----

----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**Form      10-QSB**

| þ   | QUARTERLY                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934 |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

|   | For the quarterly period ended   September              30, 2006 |
|--------|---------------------------------------------------------------------------------|

| o   | TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934 |
|---------------|------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

|   | For              the transition period from ______________              to________________ |
|--------|--------------------------------------------------------------------------------------------|

| Commission              file number |                       000-50960 |   |   |
|-------------------------------------|-------------------------------------------------------------------------|--------|--------|
|                                |                                                                    |   |   |
|                                |                                                                    |   |   |

**Integrated      Pharmaceuticals, Inc.**

----

| Idaho                                                                                              |   | 04-3413196                                                         |
|----------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|
|  (State                or other jurisdiction of                incorporation or organization) |   | (I.R.S.                Employer Identification                No.) |
|                                                                                               |   |                                                               |

**310      Authority Drive**

**Fitchburg,      MA 01420**

**(978)      696-0020**

| **Title                of class**                           | **Name                of Exchange on Which Registered** |
|-------------------------------------------------------------|---------------------------------------------------------|
|  Common                Stock, par value $.01 per share |  None                                              |
|  2006                Common Stock Purchase Warrants    |  None                                              |

**APPLICABLE      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING THE PRECEDING FIVE      YEARS**

**APPLICABLE      ONLY TO CORPORATE ISSUERS**

----

----

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**INTEGRATED      PHARMACEUTICALS, INC.**

**FORM      10-QSB**

**TABLE      OF CONTENTS**

|                                                                                                                     |   | **PAGE** |
|--------------------------------------------------------------------------------------------------------------------------|--------|----------|
| **PART                  I.  —                  FINANCIAL                  INFORMATION**                       |   | 2        |
|                                                                                                                     |   |     |
| ITEM                  1    Financial Statements                                                           |   | 3        |
|                                                                                                                     |   |     |
| ITEM                  2    Plan of Operation; Management’s Discussion and                  Analysis |   | 15       |
|                                                                                                                     |   |     |
| ITEM                  3    Controls and Procedures                                                        |   | 18       |
|                                                                                                                     |   |     |
|                                                                                                                     |   |     |
|                                                                                                                     |   | 18       |
| **PART                  II. — OTHER INFORMATION**                                                             |   |     |
|                                                                                                                     |   |     |
| ITEM                  1    Legal Proceedings                                                              |   | 18       |
|                                                                                                                     |   |     |
| ITEM                  2    Unregistered Sales of Equity Securities and Use of                  Proceeds   |   | 18       |
|                                                                                                                     |   |     |
| ITEM                  3    Default Upon Senior Securities                                                 |   | 19       |
|                                                                                                                     |   |     |
| ITEM                  4    Submission of Matters to a Vote of Security                  Holders           |   | 19       |
|                                                                                                                     |   |     |
| ITEM                  5    Other Information                                                              |   | 19       |
|                                                                                                                     |   |     |
| ITEM                  6    Exhibits and Reports on Form 8-K                                               |   | 19       |
|                                                                                                                     |   |     |
|                                                                                                                     |   |     |
| SIGNATURES                                                                                                               |   | 20       |

**NOTE        REGARDING FORWARD-LOOKING STATEMENTS **

**Except        for statements of historical fact, certain information described in this        document contains “forward-looking statements” that involve substantial risks        and uncertainties. You can identify these statements by forward-looking words        such as "anticipate," "believe," "could," "estimate," "expect," "intend,"        "may,"        "should," "will" and "would" or similar words. You should read the statements        that contain these words carefully because these statements discuss our future        expectations, contain projections of our future results of operations or        of our        financial position or state other "forward-looking" information. Integrated        Pharmaceuticals, Inc. believes that it is important to communicate our future        expectations to our investors. However, there may be events in the future        that        we are not able to accurately predict or control. The factors listed below        in        the section captioned "Risk Factors," within the section “Description of        Business” as well as any cautionary language in this Form, provide examples of        risks, uncertainties and events that may cause our actual results and        achievements expressed or implied to differ materially from the expectations        we        described in our forward-looking statements. Integrated Pharmaceuticals,        Inc.        believes that before you invest in our common stock, you should be aware        that        the occurrence of the events described in these risk factors and elsewhere        in        this Form could have a material adverse effect on our business, results of        operations and financial position.**

