UNITED STATES


SECURITIES AND EXCHANGE
COMMISSION


Washington, D.C.
20549





FORM 10-QSB








[xx]
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
      FOR THE QUARTERLY PERIOD ENDED DECEMBER 31,
  2007





Commission
file Number: 0-28053





INVESTMENT ASSOCIATES,
INC.


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





Nevada


(State or
other jurisdiction of incorporation or organization)





98-0204280


(I.R.S.
Employer Identification Number)





Suite
700
 1620
Dickson Avenue
 Kelowna,
British Columbia, V1Y 9Y2





(250)
868-8177


(Issuer's
telephone number)








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





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 [
]





State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date:   1,000,000
common shares as at February
12, 2008





Transitional
Small Business Disclosure Format (check one): Yes [ ] No [ X ]








1


INVESTMENT ASSOCIATES,
INC.








INDEX





PART
      1.
            FINANCIAL
      INFORMATIONItem
      1
            
            Financial
      StatementsBalance
      Sheet as of December 31, 2007  (unaudited)
            3Statements
      of Operations for the three monthsended
      December 31, 2007 and 2006 (unaudited)
            4Statements
      of Cash Flows for the three monthsended December
      31, 2007 and 2006  (unaudited)
            5Condensed
      Notes to Interim Financial Statements
            6Item
      2
            
            Plan
      of Operation
            9Item
      3
            
            Controls
      and Procedures
            13PART
      II.
            OTHER
      INFORMATIONItem
      1
            
            Legal
      Proceedings
            14Item
      2
            
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            14Item
      3
            
            Defaults
      Upon Senior Securities
            14Item
      4
            
            Submission
      of Matters to a Vote of Security Holders
            14Item
      5
            
            Other
      Information
            14Item
      6
            
            Exhibits
      and Reports on Form 8K
            14SIGNATURES
            
            15











2






INVESTMENT ASSOCIATES,
      INC.(A Development Stage
      Enterprise)BALANCE
      SHEETS
  December
      31,
                
                
                September
      30,2007
                
                
                2007(unaudited)
                
                
                (audited)ASSETSCURRENT
      ASSETSCash
                
                $
                44
                
                
                $
                4,462Prepaid
      Expenses & Deposits
                
                
                -
                
                
                
                -TOTAL
      ASSETS
                
                $
                44
                
                
                $
                4,462LIABILITIES
      AND STOCKHOLDERS' DEFICITCURRENT
      LIABILITIESAccounts
      payable and accrued liabilities
                
                $
                42
                
                
                $
                1,979Indebtedness
      to related parties
                
                
                2,720
                
                
                
                2,720Loans
      payable
                
                
                -
                
                
                
                -TOTAL
      CURRENT LIABILITIES
                
                
                2,762
                
                
                
                4,699COMMITMENTS
      AND CONTINGENCIES
                
                
                10,000
                
                
                
                10,000STOCKHOLDERS'
      DEFICITCommon
      stock, 25,000,000 shares authorized; $0.001par
      value; 1,000,000 shares issued and outstanding
                
                
                1,000
                
                
                
                1,000Additional
      paid-in capital
                
                
                72,283
                
                
                
                72,283Accumulated
      deficit during development stage
                
                
                (86,001
                )
                
                
                (83,520
                )TOTAL
      STOCKHOLDERS'  DEFICIT
                
                
                (12,718
                )
                
                
                (10,237
                )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                
                $
                44
                
                
                $
                4,462
  The
accompanying condensed notes are an integral part of these interim financial
statements




3




INVESTMENT ASSOCIATES,
      INC.(A Development Stage
      Enterprise)STATEMENTS OF
      OPERATIONS
  Three
      Months
                
                
                Three
      Months
                
                
                From
      InceptionEnded
                
                
                Ended
                
                
                (July
      18, 1997)December
      31,
                
                
                December
      31,
                
                
                through2007
                
                
                2006
                
                
                December
      31,(unaudited)
                
                
                (unaudited)
                
                
                2007REVENUES
                
                $
                -
                
                
                $
                -
                
                
                $
                -EXPENSESGeneral
      and administrative expenses
                
                
                2,481
                
                
                
