UNITED STATES
                        SECURITY AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB
                                 October 15, 1997


                      For the quarter ended: June 30, 1997

                         Commission file number: 0-26322


                                    IAC, Inc.


                              a Nevada corporation
                              IRS Number 88-0303769


                  714 "C" Street, San Rafael, California 94901

                                                      (800) 554-1250






Check whether 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. Yes _X__ No __





                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
4,272,578 shares.

Transitional Small Business Disclosure Format (Check one):    Yes ___     No _X_


<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements.


                                    IAC, Inc.
                           CONSOLIDATED BALANCE SHEET
                                  June 30, 1997
                                   (Unaudited)

                                    ASSETS
CURRENT ASSETS
Prepaid expense                                                   6,205
                                                          -----------------
TOTAL CURRENT ASSETS                                              6,205
                                                          -----------------
Organizational costs, net of amortization                         1,789
                                                          -----------------
                                                                  1,789
                                                          -----------------

TOTAL ASSETS                                                     $7,994
                                                          =================


                            LIABILITIES AND EQUITY

CURRENT LIABILITIES
Accounts payable (including overdraft)                           $28,830
Other liabilities                                                 25,414
                                                          -----------------
TOTAL CURRENT LIABILITIES                                        $54,244
                                                          -----------------


STOCKHOLDERS' EQUITY
Preferred stock, no par value, 5,000,000                           2,500
shares authorized; 630,000 shares outstanding
Capital stock, $.001 par value, 25,000,000                         4,273
shares authorized; 4,272,578 shares outstanding
Additional paid in capital                                       695,126
Accumulated deficit                                             (748,149)
                                                          -----------------
                                                                 (46,250)
                                                          -----------------

LIABILITIES AND STOCKHOLDERS' EQUITY                              $7,994
                                                          =================




See notes to unaudited consolidated financial statements.


<PAGE>


                                    IAC, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                             AND ACCUMULATED DEFICIT
                                   (Unaudited)

                                                   Three Months Ended
                                        June 30, 1997             June 30, 1996
                                        -------------             -------------

REVENUES
    Management fees                        $29,074                   $32,045
    Other income                                 0                     8,462
                                   ------------------    ----------------------
                                           $29,074                   $40,507
                                   ------------------    ----------------------

OPERATING AND GENERAL EXPENSES
Compensation and employee benefits           9,711                    15,635
Promotion and advertising                        0                   118,675
Administrative expenses                     35,523                    69,156
                                   ------------------    ----------------------
                                            45,234                   203,466
                                   ------------------    ----------------------
LOSS FROM OPERATIONS                       (16,160)                 (162,959)
                                   ------------------    ----------------------

INCOME TAXES                                     0                      (800)
                                   ------------------    ----------------------

NET LOSS                                   (16,160)                 (163,759)

Accumulated Deficit-
    beginning of period                   (731,989)                 (283,679)
                                   ------------------    ----------------------

Accumulated Deficit-
    end of period                        ($748,149)                ($447,438)
                                   ==================    ======================

Loss Per Share                              ($0.00)                   ($0.04)
                                   ==================    ======================

 .




See notes to unaudited consolidated financial statements


<PAGE>


                                    IAC, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                             AND ACCUMULATED DEFICIT
                                   (Unaudited)

                                                          Six Months Ended
                                        June 30, 1997             June 30, 1996
                                        -------------             -------------

REVENUES
    Management fees                         $57,430                   $62,016
    Other income                                 26                     9,146
                                     ----------------    ----------------------
                                            $57,456                   $71,162
                                     ----------------    ----------------------

OPERATING AND GENERAL EXPENSES
Compensation and employee benefits           43,981                    31,547
Promotion and advertising                     3,224                   186,489
Administrative expenses                      78,222                    82,997
                                       --------------    ----------------------
                                            125,027                   301,033
                                      ---------------    ----------------------
LOSS FROM OPERATIONS                        (67,571)                 (229,871)
                                      ---------------    ----------------------

INCOME TAXES                                   (800)                   (1,600)
                                      ---------------    ----------------------

NET LOSS                                     (68,371)                 (231,471)

DEFICIT-beginning of period                 (679,778)                 (215,967)
                                      ---------------    ----------------------

DEFICIT- end of period                     ($748,149)                ($447,438)
                                      ===============    ======================

Loss Per Share                                ($0.02)                   ($0.06)
                                      ===============    ======================

 .




