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

                                   FORM 10-KSB


[xx] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2002

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934 FOR THE TRANSITION PERIOD FROM ____ TO ____


                        Commission file Number: 000-28053
                                                ---------

                           INVESTMENT ASSOCIATES, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)


                                     Nevada
          -------------------------------------------------------------
         (State or other jurisdiction of incorporation or organization)

                                   98-0204280
                    ----------------------------------------
                     (I.R.S. Employer Identification Number)

                         Suite 810, 1708 Dolphin Avenue
                       Kelowna, British Columbia, V1Y 9S4
                    ----------------------------------------
                    (Address of principal executive offices)

                                  (250)868-8177
                            -------------------------
                           (Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act:    None

Securities registered under Section 12(g) of the Exchange Act:    Common Shares

Check  whether the Issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. [ X ] Yes [ ] No

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of Issuer's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB.   [ X ]

The Issuer's revenues for its fiscal year ended September 30, 2002 were $0.00.

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified  date within the past 60 days.  (See  definition  of affiliate in Rule
12b-2 of the Exchange Act.) N/A

<PAGE>
                                        2

Note:  If  determining  whether  a  person  is  an  affiliate  will  involve  an
unreasonable  effort and expense,  the issuer may calculate the aggregate market
value of the common  equity held by  non-affiliates  on the basis of  reasonable
assumptions, if the assumptions are stated.

On September  30, 2002,  the number of shares  outstanding  of the  registrant's
Common Stock was 1,000,000.

Transitional Small Business Disclosure Format (Check one):  Yes    ;   No X
                                                                ---      ---
<PAGE>
                                        3


                                     PART I
                                    BUSINESS

Item 1.  Description of Business
--------------------------------

Investment  Associates,  Inc. (the "Company") was incorporated on July 18, 1997,
under  the  laws of the  State of  Nevada  to  engage  in any  lawful  corporate
undertaking,  including,  but not limited to, selected mergers and acquisitions.
The  Company has been in the  developmental  stage  since  inception  and has no
operations to date. Other than issuing shares to its original shareholders,  the
Company never commenced any operational activities.  As such, the Company can be
defined as a "shell"  company,  whose sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity.

Many states have enacted  statutes,  rules and regulations  limiting the sale of
securities   of  "blank  check"  or  "shell"   companies  in  their   respective
jurisdictions.  Management  does not intend to undertake  any efforts to cause a
market to develop in the Company's securities until such time as the Company has
successfully  implemented its business plan described herein.  Relevant thereto,
each  shareholder  of the Company has executed and delivered a "lock-up"  letter
agreement,  affirming  that they shall not sell their  respective  shares of the
Company's  common  stock  until  such  time  as  the  Company  has  successfully
consummated a merger or acquisition and the Company is no longer classified as a
"blank check" company.  In order to provide  further  assurances that no trading
will occur in the Company's  securities  until a merger or acquisition  has been
consummated,  each  shareholder  has  agreed  to place  their  respective  stock
certificate  with the  Company's  legal  counsel,  who will  not  release  these
respective  certificates  until such time as legal counsel has confirmed  that a
merger  or  acquisition  has  been  successfully  consummated.   However,  while
management believes that the procedures  established to preclude any sale of the
Company's  securities  prior to  closing  of a  merger  or  acquisition  will be
sufficient,  there can be no assurances that the procedures established relevant
herein  will  unequivocally  limit  any  shareholder's  ability  to  sell  their
respective securities before such closing.

Management has continued to review prospective merger or acquisition  candidates
during the past  fiscal  year,  but as of the date of this  report,  there is no
agreement  between the Company and any third party  providing for the Company to
merge or acquire any assets.  Management  of the Company is of the opinion  that
the business  objectives  of the Company  remain  viable,  despite the Company's
failure to merge with or acquire another business entity to date.  Management of
the Company  continues to review  potential  merger  candidates and  acquisition
opportunities.

Employees
---------

During the fiscal year ended  September  30, 2002,  the Company had no full time
employees.  The Company's  President and Secretary and Treasurer  have agreed to
allocate a portion  of their  time to the  activities  of the  Company,  without
compensation.  These officers  anticipate  that the business plan of the Company
can be  implemented  by their  devoting  minimal  time per month to the business
affairs of the Company and,  consequently,  conflicts of interest may arise with
respect to the limited time commitment by such officers.

