- Amended Quarterly Report (10-Q/A)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2008

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

For the transition period from ________________________________

Commission File Number: 000-51449

INTERNATIONAL POWER GROUP, LTD.

(Exact name of registrant as specified in its charter)


Delaware		20-1686022
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)


950 Celebration Blvd. Suite A, Celebration, FL.		34747
(Address of principal executive office)		(Zip Code)

(407) 566-0318

(Issuer’s telephone number)


	N/A
(Former name, former address & former fiscal year, if changed since last report)

Check whether the issuer (1) has filed all documents and reports required to be filed by Sections 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 filings for the past 90 days. 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	[X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [ ] NO [X]

As of November 14, 2008, the number of the Company's shares of par value $0.00001 common stock outstanding was 592,588,137.

Transitional Small Business Disclosure Format (check one) [ ] Yes [X] No

Page 1 of 26

EXPLANATORY NOTE

Reference is made to Item 5 of Part I of the Form10-Q for the quarterly period ending September 30, 2008 filed on November 19, 2008. As indicated therein, this amendment is being filed for the purpose of correcting certain figures in the Consolidated Statements of Operations and the Cash Flow Statement ( specifically, Operating and Financial activities ) contained in the Form10-Q for the quarterly period ending June 30, 2008 (filed on August 18, 2008) that resulted in an understatement in that report of the net loss for the three and six months ending June 30, 2008 in the. In addition, corresponding corrections consistent with the changes in the financial statements have been made in Management’s Discussion and Analysis or Plan of Operation (Item 2 of Part I).

The errors were a result of clerical errors in preparing the financial statements and were not detected by the certifying officers. In addition, review by certifying officers failed to detect the errors. The errors were limited primarily to the Balance Sheet and Statement of Operations for the three months and six ended June 30, 2008, and to the Cash Flow Statement of operations, resulting in an overstatement of the net loss for the six and three month period by $78,064, as well as related footnotes. The errors include amounts previously recorded as part of the $800,000 convertible loan obtained by the company during the second quarter of year 2008. Specifically, the shares of stock and warrants issued in association with the transaction were not recorded according to the nature of the transaction and treated as regular shares for services and the warrant value recorded as a regular warrant issuance. Further review of the transaction and the supporting documents reveled the amount expensed for the shares issued at closing in the amount of $672,000 should had been treated as shares issued for discount instead, Also the value of warrants recorded to paid in capital in the amount of $240,000 was recorded as part of the loan discount. The discount will be amortized over the life of the loan, that is, one year. This resulted in an additional charge of $188,493 during the quarter ended June 30, 2008

We also adjusted $86,154 in items recorded as miscellaneous receivables to expense after carefully reviewing the collectability of those items. An excess discount over the principal amount of the convertible loan of $307,750 was also recorded as a period expense during the same quarter.

All related footnotes have been corrected and corresponding revisions of the Management’s Discussion and Analysis or Plan of Operation section ( Item 2 of Part I) of the subject Form 10-Q have been made.

Finally, in addition and unrelated to the above, this amendment also contains revisions to Item 4 of Part I of the report (Internal Controls), so that it is consistent with similar sections contained in the Company’s Form 10Q for the quarter ending September 30, 2008.

Page 2 of 26

International Power Group, Ltd.

Form 10-Q

Period Ended June 30, 2008

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1 - Financial Statements

Item 2- Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

Item 4 - Controls and Procedures

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

Item 1A - Risk Factors

Item 2 - Unregistered Sale of Equity Securities and Use of Proceeds

Item 3 - Defaults upon Senior Securities

Item 4 - Submission of Matters to a Vote of Security Holders

Item 5 - Other Information

Item 6 - Exhibits

SIGNATURES

INDEX TO ATTACHED EXHIBITS

Page 3 of 26

PART I – FINANCIAL INFORMATION

Item 1 - Financial Statements

INTERNATIONAL POWER GROUP, LTD

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30, 2008	December 31, 2007
	(unaudited)	(audited)
ASSETS
Current Assets
Cash	$ 7,659	$ -
Miscellaneous receivable - net	22,492	32,182
Stock subscriptions receivable	110,000	-
Prepaid expenses	24,567	133
Total current assets	164,718	32,315

Other Assets
Patents-net	2,150,412	2,300,000
Deposit	27,000	16,766
Other assets	14,362	14,360
Total other assets	2,191,774	2,331,126
Total Assets	$ 2,356,492	$ 2,363,441

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Accounts payable	1,050,293	955,111
Accrued expenses	20,603	38,336
Loans payable to related parties	459,069	755,874
Acquisition payable	962,057	962,057
Convertible loan	188,493	-
Deposits for Stock	20,000	-
Total current liabilities	$ 2,700,515	$ 2,711,378

Stockholder's Deficit

Common stock: authorized, 750,000,000 shares of $.0001 par value; issued and outstanding, 465,001,973 and 373,441,971 shares, respectively	4,650	3,734
Capital in excess of par value	26,006,048	17,434,713
Additional paid in capital - Warrants	2,747,090	1,568,702
Additional paid in capital - Options	3,800,000	3,653,000
Accumulated other comprehensive income	(195)	1,869
Deficit accumulated during development stage	(32,901,616)	(23,009,955)
Total stockholders’ deficit	(344,023)	(347,937)
Total Liabilities and Stockholder's Deficit	$ 2,356,492	$ 2,363,441

The accompanying notes are integral part of these consolidated financial statements