See notes to unaudited consolidated financial statements


<PAGE>


                                    IAC, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)


                                                  Six Months Ended
                                      June 30, 1997              June 30, 1996
                                     --------------              -------------

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss                                 ($68,371)                 ($231,471)
Adjustment to reconcile net loss to 
net cash provided by (used in)
operating activities:
   Amortization                             8,635                        360
   Increase in receivable from
     related party                                                   (13,834)
   Decrease in refundable payroll taxes                                3,973
   Increase in accounts payable and
     other liabilities                     47,623                      6,310
   Decrease in note receivable from
     related party                                                     3,000
   Issuance of shares of common
     stock for services                                              225,500
                                    -----------------    ----------------------
                                    -----------------    ----------------------
Net Cash Provided by 
   Operating Activities                   (12,113)                    (6,162)
                                    -----------------    ----------------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Sale of investment securities                                      10,000
                                    -----------------    ----------------------
Net Cash Used In Investing Activities                                  10,000
                                    -----------------    ----------------------

CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock, net of expenses                                   1,000
                                     ----------------    ----------------------
                                     ----------------    ----------------------
Net Cash Provided By Financing Activities                               1,000
                                     ----------------    ----------------------

Net Increase (Decrease) In Cash            (12,113)                     4,838
Cash At Beginning Of Period                 11,713                     37,967
                                    =================    ======================
Cash (Overdraft) At End Of Period            ($400)                   $42,805
                                    =================    ======================

     Income taxes paid during period                                     $800
                                    =================    ======================



See notes to unaudited consolidated financial statements.










<PAGE>


                                    IAC, INC
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE PERIOD ENDED JUNE 30, 1997 AND 1996

Note 1 - Organization, operations and basis of presentation:

Organization:

IAC,  Inc.(IAC)  is a Nevada  corporation  engaged in the business of managing a
malpractice insurance contract between International  Associations' Coalitions',
Inc.,  (Coalitions)  a related  party,  and an  insurance  company,  Pacific Rim
Insurance Company, a minority stockholder of IAC. The members of Coalitions' and
its successor,  Health Professionals  Coalition,  Inc. (Health), are podiatrists
seeking affordable  malpractice insurance.  Under the management contract,  IAC,
Inc. is entitled to receive  27.5% of the premiums  paid by the  podiatrists  to
United and Pacific Rim.

The  term of the  insurance  contract  between  Coalitions'  and  the  insurance
carriers is one year and is generally  renewable if both parties have  performed
satisfactorily.  The  management  contract  with  Coalitions'  also  has a  term
concurrent with the insurance contract.

Coalitions'   is  a  wholly  owned  by  the  Company's   Chairman  and  majority
shareholder.  In September, 1996, the business of Coalitions' was transferred to
a newly created  company,  Health  Professionals  Coalition,  Inc. which is also
wholly owned by IAC's Chairman .

On December 8, 1995,  IAC formed a  subsidiary,  Mt. Tam Re, Inc. in Nevis (in 
the West Indies)  with  initial  capital of $25,000.  Mt. Tam Re was formed to
provide reinsurance coverage for other insurance companies.

Basis of presentation:

The  consolidated  financial  statements have been prepared on the going concern
basis.  IAC has  reported a loss during the last two years and for the six month
period ended June 30, 1997. In addition,  its current liabilities  substantially
exceed its available cash. Losses are expected to continue.

On March 5, 1997, the Company and Health Professionals Coalition,  Inc. signed a
Consent  Cease and Desist  Order  (Cease and Desist  Order)  issued by the Texas
Insurance Commissioner that insurance coverage for podiatrists resident in Texas
must be terminated effective April 21, 1997. In 1996, Health & Coalition, in the
aggregate,  collected insurance premiums of $95,000 from podiatrists residing in
Texas. IAC received related management fees of approximately $26,000 (20% of its
revenue) in 1996. The Cease and Desist Order also requires  payment of a $10,000
fine which was recognized as an expense in the quarter ended March 31, 1997.


<PAGE>


                                    IAC, INC
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE PERIODS ENDED JUNE 30, 1997 AND 1996

Note 1 - Organization, operations and basis of presentation (continued):
     The Cease and Desist Order  provides that IAC and Health can in the future,
accept  payment of  premiums  only if first  authorized  to conduct  business in
Texas. Such  authorization  will be dependent upon formation of a risk retention
group (RRG), or retention of an insurance  broker and insurer licensed in Texas.
Pacific Rim is not licensed in Texas.  Management  was unable to retain a broker
licensed in Texas, or an insurer licensed in Texas by April 21, 1997.  Retention
in the future of some or all of the  revenues  from Texas based  podiatrists  is
dependent upon formation of an RRG.  During the quarter ended June 30, 1997, IAC
refunded $3,079 of premiums received from podiatrists located in Texas.
     In 1996, the Company received  revenues of  approximately  $19,000 from Mt.
Tam Re reinsurance  premiums and a gain from sale of a security,  which will not
reoccur in 1997.
     The Company has been seeking  funding for the initial  capitalization  of a
Risk Retention Group (RRG) for podiatrists.  The Company entered into a contract
in October of 1996 to provide  $600,000 but such funding has yet to be received.
This  agreement,  as amended,  provides that upon funding by the  investor,  the
Company must pledge 500,000 shares of convertible  preferred stock. Such pledged
shares can, at the Company's option,  either be from those currently outstanding
or be newly issued shares.  The agreement provides for a success fee of $47,500.
Without a RRG, IAC is unable to  substantially  expand its marketing  efforts to
podiatrists around the country and reduce its dependence upon the limited number
of members of Health.