Item 2.  Description of Property
--------------------------------

Facilities.  The Company  operates  from its offices at Suite 810,  1708 Dolphin
Avenue,  Kelowna,  British Columbia,  V1Y 9S4, Canada. This space is provided to
the  Company  on a rent  free  basis by Robert  Hemmerling,  a  director  of the
Company, and it is anticipated that this arrangement will remain until such time
as the Company  successfully  consummates  a merger or  acquisition.  Management
believes  that this  space  will meet the  Company's  needs for the  foreseeable
future.

Other Property. The Company has no properties and at this time has no agreements
to acquire any properties. The Company intends to attempt to acquire assets or a
business in exchange for its  securities  which assets or business is determined
to be desirable for its objectives.

Item 3.  Legal Proceedings
--------------------------

There  are no  material  legal  proceedings  which  are  pending  or  have  been
threatened against the Company of which management is aware.

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

No matter was submitted to vote of security holders during the fourth quarter of
the fiscal year covered by this report.

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters
-----------------------------------------------------------------

(a)  Market  Information.  There is presently  no trading  market for the common
     equity of the Company.

(b)  Holders. There are ten (10) holders of the Company's Common Stock.

As of the date of this report,  all of the shares of the Company's  Common Stock
are eligible for sale under Rule 144  promulgated  under the  Securities  Act of
1933,  as amended,  subject to certain  limitations  included  in said Rule.  In
general, under Rule 144, a person (or persons whose shares are aggregated),  who
has satisfied a one year holding period, under certain  circumstances,  may sell
within  any three  month  period a number of shares  which  does not  exceed the
greater  of one  percent of the then  outstanding  Common  Stock or the  average
weekly trading  volume during the four calendar  weeks prior to such sale.  Rule
144 also permits,  under certain  circumstances,  the sale of shares without any
quantity  limitation by a person who has satisfied a two year holding period and
who is not, and has not been for the preceding three months, an affiliate of the
Company.

(c)  Dividends.

     (1)  The  Company  has not paid any  dividends  on its  Common  Stock.  The
          Company does not foresee that the Company will have the ability to pay
          a dividend on its Common Stock in the fiscal year ended  September 30,
          2002,  unless  the  Company  successfully   consummates  a  merger  or
          acquisition and the relevant candidate has sufficient assets available
          to undertake  issuance of such a dividend and management  elects to do
          so, of which there can be no assurance.

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
        in Operations
--------------------------------------------------------------------------------

The  following  discussion  should  be read in  conjunction  with the  Company's
audited  financial  statements and notes thereto included herein.  In connection
with, and because it desires to take advantage of, the "safe harbor"  provisions
of the Private  Securities  Litigation  Reform Act of 1995, the Company cautions
readers regarding certain forward looking statements in the following discussion
and  elsewhere  in this  report  and in any other  statement  made by, or on the
behalf of the Company,  whether or not in future filings with the Securities and
Exchange  Commission.  Forward  looking  statements  are statements not based on

<PAGE>
                                        5

historical  information  and  which  relate to  future  operations,  strategies,
financial  results  or  other  developments.   Forward  looking  statements  are
necessarily based upon estimates and assumptions that are inherently  subject to
significant business,  economic and competitive uncertainties and contingencies,
many of which are beyond the Company's  control and many of which,  with respect
to future business  decisions,  are subject to change.  These  uncertainties and
contingencies can affect actual results and could cause actual results to differ
materially from those expressed in any forward looking statements made by, or on
behalf of, the Company.  The Company  disclaims any obligation to update forward
looking statements.

(a)  Plan of Operation.
     ------------------

The Company  intends to seek to acquire  assets or shares of an entity  actively
engaged in business which  generates  revenues,  in exchange for its securities.
The Company has no particular  acquisitions in mind and has not entered into any
negotiations  regarding  such an  acquisition.  None of the Company's  officers,
directors,  promoters or affiliates have engaged in any  preliminary  contact or
discussions  with  any   representative  of  any  other  company  regarding  the
possibility  of an  acquisition  or merger  between  the  Company and such other
company as of the date of this registration statement.

The Company's Board of Directors  intends to provide the Company's  shareholders
with  complete   disclosure   documentation   concerning  a  potential  business
opportunity  and the  structure of the proposed  business  combination  prior to
consummation  of the same,  which  disclosure is intended to be in the form of a
proxy statement.  While such disclosure may include audited financial statements
of such a target  entity,  there is no  assurance  that such  audited  financial
statements  will be  available.  The Board of  Directors  does  intend to obtain
certain  assurances of value of the target  entity assets prior to  consummating
such a transaction,  with further  assurances that an audited statement would be
provided  within  sixty  days  after  closing  of  such a  transaction.  Closing
documents  relative thereto will include  representations  that the value of the
assets conveyed to or otherwise so transferred  will not materially  differ from
the representations  included in such closing documents, or the transaction will
be voidable.