Page 4 of 26

INTERNATIONAL POWER GROUP, LTD

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT ACCUMULATED DURING

DEVELOPMENT STAGE

(Unaudited)



	Three Months Ended	Three Months Ended	April 15 2002 Date of Inception
	June 30, 2008	June 30, 2007	to June 30, 2008

Revenues	$ -	$ -	$ -

Expenses	5,200,392	1,486,471	32,287,114

Operating Loss	(5,200,392)	(1,486,471)	(32,287,114)

Other Income (Expense):
Miscellaneous income	8,811	10	13,489
Interest expense	(312,982)	(24)	(320,241)
Excess discount expense	(307,750)	-	(307,750)

Loss accumulated during
development stage	$ (5,812,313)	$ (1,486,485)	$ (32,901,616)

Other Comprehensive Income:
Foreign currency translation
gain	2,649	-

Total comprehensive loss	$ (5,809,664)	$ (1,486,485)

Net Loss per Share
Basic and Diluted	$ (0.01)	$ (0.00)

Weighted Average Number
of Shares Outstanding -
Basic and Diluted	431,981,478	350,648,341

The accompanying notes are integral part of these consolidated financial statements

Page 5 of 26

INTERNATIONAL POWER GROUP, LTD

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT ACCUMULATED DURING

DEVELOPMENT STAGE

(Unaudited)


			April 15 2002
	Six Months Ended	Six Months Ended	Date of Inception
	June 30, 2008	June 30, 2007	To June 30, 2008

Revenues	$ -	$ -	$ -

Administrative expenses	9,277,158	3,714,409	32,287,114

Operating Loss	(9,277,158)	(3,714,409)	(32,287,114)

Other Income (Expense):
Miscellaneous income	9,314	14	13,992
Interest expense	(316,067)	(48)	(320,744)
Excess discount expense	(307,750)	-	(307,750)

Loss accumulated during
development stage	$ (9,891,661)	$ (3,714,443)	$ (32,901,616)

Other Comprehensive Income:
Foreign currency translation
loss	(585)	-

Total comprehensive loss	$ (9,892,344)	$ (3,714,443)

Net Loss per Share
Basic and Diluted	$ (0.02)	$ (0.01)

Weighted Average Number
of Shares Outstanding -
Basic and Diluted	412,975,077	349,108,592

The accompanying notes are integral part of these consolidated financial statements

Page 6 of 26

INTERNATIONAL POWER GROUP, LTD.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


			April 15, 2002
	Six Months Ended June 30, 2008	Six Months Ended June 30, 2007	(Date of Inception of Development Stage) to June 30, 2008
Cash Flows From Operating Activities:
Net loss from operations	($9,891,661)	($3,714,443)	($32,901,616)
Adjustments to reconcile net loss to net cash used by operating activities:

Changes not requiring cash outlay:
Value of options granted	185,000	875,000	6,137,000
Common stock issued for services	7,248,638	253,000	14,056,439
Options exercised for services	190,000	-	525,000
Amortization - Patents	200,000	200,000	700,000
Amortization - Loan discounts	188,493	-	188,493
Excess discounts over loan balance	307,750	-	307,750
Impairment charges	-	-	123,000

Changes in assets and liabilities:
(Increase) decrease in prepaid expenses	(24,437)	(15,112)	(44,391)
Increase (decrease) in accounts payable	94,915	92,572	1,050,080
(Decrease) increase in accrued expenses	(17,733)	30,547	(12,403)
Decrease (Increase) in deposits	(10,234)	(24,104)	(11,866)
Decrease (Increase) in Misc. receivable	9,689	-	9,689
Decrease (Increase) in other assets	-	9,715	(8,903)
Net cash consumed by operating activities	(1,519,580)	(2,292,825)	(9,881,729)

Cash Flows From Investing Activities:
Acquisition of Add-Power	-	(602,272)	(1,037,943)
Investment in Mexican company	-	-	(2,500)
Note receivable	-	-	(65,000)
Proceeds from note receivable	-	-	65,000
Patents	(50,412)	(70,774)	(50,412)
Net cash consumed by investing activities	(50,412)	(673,046)	(1,090,855)
Cash Flows From Financing Activities:

Proceeds from loans	604,250	160,000	1,899,802
Proceeds from other loans	95,965	-	95,965
Repayments of loans	(142,500)	(21,205)	(682,178)
Proceeds of sales of stock units	1,002,000	944,750	7,836,348
Customer deposits	20,000	-	20,000
Proceeds from exercise of options		-	375,000
Proceed from exercise of warrants	-	287,500	1,435,500
Net cash provided by financing activities	1,579,715	1,371,045	10,980,436

Effect of foreign currency exchange rate on cash	(2,064)	1,604	(195)
Net increase in cash	7,659	(1,593,222)	7,657
Cash balance, beginning of period	-	1,652,940	-
Cash balance, end of period	$7,659	$59,718	$7,657

The accompanying notes are integral part of these consolidated financial statements

Page 7 of 26

INTERNATIONAL POWER GROUP, LTD.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008

(Unaudited)

Note 1.

BASIS OF PRESENTATION

The unaudited interim consolidated financial statements of International Power Group, Ltd. as of June 30, 2008 and December 31, 2007 and for the three and six months ended March 31 and June 30,, 2008 have been prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of such periods. The results for the three and six months ended June 30, 2008 are not necessarily indicative of the results to be expected for the full year ending December 31, 2008. Certain information and disclosures normally included in the notes to consolidated financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2007 filed in the Company’s report on Form 10-K.

