ifpgtenkjuneeight.htm

For Each of the Two Years in the Period Ended June 30, 2008

Statements of Operations

	For the years ended June 30,
	2008			2007
Gross sales	$	1,386,000		$	-
Less: returns, discounts and allowances		-			-
Net sales		1,386,000			-
Cost of goods sold		1,366,095			-
Gross profit		19,905			-
Selling expenses		297,110			-
General and administrative expenses		1,041,674			-
Total operating expenses		1,338,784			-
Loss from operations		(1,318,879	)		-
Other income (expense)
Interest expense		(10,458	)		-
Loss from discontinued operations					(1,184,659	)
Total other expense		(10,458	)		-
Loss before provision for income taxes		(1,329,337	)		(1,184,659	)
Provision for income taxes					-
Net loss	$	(1,329,337	)	$	(1,184,659	)
Net loss per share, basic and diluted	$	(0.00	)	$	(0.00	)
Shares used in per-share calculation, basic and diluted		453,537,501			348,094,751

The accompanying notes are an integral part of the financial statements.

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International Food Products Group, Inc.

Statements of Shareholders' Deficit

For Each of the Two Years in the Period Ended June 30, 2008

						Additional
	Preferred	Common		Common		Paid-in		Accumulated
	Stock	Shares		Stock		Capital		Deficit			Total
Balance June 30, 2006			270,828,501	$	270,829	$	7,810,244	$	(8,971,415	)	$	(890,342	)
Shares issued for cash			3,959,000		3,959		46,106		-			50,065
Shares issued for services			139,576,000		139,576		2,110,200		-			2,249,776
Net Loss									(1,184,659)			(1,184,659)

Balance, June 30, 2007			414 363 501		414,364		9,966,550		(10,156,074	)		224,840
Shares issued for cash			8,405,000		8.405		55,595		-			64,000
Shares issued for services			59,200,000		59,200		406,400					465,600
Preferred Stock issued	16,000						64,000					80,000
Net Loss									(1,329,337)			(1,329,337)

Balance, June 30, 2008	16,000		481,968,501	$	481,969	$	10,492,545	$	(11,485,411)		$	(494,897)

The accompanying notes are an integral part of the financial statements.

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For Each of the Two Years in the Period Ended June 30, 2008

Statements of Cash Flows

	For the Years Ended June 30,
	2008			2007
Cash flows from operating activities:
Net loss	$	(1,329,337	)	$	(1,184,659	)
Adjustments to reconcile net loss to net cash used by operating activities:

Interest accrued on notes payable - related parties paid with shares		-			-


Shares issued for services and debt		545,600			2,249,776
Decrease (increase) in assets:
Accounts Receivable		(1,386,000)			-
Inventory		-			86,906
Prepaid expenses		554,143			(593,427	)
Other assets		-			-
Increase (decrease) in liabilities:
Accounts payable		1,268,024			(138,643)

Accrued compensation costs		-			(346,390)
Accrued expenses		111,152			(84,948)
Net cash provided by (used in) operating activities		(236,418)	)		(11,385	)
Cash flows provided by (used in) investing activities:
Change in restricted cash		-			-
Net cash provided by (used in) investing activities		-			-

The accompanying notes are an integral part of the financial statements.

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For Each of the Two Years in the Period Ended June 30, 2008

Statements of Cash Flows

	For the Years Ended June 30,
	2008		2007
Cash flows provided by (used in) financing activities:
Proceeds from Related Party	$	159,448	$
Payment on notes payable		-		(39,128	)
Proceeds from notes payable		12,852		-

Sales of shares of common stock		64,000		50,065
Net cash provided by (used in) financing activities		236,300		10,937
Net increase (decrease) in cash		(118)		(448)
Cash at beginning of year		1,870		2,318
Cash at end of year	$	1,752	$	1,870

Supplemental Disclosures of Cash Flow Information
		For the Years Ended June 30,
		2008		2007
Interest paid - third parties	$			-
Income taxes paid	$	-	$	-

Supplemental Schedule of Non-cash Investing and Financing Activities
		For the Years Ended June 30,
		2008		2007
Issuance of shares in satisfaction of notes payable including accrued interest:
	$		$
Notes payable - third parties	$		$	-

The accompanying notes are an integral part of the financial statements.

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International Food Products Group, Inc.

Notes to the Financial Statements

As of June 30, 2008 and

For Each of the Two Years in the Period Ended June 30, 2008

1. Summary of Significant Accounting Policies

Revenue Recognition

Product revenues are recognized upon shipment to the customers. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related revenues are recorded.

