SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the
                      Securities Exchange Act of 1934

[ ] Transitional Report Under Section 13 or 15(d) of the
                      Securities Exchange Act of 1934

                  For the fiscal year ended September 30, 2000

                          Commission File No. 000-28053

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

          Nevada                                              98-0204280
          ------                                              ----------
(State or other jurisdiction of                            (I.R.S. Employer
Incorporation or Organization)                           Identification Number)

                              104-1456 St. Paul St.
                    Kelowna, British Columbia, Canada V1Y 2E6
                                 (250) 868-8177
                                 --------------
        (Address, including zip code and telephone number, including area
                    code, of registrant's executive offices)

                         1460 Pandosy Street, Suite 106
                        Kelowna, British Columbia V1Y 1P3
                        ---------------------------------
                         (Former Address of Registrant)

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

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

                                  Common Stock
                                  ------------
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act of 1934  during the  preceding  12
months (or for such  shorter  period that the Company was  required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.

                              Yes   X     No
                                  -----      -----

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will be contained,  to the
best of registrant'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

                          (Continued on Following Page)


<PAGE>



Issuer's revenues for its most recent fiscal year: $ -0-

     State  the   aggregate   market   value  of  the   voting   stock  held  by
non-affiliates,  computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days: As of September 30, 2000: $0.

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practicable date: As of September 30, 2000 there were
1,000,000 shares of the Company's common stock issued and outstanding.

Documents Incorporated by Reference: None

                 This Form 10-KSB consists of Twenty Nine Pages.
                 Exhibit Index is Located at Page Twenty Eight.



                                                                               2


<PAGE>



                                TABLE OF CONTENTS

                            FORM 10-KSB ANNUAL REPORT

                           INVESTMENT ASSOCIATES, INC.

                                                                           PAGE
                                                                           ----

Facing Page
Index

PART I

Item 1.    Description of Business..................................         4
Item 2.    Description of Property..................................         5
Item 3.    Legal Proceedings........................................         5
Item 4.    Submission of Matters to a Vote of
               Security Holders.....................................         5

PART II

Item 5.    Market for the Registrant's Common Equity
               and Related Stockholder Matters......................         6
Item 6.    Management's Discussion and Analysis of
               Financial Condition and Results of
               Operations...........................................         6
Item 7     Financial Statements.....................................         7
Item 8.    Changes in and Disagreements on Accounting
               and Financial Disclosure.............................        22


PART III

Item 9.    Directors, Executive Officers, Promoters
               and Control Persons, Compliance with
               Section 16(a) of the Exchange Act....................        22
Item 10.   Executive Compensation...................................        23
Item 11.   Security Ownership of Certain Beneficial
               Owners and Management................................        24
Item 12.   Certain Relationships and Related
               Transactions.........................................        25

PART IV

Item 13.   Exhibits and Reports of Form 8-K.........................        25


SIGNATURES..........................................................        27



                                                                               3


<PAGE>



                                     PART I

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.

     During the fiscal  year ended  September  30,  2000,  the  Company  filed a
registration statement with the Securities and Exchange Commission on Form 10-SB
pursuant to the rules and regulations included under the Securities Exchange Act
of 1934,  as amended,  wherein the Company  caused to be  registered  its common
stock.  This  registration  statement  became  effective on or about January 12,
2000. The purpose of the registration statement was management's belief that the
primary  attraction of the Company as a merger  partner or  acquisition  vehicle
will be its status as a public company.  Any business combination or transaction
will likely result in a significant  issuance of shares and substantial dilution
to present stockholders of the Company.

                                                                               4


<PAGE>




     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, 2000,  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 1456 St. Paul Street,
Suite 104, Kelowna, British Columbia,  Canada V1Y 2E6. This space is provided to
the  Company on a rent free basis by Devinder  Randhawa,  a  shareholder  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

     None

                                                                               5


<PAGE>



                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER 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,  2000,  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
OF 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

                                                                               6


<PAGE>



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

     (a) Plan of Operation.