As a result, of an internal review, the company determined that adjustments were required for the June 30, 2008 Form 10 Q. These adjustments were primarily required to properly account for the discounts associated with the convertible note issued during the quarter ended June 30, 2008.

Effect of corrections in the Balance Sheet as of June 30, 2008.


	Balance Sheet June 30, 2008

	Previously	Increase		As
	Reported	(Decrease)		Restated

Miscellaneous receivables	$108,646	($86,154)	(1)	$22,492

Total Assets	$2,442,646	($86,154)		$2,356,492

Convertible loan, net
of discount	800,000	(800,000)	(2)	188,493
		188,493	(3)

Liabilities	$3,312,022	($611,507)		$2,700,515

PIC	24,998,759	800,000	(2)	26,006,049
		207,289	(4)

PIC-warrants	3,307,090	(560,000)	(2)	2,747,090

		(86,154)	(1)
Deficit	(32,979,680)	560,000	(2)	(32,901,616)
		(188,493)	(3)
		(207,289)	(4)

Total deficiency	(869,376)	525,353		(344,023)

Liabilities and Stockholders' deficit	$2,442,646	($86,154)		$2,356,492

Effect of corrections in the three-month period ended June 30, 2008.

Page 8 of 26


Statement of Operations for Three Months Ended June 30, 2008


	Previously	Increase		As
	Reported	(Decrease)		Restated

Administrative expenses	$5,774,699	$86,154	(1)	$5,200,392
		(867,750)	(2)
		207,289	(4)


Operating loss	(5,774,699)	574,307		(5,200,392)

Interest expense	(124,489)	(188,493)	(3)	(312,982)

Excess discount		(307,750)	(2)	(307,750)

Net Loss	($5,890,377)	$78,064		($5,812,313)

Total Comprehensive Loss	($5,887,728)	$78,064		($5,809,664)

Effect of corrections in the six-month period ended June 30, 2008.


Statement of Operations for Six Months Ended June 30, 2008

	Previously	Increase		As
	Reported	(Decrease)		Restated

Administrative expenses	$9,851,465	$86,154	(1)	$9,277,158
		(867,750)	(2)
		207,289	(4)


Operating loss	(9,851,465)	574,307		(9,277,158)

Interest expense	(127,574)	(188,493)	(3)	(316,067)

Excess discount		(307,750)	(2)	(307,750)


Net Loss	($9,969,725)	$78,064		($9,891,661)


Total Comprehensive Loss	($9,970,408)	$78,064		($9,892,344)

Page 9 of 26

Effect of corrections on cumulative deficit as of June 30, 2008


Statement of Operations (Cumulative Deficit
since inception of development stage)

	Previously	Increase		As
	Reported	(Decrease)		Restated

Administrative expenses	$32,861,421	$86,154	(1)	$32,287,114
		(867,750)	(2)
		207,289	(4)


Operating loss	(32,861,421)	574,307		(32,287,114)

Interest expense	(131,748)	(188,493)	(3)	(320,241)

Excess discount	0	(307,750)	(2)	(307,750)

Loss	($32,979,680)	$78,064		($32,901,616)

Effect of corrections on cash flows for the six-month period ended June 30, 2008


Statement of Cash Flows for Six Months Ended June 30, 2008

	Previously	Increase		As
	Reported	(Decrease)		Restated

Net loss	$ (9,969,725)	$ 78,064		$ (9,891,661)

Amortize debt discount		188,493	(3)	188,493

Equity items for services	7,713,349	(672,000)	(2)	7,248,638
		207,289	(4)

Excess discount		307,750	(2)	307,750

Miscellaneous receivables	(76,465)	86,154	(1)	9,689

Cash consumed in operations	$ (1,715,330)	$ 195,750		$ (1,519,580)

Loan proceeds	895,965	(195,750)	(2)	604,250
				95,965

Cash provided by financing	$ 1,775,465	$ (195,750)	(2)	$ 1,579,715

Page 10 of 26

Effect of corrections on cumulative cash flows for the six-month period ended June 30, 2008


Statement of Cash Flows
(Cumulative since inception of development stage)

	Previously	Increase		As
	Reported	(Decrease)		Restated

Net loss	$(32,979,680)	$ 78,064		$(32,901,616)

Amortize debt discount		188,493	(3)	188,493

Equity items for services	14,711,150	(672,000)	(2)	14,246,439
		207,289	(4)

Excess discount		307,750	(2)	307,750


Miscellaneous receivables	(76,465)	86,154	(1)	9,689

Cash consumed in operations	$(10,077,478)	$ 195,750		$(9,881,728)



Loan proceeds	895,965	(195,750)	(2)	604,250
				95,965
Proceeds from stock	7,946,348	(110,000)	(5)	7,836,348

Cash provided by financing	$11,286,186	$(305,750)		$10,980,437

Net change in cash	$ 117,659	$(110,000)	(5)	$ 7,659

Explanations for changes


(1)	To correct errors in recording miscellaneous receivables
(2)	To correct recording of stock and warrants issued in connection with the issuance
	of convertible loan.
(3)	To record amortization of debt, discount applicable to current periods.
(4)	To correct recording of warrants that accompanied shares issued for services.
(5)	To correct typographical error in cumulative column of Cash Flow Statement

Page 11 of 26

Note 2.

