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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C.
20549

FORM 10-KSB

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
  THE SECURITIES ACT OF 1934

For the Fiscal Year Ended April 30, 2006

COMMISSION FILE NO. 0-21255

IAS COMMUNICATIONS,
INC.(Name of small business issuer as specified in its
charter)

|OREGON                          | 91-1063549            
|------------------------------- | ----------------------
|(State or other jurisdiction of | (I.R.S. Employer      
|incorporation or organization)  | Identification Number)

1103  11871 HORSESHOE WAYRICHMOND, BRITISH
COLUMBIA V7A 5H5, CANADA(Address, including postal code, of
registrant's principal executive offices)

(604) 278-5996(Telephone number including area
code)

Securities registered pursuant to Section 12(b) of the Exchange
Act: NONE

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

|Title of each class        | Name of each Exchange on which registered:
|-------------------------- | ------------------------------------------
|                           |                                           
|Common Stock, no par value | Over the Counter Bulletin Board           

Check whether the issuer (1) filed all reports required to be
  filed by Section 13 or 15(d) of the Exchange Act during the past 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

Check if disclosure of delinquent filers pursuant to Item 405
  of Regulation S-B is not contained in this form, and no disclosure will be contained,
  to the best of the registrants knowledge, in definitive proxy or information
  statements incorporated by reference in part III of this form 10-KSB or any
  amendment to this Form 10-KSB. [ X ]

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

State the issuers revenues for its most recent fiscal year:
$27,948  Oil and Gas Revenue

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The aggregate market value of the voting stock held by
non-affiliates of the registrant on July 17, 2006, computed by reference to the
price at which the stock was sold on that date: $5,106,972.

The number of shares outstanding of the registrant's Common
Stock, no par value, as of fiscal year ended April 30, 2006 and July 17, 2006
was 35,243,562.

Documents incorporated by reference: See Exhibits.

Transitional Small Business Disclosure Format (Check one): Yes
  []
  No [ X ].

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|IAS COMMUNICATIONS, INC.
|------------------------
|                        
|FORM 10-KSB             
|                        
|TABLE OF CONTENTS       

|PART I                                                                                                                       | 4 
|---------------------------------------------------------------------------------------------------------------------------- | --
|                                                                                                                             |   
|ITEM 1. DESCRIPTION OF BUSINESS                                                                                              | 4 
|BUSINESS DEVELOPMENT                                                                                                         | 4 
|BUSINESS OF THE ISSUER                                                                                                       | 4 
|RISK FACTORS                                                                                                                 | 5 
|PATENTS,
      TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY                                                        |   
|AGREEMENTS, LABOR CONTRACTS, INCLUDING DURATION                                                                              | 9 
|RESEARCH AND DEVELOPMENT                                                                                                     | 11
|NUMBER OF TOTAL EMPLOYEES AND NUMBER OF FULL-TIME EMPLOYEES                                                                  | 11
|ITEM
      2. DESCRIPTION OF PROPERTY                                                                                        | 12
|ITEM
      3. LEGAL PROCEEDINGS                                                                                              | 13
|ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                            | 14
|                                                                                                                             |   
|PART II                                                                                                                      | 14
|                                                                                                                             |   
|ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS                                                       | 14
|DIVIDEND POLICY                                                                                                              | 14
|RECENT SALES OF UNREGISTERED SECURITIES                                                                                      | 15
|ITEM
      6: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF OPERATIONS                    | 15
|PLAN OF OPERATIONS                                                                                                           | 15
|LIQUIDITY AND CAPITAL RESOURCES                                                                                              | 16
|ITEM
      7: FINANCIAL STATEMENTS                                                                                           | 16
|ITEM
      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTINGAND FINANCIAL DISCLOSURE                            | 16
|ITEM
      8A. CONTROLS AND PROCEDURES                                                                                       | 16
|ITEM
      8B. OTHER INFORAMTION.                                                                                            | 17
|                                                                                                                             |   
|PART III                                                                                                                     | 18
|                                                                                                                             |   
|ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT | 18
|ITEM 10. EXECUTIVE COMPENSATION                                                                                              | 20
|ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                                | 21
|ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                                      | 23
|ITEM 13. EXHIBITS                                                                                                            | 24
|ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                              | 25
|                                                                                                                             |   
|SIGNATURES                                                                                                                   | 26

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PART I

ITEM 1. DESCRIPTION OF BUSINESS

BUSINESS DEVELOPMENT

IAS Communications, Inc. (referred to herein as us, we, our")
is a development stage company incorporated in the state of Oregon in 1994. Our
principal business operations have historically been conducted in Indiana and
B.C. Canada. Until recently, we have been engaged in the commercialization of
advanced antenna technology known as the Contrawound Toroidal Helical Antenna,
(the "CTHA"), for wireless communications markets. We have been granted
worldwide sublicensing rights for commercial applications, excluding military
and governmental applications, for the antenna. The CTHA technology is currently
on hold due to unsuccessful attempts to complete a license agreement with
potential customers.

BUSINESS OF THE ISSUER

On April 6, 2005, we entered into an agreement with JGR
Petroleum, Inc. (JGR) to purchase an interest in two producing wells located
in Burleson County, Texas from JGR. We agree to issue 1,000,000 shares of
restricted common stock of IAS to JGR as full consideration for the purchase of
interests. The shares are to be issued quarterly on the basis of one share for
every $0.10 revenue from the oil and gas wells.

On November 3, 2005, we entered into a letter of intent to
purchase a 37.5% net revenue interest in a producing oil well in Overton and
Clay County, Tennessee, in consideration for $400,000. We also entered into a
letter of intent to drill two exploration wells in the Overton and Clay County,
Tennessee. In January 2006, we decided not to proceed with this project.

In April 2006, we signed a term sheet with a private oil and
gas company to drill initially 4 gas wells in Kentucky, with an option to drill
an additional 20 wells over a 18 month period. The term sheet is for a 100%
interest, subject to a 12 1⁄2 % interest to the landowner and 27 1⁄2 % interest to
the operator. We will retain a 60% net revenue interest in the wells. The term
sheet is subject to a definitive agreement to be signed and drilling of the
first well.

On May 4, 2006, the Company entered into a joint venture drilling
  agreement with Energy Source Inc. (ESI) where the Company can earn a 60% interest
  in 4 gas wells in Kentucky and the option to acquire a 60% interest in an additional
  20 wells over an 18 month period by paying $185,000 per well for the first 4
  wells, and a price to be agreed upon for all additional wells. Payment for the
  first well is payable within twenty days of the agreement (paid subsequently)
  and payments for additional wells are due twenty days after written notice is
  provided by ESI. In addition the Company must pay a monthly maintenance fee
  of $300 per well and any additional maintenance expenses, a monthly dehydration
  fee and a $0.55 per MCF transportation fee at 60% of the head volume as well
  as any third party transportation and marketing fees incurred in delivering
  gas to the sales point.

In June 2006, the Ken Lee #1 well was successfully completed
  as a commercial gas well. The initial open flow tested 1.22 MCF of high BTU
  gas. The well was completed to a depth of 1410' in the Big Lime formation.

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The successful drill results for the Ken Lee #1 gas well provides confirmation of a productive gas field in the Knox and Laurel counties, Kentucky. Gas production is to be completed in two weeks to the nearby Delta Natural Gas Line. [was it???]

In July 2006, we commenced the drilling of the Elvis Farris #2 well, located on the Farris Lease, in Laurel County, Kentucky. Testing of the first two wells has commenced.

Teryl Resources Inc. has an option to earn a 40% interest by paying 50% of the costs of each well that Teryl elects to participate in.

Competition

The strength of commodity prices has resulted in significantly increased operating cash flows and has led to increased drilling activity. This industry activity has increased competition for undeveloped lands; skilled personnel; access to drilling
rigs, service rigs and other equipment; and access to processing and gathering facilities, all of which may cause drilling and operating costs to increase. Most of our competitors are larger than us and have substantially greater financial and
marketing resources. In addition, some of our competitors may be able to secure products and services from vendors on more favorable terms, offer a greater product selection, and adopt more aggressive pricing policies than we can.

Governmental and Environmental Regulations

The oil and natural gas industry is subject to extensive controls and regulations imposed by various levels of government. We do not expect that any of these controls or regulations will affect our operations in a manner materially different than
they would affect other oil and gas industry participants of similar size.

Past Activities of Our Company

Up until fiscal 2002, we were engaged in the commercialization of advanced antenna technology known as the Contrawound Toroidal Helical Antenna, (the "CTHA"), for wireless communications markets.  Since then, The CTHA technology has been on hold due
to unsuccessful attempts to complete a license agreement with potential customers.

RISK FACTORS

You should carefully consider the following risks and the other information in this Report and our other filings with the SEC before you decide to invest in us or to maintain or increase your investment.

The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties may also adversely impact and impair our business. If any of the following risks actually occur, our business, results of operations, or
financial condition would likely suffer. In

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such case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Specific to Our Company

Developmental Stage Company.

We
  were incorporated on December 13, 1994. We are a development stage company.
  In a development stage company, management devotes most of its activities to
  establishing a new business. Planned principal activities have not yet produced
  significant revenues and we have suffered recurring operating losses as is normal
  in development stage companies. We also have a working capital deficit of $116,855.
  These factors raise substantial doubt about our ability to continue as a going
  concern. Our ability to emerge from the development stage with respect to our
  planned principal business activity is dependent upon our successful efforts
  to raise additional equity financing, receive funding from affiliates and controlling
  shareholders, and develop a market for our products.

Limited Operating History.

The Company had oil and gas revenue of $27,948 during the year ended April 30, 2006, but it is not likely that we will be able to generate sufficient revenue in the future until we acquire another business. We have no significant assets or
financial resources, and will, in all likelihood, sustain operating expenses without corresponding revenues for a period of time that cannot yet be determined. This may result in our continuing to incur net operating losses.

Need for Additional Financing.

We
  have experienced significant working capital deficiencies and negative cash
  flows in the past. Our ability to continue in business depends upon our continued
  ability to obtain working capital. We will require additional financing in order
  to continue Our ability to continue in business depends upon our continued ability
  to obtain such additional capital and financing. There can be no assurance that
  any such financing would be available upon terms and conditions acceptable to
  us, if at all. The inability to obtain additional financing in a sufficient
  amount when needed and upon acceptable terms and conditions could have a material
  adverse effect upon us. If additional funds are raised by issuing equity securities,
  further dilution to existing or future shareholders is likely to result. If
  adequate funds are not available on acceptable terms when needed, we may be
  required to delay, scale back or eliminate our promotional and marketing campaign
  or our development programs. Inadequate funding also could impair our ability
  to compete in the marketplace and could result in its dissolution.

Control by Current Insiders.

Approximately
  24,000,000 common shares, not including currently exercisable options or warrants,
  are owned by current affiliates and insiders representing control of approximately
  70% of the total voting power. Accordingly, the present insiders will continue
  to elect all of our directors and generally control our affairs.

Uncertain Ability to Manage Growth.

Our
  ability to achieve our planned growth is dependent upon a number of factors
  including our ability to hire, train and assimilate management and other employees,
  the adequacy

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of our financial resources, our ability to identify and efficiently provide such new products and services as our customers may require in the future and our ability to adapt our own systems to accommodate expanded operations. In addition, there can
be no assurance that we will be able to achieve our planned expansion or that we will be able to manage such expanded operations successfully.  Failure to manage anticipated growth effectively and efficiently could have a material adverse effect on
us.

Part-Time Management.

Our
  present officers and directors have other full-time or part-time positions for
  employers unrelated to us. As a result, some of our officers and directors serve
  on an as-needed basis. The lack of full-time management could have
  an adverse effect on us.

As Our Properties Are in the Exploration and Development Stage, there Can Be No Assurance that We Will Establish Commercial Discoveries on Our Properties.

Exploration
  for economic reserves of oil and gas is subject to a number of risk factors.
  Few properties that are explored are ultimately developed into producing oil
  and/or gas wells. Our properties are in the exploration and development stage
  only and are without proven reserves of oil and gas. We may not establish commercial
  discoveries on any of our properties.

The Potential Profitability of Oil and Gas Ventures Depends Upon Factors Beyond the Control of Our Company.

The
  potential profitability of oil and gas properties is dependent upon many factors
  beyond our control. For instance, world prices and markets for oil and gas are
  unpredictable, highly volatile, potentially subject to governmental fixing,
  pegging, controls, or any combination of these and other factors, and respond
  to changes in domestic, international, political, social, and economic environments.
  Additionally, due to worldwide economic uncertainty, the availability and cost
  of funds for production and other expenses have become increasingly difficult,
  if not impossible, to project. In addition, adverse weather conditions and availability
  of drilling equipment can also hinder drilling operations. These changes and
  events may materially affect our financial performance. These factors cannot
  be accurately predicted and the combination of these factors may result in our
  company not receiving an adequate return on invested capital.