Cash

The Company has no requirement for compensating balances.

Trade Accounts Receivable

The Company intends and has the ability to hold trade accounts receivable until they are paid. Trade accounts receivable are reported at their outstanding principal amount less any chargeoffs and an allowance for doubtful accounts. When a trade account receivable is deemed uncollectible, the balance is charged off against the allowance for doubtful accounts. An allowance for doubtful accounts is based on the Company's historical loss experience. Recoveries of trade accounts receivable that have been previously charged off are recorded when received as a reduction in bad debt expense in the year of collection. The Company determines trade accounts receivable delinquency based on contractual terms of the specific trade account receivable. The Company's policy for determining past due is 60 days past agreed upon payment terms. As of June 30, 2008, the Company had one customer and did no8 establish an allowance for doubtful accounts.

Fair Value of Financial Instruments

Statement of Financial Accounting Standards (“SFAS”) No. 107: Disclosures About Fair Value of Financial Instruments , requires management to disclose the estimated fair value of certain assets and liabilities defined by SFAS No. 107 as financial instruments. Financial instruments are generally defined by SFAS No. 107 as cash and cash equivalents, evidence

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For Each of the Two Years in the Period Ended June 30, 2008

1. Summary of Significant Accounting Policies, Continued

Fair Value of Financial Instruments, Continued

of ownership interest in equity, or a contractual obligation that both conveys to one entity a right to receive cash or other financial instruments from another entity and imposes on the other entity the obligation to deliver cash or other financial instruments to the first entity.

At June 30, 2008, the Company’s financial instruments are cash and cash equivalents, accounts payable-trade, accrued liabilities and notes payable. The recorded values of cash and cash equivalents and accounts payable and accrued liabilities approximate their fair values based on their short-term nature. The recorded value of the notes payable approximates the fair value, as interest approximates market rates.

Income Taxes

Deferred income taxes are determined based on the difference between the financial reporting and tax bases of assets and liabilities. Deferred income tax expense (benefit) represents the change during the reporting period in the deferred tax assets and deferred tax liabilities. Deferred tax assets and/or liabilities are classified as current and noncurrent based on the classification of the related asset or liability for financial reporting purposes, or based on the expected reversal date for deferred taxes that are not related to an asset or liability. Deferred tax assets include tax loss and credit carryforwards and are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company currently has net operating loss ("NOL") carryforwards that can be utilized to offset future income for federal and state tax purposes. The NOL's generate a significant deferred tax asset. However, the Company has recorded a valuation allowance against this deferred tax asset as it has been determined that it is more likely than not that the Company will not generate future income that the NOL's could offset.

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For Each of the Two Years in the Period Ended June 30, 2008

1. Summary of Significant Accounting Policies, Continued

Stock-based compensation

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123(R), Share-Based Payment. This pronouncement amends SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. SFAS No. 123(R) requires that companies account for awards of equity instruments issued to employees under the fair value method of accounting and recognize such amounts in their statements of operations. Under SFAS No. 123(R), we are required to measure compensation cost for all stock-based awards at fair value on the date of grant and recognize compensation expense in our consolidated statements of operations over the service period that the awards are expected to vest.

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of SFAS 123(R) and the Emerging Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services". Common stock issued to non-employees in exchange for services is accounted for based on the fair value of the services received

Advertising Costs

Advertising costs are expensed as incurred. There were no advertising costs during 2008 and 2007.

Interest Expense

Interest expense, including loan fees paid through the issuance of shares of the Company’s common stock, relate to borrowings, the proceeds of which were used to acquire products sold to others.

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Notes to the Financial Statements

As of June 30, 2008 and

For Each of the Two Years in the Period Ended June 30, 2008

1. Summary of Significant Accounting Policies, Continued

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. The most significant assumption that has been made by management with regards to the preparation of their financial statements is the valuation allowance that has been established for the deferred income tax asset and the valuation of share-based compensation. Changes in this and other estimates as well as the assumptions involved in the preparation of the financial statements are considered reasonably possible and may have a material impact on the financial statement

Recently Issued Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (FAS 141(R)). This Statement provides greater consistency in the accounting and financial reporting of business combinations. It requires the acquiring entity in a business combination to recognize all assets acquired and liabilities assumed in the transaction, establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to disclose the nature and financial effect of the business combination. FAS 141(R) is effective for fiscal years beginning after December 15, 2008. We will adopt FAS 141(R) no later than the first quarter of fiscal 2010 and are currently assessing the impact the adoption will have on our financial position and results of operations.