COMMON STOCK AND WARRANTS

The Company issued stock in private placements during the three months period ended September 30 2008. A total of 5,800,000 shares of common stock were sold for cash. These sales resulted in net proceeds to the Company of $1,112,000 out of which $1,002,000 was received within the period reported and $110,000 was recorded as subscription receivable for shares issued to an individual investor with deposit made after the quarter end. These shares were sold as part of “stock units,” with each unit consisting of one share of stock and a warrant to purchase one share of stock for each two shares of stock purchased. For the six-month period, ended June 30, 2008, warrants to purchase 13,262,500 shares of stock were issued exercisable for a period of twelve months.

The company issued 4,800,000 shares of stock and 8,000,000 warrants as part of a loan transaction, which allowed the company to borrow $800,000 from four different investors. The shares and warrants were valued and recorded as a discount. The warrants were issued in two series, namely “class A” warrants and “class B” warrants. Class A warrants have a five-year exercise term at a price of $.25 cents and class B warrants have a five-year exercise term at $.15 cents.

Warrant activity during the six -month period ended June 30, 2008 is shown as follows:


	2008
Balance December 31, 2007	11,737,123
Warrants granted during the first six months of 2008	24,392,501
Warrants exercised during the first six months of 2008	-
Warrants expired during the first six months of 2008	(3,381,873)
Balance June 30, 2008	32,747,751

Relevant information about the warrants outstanding at June 30, 2008 is presented below:


Exercise	Weighted-Average	Outstanding as of
Price	Months Remaining	June 30, 2008
$0.40	24.06	5,850,000
$0.25	7.82	22,897,751
$0.15	57.90	4,000,000
Total		32,747,751

There were no warrant exercised during the six-month period ended on June 30, 2008

Note 3.

STOCK OPTIONS

During 2005, the Company adopted and the stockholders approved a stock option plan (the Plan). The Plan permits the Board of Directors to grant options to purchase up to 30,000,000 shares of common stock to officers, employees, and key individuals deemed important to the success of the Company. All options are vested upon issuance and are immediately exercisable. The Plan has a term that runs through June 15, 2010. Under the terms of the plan, the exercise price shall not be less than the market value as determined at date of grant. The following table summarizes changes in outstanding stock options during the three month period ended June 30, 2008.


	# of Options	Avg. Price
Outstanding at the beginning of the year	26,825,000	$ 0.42
Granted (all at market price)	1,500,000	.19
Cancelled	(1,900,000)	.10
Outstanding at the end of the period	26,425,000	$ 0.43

The fair value of option granted is estimated using a Black-Sholes option-pricing model. The following weighted-average assumptions were used for options granted during the three months ended June 30, 2008 and 2007.

Page 12 of 26

INTERNATIONAL POWER GROUP, LTD.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2008

(Unaudited)


	2008	2007
Dividend yield	0%	0%
Expected volatility	183%	193%
Risk-free interest rate	2.34%	4.96%
Expected term (in years)	1.96	3.02
Weighted-average fair value of stock options granted	$ 0.43	$ 0.45

Note 4. INTANGIBLE ASSET - PATENTS

Information regarding the intangible asset – patents is as follows:


		June 30 2008
Intangible asset - patents		$2,850,412
Accumulated amortization		(700,000)
Intangible asset – patents, net		$2,150,412

Amortization expense was $200,000 for the six -month period ended June 30, 2008.

Note 5. LOANS PAYABLE

During the second quarter, the Company approved a convertible loan agreement that has $ 30.0 million due maximum. An initial $800,000 installment represented by a 12% loan due April 7, 2009, was received in the second quarter and is convertible to stock at a conversion price of $ .12 for six months and at 75% of the average of the three lowest closing bid prices of the company’s common stock for the ten trading days preceding a conversion date, thereafter. As part of the loan agreement, the Company agreed to issue 4.8 million shares of stock and 4 million Class A warrants exercisable at $ .15 for five years and 4 Class B warrants exercisable at $ .25 for five years.

The value of stock issued as well as the warrants was recorded as a discount with the excess over the loan principal expensed during the period. The discount will be amortized over the loan term, which is one year ending in April 4, 2009. The loan discount also included those origination and legal costs incurred in the transaction. The following are the total discounts associate with this transaction:


Discount on shares issued at closing	$ 672,000.00
Value of warrants issued with shares at closing	240,000.00
Closing and legal costs	195,750.00
Total value of issuances and loan costs	$1,107,750.00
Less: principal amount	(800,000.00)
Excess discount on convertible loan	$ 307,750.00

The excess of discount over the loan principal was expense in the period. Amortization of the loan amounted to $188,493 for the second quarter ended June 30, 2008.

The company also owes $962,057.00 on the acquisition of the Add-Power technology during year 2006. The company made a couple of payments in 2006 an 2007, but could not continue paying the balance due to a lack of financing and revenues. This loan agreement is now technically in default. However, the Company management’s have been negotiating with seller to satisfy the payment.

Page 13 of 26

INTERNATIONAL POWER GROUP, LTD.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2008

(Unaudited)

Note 6.

RELATED PARTY TRANSACTIONS

During the second quarter of 2008, USPM, an affiliated company whose officers are also part of the board of International Power Group, Ltd. provided an additional loan to the Company in the amount of $65,000.00. The loan was used to secure patented technology and R&D for Add-Power in the European Union. The loan has a term of one year expiring in April 8, 2009 and carries a 6% interest rate. There were no other transactions with related parties during this period.

Note 7.