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

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

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

ITEM 7.  FINANCIAL STATEMENTS


                                                                               7


<PAGE>











                           INVESTMENT ASSOCIATES, INC.
                          (A DEVELOPMENT STAGE COMPANY)


                              FINANCIAL STATEMENTS

                                      With

                          INDEPENDENT AUDITORS' REPORT

                               September 30, 2000

                                  Prepared By:

                           Cordovano and Harvey, P.C.
                           --------------------------
                          Certified Public Accountants
                                Denver, Colorado

                                                                               8
<PAGE>


                          INVESTMENT ASSOCIATES, INC.
                         (A Development Stage Company)


                         Index to Financial Statements

PART I - FINANCIAL INFORMATION


     Item 1. Financial Statements*



                                                                           Page
                                                                           ----

Independent auditor's report............................................    F-2

Balance sheet at September 30, 2000.....................................    F-4

Statements of operations for the years ended September 30, 2000 and 1999,
     and from July 18, 1997 (inception) through September 30, 2000 .....    F-5

Statement of shareholders' equity, from July 18, 1997 (inception)
     through September 30, 2000.........................................    F-6

Statements of cash flows for the years ended September 30, 2000 and 1999,
     and from July 18, 1997 (inception) through September 30, 2000 .....    F-7

Notes to financial statements...........................................    F-8




                                                                               9

<PAGE>





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

                          Independent Auditors' Report

We have audited the balance sheet of Investment Associates,  Inc. (a development
stage  company)  as  of  September  30,  2000  and  the  related  statements  of
operations, shareholders' equity and cash flows for the year ended September 30,
2000.  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 generally accepted auditing standards.
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, 2000 and the related  statements  of operations  and cash flows
for the year ended  September 30, 2000 in  conformity  with  generally  accepted
accounting principles.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in Note A to the  financial
statements,  the  Company  has a  substantial  dependence  on the success of its
development  stage  activities,  significant  losses  since  inception,  lack of
liquidity, and a working capital deficiency at September 30, 2000. These factors
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.  Management's  plans regarding those matters are also described in Note
A. The  financial  statements do not include any  adjustments  that might result
from the outcome of this uncertainty.

Cordovano and Harvey, P.C
Denver, Colorado
January 12, 2001





                                       F-2

                                                                              10
<PAGE>



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

                          Independent Auditors' Report

We have audited the balance sheet of Investment Associates,  Inc. (a development
stage company) as of September 30, 1999 (not separately included herein) and the
related  statements of operations,  shareholders'  equity and cash flows for the
year ended  September  30,  1999 and period July 18,  1997  (inception)  through
September 30, 1999.  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 generally accepted auditing standards.
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, 1999 and the related  statements  of operations  and cash flows
for the year ended  September  30,  1999,  and for the period from July 18, 1997
(inception)  through  September 30, 1999 in conformity  with generally  accepted
accounting principles.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in  Note 5 (not  separately
included herein) to the financial statements,  the Company is in the development
stage and has no operations as of September 30, 1999.  The deficiency in working
capital as of September  30, 1999 raises  substantial  doubt about the Company's
ability to continue as a going  concern.  Management's  plans  concerning  these
matters are also  described  in Note 5 (not  separately  included  herein).  The
financial  statements do not include any adjustments  that might result from the
outcome of these uncertainties.

Kish, Leake & Associates, P.C.
Certified Public Accountants
Englewood, Colorado
October 18, 1999






                                       F-3

                                                                              11
<PAGE>

<TABLE>


                           INVESTMENT ASSOCIATES, INC.
                          (A Development Stage Company)

                                  Balance Sheet

                               September 30, 2000

<CAPTION>
                                     ASSETS

<S>                                                         <C>
CURRENT ASSETS
  Cash ..................................................   $                -
                                                            ------------------
                                     TOTAL CURRENT ASSETS                    -
                                                            ------------------
                                             TOTAL ASSETS                    -
                                                            ==================

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Accrued liabilities ..................................   $            1,500
                                                           ------------------
                               TOTAL CURRENT LIABILITIES                1,500
                                                           ------------------

