China. EZ Link Holdings, Ltd. consolidates EZ Link under ASC Topic 810 as it controls EZ Link through a management contract. EZ Link is a full service international freight forwarder, who has current networks to locations in China, Hong Kong, South East Asia, North East Asia, North America, Latin America and Europe.

The capital stock of EZ Link Holdings, Ltd. (“EZ Link Holdings”) consists of 50,000 authorized shares of common stock, US$1.00 par value, of which 24,500 shares were issued and outstanding and held by Seller (“Shares”). Upon the terms and conditions set forth below, Seller assigned fifty-one percent (51%) of its shares, or 25,500 shares in the aggregate, to Buyer, such that, following such transaction, EZ Link Holdings, Ltd, was a majority owned subsidiary of Buyer. The parties agreed that 51% ownership of the issued and outstanding shares of EZ Link Holdings, Ltd had an estimated market value of approximately US$857,143 (the “Purchase Price”).

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(a) A portion of the Purchase Price amount (US$457,143) was paid in common shares of IPL Group, Inc. as of the closing date based on a per share value of US$1.00, or 457,143 shares. Such shares bear the appropriate restrictions.

(b) A portion of the Purchase Price amount (US$400,000) was paid in Series B Convertible preferred shares which are convertible into shares of IPL Group, Inc. common shares on a one for one basis. The preferred were valued at US$1.00 per share, and are exercisable pursuant to the terms and conditions specified in the purchase agreement.

Vend-out of EZ Link Corporation

As of February 28, 2015, IPLO’s majority interest in EZ Link Holdings, was sold back to EZ Link Holdings. for the following terms: In exchange for the fifty-one percent (51%) of the EZ Link Shares, or 688,500 EZ Link Shares in the aggregate acquired by IPL, EZ Link will return

(a) an aggregate of 457,143 shares of IPL common shares issued on June 26, 2009 to the shareholders of EZ Link as consideration of acquiring 51% of EZ Link; and

(b) an aggregate of 400,000 Series B preferred shares issued on June 30, 2009 to the shareholders or assigns of EZ Link as consideration of acquiring 51% of EZ Link.

Product Liability Insurance

We carry product liability insurance through Golden Eagle Insurance Corporation.

Competition

We do not compete with large glass manufacturing companies because they require very large minimum orders. Other importers are our main competition, which operate on a smaller scale, usually out of their homes and without name recognition. However, they do sometimes have a broader distribution network and warehousing facilities which can cover almost all of the United States and Canada market area. H&H Glass feels its competitive advantage is smaller minimum run requirements, shorter runaround on mold orders at a lower cost, and providing assistance in product design. H&H Glass generally has a longer service history than its competitors.

Some of our larger competitors are Owens Illinois, Vitro, Weaton’s and SGB Group (France).

Patents, Licenses and Trademarks

Not Applicable

Royalty Agreements

Not Applicable

Government Regulations

Not Applicable – No regulatory issues in Taiwan to restrict IPL Group business.

Research and Development Plan

Not Applicable

Employees

H&H Glass has four (4) full time employees and one (1) part time employee.

ITEM 2.          Description of Property

International Packaging and Logistics Group, Inc.’s corporate headquarters are located in the H&H Glass offices at 7700 Irvine Center Drive, Suite 870, Irvine California 92618. H&H Glass rents approximately 2,900 square feet of office space for its headquarters. The lease began on January 1, 2013 and expires on August 31, 2019. As of December 31, 2015, total monthly base rent is $6,612 per month.

ITEM 3.          Legal Proceedings

None

ITEM 4. Mine Safety Disclosure

Not applicable

4

PART II

ITEM 5.          Market for Common Equity and Related Shareholder Matters

Our common stock is quoted on the Over-the Counter Bulletin Board, (“the OTCBB”), under the trading symbol “IPLO”. The following table set forth the quarterly high and low bid prices per share for our common stock. The bid prices reflect inter-dealer prices, without retail markup, markdown, or commission and may not represent actual transactions. The low prices are often arbitrary prices put in the system by market makers.

High Low
Year ended December 31, 2015
First quarter $ 0.59 $ 0.15
Second quarter $ 0.22 $ 0.02
Third quarter $ 0.04 $ 0.02
Fourth quarter $ 0.12 $ 0.04
Year ended December 31, 2014
First quarter $ 0.85 $ 0.12
Second quarter $ 0.75 $ 0.12
Third quarter $ 0.75 $ 0.12
Fourth quarter $ 0.75 $ 0.01

As of December 31, 2015, there were approximately 828 registered shareholders of the Company’s Common Stock with 4,504,214 shares issues and outstanding.

Dividends

To date, the Company has not declared or paid dividends on its Preferred or Common Stock.

Transfer Agent and Registrar

The Company’s transfer agent is Jersey Transfer and Trust Company located at 1250 Sussex Turnpike, #606; Mount Freedom, NJ 07970-0606.

Securities authorized for issuance under equity compensation plans.

N/A

Recent Sales of Unregistered Securities

N/A

ITEM 6.          Selected Financial Data

N/A

ITEM 7.          Management’s Discussion and Analysis of Financial Condition and Results of Operations

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  In some cases, forward-looking statements are identified by terms such as “may”, “will”, “should”, “could”, “would”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “projects”, “predicts”, “potential”, and similar expressions intended to identify forward-looking statements.

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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.

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. (“IPL Group, Inc.”) acquiring H&H Glass in July of 2007. IPL Group, Inc. closed its pharmacy business in February 2007.

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

In 2010, International Packaging and Logistics Group, Inc., acquired a majority interest in EZ Link Holdings, Ltd., a company organized under the laws of the British Virgin Islands on December 18, 2009, which controls EZ Link Corporation, a logistics company headquartered in Taiwan. EZ Link was established in July 2003 under the laws of Taiwan, Republic of China. EZ Link Holdings, Ltd. consolidates EZ Link under ASC Topic 810 as it controls EZ Link through a management contract. EZ Link is a full service international freight forwarder, who has current networks to locations in China, Hong Kong, South East Asia, North East Asia, North America, Latin America and Europe.

Vend-out of EZ Link Corporation

As of February 28, 2015, IPLO’s majority interest in EZ Link Holdings Ltd., was sold back to EZ Link Holdings. for the following terms: In exchange for the fifty-one percent (51%) of the EZ Link Corporation Shares, or 688,500 EZ Link Corporate Shares in the aggregate acquired by IPL, EZ Link will return

(a) an aggregate of 457,143 shares of IPL common shares issued on June 26, 2009 to the shareholders of EZ Link Corp as consideration of acquiring 51% of EZ Link Corporation; and

(b) an aggregate of 400,000 Series A preferred shares issued on June 30, 2009 to the shareholders or assigns of EZ Link Corp as consideration of acquiring 51% of EZ Link Corporation.