                12,380
                
                
                
                89,779Loss
      on write-down of note receivable
                
                
                -
                
                
                
                -
                
                
                
                18,679Gain
      on forgiveness of note payable
                
                
                -
                
                
                
                -
                
                
                
                (22,500
                )Interest
      expense
                
                
                -
                
                
                
                -
                
                
                
                43TOTAL
      EXPENSES
                
                
                2,481
                
                
                
                12,380
                
                
                
                86,001LOSS
      FROM OPERATIONS
                
                
                (2,481
                )
                
                
                (12,380
                )
                
                
                (86,001
                )LOSS
      BEFORE TAXES
                
                
                (2,481
                )
                
                
                (12,380
                )
                
                
                (86,001
                )INCOME
      TAXES
                
                
                -
                
                
                
                -
                
                
                
                -NET
      LOSS
                
                $
                (2,481
                )
                
                $
                (12,380
                )
                
                $
                (86,001
                )NET
      LOSS PER COMMON SHARE,BASIC AND DILUTED
                
                $
                nil
                
                
                $
                (0.01
                )WEIGHTED
      AVERAGE NUMBEROF
      COMMON SHARES OUTSTANDING,BASIC
      AND DILUTED
                
                
                1,000,000
                
                
                
                1,000,000




The
accompanying condensed notes are an integral part of these interim financial
statements
  4
 
  INVESTMENT ASSOCIATES,
      INC.(A Development Stage
      Enterprise)STATEMENTS OF CASH
      FLOWS
 Three
      Months
                  
                  
                  Three
      Months
                  
                  
                  From
      InceptionEnded
                  
                  
                  Ended
                  
                  
                  (July
      18, 1997)December
      31,
                  
                  
                  December
      31,
                  
                  
                  through2007
                  
                  
                  2006
                  
                  
                  December
      31,(unaudited)
                  
                  
                  (unaudited)
                  
                  
                  2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                  
                  $
                  (2,481
                  )
                  
                  $
                  (12,380
                  )
                  
                  $
                  (86,001
                  )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
      in prepaid expenses and deposits
                  
                  
                  -
                  
                  
                  
                  
                  
                  
                  
                  -Increase
      (decrease) in accounts payable and accrued liabilities
                  
                  
                  (1,937
                  )
                  
                  
                  (2,421
                  )
                  
                  
                  42Net
      cash used by operating activities
                  
                  
                  (4,418
                  )
                  
                  
                  (14,801
                  )
                  
                  
                  (89,780
                  )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
                  
                  
                  
                  2,720Proceeds
      from issuance of note payable
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  22,500Capital
      contributed by an affiliate
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  72,283Net
      cash provided by financing activities
                  
                  
                  -
                  
                  
                  
                  13,000
                  
                  
                  
                  108,503NET
      INCREASE (DECREASE) IN CASH
                  
                  
                  (4,418
                  )
                  
                  
                  (1,801
                  )
                  
                  
                  44CASH,
      BEGINNING OF PERIOD
                  
                  
                  4,462
                  
                  
                  
                  2,258
                  
                  
                  
                  -CASH,
      END OF PERIOD
                  
                  $
                  44
                  
                  
                  $
                  457
                  
                  
                  $
                  44SUPPLEMENTAL
      CASH FLOW INFORMATION:Interest
      paid
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  43Income
      taxes paid
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -NON-CASH
      TRANSACTIONS:Common
      stock issued for services
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  1,000
  The
accompanying condensed notes are an integral part of these interim financial
statements
  5
  INVESTMENTS ASSOCIATES,
INC.
 (A Development Stage
Enterprise)
 CONDENSED NOTES TO THE INTERIM
FINANCIAL STATEMENTS
 December 31, 2007
 
  
 NOTE
1 – BASIS OF PRESENTATION
 
 The
foregoing unaudited interim financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Regulation S-B as promulgated by the
Securities and Exchange Commission.  Accordingly, these financial
statements do not include all of the disclosures required by generally accepted
accounting principles in the United States of America for complete financial
statements.  These unaudited interim financial statements should be
read in conjunction with the audited financial statements for the year ended
September 30, 2007.  In the opinion of management, the unaudited
interim financial statements furnished herein include all adjustments, all of
which are of a normal recurring nature, necessary for a fair statement of the
results for the interim period presented.  Operating results for the
three month period ending December 31, 2007 are not necessarily indicative of
the results that may be expected for the year ending September 30,
2008.
 