SHAREHOLDERS' EQUITY

  Preferred stock, $.001 par value,
   25,000,000 shares authorized,
   -0- shares issued and
   outstanding (See Note D) ...........................                    -
  Common stock, $.001 par value,
   50,000,000 shares authorized,
   1,000,000 shares issued and
   outstanding (See Note D) ...........................                1,000
  Additional paid-in capital ..........................               14,205
  Deficit accumulated during the
   development stage ..................................              (16,705)
                                                          ------------------
                             TOTAL SHAREHOLDERS' EQUITY               (1,500)
                                                          ------------------

                                                          $                -
                                                          ==================














                 See accompanying notes to financial statements
</TABLE>

                                       F-4

                                                                              12

<PAGE>

<TABLE>


                           INVESTMENT ASSOCIATES, INC.
                          (A Development Stage Company)

                            Statements of Operations

<CAPTION>
                                                                 July 18, 1997
                                             Year Ended           (inception)
                                    ----------------------------    Through
                                    September 30,  September 30,  September 30,
                                        2000           1999           2000
                                    -------------  -------------  -------------
<S>                                 <C>            <C>            <C>
INCOME

  Revenue ........................  $           -  $           -  $           -

COSTS AND EXPENSES
  Legal fees .....................  $      11,190  $           -  $      11,190
  Accounting fees ................          3,980              -          3,980
  Licenses and fees ..............            200            335            535
  Organizational Costs ...........              -              -          1,000
  Printing                                      -              -              -
                                    -------------  -------------  -------------
              LOSS FROM OPERATIONS        (15,370)          (335)       (16,705)
                                    -------------  -------------  -------------

INCOME TAX BENEFIT (EXPENSE) (NOTE C)
  Current tax benefit ............          2,926             64          3,180
  Deferred tax expense ...........         (2,926)           (64)        (3,180)
                                    -------------  -------------  -------------
                          NET LOSS  $     (15,370) $        (335) $     (16,705)
                                    =============  =============  =============

  BASIC LOSS PER COMMON SHARE ....  $           *  $           *  $           *
                                    =============  =============  =============

  BASIC WEIGHTED AVERAGE COMMON
    SHARES OUTSTANDING ...........      1,000,000      1,000,000      1,000,000
                                    =============  =============  =============



* Less than .01 per share


















                 See accompanying notes to financial statements
</TABLE>

                                       F-5
                                                                              13

<PAGE>


<TABLE>


                           INVESTMENT ASSOCIATES, INC.
                          (A Development Stage Company)

                        Statement of Shareholders' Equity

              July 18, 1997 (inception) through September 30, 2000

<CAPTION>
                                                                         Deficit
                                                                       Accumulated
                     Preferred Stock     Common Stock    Capital Paid    During
                     ---------------  -----------------   In Excess    Development
                     Shares  Amount     Shares   Amount  of Par Value     Stage       Total
                     ------  -------  ---------  ------  ------------  -----------  ---------
<S>                  <C>     <C>      <C>        <C>     <C>           <C>          <C>
Beginning balance,
  July 18, 1997 .....     -  $     -          -  $    -  $          -  $         -  $       -

Common stock issued
  in exchange for
  services ..........                 1,000,000   1,000             -            -      1,000

Net loss for the
  period ended
  September 30, 1997      -        -          -       -             -       (1,000)    (1,000)
                     ------  -------  ---------  ------  ------------  -----------  ---------
BALANCE,
  SEPTEMBER 30, 1997      -        -  1,000,000   1,000             -       (1,000)         -

Net loss for year
  ended September 30,
  1998 ..............     -        -          -       -             -            -          -
                     ------  -------  ---------  ------  ------------  -----------  ---------
BALANCE,
  SEPTEMBER 30, 1998      -        -  1,000,000   1,000             -       (1,000)         -

Expenses paid by
  third party on
  behalf of the
  Company ...........     -        -          -       -           335            -        335

Net loss for year
  ended September 30,
  1999 ..............     -        -          -       -             -         (335)      (335)
                     ------  -------  ---------  ------  ------------  -----------  ---------
BALANCE,
  SEPTEMBER 30,
  1999 ..............     -        -  1,000,000   1,000           335       (1,335)         -

Expenses paid by
  third party on
  behalf of the
  Company ...........     -        -          -       -        13,870            -     13,870

