FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Quarterly Report Under Section 13 or 15(d)

Of the Securities Exchange Act of 1934

For Quarter Ended ~~September~~March 3031, ~~2014~~2015

Commission File Number 33-16531-D

INTERNATIONAL AUTOMATED SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

UTAH 87-0447580

(State or other jurisdiction of (IRS Employer

~~(IRS~~incorporation ~~Employer~~or organization) Identification No.)

incorporation or organization)

Identification No.)

55 North Merchant Street 608

American Fork, Utah 84003

(Address of principal executive offices)

Registrant's telephone number

including area code (801)423-8132

(801)423-8132

Not Applicable Former Address, if changed since last report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the ~~proceeding~~preceding 12 months (or 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.Yes

No x

As of ~~September~~October 301,~~2014~~ 2015, registrant had 6467,~~894~~394,305 shares of common stock, no par value per share, issued and outstanding ~~and 5,700,00 shares of preferred stock issued and outstanding~~.

5,700,000 shares of preferred stock issued and outstanding.

FORWARD-LOOKING STATEMENTS

This report references to “International Automated Systems,” the “Company,” “we,” “us,” and “our” refer to International Automated Systems, Inc.

In this report on Form 10-Q contains certain forward-looking statements and for this purpose any statements contained in this quarterly report that are statements of historical fact are intended to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Without limiting the foregoing words the meaning of the foregoing words such as “may,” , “will,”, “expect,” , “believe,” , “anticipate”, ” ”estimate,” , or “continue,” , or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties and actual results may differ materially depending on a variety of factors many of which are not within our control. These factors include but are not limited to economic conditions generally and in the markets in which we may participate, competition within our chosen industry, technological advances and failure by us to successfully develop business relationships.

We caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made, are based on certain assumptions and expectations which may or may not be valid or actually occur and which involve various risks and uncertainties.

Unless otherwise required by applicable law, we do not undertake and specifically disclaim any obligations to update any forward-looking statement to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement,.

PART I

ITEM I - FINANCIAL STATEMENTS

The condensed financial statements included herein have been prepared by International Automated Systems, Inc. (the "Company" or the "Registrant"), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

In the opinion of the Company, all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the financial position of the Company as of ~~September~~March 3031, ~~2014~~2015, and the results of its operations from June 30, 2014, through ~~September~~March 3031, ~~2014~~2015. The results of its operations for such interim period is not necessarily indicative of the results to be expected for the entire year.

INTERNATIONAL AUTOMATED SYSTEMS, INC
Balance Sheets
ASSETS
			September 30,				June 30,
			March 31,			June 30,
			2014				2014
			2015			2014
CURRENT ASSETS			(unaudited)
	Cash and cash equivalents		$	94,~~975~~423		$	$26,108	~~26,108~~
	Accounts receivable			-			-	-
		Total Current Assets		94,~~975~~423			26,108	~~26,108~~
PROPERTY AND EQUIPMENT, net				~~280~~279,~~326~~315			280,832	~~280,832~~
		TOTAL ASSETS	$	~~290~~283,~~301~~738		$	$306,940	~~306,940~~
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
	Accounts payable		$	5,904	~~9,028~~	$	$2,677	~~2,677~~
	Related party payable			198,293	~~154,293~~		147,196	~~147,196~~
		Total Current Liabilities		204,197	~~163,321~~		149,873	~~149,873~~
Long-term notes payable				-	-		-	-
		TOTAL LIABILITIES		204,197	~~163,321~~		149,873	~~149,873~~
STOCKHOLDERS' EQUITY
				199,774
	Preferred stock, no par value; 22,000,000 shares authorized,
STOCKHOLDERS' EQUITY
		5,700,000 and 5,700,000 shares issued and outstanding, respectively			470,264			470,264
	Preferred stock, no par value; 22,000,000 shares authorized,
	Common stock, no par value, 225,000,000 shares authorized,
		5,700,000 and 5,700,000 shares issued and outstanding, respectively		470,264			470,264
		64,894,305 and 64,894,305 issued and outstanding, respectively			39,650,775			39,650,775
	Common stock, no par value, 225,000,000 shares authorized,
	Accumulated deficit				(39,994,059)			(39,963,972)
		64,894,305 and 64,894,305 issued and outstanding, respectively		39,650,775			39,650,775
		Total Stockholders' Equity			126,980			157,067
	Accumulated deficit			(40,041,498)			(39,963,972)
		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$		290,301		$	306,940
		Total Stockholders' Equity		79,541			157,067
The accompanying notes are an integral part of these financial statements.
		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	283,738		$	306,940
The accompanying notes are an integral part of these financial statements.

INTERNATIONAL AUTOMATED SYSTEMS, INC
(A Development Stage Company)
Statements of Operations
Statements of Operations
(unaudited)
(unaudited)
			For the Three Months Ended				For the Nine Months Ended
			For the Three Months Ended
			March 31,				March 31,
			September 30,
			2015		2014		2015		2014
			2014		2013
REVENUES			$	-	$	-	$	-	$	-
REVENUES			$	-	$	-
OPERATING EXPENSES
OPERATING EXPENSES
	Research and development			2,137		42,210		5,242		135,064
	Research and development			2,254		43,376
	Depreciation expense			506		10,778		1,517		32,333
	Depreciation expense			506		10,778
	General and administrative			34,519		199,450		70,767		956,393
	General and administrative			27,327		502,270
		Total Operating Expenses		37,162		252,438		77,526		1,123,790
		Total Operating Expenses		30,087		556,424
NET LOSS			$	(37,162)	$	(252,438)	$	(77,526)	$	(1,123,790)
NET LOSS			$	(30,087)	$	(556,424)
BASIC AND DILUTED LOSS PER SHARE			$	(0.00)	$	(0.00)	$	(0.00)	$	(0.02)
BASIC AND DILUTED LOSS PER SHARE			$	(0.00)	$	(0.01)
WEIGHTED AVERAGE NUMBER
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING				64,894,305		64,894,305		64,894,305		64,894,305
OF SHARES OUTSTANDING				64,894,305		64,894,305
The accompanying notes are an integral part of these financial statements
The accompanying notes are an integral part of these financial statements