Plan of Operation

Our general operating plan is as follows:

Short Term

· Continue growing revenue and profits through the existing business;
· 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 using plastic and acrylic materials.
· Integrate our new logistics business into our overall plan

Long Term

· Expand our service into other areas such as Europe and Australia through the same supplier channel.  Our existing business model copies to other markets naturally.
· Expand the client base and areas of service of our logistics business.

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Results of Operations

Year Ended December 31, 2015 Compared to December 31, 2014

Revenue:

For the years ending December 31, 2015 and 2014, revenues were $38,499,995 and $35,728,361 respectively, for an increase of $2,771,634 or 7.8% over the same period in 2014. The increase in revenue is a mainly due to an improved US economy which resulted in increased volume.

Cost of Goods Sold :

Cost of goods sold for the years ending December 31, 2015 and 2014 were $36,957,989 and $34,324,102 respectively, for an increase of $2,633,887 or 7.7% over the same period in 2014. This increase is mainly due to the increase in business. This increase in cost of goods sold is consistent with the increase in sales.

Gross Profit :

Gross profit was $1,542,006 and $1,404,259 for the years ending December 31, 2015 and 2014, an increase of $137,747 or 9.8% over the same period in 2014. The gross profit margin as a percent of sales for the years ending December 31, 2015 and 2014 was 4.0% and 3.9 % respectively for an increase of 0.1%.

Operating Expenses :

Operating expenses were $1,494,415 and $1,319,046 for the years ending December 31, 2015 and 2014, an increase of $175,369 (13.3%) over the same period in 2014. The increase in operating expenses was mostly attributable to the following:

Twelve months ending: 12/31/15 12/31/2014 $ VAR % VAR
Salaries & Related Expense $ 630,641 $ 581,481 $ 49,160 8.5% The change in salaries was bonuses paid in 2015
Rent 76,108 46,864 $ 29,244 62.4% Monthly rent credit expired in March 2015
Insurance 145,004 108,483 $ 36,521 33.7% Insurance increased due to timing of invoices received
Meals & Entertainment 15,934 16,574 ($ 640 ) -3.9% Meals and Entertainment spending remained flat
Legal 36,000 36,000 $ 0 0.0% No change as a result of no additional activity.
Accounting 101,404 124,597 ($ 23,193 ) -18.6% Audit fees reduced due to the sale of EZ Link
Travel Expense 367,240 325,955 $ 41,285 12.7% H&H Glass had increased travel in 2015
Miscellaneous 122,084 79,092 $ 42,992 54.4% Miscellaneous items
Total Expenses $ 1,494,415 $ 1,319,046 $ 175,369 13.3%

Other Income (Expense):

Interest income (expense) for the years ended December 31, 2015 and 2014 was $440,869 and ($299) respectively for a decrease of $41,168 (13,768.5%) from the same period in 2014. The increase in income is mainly a combination of accrued expenses written off of $24,675 plus miscellaneous income items of $16,194.

Liquidity and Capital Resources

Net cash provided by operating activities for the year ended December 31, 2015 amounted to $84,580, which mainly consisted of the following: Annual net income of $88,460 plus a decrease in accounts receivable of $1,203,004, a decrease in inventory of $465,995, a decrease in other assets of $21,180, offset by decrease in other current liabilities of $33,175, a decrease in accounts payable and accrued expenses of $1,660,884.

On December 31, 2015 the Company had total assets of $8,312,070 compared to $12,291,762 on December 31, 2014, a decrease of $3,979,692 or 32.4%.  The Company had total equity of $1,571,275 on December 31, 2015, compared to total stockholders’ equity of $3,194,917 on December 31, 2014 a decrease of $1,623,662 (50.8%).  As of December 31, 2015 the Company's working capital position increased by $190,336 (16.3%) from working capital of $1,164,387 at December 31, 2014 to working capital of $1,354,723 at December 31, 2015.

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Capital Resources

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

Federal Income Tax

The Company 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.

EZ Link Corporation is governed by Taiwan’s Income Tax Law and local income tax laws. Pursuant to the Taiwan Income Tax Law, enterprises are subject to tax at a statutory rate of 17%. The local government has also provided companies with various incentives to encourage economic development in the region. Such incentives include reduced tax rates and other measures.

Subsequent Events

On February 16, 2016, International Packaging and Logistics Group, Inc. (“IPLO”) entered into a Binding Letter of Intent acquire Shandong Yibao biologics Co. Ltd (“Shandong”) a China company and biotech Energy, Inc. a California corporation (“Biotech”). In summary the following will close upon completion of the audit of Shandong Yibao biologics Co. Ltd;

Transaction One

Shandong and Biotech shall purchase 3,915,000 shares of IPLO common stock from IPLO for

$225,000; and

Transaction Two

IPLO shall acquire 51% of Shandong and 100% of Biotech in exchange for the issuance of Class C, 6% Preferred Stock ("Preferred Stock") to be issued to Shandong.

(a) Preferred Stock. The number of shares of Preferred Stock to be issue to Shandong shall be determined at the Closing on the basis of $1.00 per share. The total value of the shares shall be equal to 51% of the difference between the net assets of Shandong and the net assets of Biotech.

[Ex. If the value of Shandong's net assets is $10,000,000, and the value of Biotech's net assets is $1,000,000, then the difference is $9,000,000.51% of $9,000,000 = $4,590,000. Therefore, 4,590,000 shares of Preferred Stock will be issued to Shandong.]

(b) The Preferred Stock shall pay an annual dividend of 6%: payable quarterly.
(c) The Preferred Stock may be redeemed by IPLO at any time at $1.00 dollar per share plus any accrued dividends.

The audits of the financial statements of Shandong and of Biotech need to be completed by May 1, 2016 in order for the transactions to be concluded.

ITEM 7A.        Quantitative and Qualitative Disclosures about Market Risk

N/A

ITEM 8.           Financial Statements

The report of Independent Registered Public Accounting Firm and financial statements are set forth in this report beginning on Page F-1.

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ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

ITEM 9A. Controls and Procedures .

(a) Evaluation of disclosure controls and procedures. Our Chief Executive Officer and Principal Financial Officer, 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 Annual Report on Form 10-K (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.

(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.

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 management 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 ("2013 COSO Framework").

A material weakness is a deficiency or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Our management 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 mainly one person involved in processing of transactions. Therefore, it is difficult to effectively segregate accounting duties. We have hired an additional administrative person and retained an outside professional firm to assist in the separation of duties on an ongoing basis. The use of the outside firm has proven successful in assisting in the separation of duties. However, additional people are not needed to do the administrative work therefore segregation of duties will continue to be an ongoing weakness.

