**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,
                2006





[
                ]
            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 ]





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


(check
      one): Yes [ X ] No [ ]





The
      Issuer's revenues for its fiscal year ended September 30, 2006 were
      $0.





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





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, 2006, 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_ _





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, 2006, 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, 2006, 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 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 Form 10-KSB.





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**





Our
      audited financial statements are stated in United States dollars (US$) and
      are
      prepared in accordance with United States Generally Accepted Accounting
      Principles.








The
      following audited financial statements are filed as part of this annual
      report:





Report
      of
      Independent Registered Public Accounting Firm





Balance
      Sheet as at September 30, 2006





Statements
      of Operations for the years ended September 30, 2006 and 2005





Statements
      of Changes in Shareholders’ Deficit for the period from October 1, 2001 through
      September 30, 2006





Statements
      of Cash Flows for the years ended September 30, 2006 and 2005





Notes
      to
      the Financial Statements


























**INVESTMENT
      ASSOCIATES, INC.**


(A
      development Stage Enterprise)





Financial
      Statements


**(Expressed
      in U.S. Dollars)**





(Audited)


September
      30, 2006




















**Index**








Report
      of
      Independent Registered Public Accounting Firm





Balance
      Sheets





Statements
      of Operations





Statements
      of Stockholders’ Deficit





Statements
      of Cash Flows





Notes
      to
      Financial Statements











Board
      of
      Directors


Investment
      Associates, Inc.


Kelowna,
      British Columbia


CANADA





**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





We
      have
      audited the accompanying balance sheets of Investment Associates, Inc. (a
      development stage enterprise) as of September 30, 2006 and 2005, and the related
      statements of operations, stockholders’ deficit and cash flows for the years
      then ended and for the period from July 18, 1997 (inception) through September
      30, 2006. These financial statements are the responsibility of the Company’s
      management. Our responsibility is to express an opinion on these financial
      statements based on our audit.





We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit 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 audit provides 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, 2006 and 2005, and the results of its operations, stockholders’
deficit and its cash flows for the year then ended and for the period from
      July
      18, 1997 (inception) through September 30, 2006 in conformity with accounting
      principles generally accepted in the United States of America.





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As discussed in Note 2 to the financial
      statements, the Company has suffered recurring losses and has an accumulated
      deficit at September 30, 2006. These factors raise substantial doubt about
      its
      ability to continue as a going concern. Management's plans in regard to these
      matters are also described in Note 2. The financial statements do not include
      any adjustments that might result from the outcome of this
      uncertainty.








/s/
      Williams & Webster, P.S.





Williams
      & Webster, P.S.


*Certified
      Public Accountants*


Spokane,
      Washington


December
      21, 2006













**INVESTMENT
                  ASSOCIATES, INC.****(A
                  Development Stage Enterprise)****BALANCE
                  SHEETS**September
                  30,2006
              
              2005**ASSETS**CURRENT
                  ASSETSCash
              
              $
              457
              
              $
              2,258**TOTAL
                  ASSETS**
              
              $
              457
              
              $
              2,258**LIABILITIES
                  AND STOCKHOLDERS' DEFICIT**CURRENT
                  LIABILITIESAccounts
                  payable and accrued liabilities
              
              $
              1,079
              
              $
              3,500Indebtedness
                  to related parties
              
              
              24,720
              
              
              11,720Loans
                  payable
              
              
              10,000
              
              
              10,000TOTAL
                  CURRENT LIABILITIES
              
              
              35,799
              
              
              25,220COMMITMENTS
                  AND CONTINGENCIES
              
              
              -
              
              
              -STOCKHOLDERS'
                  DEFICITCommon
                  stock, 25,000,000 shares authorized; $0.001par
                  value; 1,000,000 shares issued and outstanding
              
              
              1,000
              
              
              1,000Additional
                  paid-in capital
              
              
              29,283
              
              
              29,283Accumulated
                  deficit during development stage
              
              
              (65,625
              )
              
              (53,245
              )TOTAL
                  STOCKHOLDERS' DEFICIT
              
              
              (35,342
              )
              
              (22,962
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS' DEFICIT**
              
              $
              457
              
              $
              2,258




The
        accompanying notes are an integral part of these financial
        statements.









**INVESTMENT
                  ASSOCIATES, INC.****(A
                  Development Stage Enterprise)****STATEMENTS
                  OF OPERATIONS**From
                  Inception(July
                  18, 1997)Year
                  Ended
              
              throughSeptember
                  30,
              
              September
                  30,2006
              
              2005
              
              2006REVENUES
              
              $
              -
              
              $
              -
              
              $
              -EXPENSESSelling,
                  general and administrative expenses
              
              
              12,380
              
              
              8,335
              
              
              69,403Loss
                  on write-down of note receivable
              
              
              -
              
              
              -
              
              
              18,679Gain
                  on forgiveness of note payable
              
              
              -
              
              
              -
              
              
              (22,500
              )Interest
                  expense
              
              
              -
              
              
              -
              
              
              43TOTAL
                  EXPENSES
              
              
              12,380
              
              
              8,335
              
              
              65,625LOSS
                  FROM OPERATIONS
              
              
              (12,380
              )
              
              (8,335
              )
              
              (65,625
              )LOSS
                  BEFORE TAXES
              
              
              (12,380
              )
              
              (8,335
              )
              
              (65,625
              )INCOME
                  TAXES
              
              
              -
              
              
              -
              
              
              -NET
                  LOSS
              
              $
              (12,380
              )
              $
              (8,335
              )
              $
              (65,625
              )NET
                  LOSS PER COMMON SHARE,BASIC
                  AND DILUTED
              
              $
              (0.01
              )
              $
              (0.01
              )WEIGHTED
                  AVERAGE NUMBEROF
                  COMMON SHARES OUTSTANDING,BASIC
                  AND DILUTED
              
              
              1,000,000
              
              
              1,000,000






The
      accompanying notes are an integral part of these financial
      statements.