INTERNATIONAL AUTOMATED SYSTEMS, INC
Statements of Cash Flows
(Unaudited)
				For the Three Months Ended
				For the Nine Months Ended
				September 30,
				March 31,
				2014		2013
				2015		2014
CASH FLOWS FROM OPERATING ACTIVITIES
	Net loss			$	(3077,~~087~~526)	$	(~~556~~1,~~424~~123,790)
	Adjustments to reconcile net loss to net
		cash from operating activities:
		Depreciation and amortization			~~506~~1,517		1032,~~778~~333
	Changes in current assets and liabilities:
		(Increase) / decrease in accounts receivable			-		~~275~~668,~~993~~258
		Increase / (decrease) in accounts payable			63,~~351~~227		2977,~~075~~669
			Net cash used in operating activities		(2372,~~230~~782)		(~~240~~345,~~578~~530)
Cash flows used in investing activities
	Purchase of property and equipment				-		-
			Net cash used in (provided by) investing activities		-		-
Cash flows provided by financing activities
	Payments on cash advances from related party				751,097		-
			Net cash provided by financing activities		751,097		-
Net change in cash					(1621,~~133~~685)		(~~240~~345,~~578~~530)
Cash at beginning of period					26,108		402,656
Cash at end of period				$	94,~~975~~423	$	~~162~~57,~~078~~126
Supplemental cash flow information
	Cash payments for interest			$	-	$	-
	Cash payments for income taxes				-		-
Non Cash Financing Activities				$	-	$	-
The accompanying notes are an integral part of these financial statements.

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization - International Automated Systems, Inc. (the “Company” or “IAS”) was incorporated in the State of Utah on September 26, 1986. The Company’s activities to date have consisted of developing a business plan, raising capital through the issuance of debt and equity instruments, developing power generation equipment and obtaining the rights to certain technology related to electronic security and communication equipment.

Use of Estimates - The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Basis of Presentation / 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 of ~~September~~March 3031, ~~2014~~2015, the Company had $94,~~975~~423 of available cash and a working capital deficit of $~~153~~199,~~346~~774. For the ~~three~~nine months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014, the Company had no revenue, no operating income and used net cash for operating activities of $2372,~~230~~782 and $~~240~~345,~~578~~530, respectively. As of ~~September~~March 3031, ~~2014~~2015 the Company’s losses accumulated from inception totaled $3940,~~994~~041,~~059~~498. These factors, among others, indicate that the Company may be unable to continue as a going concern for the next twelve months. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to obtain additional financing as may be required, and ultimately to attain sufficient cash flow from operations to meet its obligations on a timely basis. Management is in the process of negotiating various sales agreements and believes these sales ~~will~~may generate sufficient cash flow for the Company to continue as a going concern. If the Company is unsuccessful in these efforts and does not attain sufficient sales to permit profitable operations or if it cannot obtain sufficient additional financing, it may be required to substantially curtail or terminate its operations.

Concentration Risks - The Federal Deposit Insurance Corporation (FDIC) insures cash deposits in most general bank accounts for up to $250,000 per institution. The Company had no cash deposits that exceeded insured amounts ~~of $-0- and $-0-~~ as of ~~September~~March 3031, ~~2014~~2015, and June 30, 2014, respectively.

Cash Equivalents - The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Fair Value of Financial Instruments - The Company’s financial instruments consist of cash and cash equivalents, payables, and notes payable. The carrying amount of cash and cash equivalents and payables approximates fair value because of the short-term nature of these items. The carrying amount of the notes payable approximates fair value as the individual borrowings bear interest at rates that approximate market interest rates for similar debt instruments.

Impairment - The Company records impairment losses on property and equipment and patents when indicators of impairment are present and undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. Furthermore, the Company makes periodic assessments about each patent and the related technology to determine if it plans to continue to pursue the technology and if the patent has value.

~~NOTE~~Research 1and –Development ~~ORGANIZATION~~- ~~AND~~Research ~~SUMMARY~~and OFdevelopment ~~SIGNIFICANT~~has ~~ACCOUNTING~~been ~~POLICIES~~the principal function of the Company. Research and development costs are expensed as incurred. Expenses in the accompanying financial statements include certain costs which are directly associated with the Company’s research and development of the Solar Power Plant technology, Steam Turbine technology, Automated Fingerprint Identification Machine technology, Digital Wave Modulation Technology and other various projects. These costs, which consist primarily of monies paid for consulting expenses, materials and supplies and compensation costs amounted to $5,242 and $135,064 for the nine months ended March 31, 2015 and 2014, respectively.

~~(CONTINUED)~~Advertising Costs - Advertising costs are expensed when incurred. Advertising expense was $258 and $7,648 for the nine months ended March 31, 2015 and 2014, respectively.