 Investment
Associates Inc. (“the Company”) is a “blank check” company.  It was
organized to evaluate, structure and complete a merger with, or acquisition of,
a privately owned corporation.
 
 Interim
financial data presented herein are unaudited.
 
 
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 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, and consummate, a business combination with another
company.  The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
 6
  INVESTMENTS ASSOCIATES,
INC.
 (A Development Stage
Enterprise)
 CONDENSED NOTES TO THE INTERIM
FINANCIAL STATEMENTS
 December 31, 2007
 Recent Accounting
Pronouncements
 
 In
February, 2007, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities – Including an amendment of FASB Statement No.
115” (hereinafter SFAS No. 159”). This statement permits entities to choose to
measure many financial instruments and certain other items at fair value. The
objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to apply complex hedge
accounting provisions. This Statement is expected to expand the use of fair
value measurement, which is consistent with the Board’s long-term measurement
objectives for accounting for financial instruments. This statement is effective
as of the beginning of an entity’s first fiscal year that begins after November
15, 2007, although earlier adoption is permitted. Management has not determined
the effect that adopting this statement would have on the Company’s financial
condition or results of operation.
 
 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.
 
 
 NOTE
3 – 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 remains unpaid at September 30, 2007 and is due on demand (See Note
6).
 
 
 NOTE
4 – 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, 2007, RD Capital contributed an additional $11,000. Through
December 31, 2007, RD Capital has contributed a total of $72,283 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.
  7
  INVESTMENTS ASSOCIATES,
INC.
 (A Development Stage
Enterprise)
 CONDENSED NOTES TO THE INTERIM
FINANCIAL STATEMENTS
 December 31, 2007
 During
the year ended September 30, 2001, Strathmore Minerals Corp, an affiliate
corporation under common control, loaned $2,720 to the Company. The loan remains
unpaid at September 30, 2007 and is due on demand. The loan is non-interest
bearing.
 
 
 NOTE
5 – 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.
 
 
 NOTE
6 – COMMITMENTS AND CONTINEGINCIES
 
 During
the year ended September 30, 2007 the Company reclassified $10,000 from Loans
Payable to Commitments and Contingencies.  The amount in question was
from a loan made through a verbal contract in 2002. The Company has been unable
to ascertain if the company who issued the loan is still in operation and will
thus be unable to make payment.  The Company believes the loan has now
exceeded the statute of limitations for loan collections in Nevada and plans to
write off the amount in fiscal 2008.
 8


PLAN OF
OPERATIONS





The
following discussion of the plan of operations of Investment Associates Inc.
(“the Company”) should be read in conjunction with the financial statements and
the related notes thereto included elsewhere in this quarterly report for the
three months ended December 31, 2007.  This quarterly report contains
certain forward-looking statements and the Company's future operation results
could differ materially from those discussed herein.
 
 We intend
to seek to acquire the assets or shares of an entity actively engaged in a
business that generates revenues, in exchange for our securities.  We
have not identified an acquisition target and have not entered into any
negotiations regarding an acquisition.  None of our 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 with us as of the date of this quarterly
report.
 
 Depending
upon the nature of the relevant business opportunity and the applicable state
statutes governing how the transaction is structured, the Company's Board of
Directors expects that it will provide our shareholders with complete disclosure
documentation concerning a potential business opportunity and the structure of
the proposed business combination prior to consummation. This disclosure is
expected to be in the form of a proxy or information statement, in addition to
the post-effective amendment.
 
 While any
disclosure must include audited financial statements of the target entity, we
cannot assure you that such audited financial statements will be
available.  As part of the negotiation process, the Board of Directors
does intend to obtain certain assurances of value, including statements of
assets and liabilities, material contracts, accounts receivable statements, or
other indicia of the target entity's condition prior to consummating a
transaction, with further assurances that an audited statement would be provided
prior to execution of a merger or acquisition agreement.  Closing
documents will include representations that the value of the assets transferred
will not materially differ from the representations included in the closing
documents, or the transaction will be voidable.
 