----

**PART        I**

**ITEM        1.**
**Financial        Statements**

| 3 | Balance                  Sheets As At September 30, 2006 And December 31,                  2005 |
|---|-------------------------------------------------------------------------------------------------|

| 4 | Statements                  Of Operations And Income For The Nine Months Ended September 30,                  2006 and                  September 30, 2005 |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | Statements                  Of Cash Flows For The Nine Months Ended September 30, 2006 and                  2005 |
|---|------------------------------------------------------------------------------------------------------------------|

| 6-31 | Notes                  To Financial Statements - September 30,                  2006 |
|------|--------------------------------------------------------------------------------------|

----

| **INTEGRATED                    PHARMACEUTICALS, INC.** |
|---------------------------------------------------------|
| **(A                    Development Stage Company)**    |
| **BALANCE                    SHEETS**                   |

|                                                                                                                                                                                                         |   | September                    30, |        |                            |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|-------------|---------------------------------|--------|
|                                                                                                                                                                                                         |   | 2006                             |        | December                    31, |   |
|                                                                                                                                                                                                         |   | (unaudited)                      |        | 2005                            |   |
| **ASSETS**                                                                                                                                                                                                   |   |                             |        |                       |   |
| CURRENT                    ASSETS                                                                                                                                                                            |   |                             |        |                       |   |
| Cash                                                                                                                                                                                                    |   | $                                | 142,538     |                            | $      | 182,582 |   |
| Accounts                    receivable                                                                                                                                                                  |   |                             | 30,685      |                            |   | 20,173 |   |
| Inventory                                                                                                                                                                                               |   |                             | 115,318     |                            |   | 123,144 |   |
| Prepaid                    expenses                                                                                                                                                                     |   |                             | 25,269      |                            |   | 58,220 |   |
|  Total                    Current Assets                                                                                                                                                                |   |                             | 313,810     |                            |   | 384,119 |   |
|                                                                                                                                                                                                         |   |                             |        |                            |   |   |   |
| PROPERTY                    AND EQUIPMENT, net                                                                                                                                                               |   |                             | 1,384,712   |                            |   | 1,745,371 |   |
|                                                                                                                                                                                                         |   |                             |        |                            |   |   |   |
| OTHER                    ASSETS                                                                                                                                                                              |   |                             |        |                            |   |   |   |
| Investments                                                                                                                                                                                             |   |                             | 1,860       |                            |   | 980 |   |
| Deposits                                                                                                                                                                                                |   |                             | —     |                            |   | 763 |   |
| Patents,                    net of amortization                                                                                                                                                         |   |                             | 107,104     |                            |   | 57,796 |   |
|  Total                    Other Assets                                                                                                                                                                  |   |                             | 108,964     |                            |   | 59,539 |   |
|                                                                                                                                                                                                         |   |                             |        |                            |   |   |   |
| **TOTAL                    ASSETS**                                                                                                                                                                          |   | $                                | 1,807,486   |                            | $      | 2,189,029 |   |
|                                                                                                                                                                                                         |   |                             |        |                            |   |   |   |
| **LIABILITIES                    AND STOCKHOLDERS' EQUITY**                                                                                                                                                  |   |                             |        |                            |   |   |   |
| CURRENT                    LIABILITIES                                                                                                                                                                       |   |                             |        |                            |   |   |   |
| Accounts                    payable                                                                                                                                                                     |   | $                                | 183,250     |                            | $      | 179,662 |   |
| Accrued                    expenses                                                                                                                                                                     |   |                             | 199,994     |                            |   | 176,118 |   |
| Related                    party short-term debt                                                                                                                                                        |   |                             | 32,322      |                            |   | 52,815 |   |
| Capital                    leases payable - current portion                                                                                                                                             |   |                             | —     |                            |   | 195 |   |
|  Total                    Current Liabilities                                                                                                                                                           |   |                             | 415,566     |                            |   | 408,790 |   |
|                                                                                                                                                                                                         |   |                             |        |                            |   |   |   |
|                                                                                                                                                                                                         |   |                             |        |                            |   |   |   |
| COMMITMENTS                    AND CONTINGENCIES                                                                                                                                                             |   |                             | —     |                            |   | — |   |
|                                                                                                                                                                                                         |   |                             |        |                            |   |   |   |
| STOCKHOLDERS'                    EQUITY                                                                                                                                                                      |   |                             |        |                            |   |   |   |
| Preferred                      stock, $0.10 par value, 20,000 shares authorized;                      no shares issued                                                                                       |   |                             | —     |                            |   | — |   |
| Common                        stock, $0.01 par value, 75,000,000 shares authorized;                        22,623,693 and 18,632,626 shares issued                        and outstanding, respectively |   |                             | 226,237     |                            |   | 186,326 |   |
| Additional                    paid-in capital                                                                                                                                                           |   |                             | 7,469,031   |                            |   | 6,736,346 |   |
| Other                    comprehensive income (loss)                                                                                                                                                    |   |                             | (160        | )                               |   | (1,040 | ) |
| Stock                    options and warrants                                                                                                                                                           |   |                             | 8,227,939   |                            |   | 7,824,142 |   |
| Accumulated                    deficit prior to development stage                                                                                                                                       |   |                             | (494,624    | )                               |   | (494,624 | ) |
| Accumulated                    deficit during development stage                                                                                                                                         |   |                             | (14,036,503 | )                               |   | (12,470,911 | ) |
|                                                                                                                                                                                                         |   |                             |        |                            |   |   |   |
|  Total                    Stockholders' Equity                                                                                                                                                          |   |                             | 1,391,920   |                            |   | 1,780,239 |   |
|                                                                                                                                                                                                         |   |                             |        |                            |   |   |   |
| **TOTAL                      LIABILITIES AND**STOCKHOLDERS' EQUITY                                                                                                                                      |   | $                                | 1,807,486   |                            | $      | 2,189,029 |   |