Because the Company  presently has nominal overhead or other material  financial
obligations,  management of the Company  believes that the Company's  short term
cash  requirements  can be satisfied by management  injecting  whatever  nominal
amounts of cash into the Company to cover these incidental  expenses.  There are
no assurances  whatsoever that any additional cash will be made available to the
Company through any means.

Item 7.  Financial Statements
-----------------------------

The audited financial  statements for Investment  Associates,  Inc. for the year
ending  September 30, 2002 are included as part of this Form 10KSB following the
signature page of this Form 10KSB.

Item 8.  Changes  in  and  Disagreements  With  Accountants  on  Accounting  and
         Financial Disclosure
--------------------------------------------------------------------------------

There were no changes or  disagreements  with Accountants or Auditors during the
fiscal year ending September 30, 2002.

                                    PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
             Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------------------------------------

<PAGE>
                                        6

Directors  are elected for  one-year  terms or until the next annual  meeting of
shareholders and until their successors are duly elected and qualified. Officers
continue in office at the pleasure of the Board of Directors.

The  Directors  and Officers of the Company as of the date of this report are as
follows:

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

David Ward                      41             President and Director
Robert Hemmerling               41             Secretary, Treasurer and Director

All  Directors of the Company will hold office until the next annual  meeting of
the shareholders and until successors have been elected and qualified.  Officers
of the Company are elected by the Board of Directors and hold office until their
death or until they resign or are removed from office.

There are no family relationships among the officers and directors.  There is no
arrangement  or  understanding  between the Company (or any of its  directors or
officers)  and any other  person  pursuant  to which such person was or is to be
selected as a director or officer.

Resumes
-------

David  Ward,  President  and a director of the  Company,  was  appointed  to his
positions  with the Company in July 1997. In addition to his positions  with the
Company,  since  July,  1992.  Mr.  Ward has been  self-employed  as a  business
consultant,   providing  management  consulting  services  for  various  private
companies  in the  construction  and service  industries.  Mr.  Ward  received a
Bachelors Degree in Commerce from the University of British Columbia in 1984 and
a Professional  Teaching  Certificate from the University of British Columbia in
1987.  He devotes  only such time as  necessary  to the business of the Company,
which time is expected to be nominal.

Robert  Hemmerling,  Secretary,  Treasurer and a director,  was appointed to his
positions  with the Company in July 1997. In addition to his positions  with the
Company, since September ,1996, Mr. Hemmerling has been employed with Strathmore
Minerals Corp., Kelowna, British Columbia, in the investor relations department.
Strathmore Minerals Corp. is engaged in the business of acquiring and developing
uranium properties. Prior, from January 1996 through August 1996, Mr. Hemmerling
was unemployed.  From January 1992 through December 1995, Mr.  Hemmerling was an
electrician with Concord Electric,  Kelowna,  British Columbia.  He devotes only
such time as necessary to the business of the Company, which time is expected to
be nominal.

Section  16(a) of the  Securities  Exchange Act of 1934  requires the  Company's
officers,  directors  and person who own more than 10% of the  Company's  Common
Stock to file reports of ownership and changes in ownership  with the Securities
and Exchange  Commission,  provided  that there were any changes to such persons
respective  stock holdings in the Company during the previous fiscal year. Based
upon  information  provided  to the  Company,  there have been no changes in the
securities holdings of any person during the past fiscal year.

Item 10.  Executive Compensation
--------------------------------

None of the Company's  officers and/or  directors  receive any  compensation for
their respective services rendered unto the Company, nor have they received such
compensation in the past. They all have agreed to act without compensation until
authorized by the Board of  Directors,  which is not expected to occur until the
Company has generated revenues from operations after consummation of a merger or
acquisition.  As of the date of this Registration Statement,  the Company has no
funds  available to pay directors.  Further,  none of the directors are accruing
any compensation pursuant to any agreement with the Company.

