UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



FORM 10-QSB



xQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period endedMarch 31, 2006



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



Commission file number333-122563



INTERNET ACQUISITION GROUP, INC.

(Exact name of small business issuer as specified in its charter)



|California                                                     | 20-0624181                       
|-------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.)



302 Creekside Ct. E.

Huntertown, Indiana 46748

(Address of principal executive offices)



(260) 385-0338

(Issuers telephone number)



Copies of Communications to:

Stoecklein Law Group

402 West Broadway, Suite 400

San Diego, CA 92101

(619) 595-4882

Fax (619) 595-4883



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



Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

|Yesx | Noo
|---- | ---



The number of shares of Common Stock, $0.001 par value, outstanding on March 31, 2006, was 69,963,360 shares.



Transitional Small Business Disclosure Format (check one):  YesoNox



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PART I -- FINANCIAL INFORMATION



Item 1. Financial Statements.



JASPERS + HALL, PC

CERTIFIED
			PUBLIC ACCOUNTANTS


9175 Kenyon Avenue, Suite 100

Denver, CO 80237

303-796-0099





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors

Internet Acquisition Group, Inc.



We have reviewed the accompanying balance sheet of Internet Acquisition Group, Inc. as of March 31, 2006 and the related statements of operations and cash flows for the three-months ended March 31, 2006 and 2005, included in the accompanying Securities and Exchange Commission Form 10-QSB for the period ended March 31, 2006.  These financial statements are the responsibility of the Companys management.



We conducted our reviews in accordance with standards established by the Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements as a whole.  Accordingly, we do not express such an opinion.



Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with accounting principles generally accepted in the United States.



The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 2, conditions exist which raise substantial doubt about the Companys ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.





Jaspers + Hall, PC

Denver, Colorado

May 5, 2006



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INTERNET ACQUISITION GROUP, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS



|                                     |                                                                                                         |                           | March 31,                  | December 31,
|------------------------------------ | ------------------------------------------------------------------------------------------------------- | ------------------------- | -------------------------- | ------------
|                                     |                                                                                                         |                           | 2006                       | 2005        
|Assets                               |                                                                                                         |                          
|Current assets:                      |                                                                                                         |                          
|                                     | Cash                                                                                                    | $        43,179           | $        43,099           
|                                     | Accounts receivable                                                                                     | 2,892                     | -                         
|                                     | Inventory                                                                                               | 21,651                    | 21,651                    
|                                     |                                                                                                         | Total current assets      | 67,722                     | 64,750      
|                                     | TOTAL ASSETS                                                                                            | $        67,802           | $          64,750         
|                                     |                                                                                                         |                           |                            |             
|Liabilities and Stockholders' Equity |                                                                                                         |                          
|                                     |                                                                                                         |                           |                            |             
|Liabilities:                         |                                                                                                         |                          
|                                     | Deferred revenue                                                                                        | $        21,731           | $          13,979         
|                                     |                                                                                                         | Total current liabilities | 21,731                     | 13,979      
|                                     |                                                                                                         |                           |                            |             
|Stockholders' equity:                |                                                                                                         |                          
|                                     | Common stock, $0.001 par value, 100,000,000 shares authorized, 69,963,360 shares issued and outstanding | 69,964                    | 69,964                    
|                                     | Additional paid-in capital                                                                              | 57,100                    | 57,100                    
|                                     | Deficit accumulated during the development stage                                                        | (81,073)                  | (76,293)                  
|                                     |                                                                                                         |                           | Total stockholders' equity | 45,991      
|                                     |                                                                                                         |                           |                            |             
|                                     | Total liabilities and stockholders' equity                                                              | $        67,722           | $        64,750           



See accountants review report and accompanying notes to the financial statements.