There Can Be No Assurance Our Wells Will Become Profitable.

Our
  wells may not become productive wells, and even if they do, they may become
  uneconomic in the event water or other deleterious substances are encountered
  which impair or prevent the production of oil and/or gas from the well. In addition,
  production from any well may be unmarketable if it is impregnated with water
  or other deleterious substances. Also, the marketability of oil and gas which
  we may acquire or discover will be affected by numerous factors, including the
  proximity and capacity of oil and gas pipelines and processing equipment, market
  fluctuations of prices, taxes, royalties, land tenure, allowable production
  and environmental protection, all of which could result in greater expenses
  than revenue generated by the well.

Competition in the Oil and Gas Industry is Highly Competitive and there Is No Assurance that We Will Be Successful in Acquiring the Leases.

The
  oil and gas industry is intensely competitive. We compete with numerous individuals
  and companies, including many major oil and gas companies, which have substantially
  greater

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technical, financial and operational resources and staffs. Accordingly, there is a high degree of competition for desirable oil and gas leases, suitable properties for drilling operations and necessary drilling equipment, as well as for access to
funds. We cannot predict if the necessary funds can be raised or that any projected work will be completed.

Risks Specific to Our Industry

The
  Marketability of Natural Resources Will Be Affected by Numerous Factors Beyond
  Our Control which May Result in Us Not Receiving an Adequate Return on Invested
  Capital To Be Profitable or Viable.

The marketability of natural resources which we may acquire or discover will be affected by numerous factors beyond our control. These factors include market fluctuations in oil and gas pricing and demand, the proximity and capacity of natural
resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and gas and environmental protection regulations. The exact effect of these factors cannot be
accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

Oil and Gas Operations Are Subject to Comprehensive Regulation Which May Cause Substantial Delays or Require Capital Outlays in Excess of those Anticipated Causing an Adverse Effect on Our Company.

Oil
  and gas operations are subject to federal, state, and local laws relating to
  the protection of the environment, including laws regulating removal of natural
  resources from the ground and the discharge of materials into the environment.
  Oil and gas operations are also subject to federal, state, and local laws and
  regulations which seek to maintain health and safety standards by regulating
  the design and use of drilling methods and equipment. Various permits from government
  bodies may be required for drilling operations to be conducted; we can give
  no assurance that we will receive such permits. Environmental standards imposed
  by federal, provincial, or local authorities may be changed and any such changes
  may have material adverse effects on our activities. Moreover, compliance with
  such laws may cause substantial delays or require capital outlays in excess
  of those anticipated, thus causing an adverse effect on us. Additionally, we
  may be subject to liability for pollution or other environmental damages. To
  date we have not been required to spend any material amount on compliance with
  environmental regulations. However, we may be required to do so in future and
  this may affect our ability to expand or maintain our operations.

Risks Related to Our Securities

You
  Will Be Subject to The Penny Stock Rules to the Extent Our Stock Price on the
  OTC Bulletin Board Is Less Than $5.00.

Since
  the common shares are not listed on a national stock exchange or quoted on the
  NASDAQ Market within the United States, trading in the common shares on the
  OTC Electronic Bulletin Board is subject, to the extent the market price for
  the common shares is less than $5.00 per share, to a number of regulations
  known as the "penny stock rules". The penny stock rules require a broker-dealer
  to deliver a standardized risk disclosure document prepared by the SEC, to provide
  the customer with additional information including current bid and offer quotations
  for the penny stock, the compensation of the broker-dealer and its salesperson
  in the transaction, monthly account statements showing the market value of each
  penny stock held in the customer's account,

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and to make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. To the extent these requirements may be applicable they will reduce the
level of trading activity in the secondary market for the common shares and may severely and adversely affect the ability of broker-dealers to sell the common shares.

Future Sales of Shares May Adversely Impact the Value of Our Stock.

We
  will seek to raise additional capital through the sale of our common stock.
  Future sales of our common stock could cause the market price of our common
  stock to decline.

Because of the Limited Market for Our Shares, Share Prices May Be Highly Volatile.

The
  market prices of equity securities of small companies have experienced extreme
  price volatility in recent years not necessarily related to the individual performance
  of specific companies. Factors such as announcements by us or our competitors
  concerning products, technology, governmental regulatory actions, other events
  affecting oil and gas companies generally and general market conditions may
  have a significant impact on the market price of our shares and could cause
  it to fluctuate substantially.

Dilution.

Sales
  of additional equity securities through a traditional underwritten offering
  or through private placement offerings may dilute, on a pro rata basis, the
  value of our common shares. The grant and exercise of warrants of creditors
  or otherwise or stock options would also likely result in a dilution of the
  value of our common shares.

In
  addition, we may grant additional stock options or other forms of equity-based
  incentive compensation to attract and retain such personnel. We also may in
  the future offer equity participation in connection with the obtaining of non-equity
  financing, such as debt or leasing arrangements accompanied by warrants to purchase
  our equity securities. Any of these actions could dilute the value of our common
  shares.

Dividend Policy.

As
  of the date of this Form 10-KSB, we have not paid any dividends on our common
  stock and we do not expect to declare or pay any dividends on our common stock
  for the foreseeable future.

Anti-Takeover Provisions.

At
  the present time, our Board of Directors has not adopted any shareholder rights
  plan or any anti-takeover provisions in our Charter or Bylaws.

PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS, LABOR CONTRACTS, INCLUDING DURATION

We obtained the rights to the CTHA through a series of transactions. Dr. James E. Smith ("Dr. Smith"), a tenured professor at West Virginia University ("WVU"), directed the research and development of CTHA utilizing WVU's facilities and funding.
Under Dr. Smith's employment

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agreement with WVU, the patentable ideas for the CTHA were assigned to West Virginia University Research Corporation ("WVURC") and became its property on April 12, 1994. An exclusive worldwide license was granted by WVURC to Integral Concepts, Inc.
(ICI"), a corporation owned and controlled by Dr. Smith, to:  (1) manufacture the CTHA and, (2) sublicense others to manufacture, market, sell copies of, license and distribute the CTHA (the "ICI License").

ICI entered into an option agreement with SMR Investment Ltd., ("SMR") a corporation owned by Sue Robertson, the wife of John Robertson, the Company's President, Chief Executive Officer and a member of the Board of Directors ("Robertson"), dated
November 18, 1994, and amended December 16, 1994 (the 'Option Agreement"). The Option Agreement provided that ICI would issue a sublicense to SMR for the CTHA subject to the payment of $250,000; a 3% royalty from gross sales; and shares in a
subsequent public entity.  SMR and Robertson organized the Company as a result.  ICI retained all military and governmental applications and resulting procurement interests. The contract period relating to the three- percent royalty to be paid to
ICI commences when sales are made by us and continues during the life of the Option Agreement. The term of the Option Agreement is perpetual as is the ICI License.

On December 13, 1994, we were assigned the rights to the Option Agreement by SMR in consideration for $50,000 advanced by Access Information Services, Inc. (the "Option Assignment"). Access Information Services, Inc. is a corporation owned and
controlled by Robertson.

On December 14, 1994, we issued 3,000,000 shares to Dr. Smith and 3,000,000 shares to Access Information Services Ltd. pursuant to the Option Assignment. The value assigned to the 3,000,000 shares issued to Dr. Smith was a total of $0.50 and the
value assigned to the 3,000,000 shares issued to Access Information Systems, Inc. was $0.50. These valuations of the 3,000,000 shares issued to Dr. Smith and Access Information Systems, Inc. were arbitrarily determined by our Board of Directors.
The $250,000 paid to ICI was a one-time payment.

On July 10, 1995, ICI granted an exclusive worldwide sublicense to us to: (1) manufacture, sell copies of, sublicense and distribute the process and equipment related to the design, construction and operation of the CTHA; and, (2) to sublicense
others to manufacture, sell copies of, license and distribute the same, excluding all military and governmental applications and resulting procurement interests (the "Sublicense"). The Sublicense was the culmination of the agreements between ICI and
SMR, and SMR and us. On December 27, 1995, SMR assigned all of its rights and duties in the CTHA technology to us pursuant to the Option Assignment. The term of the Sublicense, subject to compliance of the terms thereof, is perpetual and requires
the payment of a minimum annual royalty of $3,000. Further, we will pay a royalty of l0% of the net revenues derived from sales, leases or sublicenses of the CTHA technology less a credit for the minimum royalty. In addition, we shall pay a
royalty of 3% of the gross revenues derived from the sales, leases or sublicenses of the CTHA technology.

The Sublicense was amended effective March 4, 1997, to (i) reduce the amount of the royalty payable by us by 50% over the next 3 years, (ii) clarify that our rights pertain to commercial applications, excluding military and governmental
applications, and (iii) enlarge the definition of Technology to include all future enhancements to the CTHA technology developed by ICI, ETC, or us.

Effective March 17, 2005, we entered into a settlement and
  release agreement with Integral Concepts Inc. (ICI) to terminate
  the exclusive worldwide sublicense granted to the Company by ICI.

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We entered into a Joint Venture Agreement ("JVA") with Emergent
  Technologies Corporation (ETC) on March 4, 1997. The JVA required a new company
  to be incorporated (TEAM) whereby we own 50% and ETC owns 50% of TEAM. Pursuant
  to a voting agreement we can vote 100% of the shares of TEAM. The President
  of ETC is the President of TEAM. TEAM was organized on June 4, 1997 under the
  laws of the State of West Virginia. We retain the worldwide commercial sublicense
  rights to the CTHA excluding all military and governmental applications.

The business purpose of TEAM was to cooperate in the research and development of certain applications for the CTHA and to assemble and manufacture certain products relating thereto. IAS was to buy product from TEAM at cost to manufacture plus 30%
for all commercial applications and ETC was to buy product from TEAM at cost to manufacture plus 30% for all military applications. ETC acquired the worldwide sublicense from ICI for all military and governmental applications on January 2, 1997.
TEAM is currently inactive.

WVURC received a patent for the CTHA in August 1995. Dr. Smith is a tenured professor at WVU and conducts his research and development regarding the CTHA at WVU's facilities. As a result, WVURC owns the patent rights to the CTHA that it licensed to
ICI. The ICI License provides that ICI can grant sublicenses of the technology covered by the patent to third parties. On July 10, 1995, we were issued the Sublicense by ICI, which was amended in March 1997.

On July 29, 1997, we announced that the second US patent had been granted on the CTHA. This patent broadened the protection we already had for the CTHA by encompassing several different geometry's not specifically covered by the first patent.

On March 17, 2005, we entered into a Non-Exclusive License Agreement with WVURC regarding the CTHA technology sublicense.  IAS and WVURC agree to license the CTHA technology back to IAS on a nonexclusive basis for the worldwide rights. IAS will
continue to pay a minimum royalty fee of US$3,000 to WVURC and a royalty of 10% of the net sales, whichever is greater.

In addition, effective March 17, 2005, we entered into a settlement and release agreement with West Virginia University Research Corporation. WVRUC agrees to waive the US$315,778.50 research and development payment due from IAS in consideration
for the termination of the IAS sublicense agreement with ICI. IAS will unconditionally release and discharge WVURC and related parties from all claims IAS may have against them.

RESEARCH AND DEVELOPMENT

We spent in 2006 $3,000 on research and development as compared to $3,000 in 2005. Research and development is required to keep the license in good standing.

NUMBER OF TOTAL EMPLOYEES AND NUMBER OF FULL-TIME EMPLOYEES

In addition to our Officers, we currently employ no full-time employees and utilize contractors as required.

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ITEM 2. DESCRIPTION OF PROPERTY

Our executive offices are located at #1103-11871 Horseshoe Way, Richmond, British Columbia V7A 5H5, and the telephone number is (604) 278-5996. We lease, on a month-to-month basis, approximately 200 square feet of space at the aforementioned office
from SMR Investments. The Company occupied this space rent-free during the fiscal year.

Oil and Gas Properties

As of April 30, 2006, we had a working interest in two properties, but as of the date of this report, the Company does not own any properties.

On April 6, 2005, we entered into an agreement with JGR Petroleum, Inc. (JGR) to purchase an interest in two producing wells located in Burleson County, Texas from JGR. The wells are producing but a value cannot be placed on them due to
vertical fracture features that prevent the estimation of reserves.

On May 4, 2006, the Company entered into a joint venture drilling
  agreement with Energy Source Inc. (ESI) where the Company can earn a 60% interest
  in 4 gas wells in Kentucky and the option to acquire a 60% interest in an additional
  20 wells over an 18 month period by paying $185,000 per well for the first 4
  wells, and a price to be agreed upon for all additional wells. Payment for the
  first well is payable within twenty days of the agreement (paid subsequently)
  and payments for additional wells are due twenty days after written notice is
  provided by ESI. In addition the Company must pay a monthly maintenance fee
  of $300 per well and any additional maintenance expenses, a monthly dehydration
  fee and a $0.55 per MCF transportation fee at 60% of the head volume as well
  as any third party transportation and marketing fees incurred in delivering
  gas to the sales point.