**INVESTMENT
                  ASSOCIATES, INC.****(A
                  Development Stage Enterprise)****STATEMENT
                  OF STOCKHOLDERS' DEFICIT**DeficitAccumulatedCommon
                  Stock
              
              Additional
              
              During
              
              TotalNumber
              
              
              
              Paid-In
              
              Development
              
              Stockholders'of
                  Shares
              
              Amount
              
              Capital
              
              Stage
              
              DeficitBalance,
                  July 18, 1997 (Inception)
              
              
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Common
                  stock issued in exchange for services
              
              
              1,000,000
              
              
              1,000
              
              
              -
              
              
              -
              
              
              1,000Net
                  loss for the year ended September 30, 1997
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,000
              )
              
              (1,000
              )Balance,
                  September 30, 1997
              
              
              1,000,000
              
              
              1,000
              
              
              -
              
              
              (1,000
              )
              
              -Net
                  loss for the year ended September 30, 1998
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Balance,
                  September 30, 1998
              
              
              1,000,000
              
              
              1,000
              
              
              -
              
              
              (1,000
              )
              
              -Expenses
                  paid by third partyon
                  behalf of the Company
              
              
              -
              
              
              -
              
              
              335
              
              
              -
              
              
              335Net
                  loss for the year ended September 30, 1999
              
              
              -
              
              
              -
              
              
              -
              
              
              (335
              )
              
              (335
              )Balance,
                  September 30, 1999
              
              
              1,000,000
              
              
              1,000
              
              
              335
              
              
              (1,335
              )
              
              -Expenses
                  paid by third partyon
                  behalf of the Company
              
              
              -
              
              
              -
              
              
              13,870
              
              
              -
              
              
              13,870Net
                  loss for the year ended September 30, 2000
              
              
              -
              
              
              -
              
              
              -
              
              
              (15,370
              )
              
              (15,370
              )Balance,
                  September 30, 2000
              
              
              1,000,000
              
              
              1,000
              
              
              14,205
              
              
              (16,705
              )
              
              (1,500
              )Third
                  party expenses paid by an affiliate onbehalf
                  of the company
              
              
              -
              
              
              -
              
              
              4,898
              
              
              -
              
              
              4,898Net
                  loss for the 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 onbehalf
                  of the company
              
              
              -
              
              
              -
              
              
              898
              
              
              -
              
              
              898Net
                  loss for the year ended September 30, 2002
              
              
              -
              
              
              -
              
              
              -
              
              
              (6,790
              )
              
              (6,790
              )Balance,
                  September 30, 2002
              
              
              1,000,000
              
              
              1,000
              
              
              20,001
              
              
              (31,113
              )
              
              (10,112
              )Third
                  party expenses paid by an affiliate onbehalf
                  of the company
              
              
              -
              
              
              -
              
              
              3,190
              
              
              -
              
              
              3,190Net
                  loss for the year ended September 30, 2003
              
              
              -
              
              
              -
              
              
              -
              
              
              (7,960
              )
              
              (7,960
              )Balance,
                  September 30, 2003
              
              
              1,000,000
              
              
              1,000
              
              
              23,191
              
              
              (39,073
              )
              
              (14,882
              )Working
                  capital contributions receivedfrom
                  an affiliate
              
              
              -
              
              
              -
              
              
              6,092
              
              
              -
              
              
              6,092Net
                  loss for the year ended September 30, 2004
              
              
              -
              
              
              -
              
              
              -
              
              
              (5,837
              )
              
              (5,837
              )Balance,
                  September 30, 2004
              
              
              1,000,000
              
              
              1,000
              
              
              29,283
              
              
              (44,910
              )
              
              (14,627
              )Net
                  loss for the year ended September 30, 2005
              
              
              -
              
              
              -
              
              
              -
              
              
              (8,335
              )
              
              (8,335
              )Balance,
                  September 30, 2005
              
              
              1,000,000
              
              
              1,000
              
              
              29,283
              
              
              (53,245
              )
              
              (22,962
              )Net
                  loss for the year ended September 30, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              (12,380
              )
              
              (12,380
              )Balance,
                  September 30, 2006
              
              
              1,000,000
              
              $
              1,000
              
              $
              29,283
              
              $
              (65,625
              )
              $
              (35,342
              )








The
        accompanying notes are an integral part of these financial
        statements.









**INVESTMENT
                  ASSOCIATES, INC.****(A
                  Development Stage Enterprise)****STATEMENTS
                  OF CASH FLOWS**From
                  Inception(July
                  18, 1997)Year
                  Ended
              
              throughSeptember
                  30,
              
              September
                  30,2006
              
              2005
              
              2006**CASH
                  FLOWS FROM OPERATING ACTIVITIES:**Net
                  loss
              
              $
              (12,380
              )
              $
              (8,335
              )
              $
              (65,625
              )Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:Loss
                  on write-down of note receivable
              
              
              -
              
              
              -
              
              
              18,679Gain
                  on forgiveness note payable
              
              
              -
              
              
              -
              
              
              (22,500
              )Increase
                  (decrease) in accounts payable and accrued liabilities
              
              
              (2,421
              )
              
              1,500
              
              
              1,079Net
                  cash used by operating activities
              
              
              (14,801
              )
              
              (6,835
              )
              
              (68,367
              )**CASH
                  FLOWS PROVIDED BY INVESTING ACTIVITIES:**Issuance
                  of note receivable
              
              
              -
              
              
              -
              
              
              (18,679
              )Net
                  cash used by investing activities
              
              
              -
              
              
              -
              
              
              (18,679
              )**CASH
                  FLOWS PROVIDED BY FINANCING ACTIVITIES:**Issuance
                  of common stock
              