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INTERNET ACQUISTION GROUP, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

(unaudited)



|                                                    | Three Months Ended March 31, | Period January 16, 2004 (Inception) to March 31,
|--------------------------------------------------- | ---------------------------- | ------------------------------------------------
|                                                    | 2006                         | 2005                                            
|                                                    |                              |                                                 
|Revenue                                             | $                            | -                                               
|                                                    |                              |                                                 
|Expenses:                                           |                              |                                                 
|General and administrative       expenses           |                              | 4,780                                           
|Total operating expenses                            |                              | 4,780                                           
|                                                    |                              |                                                 
|                                                    |                              |                                                 
|Net (loss) from operations                          | $                            | (4,780)                                         
|                                                    |                              |                                                 
|Weighted average number of                          |                              |                                                 
|common shares outstanding - basic and fully diluted |                              | 69,963,630                                      
|                                                    |                              |                                                 
|Net (loss) per share - basic and fully diluted      |                              | *                                               



* - Less than $0.001 loss per share



See accountants review report and accompanying notes to the financial statements.



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INTERNET ACQUISITION GROUP, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

(unaudited)



|                                                                                |                          |                                   | Three Months Ended March 31, | Period January 16, 2004 (Inception) to March 31,
|------------------------------------------------------------------------------- | ------------------------ | --------------------------------- | ---------------------------- | ------------------------------------------------
|                                                                                | 2006                     | 2005                              | 2006                        
|Cash flows from operating activities                                            |                          |                                   |                              |                                                 
|Net (loss)                                                                      | $                        | (4,780)                           | $                            | -                                               
|Adjustments to reconcile net (loss) to net cash (used) in operating activities: |                          |                                   |                              |                                                 
|                                                                                |                          | Stock issued for services         |                              | -                                               
|                                                                                |                          | Changes in assets and liabilities |                              |                                                 
|                                                                                |                          | Increases in accounts receivable  |                              | (2,892)                                         
|                                                                                |                          | Increase in inventory             |                              | -                                               
|                                                                                |                          | Increase in deferred revenue      |                              | 7,752                                           
|Total adjustments                                                               |                          | 4,860                             |                              | -                                               
|Net cash (used) in operating activities                                         |                          | 80                                |                              | -                                               
|                                                                                |                          |                                   |                              |                                                 
|Cash flows from financing activities                                            |                          |                                   |                              |                                                 
|                                                                                | Issuance of common stock |                                   | -                            |                                                 
|Net cash provided by financing activities                                       |                          | -                                 |                              | -                                               
|                                                                                |                          |                                   |                              |                                                 
|Increase (decrease) in cash                                                     |                          | 80                                |                              | -                                               
|                                                                                |                          |                                   |                              |                                                 
|Cash and cash equivalents  beginning                                           |                          | 43,099                            |                              | -                                               
|Cash and cash equivalents  ending                                              | $                        | 43,179                            | $                            | -                                               
|                                                                                |                          |                                   |                              |                                                 
|Supplemental disclosures:                                                       |                          |                                   |                              |                                                 
|                                                                                | Interest paid            | $                                 | -                            | $                                               
|                                                                                | Income taxes paid        | $                                 | -                            | $                                               



See accountants review report and accompanying notes to the financial statements.



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INTERNET ACQUISITION GROUP, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS



|1. | Presentation of Interim Information
|-- | -----------------------------------



In the opinion of the management of Internet Acquisition Group, Inc., the accompanying unaudited financial statements include all normal adjustments considered necessary to present fairly the financial position as of March 31, 2006, and the results of operations and cash flows for the three-months ended March 31, 2006 and 2005.  Interim results are not necessarily indicative of results for a full year.



The financial statements and notes are presented as permitted by Form 10-QSB, and do not contain certain information included in the Companys audited financial statements and notes for the fiscal year ended December 31, 2005.



General



The Company was organized January 16, 2004 under the laws of the State of California as Internet Acquisition Group, Inc.  The Company began activities to engage in the business of marketing, selling, and distributing products through a number of company and non-company owned websites.