Exploratory and Development Wells Drilled

We have participated in the drilling of several wells during the last three fiscal years.

In June 2006, the Ken Lee #1 well was successfully completed as a commercial gas well. The initial open flow tested 1.22 MCF of high BTU gas. The well was completed to a depth of 1410' in the Big Lime formation.

The successful drill results for the Ken Lee #1 gas well and previous drill results provides confirmation of a productive gas field in the Knox and Laurel counties, Kentucky. The Ken Lee #1 gas well is currently in production.

In July 2006, we commenced the drilling of the Elvis Farris #2 well, located on the Farris Lease, in Laurel County, Kentucky. Testing has commenced.

The two producing wells located in Burleson County, Texas are producing but a value cannot be placed on them due to vertical fracture features that prevent the estimation of reserves.

Miscellaneous

We are not obligated to provide quantities of oil or gas in the future under existing contracts or agreements. We have not filed any reports containing oil or gas reserve estimates with any federal or foreign governmental authority or agency within
the past 12 months.

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ITEM 3. LEGAL PROCEEDINGS

To the best of the knowledge of our Officers and Directors, neither the Company nor any of our Officers and Directors are parties to any material legal proceeding or litigation other than as described below. Further, our Officers and Directors know
of no threatened or contemplated legal proceedings or litigation other than as described below. None of our Officers and Directors has been convicted of a felony and none has been convicted of any criminal offense, felony or misdemeanor, relating to
securities or performance in corporate office. To the best of the knowledge of our Officers and Directors, no investigations of felonies, misfeasance in office or securities investigations are either pending or threatened at the present time.

The Company was sued in April 1998 in a civil action filed in U.S. District Court for the District of Oregon (the Oregon Litigation). The Plaintiff, Kirk VanVoorhies, (Plaintiff) sought money damages and equitable relief
against the Company alleging patent infringement by the Company for the CTHA. The Company notified West Virginia University (WVU) of this claim and contacted WVU to assist in the defence. WVU owns the patent rights to the CTHA
technology, which were licensed to the Company. Two patents were granted for the CTHA to WVU; one in August 1995, and another in August 1997. The Plaintiffs patent was approved on March 31, 1998.

The Plaintiff in the Oregon Litigation is also a defendant in a pending civil action in the U.S. District Court for the Northern District of West Virginia brought by WVU (the West Virginia Litigation) claiming that the CTHA invention is
owned by WVU. As alleged in the West Virginia Litigation, the Company believes that the patent rights for the CTHA technology belongs to WVU and therefore based on the license, the Company owns the worldwide rights to the CTHA commercial
applications. Litigation, the Company believes that the patent rights for the CTHA technology belongs to WVU and therefore based on the license, the Company owns the worldwide rights to the CTHA commercial applications.

A decision by the United States District Court for the Northern District of West Virginia will, if upheld on appeal, signal the end to patent litigation brought by VorteKx, Inc. against the Company.

VorteKx, Inc. brought a patent infringement action against IAS in the United States District Court for the District of Oregon on a patent issued to a former graduate student at WVU, Kurt L. VanVoorhies, and subsequently assigned to VorteKx. On the
Company's motion, the case was transferred to the Northern District of West Virginia and consolidated with a previously pending action filed by WVU against VanVoorhies, discussed above. The Company and WVU both claimed that the technology covered by
the patent is actually owned by WVU. The Company is the sublicensee of commercial applications of the CTHA technology.

In a Memorandum Opinion and Order entered February 17, 2000, the West Virginia federal court granted summary judgment for WVU in its claims against VanVoorhies. The Court also dismissed VanVoorhies' claims against WVU and third-party defendants West
Virginia University Research Corporation, Dr. James E. Smith and Integral Concepts, Inc. Because the Court's holding establishes that WVU owns the technology, it should bring an end to the litigation against the Company, which was stayed pending
resolution of the case against VanVoorhies.

The dispute in the WVU action concerned inventions conceived during VanVoorhies' time at WVU as a graduate student and later as a graduate research assistant, particularly two inventions relating to the CTHA technology. The Court found that
VanVoorhies validly assigned all rights in the first invention to WVU, including all future technology derived from the technology

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underlying that invention. VanVoorhies subsequently declined to
assign to WVU any interest in a second invention. The Court found that the
second invention constituted future technology derived from the first invention.
Therefore, VanVoorhies' assignment of the first invention to WVU also
effectively assigned the second invention to WVU, and WVU is the rightful owner
of the patent applications filed by VanVoorhies on the CTHA technology.

Because one of these patent applications led to the issuance of
the patent underlying VorteKx's infringement suit against the Company, VorteKx
no longer has standing to pursue that infringement case. The case was stayed
pending VanVoorhies' appeal from the Court's order. On May 20, 2004 the United
States Court of Appeals affirmed the stay of the case.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote by our security holders
during the fourth quarter of our fiscal year ended April 30, 2006.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

Our Common Stock trades on the OTC Bulletin Board under the
symbol "IASCA.OB" where it has traded since April 16, 1996. Our Common Stock has
traded at between $0.010 and $4.62 per share since April 16, 1996.

The following table sets forth the high and low prices for the
Company's Common Stock, as reported by Nasdaq Trading & Market Services for
the quarters presented. These quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commissions, and may not reflect actual
transactions.

|                               | Bid Price | Asked Price
|------------------------------ | --------- | -----------
|                               | High $    | Low $      
|Quarter Ended July 31, 2004    | .05       | .04        
|Quarter Ended October 31, 2004 | .05       | .04        
|Quarter Ended January 31, 2005 | .05       | .031       
|Quarter Ended April 30, 2005   | .40       | .031       
|Quarter Ended July 31, 2005    | .15       | .10        
|Quarter Ended October 31, 2005 | .14       | .10        
|Quarter Ended January 31, 2006 | .16       | .10        
|Quarter Ended April 30, 2006   | .43       | .12        

As of July 17, 2006 there were 35,243,562 shares of Common
Stock outstanding, held by 133 shareholders of record.

DIVIDEND POLICY

To date we have not paid any dividends on our Common Stock and
do not expect to declare or pay any dividends on such Common Stock in the
foreseeable future. Payment of any dividends will be dependent upon future
earnings, if any, our financial condition, and other factors as deemed relevant
by our Board of Directors.

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RECENT SALES OF UNREGISTERED SECURITIES

Set forth below is information regarding the issuance and sales of our securities without registration during the past fiscal year. No such sales involved of an underwriter and no commissions were paid in connection with the sale of any securities.
See the Statement of Stockholders Equity and the Notes to our audited financial statements for the fiscal year ended April 30, 2006 for more information on recent sales of unregistered securities.

During the fiscal year ended April 30, 2006, there were no shares issued in connection with the exercise of warrants or stock options.  Please refer to Note 8, Commitments and Note 12, Subsequent Events, to our audited financial statements for the
years ended April 30, 2006 and April 30, 2005 for future commitments to issue unregistered securities.

ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements. The words, "anticipate", "believe", expect", "plan", "intend", "estimate", "project", "could", "may", "foresee", and similar expressions are intended to identify forward-looking statements. The
following discussion and analysis should be read in conjunction with our Financial Statements and other financial information included elsewhere in this report which contains, in addition to historical information, forward-looking statements that
involve risks and uncertainties. Our actual results could differ materially from the results discussed in the forward-looking statements. Factors that could cause or contribute to such differences include those discussed below, as well as those
discussed elsewhere in this report.

PLAN OF OPERATIONS

We were incorporated on December 13, 1994 pursuant to the Laws of the State of Oregon, USA. We are a development stage company. We are currently not engaged in the commercialization of the CTHA and do not have any plan of operations, however, we
plan to seek other projects, which are yet to be determined.

In a development stage company, management devotes most of its activities to establishing a new business. Planned principal activities have not yet produced significant revenues and the Company has suffered recurring losses from inception, totaling
$6,001,695 and has a working capital deficit of $116,855 which includes a cash balance of $313. These factors raise substantial doubt about our ability to continue as a going concern. Our ability to emerge from the development stage with
respect to its planned principal business activity is dependent upon our successful efforts to raise additional equity financing, develop additional markets for its products, identify additional licensees and receive ongoing support from the
majority of our creditors and affiliates.

We may raise additional funds through the exercise of warrants and stock options, if exercised. Options with respect to 1,250,000 shares may be exercised for potential proceeds of $250,000. These options and warrants are currently not
in-the-money and are unlikely to be currently exercised.

Results of Operation for the Year Ended April 30, 2006 ("2006") as compared to the Year Ended April 30, 2005 ("2005")

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During 2006 we incurred revenue of $28,000 compared to $Nil in 2005.  Administrative expenses increased by $13,000 in 2006 to $14,000 as compared to $1,000 in 2005.  No management fees were charged during 2006 nor 2005. Tranfer
agent and regulatory expenses decreased by $2,000 to $3,000 from $5,000. Professional fees increased by $32,000 to $66,000 from $34,000 in 2005. In 2006 we wrote off our accounts payable of $54,000, as compared to 2005
during which we wrote off our accounts payable of $Nil.  During 2006 we incurred an unrealized gain on securities held for trading of $141,000 compared to $44,000 in 2005. As a result of the write off of the accounts payable, the oil and
gas revenues and the unrealized gain on securities held for trading we incurred a net income of $81,000 as compared to $1,000 in 2005 and we incurred a net income per share of $nil as compared to a net income of $nil in both 2006 and
2005.

LIQUIDITY AND CAPITAL RESOURCES

During 2006 we financed our operations and received $36,000 by:

|(i) | receiving financial support from related parties in the amount of $36,000. These amounts are unsecured, non-interest bearing and due on demand.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------

During 2006 we invested these funds as follows:

|(i) | $36,000 of these funds was spent on operating activities as discussed above under Results of Operation for the year ended April 30, 2006.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------

Our cash position remained the approximately the same at $313 as compared to $nil in 2005 and our working capital deficit, as at April 30, 2006, is $116,855.

ITEM 7: FINANCIAL STATEMENTS

Our financial statements are included and begin immediately following the signature page to this report.  See Item 13 for a list of the financial statements and financial statement schedules included.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 8A. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

As required by Rule 13a-15 under the Exchange Act, as of the end of the period covered by this annual report, being April 30, 2006, we have carried out an evaluation of the effectiveness of the  design and  operation  of our company's  disclosure
controls and procedures.  This evaluation was carried out under the supervision and with the participation of our company's management, including  our  President and our Chief  Financial Officer.  Based upon that evaluation, our President and our
Chief Financial Officer concluded that our company's disclosure controls and procedures are effective. There have been no changes in our company's

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internal  controls or in other  factors,  which  could  significantly affect internal controls subsequent to the date we carried out our evaluation.

Disclosure  controls and procedures and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time
period specified in the  Securities  and  Exchange Commission's  rules and  forms.  Disclosure  controls  and procedures  include, without limitation,  controls and procedures designed to ensure that information required  to be  disclosed  in our
reports  filed  under  the  Exchange  Act is accumulated and  communicated  to management,  including our President and our Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in internal controls.

Subsequent to the date of their evaluation, there were no  corrective actions taken by our Company or other  changes made to these internal controls.  Our Company's management does not believe there were changes in other factors  that could  affect
these  controls subsequent to the date of the evaluation.

ITEM 8B. OTHER INFORAMTION.

On September 8, 2005, Manning Elliott agreed to resign as IAS Communications, Inc.s (the "Company") principal auditor, effective as of such date. On September 8, 2005, the Company appointed Smythe Ratcliffe as the principal auditor of the
Company, effective as of such date. The resignation of Manning Elliott was accepted and the appointment of Smythe Ratcliffe was approved by the Companys Audit Committee.

The reports of Manning Elliott on the Company's financial statements for the past two fiscal years did not contain an adverse opinion or a disclaimer of opinion on any matter of accounting principles or practices, financial statement disclosure, or
auditing scope of procedure and were not qualified or modified as to uncertainty, audit scope, or accounting principles.

The Company has authorized Manning Elliott to respond fully to questions of its successor independent auditors.

There were no disagreements with Manning Elliott for the past two fiscal years any subsequent interim period preceding such resignation, declination or dismissal on any matter of accounting principles or practices, financial statement disclosure, or
auditing scope of procedure, which disagreement, if not resolved to the satisfaction of Manning Elliott, would have caused it to make reference to the subject matter of the disagreement in connection with its report.

The Company has requested Manning Elliott to furnish it a letter addressed to the SEC stating whether it agrees with the above statements. A copy of that letter, dated September 13, 2005, was filed with our 8-K on September 13, 2005.