<PAGE>
                                        7

It is possible  that,  after the Company  successfully  consummates  a merger or
acquisition  with an  unaffiliated  entity,  that entity may desire to employ or
retain one or a number of members of the Company's  management  for the purposes
of  providing  services to the  surviving  entity,  or otherwise  provide  other
compensation to such persons.  However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of management will not
be  a  consideration  in  the  Company's  decision  to  undertake  any  proposed
transaction.  Each member of management  has agreed to disclose to the Company's
Board of Directors any discussions  concerning possible  compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and  further,  to  abstain  from  voting on such  transaction.  Therefore,  as a
practical  matter, if each member of the Company's Board of Directors is offered
compensation in any form from any prospective  merger or acquisition  candidate,
the  proposed  transaction  will  not be  approved  by the  Company's  Board  of
Directors  as a result of the  inability of the Board to  affirmatively  approve
such a transaction.

It is possible that persons  associated  with management may refer a prospective
merger or  acquisition  candidate  to the  Company.  In the  event  the  Company
consummates a transaction  with any entity referred by associates of management,
it is possible that such an associate will be compensated  for their referral in
the form of a finder's  fee. It is  anticipated  that this fee will be either in
the form of  restricted  common stock issued by the Company as part of the terms
of the  proposed  transaction,  or  will be in the  form of cash  consideration.
However,  if such  compensation  is in the form of cash,  such  payment  will be
tendered  by the  acquisition  or merger  candidate,  because  the  Company  has
insufficient  cash  available.  The  amount  of  such  finder's  fee  cannot  be
determined as of the date of this Registration Statement,  but is expected to be
comparable to  consideration  normally paid in like  transactions.  No member of
management  of the Company  will  receive any finders  fee,  either  directly or
indirectly,  as a result of their respective  efforts to implement the Company's
business plan outlined herein.

No retirement,  pension,  profit sharing,  stock option or insurance programs or
other  similar  programs have been adopted by the Company for the benefit of its
employees.

The Company  maintains  a policy  whereby  the  directors  of the Company may be
compensated  for  out of  pocket  expenses  incurred  by  each  of  them  in the
performance of their relevant duties. The Company did not reimburse any director
for such expenses during the fiscal year ended September 30, 2002.

There  are  no  bonus  or  incentive   plans  in  effect,   nor  are  there  any
understandings  in place  concerning  additional  compensation  to the Company's
officers.

<PAGE>
                                        8

<TABLE>
<CAPTION>
                                              SUMMARY COMPENSATION TABLE

                                                                              Long Term Compensation
                                                                       --------------------------------------

                                         Annual Compensation                    Awards            Payouts
                                 ------------------------------------- -------------------------- -----------
          (a)             (b)        (c)         (d)          (e)          (f)          (g)          (h)         (i)
------------------------ ------- ------------ ----------- ------------ ------------ ------------- ----------- ----------
                                                             Other                                               All
                                                            Annual     Restricted    Securities                 Other
  Name and Principle                                         Comp-        Stock      Underlying      LTIP       Comp-
       Position                    Salary       Bonus      ensation     Award(s)    Option/SARs    Payouts    ensation
                          Year       ($)         ($)          ($)          ($)          (#)          ($)         ($)

------------------------ ------- ------------ ----------- ------------ ------------ ------------- ----------- ----------
<S>                      <C>     <C>          <C>         <C>          <C>          <C>           <C>         <C>
David Ward,              2001/      $0.00       $0.00        $0.00        $0.00          0          $0.00       $0.00
President                2002
------------------------ ------- ------------ ----------- ------------ ------------ ------------- ----------- ----------
Robert Hemmerling,       2001/      $0.00       $0.00        $0.00        $0.00          0          $0.00       $0.00
Secretary, Treasurer     2002
and Director
------------------------ ------- ------------ ----------- ------------ ------------ ------------- ----------- ----------
</TABLE>

Item 11.  Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

The following table provides  information  regarding the beneficial ownership of
our common stock as of September 30, 2002 by:

     *    each person or entity known by us to be the  beneficial  owner of more
          than 5% of the outstanding shares of common stock,

     *    each of our directors and named executive officers, and

     *    all of our directors and executive officers as a group.

                 Name and Address            Amount and Nature          Percent
Title of Class   of Beneficial Owner         of Beneficial Owner        of Class
--------------   -------------------         -------------------        --------

Common Stock     David Ward (1)              304,000 common shares      30.4%
                 4531 Granville Avenue       Direct Ownership
                 Richmond, B. C.
                 V7C 1E3

Common Stock     Robert Hemmerling           304,000 common shares      30.4%
                 Suite 810                   Direct Ownership
                 1708 Dolphin Avenue
                 Kelowna, B.C.
                 V1Y 9S4

Common Stock     All Officers and Directors  608,000 common shares      60.8%
                 as a Group (2 persons)

(1)  Officer and Director.

