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, 2001
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)
104 - 1456 St. Paul Street
Kelowna, British Columbia, V1Y 2E6
(Address of principal executive offices)
(250)868-8177
(Issuer's telephone number)
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
December 31, 2001
Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ]
INVESTMENT ASSOCIATES, INC.
INDEX
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet as of December 31, 2001 F-1
Statement of Operations for the period ended
December 31, 2001 F-2
Statements of Cash Flows for the period ended
December 31, 2001 F-3
Notes to Consolidated Financial Statements F-4
Item 2 Plan of Operation 5
PART II. OTHER INFORMATION
Item 1 Legal Proceedings 6
Item 2 Changes in Securities 6
Item 3 Defaults Upon Senior Securities 6
Item 4 Submission of Matters to a Vote of Security Holders 6
Item 5 Other Information 6
Item 6 Exhibits and Reports on Form 8K 6
SIGNATURES 6
INVESTMENT ASSOCIATES, INC.
Condensed Balance Sheet
December 31, 2001
(Unaudited)
ASSETS
TOTAL ASSETS $ --
========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Liabilities:
Accounts payable ............................................. $ 193
Indebtedness to related party (Note B) ....................... 2,720
Accrued liabilities .......................................... 1,750
--------
Total liabilities 4,663
--------
Shareholders' deficit:
Preferred stock .............................................. --
Common stock ................................................. 1,000
Additional paid-in capital (Note B) .......................... 20,651
Retained deficit ............................................. (26,314)
--------
Total shareholders' deficit (4,663)
--------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ --
========
On Behalf of the Board of Directors:
/s/Bob Hemmerling
- ------------------------
Bob Hemmerling, Director
See accompanying notes to condensed financial statements
F-1
INVESTMENT ASSOCIATES, INC.
Condensed Statements of Operations
(Unaudited)
Three Months Ended
December 31,
-------------------------
2001 2000
----------- -----------
Total general and administrative expenses $ 1,991 $ 1,020
----------- -----------
Operating loss (1,991) (1,020)
----------- -----------
Income taxes (Note C) ............................. -- --
----------- -----------
Net loss $ (1,991) $ (1,020)
=========== ===========
Basic and diluted loss per common share ........... $ (0.00) $ (0.00)
=========== ===========
Basic and diluted weighted average common
shares outstanding ........................... 1,000,000 1,000,000
=========== ===========
See accompanying notes to condensed financial statements
F-2
INVESTMENT ASSOCIATES, INC.
Condensed Statements of Cash Flows
(Unaudited)
Three Months Ended
December 31,
------------------
2001 2000
------------------
Net cash used in operating activities $(1,548) $ (770)
------- -------
Cash flows from financing activities:
Third party expenses paid by affiliate on
behalf of the company, recorded as
additional-paid-in capital (Note B) ........ 1,548 770
------- -------
Net cash provided by financing activities 1,548 770
------- -------
Net change 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 ............................... $ -- $ --
======= =======
See accompanying notes to condensed financial statements
F-3
INVESTMENT ASSOCIATES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE A: BASIS OF PRESENTATION
The condensed financial statements presented herein have been prepared by the
Company in accordance with the accounting policies in its audited financial
statements for the year ended September 30, 2001 as filed in its Form 10-KSB and
should be read in conjunction with the notes thereto. The Company is a "blank
check" company with the purpose to evaluate, structure and complete a merger
with, or acquisition of, a privately owned corporation.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim period presented have been made. The results
of operations for the periods presented are not necessarily indicative of the
results to be expected for the year.
Interim financial data presented herein are unaudited.
NOTE B: RELATED PARTY TRANSACTIONS
On July 13, 2001, Strathmore Minerals Corp, an affiliate corporation under
common control, loaned the Company $2,720. The loan does not carry an interest
and is due on demand. The loan principal was included in the financial
statements as indebtedness to related party at September 30, 2001. There was no
change to the loan during the three months ended December 31, 2001.
The Company has no cash operating account. An affiliate, R.D. Capital, Inc., has
assumed the responsibility to pay certain obligations on behalf of the Company.
The payments are accounted for as contributed capital in the accompanying
condensed financial statements. During the three months ended December 31, 2001
and 2000, R.D. Capital made payments to vendors totaling $1,548 and $770,
respectively, on behalf of the Company. Through December 31, 2001, R.D. Capital
has contributed capital totaling $20,651.
NOTE C: INCOME TAXES
The Company records its income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes". The Company incurred net operating losses during
the periods shown on the condensed financial statements resulting in a deferred
tax asset, which was fully allowed for, therefore the net benefit and expense
result in $-0- income taxes.
F-4
5
PLAN OF OPERATIONS
The following discussion should be read in conjunction with the Company's
unaudited financial statements and notes thereto included herein. In connection
with, and because it desires to take advantage of, the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995, the Company cautions
readers regarding certain forward looking statements in the following discussion
and elsewhere in this report and in any other statement made by, or on the
behalf of the Company, whether or not in future filings with the Securities and
Exchange Commission. Forward looking statements are statements not based on
historical information and which relate to future operations, strategies,
financial results or other developments. Forward looking statements are
necessarily based upon estimates and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and contingencies,
many of which are beyond the Company's control and many of which, with respect
to future business decisions, are subject to change. These uncertainties and
contingencies can affect actual results and could cause actual results to differ
materially from those expressed in any forward looking statements made by, or on
behalf of, the Company. The Company disclaims any obligation to update forward
looking statements.
Investment Associates, Inc. ("we," "our," or "the Company") intends to seek to
acquire assets or shares of an entity actively engaged in business, in exchange
for its securities. As of the date of this report, our management has had
preliminary discussions with potential merger or acquisition candidates, but
there is no definitive agreement with any third party relevant thereto. In the
event we do enter into an agreement with such a third party, our Board of
Directors intends to obtain certain assurances of value of the target entity
assets prior to consummating such a transaction, with further assurances that an
audited financial 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.
We have no full time employees. Our President and Secretary have agreed to
allocate a portion of their time to our business, without compensation. These
officers anticipate that our business plan can be implemented by their devoting
approximately 20 hours per month to our business affairs and, consequently,
conflicts of interest may arise with respect to the limited time commitment by
such officers.
Because we presently have nominal overhead or other material financial
obligations, we believe that our short term cash requirements can be satisfied
by our management injecting whatever amounts of cash to cover these incidental
expenses. There are no assurances whatsoever that any additional cash will be
made available to us through any means.
Liquidity and Capital Resources
We presently have nominal cash or cash equivalents. Because we are not required
to pay rent or salaries to any of our officers or directors, we believe that we
have sufficient funds to continue operations through the foreseeable future.
Our securities are currently not liquid. There are no market makers in our
securities and it is not anticipated that any market will develop in our
securities until such time as we successfully implement our business plan of
engaging in a business opportunity, either by merger or acquisition of assets.
We presently have no liquid financial resources to offer such a candidate and
must rely upon an exchange of our stock to complete such a merger or
acquisition.
6
"CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Except for historical matters,
the matters discussed in this Form 10-QSB are forward-looking statements based
on current expectations and involve risks and uncertainties. Forward-looking
statements include, but are not limited to, statements under the following
heading: "Managements Discussion And Analysis Or Plan Of Operations" the timing
and expected profitable results of sales and the need for no additional
financing.
PART II
OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2 CHANGES IN 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
None
(b) Reports on Form 8-K
None
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.
Dated: February 11, 2002 Per: /s/Bob Hemmerling
--------------------------
Bob Hemmerling, Secretary,
Treasurer and Director