On May 4, 2006, the Company entered into a joint venture drilling agreement with Energy Source Inc. (ESI) where the Company can earn a 60% interest in 4 gas wells in Kentucky and the option to acquire a 60% interest in an additional 20 wells over an
18 month period by paying $185,000 per well for the first 4 wells, and a price to be agreed upon for all additional wells. Payment for the first well is payable within twenty days of the agreement (paid subsequently)

- 17 -

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and payments for additional wells are due twenty days after written notice is provided by ESI. In addition the Company must pay a monthly maintenance fee of $300 per well and any additional maintenance expenses, a monthly dehydration fee and a
$0.55 per MCF transportation fee at 60% of the head volume as well as any third party transportation and marketing fees incurred in delivering gas to the sales point.

WEST VIRGINIA UNIVERSITY RESEARCH CORPORATION NON-EXCLUSIVE LICENSE AGREEMENT

On March 17, 2005, we closed on a transaction pursuant to which we entered into a Non-Exclusive License Agreement with West Virginia University Research Corporation (WVURC) regarding the CTHA technology sublicense.

We obtained the rights to the CTHA through a series of transactions. Dr. James E. Smith ("Dr. Smith"), a tenured professor at West Virginia University ("WVU"), directed the research and development of CTHA utilizing WVU's facilities and funding.
Under Dr. Smith's employment agreement with WVU, the patentable ideas for the CTHA were assigned to WVURC and became its property on April 12, 1994. An exclusive worldwide license was granted by WVURC to Integral Concepts, Inc. (ICI"), a corporation
owned and controlled by Dr. Smith, to manufacture the CTHA and sublicense others to manufacture, market, sell copies of, license and distribute the CTHA.

On July 10, 1995, ICI granted an exclusive worldwide sublicense to us. The term of the sublicense, subject to compliance of the terms thereof, is perpetual and requires the payment of a minimum annual royalty of $3,000.

IAS and WVURC agree to license the CTHA technology back to IAS on a nonexclusive basis for the worldwide rights. IAS will continue to pay a minimum royalty fee of US$3,000 to WVURC and a royalty of 10% of the net sales, whichever is greater.

In addition, effective March 17, 2005, we entered into a settlement and release agreement with West Virginia University Research Corporation. WVRUC agrees to waive the US$315,778.50 research and development payment due from IAS in consideration
for the termination of the IAS sublicense agreement with ICI. IAS will unconditionally release and discharge WVURC and related parties from all claims IAS may have against them.

INTEGRAL CONCEPTS INC. SETTLEMENT AND RELEASE AGREEMENT

Effective March 17, 2005, we entered into a settlement and release agreement with Integral Concepts Inc. (ICI) to terminate the exclusive worldwide sublicense granted to the Company by ICI.

PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The following table sets forth the name, age and position of each Executive Officer, Director and Significant Employee of the Company:

|Name | Age | Position
|---- | --- | --------

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|Name              | Age | Position                                                                                                
|----------------- | --- | --------------------------------------------------------------------------------------------------------
|                  |     |                                                                                                         
|John G. Robertson | 65  | Principal Executive Officer,
      President, Chairman of the Board and Member of the Board of Directors
|Jennifer Lorette  | 34  | Secretary and Member of the Board of Directors                                                          
|James Vandeberg   | 62  | Chief Operating Officer, Chief
      Financial Officer and Member of the Board of Directors             

All our Directors have served since the formation of the
Company in December, 1994, except for James L. Vandeberg, who was appointed to
the Board of Directors in November, 1998. The Executive Officers were elected on
February 4, 1995, except for James L. Vandeberg, who was appointed as Chief
Operating Officer on August 1st, 1999. All officers currently devote part-time
to our operations.

There are no family relationships between any director or
executive officer and any other director or executive officer.

The present and principal occupations of our directors and
executive officers during the last five years are set forth below:

John G. Robertson - President, Principal Executive Officer and
a Member of the Board of Directors

Mr. Robertson has been the President and Principal Executive
Officer and a Director of the Company since its formation. Mr. Robertson has
been Chairman, President and Chief Executive Officer of REGI U.S., Inc. since
July 1992. Since October 1984 Mr. Robertson has been President and a Director of
Reg Technologies Inc., a British Columbia corporation listed on the TSX Venture
Exchange that has financed the research on the Rand Cam Engine since 1986. REGI
U.S. is controlled by Rand Energy Group, Inc., a British Columbia corporation of
which Reg Technologies Inc. is the majority shareholder. REGI U.S. owns the U.S.
rights to the Rand Cam (TM) technology and Rand Energy Group, Inc. owns the
worldwide rights exclusive of the U.S. Since June 1997 Mr. Robertson has been
President, Principal Executive Officer and a Director of
Information-Highway.com, Inc., a Florida corporation traded on the PinkSheets,
and its predecessor. He is also the President and Founder of Teryl Resources
Corp., a public company trading on the TSX Venture Exchange involved in gold,
diamond, and oil and gas exploration. He is also President of Linux Gold Corp.,
a public company trading on the OTC Bulletin Board. Since May 1977 Mr. Robertson
has been President and a member of the Board of Directors of SMR Investments
Ltd., a British Columbia corporation engaged in the business of management and
investment consulting.

James L. Vandeberg - Chief Operating Officer, Chief Financial
Officer and a Member of the Board of Directors

Mr. Vandeberg became a Director of the Company in November 1998
and its Chief Operating Officer in August 1999. Mr. Vandeberg is an attorney in
Seattle, Washington. He has served as our legal counsel since 1996. Mr.
Vandeberg's practice focuses on the corporate finance area, with an emphasis on
securities and acquisitions. Mr. Vandeberg was previously general counsel and
secretary of two NYSE companies. He is a director of Information-Highway.com,
Inc., a Florida corporation traded on the Pink Sheets. He is also a director of
REGI U.S., Inc.. an Oregon corporation traded on the OTC bulletin board since
November 1999. Mr. Vandeberg is also a director of Reg Technologies Inc. which
trades on the OTC bulletin board. Mr. Vandeberg is also a director of ASAP Show
Inc. since May, 2005. He is a member and former director of the

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American Society of Corporate Secretaries. He became a member
of the Washington Bar Association in 1969 and of the California Bar Association
in 1973. Mr. Vandeberg graduated cum laude from the University of Washington
with a Bachelor of Arts degree in accounting in 1966, and from New York
University School of Law in 1969, where he was a Root-Tilden Scholar.

Jennifer Lorette - Secretary/Treasurer and a Member of the
Board of Directors

Ms. Lorette is a founder, and has been Secretary/Treasurer,
Principal Financial Officer and Principal Accounting Officer of the Company
since February 1995. Since June 1994 Ms. Lorette has been Vice President and
director of REGI U.S., Inc., an Oregon corporation traded on the OTC bulletin
board. Since April 1994 she has also been Vice President of Administration and
Secretary for Reg Technologies, Inc., a British Columbia corporation listed on
the TSX Venture Exchange that has financed the research on the Rand Cam Engine
since 1986. REGI U.S. is controlled by Rand Energy Group, Inc., a British
Columbia corporation of which Reg Technologies Inc. is the majority shareholder.
Since June 1997 Ms. Lorette has been Executive Vice President and a Director of
Information-Highway.com, Inc., a Florida corporation traded on the PinkSheets,
and its predecessor. Since June 1994 Ms. Lorette has also been Vice President
and Secretary of Linux Gold Corp. Since November 1997 Ms. Lorette has been Vice
President of Teryl Resources Corp., a public company trading on the TSX Venture
Exchange involved in gold, diamond, and oil and gas exploration. She also became
a director in February 2001.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3, 4 and 5 furnished to us,
other than James Vandeberg who furnished no Forms to us during the year, no
officer, director or beneficial owner of more than ten percent of our Common
Stock failed to file on a timely basis reports required to be filed by Section
16(a) of the Exchange Act during the most recent fiscal year.

ITEM 10. EXECUTIVE COMPENSATION

None of our executive officers had an annual salary and bonus
  in excess of $100,000 during the past fiscal year. Mr. Robertson was previously
  granted 350,000 options which have been cancelled and replaced with options
  to purchase 1,000,000 shares of common stock at $0.20 per share and which expire
  on November 20, 2006.

|Name and Principal Position | Year | Annual
      Compensation | Long-Term
      Compensation
|--------------------------- | ---- | ------------------------- | ----------------------------
|                            |      |                           |                             
|                            |      | Salary 
      ($)         | Bonus 
      ($)            
|                            |      |                           |                             
|John
      G. Robertson,    | 2006 | Nil                       | Nil                         
|President
      and CEO     | 2005 | Nil                       | Nil                         
|                            | 2004 | Nil                       | Nil                         

|(1) | "SARS"or "stock appreciation right"means
      a right granted by US, as compensation for services rendered, to receive a
      payment of cash or an issue or transfer of securities based wholly or in
      part on changes in the trading price of our publicly traded
    securities.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|(2) | "LTIP"or "long term incentive plan"means
      any plan which provides compensation intended to serve as incentive for
      performance to occur over a period longer than one financial year, but
      does not include option or stock appreciation right plans or plans for
      compensation through restricted shares or restricted share
  units.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

No other compensation is paid to any of our Executive Officers
or Directors. We may in the future create retirement, pension, profit sharing,
insurance and medical reimbursement plans covering our Officers and Directors.
At the present time, we have no such plans. No advances have been made or are
contemplated by us to any of our Officers or Directors.

On November 20, 2001, Mr. Robertson was granted a new stock
option for 1,000,000 common shares at a price of $0.20 per share expiring
November 20, 2006.

The following table sets forth certain information concerning
exercises of stock options pursuant to stock option plans by the named Executive
Officers during the year ended April 30, 2006, and stock options held at year
end.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END
OPTION VALUES

Name
      Shares Acquired 
        On Exercise (#)
      Value realized ($)
      Number of 
        Unexercised Options at Years End
      Exercisable / Unexercisable
      Value of 
        Unexercised Options at Year End (1)
      Exercisable / UnexercisableJohn G. Robertson
    -0-
    -0-
    1,000,000 / 0
    $250,000 / -0-


(1) The calculation of the value of unexercised options is
based on the difference between the last sale price of $0.45 per share for our
Common Stock on April 30, 2006, and the exercise price of each option ($0.20),
multiplied by the number of shares covered by the option.

We do not have any Long Term Incentive Plans.

We do not have any employment contracts, termination of
employment and change of control arrangements.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following table sets forth, as of July 17, 2006, our
outstanding Class A Common Stock owned of record or beneficially by each person
who owned of record, or was known by us to own beneficially, more than 5% of our
Common Stock, and the name and shareholdings of each Executive Officer and
Director and all Executive Officers and Directors as a group. A person is deemed
to be the beneficial owner of securities that can be acquired by such person
within 60 days from the date of this report upon the exercise of warrants or
options. Each beneficial owner's percentage ownership is determined by assuming
that options that are held by such person and which are exercisable within 60
days from the date are exercised.

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|Name                                                                                                                   | Class A Shares Owned | Percentage of Class A Shares Owned
|---------------------------------------------------------------------------------------------------------------------- | -------------------- | ----------------------------------
|John G. Robertson, President and member of
      the Board of Directors [1] [2]                                        | 21,407,918           | 60.7%                             
|Access Information Services, Inc. [3]                                                                                  | 12,467,508           | 35.4%                             
|JGR Petroleum Inc. [8]                                                                                                 | 7,896,110            | 22.2%                             
|SMR Investments [9]                                                                                                    | 4,367,252            | 12.4%                             
|Robertson Family Trust [4]                                                                                             | 20,363,618           | 57.8%                             
|Jennifer Lorette Secretary/Treasurer [1] [6]                                                                           | 146,000              | *                                 
|James L. Vandeberg [1][5], Chief Operating
      Officer, Chief Financial Officer and Member of the Board of Directors | 100,000              | *                                 
|ALL EXECUTIVE OFFICERS & DIRECTORS AS A GROUP (FOUR
      INDIVIDUALS) (7)                                             | 24,821,170           | 70.4%                             

* Less than one percent

Except as noted below, all shares are held beneficially and of
record and each record shareholder has sole voting and investment power.

[1] These individuals are our Executive Officers and Directors
and may be deemed to be our "parents or founders" as that term is defined in the
Rules and Regulations promulgated under the Securities Act of 1933, as
amended.

[2] Includes 12,467,508 shares registered in the name of Access
Information Services, Ltd., a corporation controlled by the Robertson Family
Trust, 7,896,110 shares registered in the name of JGR Petroleum Inc. , a
corporation controlled by the Robertson Family Trust and 1,000,000 options that
are currently exercisable. Mr. Robertson is one of three trustees of the
Robertson Family Trust, which acts by the majority vote of the three trustees.
Mr. Robertson disclaims beneficial ownership of the shares owned or controlled
by the Robertson Family Trust. Mr. Robertson's address is the same as our
address.

[3] Access Information Services is a corporation owned by the
Robertson Family Trust. Its address is 1103 - 11871 Horseshoe Way, Richmond,
British Columbia V7A 5H5, Canada.