              
              -
              
              
              -
              
              
              1,000Proceeds
                  from issuance of loan payable
              
              
              -
              
              
              -
              
              
              10,000Proceeds
                  from related party advances
              
              
              13,000
              
              
              9,000
              
              
              24,720Proceeds
                  from issuance of note payable
              
              
              -
              
              
              -
              
              
              22,500Capital
                  contributed by an affiliate
              
              
              -
              
              
              -
              
              
              29,283Net
                  cash provided by financing activities
              
              
              13,000
              
              
              9,000
              
              
              87,503**NET
                  INCREASE (DECREASE) IN CASH**
              
              
              (1,801
              )
              
              2,165
              
              
              457**CASH,
                  BEGINNING OF PERIOD**
              
              
              2,258
              
              
              93
              
              
              -**CASH,
                  END OF PERIOD**
              
              $
              457
              
              $
              2,258
              
              $
              457**SUPPLEMENTAL
                  CASH FLOW INFORMATION:**Interest
                  paid
              
              $
              -
              
              $
              -
              
              $
              43Income
                  taxes paid
              
              $
              -
              
              $
              -
              
              $
              -**NON-CASH
                  TRANSACTIONS:**Common
                  stock issued for services
              
              $
              -
              
              $
              -
              
              $
              1,000











The
      accompanying notes are an integral part of these financial
      statements.










**INVESTMENTS
      ASSOCIATES, INC.**


**(A
      Development Stage Enterprise)**


**NOTES
      TO THE FINANCIAL STATEMENTS**


**September
      30, 2006**








**NOTE
      1 - ORGANIZATION AND DESCRIPTION OF BUSINESS**





Investments
      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.





The
      Company has been in a development stage since its inception on July 18, 1997
      and
      has not realized any revenues from its planned operations. The Company’s year
      end is September ** 30.








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





This
      summary of significant accounting policies is presented to assist in
      understanding the Company’s financial statements. The financial statements and
      notes are representations of the Company’s management, which is responsible for
      their integrity and objectivity. These accounting policies conform to accounting
      principles generally accepted in the United States of America, and have been
      consistently applied in the preparation of the financial
      statements.





Accounting
      Method





The
      Company’s financial statements are prepared using the accrual basis of
      accounting in accordance with accounting principles generally accepted in the
      United States of America.





Basic
      and Diluted Net Loss Per Share


Loss
      per
      share was computed by dividing the net loss by the weighted average number
      of
      shares outstanding during the period. The weighted average number of shares
      was
      calculated by taking the number of shares outstanding and weighting them by
      the
      amount of time that they were outstanding. At September 30, 2006 and 2005,
      basic
      and diluted loss per share are the same, as there are no common stock
      equivalents outstanding.





Cash
      and Cash Equivalents


The
      Company considers all highly liquid investments with an original maturity of
      three months or less to be cash equivalents.





Concentration
      of Risk


The
      Company maintains its cash in primarily one business checking account, the
      funds
      of which are insured by the Federal Deposit Insurance Corporation.








12





**INVESTMENTS
      ASSOCIATES, INC.**


**(A
      Development Stage Enterprise)**


**NOTES
      TO THE FINANCIAL STATEMENTS**


**September
      30, 2006**








Compensated
      Absences


Currently,
      the Company has no employees; therefore, no liability has been recorded in
      the
      accompanying financial statements. The Company’s policy will be to recognize the
      costs of compensated absences when there are employees who earn such
      benefits.








Deferred
      Offering Costs


Costs
      related to common stock offerings are recorded initially as a deferred asset
      until the offering is successfully completed, at which time they are recorded
      as
      a reduction of gross proceeds in shareholders’ equity. If an offering is not
      successful, the costs are charged to operations at that time.





Derivative
      Instruments


The
      Financial Accounting Standards Board issued Statement of Financial Accounting
      Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging
      Activities,” as amended by SFAS No. 137, “Accounting for Derivative Instruments
      and Hedging Activities - Deferral of the Effective Date of FASB No. 133”, SFAS
      No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging
      Activities”, and SFAS No. 149, “Amendment of Statement 133 on Derivative
      Instruments and Hedging Activities”, which is effective for the Company as of
      January 1, 2001. These statements establish accounting and reporting standards
      for derivative instruments, including certain derivative instruments embedded
      in
      other contracts, and for hedging activities. They require that an entity
      recognize all derivatives as either assets or liabilities in the balance sheet
      and measure those instruments at fair value.





If
      certain conditions are met, a derivative may be specifically designated as
      a
      hedge, the objective of which is to match the timing of gain or loss recognition
      on the hedging derivative with the recognition of (i) the changes in the fair
      value of the hedged asset or liability that are attributable to the hedged
      risk
      or (ii) the earnings effect of the hedged forecasted transaction. For a
      derivative not designated as a hedging instrument, the gain or loss is
      recognized in income in the period of change. The Company has not entered into
      derivatives contracts to hedge existing risks or for speculative
      purposes.





For
      the
      years ended September 30, 2006 and 2005, the Company has not engaged in any
      transactions that would be considered derivative instrument or hedging
      activities.





Development
      Stage Activities


The
      Company has been in the development stage since its formation and has not
      realized any revenue from operations. It will be primarily engaged in
      evaluating, structuring, and completing a merger with, or acquisition of, a
      privately owned corporation.





12





**INVESTMENTS
      ASSOCIATES, INC.**


**(A
      Development Stage Enterprise)**


**NOTES
      TO THE FINANCIAL STATEMENTS**


**September
      30, 2006**








Fair
      Value of Financial Instruments


The
      Company's financial instruments as defined by Statement of Financial Accounting
      Standards


No.
      107,
      "Disclosures about Fair Value of Financial Instruments," may include cash,
      receivables,


advances,
      accounts payable and accrued expenses. All such instruments are accounted for
      on
      a historical cost basis, which, due to the short maturity of these financial
      instruments, approximates fair value at September 30, 2006 and
      2005.





Going
      Concern


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 no revenues, minimal cash, 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. Management’s plans are to
      engage in evaluating, structuring, and completing a merger with, or acquisition
      of, a privately owned corporation. These plans, if successful, will mitigate
      the
      factors which raise substantial doubt about the Company’s ability 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.