The Company has not commenced significant operations, and in accordance with SFAS # 7, the Company is considered a development stage company.



|2. | Going Concern
|-- | -------------



The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which contemplates continuation of the Company as a going concern.  The Companys operations generated no income during the current period ended and the Companys deficit is $81,073 as of March 31, 2006.



The future success of the Company is likely dependent on its ability to attain additional capital to develop its proposed products and ultimately, upon its ability to attain future profitable operations.  There can be no assurance that the Company will be successful in obtaining such financing, or that it will attain positive cash flow from operations.



|3. | Inventory
|-- | ---------



At March 31, 2006, inventory consisted of the following:



| | Finished goods | $21,731
| | -------------- | -------





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FORWARD-LOOKING STATEMENTS



This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.



Forward-looking statements may include the words may, could, estimate, intend, continue, believe, expect or anticipate or other similar words.  These forward-looking statements present our estimates and assumptions only as of the date of this report.  Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.



Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements.  Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.  The factors impacting these risks and uncertainties include, but are not limited to:



| |  | heightened competition;
| | - | -----------------------



| |  | problems developing new internet based stores;
| | - | ----------------------------------------------



| |  | failure to identify, develop or profitably manage additional businesses;
| | - | ------------------------------------------------------------------------



| |  | failure to obtain new customers or retain existing customers;
| | - | -------------------------------------------------------------



| |  | inability to carry out marketing and sales plans;
| | - | -------------------------------------------------



| |  | inability to obtain capital for future growth;
| | - | ----------------------------------------------



| |  | loss of key executives; and
| | - | ---------------------------



| |  | general economic and business conditions.
| | - | -----------------------------------------



For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see Factors That May Affect Our Results of Operation in this document.



In this form 10-KSB references to IAG, the Company, we, us, and our refer to INTERNET ACQUISITION GROUP, INC.



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|ITEM 2. | PLAN OF OPERATION
|------- | -----------------



OVERVIEW



The original plan of operation was to acquire existing internet based businesses and achieve economies of scale and develop cross-marketing opportunities between these businesses. The business plan was revised to focus on developing Internet based businesses following a failed merger.  With the minimal barriers to entry for Internet based businesses, IAG determined that it was more cost-effective to develop its business rather than to seek to acquire existing businesses.  While IAG cannot rule out the possibility of a future merger or acquisition, with the approval of shareholders, IAGs business plan is not to engage in a merger or acquisition with an unidentified company or companies.  We will not be engaging in a reverse acquisition with an operating company for the next twelve months.



Since inception, we have not been engaged in any significant operations nor have we had any significant revenues, as we are in the development stage. Our only recent activities include organization of the Company, the development of several websites, and research over the Internet to determine methods of acquiring market share presence without significant start up expenses.



Our Business



IAG is in the business of marketing, selling and distributing products through a number of its internet based stores. Through our websites we offer a convenient shopping interface that features product information. Our Internet or electronic commerce websites include clickable links between all of our Internet specialty stores and are designed to enhance the customers online shopping experience 24 hours a day, seven days a week.



We use a virtual operating model that includes outsourcing the majority of our operating infrastructure to national distribution and fulfillment partners with established expertise. In other words, we rely on distributors to fulfill a number of the traditional retail functions for our Internet stores, including maintaining inventory, processing orders, and shipping merchandise.  This helps to minimize the initial start-up costs and ongoing operating costs of our internet stores.



This allows us maximum flexibility for the operations of business by defining a business model that uses outsourcing and partnerships to both free our corporate resources and maintains a higher degree of efficiency than would normally be possible were we handling such tasks as inventory and shipping in-house. This operating model allows us to add new product categories easily and rapidly, and eliminates significant capital investments and the costs and risks of carrying inventory. We intend to expand our product offerings by establishing strategic relationships with additional partners. We do not own any of the products or inventory featured on our websites.