~~Research~~Property and ~~Development~~Equipment - ~~Research~~Property and ~~development~~equipment ~~has~~are ~~been~~recorded ~~the~~at ~~principal~~cost ~~function of the Company. Research~~ and ~~development costs~~ are ~~expensed~~depreciated asusing ~~incurred. Expenses in~~ the ~~accompanying~~straight-line ~~financial~~method ~~statements~~based ~~include~~on ~~certain costs which are directly associated with~~ the ~~Company’s~~expected ~~research~~useful ~~and~~lives ~~development~~ of the ~~Solar~~assets ~~Power~~which ~~Plant~~range ~~technology,~~from ~~Steam~~five ~~Turbine~~to ~~technology,~~ten ~~Automated~~years. ~~Fingerprint~~Depreciation ~~Identification~~expense ~~Machine~~for ~~technology,~~the ~~Digital~~nine ~~Wave~~months ~~Modulation~~ended ~~Technology~~March ~~and other various projects. These costs~~31, ~~which consist primarily of monies paid for consulting expenses~~2015, ~~materials~~ and ~~supplies~~2014, ~~and~~was ~~compensation costs amounted to~~ $~~181~~1,~~792~~517 and $~~144~~32,~~617~~333, ~~for~~respectively. ~~the~~The ~~fiscal~~major ~~years~~classes ~~ended~~of ~~June~~assets ~~30,~~are ~~2014~~as ~~and 2013, respectively.~~follows:

~~Advertising Costs - Advertising costs are expensed when incurred. Advertising expense was $202 and $3,133 for the three months ended September 30, 2014 and 2013, respectively.~~7

Property and Equipment - Property and equipment are recorded at cost and are depreciated using the straight-line method based on the expected useful lives of the assets which range from five to ten years. Depreciation expense for the three months ended September 30, 2014 and 2013 was $506 and $10,778, respectively. The major classes of assets are as follows:

Income Taxes - The Company recognizes the amount of income taxes payable or refundable for the current year and recognizes deferred tax assets and liabilities for operating loss carryforwards and for the future tax consequences attributable to differences between the financial statement amounts of certain assets and liabilities and their respective tax basis. Deferred tax assets and deferred liabilities are measured using enacted tax rates expected to apply to taxable income in the years those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance to the extent that uncertainty exists as to whether the deferred tax assets will ultimately be realized.

Condensed Financial Statements - The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at ~~September~~March 3031, ~~2014~~2015, and ~~2013~~2014, and for all periods presented herein, have been made.

~~NOTE~~Certain 1information –and ~~ORGANIZATION~~footnote ~~AND~~disclosures ~~SUMMARY~~normally OFincluded ~~SIGNIFICANT~~in ~~ACCOUNTING~~financial ~~POLICIES~~statements ~~(CONTINUED)~~prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s June 30, 2015 audited financial statements. The results of operations for the three month and the nine month periods ended March 31, 2015, and 2014, are not necessarily indicative of the operating results for the full year.

~~Certain~~Recent ~~information~~Accounting ~~and~~Pronouncements ~~footnote~~– ~~disclosures~~The ~~normally~~Company ~~included~~has inreviewed ~~financial~~all ~~statements~~recently ~~prepared~~issued, inbut ~~accordance~~not ~~with~~yet adopted, accounting ~~principles~~standards ~~generally accepted~~ in ~~the~~order ~~United~~to ~~States~~determine oftheir ~~America~~effects, ~~have~~if ~~been~~any, ~~condensed~~on orits ~~omitted. It~~results isof ~~suggested~~operations, ~~that these condensed~~ financial ~~statements~~position beor ~~read~~cash inflows. Based ~~conjunction~~on ~~with~~that ~~the~~review, ~~financial statements and notes thereto included in~~ the Company’s ~~June~~believes ~~30,~~that ~~2014~~none ~~audited financial statements. The results~~ of ~~operations~~these ~~for~~pronouncements ~~the~~will ~~periods~~have ~~ended~~a ~~September~~significant ~~30,~~effect ~~2014~~on ~~and~~its ~~2013~~financial ~~are not necessarily indicative of the operating results for the full year~~statements.

Recent Accounting Pronouncements – The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its financial statements.

NOTE 2 – BASIC AND DILUTED NET LOSS PER COMMON SHARE

Basic earnings per share is computed by dividing the net income or loss applicable to common shares by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing the net income or loss by the sum of the weighted average number of common shares plus the weighted average common stock equivalents which would arise from the exercise of outstanding stock options, issuance of stock held in trust and conversion of Series B Preferred Shares into options to purchase shares of common stock, using the treasury stock method and the average market price per share during the period.

NOTE 3 – RELATED PARTY TRANSACTIONS

The Company owes $~~154~~198,293 and $147,196 to its president for expenses paid on the Company’s behalf as of ~~September~~March 3031, ~~2014~~2015, and June 30, 2014, respectively. The liability is non -interest bearing, unsecured and due upon demand.

NOTE 4 – STOCK BASED COMPENSATION

Options and Warrants

The Company’s board of directors authorized the Company to enter into an agreement dated May 14, 2004, and amended October 13, 2004, with the Company’s president, in which the Company acquired patents, patents pending, designs and contracts related to certain technology (developed by the president) from the president. The direct costs of developing and obtaining the acquired patents, patents pending, designs and contracts were paid and capitalized by the Company. No additional value has been assigned to these patents as a result of them being acquired from the president.