Provision
      for Taxes


Income
      taxes are provided based upon the liability method of accounting pursuant to
      Statement of Financial Accounting Standards No. 109, “Accounting for Income
      Taxes” (“SFAS No. 109”).


Under
      this approach, deferred income taxes are recorded to reflect the tax
      consequences in future years of differences between the tax basis of assets
      and
      liabilities and their financial reporting amounts at each year-end. A valuation
      allowance is recorded against the deferred tax asset if management does not
      believe the Company has met the “more likely than not” standard imposed by SFAS
      No. 109 to allow recognition of such an asset.








12





**INVESTMENTS
      ASSOCIATES, INC.**


**(A
      Development Stage Enterprise)**


**NOTES
      TO THE FINANCIAL STATEMENTS**


**September
      30, 2006**








Recent
      Accounting Pronouncements


In
      September 2006, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 157, “Fair Value Measurements,” (hereinafter
      "SFAS No. 157") which defines fair value, establishes a framework for measuring
      fair value in generally accepted accounting principles (GAAP), and expands
      disclosures about fair value measurements. Where applicable, SFAS No. 157
      simplifies and codifies related guidance within GAAP and does not require any
      new fair value measurements. SFAS No. 157 is effective for financial statements
      issued for fiscal years beginning after November 15, 2007, and interim periods
      within those fiscal years. Earlier adoption is encouraged. The Company does
      not
      expect the adoption of SFAS No. 157 to have a significant immediate effect
      on
      its financial position or results of operation





In
      June
      2006, the Financial Accounting Standards Board issued FASB Interpretation No.
      48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB
      Statement No. 109” (hereinafter "FIN 48"), which prescribes a recognition
      threshold and measurement attribute for the financial statement recognition
      and
      measurement of a tax position taken or expected to be taken in a tax return.
      FIN
      48 also provides guidance on de-recognition, classification, interest and
      penalties, accounting in interim periods, disclosure and transition. FIN 48
      is
      effective for fiscal years beginning after December 15, 2006. The Company does
      not expect the adoption of FIN 48 to have a material immediate impact on its
      financial reporting. The Company is currently evaluating the impact, if any,
      the
      adoption of FIN 48 will have on its disclosure requirements.





In
      March
      2006, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards No. 156, “Accounting for Servicing of Financial Assets—an
      amendment of FASB Statement No. 140.” This statement requires an entity to
      recognize a servicing asset or servicing liability each time it undertakes
      an
      obligation to service a financial asset by entering into a servicing contract
      in
      any of the following situations: a transfer of the servicer’s financial assets
      that meets the requirements for sale accounting; a transfer of the servicer’s
      financial assets to a qualifying special-purpose entity in a guaranteed mortgage
      securitization in which the transferor retains all of the resulting securities
      and classifies them as either available-for-sale securities or trading
      securities; or an acquisition or assumption of an obligation to service a
      financial asset that does not relate to financial assets of the servicer or
      its
      consolidated affiliates. The statement also requires all separately recognized
      servicing assets and servicing liabilities to be initially measured at fair
      value, if practicable, and permits an entity to choose either the amortization
      or fair value method for subsequent measurement of each class of servicing
      assets and liabilities. The statement further permits, at its initial adoption,
      a one-time reclassification of available for sale securities to trading
      securities by entities with recognized servicing rights, without calling into
      question the treatment of other available for sale securities under Statement
      115, provided that the available for sale securities are identified in some
      manner as offsetting the entity’s exposure to changes in fair value of servicing
      assets or servicing liabilities that a servicer elects to subsequently measure
      at fair value and requires separate presentation of servicing assets and
      servicing liabilities subsequently measured at fair value in the statement
      of
      financial position





12





**INVESTMENTS
      ASSOCIATES, INC.**


**(A
      Development Stage Enterprise)**


**NOTES
      TO THE FINANCIAL STATEMENTS**


**September
      30, 2006**








and
      additional disclosures for all separately recognized servicing assets and
      servicing liabilities. This statement is effective for fiscal years beginning
      after September 15, 2006, with early adoption permitted as of the beginning
      of
      an entity’s fiscal year. Management believes the adoption of this statement will
      have no immediate impact on the Company’s financial condition or results of
      operations.





In
      February 2006, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 155, “Accounting for Certain Hybrid Financial
      Instruments, an Amendment of FASB Standards No. 133 and 140” (hereinafter “SFAS
      No. 155”). This statement established the accounting for certain derivatives
      embedded in other instruments. It simplifies accounting for certain hybrid
      financial instruments by permitting fair value remeasurement for any hybrid
      instrument that contains an embedded derivative that otherwise would require
      bifurcation under SFAS No. 133 as well as eliminating a restriction on the
      passive derivative instruments that a qualifying special-purpose entity (“SPE”)
      may hold under SFAS No. 140. This statement allows a public entity to
      irrevocably elect to initially and subsequently measure a hybrid instrument
      that
      would be required to be separated into a host contract and derivative in its
      entirety at fair value (with changes in fair value recognized in earnings)
      so
      long as that instrument is not designated as a hedging instrument pursuant
      to
      the statement. SFAS No. 140 previously prohibited a qualifying special-purpose
      entity from holding a derivative financial instrument that pertains to a
      beneficial interest other than another derivative financial instrument. This
      statement is effective for fiscal years beginning after September 15, 2006,
      with
      early adoption permitted as of the beginning of an entity’s fiscal year.
      Management believes the adoption of this statement will have no immediate impact
      on the Company’s financial condition or results of operations.





Use
      of
      Estimates


The
      process of preparing financial statements in conformity with accounting
      principles generally accepted in the United States of America requires the
      use
      of estimates and assumptions regarding certain types of assets, liabilities,
      revenues, and expenses. Such estimates primarily relate to unsettled
      transactions and events as of the date of the financial statements. Accordingly,
      upon settlement, actual results may differ from estimated amounts.