[4] Includes 12,467,508 shares owned of record by Access
Information Services, a corporation owned by the trust and 7,896,110 shares
registered in the name of JGR Petroleum Inc. , a corporation controlled by the
Robertson Family Trust. The address of the Robertson Family Trust is 1103 -
11871 Horseshoe Way, Richmond, British Columbia V7A 5H5, Canada.

[5] Includes 100,000 options that are currently exercisable.
Mr. Vandeberg's address is 22344 NE 31st Street, Sammamish, WA 98074.

[6] Includes 100,000 options that are currently exercisable.
Ms. Lorette's address is the same as our address.

[7] Includes 12,467,508 shares registered in the name of Access
  Information Services, Inc., a corporation controlled by the Robertson Family
  Trust, 7,896,110 shares registered in the name of JGR Petroleum Inc. , a corporation
  controlled by the Robertson Family Trust and 1,000,000 options that are currently
  exercisable. Mr. Robertson is one of three trustees of the Robertson Family
  Trust, which acts by the majority vote of the three trustees. Mr. Robertson
  disclaims beneficial ownership of the shares owned or controlled by the Robertson
  Family Trust.

[8] JGR Petroleum Inc. is a corporation owned by The Robertson
  Family Trust. Its address is 1103 - 11871 Horseshoe Way, Richmond, British Columbia
  V7A 5H5, Canada

[9] SMR Investments is a corporation owned by Sue Robertson,
  the wife of Mr. Robertson. Its address is 1103 - 11871 Horseshoe Way, Richmond,
  British Columbia V7A 5H5, Canada

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CHANGES IN CONTROL

We know of no arrangements the operation of which may result in a change of our control.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Integral Concepts, Inc. ("ICI"), holder of the exclusive worldwide license to the CTHA technology, entered into an option agreement with SMR Investments Ltd. ("SMR"), a corporation owned by Sue Robertson, the wife of Mr. Robertson, dated November
18, 1994, and amended December 16, 1994 (the "Option Agreement"). The Option Agreement provided that ICI would issue a sublicense to SMR for the CTHA subject to the payment of $250,000; a 3% royalty from gross sales; and a subsequent public
entity to be established. We were organized by SMR and Robertson as a result. ICI retained all military applications and resulting procurement interests. The contract period relating to the three percent royalty to be paid to ICI commences when
sales are made by us and SMR and continue during the life of the Option Agreement. The term of the Option Agreement is perpetual as is the ICI License.

On December 13, 1994, SMR assigned us the rights to the Option Agreement in consideration of $50,000 advanced by Access Information Services, Inc. (the "Option Assignment"). Access Information Services, Inc. is a corporation owned and controlled
by the Robertson Family Trust.

On December 14, 1994, we issued 3,000,000 Class A Shares to Access Information Services, Inc., pursuant to the Option Assignment. The value assigned to the 3,000,000 Class A common shares issued to Access Information Services Inc. was $0.50. The
valuation of the 3,000,000 shares issued to Access Information Services, Inc. was arbitrarily determined by our Board of Directors. The $250,000 has been paid to ICI and was a one time payment.

On July 10, 1995, ICI entered into the Sublicense wherein
  ICI granted to us the exclusive worldwide right to manufacture, sell copies
  of, sublicense and distribute the process and equipment related to the design,
  construction and operation of the CTHA and to further sublicense others the
  rights to manufacture, sell copies of, license and distribute the same, excluding
  all military applications and procurement interests. The Sublicense was the
  culmination of the agreement between ICI and SMR, and SMR and us. On December
  27, 1995, SMR assigned us all of its rights and duties in the CTHA technology.
  The purpose of this assignment was to assign any and all rights or duties which
  may have been held by SMR as a result of the Option Agreement, it being understood
  that the Option Agreement was nothing more than an agreement in principle. The
  term of the Sublicense is perpetual and requires the payment of a minimum annual
  royalty of $3,000. Further, we will pay a royalty of 10% of the net revenues
  derived from sales, licenses or sublicenses of the CTHA technology with a credit
  for the minimum royalty. In addition we shall pay a royalty of 3% of the gross
  revenues derived from the sales, licenses or sublicenses of the CTHA technology.

We amended the Sublicense with ICI in March 1997 to clarify
  the applications of CTHA technology subject to our sublicense. As amended, we
  have exclusive rights to all commercial applications. Emergent Technologies
  Corporation ("ETC") has the exclusive rights to all governmental and military
  applications for the CTHA antenna. In consideration for the amendment, we received
  a 50% reduction in royalties to be paid to ICI over a three year period plus
  an enlarged definition of Technology to include all future enhancements to the
  CTHA technology.

Effective March 17, 2005, we entered into a settlement and release
  agreement with Integral Concepts Inc. (ICI) to terminate the exclusive
  worldwide sublicense granted to the Company by ICI.

The Company entered into an agreement dated April 6, 2005, with
  a private company controlled by the President of the Company to acquire a working
  interest in two oil wells located in Burleson County, Texas. The wells are producing
  but a value cannot be placed on them due to vertical fracture features that
  prevent the estimation of reserves. The Company agreed to issue up to 1,000,000
  shares (issued  nil) of restricted common stock at the rate of one share
  for every $0.10 of revenue from the wells. Refer to Note 8 (b) to our financial
  statements.

The Company entered into an agreement with a professional law
  firm in which a partner of the firm is an Officer and Director of the Company.
  Refer to Note 8 (a) to our financial statements.

To date, there have not been any transactions between us and
  our officers, directors, principal shareholders or affiliates other than as
  set forth above. We believe that the transactions described here were on terms
  more favorable to our officers, and directors, than otherwise could be obtained
  if such transactions were with non-related parties.

- 23 -

---

ITEM 13. EXHIBITS.

|Number | Description                                                                                                                                                                  |    
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|3.1    | Articles of Incorporation                                                                                                                                                    | (1)
|3.2    | Article of Amendment                                                                                                                                                         | (1)
|3.3    | By-Laws                                                                                                                                                                      | (1)
|4.1    | Specimen Share Certificate for Class A
      Shares                                                                                                                          | (1)
|4.2    | Specimen Share Certificate
      for Class B Shares                                                                                                                          | (1)
|4.3    | Specimen Warrant                                                                                                                                                             | (2)
|4.4    | Marketing Agreement between
      IAS and Information Highway.com, Inc.                                                                                                      | (3)
|23.1   | Professional Service Agreement between
      IAS and Cadence Design Systems, Inc.                                                                                            | (3)
|23.2   | Consulting Agreement between
      IAS and Capital Research Group Inc.                                                                                                       | (3)
|23.3   | License Agreement between IAS and World
      Tracking Technologies, Inc.                                                                                                    | (3)
|23.4   | Amendment to License Agreement
      between IAS and World Tracking Technologies, Inc.                                                                                       | (3)
|10.6   | License Agreement between IAS and ARINC
      Incorporated                                                                                                                   | (3)
|10.7   | Renewal Lease Agreement
      for Kokomo, Indiana Facilities                                                                                                                 | (3)
|10.8   | Amendment No.2 to License Agreement between
      IAS and Wherify Wireless, Inc. (formerly World Tracking Technologies,
      Inc.)                                         | (4)
|10.9   | JGR Petroleum, Inc. Interest
      in Oil and Gas Wells                                                                                                                      | (5)
|10.10  | West Virginia University Research Corporation
      Non-Exclusive License Agreement                                                                                          | (5)
|10.11  | West Virginia University
      Research Corporation Settlement and Release Agreement                                                                                         | (5)
|10.12  | Integral Concepts Inc. Settlement And Release
      Agreement                                                                                                                | (5)
|23.1   | Consent
      of Smythe Ratcliffe                                                                                                                                            | (5)
|23.2   | Consent of Manning
      Elliott                                                                                                                                             | (5)
|31.1   | Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002                                                               | (5)
|31.2   | Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002                                                               | (5)
|32.1   | Certification
      of John Robertson, Chief Executive Officer, pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of Sarbanes - Oxley Act of 2002 | (5)
|32.2   | Certificate of
      James Vandeberg, Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
      as adopted pursuant to Section 906 of Sarbanes - Oxley Act of 2002   | (5)

|(1) | Incorporated by reference from Form S-1 Registration
        Statement (33-92592).
|--- | ----------------------------------------------------------------------------------
|(2) | Incorporated by reference from Form 10-KSB for Fiscal
        Year 1998.          
|(3) | Incorporated by reference from Form 10-KSB for Fiscal
        Year 2000.          
|(4) | Incorporated by reference from Form 10-KSB for Fiscal
        Year 2001.          
|(5) | Attached hereto.                                                                  

- 24 -

---

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The following table discloses accounting fees and services which
  we paid to our former auditors, Manning Elliott, in fiscal 2006 and 2005:

Type of Services Rendered
    2006 Fiscal Year (CAD$)
    2005 Fiscal Year (CAD$)(a) Audit Fees
      $5,000
    $7,950(b) Audit-Related Fees
      $0
    $0(c) Tax Fees
      $2,200
    $500(d) All Other Fees
      $0
      $0


- 25 -

---

**SIGNATURES**

In accordance with Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report or amendment to
be signed on its behalf by the undersigned, thereunto duly authorized.

IAS COMMUNICATIONS, INC.

By: /s/ John G. RobertsonJohn G. Robertson,
President Chief Executive Officer and Director

Dated: August 14, 2006

In accordance with the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities indicated as of July 27, 2004.

|**Signature**         | **Title**                            | **Date**
|--------------------- | ------------------------------------ | --------
|                      |                                      |         
|/s/ John G. Robertson | Chairman of the Board, President,    | 8/14/06 
|(John G. Robertson)   | Chief Executive Officer and Director |         
|                      |                                      |         
|                      |                                      |         
|/s/James Vandeberg    | Chief Operating Officer and          | 8/14/06 
|(James Vandeberg)     | Chief Financial Officer and Director |         
|                      |                                      |         
|                      |                                      |         
|/s/ Jennifer Lorette  | Secretary and Director               | 8/14/06 
|(Jennifer Lorette)    |                                      |         

- 26 -

---

IAS Communications, Inc.
  (A Development Stage Company)

April 30, 2006

|                                                        | Index
|------------------------------------------------------- | -----
|                                                        |      
|Report of Independent Registered Public Accounting Firm | F1  
|                                                        |      
|Balance Sheets                                          | F3  
|                                                        |      
|Statements of Operations                                | F4  
|                                                        |      
|Statements of Stockholders Deficit                     | F5  
|                                                        |      
|Statements of Cash Flows                                | F7  
|                                                        |      
|Notes to the Financial Statements                       | F8  

---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE DIRECTORS AND STOCKHOLDERS OF IAS COMMUNICATIONS, INC.
  
  (A Development Stage Company)

We have audited the accompanying balance sheet of IAS Communications,
  Inc. (A Development Stage Company) as at April 30, 2006 and the statements of
  operations, stockholders deficit and cash flows for the year ended April
  30, 2006 and the cumulative totals for the development stage of operations from
  December 13, 1994 (date of inception) through April 30, 2006. These financial
  statements are the responsibility of the Companys management. Our responsibility
  is to express an opinion on these financial statements based on our audit. The
  statements of operations, stockholders deficit and cash flows from December
  13, 1994 (date of inception) to April 30, 2005 were audited by other auditors
  whose report dated July 28, 2005 expressed an unqualified opinion, with an explanatory
  paragraph discussing the Companys ability to continue as a going-concern.
  Our opinion on the statements of operations, stockholders deficit and
  cash flows from inception to April 30, 2005, is solely based on the reports
  of other auditors.

We conducted our audit in accordance with standards of the Public
  Company Accounting Oversight Board (United States of America). Those standards
  require that we plan and perform an audit to obtain reasonable assurance whether
  the financial statements are free of material misstatement. An audit includes
  examining, on a test basis, evidence supporting the amounts and disclosures
  in the financial statements. An audit also includes assessing the accounting
  principles used and significant estimates made by management, as well as evaluating
  the overall financial statement presentation. We believe that our audit provides
  a reasonable basis for our opinion.

In our opinion, based on our audit and the reports of other auditors,
  the financial statements referred to above present fairly, in all material respects,
  the financial position of the Company as at April 30, 2006 and the results of
  its operations and its cash flows for the year ended April 30, 2006 and the
  cumulative totals for the development stage of operations from December 13,
  1994 (date of inception) through April 30, 2006 in conformity with accounting
  principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming
  that the Company will continue as a going-concern. As discussed in note 1 to
  the financial statements, the Company has sustained accumulated losses of $6,001,695
  since its inception and has deficits in working capital and equity, which raises
  substantial doubt about its ability to continue as a going-concern. The financial
  statements do not include any adjustments related to the recoverability and
  classification of asset carrying amounts or the amounts and classification of
  liabilities that might result should the Company be unable to continue as a
  going-concern. Managements plans in regard to these matters are also described
  in note 1.