Similarly, the EZ Link operation also has a material weakness due to lack of segregation of duties. Its 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. We have retained an outside professional firm to assist in the separation of duties on an ongoing basis. The use of the outside firm has proven successful in assisting in the separation of duties. However, additional people are not needed to do the administrative work therefore segregation of duties will continue to be an ongoing weakness.

Based on this evaluation and because of the material weaknesses, management has concluded that our internal control over financial reporting was not effective as of December 31, 2015.

This annual report does not include an attestation report of the Company's independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's independent registered public accounting firm pursuant to rules of the SEC that permit the company to provide only management's report on internal control in this annual report.

Item 9B.        Other Information.

N/A

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PART III

ITEM 10. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act

The Company has three directors and a sole executive officer, and their ages and positions with the Company as of December 31, 2015 are as follows:

Name Age Office Since
Owen Naccarato 66 Director, CEO and Acting CFO April 2012
William Gresher 69 Director January 2007
Allen Lin 62 Director January 2007

Allen Lin has over 20 years of packaging industry and financial venture investment experiences which included successful start-ups, H & H Glass Inc., in 1989, where he is instrumental in global manufacturing outsourcing for rigid packaging material (including but not limited to glass containers) in packaging distribution solutions for North America. Mr. Lin recently earned a degree of Mater of International Law from a national university in Germany and also holds an MBA from a national university in Chicago, Illinois, USA (graduated with Honor). Mr. Lin has gained international exposure from the tasks involved in identifying merger and acquisition candidates in the packaging distribution network and promoting his packaging business in the North American, South American and European continents. Born and raised in Taiwan, Mr. Lin is fluent in both Chinese and English.

William Gresher retired in July 2009 as the Chief Financial Officer with The Mexmil Company where he had been for 4 years. Prior to Mexmil, Mr. Gresher held high level financial positions in several companies including the Chief Financial Officer for Distinctive Appliances, Inc. (DACOR), in Pasadena, CA, Vice President of Finance for Fadal Engineering in Chatsworth, CA., Vice President Corporate Financial Planning for Allergan Inc., Irvine, CA., Vice President Controller, Bentley Laboratories, Inc., Irvine CA, a division of Baxter International, Inc., Controller of Bell & Howell Co., Lincolnwood, IL., and several years with Arthur Andersen & Co., Chicago, IL. Mr. Gresher has a Bachelor’s Degree in Accounting and an MBA from Northern Illinois University. Mr. Gresher started his career as a CPA with Arthur Andersen & Co. Next, Mr. Gresher moved to Bell & Howell for 8 years of which 4 years were spent in Tokyo, Japan where he was Plant Controller for their manufacturing operations. The next 10 years were spent with Baxter International in a variety of managerial positions including Director of Finance – Asia Pacific, Assistant Corporate Controller and Vice President Finance for Bentley Laboratories in Irvine California. At Allergan Inc., Mr. Gresher held Vice President positions for the Humphrey, International and European divisions, as well a Vice President Corporate Financial Planning.

Owen Naccarato has been corporate counsel and secretary for the Company since 2007. Mr. Naccarato also has for the last fifteen years been a practicing attorney specializing in corporate and securities law. Prior to practicing law, Mr. Naccarato held various high level financial and operating positions with fortune 500 firms. Mr. Naccarato is a member of the American Bar Association, the California State Bar Association, the Orange County and the Los Angeles County Bar Associations. Mr. Naccarato has a J.D. from Western State University, an MBA from DePaul University and an undergraduate degree in accounting from Northern Illinois University. Mr. Naccarato is also a Director for Greengro Technologies Inc. and Optex Systems Holding, Inc.

Compensation of Directors :

Directors received remuneration totaling in aggregate of $12,000 during the years ended December 31, 2015 and 2014. Directors receive $500 a month in directors’ fees with the exception of Mr. Lin who received no compensation for director’s services for the years ended December 31, 2015 and 2014.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors and executive officers, and persons who own more than 10% of a registered class of the Company’s equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Officers, directors and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

To the Company’s knowledge, based solely on its review of the copies of such reports furnished to the Company and written representations that no other reports were required during the fiscal year ended December 31, 2014, all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% beneficial owners were complied with.

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Code of Ethics for the Chief Executive Officer and the Principal Financial Officer

On September 7, 2004, the Board of Directors of the Company adopted the Code of Ethics for Chief Executive Officer and the Principal Financial Officer, which was included as exhibit 14.1 with the December 31, 2004 Form 10KSB.

ITEM 11. Executive Compensation

The following table sets forth certain summary information regarding compensation paid by IPL Group for services rendered during the fiscal years ended December 31, 2015 and 2014, respectively, to the Company’s Chief Executive Officer and Chief Financial Officer during such period.

Summary Compensation Table

Executive Compensation :

SUMMARY COMPENSATION TABLE
Name and principal position

Year

Salary ($)

Bonus ($)

Stock Awards ($)

Option Awards ($)

Non-Equity Incentive Plan Compensation ($)

Nonqualified Deferred Compensation Earnings ($)

All Other Compensation ($)

Total ($)

Owen Naccarato, CEO and CFO 2015 0 0 0 0 0 0 42,000 42,000
2014 0 0 0 0 0 0 42,000 42,000
Allen Lin, President H&H Glass 2015 276,000 0 0 0 0 0 50,000 326,000
2014 268,000 0 0 0 0 0 37,000 305,000

During 2015 and 2014, Mr. Naccarato received $6,000 in annual director’s fees, included above.

Outstanding Equity Awards at Fiscal Year-end

The following table sets forth certain summary information regarding outstanding equity awards as of December 31, 2015 to the Company's Chief Executive Officer and Chief Financial Officer and most highly paid executive officers during such period.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OPTION AWARDS STOCK AWARDS
Name

Number of Securities Underlying Unexercised Options
(#)
Exercisable

Number of Securities Underlying Unexercised Options
(#)
Unexercisable

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)

Option Exercise Price
($)

Option Expiration Date

Number of Shares or Units of Stock That Have Not Vested
(#)

Market Value of Shares or Units of Stock That Have Not Vested
($)

Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
(#)

Owen Naccarato 0 0 0 0 0 0 0 0 0
Allen Lin 0 0 0 0 0 0 0 0 0

11

Compensation of Directors

DIRECTOR COMPENSATION
Name

Fees Earned or Paid in Cash
($)

Stock Awards ($)

Option Awards ($)

Non-Equity Incentive
Plan Compensation
($)

Non-Qualified Deferred Compensation Earnings
($)

All
Other Compensation ($)

Total ($)

Owen Naccarato $ 6,000 0 0 0 0 0 $ 6,000
William Gresher $ 6,000 0 0 0 0 0 $ 6,000
Allen Lin $ 0 0 0 0 0 0 $ 0

Options/SAR Grants in the Last Fiscal Year:

None

Employment Agreements

None

Employee Benefits

H&H Glass offers health insurance to all its employees. H&H Glass also has a discretionary post-employment benefit plan available to its employees.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information known to the Company with respect to the beneficial ownership of the Company’s common stock as of December 31, 2015 by (i) each person who is known by the Company to own beneficially more than 5% of the Company's common stock and (ii) the Company’s directors and executive officers, and (iii) all officers and directors of the Company as a group.