 Due to
our intent to remain a shell corporation until a merger or acquisition candidate
is identified, it is anticipated that its cash requirements shall be minimal,
and that all necessary capital, to the extent required, will be provided by the
directors or officers.  We do not anticipate that we will have to
raise capital in the next twelve months.  We also do not expect to
acquire any plant or significant equipment.
 
 We have
not and do not intend to enter into, any arrangement, agreement or understanding
with non-management shareholders allowing non-management shareholders to
directly or indirectly participate in or influence our management of the
Company.  As a result, management is in a position to elect a majority
of the directors and to control our affairs.
 
 We have
no full time employees.  Our President and Secretary have agreed to
allocate a portion of their time to our activities, without
compensation.  These officers anticipate that our business plan can be
implemented by their devoting approximately five (5) hours each per month to our
business affairs and, consequently, conflicts of interest may arise with respect
to their limited time commitment.  We do not expect any significant
changes in the number of employees.  See "Management."
 
 Our
officers and directors may become involved with other companies who have a
business purpose similar to ours.  As a result, potential conflicts of
interest may arise in the future.  If a conflict does arise and an
officer or director is presented with business opportunities under circumstances
where there may be a doubt as to whether the opportunity should belong to the
Company or another "blank check" company they are affiliated with, they will
disclose the opportunity to all the companies.  If a situation arises
where more than one company desires to merge with or acquire that target company
and the principals of the proposed target company have no preference as to which
company will merge with or acquire the target company, the company that first
filed a registration statement with the Securities and Exchange Commission will
be entitled to proceed with the proposed transaction.  See "Risk
Factors - Affiliation With Other "Blank Check"
Companies."


-
9 -


General Business
Plan
 
 Our
purpose is to seek, investigate and, if investigation warrants, acquire an
interest in business opportunities presented to it by persons or firms that
desire to seek the perceived advantages of an Exchange Act registered
corporation.  We will not restrict our search to any specific
business, industry, or geographical location and we may participate in a
business venture of virtually any kind or nature.  This discussion of
the proposed business is purposefully general and is not meant to restrict our
discretion to search for and enter into potential business
opportunities.  Management anticipates that it may be able to
participate in only one potential business venture because we have nominal
assets and limited financial resources.  This lack of diversification
should be considered a substantial risk to our shareholders because it will not
permit us to offset potential losses from one venture against gains from
another.
 
 We may
seek a business opportunity with entities that have recently commenced
operations, or that wish to utilize the public marketplace in order to raise
additional capital in order to expand into new products or markets, to develop a
new product or service, or for other corporate purposes.  We may
acquire assets and establish wholly owned subsidiaries in various businesses or
acquire existing businesses as subsidiaries.
 
 We
anticipate that the selection of a business opportunity will be complex and
extremely risky.  Due to general economic conditions, rapid
technological advances being made in some industries and shortages of available
capital, management believes that there are numerous firms seeking the perceived
benefits of a publicly registered corporation.  The perceived benefits
may include facilitating or improving the terms for additional equity financing
that may be sought, providing liquidity for incentive stock options or similar
benefits to key employees, providing liquidity (subject to restrictions of
applicable statutes) for all shareholders and other
factors.  Potentially, available business opportunities may occur in
many different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of these business
opportunities extremely difficult and complex.
 
 We have,
and will continue to have, no capital to provide the owners of business
opportunities with any significant cash or other assets.  However,
management believes we will be able to offer owners of acquisition candidates
the opportunity to acquire a controlling ownership interest in a publicly
registered company without incurring the cost and time required to conduct an
initial public offering.  The owners of the business opportunities
will, however, incur significant legal and accounting costs in connection with
acquisition of a business opportunity, including the costs of preparing Form
8-K's, 10-KSB's, or 10-QSB's, agreements and related reports and
documents.  The '34 Act specifically requires that any merger or
acquisition candidate comply with all applicable reporting requirements, which
include providing audited financial statements to be included within the
numerous filings relevant to complying with the `34
Act.  Nevertheless, the officers and directors of the Company have not
conducted market research and are not aware of statistical data that would
support the perceived benefits of a merger or acquisition transaction for the
owners of a business opportunity.
 