As consideration, the Company authorized and issued warrants to purchase 100,000,000 shares of common stock to the president and agreed to pay the president royalties in the future equal to 10% of future sales proceeds from the technology. The warrants, which were considered stock-based compensation for services to be rendered, had no intrinsic value on the grant date. The fair value of the warrants was $37,136,781, calculated on the grant date using the Black-Scholes model. The following assumptions were used for this grant: Average risk-free interest rate of 4.79%; expected lives of 10 years; expected dividend yield of zero percent; and expected volatility of 138.76%. On July 1, 2006, the Company began recognizing stock-based compensation expense over the graded exercisability period of the options using 8

~~NOTE~~As consideration, the Company authorized and issued warrants to purchase 100,000,000 shares of common stock to the president and agreed to pay the president royalties in the future equal to 10% of future sales proceeds from the technology. The warrants, which were considered stock-based compensation for services to be rendered, had no intrinsic value on the grant date. The fair value of the warrants was $37,136,781, calculated on the grant date using the Black-Scholes model. The following assumptions were used for this grant: Average risk-free interest rate of 4.79%; –expected ~~STOCK~~lives ~~BASED~~of ~~COMPENSATION~~10 ~~(CONTINUED)~~years; expected dividend yield of zero percent; and expected volatility of 138.76%. On July 1, 2006, the Company began recognizing stock-based compensation expense over the graded exercisability period of the options using the straight-line basis over the requisite service period for each separately exercisability portion of the award as if the award was, in-substance, multiple awards.

~~the~~The ~~straight~~agreement contains a standard anti-~~line~~dilution ~~basis~~clause ~~over~~that gives the ~~requisite~~president ~~service~~the ~~period~~right ~~for~~to ~~each~~purchase ~~separately~~the ~~exercisability~~same ~~portion~~number of shares of common stock, given reclassification, reorganization or change by a stockholder, as were purchasable prior to any such changes, at a total price equal to that payable upon the ~~award~~exercise of the options. asAppropriate ifadjustments shall be made to the ~~award~~exercise ~~was,~~price ~~in-substance,~~so ~~multiple~~the ~~awards~~aggregate purchase price of the shares will remain the same. The warrants have an exercise price of $0.40 per share and are all exercisable as of March 31, 2015.

The ~~agreement~~following ~~contains~~table asummarizes ~~standard anti-dilution clause that gives~~ the ~~president the right to purchase the same number of shares of common~~ stock, ~~given~~option ~~reclassification,~~and ~~reorganization~~warrant oractivity ~~change by a stockholder,~~ as ~~were purchasable prior to any such changes, at a total price equal to that payable upon the exercise~~ of ~~the~~and ~~options. Appropriate~~for ~~adjustments shall be made to~~ the ~~exercise~~nine ~~price~~month soperiod ~~the~~ended ~~aggregate~~March ~~purchase~~31, ~~price~~2015, ofand the ~~shares~~years ~~will~~ended ~~remain~~June ~~the same. The warrants have an exercise price of $0.40 per share and are all exercisable as of September~~ 30, 2014., and 2013:

The following table summarizes the stock option and warrant activity as of and for the years ended June 30, 2014 and 2013:

36,920,000

NOTE 5 – PREFERRED STOCK

Series A Preferred Stock

The Series A Preferred Stock has equal dividend rights to the common shares, is not convertible into common shares, has no cumulative dividend requirements and has liquidation preferences equivalent to the common shares. 3,400,000 shares of the Series A Preferred Stock are entitled to the voting rights of 10 common shares, and 2,000,000 shares of the Series A Preferred Stock are entitled to the voting rights of 100 common shares. At ~~September~~March 3031, ~~2014~~2015, and June 30, 2014, there were 5,400,000 Series A Preferred Stock issued and outstanding, respectively.

NOTE 5 – PREFERRED STOCK (CONTINUED)

Series B Preferred Stock

The Series B Preferred Stock has equal dividend rights to the common shares, has no cumulative dividend requirements, has liquidation preferences equivalent to the common shares and each preferred share is entitled to the voting rights of 10 common shares. Each share is convertible into options to purchase two shares of common stock at $3.00 per share, exercisable immediately and the options expire ten years from the date the preferred stock is ~~exchanged~~issued. At ~~September~~March 3031, ~~2014~~2015, and June 30, 2014, there were 300,000, series B Preferred shares issued and outstanding.

The Company’s policy for recording interest and penalties associated with taxes is to recognize it as a component of income tax

NOTE 6 – SUBSEQUENT EVENTS

In accordance with ASC 855, the Company evaluated subsequent events through the date these financial statements were issued. There were no additional material subsequent events that required recognition or additional disclosure in these financial statements.

~~ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL~~10

~~CONDITION~~ITEM 2. - MANAGEMENT’S DISCUSSION AND ~~RESULTS~~ANALYSIS OF ~~OPERATIONS~~FINANCIAL

~~Liquidity~~CONDITION ~~and~~AND ~~Capital~~RESULTS ~~Resources. As~~OF ~~of September 30, 2014, Registrant had cash of $9,975~~OPERATIONS. Cash declined because of the funds spent on the development of the technology and products of the Company. Registrant's has total liabilities of $111,230 and shareholders' equity of $91,806. During the quarter the obligation to a related party in the amount of $147,196 as shown on the balance sheet dated September 30, 2014, increased to $154,293 as of September 30, 2014. As of June 30, 2014, Registrant had cash and total current assets of $9,975 and had current liabilities of $163,321 and shareholders' equity of $126,980 as of September 30,2014, compared to cash of $26,108, current liabilities of $149,873 and stockholders’ equity of $157,067 as of June 30, 2014. As of September 30, 2014, the ratio of current assets to current liabilities was approximately sixteen to one.

