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 ~~March~~ December 31, 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

incorporation or organization) Identification No.)

552730 ~~North~~W ~~Merchant~~4000 ~~Street 608~~S

~~American Fork~~Oasis, ~~Utah~~UT ~~84003~~84624

(Address of principal executive offices)

Registrant's telephone number

including area code (801) 423-8132

~~Not~~55 ~~Applicable Former~~North ~~Address,~~Merchant ifStreet ~~changed since last report~~608

~~Indicate~~American byFork, ~~check~~Utah 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 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 84003

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 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 ~~October~~January 127, ~~2015~~2017, registrant had 6779,~~394~~156,~~305~~344 shares of common stock, no par value per share, issued and outstanding; registrant also had 5,700,000 shares of preferred stock, no par value 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 ~~March~~December 31, 2015, and the results of its operations from June 30, ~~2014~~2015, and from September 30, 2015 through ~~March~~December 31, 2015 have been made. The results of its operations for such interim ~~period~~periods isare not necessarily indicative of the results to be expected for the entire year.

INTERNATIONAL AUTOMATED SYSTEMS, INC
Balance Sheets
ASSETS
			March 31,		June 30,
			December 31, 2015			June 30, 2015
			2015		2014
			(Unaudited)
CURRENT ASSETS			~~(unaudited)~~
	Cash and cash equivalents		$	43,~~423~~773,874	$	~~26,108~~$	16,822
	Accounts receivable			-		-	-
		Total Current Assets		43,~~423~~773,874		~~26,108~~	16,822
PROPERTY AND EQUIPMENT, net				~~279~~283,~~315~~685		~~280,832~~	283,685
		TOTAL ASSETS	$	~~283~~4,~~738~~057,559	$	~~306,940~~$	300,507
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
	Accounts payable		$	58,~~904~~248	$	~~2,677~~$	27,794
	Related party payable			~~198~~149,~~293~~213		~~147,196~~	163,668
		Total Current Liabilities		204,197		149,873
	Deferred revenue			-			23,000
Long-term notes payable				-		-
	Prepaid common stock subscription - related party			3,077,868			-
		TOTAL LIABILITIES		204,197		149,873
		Total Current Liabilities		3,235,330			214,462
				199,774
Long-term notes payable				-			-
STOCKHOLDERS' EQUITY
		TOTAL LIABILITIES		3,235,330			214,462
	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			(40,041,498)		(39,963,972)
		67,394,305 and 64,894,305 issued and outstanding, respectively		40,450,775			39,650,775
		Total Stockholders' Equity		79,541		157,067
	Accumulated deficit			(40,098,810)			(40,034,994)
		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	283,738	$	306,940
		Total Stockholders' Equity		822,229			86,045
The accompanying notes are an integral part of these financial statements.
		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	4,057,559		$	300,507
				.
The accompanying notes are an integral part of these unaudited condensed financial statements.

INTERNATIONAL AUTOMATED SYSTEMS, INC
Statements of Operations
(unaudited)
(Unaudited)
			For the Three Months Ended				For the Nine Months Ended
				For the Three Months Ended December 31,				For the Six Months Ended December 31,
			March 31,				March 31,
				2015		2014		2015		2014
			2015		2014		2015		2014
REVENUES			$	-	$	-	$	-	$	-
OPERATING EXPENSES
	Research and development			~~2,137~~714		~~42,210~~851		518,~~242~~704		~~135~~3,~~064~~105
	Depreciation expense			~~506~~-		~~10,778~~505		~~1,517~~-		321,~~333~~011
	General and administrative			3428,~~519~~942		~~199~~8,~~450~~912		7045,~~767~~113		~~956~~36,~~393~~238
		Total Operating Expenses		3729,~~162~~657		~~252~~10,~~438~~268		7763,~~526~~816		140,~~123,790~~355
NET LOSS			$	(37,162)	$	(252,438)	$	(77,526)	$	(1,123,790)
		Net Operating Loss		(29,657)		(10,268)		(63,816)		(40,355)
BASIC AND DILUTED LOSS PER SHARE			$	(0.00)	$	(0.00)	$	(0.00)	$	(0.02)
NET LOSS			$	(29,657)	$	(10,268)		(63,816)		(40,355)
BASIC AND DILUTED LOSS PER SHARE			$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING				6467,~~894~~394,305		64,894,305		6466,~~894~~806,~~305~~873		64,894,305
The accompanying notes are an integral part of these financial statements
The accompanying notes are an integral part of these unaudited condensed financial statements.