 The
analysis of new business opportunities will be undertaken by our officers and
directors, none of whom is a professional business
analyst.  Management intends to concentrate on identifying preliminary
prospective business opportunities that may be brought to our attention through
present associations of our officers and directors, or by our
shareholders.  In analyzing prospective business opportunities,
management will consider:
 
 -
              the
      available technical, financial and managerial
  resources;
 -
              working
      capital and other financial
requirements;
 -
              history
      of operations, if any;
 -
              prospects
      for the future;
 -
              nature
      of present and expected
competition;
 -
              the
      quality and experience of management services that may be available and
      the depth of that management;
 -
              the
      potential for further research, development, or
    exploration;
 -
              specific
      risk factors not now foreseeable but could be anticipated to impact our
      proposed activities;
 -
              the
      potential for growth or expansion;
 -
              the
      potential for profit;
 -
              the
      perceived public recognition of acceptance of products, services, or
      trades;
 -
              name
      identification; and
 -
              other
      relevant factors.


-
10 -


Our
officers and directors expect to meet personally with management and key
personnel of the business opportunity as part of their "due diligence"
investigation.  To the extent possible, the Company intends to utilize
written reports and personal investigations to evaluate the above
factors.  We will not acquire or merge with any company that cannot
provide audited financial statements within a reasonable period of time after
closing of the proposed transaction.
 
 Our
management, while probably not especially experienced in matters relating to the
prospective new business of the Company, shall rely upon their own efforts and,
to a much lesser extent, the efforts of our shareholders, in accomplishing our
business purposes.  We do not anticipate that any outside consultants
or advisors, except for our legal counsel and accountants, will be utilized by
us to accomplish our business purposes.  However, if we do retain an
outside consultant or advisor, any cash fee will be paid by the prospective
merger/acquisition candidate, as we have no cash assets.  We have no
contracts or agreements with any outside consultants and none are
contemplated.
 
 We will
not restrict our search for any specific kind of firms, and may acquire a
venture that is in its preliminary or development stage or is already
operating.  We cannot predict at this time the status of any business
in which we may become engaged, because the business may need to seek additional
capital, may desire to have its shares publicly traded, or may seek other
perceived advantages that we may offer.  Furthermore, we do not intend
to seek capital to finance the operation of any acquired business opportunity
until we have successfully consummated a merger or acquisition.
 
 We
anticipate that we will incur nominal expenses in the implementation of its
business plan.  Because we have no capital to pay these anticipated
expenses, present management will pay these charges with their personal funds,
as interest free loans, for a minimum of twelve months from the date of this
quarterly report.  If additional funding is necessary, management and
or shareholders will continue to provide capital or arrange for additional
outside funding.  However, the only opportunity that management has to
have these loans repaid will be from a prospective merger or acquisition
candidate.  Management has no agreements with us that would impede or
prevent consummation of a proposed transaction.  We cannot assure,
however, that management will continue to provide capital indefinitely if a
merger candidate cannot be found.  If a merger candidate cannot be
found in a reasonable period of time, management may be required reconsider its
business strategy, which could result in our dissolution.
 
 Acquisition of
Opportunities
 
 In
implementing a structure for a particular business acquisition, we may become a
party to a merger, consolidation, reorganization, joint venture, or licensing
agreement with another corporation or entity.  It may also acquire
stock or assets of an existing business.  On the consummation of a
transaction, it is probable that our present management and shareholders will no
longer be in control.  In addition, our directors may, as part of the
terms of the acquisition transaction, resign and be replaced by new directors
without a vote of our shareholders.  Furthermore, management may
negotiate or consent to the purchase of all or a portion of our
stock.  Any terms of sale of the shares presently held by officers
and/or directors will be also afforded to all other shareholders on similar
terms and conditions.  Any and all sales will only be made in
compliance with the securities laws of the United States and any applicable
state.