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Goals and Objectives:



As a result of our being a development stage company with minimal amounts of equity capital initially available, our business plan set our goals in three stages: (1) begin basic operations based upon the availability of initial funding of less than $100,000; (2) grow our business through marketing and advertising based upon additional funding of $200,000; and (3) full scale operations with full-time staff and additional advertising based upon additional equity and/or debt financing in the approximate sum of $500,000 to $1,000,000. The first goal, listed as Stage I below, was accomplished through a private placement that raised the Companys start up capital in an amount of $81,020. Financing for Stage II and III will be pursued in the future upon the successful completion of Stage I.



Going Concern



The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which contemplates continuation of the Company as a going concern.  The Companys operations generated no income during the current period ended and the Companys deficit is $81,073 as of March 31, 2006.  The Company is in the development stage and, accordingly, has generated limited revenues from operations.  Since its inception, the Company has been engaged substantially in financing activities and developing its product line, setting up its e-commerce websites, and incurring substantial costs and expenses.



The future success of the Company is likely dependent on its ability to attain additional capital to develop its proposed products and ultimately, upon its ability to attain future profitable operations.  There can be no assurance that the Company will be successful in obtaining such financing, or that it will attain positive cash flow from operations.  The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities.



Satisfaction of our cash obligations for the next 12 months.



Our plan of operation has provided for us to establish operational Internet stores as soon as practical. We have accomplished the goal through the creation of several websites. Initially we capitalized our company with $81,020 from a private placement. As of March 31, 2006, we had $46,071 in working capital. Our plan of operation indicates expenditures in the following year of at least $100,000. We have based our assumptions on the fact that we will not incur additional obligations for personnel, office, etc. until such time as we either raise additional equity or debt, or generate significant revenues to support such expenditures.



Summary of any product research and development that we will perform for the term of the plan.



We do not anticipate performing any significant product research and development under our plan of operation. In lieu of product research and development we anticipate maintaining control over our advertising, especially on the Internet, to assist us in determining the allocation of our limited advertising dollars.



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Expected purchase or sale of plant and significant equipment.



We do not anticipate the purchase or sale of any plant or significant equipment, as such items are not required by us at this time or in the next 12 months.



Significant changes in number of employees.



The number of employees required to operate our business is currently one part time individual. After we have commenced generating revenues based upon the expenditures of our advertising dollars, and word of mouth advertising, and at the end of the initial 12 month period, our plan of operation anticipates our requiring additional capital to hire at least one full time person.



Liquidity and Capital Resources



Since inception, we have financed our cash flow requirements through the issuance of common stock which has resulted in our receipt of $81,020. As we expand our activities, we may continue to experience net negative cash flows from operations, pending receipt of sales revenues. Additionally we anticipate obtaining additional financing to fund operations through common stock offerings, to the extent available; or to obtain additional financing to the extent necessary to augment our working capital. As of the date of this filing, we do not have any arrangements or agreement to provide for future financing.



We anticipate that we will incur operating losses in the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving markets. Such risks for us include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks, we must, among other things, obtain a customer base, implement and successfully execute our business and marketing strategy, continually develop and upgrade our product packaging, provide order fulfillment through the Internet, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will
be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.



Critical Accounting Policies and Estimates



In March 2005, the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (FIN 47). FIN 47 provides guidance relating to the identification of and financial reporting for legal obligations to perform an asset retirement activity. The Interpretation requires recognition of a liability for the fair value of a conditional asset retirement obligation when incurred if the liabilitys fair value can be reasonably estimated. FIN 47 also defines when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. The provision is effective no later than the end of fiscal years ending after December 15, 2005.



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The Company adopted FIN 47 during the first quarter of 2006 and does not believe the adoption will have a material impact on its consolidated financial position or results of operations or cash flows.