The balance of our  outstanding  common stock is held by eight persons,  none of
whom hold 5% or more of our outstanding common stock.

Item 12.  Certain Relationships and Related Transactions
--------------------------------------------------------

The Company maintains a mailing address at an affiliate's address.  This address
is Suite 810, 1708 Dolphin Avenue,  Kelowna, B.C., Canada, V1Y 9S4. At this time
the Company has no need for an office.

The Company  does not maintain a checking  account and all expenses  incurred by
the Company are paid by an affiliate. For the fiscal year ended September, 2002,
the Company incurred $2,440 in legal expenses, $2,250 in accounting expenses and
$2100 in other  costs.  The  affiliate  does not  expect  to be  repaid  for the
expenses it pays on behalf of the Company.

There are no other  related party  transactions,  or any other  transactions  or
relationships required to be disclosed pursuant to Item 404 of Regulation S-B.

<PAGE>
                                        9

Item 13.  Exhibits, List and Reports on Form 8-K.
-------------------------------------------------

(A)  Exhibits

Exhibit
Number    Description
------    -----------

3.1       Articles of Incorporation  and amendments  thereto,  as filed with the
          Issuer's  Form 10-SB (file no.  000-28053)  filed on November 12, 1999
          incorporated herein by reference.

3.3       Bylaws as filed with the Issuer's  Form 10-SB (file no.  000-28053) on
          November 12, 1999 incorporated herein by reference.

4.1       Form of Lock Up  Agreement  Executed by the Issuer's  Shareholders  as
          filed  with the  Issuer's  Form  10-SB  (file  no.000-28053)  filed on
          November 12, 1999, incorporated herein by reference.

13.1      Form 10QSB for the Period ended  December 31, 2001,  filed on February
          12, 2002, incorporated herein by reference.

13.2      Form 10QSB for the Period ended March 31, 2002, filed on May 15, 2002,
          incorporated herein by reference.

13.3      Form 10QSB for the Period  ended  June 30,  2002,  filed on August 14,
          2002, incorporated herein by reference.

99.1      Certification of Disclosure by the Company's Chief Executive Officer

99.2      Certification of Disclosure by the Company's Chief Financial Officer


(B)  Reports on Form 8-K

None

                                   SIGNATURES

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

                                            INVESTMENT ASSOCIATES, INC.


Dated:  December 18, 2002          Per:     /s/David Ward
                                            -----------------------------------
                                            David Ward
                                            C.E.O., President and Director


<PAGE>
                                       10

In  accordance  with the Exchange  Act, this report has been signed below by the
following  person on behalf of the  Registrant  and in the capacities and on the
dates indicated.

                                   /s/David Ward
                                   --------------------------------------------
                                   David Ward, C.E.O., President and Director

                                   December 18, 2002
                                   --------------------------------------------
                                   Date


<PAGE>

PART II

ITEM 7 FINANCIAL STATEMENTS


                           INVESTMENT ASSOCIATES, INC.

                          Index to Financial Statements


                                                                          Page
                                                                          ----

Independent Auditors' Report ...........................................   F-2

Balance Sheet at September 30, 2002 ....................................   F-3

Statements of Operations for the years ended September 30, 2002 and 2001   F-4

Statement of Changes in Shareholders' Deficit for the period from
     October 1, 2000 through September 30, 2002 ........................   F-5

Statements of Cash Flows for the years ended September 30, 2002 and 2001   F-6

Notes to Financial Statements ..........................................   F-7


<PAGE>


                          Independent Auditors' Report

To the Board of Directors and Shareholders
Investment Associates, Inc.


We have audited the balance sheet of Investment Associates, Inc. as of September
30, 2002 and the related  statements  of  operations,  changes in  shareholders'
deficit and cash flows for the years ended  September  30, 2002 and 2001.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United  States.  Those  standards  require  that we plan and  perform the
audits to obtain reasonable assurance about whether the financial statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Investment Associates,  Inc. as
of September 30, 2002,  and the related  statements of operations and cash flows
for the years ended  September 30, 2002 and 2001 in conformity  with  accounting
principles generally accepted in the United States.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in Note 1 to the  financial
statements,  the Company has incurred recurring losses and has a working capital
deficiency as of September 30, 2002. These factors raise substantial doubt about
the  Company's  ability  to  continue  as a going  concern.  Management's  plans
regarding  those matters are also described in Note 1. The financial  statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.