As discussed in note 11, the accompanying financial statements
  of the Company as at April 30, 2005 and the statements of operations, stockholders
  deficit, and cash flows for the year ended April 30, 2005 and for the period
  from December 13, 1994 (date of inception) to April 30, 2006 have been restated.

Smythe Ratcliffe LLP (signed)

Chartered Accountants

Vancouver, British Columbia 
  July 12, 2006



F-1



---



Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of
  IAS Communications, Inc. (A Development Stage Company)

We have audited the accompanying balance sheet of IAS Communications,
  Inc. (A Development Stage Company) as at April 30, 2005 and the related statements
  of operations, cash flows and stockholders’ deficit for the year then
  ended and for the period from December 13, 1994 (Date of Inception) to April
  30, 2005. These financial statements are the responsibility of the Company’s
  management. Our responsibility is to express an opinion on these financial statements
  based on our audit.

We conducted our audit in accordance with the standards of
  the Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform an audit to obtain reasonable assurance whether
  the financial statements are free of material misstatement. An audit includes
  examining, on a test basis, evidence supporting the amounts and disclosures
  in the financial statements. An audit also includes assessing the accounting
  principles used and significant estimates made by management as well as evaluating
  the overall financial statement presentation. We believe that our audit 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 the Company
  as at April 30, 2005, and the results of its operations and its cash flows for
  the year then ended and for the period from December 13, 1994 (Date of Inception)
  to April 30, 2005, in conformity with accounting principles generally accepted
  in the United States.

The accompanying financial statements have been prepared assuming
  the Company will continue as a going concern. As discussed in Note 1 to the
  financial statements, the Company has not generated any revenues and has accumulated
  operating losses since inception. These factors raise substantial doubt about
  the Company’s ability to continue as a going concern. Management’s
  plans in regard to these matters are also discussed in Note 1. These financial
  statements do not include any adjustments that might result from the outcome
  of these uncertainties.



CHARTERED ACCOUNTANTS
  Vancouver, Canada
  July 28, 2005

F-2

---



|IAS Communications, Inc.     
|-----------------------------
|(A Development Stage Company)
|Balance Sheets               
|(Expressed in U.S. Dollars)  
|Restatement - Note 11        

|                                                                                         |  | April 30,  |   |  | April 30,  |  
|---------------------------------------------------------------------------------------- |  | ---------- | - |  | ---------- | -
|                                                                                         |  | 2006       |   |  | 2005       |  
|                                                                                         |  | $          |   |  | $          |  
|                                                                                         |  |            |   |  |            |  
|Assets                                                                                   |  |            |   |  |            |  
|Current Assets                                                                           |  |            |   |  |            |  
|Cash                                                                                     |  | 313        |   |  |           |  
|Available-for-sale securities                                                            |  | 216,697    |   |  | 75,997     |  
|Accrued revenues from petroleum
      interests                                          |  | 1,396      |   |  |           |  
|Prepaid expenses                                                                         |  | 12,000     |   |  | 2,000      |  
|Total Assets                                                                             |  | 230,406    |   |  | 77,997     |  
|                                                                                         |  |            |   |  |            |  
|Liabilities and Stockholders Deficit                                                    |  |            |   |  |            |  
|Current Liabilities                                                                      |  |            |   |  |            |  
|Cheques issued in excess of funds
      on deposit                                       |  |           |   |  | 523        |  
|Accounts payable (Note 4)                                                                |  | 69,174     |   |  | 83,378     |  
|Accrued liabilities                                                                      |  | 16,792     |   |  | 19,784     |  
|Due to related parties (Note 5)                                                          |  | 236,295    |   |  | 200,864    |  
|Convertible debentures (Note 6)                                                          |  | 25,000     |   |  | 25,000     |  
|Total Liabilities                                                                        |  | 347,261    |   |  | 329,549    |  
|Commitments and Contingent Liability (Notes
      8 and 9)                               |  |            |   |  |            |  
|Stockholders Deficit                                                                    |  |            |   |  |            |  
|Preferred Stock                  
         50,000 shares authorized; none issued        |  |           |   |  |           |  
|Common Stock                                                                             |  |            |   |  |            |  
|Class A voting                
       100,000,000 shares authorized without par value |  |            |   |  |            |  
| 35,243,562 (2005  35,243,562) shares issued                                           |  |            |   |  |            |  
|and outstanding                                                                          |  | 5,831,415  |   |  | 5,831,415  |  
|Class B non-voting          
      100,000,000 shares authorized without par value    |  |            |   |  |            |  
|
      none issued                                                                      |  |           |   |  |           |  
|Obligation to Issue Shares (Note 5(b))                                                   |  | 53,425     |   |  |           |  
|Deficit Accumulated During the Development
      Stage                                   |  | (6,218,392 | ) |  | (6,158,964 | )
|Comprehensive Income                                                                     |  | 216,697    |   |  | 75,977     |  
|Total Stockholders Deficit and Comprehensive Income                                     |  | (116,855   | ) |  | (251,572   | )
|Total Liabilities,
      Stockholders Deficit and Comprehensive Income                  |  | 230,406    |   |  | 77,977     |  

Approved by the Directors:

J. RobertsonJ. Robertson - Director

J. LoretteJ. Lorette - Director

F-3

The Accompanying Notes are an Integral Part of these Financial
  Statements

---

|IAS Communications, Inc.     
|-----------------------------
|(A Development Stage Company)
|Statements of Operations     
|(Expressed in U.S. Dollars)  
|Restatement - Note 11        

|                                                       |  |            |   |  |            |   |  | Cumulative from     |  
|------------------------------------------------------ |  | ---------- | - |  | ---------- | - |  | ------------------- | -
|                                                       |  | Year       |   |  | Year       |   |  | December 13, 1994   |  
|                                                       |  | Ended      |   |  | Ended      |   |  | (Date of Inception) |  
|                                                       |  | April 30,  |   |  | April 30,  |   |  | to April 30,        |  
|                                                       |  | 2006       |   |  | 2005       |   |  | 2006                |  
|                                                       |  | $          |   |  | $          |   |  | $                   |  
|                                                       |  |            |   |  |            |   |  |                     |  
|Operating Expenses                                     |  |            |   |  |            |   |  |                     |  
|                                                       |  |            |   |  |            |   |  |                     |  
|Depreciation                                           |  |           |   |  | 447        |   |  | 1,823               |  
|Interest on convertible debentures                     |  | 2,188      |   |  | 2,188      |   |  | 8,752               |  
|Investor relations                                     |  |           |   |  |           |   |  | 1,595               |  
|License                                                |  | 3,000      |   |  | 1,000      |   |  | 8,500               |  
|Office                                                 |  | 13,953     |   |  | 1,096      |   |  | 20,749              |  
|Professional fees                                      |  | 66,489     |   |  | 34,327     |   |  | 137,906             |  
|Transfer agent and regulatory                          |  | 2,707      |   |  | 4,668      |   |  | 14,244              |  
|                                                       |  |            |   |  |            |   |  |                     |  
|Total Operating Expenses                               |  | 88,337     |   |  | 43,726     |   |  | 193,569             |  
|                                                       |  |            |   |  |            |   |  |                     |  
|Loss from Operations                                   |  | (88,337    | ) |  | (43,726    | ) |  | (193,569            | )
|                                                       |  |            |   |  |            |   |  |                     |  
|Other Income                                           |  |            |   |  |            |   |  |                     |  
|Gain on license obligation                             |  |           |   |  | 1,000      |   |  | 1,000               |  
|Gain on write-off of payables
      (Note 4)           |  | 54,386     |   |  |           |   |  | 54,386              |  
|Petroleum revenues (Note 5)                            |  | 27,948     |   |  |           |   |  | 27,948              |  
|Impairment loss  petroleum interests
      (Note 5)   |  | (53,425    | ) |  |           |   |  | (53,425             | )
|                                                       |  |            |   |  |            |   |  |                     |  
|Loss Before Discontinued Operations                    |  | (59,428    | ) |  | (42,726    | ) |  | (163,660            | )
|                                                       |  |            |   |  |            |   |  |                     |  
|Discontinued Operations                                |  |           |   |  |           |   |  | (6,054,732          | )
|                                                       |  |            |   |  |            |   |  |                     |  
|Net Loss                                               |  | (59,428    | ) |  | (42,726    | ) |  | (6,218,392          | )
|                                                       |  |            |   |  |            |   |  |                     |  
|Comprehensive Income                                   |  |            |   |  |            |   |  |                     |  
|Unrealized gain
      on available-for-sale securities |  | 140,700    |   |  | 44,178     |   |  | 216,697             |  
|                                                       |  |            |   |  |            |   |  |                     |  
|Total Comprehensive
      Income (Loss)                |  | 81,272     |   |  | 1,452      |   |  | (6,001,695          | )
|                                                       |  |            |   |  |            |   |  |                     |  
|Income Per Share  Basic and Diluted                   |  |            |   |  |            |   |  |                     |  
|From Continuing Operations                             |  | 0.00       |   |  | 0.00       |   |  |                     |  
|                                                       |  |            |   |  |            |   |  |                     |  
|Weighted Average Common Shares Outstanding             |  | 35,243,562 |   |  | 35,243,562 |   |  |                     |  

F-4

The Accompanying Notes are an Integral Part of these Financial
  Statements

---

|IAS Communications, Inc.                                    
|------------------------------------------------------------
|(A Development Stage Company)                               
|Statements of Stockholders Deficit                         
|From December 13, 1994 (Date of Inception) to April 30, 2006
|(Expressed in U.S. dollars)                                 
|Restatement - Note 11                                       

|                                                     |  |              |   |  |            |   |  |             |  |  | Deficit       |   |  |            |  
|---------------------------------------------------- |  | ------------ | - |  | ---------- | - |  | ----------- |  |  | ------------- | - |  | ---------- | -
|                                                     |  |              |   |  |            |   |  |             |  |  | Accumulated   |   |  | Total      |  
|                                                     |  | Common Stock |   |  | Obligation |   |  | During the  |  |  | Stockholders |  
|                                                     |  | Class A      |   |  | to Issue   |   |  | Development |  |  | Equity        |  
|                                                     |  | Shares       |   |  | Amount     |   |  | Shares      |  |  | Stage         |   |  | (Deficit)  |  
|                                                     |  | #            |   |  | $          |   |  | $           |  |  | $             |   |  | $          |  
|Balance  December 13, 1994 (Date of inception)      |  |             |   |  |           |   |  |            |  |  |              |   |  |           |  
|Shares issued for cash                               |  | 100          |   |  | 10         |   |  |            |  |  |              |   |  | 10         |  
|Shares issued for technology                         |  | 6,000,000    |   |  | 1          |   |  |            |  |  |              |   |  | 1          |  
|Stock issued for cash pursuant to:                   |  |              |   |  |            |   |  |             |  |  |               |   |  |            |  
|A private placement                                  |  | 700,000      |   |  | 70,000     |   |  |            |  |  |              |   |  | 70,000     |  
|A public offering memorandum                         |  | 336,333      |   |  | 252,250    |   |  |            |  |  |              |   |  | 252,250    |  
|Net loss for the period                              |  |             |   |  |           |   |  |            |  |  | (83,615       | ) |  | (83,615    | )
|Balance  April 30, 1995                             |  | 7,036,433    |   |  | 322,261    |   |  |            |  |  | (83,615       | ) |  | 238,646    |  
|Shares previously issued, donated back and           |  |              |   |  |            |   |  |             |  |  |               |   |  |            |  
|cancelled                                            |  | (100         | ) |  | (10        | ) |  |            |  |  |              |   |  | (10        | )
|Shares issued for cash pursuant to options           |  |              |   |  |            |   |  |             |  |  |               |   |  |            |  
|exercised                                            |  | 210,000      |   |  | 52,500     |   |  |            |  |  |              |   |  | 52,500     |  
|Net loss for the year                                |  |             |   |  |           |   |  |            |  |  | (480,298      | ) |  | (480,298   | )
|Balance  April 30, 1996                             |  | 7,246,333    |   |  | 374,751    |   |  |            |  |  | (563,913      | ) |  | (189,162   | )
|Shares issued for cash pursuant to:                  |  |              |   |  |            |   |  |             |  |  |               |   |  |            |  
|A private placement                                  |  | 722,000      |   |  | 1,124,500  |   |  |            |  |  |              |   |  | 1,124,500  |  
|Options exercised                                    |  | 224,000      |   |  | 140,500    |   |  |            |  |  |              |   |  | 140,500    |  
|Shares issued for services                           |  | 25,000       |   |  | 8,333      |   |  |            |  |  |              |   |  | 8,333      |  
|Net loss for the year                                |  |             |   |  |           |   |  |            |  |  | (1,044,516    | ) |  | (1,044,516 | )
|Balance  April 30, 1997                             |  | 8,217,333    |   |  | 1,648,084  |   |  |            |  |  | (1,608,429    | ) |  | 39,655     |  
|Shares issued for cash pursuant to:                  |  |              |   |  |            |   |  |             |  |  |               |   |  |            |  
|A public offering memorandum                         |  | 263,667      |   |  | 197,750    |   |  |            |  |  |              |   |  | 197,750    |  
|Options exercised                                    |  | 87,500       |   |  | 26,875     |   |  |            |  |  |              |   |  | 26,875     |  
|A private placement                                  |  | 7,000        |   |  | 15,750     |   |  |            |  |  |              |   |  | 15,750     |  
|A private placement and
      foreign units offering |  | 575,600      |   |  | 1,007,300  |   |  |            |  |  |              |   |  | 1,007,300  |  
|Shares issued for services                           |  | 169,250      |   |  | 260,125    |   |  |            |  |  |              |   |  | 260,125    |  
|Net loss for the year                                |  |             |   |  |           |   |  |            |  |  | (1,633,047    | ) |  | (1,633,047 | )
|Balance  April 30, 1998                             |  | 9,320,350    |   |  | 3,155,884  |   |  |            |  |  | (3,241,476    | ) |  | (85,592    | )
|Shares issued for cash pursuant to:                  |  |              |   |  |            |   |  |             |  |  |               |   |  |            |  
|Options exercised                                    |  | 2,000        |   |  | 500        |   |  |            |  |  |              |   |  | 500        |  
|A private placement and
      foreign units offering |  | 95,000       |   |  | 166,250    |   |  |            |  |  |              |   |  | 166,250    |  
|A private placement                                  |  | 200,000      |   |  | 200,000    |   |  |            |  |  |              |   |  | 200,000    |  
|Exercise of warrants                                 |  | 48,000       |   |  | 84,000     |   |  |            |  |  |              |   |  | 84,000     |  
|Shares issued for services                           |  | 132,000      |   |  | 230,640    |   |  |            |  |  |              |   |  | 230,640    |  
|Shares issued pursuant to conversion of convertible  |  |              |   |  |            |   |  |             |  |  |               |   |  |            |  
|debentures including accrued interest                |  | 471,508      |   |  | 345,520    |   |  |            |  |  |              |   |  | 345,520    |  
|Net loss for the year                                |  |             |   |  |           |   |  |            |  |  | (1,219,435    | ) |  | (1,219,435 | )
|Balance  April 30, 1999                             |  | 10,268,858   |   |  | 4,182,794  |   |  |            |  |  | (4,460,911    | ) |  | (278,117   | )
|Shares issued pursuant to:                           |  |              |   |  |            |   |  |             |  |  |               |   |  |            |  
|A private placement                                  |  | 968,902      |   |  | 484,451    |   |  |            |  |  |              |   |  | 484,451    |  
|Options exercised                                    |  | 2,500        |   |  | 2,500      |   |  |            |  |  |              |   |  | 2,500      |  
|Warrants exercised                                   |  | 18,125       |   |  | 30,938     |   |  |            |  |  |              |   |  | 30,938     |  
|Shares issued pursuant to conversion of convertible  |  |              |   |  |            |   |  |             |  |  |               |   |  |            |  
|debentures including accrued interest                |  | 62,854       |   |  | 38,266     |   |  |            |  |  |              |   |  | 38,266     |  
|Net loss for the year                                |  |             |   |  |           |   |  |            |  |  | (572,169      | ) |  | (572,169   | )
|Balance  April
      30, 2000                       |  | 11,321,239   |   |  | 4,738,949  |   |  |            |  |  | (5,033,080    | ) |  | (294,131   | )