OPERATING EXPENSES

Major categories of operating expenses are presented below:


Detail of Expenses by Category	Six Months Ended June 30, 2008	Six Months Ended June 30, 2007	April 15, 2002 (Date of Inception of Development Stage) to June 30, 2008

Stock based compensation	$ 958,000	$ 875,000	$ 6,975,000
Consulting expense	6,300,452	715,594	15,710,485
Professional fees	832,719	396,233	2,753,116
Research and development	89,441	-	215,288
Impairment	-	-	123,000
Office expenses	58,929	33,322	335,679
Travel and meals	106,100	326,136	1,421,428
Public relations	2,569	197,631	464,731
Salaries and other employee expenses	482,929	744,371	2,413,344
Insurance	27,031	9,354	86,798
Automobile expenses	27,442	28,654	146,259
Telecommunications	8,327	46,814	202,912
Rent	71,643	91,409	371,067
Amortization	200,000	200,000	700,000
Other expenses	111,578	49,890	368,009
Total expenses	$ 9,277,158	$3,714,409	$32,287,114

Note 8.

SUPPLEMENTAL CASH FLOWS

There was no cash paid for income taxes during any of the periods presented. The company paid $3,085 on interest during the three month period ended June 30, 2008. The following non-cash activities took place during the periods presented:

During the six-month period ended in June 30, 2008, the company had issued a total of 57,620,000 shares of stock for services to a total of 37 individuals with a total value of $7,248,638.

Page 14 of 26

From that total, the Company issued 43,955,000 shares of common stock to 25 individuals for services valued at $4,138,239 during the second quarter ended June 30, 2008

There were 4,800,000 shares issued for discount valued at $672,000 and 8,000,000 warrants issued valued at $240,000 that are reflected as discounts on the convertible loan taken in the second quarter of 2008.

Note 9. GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the financial statements, the Company has experienced continuing losses that resulted in a material working capital deficiency, and an accumulated deficit of $ 32.8 million as of June 30, 2008. These factors raise substantial doubt about the ability of the Company to continue as a going concern.

The financial statements do not include adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation. The Company’s present plans, the realization of which cannot be assured, to overcome these difficulties include but are not limited to the continuing effort to raise capital in the public and private markets.

Note 10. CONTINGENCIES

None

Note 11. SUBSEQUENT EVENTS

During the month of July 2008, the Company management detected an embezzlement scheme perpetrated by one company employee. The matter was immediately investigated and brought to the employee’s attention with admission on the fraud scheme. The total amount accounted for was $35,233.97 and the individual claimed it had already used all the money. From this total, $28,810.00 has been reclassified as a receivable and a reserve for uncollectible established and the rest as been expensed as unauthorized salaries.

The employee was immediately terminated and a case was filed with the local police and there is an ongoing investigation at this time. The matter was also brought to the board and they were told about the corrective action taken to prevent this type of incident from recurring.

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Item 2- Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “intends”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “ Risk Factors ” in our Annual Report on Form 10-K/A for our fiscal year ended December 31, 2007 filed with the United States Securities and Exchange Commission , 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 these forward-looking statements.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we undertake no obligation to update any of the forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We commenced our development stage on April 15, 2002. The Company has spent approximately the last two years initiating and developing our Waste to Energy (“WTE”) technology business plan. Initial steps in that process were negotiation for the opportunity to construct WTE Plants in Mexico and Saudi Arabia. As part of our continued effort to tap into the current opportunities provided by alternative energy sources and environmental issues associated with global warming, we have recently initiated contacts within the US and are working on a joint venture to build a WTE plant in the US mainland. We have also been in contact with other countries in the Caribbean interested in building WTE facilities to reduce their dependence on oil to produce energy and reduce waste accumulation.

The second step in developing our business plan was to find sources that could assist us to raise the capital required to build and begin operating WTE facilities. We have revamped our business plan and have retained the services of expert professionals to make sure we can effectively obtained financing. We are currently working with various sources willing to finance the company and its projects, including the Add-Power technology.

IPWG has not had any revenues and cumulative losses of $33.0 million since inception. Accordingly, a comparison of our financial information for accounting periods would likely not be meaningful or helpful in making an investment decision regarding our Company.

In July 2006, the Kingdom of Saudi Arabia’s Presidency of Meteorology and Environment issued to us an environmental license, which will enable us to establish WTE plants in the country. This license is active for three years and could be renewed with the ministry approval.

At the present time, we are waiting for receipt of permits from some of the projects that we have been pursuing in the different geographic areas and continue assessing the capital requirement for these projects. Although our previous estimate for revenues was for the 4 ^th quarter of 2008, we believe that this target may not be met and will be delayed until calendar year 2009. Our assessment of the construction timeframe since permit release to revenue generation may take six months. Therefore, in view of the above, a delay in the project revenue target date until 2009 is prudent at this time.

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Once all permits are in place, and facilities are prepared for waste collection, we expect to begin realizing operating revenues from waste disposal fees to be collected from municipalities and other waste management related companies in the areas were our projects are located. This is the first phase of our plan before we begin the construction of WTE facilities. Although we believe that it is reasonable to expect revenue from our first WTE energy plant to commence by year 2011 (after the completion of the construction of the first plant), many factors exist that are beyond our control that could delay or even prevent this from happening. These factors include but are not limited to, construction delays, political unrest and severe economic turndowns. Our strategy to construct plants in the US will help us in balancing the risk associated with our offshore projects on this regard.

In October 2006, we purchased proprietary patented technologies, Add-Power, a low temperature turbine (LTT), and Scrub Power, a special emission-to-energy system from three Swedish entities, Anovo AB Angelholm, Add-Power AB Angelholm, and SUPE Ltd for a total consideration of $2.8 million. The prototype has been substantially upgraded through the incurrence of additional research and development costs. We spent around $125,847 during year 2007 and are looking to patent new technology that will make the product more competitive and efficient. It has been tested and results have been drawn from its operating capacity at a Steel Mill in Sweden under a contract arrangement.