Shares beneficially owned  (1)
Number of shares Percentage of class (2)
Standard Resources Ltd. (3)
8/F Hing Wong Court
21-23 Tai Wong Street East
Wanchi, Hong Kong
3,915,000 86.9%
Officers and Directors as a group 3,915,000 86.9%

(1) Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable or convertible within 60 days of December 31, 2015 are deemed outstanding for computing the percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person. Except as pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned.

(2) Percentage based on 4,504,214 shares of common stock outstanding as of December 31, 2015.

(3) Standard Resources LTD is a related company to Allen Lin, the founder and CEO of H&H Glass.

12

ITEM 13. Certain Relationships and Related Transaction

Allen Lin

The Company paid Mr. Allen Lin, President of H&H Glass and a member of the board of directors of the Company, compensation of $326,000 and $305,000 for the years ended December 31, 2015 and 2014, respectively.

Josephine Lin

Josephine Lin, Mr. Lin’s wife, is employed by the Company and was paid a salary of $60,000 and $58,000 for the years ended December 31, 2015 and 2014, respectively.

Owen Naccarato

During 2015 and 2014, Mr. Naccarato, the Company’s Chief Executive Office and acting Chief Financial Officer, was paid director fees of $6,000 and $36,000 for legal fees performed.

William Gresher

During 2015 and 2014, Mr. Gresher, a member of the Board of Directors, was paid $6,000 per year director fees.

ITEM 14. Principal Accountant Fees and Services

The Company paid the following fees in each of the prior two fiscal years to its independent certified public accountants, RBSM LLP:

For the Year Ended December 31,
2015 2014
Audit Fees $ 50,040 $ 78,750
Audit-Related Fees 26,000 69,000
Tax Fees 25,000 25,505
All Other Fees
Total Fees $ 101,040 $ 173,255

"Audit Fees" consisted of fees billed for services rendered for the audit of the Company’s annual financial statements and audit related fees are for review of the financial statements included in the Company’s quarterly reports on Form 10-Q. Tax fees are for tax preparation and compliance services.

ITEM 15. Exhibits, List and Reports in Form 8-K

(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)

(b) Reports on Form 8-K
Form 8-K filed on 3-20-2015: EZ LINK Corporation (“EZ LINK”), a majority owned subsidiary of  IPL Group Inc., acquired back IPL Group Inc.’s share position in EZ Link in exchange for their share position in IPL Group Inc. This transaction was effective as of February 28, 2015.

13

Signatures

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

International Packaging and Logistics Group, Inc.
By: /s/ Owen Naccarato
Owen Naccarato
Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/          Owen Naccarato April 19, 2016
Owen Naccarato Chief Executive Officer,
Principal Financial Officer and Director
/s/          Allen Lin April 19, 2016
Director
/s/          William Gresher April 19, 2016
Director

14

International Packaging and Logistics Group, Inc.,

and Subsidiaries

Consolidated Financial Statements

for the Years Ended

December 31, 2015 and 2014

C O N T E N T S

Reports of Independent Registered Public Accountants F-1
Consolidated Balance Sheets F-2
Consolidated Statements of Operations and Comprehensive Income F-3 – F-5
Consolidated Statements of Changes in Stockholders’ Equity F-6
Consolidated Statements of Cash Flows F-7
Notes to Consolidated Financial Statements F-8 – F-17

15

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
International Packaging and Logistics Group, Inc.

We have audited the accompanying consolidated balance sheets of International Packaging and Logistics Group, Inc. (the “Company”) as of December 31, 2015 and 2014, and the related consolidated statements of operations and comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2015. International Packaging and Logistics Group, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of International Packaging and Logistics Group, Inc. as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

/s/ RBSM LLP

RBSM LLP

Larkspur, CA

April 19, 2016

F- 1

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2015 AND DECEMBER 31, 2014

December 31 December 31
2015 2014
Current Assets
Cash $ 746,786 $ 661,510
Accounts receivable, net 6,877,827 8,080,831
Inventory 470,905 936,900
Total Current Assets 8,095,518 9,679,241
Other Assets
Deposits 12,953 12,953
Deferred tax assets 203,599 224,779
Total Other Assets 216,552 237,732
Assets Held for Sale - Discontinued Operations 2,374,789
Total Assets $ 8,312,070 $ 12,291,762
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses $ 6,740,795 $ 8,434,854
Notes payable - related party 80,000
Total Current Liabilities 6,740,795 8,514,854
Liabilities Discontinued subsidiary
Notes payable 8,287
Accounts payable 566,838
Other current liabilities 6,846
Liabilities - discontinued Operations 581,971
Total Liabilities 6,740,795 9,096,825
Stockholders' Equity
Convertible preferred shares: $0.0001 par value, 50,000,000 shares authorized,
974,730 Series A issued and outstanding 98 98
nil and 400,000 Series B issued and outstanding, respectively 40
Common stock: $0.001 par value, 900,000,000 shares authorized, 4,504,214 and 4,961,357 issued and outstanding, respectively 4,504 4,961
Additional paid-in capital 1,355,570 2,202,877
Accumulated earnings 211,103 106,719
Total International and Logistics Group Inc. Stockholders’ Equity 1,571,275 2,314,695
Non-controlling interest in subsidiary 880,242
Total Stockholders’ Equity 1,571,275 3,194,937
Total Liabilities and Stockholders’ Equity $ 8,312,070 $ 12,291,762

The accompanying notes are integral to these consolidated financial statements.

F- 2

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

December 31 December 31
2015 2014
Revenues
Packaging $ 38,499,995 $ 35,728,361
Total Revenues 38,499,995 35,728,361
Cost of Goods Sold
Packaging 36,957,989 34,324,102
Total Cost of Goods Sold 36,957,989 34,324,102
Gross Profit 1,542,006 1,404,259
Operating Expenses
Administrative expenses 787,666 690,701
Rent 76,108 46,864
Salaries and wages 630,641 581,481
Total Operating Expenses 1,494,415 1,319,046
Income from Operations 47,591 85,213
Other income (loss)
Interest income (expense), net (299 )
Other income (expense) 40,869
Total Other Income (Loss) 40,869 (299 )
Net Income from Continuing
Operations before Income Taxes 88,460 84,914

The accompanying notes are integral to these consolidated financial statements.