In December 2007, the FASB issued SFAS No. 160. Noncontrolling Interests in Consolidated Financial Statements (FAS 160). This Statement amends Accounting Research Bulletin No. 51, Consolidated Financial Statements, to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. FAS 160 is effective for fiscal years beginning after December 15, 2008. We will adopt FAS 160 no later than the first quarter of fiscal 2010 and are currently assessing the impact the adoption will have on our financial position and results of operations.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities , which permits entities to choose to measure at fair value eligible financial instruments and certain other items that are not currently required to be measured at fair value. This statement requires that unrealized gains and losses on items for which the fair value option has been elected be reported in earnings at each subsequent reporting date. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. We will adopt SFAS No. 159 no later than the first quarter of fiscal 2009. We are currently assessing the impact the adoption of SFAS No. 159 will have on our financial position and results of operations.

In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R) . SFAS No. 158 requires company plan sponsors to display the net over or under-funded position of a defined benefit postretirement plan as an asset or liability, with any unrecognized prior service costs, transition obligations or actuarial gains/losses reported as a component of other comprehensive income in shareholders’ equity. SFAS No. 158 is effective for fiscal years ending after December 15, 2006. We adopted the recognition provisions of SFAS No. 158 as of the end of fiscal 2007. The adoption of SFAS No. 158 did not have an effect on the Company’s financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements . SFAS No. 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements. However, the application of SFAS No. 157 may change current practice for some entities. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We will adopt SFAS No. 157 in the first quarter of fiscal 2009. We are currently assessing the impact that the adoption of SFAS No. 157 will have on our financial position and results of operations.

In July 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109 (FIN 48). This interpretation clarifies the application of SFAS No. 109, Accounting for Income Taxes , by defining a criterion that an individual tax position must meet for any part of the benefit of that position to be recognized in an enterprise’s financial statements and also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006, but earlier adoption is permitted. The Company is in the process of evaluating the impact of the application of the Interpretation to its financial statements.

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Notes to the Financial Statements

As of June 30, 2008 and

For Each of the Two Years in the Period Ended June 30, 2008

1. Summary of Significant Accounting Policies, Continued

New Accounting Pronouncements, Continued

allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The Company does not expect the adoption of this statement to have a material impact on its financial position, results of operations or cash flows.

2. Equipment

Equipment consisted of the following as of June 30, 2008:
Computer equipment	$	35,090
Furniture and fixtures		2,424
		37,514
Less: accumulated depreciation		(37,514	)
Total equipment		-

Depreciation expense for the year ended June 30, 2007 was $0. Equipment was fully depreciated at June 30, 2006.

3. Accounts Payable

Included in Accounts Payable is a payable to a vendor of the Company who supplied packaging for the Company's products during the period from fiscal year 2000 through fiscal year 2002 and obtained a judgment in the California Superior Court against the Company for the amounts due for the products that were provided and court-awarded attorney’s fees. This judgment awarded by the court to the vendor has been recorded, and a lien has been filed in the amount of $137,767.

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For Each of the Two Years in the Period Ended June 30, 2008

4. Notes Payable

Note payable to related party who is an officer, director and major shareholder; the note is uncollateralized with interest. @10% due on demand, including interest	$	159,448


Note payable to a third party, uncollateralized with interest @10% due on demand, including interest		80,500

5. Deferred Income Taxes

The components of the provision for income taxes are as follows:

	For the Years Ended June 30,
	2008		2007
Current tax expense:
Federal		-		-
State	$	-	$	1,175
		-		1,175
Deferred tax expense:
Federal		-		-
State		-
-				-
Total provision	$	-	$	1,175

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International Food Products Group, Inc.

Notes to the Financial Statements

As of June 30, 2008 and

For Each of the Two Years in the Period Ended June 30, 2008

5. Deferred Income Taxes, Continued

Significant components of the Company's deferred income tax assets and liabilities at June 30, 2008 and 2007 are as follows:

	For the Years Ended June 30,
	2008			2007
Deferred income tax assets:
Net operating loss carryforward	$	3,301,684		$	2,063,191
Allowance and reserves		-			-
Other		-			-
Total deferred income tax asset		3,301,684			2,063,191
Valuation allowance		(3,301,684	)		(2,063,191	)
Net deferred income tax asset		-			-

The Company, based upon its history of losses and management's assessment of when operations are anticipated to generate taxable income, has concluded that it is more likely than not that none of the net deferred income tax assets will be realized through future taxable earnings and has established a valuation allowance for them.