----

| **INTEGRATED                  PHARMACEUTICALS, INC.** |
|-------------------------------------------------------|
| **(A                  Development Stage Company)**    |
| **STATEMENTS                  OF OPERATIONS**         |

|                                                                        |   |                               |       |                               |   |                               |   |                               |       |  Period                from           |   |
|-----------------------------------------------------------------------------|--------|-----------------------------------------|------------|-----------------------------------------|--------|-----------------------------------------|--------|-----------------------------------------|------------|--------------------------------------------|--------|
|                                                                        |   |                               |       |                               |   |                               |   |                               |       |  February                1, 2003      |   |
|                                                                        |   | Three                Months Ended       |       | Nine                Months Ended        |   |  (inception                of      |   |
|                                                                        |   |                               |       |                               |   |                               |   |                               |       |  development                stage)    |   |
|                                                                        |   |  September                30, 2006 |       |  September                30, 2005 |   |  September                30, 2006 |   |  September                30, 2005 |       |  to                September 30, 2006 |   |
|                                                                        |   |  (unaudited)                       |       |  (unaudited)                       |   |  (unaudited)                       |   |  (unaudited)                       |       |  (unaudited)                          |   |
|                                                                        |   |                               |       |                               |   |                               |   |                               |       |                                  |   |
| REVENUES                                                                    |   | $                                       | —    |                                    | $      | 17,560                                  |   | $                                       | 60,658     |                                       | $      | 52,210 |   | $ | 137,999 |   |
|                                                                        |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| COST                OF GOODS SOLD                                           |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| Materials                and supplies                                  |   |                                    | —    |                                    |   | 19,000                                  |   |                                    | 56,101     |                                       |   | 24,694 |   |   | 101,079 |   |
|  Total                Cost of Goods Sold                               |   |                                    | —    |                                    |   | 19,000                                  |   |                                    | 56,101     |                                       |   | 24,694 |   |   | 101,079 |   |
|                                                                        |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| GROSS                PROFIT                                                 |   |                                    | —    |                                    |   | (1,440                                  | )      |                                    | 4,557      |                                       |   | 27,516 |   |   | 36,920 |   |
|                                                                        |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| GENERAL                AND ADMINISTRATIVE EXPENSES                          |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| Depreciation                and amortization                           |   |                                    | 64,770     |                                    |   | 63,689                                  |   |                                    | 195,556    |                                       |   | 189,186 |   |   | 719,322 |   |
| Research                and development                                |   |                                    | 47,919     |                                    |   | 66,204                                  |   |                                    | 134,452    |                                       |   | 233,346 |   |   | 883,546 |   |
| Marketing                                                              |   |                                    | 3,900      |                                    |   | 58,804                                  |   |                                    | 12,749     |                                       |   | 209,957 |   |   | 584,086 |   |
| Legal                and professional fees                             |   |                                    | 51,152     |                                    |   | 70,894                                  |   |                                    | 143,043    |                                       |   | 257,333 |   |   | 1,121,821 |   |
| Consulting                                                             |   |                                    | 51,918     |                                    |   | 198,038                                 |   |                                    | 125,996    |                                       |   | 552,431 |   |   | 3,159,995 |   |
| Idle                facility expense                                   |   |                                    | 153,743    |                                    |   | 242,045                                 |   |                                    | 439,007    |                                       |   | 858,669 |   |   | 1,868,189 |   |
| Occupancy                                                              |   |                                    | 30,330     |                                    |   | 44,660                                  |   |                                    | 99,540     |                                       |   | 223,228 |   |   | 1,125,657 |   |
| Labor                and benefits                                      |   |                                    | 13,750     |                                    |   | 81,403                                  |   |                                    | 61,418     |                                       |   | 231,909 |   |   | 815,440 |   |
| Services                paid by stock options                          |   |                                    | 43,754     |                                    |   | 193,575                                 |   |                                    | 224,402    |                                       |   | 454,155 |   |   | 1,479,831 |   |