Note 2 - Accounting Policies:
     The process of preparing financial  statements in conformity with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions regarding certain assets,  liabilities,  revenue and expenses.  Such
estimates  primarily relate to unsettled  transactions and events as of the date
of the financial statements.  Accordingly,  upon settlement,  actual results may
differ.
     Revenues  are  recorded by IAC when  insurance  premiums  are  collected by
     Coalitions  or by Health.  Expenses are  recorded on the accrual  method of
     accounting.  The carrying value of cash, note receivable,  accounts payable
     and accrued liabilities is a reasonable estimate of
fair value of these financial instruments.

Note 3 - Authorized stock:
     The Company's authorized capital consists of 25,000,000 shares of $.001 par
value common stock and 5,000,000 shares of no par preferred stock. Each share of
preferred  stock is  entitled to one vote per share and is  convertible  into 10
shares of common stock; the preferred stock has no dividend rights or preference
in liquidation.

Note 4 - Income Taxes:
     At December 31, 1996, IAC's  consolidated net operating loss carry forwards
(NOL's) amounted to approximately $516,000 for federal tax purposes.  These NOLs
will expire from 1999 through 2011. For California  franchise tax purposes,  the
NOL is approximately $258,000 and expires in 2001.

<PAGE>


Item 2.   Management's Discussion and Analysis or Plan of Operation.


The following  discussion relates to the unaudited financial  statements for the
three month  periods  ended June 30, 1997 and 1996 which are  included in Item 1
above.

Basis of presentation:

The consolidated  financial statements as of June 30, 1997 have been prepared on
the going concern  basis.  IAC has reported a loss during the last two years and
the  quarter  ended  June  30,  1997.  In  addition,   its  current  liabilities
substantially  exceed its available cash. Losses are expected to continue in the
foreseeable future.

On March 5, 1997, the Company and Health Professionals Coalition,  Inc. signed a
Consent  Cease and Desist  Order  (Cease and Desist  Order)  issued by the Texas
Insurance Commissioner that insurance coverage for podiatrists resident in Texas
must be terminated effective April 21, 1997. In 1996, Health & Coalition, in the
aggregate,  collected insurance premiums of $95,000 from podiatrists residing in
Texas. IAC received related management fees of approximately $26,000 (20% of its
revenue) in 1996. The Cease and Desist Order also requires  payment of a $10,000
fine which was recognized as an expense in the quarter ended June 30, 1997.

The Cease and Desist  Order  provides  that IAC and  Health  can in the  future,
accept  payment of  premiums  only if first  authorized  to conduct  business in
Texas. Such  authorization  will be dependent upon formation of a risk retention
group (RRG), or retention of an insurance  broker and insurer licensed in Texas.
Pacific Rim is not licensed in Texas.  Management  was unable to retain a broker
licensed in Texas, or an insurer licensed in Texas by April 21, 1997.  Retention
in the future of some or all of the  revenues  from Texas based  podiatrists  is
dependent upon formation of an RRG.

In 1996, the Company received revenues of approximately  $19,000 from Mt. Tam Re
reinsurance premiums and a gain from sale of a security,  which will not reoccur
in 1997.

The Company has been seeking  funding for the initial  capitalization  of a Risk
Retention  Group (RRG) for  podiatrists.  The Company entered into a contract in
October of 1996 to provide  $600,000  but such  funding has yet to be  received.
This  agreement,  as amended,  provides that upon funding by the  investor,  the
Company must pledge 500,000 shares of convertible  preferred stock. Such pledged
shares can, at the Company's option, be either from those currently  outstanding
or be newly issued shares.  The agreement provides for a success fee of $47,500.
Without a RRG, IAC is unable to  substantially  expand its marketing  efforts to
podiatrists around the country and reduce its dependence upon the limited number
of members of Health.

 Liquidity:

IAC has used all of its available cash in its operations as of June 30, 1997. As
of June 30, 1997,  IAC's current  liabilities  were $54,244.  Negotiations  with
suppliers  are ongoing and the company  believes it will be able to  restructure
most of these obligations.



Discussion of quarterly results:

Management  fees in the second  quarter of 1997  declined  $2,971 or 9% from the
preceding  year.  This  was  due  to a  decrease  in  premiums  written  to  the
podiatrists  group under  management,  primarily  as a result of the loss of the
participants in Texas.

Employee  compensation  decreased $5,924 and  administrative  expenses decreased
$33,623 largely due to lower legal expenses.  Promotional expenses declined from
the previous year's $118,675 to zero.


                           PART II - OTHER INFORMATION

Item 1.   Legal Proceedings.
         NA.
Item 2.   Changes in Securities.
         NA.
Item 3.   Defaults Upon Senior Securities.
         NA.
Item 4.   Submission of Matters to a Vote of Security Holders.
         NA.
Item 5.   Other Information.
         NA.
Item 6.   Exhibits and Reports on Form 8-K.
         a.  Exhibits
                  NA

         b. Reports on Form 8-K.
                  No reports have been filed on Form 8-K during this quarter.


/S/   Dr. Michael Wener, President

October 15, 1997