F- 3

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

December 31 December 31
2015 2014
Income tax benefit (expense) (41,137 )
Net Income from Continuing Operations 88,460 43,777
Discontinued operations:
Gain from operations, including portion attributable to non-controlling interest of discontinued Logistics component
15,924 18,855
Income tax benefit (10,217 )
Income on discontinued operations 15,924 8,638
Net Income 104,384 52,415
Reclassification discontinued operations (34,414 )
Comprehensive Income $ 104,384 $ 18,001
Earnings per weighted average share of common stock - basic
$ 0.02 $ 0.01
Earnings per weighted average share of common stock - diluted
$ 0.02 $ 0.01
Weighted average shares outstanding - basic 4,578,120 4,961,357
Effect of dilutive securities 1,039,388 1,374,730
Weighted average shares outstanding - diluted 5,617,508 6,336,087

The accompanying notes are integral to these consolidated financial statements.

F- 4

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

AMOUNTS ATTRIBUTABLE TO THE COMMON STOCKHOLDERS: 2015 2014
Income from continuing operations, net of tax $ 88,460 $ 43,777
Income from discontinued operations, net of tax 15,924 8,638
Net income $ 104,384 $ 52,415
BASIC EARNINGS PER SHARE:
Income from continuing operations attributable to common stockholders, net of tax $ 0.02 $ 0.01
Income from discontinued operations attributable common stockholders, net of tax 0.00 0.00
NET INCOME ATTRIBUTABLE TO THE COMMON STOCKHOLDERS $ 0.02 $ 0.01
DILUTED EARNINGS PER SHARE:
Income from continuing operations attributable to common stockholders, net of tax $ 0.02 $ 0.01
Income from discontinued operations attributable to common stockholders, net of tax 0.00 0.00
NET INCOME ATTRIBUTABLE COMMON STOCKHOLDERS $ 0.02 $ 0.01
Comprehensive income $ 104,384 $ 18,001

The accompanying notes are integral to these consolidated financial statements.

F- 5

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

Preferred Stock Preferred Stock Additional Accumulated Other Non
Series A Series B Common Stock Paid-In Comprehensive Accumulated Controlling
Shares Amount Shares Amount Shares Amount Capital Income Earnings Interest Total
December 31, 2013 974,730 $ 98 400,000 $ 40 4,961,357 $ 4,961 $ 2,202,877 $ 34,414 $ 54,304 $ 878,152 3,174,846
Net Income 2014 52,415 2,090 54,505
Loss on translation (34,414 ) (34,414 )
December 31, 2014 974,730 $ 98 400,000 $ 40 4,961,357 $ 4,961 $ 2,202,877 $ $ 106,719 $ 880,242 3,194,937
Divestiture of EZ Link (400,000 ) (40 ) (457,143 ) (457 ) (927,307 ) (880,242 ) (1,808,046 )
Forgiveness of debt - related party 80,000 80,000
Net Income 2015 104,384 104,384
December 31, 2015 974,730 $ 98 $ 4,504,214 $ 4,504 $ 1,355,570 $ $ 211,103 $ $ 1,571,275

F- 6

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES OF CASH FLOW

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

December 31 December 31
2015 2014
Cash flows from operating activities:
Net income from continuing operations $ 88,460 $ 48,152
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation expense 7,192
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable 1,203,004 (2,622,116 )
Decrease (increase) in inventory 465,995 (936,900 )
Decrease in other assets 21,180 48,975
Decrease in other current liabilities (33,175 ) (18,851 )
Increase (decrease) in accounts payable and accrued expenses (1,660,884 ) 3,306,118
Net cash (used in) provided by operating activities 84,580 (167,430 )
Cash flow from investing activities:
Net cash used in investing activities
Cash flow from financing activities:
Proceeds from short-term borrowing (43,306 )
Net cash provided by financing activities (43,306 )
Cash flow from discontinued operations
Net cash used in operating activities 696 (256,241 )
Net cash used in investing activities (43,154 )
Net cash provided by discontinued operations 696 (299,395 )
Effect of currency translation (20,802 )
Net (decrease) increase in cash and cash equivalents 85,276 (530,933 )
Cash and cash equivalents at beginning of period 661,510 1,192,443
Cash and cash equivalents at end of period $ 746,786 $ 661,510
Supplementary Disclosures of Cash Flow
Cash paid during the year for:
Interest $ $ 299
Taxes (refund) $ $
Forgiveness of related party debt $ 80,000 $

F- 7

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

NOTES FOR THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

1. Summary of Significant Accounting Policies

Nature of Operations

On July 2, 2007, International Packaging and Logistics Group, Inc. (“IPL Group” or the “Company”), through its wholly-owned subsidiary, YesRx.com (“YesRx”) acquired all the outstanding shares of H&H Glass, Inc. (“H&H Glass” or “H&H”), in exchange for 3,915,000 shares of its common stock in a reverse triangular merger (the “Merger”). H&H Glass is a glass importer that supplies custom products such as perfume bottles and food condiment bottles, plus provides complementary services such as container design and mold making. H&H Glass imports glass containers from Asia and distributes to North America. H&H Glass acquires its products mainly from one supplier in China and Taiwan and sells its products through several distributors in the United States and Canada who service small to medium sized customers. H&H imports in excess of 1,000 shipping containers of glass a year. Depending on the size of the product, a container can contain anywhere from 3,000 to 300,000 pieces.

On January 1, 2010, International Packaging and Logistics Group, Inc., (“IPL Group Inc.”), acquired a majority interest in EZ Link Holdings, Ltd., company organized under the laws of the British Virgin Islands which contractually controls EZ Link Corporation (“EZ Link”), a logistics company headquartered in Taiwan. EZ Link was established in July 2003 under the laws of Taiwan, Republic of China (“PRC”) EZ Link is a full service international freight forwarder, who has current networks to locations in China, Hong Kong, South East Asia, North East Asia, North America, Latin America and Europe.

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, Inc. converted from a Delaware corporation to a Nevada Corporation.

EZ Link Holdings Ltd .

EZ Link Holdings Ltd. was incorporated in 2009, under the laws of the British Virgin Islands. The Company has no substantive operations of its own.

EZ Link, a Taiwan company established in July 2003 with initial registered capital of NTD 13,500,000, is a freight forwarder with current networks of locations in China, Hong Kong, South East Asia, North East Asia, North America, Latin America and Europe, and holds the licenses and approvals necessary to operate its business in China.