12





**INVESTMENTS
      ASSOCIATES, INC.**


**(A
      Development Stage Enterprise)**


**NOTES
      TO THE FINANCIAL STATEMENTS**


**September
      30, 2006**








**NOTE
      3 - INCOME TAXES**





Years
                Ended September 30,2006
            
            2005Net
                operating loss carryforward****
            
            $
            65,625
            
            $
            53,245Deferred
                tax asset
            
            $
            22,300
            
            $
            18,103Deferred
                tax asset valuation allowance
            
            
            (22,300
            )
            
            (18,103
            )$
            -
            
            $
            -








At
      September 30, 2006, the Company had deferred tax assets before offsetting
      valuation allowance calculated at an expected rate of 34% of $22,300. At
      September 30, 2005, the Company had deferred tax assets before offsetting
      valuation allowance calculated at an expected rate of 34% of
      $18,103.





As
      management of the Company cannot determine that it is more likely than not
      that
      the Company will realize the benefit of the its deferred tax assets, a valuation
      allowance equal to the deferred tax assets was recorded at the Company’s
      year-end financial reporting dates.





At
      September 30, 2006 and 2005, the Company has net operating loss carryforwards
      of
      $65,625 and $53,245, respectively, which will expire through the year 2026.
      The
      change in valuation allowance from September 30, 2005 to September 30, 2006
      is
      $4,197. This
      change is primarily due to the change in the Company’s net operating loss
      carryforwards.





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.








12





**INVESTMENTS
      ASSOCIATES, INC.**


**(A
      Development Stage Enterprise)**


**NOTES
      TO THE FINANCIAL STATEMENTS**


**September
      30, 2006**








**NOTE
      4 - LOAN PAYABLE**





During
      the year ended September 30, 2002, an unrelated third party made an unsecured,
      non-interest bearing loan to the Company for working capital. The loan remained
      unpaid at September 30, 2006 and is due on demand.








**NOTE
      5 - RELATED PARTY TRANSACTIONS**





The
      Company maintains a mailing address at the offices of RD Capital, Inc. (“RD
      Capital”), an affiliate under common control. At this time, the Company has no
      need for an office.





RD
      Capital has assumed responsibility for funding the Company’s limited operations.
      The Company accounts for such proceeds as contributed capital or as indebtedness
      to a related party. During the year ended September 30, 2004, RD Capital made
      contributions to the Company totaling $6,092. No capital contributions were
      made
      during the years ended September 30, 2006 and September 30, 2005. Through
      September 30, 2006, RD Capital has contributed a total of $29,283 on behalf
      of
      the stockholders, which is included in the accompanying financial statements
      as
“additional paid-in capital”. RD Capital does not expect to be repaid for its
      capital contributions to the Company.





During
      the year ended September 30, 2001, Strathmore Minerals Corp, an affiliate
      corporation under common control, loaned $2,720 to the Company. During the
      year
      ended September 30, 2006, RD Capital loaned $13,000 to the Company. This
      indebtedness is non-interest bearing and not collateralized. At September 30,
      2006, the Company owed $24,720 to related parties.








**NOTE
      6 - COMMON STOCK**





During
      the year ended September 30, 1997, the Company issued 1,000,000 shares of common
      stock in exchange for services. There have been no issuances of the Company’s
      common stock after September 30, 1997.














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





There
      were no other changes or disagreements with Accountants or Auditors during
      the
      fiscal year ended September 30, 2006 except as noted below.





We
      have
      engaged new auditors as our independent accountants to audit our financial
      statements. The former auditors, Cordovano & Honeck, LLP resigned as our
      auditors on December 5, 2005 and on December 5, 2005, our board of directors
      approved the change of independent accountants and appointed Williams &
Webster, P.S. as our independent accountants.





During
      the years ended September 30, 2003 and September 30, 2004, there were no
      disagreements with our former accountants, Cordovano & Honeck, LLP, on any
      matter of accounting principles or practices, financial statement disclosure,
      or
      auditing scope or procedure.





During
      the years ended September 30, 2003 and September 30, 2004, our former
      accountant’s report on our financial statements contained the qualification that
      our financial statements were prepared assuming that we will continue as a
      going
      concern. Given that we have suffered losses from operations and the satisfaction
      of liabilities and commitments are dependent upon our ability to meet our future
      financing requirements and the success of its future operations, there is
      substantial doubt about our ability to continue as a going concern. Our
      financial statements do not include any adjustments that might result from
      the
      outcome of this uncertainty. Other than the qualification regarding uncertainty
      of our ability to continue as a going concern, our former accountant’s report on
      our financial statements did not contain an adverse opinion, a disclaimer of
      opinion or qualification or modification as to uncertainty, audit scope or
      accounting principles.





We
      have
      engaged the firm of Williams & Webster, P.S. as of December 5, 2005. During
      the years ended September 30, 2003 and September 30, 2004, Williams &
Webster, P.S. was not consulted on any matter relating to accounting principles
      to a specific completed or proposed transaction or the type of audit opinion
      that might be rendered on our financial statements. During the years ended
      September 30, 2003 and September 30, 2004,Williams & Webster, P.S. did not
      provide any written or oral advice that was an important factor considered
      by it
      in reaching any decision as to accounting, auditing or financial reporting
      issues.