~~Results~~Liquidity of Operation. For the quarter ended September 30, 2014, Registrant had no revenues compared to no revenues for the same period a year earlier. For the quarter ended September 30, 2014, Registrant had expenses of $30,087 compared to expenses of $556,424 for the same period a year earlier. The lack of revenues reflects potential products were under development. For the quarter ended September 30, 2014, Registrant had a net loss of ($33,370) compared to a net loss of $(556,424) for the same period a year earlier. The decrease in net loss is attributable to a reduction in research and ~~development~~Capital ~~expenses~~Resources. ~~Basic and diluted loss per share were $(0.00) compared to basic and diluted loss per share~~ of $(0.01) for the same period in 2013. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain successful operations. Management is pursuing various sales agreements and is hopeful that these potential agreements will generate sufficient cash flow for the Company to remain and be as a going concern. If the Company is unsuccessful in these efforts and cannot attain sufficient sales to permit profitable operations or if it cannot obtain funding or investment, it may substantially curtail or end its operations.

~~Company’s~~The ~~Business~~results discussed below are for the three and nine month periods ended March 31, 2015, and March 31, 2014, respectively.

The products which the Company has under development were described in its report on Form 10-K which was filed on or about July 16, 2015.Generally speaking the Company is continuing its development of these products. The Company is incorporating the report on Form 10-K filed on July 16, 2015,into this report by reference Revenues

~~The~~For ~~Company has an Alternate Solar Energy Thermal System (“System”) which can be used with~~ the ~~Company’s~~three ~~bladeless~~month ~~turbine to generate power. The system captures the solar energy onto a receiver~~ and the ~~energy~~nine ismonth ~~used~~periods toended ~~propel~~March ~~the~~31, ~~bladeless~~2015, ~~turbine. The~~and ~~System~~2014, ~~may~~there ~~use~~were ~~multiple~~no ~~concentrators to supply a single turbine~~revenues.

~~The~~Research ~~Company~~and ~~has~~Development aExpenses an Automated Fingerprint Identification Machine (“AFIM”) which is designed to have the capability to verify the identity of individuals. The AFIM is able to identify a person verifying the identity from information previously stored. The Company believes that it has the ability to connect a series of AFIM’s to a single personal computer. The person whose identity will be verified has the AFIM read the fingerprint. Previously the person whose identify is being verified has the AFIM read the fingerprint which is then stored in a storage medium.

~~The~~During ~~Company~~the ~~purports~~three ~~that~~months itended ~~has~~March ~~developed~~31, ~~technology~~2015, ~~that~~research ~~transmits information~~ and ~~data~~development ~~using~~expenses ~~different~~declined ~~wave~~from ~~patterns~~$49,478 ~~configurations and timing in the electromagnetic spectrum. The Company refers~~ to ~~this technology as the Digital Wave Modulation (“DWM”)~~$851. ~~The~~For ~~Company believes that this technology may increase~~ the ~~amount~~nine ofmonths ~~information~~ending ~~which~~on ~~can~~March be31, ~~transmitted.~~2015 ~~The commercial feasibility of this technology has not been demonstrated. The Company is continuing the technology’s feasibility. There is great competition in the communication data transfer~~ and ~~storage~~2014, ~~systems.~~research ~~There are risks to commercially viable products being developed~~ and ~~in demand. The Company’s~~ development isexpenses ~~limited~~declined byfrom ~~funds~~$92,854 ~~available~~to ~~for development~~$3,105. To ~~be successful the Company must have marketing capabilities and strategies for each product developed or under development.~~

~~The~~General Company has patented a propulsion steam turbine. It uses the expansion of steam to be a propulsion to create a rotational force. The Company believes that its turbine is as effective as other turbines, is smaller in size, requires less maintenance, is less expensive to manufacture, is mass producible, and ~~does~~Administrative not require cooling towers. It is more mobile and water conserving than other turbines. The Company believes that its turbine will be marketable to the utility power industry, hydrogen production, and transportation. The Company may not be able to manufacture because of lack of sufficient funding, government interference and regulation, lack of acceptance in the industry, and many other conditions not under the Company’s control. Expenses

~~The~~During ~~Company~~the ~~has~~three ~~developed~~months anended ~~Automatic~~March ~~Self-Service~~31, ~~Check-out~~2015, ~~System. The~~and is2014, ~~referred~~respectively, ~~to as~~ the ~~“Self-Check~~general ~~System.”~~and Inadministrative ~~retail~~expenses ~~operations~~declined ~~the~~from ~~Self-Check~~$199,450 ~~System allows customers~~ to ~~check out the items to be purchased~~$34,519. During ~~A scanner reads~~ the ~~bar~~nine ~~codes~~months ofended ~~the~~March ~~items~~31, ~~being~~2015, ~~purchased~~ and a2014, ~~scale weighs~~ the ~~scanned~~general ~~items~~and ~~that~~administrative ~~are~~expenses ~~placed~~declined infrom ~~the~~$956,393 ~~receiving~~to ~~baskets~~$70,767. The ~~Self-Check~~decline ~~System~~reflected ~~is designed to replace clerk operated cashier register. When fully implemented~~ a ~~store~~reduction ~~manager~~in ~~is able to maintain accurate inventory of items on a contemporary basis~~personnel.