In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections (SFAS 154) which replaces Accounting Principles Board Opinions No. 20 Accounting Changes and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements-An Amendment of APB Opinion No. 28. SFAS 154 provides guidance on the accounting for and reporting of accounting changes and error corrections. It establishes retrospective application, or the latest practicable date, as the required method for reporting a change in accounting principle and the reporting of a correction of an error. SFAS 154 is effective for accounting changes and a correction of errors made in fiscal years beginning after December 15, 2005 and is required to be adopted by the Company in the first quarter of 2006. The Company is currently evaluating the effect that the adoption
of SFAS 154 will have on its results of operations and financial condition but does not expect it to have a material impact.



In June 2005, the Emerging Issues Task Force, or EITF, reached a consensus on Issue 05-6, Determining the Amortization Period for Leasehold Improvements, which requires that leasehold improvements acquired in a business combination or purchased subsequent to the inception of a lease be amortized over the lesser of the useful life of the assets or a term that includes renewals that are reasonably assured at the date of the business combination or purchase. EITF 05-6 is effective for periods beginning after July 1, 2005. We do not expect the provisions of this consensus to have a material impact on the financial position, results of operations or cash flows.



Off-Balance Sheet Arrangements



We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.



FACTORS THAT MAY AFFECT OUR RESULTS OF OPERATION



RISKS RELATING WITH OUR BUSINESS AND MARKETPLACE



We are a development stage company organized in January 2004 and have no operating history, which makes an evaluation of us extremely difficult. At this stage of our business operations, even with our good faith efforts, potential investors have a high probability of losing their investment.





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We were incorporated in January of 2004 as a California corporation. As a result of our recent start up we have yet to generate revenues from operations and have been focused on organizational, start-up, and market analysis activities since we incorporated. Our operating activities during this period consisted primarily of developing our websites. Our websites are linked to the marketers of various products and services over the Internet, there is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will ever be able to operate profitably. Our future operating results will depend on many factors, including our ability to raise adequate working capital, demand for our products, the level of our competition and our ability to attract and maintain key management and employees.



Our prospects are subject to the risks and expenses encountered by start up companies establishing a business as an online retailer selling products over the Internet. Our limited operating history makes it difficult or impossible to predict future results of our operations. We may not establish a clientele that will make us profitable, which might result in the loss of some or all of your investment in our common stock.



You should consider our prospects in light of the risks and difficulties frequently encountered by early stage companies in the rapidly evolving online commerce market. These risks include, but are not limited to, an unpredictable business environment, the difficulty of managing growth and the use of our business model. To address these risks, we must, among other things:



| |  | expand our customer base;
| | - | -------------------------

| |  | enhance our brand recognition;
| | - | ------------------------------

| |  | expand our product and service offerings;
| | - | -----------------------------------------

| |  | access sufficient product inventory to fulfill our customers orders;
| | - | ---------------------------------------------------------------------

| |  | successfully implement our business and marketing strategy;
| | - | -----------------------------------------------------------

| |  | provide superior customer service and order processing;
| | - | -------------------------------------------------------

| |  | respond effectively to competitive and technological developments; and
| | - | ----------------------------------------------------------------------

| |  | attract and retain qualified personnel.
| | - | ---------------------------------------



We will require additional financing in order to implement our marketing plan. In the event we are unable to acquire additional financing, we may not be able to implement our marketing plan resulting in a loss of revenues and ultimately the loss of your investment.



Due to our start-up nature, we will have to incur the costs of developing professional marketing materials, hiring new employees and commencing marketing activities for our websites. To fully implement our business plan we will require substantial additional funding. Our current cash on hand is anticipated to enable us to maintain minimum operations and working capital requirements for at least six months.



We will need to raise additional funds to expand our operations. We plan to raise additional funds through private placements, registered offerings, debt financing or other sources to maintain and expand our operations. Adequate funds for this purpose on terms favorable to us may not be available, and if available, on terms significantly more adverse to us than are manageable. Without new funding, we may be only partially successful or completely unsuccessful in implementing our business plan, and our shareholders may lose part or all of their investment.