/s/ Cordovano and Harvey, P.C
-----------------------------
Cordovano and Harvey, P.C
Denver, Colorado
December 19, 2002

                                       F-2
<PAGE>


                           INVESTMENT ASSOCIATES, INC.

                                  Balance Sheet
                               September 30, 2002

                                     Assets

Current assets:
    Cash .........................................................   $  4,108
                                                                     --------

                Total current assets .............................   $  4,108
                                                                     ========


                      Liabilities and Shareholders' Deficit

Current liabilities:
    Accounts payable and accrued liabilities .....................   $  1,500
    Indebtedness to related party (Note 2) .......................      2,720
    Loans payable (Note 3) .......................................     10,000
                                                                     --------

                Total current liabilities ........................     14,220
                                                                     --------

Shareholders' deficit:
    Common stock , $.001 par value.  25,000,000 shares authorized,
      1,000,000 shares issued and outstanding ....................      1,000
    Additional paid-in capital ...................................     20,001
    Retained deficit .............................................    (31,113)
                                                                     --------

                Total shareholders' deficit ......................    (10,112)
                                                                     --------

                                                                     $  4,108
                                                                     ========



                 See accompanying notes to financial statements

                                       F-3
<PAGE>
                           INVESTMENT ASSOCIATES, INC.

                            Statements of Operations

                                                    Years Ended September 30,
                                                   --------------------------
                                                     2002              2001
                                                   -----------    -----------

Costs and expenses:
    Selling, general and administrative expenses   $     6,790    $     7,618
                                                   -----------    -----------


               Loss before income taxes ........        (6,790)        (7,618)
                                                   -----------    -----------

Income tax provision (Note 4) ..................          --             --
                                                   -----------    -----------

               Net loss ........................   $    (6,790)   $    (7,618)
                                                   ===========    ===========

Basic and diluted loss per share ...............   $     (0.01)   $     (0.01)
                                                   ===========    ===========

Weighted average common shares outstanding .....     1,000,000      1,000,000
                                                   ===========    ===========


                 See accompanying notes to financial statements

                                       F-4
<PAGE>

<TABLE>
                           INVESTMENT ASSOCIATES, INC.

                 Statements of Changes in Shareholders' Deficit
<CAPTION>

                                                                    Common Stock        Additional
                                                                ---------------------   Paid-In      Retained
                                                                 Shares     Par Value    Capital     Deficit       Total
                                                                ---------   ---------   ---------   ---------    ---------
<S>                                                                 <C>        <C>        <C>        <C>         <C>
                                     BALANCE, OCTOBER 1, 2000   1,000,000   $   1,000   $  14,205   $ (16,705)   $  (1,500)

Third party expenses paid by an affiliate on
   behalf of the Company (Note 2) ...........................        --          --         4,898        --          4,898
Net loss for year ended September 30, 2001 ..................        --          --          --        (7,618)      (7,618)
                                                                ---------   ---------   ---------   ---------    ---------
                                  BALANCE, SEPTEMBER 30, 2001   1,000,000       1,000      19,103     (24,323)      (4,220)

Third party expenses paid by an affiliate on
   behalf of the Company (Note 2) ...........................        --          --           898        --            898
Net loss for year ended September 30, 2002 ..................        --          --          --        (6,790)      (6,790)
                                                                ---------   ---------   ---------   ---------    ---------
                                  BALANCE, SEPTEMBER 30, 2002   1,000,000   $   1,000   $  20,001   $ (31,113)   $ (10,112)
                                                                =========   =========   =========   =========    =========
</TABLE>

                 See accompanying notes to financial statements

                                       F-5
<PAGE>

<TABLE>
                           INVESTMENT ASSOCIATES, INC.

                            Statements of Cash Flows
<CAPTION>


                                                                                   Years Ended September 30,
                                                                                     --------------------
                                                                                       2002        2001
                                                                                     --------    --------
<S>                                                                                  <C>         <C>
Cash flows from operating activities:
      Net loss ...................................................................   $ (6,790)   $ (7,618)
         Changes in operating liabilities:
            Accounts payable and accrued liabilities .............................       --          --
                                                                                     --------    --------
                                             Net cash used in operating activities     (6,790)     (7,618)
                                                                                     --------    --------

Cash flows from financing activities:
      Proceeds from loan issuance by related party (Note 2) ......................       --         2,720
      Proceeds from loan issues by unrelated third party (Note 3) ................     10,000        --
      Third party expenses paid by affiliate on
         behalf of the Company (Note 2) ..........................................        898       4,898
                                                                                     --------    --------
                                         Net cash provided by financing activities     10,898       7,618
                                                                                     --------    --------

Net change in cash ...............................................................      4,108        --
Cash, beginning of period ........................................................       --          --
                                                                                     --------    --------

                                                               Cash, end of period   $  4,108    $   --
                                                                                     ========    ========


Supplemental  disclosure of cash flow  information:
      Cash paid during the period for:
         Interest ................................................................   $   --      $   --
                                                                                     ========    ========
                                                                                     ========    ========
         Income taxes ............................................................   $   --      $   --
                                                                                     ========    ========
</TABLE>
                 See accompanying notes to financial statements

                                       F-6
<PAGE>


                           INVESTMENT ASSOCIATES, INC.