Net loss for year
  ended September 30,
  2000 ..............     -        -          -       -             -      (15,370)   (15,370)
                     ------  -------  ---------  ------  ------------  -----------  ---------
BALANCE,
  SEPTEMBER 30,
  2000 ..............     -        -  1,000,000   1,000        14,205      (16,705)    (1,500)
                     ======  =======  =========  ======  ============  ===========  =========


                 See accompanying notes to financial statements
</TABLE>

                                       F-6

                                                                              14
<PAGE>

<TABLE>

                           INVESTMENT ASSOCIATES, INC.
                          (A Development Stage Company)

                            Statements of Cash Flows


<CAPTION>
                                                                 July 18, 1997
                                             Year Ended           (inception)
                                    ----------------------------    Through
                                    September 30,  September 30,  September 30,
                                        2000           1999           2000
                                    -------------  -------------  -------------
<S>                                 <C>            <C>            <C>
CASH (USED IN)
  OPERATING ACTIVITIES
    Net Loss .....................  $     (15,370) $        (335) $     (16,705)

    Non-cash transactions:
      Common stock issued
      for services ...............              -              -          1,000
    Changes in operating assets and
      liabilities:
        Accounts payable and
          accrued liabilities ....          1,500              -          1,500
    Third party expenses paid by
      affiliate on behalf of the
      company, recorded as
      additional paid-in capital .         13,870            335         14,205
                                    -------------  -------------  -------------
    NET CASH PROVIDED BY (USED IN)
              OPERATING ACTIVITIES              -              -              -
                                    -------------  -------------  -------------

              NET CASH PROVIDED BY
              FINANCING ACTIVITIES              -              -              -
                                    -------------  -------------  -------------

              NET INCREASE IN CASH              -              -              -

    Cash, beginning of period ....              -              -              -
                                    -------------  -------------  -------------
               CASH, END OF PERIOD  $           -  $           -  $           -
                                    =============  =============  =============

SUPPLEMENTAL DISCLOSURE OF CASH
  FLOW INFORMATION:
Cash paid during the period for:

  Interest .......................  $           -  $          -  $           -
                                    =============  ============  =============
  Income taxes ...................  $           -  $          -  $           -
                                    =============  ============  =============

Non-cash financing activities:
  1,000,000 shares common stock
    issued for services ..........  $           -  $          -  $      1,000
                                    =============  ============  ============




                 See accompanying notes to financial statements
</TABLE>

                                       F-7

                                                                              15

<PAGE>




                           INVESTMENT ASSOCIATES, INC.
                          (A Development Stage Company)

                          Notes to Financial Statements

Note A: Organization and summary of significant accounting policies

Organization
------------

Investment  Associates,  Inc. (the "Company") was incorporated under the laws of
Nevada  on  July  18,  1997  to  engage  in any  lawful  corporate  undertaking,
including, but not limited to, selected mergers and acquisitions. The Company is
a  development  stage  enterprise  in  accordance  with  Statement  of Financial
Accounting Standard (SFAS) No. 7.

The  Company  has  been in the  development  stage  since  inception  and has no
operations to date.

The accompanying consolidated 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
consolidated  financial  statements,  the Company is a development stage company
with no revenue as of September  30, 2000 and has incurred  losses of $(15,370),
$(335) and $(16,705) for the years ended September 30, 2000 and 1999 and for the
period July 18, 1997 (inception) through September 30, 2000,  respectively.  The
Company has no operating  history or revenue,  no assets,  and continuing losses
which the Company  expects  will  continue  for the  foreseeable  future.  These
factors among others may indicate that the Company will be unable to continue as
a going  concern for a  reasonable  period of time.  An affiliate of the Company
plans to continue  advancing funds on an as needed basis and in the longer term,
revenues from the  operations  of a merger  candidate,  if found.  The Company's
continuation  as a going concern is dependent upon continuing  capital  advances
from an affiliate  and  commencing  operations  or locating and  consummating  a
business  combination with an operating company.  There is no assurance that the
affiliate  will  continue to provide  capital to the Company or that the Company
can commence  operations or identify such a target company and consummate such a
business combination. These factors, among others, raise substantial doubt about
its ability to continue as a going  concern.  The  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.