Taiwan law currently has limits on foreign ownership of companies. To comply with these foreign ownership restrictions, on December 31, 2009, EZ Link Holdings Ltd. entered into following exclusive agreements with EZ Link and its owners (collectively the “Contractual Arrangements”):

(1) Consulting Services Agreement , through which EZ Link Holdings Ltd. has the right to advise, consult, manage and operate EZ Link and collect and own all of its net profits;

(2) Operating Agreement , through which EZ Link Holdings Ltd has the right to recommend director candidates and appoint the senior executives of EZ Link, approve any transactions that may materially affect the assets, liabilities, rights or operations of EZ Link, and guarantee the contractual performance by EZ Link of any agreements with third parties, in exchange for a pledge by EZ Link of its accounts receivable and assets.

Divestiture of EZ Link

Effective as of February 28, 2015, EZ Link is acquiring back IPL Group Inc.’s share position in EZ Link in exchange for their share position in IPL Group Inc.

International Packaging and Logistics Group, Inc. (“IPL Group Inc.”) (Seller), entered into an agreement with its majority owned subsidiary, EZ Link Corporation (“EZ Link”) (Buyer) which is a logistics company headquartered in Taiwan. EZ Link was established in July 2003 under the Company Law of Republic of China. Under this agreement EZ Link is acquiring back IPL Group Inc.’s share position in EZ Link in exchange for their share position in IPL Group Inc. This transaction is effective as of February 28, 2015.

F- 8

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

NOTES FOR THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

1. Summary of Significant Accounting Policies (continued)

The terms were as follows:

IPL Group Inc. will assign its position in EZ Link or 688,500 shares in the aggregate, to EZ Link, such that, following such transaction, EZ Link will no longer be a subsidiary of IPL Group Inc.

EZ Link will assign the following:

(a) The 457,143 shares of common stock held by EZ LINK shareholders.

(b) The 400,000 Series B Convertible preferred shares held by EZ LINK shareholders.

There was a $25,394 gain as a result of the divestiture of EZ Link, which was the net the assets less liabilities sold back.

Principles of Consolidation

The accompanying consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America. EZ Link’s functional currency is New Taiwan Dollars (NTD), however, the accompanying consolidated financial statements have been re-measured and presented in United States Dollars ($).

The consolidated financial statements include the accounts of IPL Group and its subsidiaries (collectively the “Company”). The Company’s subsidiaries include H&H Glass and 51% of EZ Link Holdings, Ltd. through February 28, 2015 which is now shown in discontinued operations.

Intercompany accounts and transactions have been eliminated upon consolidation.

Reclassifications

Certain amounts in the prior year have been reclassified to conform to the current year presentation.

Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States 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 consolidated financial statements. Significant estimates include an allowance for doubtful accounts and depreciation of property, plant and equipment.

Cash and Cash Equivalents

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

Revenue Recognition

The Company recognizes product revenue provided that (1) persuasive evidence of an arrangement exists, (2) delivery to the customer has occurred, (3) the selling price is fixed or determinable and (4) collection is reasonably assured. Delivery is considered to have occurred when title and risk of loss have transferred to the customer. The price is considered fixed or determinable when it is not subject to refund or adjustments. Outbound shipping and handling charges are included in net sales and cost of goods sold.

Inventories

Inventories are stated at the lower of cost (first-in, first-out basis) or market (net realizable value). All inventories consists of finished goods.

F- 9

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

NOTES FOR THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

1. Summary of Significant Accounting Policies (continued)

Foreign Currency Translation

The accounts of the EZ Link were maintained, and its consolidated financial statements were expressed, in NTD. Such consolidated financial statements were translated into USD with NTD as the functional currency. All assets and liabilities were translated at the exchange rate on the consolidated balance sheet dates, stockholders’ equity are translated at the historical rates and the statements of income items were translated at the weighted average exchange rate for the year. The resulting translation adjustments were reported under other comprehensive income in 2013 and earlier periods. In 2015, the EZ Link operations have been reclassified as discontinued operations. Accordingly, the other comprehensive income previously accumulated has been recognized as income from discontinued operations in 2015, and consequently the foreign currency translation adjustments are eliminated as of December 31, 2015.

Concentration of Credit Risk

The Company maintains balances in a Money Market Fund that is not federally insured. Balances in this fund were $681,678 and $404,173 at December 31, 2015 and December 31, 2014, respectively.

Accounts receivable are typically unsecured. The Company performs ongoing credit evaluations of its customers’ financial condition. It generally requires no collateral and maintains reserves for potential credit losses on customer accounts, when necessary. As of December 31, 2015, 80.3% of H&H Glass’s Accounts Receivable were attributable to three customers. As of December 31, 2014, 86.7% of H&H Glass’s Accounts Receivable were attributable to three customers.

At December 31, 2015 and 2014 H&H Glass had allowance for doubtful reserves of $0 and $16,194 respectively.

In general the Company will reserve a receivable based one of the following reasons; if the receivable is over 90 days old the company will reserve 50% and if over 12 months old the Company will reserve 100% of the amount.

H&H Glass purchased 100% of its glass from one vendor in the twelve- month periods ending December 31, 2015 and 2014.  During the twelve-month period ending December 31, 2015 and 2014, H&H Glass purchased $34,704,424 and $31,531,403 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 additional suppliers.

Non-controlling Interest

IPLO sold its interest in EZ Link as of February 28, 2015.

The Company accounted for its non-controlling interest of 49% in EZ Link Holdings, Ltd. in the consolidated financial statements classified as a separate component of equity. In addition, net earnings, and components of other comprehensive income are attributed to both the Company and non-controlling interest.

The Company accounts for its non-controlling interest of 49% in EZ Link Holdings, Ltd. in the consolidated financial statements classified as a separate component of equity. In addition, net earnings, and components of other comprehensive income are attributed to both the Company and non-controlling interest.

Net Earnings/(Loss) per Share

Earnings/(loss) per common share is computed on the weighted average number of common shares outstanding during each year. Basic earnings per share is computed as net loss applicable to common stockholders’ divided by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur from common shares issuable through convertible preferred shares, stock options, warrants and other convertible securities when the effect would be dilutive.

F- 10

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

NOTES FOR THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

1. Summary of Significant Accounting Policies (continued)

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed for financial reporting purposes using the straight-line method over the estimated useful lives of the assets. Repairs and maintenance that do not extend the useful life of property and equipment are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the asset and its accumulated depreciation are removed, and the resulting profit or loss is reflected in income.