~~For~~Net the Self-Check System to operate at least 95% of the items must have bar codes. The retailer may have to purchase equipment to be able to put bar coedes on items in the store. The Company believes that the Self-check System may reduce thefts and employees will be unable to circumvent the check-out systems. Loss

~~Another~~For ~~market~~the ~~being~~three ~~tested~~months isended ~~automatic~~March ~~ordering~~31, ~~and~~2015, ~~payment. The~~our ~~customers~~net ~~would~~loss ~~use~~was a$37,162 ~~touch~~compared ~~screen~~ to ~~initiate~~a annet ~~order~~loss of $252,438 ~~and~~for ~~make~~the ~~payment~~three ~~using~~months ~~the~~ended ~~Company’s~~March ~~AFIM~~31, ~~technology~~2014. The ~~order~~decrease ~~would~~was bea ~~sent~~result ~~automatically~~of toreductions ~~the~~in ~~food~~expenses ~~preparers~~incurred.

~~Patents~~For ~~and~~the ~~Trade~~nine ~~Secrets~~months ended March 31, 2015, our net loss was $77,526 compared to a net loss of $1,123,790. The decline in the net loss represented the combined reductions in expenses incurred.

~~The~~Financial ~~Company has been assigned or will be assigned the rights to several U.S. patents. Four patents pertaining to the AFIM technology were granted in January 1997~~Condition, ~~February~~Liquidity ~~2001, July 2001,~~ and ~~September~~Capital 2002. Seven patents pertaining to the DWM technology were granted in May 1996, June 1997, November 1997, July 2000, September 2000, October 2000, and May 2001. A patent relating to shelf tag was granted on September 2003. Four patents relating to the turbine were granted in March 2003, January 2004, February 2006, and November 2007. A patent pertaining to the solar energy technology was granted in October 2007. Resources

~~The~~During ~~Company~~the ~~has~~nine ~~not~~months ~~sought~~ended orMarch ~~received~~31, an2015, ~~opinion~~the ~~from~~Company anused ~~independent~~cash ~~patent~~in ~~attorney~~operations ~~regarding~~of ~~the~~$71,782 ~~strength~~compared ofto $345,530 used during the ~~patents~~comparable orperiod ~~patents~~of ~~pending~~2014. The ~~and~~decrease ~~the~~in ~~ability~~cash ofused ~~the~~was ~~Company~~due to ~~withstand~~reduced ~~any~~expenditures ~~challenge~~for toresearch ~~the~~and ~~patent~~development orcosts ~~any~~and ~~future~~general ~~efforts~~and byadministrative costs net of the ~~Company~~cash toflow ~~enforce~~in ~~its~~2014 ~~rights~~arising ~~under~~from athe ~~patent~~collection orof ~~patents~~$668,258 ~~against~~of ~~others. In~~accounts ~~2008~~receivable aand ~~court~~the ~~held~~increase ~~that~~of ~~one~~$77,669 of accounts payable during the ~~AFIM~~nine ~~patents~~months ~~was~~ended ~~invalid~~March 31, 2014.

~~The Company believes that it has trade secrets and it has made effort to safeguard and secure its trade secrets.~~ There ~~can~~was be no ~~assurance~~net ~~that~~cash ~~these~~used ~~safeguards~~or ~~will~~provided ~~enable~~by ~~the~~investing ~~Company~~activities toduring ~~prevent~~either ~~competitors~~the ~~from~~nine ~~gaining~~months ~~knowledge~~ended ofMarch ~~these~~31, ~~trade~~2015 ~~secrets~~or ~~and using them to their advantage and to the detriment of the Company~~2014.

~~The~~Net ~~Company~~cash ~~relies~~provided onby ~~its~~financing ~~proprietary~~activities ~~technology~~during in the ~~development~~nine ofmonths ~~its~~ended ~~products. There~~March ~~can~~31, be2015 noamounted ~~assurance~~to ~~that~~$51,097 ~~others~~representing ~~may~~payments ~~not~~made ~~develop~~on ~~technology which competes with~~ the Company’s ~~products~~behalf ~~and~~by ~~technology~~a related party. During the nine months ended March 31, 2014, there was no cash provided by financing activities.

~~Part~~At IIMarch 31, 2015, the Company had cash on hand of $4,423, which is not sufficient to meet our operating needs for the next twelve months. Because we are engaged in the research and development of our products and aren’t receiving material cash proceeds from our sales, we will need to continue to raise additional capital on an ongoing basis. We anticipate that we may need to secure additional sources of capital to support our operating and development costs and to grow the Company.

~~Item~~At 1.March ~~Legal~~31, ~~Proceedings~~2015, our current assets were $4,423 and our current liabilities were $204,197 resulting in a working capital deficit of $199,774. At June 30, 2014, the current assets were $26,108 and our current liabilities were $149,873 resulting in a working capital deficit of $123,765

~~None.~~Company’s Business

~~Item~~The 2.products ~~Changes~~which the Company has under development were described in ~~Securities~~its report on Form 10-K which was filed on or about July 16, 2015. Generally speaking the Company is continuing to develop these products. The Company is incorporating the report on Form 10-K filed on July 16, 2015, into this report by reference.

~~None~~The Company has an Alternate Solar Energy Thermal System (“System”) which can be used with the Company’s bladeless turbine to generate power. The system captures the solar energy onto a receiver and the energy is used to propel the bladeless turbine. The System may use multiple concentrators to supply a single turbine.