| Office                supplies and expenses                            |   |                                    | 5,359      |                                    |   | 8,191                                   |   |                                    | 15,277     |                                       |   | 30,657 |   |   | 178,625 |   |
| Travel                                                                 |   |                                    | 2,870      |                                    |   | 1,134                                   |   |                                    | 6,491      |                                       |   | 25,002 |   |   | 177,294 |   |
| Other                general and administrative expenses               |   |                                    | 30,380     |                                    |   | 44,311                                  |   |                                    | 106,455    |                                       |   | 109,538 |   |   | 541,957 |   |
|  Total                General and Administrative Expenses              |   |                                    | 499,845    |                                    |   | 1,072,948                               |   |                                    | 1,564,386  |                                       |   | 3,375,411 |   |   | 12,655,763 |   |
|                                                                        |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| OPERATING                INCOME (LOSS)                                      |   |                                    | (499,845   | )                                       |   | (1,074,388                              | )      |                                    | (1,559,829 | )                                          |   | (3,347,895 | ) |   | (12,618,843 | ) |
|                                                                        |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| OTHER                INCOME (EXPENSES)                                      |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| Interest                income                                         |   |                                    | 3          |                                    |   | 127.17                                  |   |                                    | 79         |                                       |   | 1,255 |   |   | 10,277 |   |
| Interest                expense                                        |   |                                    | (2,805     | )                                       |   | (179.15                                 | )      |                                    | (5,842     | )                                          |   | (589 | ) |   | (1,422,377 | ) |
| Other                income (expense)                                  |   |                                    | —    |                                    |   | —                                 |   |                                    | —    |                                       |   | — |   |   | (5,560 | ) |
|  Total                Other Income and Expenses                        |   |                                    | (2,802     | )                                       |   | (52                                     | )      |                                    | (5,763     | )                                          |   | 666 |   |   | (1,417,660 | ) |
|                                                                        |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| LOSS                BEFORE TAXES                                            |   |                                    | (502,647   | )                                       |   | (1,074,440                              | )      |                                    | (1,565,592 | )                                          |   | (3,347,229 | ) |   | (14,036,503 | ) |
|                                                                        |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| INCOME                TAXES                                                 |   |                                    | —    |                                    |   | —                                 |   |                                    | —    |                                       |   | — |   |   | — |   |
|                                                                        |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| NET                LOSS                                                     |   |                                    | (502,647   | )                                       |   | (1,074,440                              | )      |                                    | (1,565,592 | )                                          |   | (3,347,229 | ) |   | (14,036,503 | ) |
|                                                                        |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| OTHER                COMPREHENSIVE INCOME (LOSS)                            |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| Unrealized                  gain (loss) in market value of investments |   |                                    | 1,570      |                                    |   | (220                                    | )      |                                    | 880        |                                       |   | (1,000 | ) |   | (160 | ) |
|                                                                        |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| COMPREHENSIVE                LOSS                                           |   | $                                       | (501,077   | )                                       | $      | (1,074,660                              | )      | $                                       | (1,564,712 | )                                          | $      | (3,348,229 | ) | $ | (14,036,663 | ) |
|                                                                        |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| NET                INCOME (LOSS) PER COMMON SHARE,                          |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| BASIC                AND DILUTED                                       |   | $                                       | (0.02      | )                                       | $      | (0.06                                   | )      | $                                       | (0.07      | )                                          | $      | (0.20 | ) |   |   |   |
|                                                                        |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| WEIGHTED                AVERAGE NUMBER OF COMMON                            |   |                                    |       |                                    |   |                                    |   |                                    |       |                                       |   |   |   |   |   |   |
| SHARES                OUTSTANDING, BASIC AND DILUTED                   |   |                                    | 22,593,196 |                                    |   | 17,438,891                              |   |                                    | 21,019,032 |                                       |   | 16,849,830 |   |   |   |   |