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We are substantially dependent on the Internet and continued growth of the online commerce market. If the online commerce market does not grow, or we are unable to develop a market based upon the online commerce market, your investment in us is at risk of being lost.



The market for the sale of goods over the Internet is an emerging market. Our future revenues and profits are substantially dependent upon the widespread acceptance and use of the Internet and other online services as a medium for commerce by consumers. Rapid growth in the use of and interest in the Web, the Internet and other online services is an evolving phenomenon and there can be no assurance that this acceptance and use will continue to develop or that a sufficiently broad base of consumers will adopt, and continue to use, the Internet as a medium of commerce.



In addition, the Internet may not be commercially viable in the long term for a number of reasons, including potentially inadequate development of the necessary network infrastructure or delayed development of enabling technologies, performance improvements and security measures. To the extent that the Internet continues to experience significant growth in the number of users, their frequency of use or their bandwidth requirements, there can be no assurance that the infrastructure for the Internet and other online services will be able to support the demands placed upon them. In addition, the Internet or other online services could lose their viability due to delays in the development or adoption of new standards and protocols required to handle increased levels of Internet or other online service activity, or due to increased governmental regulation. Changes in or insufficient
availability of telecommunications services to support the Internet or other online services also could result in slower response times and adversely affect usage of the Internet, access to our websites, and other online services generally. If use of the Internet and other online services does not continue to grow or grows more slowly than expected, if the infrastructure for the Internet and other online services do not effectively support growth that may occur, or if the Internet and other online services do not continue as a viable commercial marketplace, our business, results of operations and financial condition would be materially adversely affected and we may have to discontinue our operations.



We are significantly dependent on Matt Lettau, our sole officer and director, who has limited experience in running a business such as ours. The loss or unavailability to IAG of Mr. Lettaus services would have an adverse effect on our business, operations and prospects which could result in a loss of your investment in us.



Our business plan is significantly dependent upon the abilities and continued participation of Matt Lettau, our sole officer and director. Mr. Lettau is not irreplaceable; however it would be difficult to replace Mr. Lettau at such an early stage of development of IAG. The loss by or unavailability to IAG of Mr. Lettaus services would have an adverse effect on our business, operations and prospects. There can be no assurance that we would be able to locate or employ personnel to replace Mr. Lettau, should his services be discontinued. In the event we are unable to locate or employ personnel to replace Mr. Lettau, then we would be required to cease pursuing our business opportunity, which could result in a loss of your investment.



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We are dependent on several third party providers to fulfill a number of our retail functions. If these parties are unwilling or unable to continue providing services to us, our business could be seriously harmed.



We are currently dependent on our distribution and fulfillment providers to manage inventory, process orders and distribute products to customers in a timely manner. We do not have any long-term agreements with any of these third parties. If we do not maintain our existing relationships with these providers on acceptable commercial terms, we may not be able to offer a broad selection of merchandise, and customers may refuse to shop at our online stores. In addition, manufacturers may decide, for reasons outside our control, not to offer particular products for sale on the Internet. If we are unable to supply products to customers, or if other product manufacturers refuse to allow their products to be sold via the Internet, our business would suffer severely.



We rely on distributors to fulfill a number of traditional retail functions, including maintaining inventory and preparing merchandise for shipment to individual customers. In the future, vendors may not be willing to provide these services at competitive rates. In addition, vendors may refuse to develop the communications technology necessary to support our direct shipment infrastructure. We also have no effective means to ensure that providers will continue to perform these services to our satisfaction. Customers could become dissatisfied and cancel their orders or decline to make future purchases if we or our providers are unable to deliver products on a timely basis. If customers become dissatisfied with our distributors and third party service providers, our reputation could suffer.



Our operations are also heavily dependent upon a number of other third parties for customer service and support, credit card processing, and hosting our system infrastructure. In addition, our distributors and fulfillment providers will use the Federal Express Corporation, United Parcel Service and the United States Postal Service to deliver substantially all of the products sold through our websites. If the services of any of these third parties become unsatisfactory, customers may experience lengthy delays in receiving orders, and we may not be able to find a suitable replacement on a timely basis or on commercially reasonable terms.