**Item
      8A. Controls and Procedures**





**(a)**  **Evaluation
      of disclosure controls and procedures.**





As
      required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended
      (the "Exchange Act"), the Company carried out an evaluation under the
      supervision and with the participation of the Company's management, including
      the President and Chief Executive Officer and the Chief Financial Officer,
      of
      the effectiveness of the Company's disclosure controls and procedures as of
      September 30, 2006. In designing and evaluating the Company's disclosure
      controls and procedures, the Company and its management recognize that there
      are
      inherent limitations to the effectiveness of any system of disclosure controls
      and procedures, including the possibility of human error and the circumvention
      or overriding of the controls and procedures. Accordingly, even effective
      disclosure controls and procedures can only provide reasonable assurance of
      achieving their desired control objectives. Additionally, in evaluating and
      implementing possible controls and procedures, the Company's management was
      required to apply its reasonable judgment. Furthermore, in the course of this
      evaluation, management considered certain internal control areas, in which
      we
      have made and are continuing to make changes to improve and enhance controls.
      Based upon the required evaluation, the Chief Executive Officer and the Chief
      Financial Officer concluded that as of September 30, 2006, the Company's
      disclosure controls and procedures were effective (at the "reasonable assurance"
      level mentioned above) to ensure that information required to be disclosed
      by
      the Company in the reports it files or submits under the Exchange Act is
      recorded, processed, summarized and reported within the time periods specified
      in the Securities and Exchange Commission's rules and forms.





From
      time-to-time, the Company and its management have conducted and will continue
      to
      conduct further reviews and, from time to time put in place additional
      documentation, of the Company's disclosure controls and procedures, as well
      as
      its internal control over financial reporting. The Company may from time to
      time
      make changes aimed at enhancing their effectiveness, as well as changes aimed
      at
      ensuring that the Company's systems evolve with, and meet the needs of, the
      Company's business. These changes may include changes necessary or desirable
      to
      address recommendations of the Company's management, its counsel and/or its
      independent auditors, including any recommendations of its independent auditors
      arising out of their audits and reviews of the Company's financial statements.
      These changes may include changes to the Company's own systems, as well as
      to
      the systems of businesses that the Company has acquired or that the Company
      may
      acquire in the future and will, if made, be intended to enhance the
      effectiveness of the Company's controls and procedures. The Company is also
      continually striving to improve its management and operational efficiency and
      the Company expects that its efforts in that regard will from time to time
      directly or indirectly affect the Company's disclosure controls and procedures,
      as well as the Company's internal control over financial reporting.





**(b)**  **Changes
      in internal controls.**





There
      were no significant changes in the Company's internal controls or other factors
      that could significantly affect the Company's internal controls subsequent
      to
      the date of their evaluation.





**PART
      III**





**Item
      9. Directors, Executive Officers, Promoters and Control
      Persons;**


**Compliance
      with Section 16(a) of the Exchange Act.**





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**Steven
                N. Khan
            50
            President
                and DirectorRobert
                Hemmerling
            44
            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.





*Business
      Experience*





The
      following is a brief account of the education and business experience during
      at
      least the past five years of each director, executive officer and key employee,
      indicating the principal occupation during that period, and the name and
      principal business of the organization in which such occupation and employment
      were carried out.








Resumes





Steven
      N.
      Khan, President and a director of the Company, was appointed to his positions
      with the Company on February 24, 2004. Mr. Steven Khan currently consults for
      private and public early stage growth companies in all sectors of industry.
      He
      spent close to twenty years in all aspects of the investment industry, including
      retail, institutional, corporate finance, capital markets, and investment
      banking areas. Mr. Khan has held senior management roles including serving
      as
      President, Chief Executive Officer, and Chairman of a number of regional and
      national Canadian investment brokerage houses. Mr. Khan is currently a
      consultant or officer of a number of private and public companies and has raised
      funds for a variety of companies, with a focus on the natural resource
      sector.





Mr.
      Khan
      completed his Bachelor of Science and Master of Business degrees at the
      University of British Columbia before entering the investment industry. He
      is a
      Fellow of the Canadian Securities Institute, holds a Chartered Financial Analyst
      designation, and is a member of the CFA Institute. 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.





*Family
      Relationships*





There
      are
      no family relationships among our directors and officers.





*Board
      and Committee Meetings*





The
      Board
      of Directors of the Company held no formal meetings during the year ended
      September 30, 2006. All proceedings of the Board of Directors were conducted
      by
      resolutions consented to in writing by all the directors and filed with the
      minutes of the proceedings of the directors. Such resolutions consented to
      in
      writing by the directors entitled to vote on that resolution at a meeting of
      the
      directors are, according to the Nevada General Corporate Law and the By-laws
      of
      the Company, as valid and effective as if they had been passed at a meeting
      of
      the directors duly called and held.





For
      the
      year ended September 30, 2006 our only standing committee of the Board of
      Directors was our audit committee.








*Audit
      Committee*





Currently
      our audit committee consists of our entire Board of Directors. We currently
      do
      not have nominating, compensation committees or committees performing similar
      functions. There has not been any defined policy or procedure requirements
      for
      shareholders to submit recommendations or nomination for directors.





During
      fiscal 2005/2006, there were informal meetings held by this Committee. The
      business of the Audit Committee was conducted by resolutions consented to in
      writing by all the members and filed with the minutes of the proceedings of
      the
      Audit Committee.





*Audit
      Committee Financial Expert*





Our
      board
      of directors has determined that it does not have a member of its audit
      committee that qualifies as an "audit committee financial expert" as defined
      in
      Item 401(e) of Regulation S-B, and is "independent" as the term is used in
      Item
      7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as
      amended.





We
      believe that the members of our board of directors are collectively capable
      of
      analyzing and evaluating our financial statements and understanding internal
      controls and procedures for financial reporting. In addition, we believe that
      retaining an independent director who would qualify as an "audit committee
      financial expert" would be overly costly and burdensome and is not warranted
      in
      our circumstances given the early stages of our development and the fact that
      we
      have not generated any material revenues to date.