                          Notes To Financial Statements


Note 1: Organization and summary of significant accounting policies

Organization

Investment Associates, Inc. (the "Company") was incorporated,  under the laws of
Nevada  on  July  18,  1997  to  engage  in any  lawful  corporate  undertaking,
including, but not limited to, selected mergers and acquisitions.  The Company's
business  plan  is to  evaluate,  structure  and  complete  a  merger  with,  or
acquisition of, a privately owned corporation.

Management  changed  the manner in which it  presents  the  Company's  operating
results and cash flows during the year ended  September 30, 2001.  Management no
longer  considers  the Company in the  development  stage as defined by the FASB
Statement of Standards No. 7,  "Accounting  and Reporting by  Development  Stage
Enterprises."  As  a  result,   cumulative   operating  results  and  cash  flow
information is no longer presented in the financial statements. This change does
not affect the Company's operating results or financial  position.  Accordingly,
no pro forma financial information is necessary. Historical information has been
revised in conformity with current practice.

The  accompanying  financial  statements  have been  prepared on a going concern
basis,  which  contemplates  the  realization of assets and the  satisfaction of
liabilities  in the  normal  course of  business.  As shown in the  accompanying
financial  statements,  the  Company  has a  working  capital  deficiency  as of
September 30, 2002 and recurring  losses since inception.  These factors,  among
others,  may  indicate  that the  Company  will be unable to continue as a going
concern for a reasonable period of time.

The  financial  statements  do  not  include  any  adjustments  relating  to the
recoverability  and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern. The Company's continuation
as a going concern is dependent upon continuing  capital  contributions  from an
affiliate to meet its  obligations  on a timely basis,  consummating  a business
combination with an operating company, and ultimately  attaining  profitability.
There is no assurance that the affiliate will continue to provide capital to the
Company or that the  Company can  identify a target  company  and  consummate  a
business  combination.  The financial  statements do not include any adjustments
that might result from the outcome of this uncertainty.

Summary of significant accounting policies

Cash and equivalents

For the  purposes of the  statement  of cash flows,  the Company  considers  all
highly  liquid debt  instruments  purchased  with an original  maturity of three
months  or  less  to be  cash  equivalents.  The  Company  had no  cash  or cash
equivalents  at  September  30,  2002.  The Company does not maintain a checking
account and expenses  incurred by the Company have  historically been paid by an
affiliate.

Fair value of financial instruments

The  Company's  financial  instruments  consist of accounts  payable and accrued
liabilities.  The carrying amounts of the current  liabilities  approximate fair
value due to the short-term maturity of the instruments.

                                       F-7
<PAGE>
                           INVESTMENT ASSOCIATES, INC.

                          Notes To Financial Statements

Use of estimates

The  preparation  of the  financial  statements  in  conformity  with  generally
accepted  accounting  principals  requires  management  to  make  estimates  and
assumptions  that affect  certain  reported  amounts of assets and  liabilities;
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements;  and the  reported  amounts  of  revenues  and  expenses  during the
reporting period. Accordingly, actual results could differ from those estimates.

Prospecting costs

The  Company  follows  the full cost  method  of  accounting  for ore  reserves.
Accordingly, all costs associated with acquisition, exploration, and development
of reserves,  including  directly  related  overhead costs, is capitalized.  All
other costs,  including  prospecting  costs, are expensed as incurred.  No costs
were capitalized as of September 30, 2002.

Income Taxes

The Company  reports income taxes in accordance  with SFAS No. 109,  "Accounting
for Income Taxes",  which requires the liability method in accounting for income
taxes. Deferred tax assets and liabilities arise from the difference between the
tax basis of an asset or  liability  and its  reported  amount on the  financial
statements.  Deferred tax amounts are determined by using the tax rates expected
to be in effect  when the taxes will  actually be paid or refunds  received,  as
provided under currently enacted law. Valuation  allowances are established when
necessary  to reduce the  deferred  tax  assets to the  amounts  expected  to be
realized.  Income  tax  expense or  benefit  is the tax  payable or  refundable,
respectively,  for the period plus or minus the change  during the period in the
deferred tax assets and liabilities.