----

| **INTEGRATED                  PHARMACEUTICALS, INC.** |
|-------------------------------------------------------|
| **(A                  Development Stage Company)**    |
| **STATEMENTS                  OF CASH FLOWS**         |

|                                                                                                |   |                                    |       |                                    |   |  Period                from                |   |
|-----------------------------------------------------------------------------------------------------|--------|----------------------------------------------|------------|----------------------------------------------|--------|-------------------------------------------------|--------|
|                                                                                                |   |                                    |       |                                    |   | February                1, 2003                 |   |
|                                                                                                |   |                                    |       |                                    |   | (inception                of                    |   |
|                                                                                                |   | Period                Ended                  |       | Period                Ended                  |   | development                stage)               |   |
|                                                                                                |   | September                30, 2006(Unaudited) |       | September                30, 2005(Unaudited) |   | to                September 30, 2006(Unaudited) |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES:                                                |   |                                    |       |                                    |   |                                       |   |
| Net                income (loss)                                                               |   | $                                            | (1,565,592 | )                                            | $      | (3,347,229                                      | )      | $ | (14,036,503 | ) |
| Adjustments                to reconcile net income (loss) to net cash                          |   |                                         |       |                                         |   |                                            |   |   |   |   |
| flows                provided (used) by operating activities:                                  |   |                                         |       |                                         |   |                                            |   |   |   |   |
|  Depreciation                and amortization                                                  |   |                                         | 405,587    |                                         |   | 396,043                                         |   |   | 1,205,641 |   |
|  Loss                on disposition of assets                                                  |   |                                         | —    |                                         |   | —                                         |   |   | 7,024 |   |
|  Stock                and warrants issued as incentive for notes payables                      |   |                                         | —    |                                         |   | —                                         |   |   | 496,389 |   |
|  Stock                issued for interest expense                                              |   |                                         | —    |                                         |   | —                                         |   |   | 149,878 |   |
|  Stock                issued for rent expense                                                  |   |                                         | 22,605     |                                         |   | 149,666                                         |   |   | 614,184 |   |
|  Stock                issued for services                                                      |   |                                         | 18,390     |                                         |   | 69,934                                          |   |   | 1,026,011 |   |
|  Stock                issued for assets and securities                                         |   |                                         | —    |                                         |   | —                                         |   |   | 43,739 |   |
|  Stock                options and warrants vested                                              |   |                                         | 350,399    |                                         |   | —                                         |   |   | 3,740,306 |   |
|  Recognition                of noncash deferred financing expense                              |   |                                         | —    |                                         |   | —                                         |   |   | 578,699 |   |
|  Options                and warrants issued for services and financing                         |   |                                         | —    |                                         |   | 969,761                                         |   |   | 253,753 |   |
|  Noncash                recovery of other income                                               |   |                                         | —    |                                         |   | —                                         |   |   | (1,850 | ) |
| Changes                in assets and liabilities:                                              |   |                                         |       |                                         |   |                                            |   |   |   |   |
|  Receivables                                                                                   |   |                                         | (10,512    | )                                            |   | (17,500                                         | )      |   | (14,601 | ) |
|  Inventory                                                                                     |   |                                         | 7,826      |                                         |   | (58,118                                         | )      |   | (115,318 | ) |
|  Prepaid                expenses                                                               |   |                                         | 32,951     |                                         |   | 8,431                                           |   |   | 122,290 |   |
|  Other                assets                                                                   |   |                                         | 763        |                                         |   | —                                         |   |   | 6,370 |   |
|  Accounts                payable                                                               |   |                                         | 3,588      |                                         |   | (89,031                                         | )      |   | 84,703 |   |
|  Accrued                expenses                                                               |   |                                         | 23,876     |                                         |   | (5,026                                          | )      |   | 17,011 |   |
| Net                cash used by operating activities                                           |   |                                         | (710,119   | )                                            |   | (1,923,069                                      | )      |   | (5,822,274 | ) |
|                                                                                                |   |                                         |       |                                         |   |                                            |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES:                                                |   |                                         |       |                                         |   |                                            |   |   |   |   |
|  Purchase                of fixed assets                                                       |   |                                         | (39,664    | )                                            |   | (199,096                                        | )      |   | (2,713,762 | ) |