Summary of significant accounting policies
------------------------------------------

Cash equivalents
----------------

The  Company's  financial  instruments  consist of accounts  payable and accrued
liabilities.  For financial accounting purposes and the statement of cash flows,
cash equivalents  include all highly liquid debt  instruments  purchased with an
original maturity of three months or less.

                                       F-8

                                                                              16
<PAGE>



                           INVESTMENT ASSOCIATES, INC.
                          (A Development Stage Company)

                          Notes to Financial Statements

Note A: Organization and summary of significant accounting policies, continued

Use of estimates
----------------

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

Income Taxes
------------

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

Loss per common share
---------------------

The Company has adopted  Statement of  Financial  Accounting  Standards  No. 128
("SFAS 128") which  requires the  disclosure  of basic and diluted  earnings per
share.  Basic earnings per share is calculated  using income available to common
shareowners  divided by the weighted average of common shares outstanding during
the year.  Diluted  earnings  per share is similar to basic  earnings  per share
except that the weighted  average of common shares  outstanding  is increased to
include the number of additional  common shares that would have been outstanding
if the dilutive potential common shares,  such as options,  had been issued. The
Company has a simple capital  structure and no outstanding  options at September
30,  2000.  Therefore,  dilutive  earnings  per  share  are not  applicable  and
accordingly have not been presented

Fiscal year
-----------

The Company operates on a fiscal year ending on September 30.

                                       F-9

                                                                              17
<PAGE>


                           INVESTMENT ASSOCIATES, INC.
                          (A Development Stage Company)

                          Notes to Financial Statements

Note A: Organization and summary of significant accounting policies, continued

Stock based compensation
------------------------

SFAS No. 123,  "Accounting for Stock-Based  Compensation"  was issued in October
1995.  This  accounting  standard  permits  the use of either a fair value based
method  or the  method  defined  in  Accounting  Principles  Board  Opinion  25,
"Accounting for Stock Issued to Employees" ("APB 25") to account for stock-based
compensation  arrangements.  Companies that elect to use the method  provided in
APB 25 are required to disclose pro forma net income and earnings per share that
would have resulted from the use of the fair value based method. The Company has
elected  to  continue  to  determine  the  value  of  stock-based   compensation
arrangements  under the  provisions  of APB 25. For stock issued to officers the
fair value approximates the intrinsic value. Therefore, no pro forma disclosures
are presented.

Fair value of financial instruments
-----------------------------------

SFAS 107,  "Disclosure  About Fair  Value of  Financial  Instruments,"  requires
certain  disclosures  regarding  the fair value of  financial  instruments.  The
Company has determined,  based in available  market  information and appropriate
valuation   methodologies,   the  fair  value  of  its   financial   instruments
approximates carrying value. The carrying amounts of cash, accounts payable, and
other accrued liabilities  approximate fair value due to the short-term maturity
of the instruments.

Recently issued accounting pronouncements
-----------------------------------------

The Company has adopted the following new accounting pronouncements for the year
ended  September  30,  2000.  There was no effect  on the  financial  statements
presented from the adoption of the new pronouncements.

Statement  of  Financial   Accounting  Standard  ("SFAS")  No.  130,  "Reporting
Comprehensive Income," requires the reporting and display of total comprehensive
income and its components in a full set of general-purpose financial statements.

SFAS  No.  131,  "Disclosures  about  Segments  of  an  Enterprise  and  Related
Information," is based on the "management" approach for reporting segments.  The
management  approach  designates  the  internal  organization  that  is  used by
management  for making  operating  decisions  and assessing  performance  as the
source  of the  Company's  reportable  segments.  SFAS  No.  131  also  requires
disclosure about the Company's products,  the geographic areas in which it earns
revenue and holds long-lived assets, and its major customers.

SFAS No. 132, "Employers'  Disclosures about Pensions and Other  Post-retirement
Benefits,"  which  requires  additional  disclosures  about  pension  and  other
post-retirement   benefit  plans,   but  does  not  change  the  measurement  or
recognition of those plans.