-
11 -


While the
actual terms of a transaction that management may not be a party to cannot be
predicted, it may be expected that the parties to the business transaction will
find it desirable to avoid the creation of a taxable event and thereby structure
the acquisition in a so-called "tax-free" reorganization under Sections
368(a)(1) or 351 of the Internal Revenue Code (the "Code").  In order
to obtain tax-free treatment under the Code, it may be necessary for the owners
of the acquired business to own 80% or more of the voting stock of the surviving
entity.  In that event, the shareholders of the Company would retain
20% or less of the issued and outstanding shares of the surviving entity, which
would result in significant dilution in the equity of the
shareholders.





As part
of the "due diligence" investigation, our officers and directors will meet
personally with management and key personnel, may visit and inspect material
facilities, obtain independent analysis of verification of certain information
provided, check references of management and key personnel, and take other
reasonable investigative measures to the extent of our limited financial
resources and management expertise.  How we will participate in an
opportunity will depend on the nature of the opportunity, the respective needs
and desires of the parties, the management of the target company and our
relative negotiation strength.





With
respect to any merger or acquisition, negotiations with target company
management are expected to focus on the percentage of our Company that the
target company shareholders would acquire in exchange for all of their
shareholdings in the target company.  Depending upon, among other
things, the target company's assets and liabilities, our shareholders will
probably hold a substantially lesser percentage ownership interest following any
merger or acquisition.  The percentage ownership may be subject to
significant reduction in the event we acquire a company with substantial
assets.  Any merger or acquisition effected by us can be expected to
have a significant dilutive effect on the percentage of shares held by our then
shareholders.





We will
participate in a business opportunity only after the negotiation and execution
of appropriate written agreements.  Although we cannot predict the
terms of the agreements, generally the agreements will require some specific
representations and warranties by all of the parties, will specify certain
events of default, will detail the terms of closing and the conditions that must
be satisfied by each of the parties prior to and after the closing, will outline
the manner of bearing costs, including costs associated with our attorneys and
accountants, will set forth remedies on default and will include miscellaneous
other terms.





As stated
previously, we will not acquire or merge with any entity that cannot provide
independent audited financial statements concurrent with the closing of the
proposed transaction.  We are subject to the reporting requirements of
the '34 Act.  Included in these requirements is our affirmative duty
to file independent audited financial statements as part of its Form 8-K to be
filed with the Securities and Exchange Commission upon consummation of a merger
or acquisition, as well as our audited financial statements included in our
annual report on Form 10-K (or 10-KSB, as applicable) and quarterly reports on
Form 10-Q (or 10-QSB, as applicable).  If the audited financial
statements are not available at closing, or if the audited financial statements
provided do not conform to the representations made by the candidate to be
acquired in the closing documents, the closing documents will provide that the
proposed transaction will be voidable at the discretion of our present
management.  If the transaction is voided, the agreement will also
contain a provision providing for the acquisition entity to reimburse us for all
costs associated with the proposed transaction.





Competition





We will
remain an insignificant participant among the firms that engage in the
acquisition of business opportunities.  There are many established
venture capital and financial concerns that have significantly greater financial
and personnel resources and technical expertise than we do.  In view
of our combined extremely limited financial resources and limited management
availability, we will continue to be at a significant competitive disadvantage
compared to our competitors.


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12 -





Item 3 - 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
December 31, 2007.  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 December 31, 2007,
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.


-
13 -


PART II


OTHER INFORMATION





Item
1.   LEGAL
PROCEEDINGS





None








Item
2   UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





None





Item
3   DEFAULTS
UPON SENIOR SECURITIES





None





Item
4   SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS





None





Item
5   OTHER
INFORMATION





None





Item
6   EXHIBITS
AND REPORTS ON FORM 8-K





(a)
            Exhibits





31.1  Section
302 Certification of Chief Executive Officer


31.2  Section
302 Certification of Chief Financial Officer


32  Section
906 Certification





(b)
              Reports
      on Form 8-K


None




-
14 -




SIGNATURES





In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.









INVESTMENT ASSOCIATES,
      INC.Date: February
      12, 2008
            Per:
            /s/Robert
      HemmerlingRobert
      Hemmerling,
              C.F.O.,
      Secretary, Treasurer and Director




15