~~Item~~The 3Company has an Automated Fingerprint Identification Machine (“AFIM”), designed to have the capability of verifying the identity of individuals. ~~Defaults~~The ~~upon~~AFIM ~~Senior~~is ~~Securities~~able to identify a person utilizing information previously stored. The Company believes that it has the ability to connect a series of AFIM’s to a single personal computer. The person whose identity will be verified as the AFIM reads the fingerprint. The fingerprint being verified has previously been read and stored within the system.

~~None~~The Company has technology, referred to as the Digital Wave Modulation (“DWM”). The Company believes that this technology may increase the amount of information which may be transmitted. To date the commercial feasibility of this technology is uncertain. There is competition in communication, data transfer and storage systems. There are risks related to development of commercially viable products as well as an uncertain demand. The Company’s development is limited by funds available for development. .

~~Item~~The 4Company has patented a propulsion steam turbine. It ~~Matters~~uses ~~Submitted~~the expansion of steam to be propulsion to create a ~~Vote~~rotational force. The Company believes that its turbine is as effective as other turbines, is smaller in size, requires less maintenance, is less expensive to manufacture, is mass producible, and does not require cooling towers. It is more mobile and water conserving than other turbines. The Company may not be able to successfully manufacture because of lack of sufficient funding, government interference and regulation, lack of acceptance in the industry, and many other conditions not under the Company'’s ~~Shareholders~~control.

~~None~~The Company has developed an Automatic Self-Service Check-out System. The check-out system is referred to as the “Self-Check System.” In retail operations the Self-Check System allows customers to check out the items to be purchased. A scanner reads the bar codes of the items being purchased and a scale weighs the scanned items that are placed in the receiving baskets. The Self-Check System is designed to replace clerk-operated cashier registers. When fully implemented a store manager is able to maintain accurate inventory of items on a real-time basis.

~~Item~~For 5the Self-Check System to operate at least 95% of the items must have bar codes. ~~Other~~The ~~Information~~retailer may have to purchase equipment to be able to put bar codes on items in the store. The Company believes that the Self-check System may reduce thefts and employees will be unable to circumvent the check-out systems.

~~Our~~Another ~~shares~~market ofbeing ~~common~~tested ~~stock~~is ~~are~~automatic ~~quoted~~ordering onand ~~the~~payment. The ~~over-~~customers would use a touch screen to initiate an order, and make payment using the~~-counter~~ ~~electronic~~Company’s ~~bulletin~~AFIM ~~board~~technology. The ~~under~~order would be sent automatically to the ~~symbol~~food ~~“IAUS~~preparers.”.

~~Item~~Patents ~~6. Exhibits, Financial Statements, Schedules~~ and ~~Reports~~Trade ~~on Form 10-Q.~~Secrets

The Company has been assigned or will be assigned the rights to several U.S. patents. Four patents pertaining to the AFIM technology were granted in January 1997, February 2001, July 2001, and September 2002. Seven patents pertaining to the DWM technology were granted in May 1996, June 1997, November 1997, July 2000, September 2000, October 2000, and May 2001. A patent relating to shelf tag was granted on September 2003. ~~Exhibits~~Four patents relating to the turbine were granted in March 2003, January 2004, February 2006, and November 2007. A patent pertaining to the solar energy technology was granted in October 2007.

NoThe Company has not sought or received an opinion from an independent patent attorney regarding the strength of the patents or patents pending and the ability of the Company to withstand any challenge to the patent or any future efforts by the Company to enforce its rights under a patent or patents against others. In 2008 a court held that one of the AFIM patents was invalid.

~~Description~~The Company believes that it has trade secrets and it has made efforts to safeguard and secure its trade secrets. There can be no assurance that these safeguards will enable the Company to prevent competitors from gaining knowledge of these trade secrets and using them to their advantage and to the detriment of the Company.

31The Company relies on its technology in the development of its products.1 There can be no assurance that others may not develop technology which competes with the Company’s products and technology.

~~Certification~~Accounting ~~pursuant~~Policies toand ~~Section 302~~Estimates

31We believe that our financial statements and the accompanying notes are prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions about future events that affect the reported amounts in the financial statements and the accompanying notes.2 We identified certain accounting policies which are important in the financial statements’ reporting of financial condition, results of operations, or liquidity. Accounting policies cover accounting matters that are inherently uncertain because the future resolution of such matters is unknown.

~~Certification~~Off-Balance ~~pursuant~~Sheet ~~to Section 302~~Arrangements.

~~32.1~~ 11

~~Certification~~Under SEC regulations, we are required to disclose our off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we may enter into lease commitments, purchase commitments and other contractual obligations.

32ITEM 3.2 QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

~~Certification~~We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. Certain market risks were disclosed in the Company’s June 30, 2014, Form 10K, which was filed July 16, 2015.

ITEM 4. CONTROLS AND PROCEDURES.

B.Evaluation ~~Reports~~of onDisclosure ~~Form~~Controls ~~8-K.~~and Procedures

~~None~~Evaluation of Disclosure Controls and Procedures

~~Item~~Under 9Athe ~~CONTROLS~~supervision ~~AND~~and ~~PROCEDURES~~the participation of management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15 under the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this report. Based upon the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

~~Evaluation~~Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of ~~Disclosure~~financial ~~Controls~~reporting and ~~Procedures~~the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.