Loss per common share

Basic  loss per  share is  computed  by  dividing  income  available  to  common
shareholders  (the  numerator) by the  weighted-average  number of common shares
(the  denominator) for the period.  The computation of diluted loss per share is
similar to basic loss per share,  except that the  denominator  is  increased to
include the number of additional  common shares that would have been outstanding
if potentially dilutive common shares had been issued.

At September 30, 2002,  there was no variance between basic and diluted loss per
share as there were no potentially dilutive common shares outstanding.

Stock-based compensation

SFAS No.  123,  "Accounting  for  Stock-Based  Compensation"  permits the use of
either a "fair value based method" or the  "intrinsic  value method"  defined in
Accounting  Principles  Board  Opinion  25,  "Accounting  for  Stock  Issued  to
Employees" (APB 25) to account for stock-based compensation arrangements.

Companies  that  elect to use the  method  provided  in APB 25 are  required  to
disclose pro forma net income and pro forma earnings per share  information that
would have resulted from the use of the fair value based method. The Company has
elected  to  continue  to  determine  the  value  of  stock-based   compensation
arrangements  with  employees  under  the  provisions  of APB 25.  No pro  forma
disclosures  have been included with the  accompanying  financial  statements as
there was no pro forma effect to the Company's net loss or net loss per share.

Note 2: Related party transactions

The Company maintains a mailing address at an affiliate's address. At this time,
the Company has no need for an office.

                                       F-8
<PAGE>

                           INVESTMENT ASSOCIATES, INC.

                          Notes To Financial Statements


During the years ended September 30, 2002 and 2001, the Company incurred $14,408
in expenses of which $898 was paid by the  affiliate.  The remaining  $14,220 is
included in loan payable and accrued  liabilities in the accompanying  financial
statements.

Since the Company's inception,  the affiliate has paid expenses on behalf of the
Company  totaling  $20,001.  The affiliate  does not expect to be repaid for the
expenses it pays on behalf of the  Company.  Accordingly,  payments  made by the
affiliate are classified as additional paid-in capital.

On July 13, 2001,  Strathmore  Minerals  Corp,  an affiliate  corporation  under
common control,  loaned the Company $2,720 to pay county,  staking and geologist
fees on uranium ore  reserves  in the State of Utah.  The loan does not carry an
interest rate and is due on demand.  The $2,720 is included in the  accompanying
financial   statements  as  prospecting  costs  with  an  offsetting  credit  to
indebtedness to related party.

Note 3: Loan payable

During the year ended, an unrelated third party made a non-interest bearing loan
to the Company for working capital. The loan is due on demand.

Note 4: Income taxes

A reconciliation of U.S. statutory federal income tax rate to the effective rate
is as follows:


                                                          For the Years Ended
                                                             September 30,
                                                          ---------------------
                                                             2002       2001
                                                          ---------   ---------
U.S. statutory federal rate ............................     15.00%      15.00%
State income tax rate, net of federal benefit ..........      3.94%       3.94%
Net operating loss (NOL) for which no tax
    benefit is currently available .....................    -18.94%     -18.94%
                                                          ---------   ---------
                                                              0.00%       0.00%
                                                          =========   =========

At September 30, 2002, deferred taxes consisted of a net tax asset of $5,591 due
to operating loss carryforwards of $31,113,  which was fully allowed for, in the
valuation  allowance of $5,591. The valuation allowance offsets the net deferred
tax asset for which  there is no  assurance  of  recovery.  The  changes  in the
valuation  allowance for the years ended September 30, 2002 and 2001 were $1,286
and $1,443,  respectively.  Net operating loss carryforwards will expire through
2022.

The valuation  allowance will be evaluated at the end of each year,  considering
positive and negative evidence about whether the asset will be realized. At that
time, the allowance will either be increased or reduced;  reduction could result
in the complete elimination of the allowance if positive evidence indicates that
the value of the deferred tax asset is no longer  impaired and the  allowance is
no longer required.

Should the Company undergo an ownership change, as defined in Section 382 of the
Internal  Revenue  Code,  the Company's  tax net  operating  loss  carryforwards
generated prior to the ownership change will be subject to an annual  limitation
which could reduce or defer the utilization of those losses.

                                       F-9