The acquisition of these technologies will allow us to convert greater quantities of heat, produced from boilers and turbines, and potentially increase the output of salable electricity by 20 to 30% or more over technologies that are currently available. We also believe that the LTT technology will provide us with an extremely efficient “low-temp turbine” which is powered by a proprietary fluid to drive the turbine and produce electricity at approximately 200 ° F, whereas most conventional boilers and turbines can only produce electricity at temperatures between 600 ° - 800 ° F.

We believe that we will be able to sell these technologies to other companies in the energy industry in order to help them increase their output of electricity. The Company also plans to use these technologies to increase the efficiency of its own planned WTE facilities. We believe we will begin to receive orders for our Add-Power units in 2009, soon after we have completed the testing and establish the manufacturing process. Other applications are being explored to expand its use and expand our market opportunities for alternate energy sources.

We have presented Add-Power to potential investors through our business plan and have received positive response. We believe financing for Add-Power will be possible to meet our 2009 revenue target for this product. However, we make no assurances on the outcome of our negotiations and of any other factors out of our control that may change investor’s perception of value and return.

It should be noted that our independent auditors have concluded that there are many factors regarding our company and its operations that raise substantial doubt about the ability of the Company to continue as a going concern and consequently, its ability to raise capital.

Plan of Operation

Because we did not have sufficient financing (debt and/or equity) during the last fiscal year, our Plan of Operation has not significantly changed from our plan indicated in our 10K Report for the year ended December 31, 2007 and during the six month period ended in June 30, 2008

Prior to the adoption of our present business plan, we investigated the option of engaging in the management of low-level radioactive waste as a result of our acquisition of Terra Mar Environmental Systems, Inc. (TMES) assets. We determined not to pursue that business because of the time and expense of compliance with government regulation in the field.

Our operating plan for year 2008 and thereafter has three components: (1) to complete negotiations to begin a Land field operation and the construction of WTE project in Egypt and Saudi Arabia, (2) complete the research and development of our Add-Power electrical generating unit to make it a commercially viable product, and 3) to continue our existing program of introducing WTE technology to governments and others charged with responsibility to manage solid waste and/or provide potable water and electricity to various population segments. In furtherance of this general plan, we have self-imposed the following goals:

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Research and Development

PROJECTED DATE


Goal		Projected Date

1. Processing of site permits in Mexico and start waste collection		Present through 2009
2. Fabricate and deliver first Add-Power units		Present through 2009
3. Generate revenue from Egypt / Saudi landfill operation		Present through 2009
4. Negotiations for WTE sites in several foreign countries and US
territory now identified, including forming subsidiaries or strategic
alliances as may be required		On going

Although we have raised $1,112,000 in equity financing and obtained loans to finance the operation, we have not reached the $30 million dollar target required for a full deployment of our resources and execution of the plan., We continue our funding campaign and have been making strides by re focusing our strategy and finding new players with synergies that increases the probability of a successful business relationship.

Research and Development

We do not expect to establish a discrete program of research or development as part of our business plan. We expect to expend our research and development efforts towards “on the job” training. We intend to cooperate with our development partners to develop efficient WTE technology customized to each customer’s needs. We intend to share the learning from each project and application to improve all areas of existing WTE technology from air scrubbing to waste disposal.

We have invested in research and development for the Add-Power unit and have tested it under a contract with an operating steel mill in Sweden. The machine has been upgraded and has been performing better than expected, but it will require additional upgrading and design to be able to produce at different outputs in different applications. We are in the process of seeking funding to take the prototype to a design stage and line up the manufacturing of the units.

Purchase of Plant and Equipment

The development and construction of each proposed WTE facility will be dependent on: (i) locating appropriate land and obtaining permits for a WTE facility, (ii) obtaining significant external financing (including related financial guaranty and risk insurance) for purchase of materials and equipment and construction of facilities and (iii) securing contracts for delivery of waste and sales of byproducts necessary to produce revenues sufficient to cover debt service and operation costs. To that regard, we have moved into strategic alliances that allow us for a low cost entry into the markets we are exploring. This will make us move swiftly into some projects and allow us to generate revenues at a low cost possible. In the event we are not able to finance one or more proposed WTE facilities, we would be forced to abandon any such projects.

WTE Facility Finance

Our plan to build one or more WTE facilities will require significant capital, which we do not currently have. We intend to finance the construction and operation of WTE facilities through a combination of loans and securitization of income from long-term contracts for tipping fees, power and potable water sales. We have been pursuing strategic alliances to provide a stronger position by leveraging experience, track record and managerial expertise in WTE design, construction and operation. With this new approach, we believe that we will be successful in securing such financing although no assurance can be given. We have entered into an agreement with Marsh USA, Inc., an international insurance broker with the ability to provide financial guaranty insurance and risk management, to locate insurance for our projects.

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Changes in the Number of Employees

We expect a substantial increase in full and part time employees in the foreseeable future to bolster our technical and marketing departments. We hired Mr. Woodrow W. Crouch, CEO with ample experience and track record in designing and building energy plants, John Benvengo, President and COO, who counts with ample experience in landfill design, construction and operations and a host of other professionals and consultants in the field. Once financing is available, we will bring in additional full time staff to support project development and operations.

We expect that plant construction projects will be completed by third parties who will be engaged pursuant to contractual agreements most of whom we are already in negotiation with.