The estimated service lives of property and equipment are principally as follows:

Computers and equipment 3-10 years
Furniture & Fixtures 5-10 years

Income Taxes

The Company accounts for its income taxes using the Financial Accounting Standards Board ASC 740, “Income Taxes,” which requires the establishment of a deferred tax asset or liability for the recognition of future deductible or taxable amounts and operating loss and tax credit carryforwards. Deferred tax expense or benefit is recognized as a result of timing differences between the recognition of assets and liabilities for book and tax purposes during the year.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized for deductible temporary differences and operating loss, and tax credit carryforwards. A valuation allowance is established to reduce the deferred tax asset if it is “more likely than not” that the related tax benefits will not be realized.

The Company accounts for income taxes in accordance ASC Topic 740. Realization of an uncertain income tax position must be estimated as “more likely than not” (i.e., greater than 50% likelihood of receiving a benefit) before it can be recognized in the financial statements. Further, the recognition of tax benefits is required to be 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. ASC 740 also clarifies the financial statement classification of tax-related penalties and interest and sets forth new disclosures regarding unrecognized tax benefits. As of December 31, 2015, the Company has not recognized any obligation for uncertain tax positions.

EZ Link, Corporation is governed by the Taiwan’s Income Tax Law and local income tax laws. Pursuant to the Taiwan Income Tax Law, enterprises are subject to tax at a statutory rate of 17%. The local government has also provided companies with various incentives to encourage economic development in the region. Such incentives include reduced tax rates and other measures.

2. Preferred Stock Transactions

The Preferred Shares shall be convertible into common shares in two equal tranches, the first being upon completion and receipt of the year ending December 31, 2010, financials if all of the following performance targets are met by EZ Link:

(a) Maintain revenues and before tax earnings same as the prior 12 month period; and

(b) Maintained a positive cash flow from operations over the prior 12 month period.

These criteria were not met, so there were no conversions as of February 28, 2015. These certificates were returned to the Company pursuant to the sale of EZ Link back to its original shareholders.

Series A Preferred Shares

The Series A 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.

F- 11

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

NOTES FOR THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

2. Preferred Stock Transactions - continued

ASC Topic 480, “Distinguishing Liabilities from Equity,” establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity.

A mandatorily redeemable financial instrument shall be classified as a liability unless the redemption is required to occur only upon the liquidation or termination of the reporting entity. A financial instrument issued in the form of shares is mandatorily redeemable if it embodies an unconditional obligation requiring the issuer to redeem the instrument by transferring its assets at a specified or determinable date (or dates) or upon an event certain to occur. A financial instrument that embodies a conditional obligation to redeem the instrument by transferring assets upon an event not certain to occur becomes mandatorily redeemable—and, therefore becomes a liability—if that event occurs, the condition is resolved, or the event becomes certain to occur.

The Company determined that the preferred shares are not mandatorily or conditionally redeemable and are properly classified as permanent equity in the accompanying unaudited condensed consolidated financial statements.

Series B Preferred Shares

As of January 1, 2010 pursuant to the purchase agreement for 51% ownership in EZ Link Holdings Ltd., approximately 47% of the purchase price amount $400,000 was paid in Series B convertible preferred shares of IPL Group, Inc. at a per share value of $1.00, or 400,000 shares. As a result of the divesture of EZ Link, the Company received from EZ Link shareholders the 400,000 shares of Series B preferred stock. As of December 31, 2015, there are no shares of Series B preferred stock issued and outstanding.

3. Common Stock Transactions

During the years ending December 31, 2015 and 2014 no stock was issued.

As of February 28, 2015, there was 457,143 shares of common stock were cancelled as a result of the sale of EZ Link.

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, compensation of $326,000 and $305,000 for the years ended December 31, 2015 and 2014, respectively.

Mr. Lin forgave $80,000 of debt to the Company which was recorded as an increase in additional paid in capital as of December 31, 2015.

Josephine Lin

Josephine Lin, Mr. Lin’s wife, is employed by the Company and was paid salary of $60,000 and $58,000 for the years ended December 31, 2015 and 2014, respectively.

William Gresher

Mr. Gresher, a member of the Board of Directors, was paid $6,000 per year in cash for Director fees in the years ended December 31, 2015 and 2014.

Owen Naccarato

For the years ended December 31, 2015 and 2014 respectively, Mr. Naccarato, a member of the Board of Directors, was paid $36,000 in cash for legal fees and $6,000 in cash for Directors fees.

Easy Global Company, Ltd.

The chairman of Easy Global Company, Ltd. is also a shareholder of EZ Link Corporation. EZ Link rents its offices from Easy Global Company, Ltd. During the two months ended February 28, 2015 and for the year ended December 31, 2014, EZ Link paid $7,233 and $42,257, respectively to Easy Global Company for rent expense.

F- 12

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

NOTES FOR THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

5. Other Income

During the year ended December 31, 2015 and 2014, the Company recorded $40,869 and $(299) in Other Income respectively as follows:

2015 2014
Interest expense (299 )
Miscellaneous income (expense) 40,869
$ 40,869 $ (299 )

6. Property and Equipment

The Company’s property and equipment at December 31, 2015 and 2014, consisted of the following:

December 31, 2015 December 31, 2014
Furniture and fixtures $ 14,552 $ 14,552
Computers and equipment 23,452 23,452
38,004 38,004
Less accumulated depreciation (38,004 ) (38,004 )
Total $ $

The Company recorded depreciation expense for the year ended December 31, 2015 and 2014, of $0 and $0 respectively.

7. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses at December 31, 2015 and 2014, consisted of the following:

2015 2014
Accounts payable $ 6,701,295 $ 8,362,179
Accrued professional and related fees 39,500 72,675
Total $ 6,740,795 $ 8,434,854

8. Income Taxes

Significant components of the provision for taxes based on income are as follows for the years ended December 31:

2015 2015
US Federal $ $
US State
Foreign 10,217
Total Current 10,217
Deferred (41,137 )
Total provision (benefit) for income taxes $ $ 51,354

The totals above include current taxes from discontinued operations of $- and $10,217 in 2015 and 2014, respectively. The income tax expense (benefit) from continuing operations was $- and $51,354 in 2015 and 2014, respectively.

Significant temporary differences that give rise to the deferred tax assets as of December 31, 2014 and 2013 follow:

2015 2014
Deferred tax assets/(liabilities):
Net operating loss carryforwards $ 217,318 $ 218,334
Allowance for doubtful accounts 6,445 6,445
Other (20,164 )
Net deferred tax assets $ 203,599 $ 224,779

F- 13

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

NOTES FOR THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

8. Income Taxes - continued

The Company has federal net operating loss carryforwards totaling $518,061 and $705,778 in state carryforwards. These net operating losses expire from 2021 through 2031. The Company has not recorded any valuation allowance against these deferred tax assets.