*Involvement
      in Certain Legal Proceedings*





Our
      directors, executive officers and control persons have not been involved in
      any
      of the following events during the past five years:





1.
            any
                bankruptcy petition filed by or against any business of which such
                person
                was a general partner or executive officer either at the time of
                the
                bankruptcy or within two years prior to that
                time;





2.
            any
                conviction in a criminal proceeding or being subject to a pending
                criminal
                proceeding (excluding traffic violations and other minor
                offences);





3.
            being
                subject to any order, judgment, or decree, not subsequently reversed,
                suspended or vacated, of any court of competent jurisdiction, permanently
                or temporarily enjoining, barring, suspending or otherwise limiting
                his
                involvement in any type of business, securities or banking activities;
                or





4.
            being
                found by a court of competent jurisdiction (in a civil action), the
                Commission or the Commodity Futures Trading Commission to have violated
                a
                federal or state securities or commodities law, and the judgment
                has not
                been reversed, suspended, or
                vacated.





*Section
      16(a) Beneficial Ownership Compliance*





Section
      16(a) of the Securities Exchange Act requires our executive officers and
      directors, and persons who own more than 10% of our common stock, to file
      reports regarding ownership of, and transactions in, our securities with the
      Securities and Exchange Commission and to provide us with copies of those
      filings. Based solely on our review of the copies of such forms received by
      us,
      or written representations from certain reporting persons, we believe that
      during fiscal year ended September 30, 2006, all filing requirements applicable
      to its officers, directors and greater than 10% percent beneficial owners were
      complied with.








*Code
      of Ethics*





Effective
      December 1, 2005, our company's board of directors adopted a Code of Business
      Conduct and Ethics that applies to, among other persons, our company's President
      and Secretary (being our principal executive officer, principal financial
      officer and principal accounting officer), as well as persons performing similar
      functions. As adopted, our Code of Business Conduct and Ethics sets forth
      written standards that are designed to deter wrongdoing and to
      promote:





1.
            honest
                and ethical conduct, including the ethical handling of actual or
                apparent
                conflicts of interest between personal and professional
                relationships;





2.
            full,
                fair, accurate, timely, and understandable disclosure in reports
                and
                documents that we file with, or submit to, the Securities and Exchange
                Commission and in other public communications made by
                us;





3.
            compliance
                with applicable governmental laws, rules and
                regulations;





4.
            the
                prompt internal reporting of violations of the Code of Business Conduct
                and Ethics to an appropriate person or persons identified in the
                Code of
                Business Conduct and Ethics; and





5.
            accountability
                for adherence to the Code of Business Conduct and
                Ethics.





Our
      Code
      of Business Conduct and Ethics requires, among other things, that all of our
      company's Senior Officers commit to timely, accurate and consistent disclosure
      of information; that they maintain confidential information; and that they
      act
      with honesty and integrity.





In
      addition, our Code of Business Conduct and Ethics emphasizes that all employees,
      and particularly Senior Officers, have a responsibility for maintaining
      financial integrity within our company, consistent with generally accepted
      accounting principles, and federal and state securities laws. Any Senior Officer
      who becomes aware of any incidents involving financial or accounting
      manipulation or other irregularities, whether by witnessing the incident or
      being told of it, must report it to our company. Any failure to report such
      inappropriate or irregular conduct of others is to be treated as a severe
      disciplinary matter. It is against our company policy to retaliate against
      any
      individual who reports in good faith the violation or potential violation of
      our
      company's Code of Business Conduct and Ethics by another.





Our
      Code
      of Business Conduct and Ethics was filed with the Securities and Exchange
      Commission as Exhibit 14.1 to our annual report for the year ended September
      30,
      2005. We will provide a copy of the Code of Business Conduct and Ethics to
      any
      person without charge, upon request. Requests can be sent to: Investment
      Associates Inc., Suite 810, 1708 Dolphin Avenue, Kelowna, British Columbia,
      V1Y
      9S4.





**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 Form 10-KSB, 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.








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 Form 10-KSB, 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, 2006.





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





**SUMMARY
                COMPENSATION TABLE**Long
                Term CompensationAnnual
                Compensation
            Awards
            Payouts(a)
            (b)
            (c)
            (d)
            (e)
            (f)
            (g)
            (h)
            (i)Name
                and Principle Position
            Year
            Salary
              ($)
            Bonus
              ($)
            Other
              Annual
                Comp-
              ensation
              ($)
            Restricted
              Stock
              Award(s)
              ($)
            Securities
              Underlying
              Option/SARs
              (#)
            LTIP
              Payouts
              ($)
            All
              Other
              Comp-
              ensation
              ($)Robert
                Hemmerling,
              Secretary,
                Treasurer and Director
            2005/
              2006
            $0.00
              $0.00
            $0.00
              $0.00
            $0.00
              $0.00
            $0.00
              $0.00
            0
              0
            $0.00
              $0.00
            $0.00
              $0.00Steven
                N. Khan,
              President
                and Director
            2005/
              2006
            $0.00
              $0.00
            $0.00
              $0.00
            $0.00
              $0.00
            $0.00
              $0.00
            0
              0
            $0.00
              $0.00
            $0.00
              $0.00








*Long-Term
      Incentive Plans*





There
      are
      no arrangements or plans in which we provide pension, retirement or similar
      benefits for directors or executive officers, except that our directors and
      executive officers may receive stock options at the discretion of our board
      of
      directors. We do not have any material bonus or profit sharing plans pursuant
      to
      which cash or non-cash compensation is or may be paid to our directors or
      executive officers, except that stock options may be granted at the discretion
      of our board of directors.





We
      have
      no plans or arrangements in respect of remuneration received or that may be
      received by our executive officers to compensate such officers in the event
      of
      termination of employment (as a result of resignation, retirement, change of
      control) or a change of responsibilities following a change of control, where
      the value of such compensation exceeds $60,000 per executive
      officer.





*Compensation
      Of Directors*





We
      reimburse our directors for expenses incurred in connection with attending
      board
      meetings. We did not pay director's fees or other cash compensation for services
      rendered as a director in the year ended September 30, 2006.