|  Patent                costs                                                                   |   |                                         | (54,573    | )                                            |   | —                                         |   |   | (118,791 | ) |
|  Leasehold                concessions received                                                 |   |                                         | —    |                                         |   | —                                         |   |   | 185,000 |   |
| Net                cash used by investing activities                                           |   |                                         | (94,237    | )                                            |   | (199,096                                        | )      |   | (2,647,553 | ) |
|                                                                                                |   |                                         |       |                                         |   |                                            |   |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES:                                                |   |                                         |       |                                         |   |                                            |   |   |   |   |
|  Sale                of common stock units                                                     |   |                                         | 785,000    |                                         |   | 783,125                                         |   |   | 7,417,375 |   |
|  Payments                on capital leases                                                     |   |                                         | (195       | )                                            |   | (3,984                                          | )      |   | (9,563 | ) |
|  Proceeds                from related party loans                                              |   |                                         | (20,493    | )                                            |   | —                                         |   |   | (24,379 | ) |
|  Proceeds                from exercise of options                                              |   |                                         | —    |                                         |   | 1,080                                           |   |   | 1,080 |   |
|  Proceeds                from convertible debt                                                 |   |                                         | —    |                                         |   | —                                         |   |   | 939,900 |   |
| Net                cash provided by financing activities                                       |   |                                         | 764,312    |                                         |   | 780,221                                         |   |   | 8,324,413 |   |
|                                                                                                |   |                                         |       |                                         |   |                                            |   |   |   |   |
| Net                increase in cash                                                                 |   |                                         | (40,044    | )                                            |   | (1,341,944                                      | )      |   | (145,414 | ) |
|                                                                                                |   |                                         |       |                                         |   |                                            |   |   |   |   |
| Cash,                beginning of period                                                            |   |                                         | 182,582    |                                         |   | 1,461,708                                       |   |   | 287,952 |   |
|                                                                                                |   |                                         |       |                                         |   |                                            |   |   |   |   |
| Cash,                end of period                                                                  |   | $                                            | 142,538    |                                         | $      | 119,764                                         |   | $ | 142,538 |   |
|                                                                                                |   |                                         |       |                                         |   |                                            |   |   |   |   |
|                                                                                                |   |                                         |       |                                         |   |                                            |   |   |   |   |
| SUPPLEMENTAL                CASH FLOW DISCLOSURES:                                                  |   |                                         |       |                                         |   |                                            |   |   |   |   |
| Income                taxes paid                                                               |   | $                                            | —    |                                         | $      | —                                         |   | $ | — |   |
| Interest                paid                                                                   |   | $                                            | —    |                                         | $      | —                                         |   | $ | 25,000 |   |
|                                                                                                |   |                                         |       |                                         |   |                                            |   |   |   |   |
| NON-CASH                INVESTING AND FINANCING:                                                    |   |                                         |       |                                         |   |                                            |   |   |   |   |
| Stock                options and warrants vested                                               |   | $                                            | 350,399    |                                         | $      | —                                         |   | $ | 3,740,306 |   |
| Stock                and warrants issued for convertible debt                                  |   | $                                            | —    |                                         | $      | —                                         |   | $ | 1,613,076 |   |
| Stock                issued for assets and securities                                          |   | $                                            | —    |                                         | $      | —                                         |   | $ | 43,739 |   |
| Stock                issued as deferred incentive for notes payables                           |   | $                                            | —    |                                         | $      | —                                         |   | $ | 519,587 |   |
| Stock                issued for prepaid and deferred rent and rent                expense      |   | $                                            | 22,605     |                                         | $      | 149,666                                         |   | $ | 614,184 |   |
| Stock                and warrants issued for services                                          |   | $                                            | 18,390     |                                         | $      | 69,934                                          |   | $ | 1,026,011 |   |
| Warrants                and options issued for deferred services and                financing  |   | $                                            | —    |                                         | $      | 969,761                                         |   | $ | 520,102 |   |
| Accounts                payable paid by contributed capital                                    |   | $                                            | —    |                                         | $      | —                                         |   | $ | 27,767 |   |
| Noncash                recovery of other income                                                |   | $                                            | —    |                                         | $      | —                                         |   | $ | 1,850 |   |