F-5

The Accompanying Notes are an Integral Part of these Financial
  Statements

---

|IAS Communications, Inc.                                    
|------------------------------------------------------------
|(A Development Stage Company)                               
|Statements of Stockholders Deficit (continued)             
|From December 13, 1994 (Date of Inception) to April 30, 2006
|(Expressed in U.S. dollars)                                 
|Restatement - Note 11                                       

|                                             |  |              |  |  |            |  |  |             |  |  | Deficit       |   |  |               |  |  |            |  
|-------------------------------------------- |  | ------------ |  |  | ---------- |  |  | ----------- |  |  | ------------- | - |  | ------------- |  |  | ---------- | -
|                                             |  |              |  |  |            |  |  |             |  |  | Accumulated   |   |  |               |  |  | Total      |  
|                                             |  | Common Stock |  |  | Obligation |  |  | During the  |  |  | Accumulated   |   |  | Stockholders | 
|                                             |  | Class A      |  |  | to Issue   |  |  | Development |  |  | Comprehensive |   |  | Equity        | 
|                                             |  | Shares       |  |  | Amount     |  |  | Shares      |  |  | Stage         |   |  | Income        |  |  | (Deficit)  |  
|                                             |  | #            |  |  | $          |  |  | $           |  |  | $             |   |  | $             |  |  | $          |  
|Balance  April 30, 2000                     |  | 11,321,239   |  |  | 4,738,949  |  |  |            |  |  | (5,033,080    | ) |  |              |  |  | (294,131   | )
|Shares issued to settle debt                 |  | 267,048      |  |  | 211,781    |  |  |            |  |  |              |   |  |              |  |  | 211,781    |  
|Shares issued pursuant to conversion of      |  |              |  |  |            |  |  |             |  |  |               |   |  |               |  |  |            |  
|convertible debentures including accrued     |  |              |  |  |            |  |  |             |  |  |               |   |  |               |  |  |            |  
|interest                                     |  | 12,358       |  |  | 10,875     |  |  |            |  |  |              |   |  |              |  |  | 10,875     |  
|Net loss for the year                        |  |             |  |  |           |  |  |            |  |  | (755,406      | ) |  |              |  |  | (755,406   | )
|Balance  April 30, 2001                     |  | 11,600,645   |  |  | 4,961,605  |  |  |            |  |  | (5,788,486    | ) |  |              |  |  | (826,881   | )
|Net loss for the year                        |  |             |  |  |           |  |  |            |  |  | (752,321      | ) |  |              |  |  | (752,321   | )
|Balance April 30, 2002                       |  | 11,600,645   |  |  | 4,961,605  |  |  |            |  |  | (6,540,807    | ) |  |              |  |  | (1,579,202 | )
|Shares issued for cash pursuant to a private |  |              |  |  |            |  |  |             |  |  |               |   |  |               |  |  |            |  
|placement                                    |  | 944,250      |  |  | 188,850    |  |  |            |  |  |              |   |  |              |  |  | 188,850    |  
|Shares issued to settle related party debt   |  | 22,698,667   |  |  | 680,960    |  |  |            |  |  |              |   |  |              |  |  | 680,960    |  
|Net income for the year                      |  |             |  |  |           |  |  |            |  |  | 304,576       |   |  |              |  |  | 304,576    |  
|Unrealized gain on
      securities          |  |             |  |  |           |  |  |            |  |  |              |   |  | 4,800         |  |  | 4,800      |  
|Balance April 30, 2003                       |  | 35,243,562   |  |  | 5,831,415  |  |  |            |  |  | (6,236,231    | ) |  | 4,800         |  |  | (400,016   | )
|Net income for the year                      |  |             |  |  |           |  |  |            |  |  | 119,993       |   |  |              |  |  | 119,993    |  
|Unrealized gain on securities                |  |             |  |  |           |  |  |            |  |  |              |   |  | 27,019        |  |  | 27,019     |  
|Balance April 30, 2004                       |  | 35,243,562   |  |  | 5,831,415  |  |  |            |  |  | (6,116,238    | ) |  | 31,819        |  |  | (253,004   | )
|Net loss for the year                        |  |             |  |  |           |  |  |            |  |  | (42,726       | ) |  |              |  |  | (42,726    | )
|Unrealized gain on
      securities          |  |             |  |  |           |  |  |            |  |  |              |   |  | 44,178        |  |  | 44,178     |  
|Balance April 30, 2005                       |  | 35,243,562   |  |  | 5,831,415  |  |  |            |  |  | (6,158,964    | ) |  | 75,997        |  |  | (251,552   | )
|Obligation to issue shares                   |  |             |  |  |           |  |  | 53,425      |  |  |              |   |  |              |  |  | 53,425     |  
|Net loss for the year                        |  |             |  |  |           |  |  |            |  |  | (59,428       | ) |  |              |  |  | (59,428    | )
|Unrealized gain on
      securities          |  |             |  |  |           |  |  |            |  |  |              |   |  | 140,700       |  |  | 140,700    |  
|Balance April 30, 2006                       |  | 35,243,562   |  |  | 5,831,415  |  |  | 53,425      |  |  | (6,218,392    | ) |  | 216,697       |  |  | (116,855   | )

F-6

The Accompanying Notes are an Integral Part of these Financial
  Statements

---

|IAS Communications, Inc.     
|-----------------------------
|(A Development Stage Company)
|Statements of Cash Flows     
|(Expressed in U.S. Dollars)  
|Restatement - Note 11        

|                                                                    |  |            |   |  |            |   |  | Cumulative from     |  
|------------------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ------------------- | -
|                                                                    |  |            |   |  |            |   |  | December 13, 1994   |  
|                                                                    |  | Year Ended |   |  | Year Ended |   |  | (Date of Inception) |  
|                                                                    |  | April 30,  |   |  | April 30,  |   |  | to April 30,        |  
|                                                                    |  | 2006       |   |  | 2005       |   |  | 2006                |  
|                                                                    |  | $          |   |  | $          |   |  | $                   |  
|                                                                    |  |            |   |  |            |   |  |                     |  
|Operating Activities                                                |  |            |   |  |            |   |  |                     |  
|                                                                    |  |            |   |  |            |   |  |                     |  
|Net loss                                                            |  | (59,428    | ) |  | (42,726    | ) |  | (6,218,392          | )
|                                                                    |  |            |   |  |            |   |  |                     |  
|Items not involving cash                                            |  |            |   |  |            |   |  |                     |  
|Assets written-off                                                  |  |           |   |  |           |   |  | 455,957             |  
|Depreciation                                                        |  |           |   |  | 447        |   |  | 189,109             |  
|Gain on shares cancelled                                            |  |           |   |  |           |   |  | (10                 | )
|Gain on write-off
      of payables                                 |  | (54,386    | ) |  |           |   |  | (540,461            | )
|Shares and options issued for services                              |  |           |   |  |           |   |  | 556,050             |  
|Shares issued for
      convertible debenture interest              |  |           |   |  |           |   |  | 18,786              |  
|Impairment loss  petroleum
      interests                         |  | 53,425     |   |  |           |   |  | 53,425              |  
|                                                                    |  |            |   |  |            |   |  |                     |  
|Changes in non-cash working capital                                 |  |            |   |  |            |   |  |                     |  
|Prepaid expenses                                                    |  | (10,000    | ) |  | (2,000     | ) |  | (12,000             | )
|Inventory                                                           |  |           |   |  |           |   |  | (28,615             | )
|Accrued revenues
      from petroleum interest                      |  | (1,396     | ) |  |            |   |  | (1,396              | )
|Accounts payable and accrued liabilities                            |  | 36,147     |   |  | 13,864     |   |  | 782,129             |  
|                                                                    |  |            |   |  |            |   |  |                     |  
|Cash Used in Operating
      Activities                             |  | (35,638    | ) |  | (30,415    | ) |  | (4,745,418          | )
|                                                                    |  |            |   |  |            |   |  |                     |  
|Investing Activities                                                |  |            |   |  |            |   |  |                     |  
|Purchase of property
      and equipment                            |  |           |   |  |           |   |  | (99,626             | )
|Purchase of license                                                 |  |           |   |  |           |   |  | (250,000            | )
|Increase in patent protection
      costs                           |  |           |   |  |           |   |  | (266,822            | )
|                                                                    |  |            |   |  |            |   |  |                     |  
|Cash Used in Investing Activities                                   |  |           |   |  |           |   |  | (616,448            | )
|                                                                    |  |            |   |  |            |   |  |                     |  
|Financing Activities                                                |  |            |   |  |            |   |  |                     |  
|Advances from related parties                                       |  | 36,474     |   |  | 29,947     |   |  | 917,255             |  
|Checks issued in excess of funds
      on deposit                   |  | (523       | ) |  | 289        |   |  |                    |  
|Proceeds from issuance of common stock                              |  |           |   |  |           |   |  | 4,044,924           |  
|Proceeds from convertible debentures                                |  |           |   |  |           |   |  | 400,000             |  
|                                                                    |  |            |   |  |            |   |  |                     |  
|Cash Provided by Financing Activities                               |  | 35,951     |   |  | 30,236     |   |  | 5,362,179           |  
|                                                                    |  |            |   |  |            |   |  |                     |  
|Net Increase (Decrease) in Cash                                     |  | 313        |   |  | (179       | ) |  | 313                 |  
|Cash  Beginning
      of Period                                    |  |           |   |  | 179        |   |  |                    |  
|Cash  End of Period                                                |  | 313        |   |  |           |   |  | 313                 |  
|                                                                    |  |            |   |  |            |   |  |                     |  
|Non-Cash Investing and Financing Activities                         |  |            |   |  |            |   |  |                     |  
|                                                                    |  |            |   |  |            |   |  |                     |  
|Shares issued to settle related
      party debt                    |  |           |   |  |           |   |  | 892,741             |  
|Shares issued for services                                          |  |           |   |  |           |   |  | 499,098             |  
|Shares issued for convertible
      debentures and accrued interest |  |            |   |  |            |   |  |                     |  
|converted                                                           |  |           |   |  |           |   |  | 394,661             |  
|Shares issued for technology                                        |  |           |   |  |           |   |  | 1                   |  
|Shares
      issued to an officer donated back and cancelled        |  |           |   |  |           |   |  | (10                 | )
|                                                                    |  |            |   |  |            |   |  |                     |  
|Supplemental Disclosures:                                           |  |            |   |  |            |   |  |                     |  
|                                                                    |  |            |   |  |            |   |  |                     |  
|Interest paid                                                       |  | 2,188      |   |  | 875        |   |  |                     |  
|Income tax paid                                                     |  |           |   |  |           |   |  |                     |  