Trends

We believe that the trend that is most likely to affect our business is the burgeoning need of local governments at all levels in most countries to manage sold waste, significant quantities of which are hazardous. We believe this trend will generate demand for the technology we offer although no assurance can be given.

We also believe the trend of global warming will affect our business. The need to reduce the output of greenhouse gases has caused a trend to find ways of generating cleaner electricity from cleaner renewable energy sources. We believe the trend will generate a demand for our technology and services we offer although no assurance can be given.

FINANCIAL CONDITION

Ability to Meet Cash Requirements

We are considered to be in the development stage as defined in the Statement of Financial Accounting Standards (“FASB”) No. 7. To date, we have received no income from our business operations. We have incurred substantial losses since our inception. As of June 30, 2008, we had an accumulated loss of $32.8 million during the development stage.

Net cash consumed by operating activities during development stage total almost $9.8 million comprised of $20.7 million used in non cash transactions such as issuance of shares of stock for services, stock options exercised for free and value of options granted under our stock option plan. In addition to that, $1.3 million was charged for amortization and impairment charges and the remaining $1.0 million used to pay vendors, employee salaries and other operating expenses.

On the cash transactions, the company invested nearly $1.1 million in asset acquisition, with $1.0 million used to acquire the Add-Power technology and the remaining $0.5 million was invested in other assets.

Total cash provided by financing activities amounted $11.0 million from which $7.8 million came from sales of stock, $1.8 million was provided by exercise of options and warrants and $2.0 came from loans from officers and other borrowing. An offset of nearly $0.7 million was used to repay loan obligations.

Based on the above data, we believe that without additional equity or debt financing, we will not be able to satisfy our cash requirements for the next twelve months.

Two Year Cash Forecast

We have developed a two-year timeline and cash forecast of our cash needs to execute our business plan and are in the process of raising the funds required to fund our operations for the next 24 months. Our first priority will be the development of the Add-Power unit, which has been already tested and operating at a steel mill in Sweden. Our investment in the manufacturing of the first couple of units should provide us with the foundation to seek contracts from interested customers, some of which have already seen the unit operational and have expressed interest in the Add-Power unit.

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We will also pursue WTE projects, specifically those we already have started in Egypt, Saudi Arabia and Mexicali, Mexico. However, our approach will be that of pursuing the landfill permits and construction to be able to operate with revenues from waste collection, until the time we estimate that our first WTE facility will come online. At that Point, we will be in a better financial position to seek additional financing for the development and construction of WTE facilities, all of which will be equipped with the Add-Power unit for a more efficient and low cost energy production.

There can be no assurance, however, that we will be able to raise the amounts of financing required to operate our business until revenues commence, that we will be able to timely commence revenue generating operations of WTE facility (ies) or that if such facility (ies) commence operation, that we will generate sufficient revenue to be profitable.

We are in the process of attempting to raise capital to address approximately $30.3 million of financing needs for the next twenty-four months, outside of construction/project financing for specific waste to energy projects. Uses of the capital we are attempting to raise include:

Working capital to cover overhead and execution costs during construction of waste to energy plants ( approximately $18.4 million ), additional details provided in the chart below.

Working capital to cover the recently completed acquisition of Add-Power AB and the commercialization of Add-Power units (a patented low temperature turbine used for converting waste heat into electricity) of approximately $1.8 million.

Additional development funding to apply Add-Power technology to low cost solar power generation, as well as to test the feasibility of integrating the Add-Power technology into small scale solar units for office parks, malls, and residential projects ( $10.1 million ).

A detailed schedule of our capital needs for the two years ended December 31, 2009 is as follows:


	2008	2009	Total
Employee Costs	$ 2,832,450	$4,240,050	$ 7,072,500
Travel	1,196,000	1,196,000	2,392,000
Construction/Project Management	345,000	828,000	1,173,000
Legal Fees	979,800	966,000	1,945,800
Outsourced Engineering	316,250	690,000	1,006,250
Contractors/Consultants	949,900	940,700	1,890,600
External & Internal Audit	142,600	345,000	487,600
Corporate Insurance	287,500	517,500	805,000
Accounting Services (Outsourced)	86,250	345,000	431,250
Marketing	178,250	345,000	523,250
Rental /Office Expenses	320,850	345,000	665,850
Total Operating Costs	$7,634,850	$10,758,250	$18,393,100
Additional Investment/Commercialization of
other Proprietary Technology
Cash for Add-Power Acquisition	1,798,600	-	1,798,600
R&D of Add-Power unit for commercialization	4,025,000	-	4,025,000
R&D of Add-Power unit for potential solar
commercialization	-	6,095,000	6,095,000
Total Forecasted Cash Usage Excluding
Project Specific Financing	$13,458,450	$16,853,250	$ 30,311,700

In addition to the above, we plan to develop and execute contracts for our WTE facilities in Egypt, Mexico and elsewhere, ( these contracts may include long term, ie.7-10 year, commitments for waste disposal, electric and water sales ). We expect to use these contracts, and the expected revenue sources

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they represent, to secure project specific financing. We expect to have multiple financing sources for project/construction financing on a project-by-project basis outside of this specific equity raise.

Payments Due under Contractual Obligations

We have future commitments at March 31, 2007 consisting of office lease obligations as follows:



Year Ending December 31,		Office Lease Obligations
2008		65,459
2009		91,603
2010		91,443
2011		7,639
Total		$256,144

In addition, we have a contractual obligation to pay during 2008 the remaining $962,057 for the purchase of Add-Power. We will not be able to meet this obligation without proceeds of external financing, of which we provide no assurance .