INTERNATIONAL AUTOMATED SYSTEMS, INC
Statements of Cash Flows
(Unaudited)
				For the Nine Months Ended
				For the Six Months Ended
				March 31,
				December 31,
				2015		2014
CASH FLOWS FROM OPERATING ACTIVITIES
	Net loss			$	(7763,~~526~~816)	$	(140,~~123,790~~355)
	Adjustments to reconcile net loss to net
		cash from operating activities:
		Depreciation and amortization			~~1,517~~-		321,~~333~~011
	Changes in current assets and liabilities:
		(Increase) / decrease in accounts receivable			-		~~668,258~~-
		Increase / (decrease) in accounts payable			3(19,~~227~~546)		~~77,669~~84
			Net cash used in operating activities		(72,782)		(345,530)
		Increase / (decrease) in deferred revenue			(23,000)		-
		Increase / (decrease) in prepaid common stock subscription - related party			3,077,868
			Net cash provided (used) in operating activities		2,971,506		(39,260)
Cash flows used in investing activities
	Purchase of property and equipment				-		-
			Net cash used in (provided by) investing activities		-		-
			Net cash provided (used) in investing activities		-		-
Cash flows provided by financing activities
	Payments on cash advances from related party				51,097		-
	Payments/(Advances) on cash advances from related party				(14,456)		32,097
			Net cash provided by financing activities		51,097		-
	Sale of common stock				800,000		-
Net change in cash					(21,685)		(345,530)
			Net cash provided by financing activities		785,544		32,097
Cash at beginning of period					26,108		402,656
Net change in cash					3,757,050		(7,163)
Cash at end of period				$	4,423	$	57,126
Cash at beginning of period					16,822		26,108
Cash at end of period
				$	3,773,873	$	18,945
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.
The accompanying notes are an integral part of these unaudited condensed 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~~ Liquidity - 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 ~~March~~December 31, 2015, the Company had $43,~~423~~773,874 of available cash and a working capital ~~deficit~~ of $~~199~~538,~~774~~544. ~~For~~At ~~the~~June ~~nine months ended March 31~~30, 2015 ~~and 2014~~, the Company had noavailable ~~revenue, no operating income and used net~~ cash ~~for operating activities~~ of $7216,~~782~~822 and ~~$345,530,~~a ~~respectively.~~deficit Asin ofworking ~~March~~capital ~~31,~~of ~~2015 the Company’s losses accumulated from inception totaled~~ $40(197,~~041,498~~640). ~~These~~For ~~factors, among others, indicate that~~ the ~~Company~~three ~~may~~and besix ~~unable~~months toended ~~continue~~December as31, a2015 ~~going~~and ~~concern~~2014, ~~for~~ the ~~next~~Company ~~twelve~~had ~~months.~~no ~~The~~revenue ~~financial statements do not include any adjustments relating to the recoverability~~ and ~~classification~~no ofoperating ~~recorded~~income. For ~~asset amounts or~~ the ~~amount~~six ~~and~~months ~~classification~~ended ofDecember ~~liabilities~~31, ~~that~~2015, ~~might be necessary should~~ the Company beincreased ~~unable~~cash toby ~~continue~~$2,971,506 asand afor ~~going~~December ~~concern. The Company’s ability to continue as a going concern is dependent upon its ability to obtain additional financing as may be required~~31, ~~and~~2014 ~~ultimately~~decreased tonet ~~attain sufficient~~ cash ~~flow~~ from operating ~~operations~~activities ~~to meet its obligations on a timely basis. Management is in the process~~ of ~~negotiating~~$2,971,506 ~~various sales agreements~~ and believes these sales may generate sufficient cash flow for the Company to continue as a going concern. If the Company is unsuccessful in these efforts and does not attain sufficient sales to permit profitable operations or if it cannot obtain sufficient additional financing$(39,260), ~~it may be required to substantially curtail or terminate its operations~~respectively.

~~Concentration~~As ~~Risks~~of ~~- The~~December ~~Federal~~31, ~~Deposit~~2015, ~~Insurance~~the ~~Corporation~~Company’s ~~(FDIC)~~total ~~insures~~accumulated ~~cash~~losses ~~deposits~~amounted ~~in most general bank accounts for up~~ to $~~250~~(40,~~000 per institution. The Company had no cash deposits that exceeded insured amounts as of March 31~~098, ~~2015, and June 30, 2014, respectively~~810).