Tax years that remain open by the Internal Revenue Service and the California Franchise Tax Board are 2011 through 2015. Additionally, NOLs from earlier years may be examined when they are utilized.

Tax rate reconciliation
2015 2014
Federal tax rate 34.0 % 34.0 %
State taxes, net of benefit 5.8 % 5.8 %
Non-deductible tax expenses 16.6 % 13.6 %
Rate difference (3.3 )% (3.3 )%
NOL true-up adjustment %
Other (64.6 )% 1.6 %
Effective tax rate (15.4 )% 51.7 %

9. Commitments and Contingencies

Litigation

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.

Leases

Operating leases

H&H Glass rents approximately 2,900 square feet of office space for its headquarters. The lease began on January 1, 2013 and expires on August 31, 2019. As of December 31, 2015, total monthly base rent is $6,612 per month.

Future minimum payments on this lease for fiscal years following December 31, 2015, are:

Fiscal Year ended December 31,
2016 $ 81,780
2017 84,216
2018 86,652
Thereafter 59,624
$ 312,272

F- 14

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

NOTES FOR THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

10. Earnings per Share

The computation of basic earnings per share and diluted earnings per share is as follows for the years ended December 31, 2015 and 2014:

2015 2014
Weighted-average number of common shares outstanding—Basic 4,578,120 4,961,357
Effect of dilutive securities— 1,039,388 1,374,730
Weighted-average number of common shares outstanding—Diluted 5,617,508 6,336,087

A MOUNTS ATTRIBUTABLE TO THE COMMON STOCKHOLDERS: 2015 2014
Income from continuing operations, net of tax $ 88,460 $ 43,777
Income from discontinued operations, net of tax 15,924 8,638
Net income $ 104,384 $ 52,415
BASIC EARNINGS PER SHARE:
Income from continuing operations attributable to common stockholders, net of tax $ 0.02 $ 0.01
Income from discontinued operations attributable common stockholders, net of tax 0.00 0.00
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS $ 0.02 $ 0.01
DILUTED EARNINGS PER SHARE:
Income from continuing operations attributable to common stockholders, net of tax $ 0.02 $ 0.01
Income from discontinued operations attributable to common stockholders, net of tax 0.00 0.00
NET INCOME (LOSS) ATTRIBUTABLE COMMON STOCKHOLDERS $ 0.02 $ 0.01

11. Discontinued Operations

Discontinued Operations

Discontinued operations are accounted for in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Section 360-10-35 Property, Plant, and Equipment . In accordance with FASB ASC Section 360-10-35, the net assets of discontinued operations are recorded on our consolidated balance sheets at estimated fair value. The results of operations of discontinued operations are segregated from continuing operations and reported separately as discontinued operations in our consolidated statements of loss and comprehensive loss.

International Packaging and Logistics Group, Inc. (“IPL Group Inc.”) (Seller), entered into an agreement with its majority owned subsidiary, EZ Link Corporation (“EZ Link”) (Buyer) which is a logistics company headquartered in Taiwan. EZ Link was established in July 2003 under the Company Law of Republic of China. Under this agreement EZ Link is acquiring back IPL Group Inc.’s share position in EZ Link in exchange for their share position in IPL Group Inc. This transaction was effective as of February 28, 2015.

The terms are as follows:

IPL Group Inc. assigned its position in EZ Link or 688,500 shares in the aggregate, to EZ Link, such that, following such transaction, EZ Link will no longer be a subsidiary of IPL Group Inc.

IPL Group Inc. will exchange its position in EZ Link or 688,500 shares in the aggregate, to the original EZ Link shareholders, and such EZ Link shareholders will exchange the following to IPLO:

(a) The 457,143 shares of common stock held by EZ Link shareholders.

(b) The 400,000 Series B Convertible preferred shares held by EZ Link shareholders.

F- 15

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

NOTES FOR THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

11. Discontinued Operations - continued

Results of Discontinued Operations

Summary results of operations for our discontinued operations for the years:

Discontinued operations: December 31 December 31
2015 2014
Revenue $ 1,015,230 $ 7,549,512
Gain from operations, including portion attributable to
non-controlling interest of discontinued Logistics component $ 15,924 $ 18,855
Income tax expense $ $ 10,217
Income from discontinued operations $ 15,924 $ 8,638

Assets and Liabilities of Discontinued Operations

Assets and liabilities of discontinued operations on our consolidated balance sheets as of December 31, 2015 and 2014 include the following (dollars in thousands):

December 31 December 31
2015 2014
Assets Discontinued subsidiary
Cash and cash equivalents $ $ 460,545
Notes receivable 62,209
Accounts receivable 489,286
Contract in place 1,295,726
Other assets 24,392
Property, Plant and Equipment, net 42,631
Assets Held for Sale - Discontinued Operations $ $ 2,374,789

December 31 December 31
2015 2014
Liabilities Discontinued subsidiary
Notes payable $ $ 8,287
Accounts payable 566,838
Other current liabilities 6,846
Liabilities - discontinued Operations $ $ 581,971

F- 16

INTERNATIONAL PACKAGING AND LOGISTICS GROUP, INC., AND SUBSIDIARIES

NOTES FOR THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

13. Subsequent Events:

On February 16, 2016, International Packaging and Logistics Group, Inc. (“IPLO”) entered into a Binding Letter of Intent acquire Shandong Yibao biologics Co. Ltd (“Shandong”) a China company and biotech Energy, Inc. a California corporation (“Biotech”). In summary the following will close upon completion of the audit of Shandong Yibao biologics Co. Ltd;

Transaction One

Shandong and Biotech shall purchase 3,915,000 shares of IPLO common stock from IPLO for

$225,000; and

Transaction Two

IPLO shall acquire 51% of Shandong and 100% of Biotech in exchange for the issuance of Class C, 6% Preferred Stock ("Preferred Stock") to be issued to Shandong.

(a) Preferred Stock. The number of shares of Preferred Stock to be issue to Shandong shall be determined at the Closing on the basis of $1.00 per share. The total value of the shares shall be equal to 51% of the difference between the net assets of Shandong and the net assets of Biotech.

[Ex. If the value of Shandong's net assets is $10,000,000, and the value of Biotech's net assets is $1,000,000, then the difference is $9,000,000.51% of $9,000,000 = $4,590,000. Therefore, 4,590,000 shares of Preferred Stock will be issued to Shandong.]

(b) The Preferred Stock shall pay an annual dividend of 6%: payable quarterly.
(c) The Preferred Stock may be redeemed by IPLO at any time at $1.00 dollar per share plus any accrued dividends.

F- 17

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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