RISKS FACTORS RELATING TO OUR COMMON STOCK



There is no current public market for our common stock; therefore you may be unable to sell your securities at any time, for any reason, and at any price, resulting in a loss of your investment.



As of the date of this report, there is no public market for our common stock. Although we have contacted an authorized OTC Bulletin Board market maker for sponsorship of our securities on the Over-the-Counter Bulletin Board, there can be no assurance that our attempts to do so will be successful. Furthermore, if our securities are not quoted on the OTC Bulletin Board or elsewhere, there can be no assurance that a market will develop for the common stock or that a market in the common stock will be maintained. As a result of the foregoing, investors may be unable to liquidate their investment for any reason.



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Our common stock could be deemed a low-priced Penny stock which could make it cumbersome for brokers and dealers to trade in our common stock, making the market for our common stock less liquid and negatively effect the price of our stock.



In the event we are accepted for trading in the over-the-counter market, trading of our common stock may be subject to certain provisions of the Securities Exchange act of 1934, commonly referred to as the penny stock rules as defined in Rule 3a51-1.  A penny stock is generally defined to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions.  If our stock is deemed to be a penny stock, trading will be subject to additional sales practice requirements on broker-dealers.  These require a broker-dealer to:



| | Deliver to the customer, and obtain a written receipt for, a disclosure document;
|- | ---------------------------------------------------------------------------------
| | Disclose certain price information about the stock;                              

| | Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;
|- | ----------------------------------------------------------------------------------------------------------------

| | Send monthly statements to customers with market and price information about the penny stock; and
|- | -------------------------------------------------------------------------------------------------

| | In some circumstances, approve the purchasers account under certain standards and deliver written statements to the customer with information specified in the rules.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



Consequently, penny stock rules may restrict the ability or willingness of broker-dealers to trade and/or maintain a market in our common stock.  Also, prospective investors may not want to get involved with the additional administrative requirements, which may have a material adverse effect on the trading of our shares.

Our auditors report reflects the fact that without realization of additional capital, it would be unlikely for us to continue as a going concern.



As a result of our deficiency in working capital at December 31, 2005 and other factors, our auditors have included a paragraph in their audit report regarding substantial doubt about our ability to continue as a going concern. Our plans in this regard are to seek merger or acquisition candidates, and to seek additional funding through future equity private placements or debt facilities.



Item 3. Controls and Procedures.



We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the end of the period covered by this report, Matt Lettau, our President and Chief Accounting Officer evaluated the effectiveness of our disclosure controls and procedures. Based on the evaluation, which disclosed no significant deficiencies or material weaknesses, Mr. Lettau concluded that our disclosure controls and procedures are effective, in light of minimal operations. There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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PART II  OTHER INFORMATION



|Item 1. | Legal Proceedings.
|------- | ------------------



From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.



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



None.



|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------



None.



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



None.



|Item 5. | Other Information.
|------- | ------------------



None.



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



|3.1(i)**  | Articles of Incorporation                                                                                           
|--------- | --------------------------------------------------------------------------------------------------------------------
|3.1(ii)** | Bylaws of the Company                                                                                               
|31.1*     | Certification of Matt Lettau, CEO and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act
|32.1*     | Certification of Matt Lettau, CEO and Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act

| | *  | Filed herewith                                                                  | 
| | -- | ------------------------------------------------------------------------------- | 
| | ** | Filed as an exhibit of Form SB-2, filed with the Commission on February 2, 2004



Reports on Form 8-K



None.



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SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



INTERNET ACQUISITION GROUP, INC.

(Registrant)



By:/s/
Matt Lettau

| | Matt Lettau,                              
| | ------------------------------------------
| | President and Principal Accounting Officer
| | (On behalf of the registrant and as       
| | principal accounting officer)             



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