Reconciliation of the effective tax rate to the U.S. statutory rate is as follows:

	For the Years Ended June 30,
	2008			2007
Tax benefit at U.S. statutory rate		(34.0)	%		(34.0.)	%
State tax provision		-			-
Other		-			(2.0)
Stock-based compensation		29.9			24.9
Change in valuation allowance		4.0			12.2
Effective income tax rate		.1	%		1.1	%

The Company also has federal and state net operating loss carryforwards of approximately 11,000,000. The federal net operating loss carryforwards will begin to expire in the years 2018 ..

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For Each of the Two Years in the Period Ended June 30, 2008

6. Commitments

The Company rents its corporate office on a month to month basis. .

7. Going Concern -

The Company has incurred net losses for the year of $1,329,227. Managements plans include an acquisition of a food company which it believes will lead to profits, significant revenue and significant funding. No assurances can be given that the Company will be able to raise the capital required to implement its business plan. In addition even if the Company is able to achieve distribution of its products, there is no assurance that there will be sufficient sell-through of those products to warrant reorders, that reliable sources of products will be retained or that the company will be able to sustain levels of sales at prices that generate sufficient gross profit to cover expenses. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the company is unable to continue as a going concern.

8. Share-Based Compensation

In prior years, the Company granted options to its officers and certain consultants. No options were granted during either of the two years in the period ended June 30, 2008. The Company does not have a formal plan for granting options.

The following table summarizes information about stock options granted and outstanding at June 30, 2008. There were no changes during the years then ended June 30, 2008 and 20067 All options granted are fully vested at June 30, 2007 and are exercisable, upon proper notice, in whole or in part at any time. The options granted have contractual lives ranging from ten to sixteen years.

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For Each of the Two Years in the Period Ended June 30, 2008

8. Share-Based Compensation, Continued

			Weighted
			Average
	Shares		Exercise Price
Balance, June 30, 2005		16,650,000	$	0.133
Granted		-		-
Exercised		-		-
Canceled		-		-
Balance, June 30, 2006		16,650,000		0.133
Granted		-		-
Exercised		-		-
Canceled		-		-
Balance, June 30, 2007		16,650,000	$	0.133
Exercisable at June 30, 2006		16,650,000	$	0.133
Exercisable at June 30, 2007		16,650,000	$	0.133

Summary information about the Company's options outstanding all of which are exercisable at June 30, 2008:

Stock Options Outstanding
		Weighted
Average		Average
Option		Remaining		Average
Exercise	Number	Contractual		Exercise
Price	Outstanding	Life		Price
$0.083	11,250,000	3.5	$	0.083
$0.250	5,400,000	6.2	$	0.250
	16,650,000	4.4	$	0.133

The Company issues shares of its common stock to non employees in payment for services provided, and issued shares to employees in satisfaction of accrued compensation. The Company records the fair value of the shares issued to measure the cost of the transactions with both non employees and employees. The Company does not have a formal share based compensation plan.

The fair value of unrestricted shares is determined by the quoted market price at the measurement date of each issuance. The fair value of restricted shares is estimated at the measurement date of each issuance using the Black-Scholes Option Model that uses the assumptions noted in the following table. Expected volatilities are based on historical

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For Each of the Two Years in the Period Ended June 30, 2008

8. Share-Based Compensation, Continued

volatility of the Company’s common stock. The risk free rate is based on the U.S. Treasury yield curve in effect at the measurement date.

	For the Years Ended June 30,
	2008		2007
Volatility	175% to 736%		175% to 736%
Expected dividends		-		-
Risk-free rate	2.18% to 3.66%		2.18% to 3.66%
Expected life of the options	1.0 to 2.0 years		1.0 to 2.0 years
A summary of share activity follows.
	For the Years Ended June 30,
	2008		2007
Shares issued to non employees for services:
Number of shares issued		-		52,018,996
Estimated fair value	$	-	$	626,313
Shares issued to employees in satisfaction of accrued payroll:
Number of shares issued		-		31,762,839
Estimated fair value	$	-	$	345,879

9. Loss Per Share

Basic and diluted loss per common share have been computed by dividing the loss available to common shareholders by the weighted-average number of common shares..

The computations of basic and diluted loss per common share are as follows:

	For the Years Ended June 30,
	2008			2007
Loss per common share, basic and diluted:
Numerator:
Net loss available to common shareholders	$	(1,329,337	)	$	(1,184,659	)
Denominator:
Weighted average shares - basic and diluted		453,547,501			348,094,751
Loss per common share, basic and diluted	$	(0.00	)	$	(0.00	)

The effect of the potentially dilutive securities listed below was not included in the computation of diluted loss per share, because to do so would have been antidilutive for the two years presented.

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