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**INTEGRATED          PHARMACEUTICALS, INC.**

**CONDENSED          NOTES TO FINANCIAL STATEMENTS **

**September          30, 2006**

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**NOTE          1 - BUSINESS ORGANIZATION AND BASIS OF PRESENTATION**

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**INTEGRATED              PHARMACEUTICALS, INC.**

**CONDENSED              NOTES TO FINANCIAL STATEMENTS **

**September              30, 2006**

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**NOTE          2 - LIMITED SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

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**INTEGRATED              PHARMACEUTICALS, INC.**

**CONDENSED              NOTES TO FINANCIAL STATEMENTS **

**September              30, 2006**

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**INTEGRATED              PHARMACEUTICALS, INC.**

**CONDENSED              NOTES TO FINANCIAL STATEMENTS **

**September              30, 2006**

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**INTEGRATED              PHARMACEUTICALS, INC.**

**CONDENSED              NOTES TO FINANCIAL STATEMENTS **

**September              30, 2006**

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**NOTE          3 - PROPERTY AND EQUIPMENT**

|                                              |   | 2006   |       | 2005   |   |
|---------------------------------------------------|--------|--------|------------|--------|--------|
| Equipment                                         |   | $      | 1,770,477  |   | $      | 1,730,815 |   |
| Furniture                    and fixtures         |   |   | 120,114    |   |   | 120,114 |   |
| Leasehold                    improvements         |   |   | 826,511    |   |   | 826,511 |   |
|                                              |   |   | 2,717,102  |   |   | 2,677,440 |   |
| Less:                    Accumulated depreciation |   |   | (1,332,390 | )      |   | (932,069 | ) |
| Total                                             |   | $      | 1,384,712  |   | $      | 1,745,371 |   |

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**INTEGRATED              PHARMACEUTICALS, INC.**

**CONDENSED              NOTES TO FINANCIAL STATEMENTS **

**September              30, 2006**

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**NOTE          4 - CAPITAL STOCK**

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**INTEGRATED              PHARMACEUTICALS, INC.**

**CONDENSED              NOTES TO FINANCIAL STATEMENTS **

**September              30, 2006**

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**NOTE          5 - COMMON STOCK OPTIONS AND WARRANTS**

| Plan                                                                         |   | Number                    of securities to be issued upon exercise                    of outstanding options |      | Weighted-average                    exerciseprice                    of outstanding options |   | Number                    of securities remaining available                    for future issuance under                    equity                    compensation plans |   |
|------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------|-----------|---------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                         |   |                                                                                                         |      |                                                                                        |   |                                                                                                                                                                     |   |
| Equity                    compensation plan approved by security holders (1) |   |                                                                                                         | 1,025,000 |                                                                                        | $      | 0.62                                                                                                                                                                     |   |   | 575,000 |   |
|                                                                         |   |                                                                                                         |      |                                                                                        |   |                                                                                                                                                                     |   |   |   |   |
| Total                                                                        |   |                                                                                                         | 1,025,000 |                                                                                        |   |                                                                                                                                                                     |   |   | 575,000 |   |

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**INTEGRATED              PHARMACEUTICALS, INC.**

**CONDENSED              NOTES TO FINANCIAL STATEMENTS **

**September              30, 2006**

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|                                                                      |   | Number                    of Shares |      | Weighted                    Average Exercise Price |   |
|---------------------------------------------------------------------------|--------|-------------------------------------|-----------|----------------------------------------------------|--------|
| Outstanding                    at December 31, 2004                       |   |                                | 1,283,000 |                                               | $      | 0.96 |   |
| Granted                                                                   |   |                                | 2,000     |                                               |   | .65 |   |
| Exercised                                                                 |   |                                | (6,000    | )                                                  |   | .18 |   |
| Rescinded                                                                 |   |                                | (119,000  | )                                                  |   | — |   |
| Outstanding                    at December 31, 2005                       |   |                                | 1,160,000 |                                               |   | 0.60 |   |
| Granted                                                                   |   |                                | —   |                                               |   | — |   |
| Exercised                                                                 |   |                                | —   |                                               |   | — |   |
| Rescinded                                                                 |   |                                | (135,000  | )                                                  |   | — |   |
| Options                    outstanding at September 30, 2006              |   |                                | 1,025,000 |                                               | $      | 0.62 |   |
|                                                                      |   |                                |      |                                               |   |   |   |
| Options                    exercisable at September 30, 2006              |   |                                | 782,400   |                                               | $      | 0.72 |   |
| Weighted                    average fair value of options granted in 2006 |   |                                |      |                                               |   | — |   |

**NOTE          6 - CONCENTRATIONS**

**NOTE          7 - COMMITMENTS AND CONTINGENCIES**

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**INTEGRATED                PHARMACEUTICALS, INC.**

**CONDENSED                NOTES TO FINANCIAL STATEMENTS **

**September                30, 2006**

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**NOTE          8 -SUBSEQUENT EVENTS**

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**Item      2 **
**Management’s      Discussion and Analysis **