We
      have
      no formal plan for compensating our directors for their service in their
      capacity as directors, although such directors are expected in the future to
      receive stock options to purchase common shares as awarded by our board of
      directors or (as to future stock options) a compensation committee which may
      be
      established. Directors are entitled to reimbursement for reasonable travel
      and
      other out-of-pocket expenses incurred in connection with attendance at meetings
      of our board of directors. Our board of directors may award special remuneration
      to any director undertaking any special services on our behalf other than
      services ordinarily required of a director. No director received and/or accrued
      any compensation for their services as a director, including committee
      participation and/or special assignments.





*Employment
      Contracts*





There
      are
      no arrangements or plans in which we provide pension, retirement or similar
      benefits for directors or executive officers. Our directors and executive
      officers may receive stock options at the discretion of our board of directors
      in the future. We do not have any material bonus or profit sharing plans
      pursuant to which cash or non-cash compensation is or may be paid to our
      directors or executive officers, except that stock options may be granted at
      the
      discretion of our board of directors.





We
      have
      no plans or arrangements in respect of remuneration received or that may be
      received by our executive officers to compensate such officers in the event
      of
      termination of employment (as a result of resignation, retirement, change of
      control) or a change of responsibilities following a change of control, where
      the value of such compensation exceeds $60,000 per executive
      officer.








**Item
      11. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters**





The
      following table provides information regarding the beneficial ownership of
      our
      common stock as of September 30, 2006 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.





**Title
                of Class**
            **Name
                and Address**
              **of
                Beneficial Owner**
            **Amount
                and Nature**
              **of
                Beneficial Owner**
            **Percent**
              **of
                Class**Common
                Stock
            David
                Ward
              4531
                Granville Avenue
              Richmond,
                B. C.
              V7C
                1E3
            304,000
                common shares
              Direct
                Ownership
            30.4%Common
                Stock
            Robert
                Hemmerling (1)
              Suite
                810
              1708
                Dolphin Avenue
              Kelowna,
                B.C.
              V1Y
                9S4
            304,000
                common shares
              Direct
                Ownership
            30.4%Common
                Stock
            Steven
                N. Khan (1)
              Director
              Suite
                810
              1708
                Dolphin Avenue
              Kelowna,
                B.C.
              V1Y
                9S4
            No
                Shares Held
            0%Common
                Stock
            All
                Officers and Directors
              as
                a Group (2 persons)
            304,000
                common shares
            30.4%





(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.





*Changes
      in Control*





We
      are
      unaware of any contract or other arrangement the operation of which may at
      a
      subsequent date result in a change in control of our company.





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





There
      have been no related party transactions or any other transactions or
      relationships required to be disclosed pursuant to item 404 of Regulation
      S-B.








**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, 2005, filed on February 14,
                2006,
                incorporated herein by reference.13.2
            Form
                10QSB for the Period ended March 31, 2006, filed on May 12, 2006,
                incorporated herein by reference.13.3
            Form
                10QSB for the Period ended June 30, 2006, filed on August 14, 2006,
                incorporated herein by reference.31.1
            Section
                302 Certification of Chief Executive Officer31.2
            Section
                302 Certification of Chief Financial Officer32
            Section
                906 Certification





(B)  Reports
      on Form 8-K





None





**Item
      14. Principal Accountant Fees and Services**





*Audit
      Fees*





For
      the
      period ended September 30, 2006, the aggregate fees billed by Williams &
Webster, P.S. for professional services rendered for the audit of our annual
      financial statements included in our annual report on Form 10-KSB were $5,954.
      For the fiscal year ended September 30, 2005, the aggregate fees billed by
      Williams & Webster, P.S. for professional services rendered for the audit of
      our annual financial statements included in our annual report on Form 10-KSB
      were $2,500.








*Audit
      Related Fees*





For
      the
      period ended September 30, 2006, the aggregate fees billed for assurance and
      related services by Williams & Webster, P.S. relating to the performance of
      the audit of our financial statements which are not reported under the caption
      "Audit Fees" above, was $0. For the fiscal year ended September 30, 2005, no
      aggregate fees were billed for assurance and related services by Williams &
Webster, P.S. relating to the performance of the audit of our financial
      statements which are not reported under the caption "Audit Fees"
      above.





*Tax
      Fees*





For
      the
      period ended September 30, 2006, the aggregate fees billed by Williams &
Webster, P.S. for other non-audit professional services, other than those
      services listed above, totalled $0. For the fiscal year ended September 30,
      2005, no aggregate fees were billed by Williams & Webster, P.S. for other
      non-audit professional services, other than those services listed
      above.





We
      do not
      use Williams & Webster, P.S. for financial information system design and
      implementation. These services, which include designing or implementing a system
      that aggregates source data underlying the financial statements or generates
      information that is significant to our financial statements, are provided
      internally or by other service providers. We do not engage Williams &
Webster, P.S. to provide compliance outsourcing services.





Effective
      May 6, 2003, the Securities and Exchange Commission adopted rules that require
      that before Williams & Webster, P.S. is engaged by us to render any auditing
      or permitted non-audit related service, the engagement be:





-
            approved
                by our audit committee (which consists of our entire board of directors);
                or





-
            entered
                into pursuant to pre-approval policies and procedures established
                by the
                board of directors, provided the policies and procedures are detailed
                as
                to the particular service, the board of directors is informed of
                each
                service, and such policies and procedures do not include delegation
                of the
                board of directors' responsibilities to
                management.





The
      board
      of directors pre-approves all services provided by our independent auditors.
      All
      of the above services and fees were reviewed and approved by the board of
      directors either before or after the respective services were
      rendered.





The
      board
      of directors has considered the nature and amount of fees billed by Williams
      & Webster, P.S. and believes that the provision of services for activities
      unrelated to the audit is compatible with maintaining Williams & Webster,
      P.S.’s independence.








**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 21,
      2006 Per:  /s/Steven
      N. Khan


Steven
      N.
      Khan,


C.E.O.,
      President and Director





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/Steven N. Khan


Steven N. Khan,


C.E.O., President and Director





December 21, 2006


Date