                                      F-10

                                                                              18
<PAGE>


                           INVESTMENT ASSOCIATES, INC.
                          (A Development Stage Company)

                          Notes to Financial Statements

Note A: Organization and summary of significant accounting policies, concluded

SFAS No. 133,  "Accounting for Derivative  Instruments and Hedging  Activities,"
requires an entity to recognize all derivatives on a balance sheet,  measured at
fair value.

Statement  of  Position  ("SOP")  98-1  "Accounting  for the  Costs of  Computer
Software  Developed  or  Obtained  for  Internal  Use." This SOP  requires  that
entities  capitalize certain  internal-use  software costs once certain criteria
are met.

SOP 98-5,  "Reporting on the Costs of Start-Up  Activities."  Sop 98-5 provides,
among other things, guidance on the reporting of start-up costs and organization
costs.  It requires costs of start-up  activities and  organization  costs to be
expensed as incurred.

The Company will  continue to review these new  accounting  pronouncements  over
time to determine if any additional  disclosures are necessary based on evolving
circumstances.

Note B: Related party transactions

The Company maintains a mailing address at an affiliate's address.  This address
is Suite 104, 1456 St. Paul Street, Kelowna, B.C., Canada, V1Y 2E6. At this time
the Company has no need for an office.

The Company  does not maintain a checking  account and all expenses  incurred by
the Company are paid by an affiliate.  For the fiscal year ended  September 2000
the Company incurred $11,190 in legal expense, $3,980 in accounting expense, $85
in filing fees,  and $115 in resident  agent fees. The affiliate does not expect
to be repaid for the expenses it pays on behalf of the Company.  Accordingly, as
the expenses are paid, they are classified as additional-paid-in capital.

                                      F-11

                                                                              19
<PAGE>


                           INVESTMENT ASSOCIATES, INC.
                          (A Development Stage Company)

                          Notes to Financial Statements

Note C: Income taxes

A reconciliation of U.S. statutory federal income tax rate to the effective rate
for the years ended September 30, 2000 and September 30, 1999 is as follows:

                                                    Year Ended     Year Ended
                                                   September 30,  September 30,
                                                       2000           1999
                                                   -------------  -------------

  U.S. statutory federal rate......................    15.00%         15.00%
  State income tax rate, net of federal benefits...     4.04%          4.04%
  Offering costs, permanent difference ............     0.00%          0.00%
  Net operating loss (NOL) for which no tax
    benefit is currently available.................   -19.04%        -19.04%
                                                   -------------  -------------
                                                        0.00%          0.00%
                                                   =============  =============

The valuation allowance offsets the net deferred tax asset for which there is no
assurance of recovery.  The change in the  valuation  allowance  the years ended
September  30, 2000 and  September  30, 1999 was $2,862.  NOL  carryforwards  at
September 30, 2000 will begin to expire in 2013. 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.

Note D: Shareholders' equity

Common Stock
------------

The Company initially  authorized 25,000 shares of no par value common stock. On
July 23, 1999 the Board of Directors  approved an increase in authorized  shares
to 50,000,000  and changed the par value to $.001.  On July 20, 1997 the Company
issued 1,000 shares of common stock for services  valued at $1.00 per share,  or
$1000.

                                      F-12

                                                                              20
<PAGE>


                           INVESTMENT ASSOCIATES, INC.
                          (A Development Stage Company)

                          Notes to Financial Statements

Note D: Shareholders' equity, concluded

On October 5, 1999 the Company filed  amended  articles with the state of Nevada
to change the authorized shares of common stock originally approved by the Board
of Directors to 50,000,000,  $.001 par and 25,000,000  shares of preferred stock
$.001 par.

On October 6, 1999 the Board of Directors  approved a 1,000 to 1 forward  split.
This increases outstanding common shares from 1,000 to 1,000,000.  The financial
statements take into account this split.

                                      F-13

                                                                              21


<PAGE>



ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE.