RESULTS OF OPERATIONS

Quarter ended June 30, 2008 compared to the quarter ended June 30, 2007

The company has accumulated net losses during its development stage of $32.9 million. During the first six months of 2008, the company had total expenses of $9,277,158 compared to $3,714,409 during same period in 2007. Net operating losses were $9,891,661 in 2008 and $3,714,443 for the same period in year 2007.

The main contributor for the significant increase in expenses for the comparable period in 2008 and 2007 arises from additional issuance of stock for services and options exercised for free during the six month period ended June 30, 2008. This was due to additional services rendered by consultants and professionals during year 2008 in comparison to the previous year. The effect during the six month period ended June 30, 2008 was an increase of $6.3 million in shares for Services and an increase in officer’s compensation of roughly $.6 million in comparison for same period in year 2007, or a net increase of $5.7 million in expenses. The Company has depended on issuance of additional shares of stock to pay some of its debt, to compensate for the cash insufficiency. In addition, it has compensated some of the Directors and Officers in an effort to boost its image and strengthen its technical and professional proficiency in the industry field.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We have adopted various accounting policies that govern the application of accounting principles generally accepted in the United States of America in the preparation of our financial statements, which requires us to make estimates, and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Although these estimates are based on our knowledge of current events and actions, we may undertake in the future, they may ultimately differ from actual results. Certain accounting policies involve significant judgments and assumptions by us, which have a material impact on our financial condition and results. Management believes its critical accounting policies reflect its most significant estimates and assumptions used in the presentation of our financial statements. Our critical accounting policies include debt management and accounting for stock-based compensation. We do not have off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities".

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Item 3 - Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4 - Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure Controls

We carried out an evaluation required by Rule 13a-15(b) of the Securities Exchange Act of 1934 or the Exchange Act under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.

Disclosure controls and procedures are designed with the objective of ensuring that (i) information required to be disclosed in an issuer's reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

The evaluation of our disclosure controls and procedures included a review of our objectives and processes and effect on the information generated for use in this Report. This type of evaluation is done quarterly so that the conclusions concerning the effectiveness of these controls can be reported in our periodic reports filed with the SEC. Our assessment of the internal controls in place during the quarter ended June 30, 2008 did not revealed any internal control deficiencies that when individually and collectively evaluated, may have a material effect in the timeliness and accuracy of financial information and therefore, did not warrant additional disclosure. We have implemented the required processes and compensatory controls to minimize the risk in these areas and continue to develop those necessary as the business grows, and financial reporting becomes more complex. We intend to maintain these controls as processes that may be appropriately modified as circumstances warrant.

Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective in timely alerting them to material information, which is required to be included in our periodic reports filed with the SEC as of the filing of this Report.

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 Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of the company’s disclosures controls and procedures pursuant to exchange act rule 13a – 15e our internal control over financial reporting as of December 31, 2007 based on the criteria set forth in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the criteria set forth in Internal Control — Integrated Framework, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures over financial reporting was effective as of September 30, 2008.

However, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Management necessarily applied its judgment in assessing the benefits of controls relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there

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can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and may not be detected.

Evaluation of Disclosure Controls and Procedures

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

None

Item 1A - Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 2 - Unregistered Sale of Equity Securities and Use of Proceeds

During the period covered by this report, we sold 38 units to 26 investors for $1,112,000 in gross proceeds. Each unit consisted of 500,000 shares of common stock and a warrant to purchase 250,000 shares of common stock. The purchase price of each unit was $50,000. The warrants are exercisable at $0.25 per full share of common stock and expire twelve months from date of issuance.

The offering and sale qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance did not involve a public offering. The offering was not a public offering as defined in Section 4(2) because the offer and sale was made to an insubstantial number of persons and because of the manner of the offering. This offering was done with no general solicitation or advertising by the Registrant. Each investor made representations regarding his or her financial sophistication and had an opportunity to ask questions of our management. In addition, these investors had the necessary investment intent as required by Section 4(2) since they agreed to, and received, share certificates bearing a legend stating that such shares are restricted. This restriction ensures that these shares will not be immediately redistributed into the market and therefore not be part of a public offering. Based on an analysis of the above factors, the Registrant has met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for this transaction.

Item 3 - Defaults upon Senior Securities

None

Item 4 - Submission of Matters to a Vote of Security Holders

None

Item 5 - Other Information

During the six-month period ended June 30, 2008, two board members resigned to the company’s board of directors of directors. Mr. Robert J. Astore, Director and Mr. Salvatore Arnone resign to the board of directors and were replaced by Mr. Michael J. Kugler and Mr. Daniel P. Conte.

There have been no other changes in the board of directors in 2008.

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Item 6 - Exhibits

Exhibit 31.1 - Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (“SOX”)

Exhibit 31.2 - Certification of the Principal Financial Officer pursuant to Section 302 of SOX

Exhibit 32.1 - Certification of the Chief Executive Officer pursuant to Section 906 of SOX

Exhibit 32.2 - Certification of the Principal Financial Officer pursuant to Section 906 of SOX

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SIGNATURES

Pursuant to the requirements 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 Power Group, Ltd.

(Registrant)





	/s/ *Peter Toscano*
Date: November 21, 2008	Peter Toscano
	Principal Executive Officer



	/s/ *Jesus Oliveras*
Date: November 21, 2008	Jesus Oliveras
	Principal Financial Officer