F-7

The Accompanying Notes are an Integral Part of these Financial
  Statements

---

|IAS Communications, Inc.                   
|-------------------------------------------
|(A Development Stage Company)              
|Notes to the Financial Statements          
|For the Years Ended April 30, 2006 and 2005
|(Expressed in U.S. Dollars)                

|1. | CONTINUANCE OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | IAS Communications, Inc., herein the
        Company, was incorporated on December 13, 1994 pursuant to the laws
        of the state of Oregon, USA. The Company is a development stage company,
        as defined by Statement of Financial Accounting Standard (SFAS)
        No. 7, Accounting and Reporting by Development Stage Enterprises.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The financial statements have been prepared
        using generally accepted accounting principles in the United States of
        America applicable for a going-concern, which assumes that the Company
        will realize its assets and discharge its liabilities in the ordinary
        course of business. At April 30, 2006, the Company had a working capital
        deficiency of $116,855, which is not sufficient to meet its planned business
        objectives and ongoing operations for the next twelve months. The Company
        has accumulated losses of $6,001,695 since its inception. Its ability
        to continue as a going-concern is dependent upon the ability of the Company
        to obtain the necessary financing to meet its obligations and pay its
        liabilities arising from normal business operations when they come due.
        These factors raise substantial doubt regarding the Companys ability
        to continue as a going-concern. Management of the Company will be liquidating
        the securities held for trading and is actively seeking equity financing
        for the purpose of maintaining operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

F-8

---

|IAS Communications, Inc.                   
|-------------------------------------------
|(A Development Stage Company)              
|Notes to the Financial Statements          
|For the Years Ended April 30, 2006 and 2005
|(Expressed in U.S. Dollars)                

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | (f)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   | (g)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   | (h)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      

F-9

---

|IAS Communications, Inc.                   
|-------------------------------------------
|(A Development Stage Company)              
|Notes to the Financial Statements          
|For the Years Ended April 30, 2006 and 2005
|(Expressed in U.S. Dollars)                

|3. | ASSET RETIREMENT OBLIGATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The basis of this policy is the recognition
        of a legal liability for obligations related to the retirement of property,
        plant and equipment and obligations arising from the acquisition, construction,
        development or normal operations of those assets. Such asset retirement
        costs must be recognized at fair value when a reasonable estimate of fair
        value can be estimated in the period in which the liability is incurred.
        A corresponding increase to the carrying amount of the related asset,
        when one is identifiable, is recorded and amortized over the life of the
        asset. Where a related future value is not easily identifiable with a
        liability, the change in fair value over the course of the year is expensed.
        The amount of the liability is subject to re-measurement at each reporting
        period. The estimates are based principally on legal and regulatory requirements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | It is possible that the Companys estimates
        of its ultimate reclamation and closure liabilities could change as a
        result of changes in regulations, changes in the extent of environmental
        remediation required, changes in the means of reclamation, or changes
        in cost estimates. Changes in estimates are accounted for prospectively
        commencing in the period the estimate is revised.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Although the Companys wells are producing,
        no liability has been reported because any costs in shutting down the
        wells would be minimal. There is no effect on prior years as a result
        of adopting this new recommendation, as the Company has only owned the
        interests in the oil properties since April 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4. | ACCOUNTS PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Long outstanding accounts payable in the amount
        of $54,386, of which $12,106 was payable to a company related to a director,
        was determined to be no longer payable and written off during the year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|5. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|6. | CONVERTIBLE DEBENTURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On June 15, 1997, the Company offered three-year,
        8.75% interest and unsecured convertible debentures. The debentures were
        convertible into Class A shares until June 15, 2000. As at
        April 30, 2006, $25,000 of debentures remains outstanding. Interest is
        due annually.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-10

---

|IAS Communications, Inc.                   
|-------------------------------------------
|(A Development Stage Company)              
|Notes to the Financial Statements          
|For the Years Ended April 30, 2006 and 2005
|(Expressed in U.S. Dollars)                

|7. | STOCK OPTION PLAN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company has a Stock Option Plan to issue up to 2,500,000
        Class A common shares to certain key directors and employees,
        approved and registered October 2, 1996, as amended. Pursuant to the Stock
        Option Plan, the Company has granted stock options to certain directors
        and employees. The fair value of the employee's purchase rights, pursuant
        to stock options, under SFAS 123, was estimated using the Black-Scholes
        option pricing model.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The following table summarizes stock option plan activities:                                                                                                                                                                                                                                                                                                                                                                                                                                           

| |                                  | Year Ended     | Year Ended      
| | -------------------------------- | -------------- | ----------------
| |                                  | April 30, 2006 | April 30, 2005  
| |                                  |                | Weighted Average
| |                                  | Shares         | Exercise Price  
| |                                  | #              | $               
| |                                  |                |                 
| | Outstanding at beginning of year | 1,250,000      | 0.20            
| | Granted                          |               |                
| | Exercised                        |               |                
| | Cancelled                        |               |                
| |                                  |                |                 
| | Outstanding at end
      of year | 1,250,000      | 0.20            
| |                                  |                |                 
| | Exercisable at end
      of year | 1,250,000      | 0.20            

| | Stock options outstanding at April 30, 2006 had
      a weighted average remaining life of 0.63 years (April 30, 2005  1.63
      years).
| | ------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                           
| | Additional information regarding options outstanding
      as at April 30, 2006 and 2005 is as follows:                                   

| |                                       | Exercise | Options  
| | ------------------------------------- | -------- | ---------
| | Expiry Date                           | Price    | 2006     
| |                                       | $        | #        
| |                                       |          |          
| | November 20, 2006                     | 0.20     | 1,200,000
| | October 8, 2008                       | 0.20     | 50,000   
| |                                       |          |          
| | Total stock options
      outstanding |          | 1,250,000
| |                                       |          |          
| | Total stock options
      exercisable |          | 1,250,000

|8. | COMMITMENTS
|-- | -----------
|   |            
|   | (a)        
|   |            
|   | (b)        

F-11

---

|IAS Communications, Inc.                   
|-------------------------------------------
|(A Development Stage Company)              
|Notes to the Financial Statements          
|For the Years Ended April 30, 2006 and 2005
|(Expressed in U.S. Dollars)                

|8. | COMMITMENTS(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|9. | CONTINGENT LIABILITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company was sued in April 1998 in a civil
        action filed in U.S. District Court for the District of Oregon (the Oregon
        Litigation). The Plaintiff, Kirk VanVoorhies (Plaintiff),
        sought money damages and equitable relief against the Company alleging
        patent infringement by the Company for the CTHA. The Company notified
        West Virginia University (WVU) of this claim and contacted
        WVU to assist in the defence. WVU owns the patent rights to the CTHA technology,
        which were licensed to the Company. Two patents were granted for the CTHA
        to WVU, one in August 1995 and another in August 1997. The Plaintiffs
        patent was approved on March 31, 1998.                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The dispute in the WVU action concerned inventions
        conceived during the Plaintiffs time at WVU as a graduate student
        and later as a graduate research assistant, particularly two inventions
        relating to the CTHA technology. The Court found that the Plaintiff validly
        assigned all rights in the first invention to WVU, including all future
        technology derived from the technology underlying that invention. The
        Plaintiff subsequently declined to assign to WVU any interest in a second
        invention. The Court found that the second invention constituted future
        technology derived from the first invention. Therefore, the Plaintiffs
        assignment of the first invention to WVU also effectively assigned the
        second invention to WVU, and WVU is the rightful owner of the patent applications
        filed by the Plaintiff on the CTHA technology.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Because one of these patent applications led
        to the issuance of the patent underlying VorteKx's infringement suit against
        the Company, VorteKx no longer has standing to pursue that infringement
        case. The case was stayed pending the Plaintiffs appeal from the
        Court's order. On May 20, 2004 the United States Court of Appeals affirmed
        the stay of the case.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

F-12

---

|IAS Communications, Inc.                   
|-------------------------------------------
|(A Development Stage Company)              
|Notes to the Financial Statements          
|For the Years Ended April 30, 2006 and 2005
|(Expressed in U.S. Dollars)                

|10. | INCOME TAX
|--- | ----------

Potential benefits of income tax losses
  are not recognized in the accounts until realization is more likely than not.
  The Company has net operating losses of $6,130,000, which commence expiring
  in 2010. Pursuant to SFAS No. 109, the Company is required to compute tax asset
  benefits for net operating losses carried forward. Potential benefit of net
  operating losses have not been recognized in these financial statements because
  the Company cannot be assured it more likely than not will utilize the net operating
  losses carried forward in future years. For the years ended April 30, 2006 and
  2005, the valuation allowance established against the deferred tax assets increased
  by $2,000 and $76,000, respectively.

The components of the net deferred tax
  asset at June 30, 2006 and 2005 and the statutory tax rate, the effective tax
  rate and the elected amount of the valuation allowance are scheduled below:

| |                        | April 30,   | April 30,  
| | ---------------------- | ----------- | -----------
| |                        | 2006        | 2005       
| |                        | $           | $          
| | Net Operating Losses   | 6,182,000   | 6,123,000  
| | Statutory Tax Rate     | 35%         | 35%        
| | Effective Tax Rate     |            |           
| | Deferred Tax Asset     | 2,164,000   | 2,143,000  
| | Valuation Allowance    | (2,164,000) | (2,143,000)
| | Net Deferred Tax Asset |            |           

Pursuant to SFAS No. 109, the Company
  is required to compute tax asset benefits for non-capital losses carried forward.
  Potential benefit of non-capital losses have not been recognized in these financial
  statements because the Company cannot be assured it is more likely than not
  it will utilize the losses carried forward in future years. The reconciliation
  of income tax attributable to continuing operations computed at the statutory
  tax rates to income tax expense is:

| |                                                           | April 30, | April 30,
| | --------------------------------------------------------- | --------- | ---------
| |                                                           | 2006      | 2005     
| |                                                           | $         | $        
| | Income tax benefit computed at U.S. statutory
      rates | 20,800    | 14,954   
| | Write-off of accounts payable                             | (19,035)  |         
| | Unrecognized tax losses                                   | (1,765)   | (14,954) 
| | Future income tax
      benefit                           |          |         

F-13

---

|IAS Communications, Inc.                   
|-------------------------------------------
|(A Development Stage Company)              
|Notes to the Financial Statements          
|For the Years Ended April 30, 2006 and 2005
|(Expressed in U.S. Dollars)                

|11. | RESTATEMENT                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                           
|    | During 2003, the Company received 60,000 shares of REGI
        U.S., Inc., a company related by common directors, for the settlement
        of $3,000 of debt. During 2004, the Company received 128,710 shares of
        REG Technologies, Inc., a company related by common directors, for the
        settlement of $12,871 of debt.
|    |                                                                                                                                                                                                                                                                                                                                           
|    | These foregoing transactions, as well as the gain on
        the securities at each year-end since 2003, have not been recorded.                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                           
|    | As a result of the above errors, prior period statements
        have been retroactively restated to reflect the errors as follows:                                                                                                                                                                                                       

| |                               | 2005   | 2004   | 2003 
| | ----------------------------- | ------ | ------ | -----
| |                               | $      | $      | $    
| |                               |        |        |      
| | Comprehensive Income          |        |        |      
| | As previously reported        |       |       |     
| | Prior
      period adjustment | 44,178 | 27,019 | 4,800
| | As restated                   | 44,178 | 27,019 | 4,800
| | Available-for-Sale Securities |        |        |      
| | As previously reported        |       |       |     
| | Prior
      period adjustment | 75,997 | 31,319 | 4,800
| |                               |        |        |      
| | As restated                   | 75,997 | 31,319 | 4,800

|12. | SUBSEQUENT EVENTS
|--- | -----------------
|    |                  
|    | (a)              
|    |                  
|    | (b)              

F-14

---