**MANAGEMENT’S      DISCUSSION AND ANALYSIS **

**OF      FINANCIAL CONDITION AND PLAN OF OPERATION**

***You      should read the following discussion in conjunction with our financial      statements, together with the notes to those statements included elsewhere      in      this prospectus. The following discussion contains forward-looking statements      that involve risks, uncertainties and assumptions such as statements of our      plans, objectives, expectations and intentions. Our actual results may differ      materially from those discussed in these forward-looking statements because      of      the risks and uncertainties inherent in future events.***
** **

**Plan      of Operation **

**Results      of Operations **

*Revenues.*

*Cost      of Goods Sold*

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*Selling,      General and Administrative Expenses*

***Year      Ended December 31, 2005 Compared To Year Ended December 31,      2004***
** **

*Revenue*

*Cash      and Cash Equivalents*

*Research      & Development *

| ·                     | *The                Calcium Supplement Project.*                We                have filed two patent applications relating to a new process for                adding a                calcium supplement to beverages in a manner that does not affect                the taste                or flavor of the beverage. We expect to continue to refine our processes                related to the calcium supplement product as we gain experience in                making                this product. |
|----------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·                     | *The                Dairy Product.*                We                have filed two patent applications relating to the production and                distribution of a popular dairy product that has potentially unique                adaptations. As of December 31, 2005, we were refining our technology                in                this area, and hoped to have this product ready to sell in late 2006,                and                to have actual sales in 2007. At present, however, due to the effort                required to successfully produce and distribute our bottled water                and                calcium supplement products, we do not anticipate bringing this product                to                market before 2008. |
|----------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·                      | *The                Generic Drug Project.*                As                of December 31, 2005, we were conducting preliminary research concerning                the production of generic drugs through novel recombinant DNA processes.                This project had been underway since August 2004. By “recombinant DNA                processes” we mean a process whereby the DNA of an organism, such as the                bacterium *E                Coli*,                is modified in a manner that causes it to produce a desired compound.                The                organism then reproduces, and a colony of organisms that produce                the                compound can be purified. As of December 31, 2005, we had spent                approximately $55,000 on this project. We are not dependant upon                cash                inflows from the results of this project to fund our business, and                are no                longer devoting substantial resources to this project as our primary                focus                is on our calcium supplement and mineral water products. |
|----------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Plant      and Equipment*

*Number      of Employees*

*Financial      Condition*

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*Operations*

***Nine      Months Ended September 30, 2006 Compared To Nine Months Ended September 30,      2005***
** **

*Revenue      *

*Cash      and Cash Equivalents*

*Research      & Development *

*Plant      and Equipment*

*Number      of Employees*

*Financial      Condition*

***Operations***

**Off-Balance      Sheet Arrangements **

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**Material      Commitments for Capital Expenditures**

**Seasonality**

**Item      3.              Controls and Procedures**

**PART      II. —      OTHER INFORMATION**

**Item      1.              Legal Proceedings.**

**Item      2.             **
**Unregistered      Sales of Equity Securities and Use of Proceeds.**

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**Item      3.              Default Upon Senior Securities.**

**Item      4.              Submission of Matters to a Vote of Security Holders.**

**Item      5.              Other Information.**

**Item      6.              Exhibits and Reports on Form 8-K **

| **Number** | **Description                of Exhibit**                                                                                                         |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1        | Amended                and Restated Articles of Incorporation of Integrated Pharmaceuticals,                Inc.                (1)               |
| 3.2        | Amended                and Restated Bylaws of Integrated Pharmaceuticals, Inc.                (2)                                                 |
| 4.1        | Specimen                Certificate for Integrated Pharmaceuticals, Inc. Common Stock, par                value                $.01 per share (2) |
| 4.2        | Form                of Common Stock Purchase Warrant (2)                                                                                          |
| 10.1       | Amended                and Restated Patent License Agreement with NEC Partners                (2)                                                 |
| 10.2       | Lease                Agreement with Chantilas Properties, LLC and Advanced Process                Technologies, Inc. (2)                          |
| 10.3       | Assignment                and Assumption of Lease(2)                                                                                              |
| 10.4       | Consulting                and Warrant Agreements with James Czirr (2)                                                                             |
| 10.5       | 2002                Stock Plan (2)                                                                                                                |
| 10.6       | Registration                Rights Agreement(2)                                                                                                   |
| 10.7       | Letter                dated May 5, 2005 amending the Patent License Agreement with NEC                Partners                (3)                 |
| 10.8       | Letter                dated October 13, 2005 amending the Patent License Agreement with                NEC                Partners (4)            |
| 14         | Financial                Code of Ethics (5)                                                                                                       |
| 21         | Subsidiaries                of Integrated Pharmaceuticals (5)                                                                                     |

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**SIGNATURES**

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