~~Under~~Because ~~the supervision and the participation~~ of ~~management,~~inherent ~~including our Chief Executive Officer and Chief Financial Officer~~limitations, weinternal ~~evaluated~~control ~~the~~over ~~effectiveness~~financial ofreporting ~~the~~may ~~design~~not ~~and~~prevent ~~operation~~or ofdetect ~~our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15 under the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this report~~misstatements. ~~Based upon the evaluation~~Therefore, ~~our~~even ~~Chief~~those ~~Executive~~systems ~~Officer~~determined ~~and Chief Financial Officer concluded that the disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required~~ to be ~~disclosed~~effective bycan us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide ~~absolute~~only reasonable assurance, ~~however, that the objectives~~ of ~~the~~achieving ~~controls~~their ~~system are met, and no evaluation of controls can provide absolute assurance that all~~ control ~~issues and instances of fraud, if any, within a company have been detected~~objectives.

Our management, iswith ~~responsible~~the ~~for~~participation ~~establishing~~of the Chief Executive Officer and ~~maintaining~~Chief ~~adequate~~Financial Officer evaluated the effectiveness of the Company’s internal control over financial reporting (as ~~defined~~of inMarch ~~Rule~~31, ~~13a-15(f)~~2015. ~~under~~In making this assessment, our management used the ~~Exchange~~criteria ~~Act).~~set ~~Our~~forth ~~internal~~by ~~control~~the ~~over~~Committee ~~financial~~of ~~reporting~~Sponsoring isOrganization aof ~~process~~the ~~designed~~Treadway toCommission ~~provide~~(COSO) ~~reasonable~~in ~~assurance~~Internal ~~regarding~~Control ~~the~~-- ~~reliability~~Integrated ofFramework. Based ~~financial~~on ~~reporting~~this ~~and~~evaluation, our management, with the ~~preparation~~participation of ~~financial~~the ~~statements~~Chief ~~for~~Executive ~~external~~Officer ~~purposes~~and Chief Financial Officer, concluded that as of ~~accounting~~March ~~principles~~31, ~~generally~~2015 ~~accepted~~our ininternal ~~the~~control ~~United~~over ~~States~~financial reporting was not effective.

~~Because~~This report does not include an attestation report of ~~inherent~~the ~~limitations,~~Company’s registered public accounting firm regarding internal control over financial reporting. Management’s ~~may~~report was not ~~prevent~~subject orto ~~detect~~attestation ~~misstatements. Therefore,~~by ~~even~~the ~~those~~Company’s ~~systems~~registered ~~determined~~public accounting firm pursuant to berules ~~effective~~of ~~can~~the ~~provide~~Securities ~~only~~and ~~reasonable~~Exchange ~~assurance~~Commission ofthat ~~achieving~~permit ~~their~~the ~~control~~Company ~~objectives.~~to provide only management’s report in this report.

~~Our~~Changes management, with the participation of the Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the Company’s internal control over financial reporting as of September 30, 2014. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organization of the Treadway Commission (COSO) in Internal Control --over ~~Integrated Framework. Based on this evaluation, our management, with the participation of the Chief Executive Officer and Chief~~ Financial ~~Officer, concluded that as of September 30, 2014 our internal control over financial reporting was not effective.~~Reporting

~~This~~During ~~report~~the ~~does~~most ~~not~~recent ~~include~~quarter anended ~~attestation~~March ~~report~~31, of2015, ~~the~~there ~~Company’s~~has ~~registered~~been ~~public~~no ~~accounting~~change ~~firm~~in ~~regarding~~our internal control over financial reporting~~. Management’s~~ ~~report~~(as ~~was~~defined ~~not~~in ~~subject~~Rule to13a-15(f) ~~attestation~~and by15d-15(f) under the ~~Company’s~~Exchange ~~registered~~Act) ~~public~~that ~~accounting~~has ~~firm~~materially ~~pursuant~~affected toor ~~rules~~is ofreasonably ~~the~~likely ~~Securities and Exchange Commission that permit the Company~~ to ~~provide~~materially ~~only~~affect, ~~management’s~~our ~~report~~internal incontrol ~~this~~over ~~report~~financial reporting.

~~Changes~~Part ~~in Internal Control Over Financial Reporting~~II.

~~During~~Item ~~the~~1. ~~most~~Legal recent quarter ended September 30, 2014, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected or is reasonably likely to materially affect, our internal control over financial reportingProceedings.

~~Signatures~~There is a lawsuit pending. Refer to the June 30, 2013 Form 10K filed on or about July 16, 2015.

~~Pursuant~~Item to2. ~~the~~Unregistered ~~requirements~~Sales of ~~the~~Equity Securities ~~Exchange~~and ~~Act~~Use of ~~1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized~~Proceeds.

~~Date:~~On ~~September~~August 113, 2015, the Company sold 2,500,000 shares of restricted common stock at price of $0.32 per share. The proceeds were received by the Company on August 13, 2015.

~~International~~Item ~~Automated~~3. ~~Systems,~~Defaults ~~Inc~~upon Senior Securities.

~~By s/Neldon Johnson~~None.

~~President~~Item ~~and~~4. ~~Chief~~Matters ~~Operating~~Submitted ~~Officer~~to a Vote of the Company's Shareholders.

None.

Item 5. Other Information.

Our shares of common stock are quoted on the electronic over the counter bulletin board under the symbol “IAUS”.

Item 6. Exhibits, Financial Statements, Schedules and Reports on Form 10-Q.

A. Exhibits.

No.

Description

31.1

Certification pursuant to Section 302

31.2

Certification pursuant to Section 302

32.1

Certification

32.2

Certification

B. Reports on Form 8-K.

None

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: October 1, 2015

International Automated Systems, Inc.

By /s/Neldon Johnson

President and Chief Executive Officer

October 2, 2015

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