     None

                                    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
----------------           ---          -------------------------

David Ward                 41           President and Director

Robert Hemmerling          41           Secretary, Treasurer
                                        and Director

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

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

     (b) Resumes:

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

                                                                              22


<PAGE>



     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 Resources, Ltd., Kelowna, British Columbia, in the investor relations
department.  Strathmore  Resources is engaged in the  business of acquiring  and
developing uranium properties. Prior, from January 1996 through August 1996, Mr.
Hemmerling  was  unemployed.  From  January  1992  through  December  1995,  Mr.
Hemmerling was an electrician with Concord Electric,  Kelowna, British Columbia.
He devotes only such time as  necessary  to the  business of the Company,  which
time is expected to be nominal.

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

ITEM 10.  EXECUTIVE COMPENSATION.

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

     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

                                                                              23


<PAGE>



proposed transaction will not be approved by the Company's Board of Directors as
a  result  of the  inability  of  the  Board  to  affirmatively  approve  such a
transaction.

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

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

     The Company  maintains a policy whereby the directors of the Company may be
compensated  for  out of  pocket  expenses  incurred  by  each  of  them  in the
performance of their relevant duties. The Company did not reimburse any director
for such expenses during the fiscal year ended September 30, 2000.

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

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     (a) and (b) Security Ownership of Certain Beneficial Owners and Management.

     The table below lists the  beneficial  ownership  of the  Company's  voting
securities  by each person  known by the Company to be the  beneficial  owner of
more than 5% of such securities, as well as by all directors and officers of the
issuer. Unless otherwise indicated,  the shareholders listed possess sole voting
and investment power with respect to the shares shown.

                                                                              24


<PAGE>



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

Common        David Ward(1)             304,000            30.4%
              4531 Granville Avenue
              Richmond, British Columbia
              Canada V7C 1E3

Common        Robert Hemmerling(1)      304,000            30.4%
              1908 Horizon Drive
              Kelowna, British Columbia
              Canada V1Z 3L3

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

(1)  Officer and Director.

     The  balance  of the  Company's  outstanding  Common  Shares  are held by 8
persons.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The Company  maintains a mailing  address at an affiliate's  address.  This
address is Suite 104, 1456 St. Paul Street,  Kelowna,  B.C., Canada, V1Y 2E6. At
this time the Company has no need for an office.

     The Company does not maintain a checking account and all expenses  incurred
by the Company  are paid by an  affiliate.  For the fiscal year ended  September
2000,  the  Company  incurred  $11,190 in legal  expense,  $3,980 in  accounting
expense, $85 in filing fees, and $115 in resident agent fees. The affiliate does
not expect to be repaid for the expenses it pays on behalf of the Company.

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

                                     PART IV

Item 13.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)   Exhibits

      3.1*   Certificate and Articles of Incorporation

      3.2*   Bylaws

                                                                              25


<PAGE>




      4.1*   Form of Lock-up Agreements Executed by the Company's
             Shareholders

      EX-27  Financial Data Schedule

* Filed with the  Securities  and  Exchange  Commission  in the Exhibits to Form
10-SB, filed on November 12, 1999, and are incorporated by reference herein.

(b)   Reports on Form 8-K

     The Company did not file any reports on Form 8-K during the last quarter of
the fiscal year ended September 30, 2000.

                                                                              26


<PAGE>



                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the  Securities  Exchange Act of
1934,  the  Company  caused  this  report  to be  signed  on its  behalf  by the
undersigned, thereunto duly authorized, on January 11, 2001.

                                       INVESTMENT ASSOCIATES, INC.
                                       (Registrant)


                                       By:s/ David Ward
                                          --------------------------------
                                          David Ward, President

                                       By:s/ Robert Hemmerling
                                          --------------------------------
                                          Robert Hemmerling, Treasurer

     In  accordance  with the Exchange Act, this report has been signed below by
the  following  persons  on  behalf  of the  registrant  and  in the  capacities
indicated on January 11, 2001.

s/ David Ward
------------------------------
David Ward, Director

s/ Robert Hemmerling
------------------------------
Robert Hemmerling, Director

                                                                              27


<PAGE>


                           INVESTMENT ASSOCIATES, INC.

                  Exhibit Index to Annual Report on Form 10-KSB
                  For the Fiscal Year Ended September 30, 2000

EXHIBITS                                                                Page No.

  EX-27  Financial Data Schedule..............................................29



                                                                              28