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 cash deposits that exceeded insured amounts of $3,273,874 and $-0- as of December 31, 2015 and June 30, 2015, 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~~payables. 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.

~~Research~~As ~~and Development - Research and development has been the principal function~~ of ~~the~~December ~~Company.~~31, ~~Research~~2015 ~~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~~has ~~and~~no ~~development~~unimpaired ofpatents ~~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~~equipment ~~months~~is ~~ended~~fully ~~March 31, 2015 and 2014, respectively~~depreciated.

~~Advertising~~Research ~~Costs~~and Development - ~~Advertising~~Research and development has, historically, been the principal function of the Company. Research and development costs are expensed ~~when~~as incurred. Expenses ~~Advertising~~in ~~expense~~the ~~was~~accompanying financial statements include certain costs which are directly associated with the Company’s research and development of the Solar Lens technology. These costs, which consist primarily of monies paid for consulting expenses, materials and supplies and compensation costs amounted to $~~258~~714 and $718,~~648~~704 for the ~~nine~~three and six months ended ~~March~~December 31, 2015 ~~and 2014~~, respectively. For the comparative three and six

~~Property~~month ~~and~~periods 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 nine months ended ~~March~~December 31, ~~2015~~2014, the research and ~~2014,~~development ~~was~~expenses were $~~1,517~~851 and $323,~~333,~~105 respectively. ~~The major classes of assets are as follows:~~

7Advertising Costs - Advertising costs are expensed when incurred. There were no advertising expenses for the three months and six months ended December 31, 2015 and 2014, respectively.

~~Income~~Property ~~Taxes~~and Equipment - ~~The~~Property ~~Company~~and ~~recognizes~~equipment ~~the~~are ~~amount~~recorded ofat ~~income~~cost ~~taxes payable or refundable for the current year~~ and ~~recognizes~~are ~~deferred~~depreciated ~~tax~~using ~~assets and liabilities for operating loss carryforwards and for~~ the ~~future~~straight-line ~~tax~~method ~~consequences~~based ~~attributable~~on ~~to differences between~~ the ~~financial~~expected ~~statement~~useful ~~amounts~~lives of ~~certain~~the assets. ~~and~~Depreciation ~~liabilities~~expense ~~and~~for ~~their~~the ~~respective~~three ~~tax~~months ~~basis.~~ended ~~Deferred~~December ~~tax~~31, ~~assets~~2015 and ~~deferred~~2014 ~~liabilities~~was ~~are~~$-0- ~~measured~~and ~~using~~$506, ~~enacted~~respectively. For ~~tax~~the ~~rates~~comparative ~~expected~~six tomonth ~~apply~~periods toended ~~taxable~~December ~~income~~31, in2015 ~~the~~and ~~years~~2014, ~~those~~depreciation ~~temporary~~expense ~~differences~~was ~~are~~charged ~~expected~~$-0- toand ~~be recovered or settled~~$1,011. The ~~Deferred~~major ~~tax~~classes of assets are ~~reduced by a valuation allowance to the extent that uncertainty exists~~ as ~~to whether the deferred tax assets will ultimately be realized.~~follows:

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 March 31, 2015, and 2014, and for all periods presented herein, have been made.


Long-term Assets	December 31, 2015	June 30, 2015
Land	$ 283,685	$ 283,685
Computer and equipment	528	528
Total property and equipment	284,213	284,213
Less: Accumulated depreciation	(528)	(528)
Total property and equipment, net	$ 283,685	$ 283,685

~~Certain~~Income ~~information~~Taxes - The Company recognizes the amount of income taxes payable or refundable for the current year and ~~footnote~~recognizes ~~disclosures~~deferred ~~normally~~tax ~~included~~assets inand ~~financial~~liabilities ~~statements~~for ~~prepared~~operating inloss ~~accordance~~carryforwards ~~with~~and ~~accounting~~for ~~principles~~the ~~generally~~future ~~accepted~~tax inconsequences attributable to differences between the ~~United~~financial ~~States~~statement amounts of ~~America~~certain ~~have~~assets ~~been~~and ~~condensed~~liabilities orand ~~omitted. It~~their isrespective ~~suggested~~tax ~~that~~basis. ~~these~~Deferred ~~condensed~~tax ~~financial~~assets ~~statements~~and bedeferred ~~read~~liabilities inare ~~conjunction~~measured ~~with~~using ~~the~~enacted ~~financial~~tax ~~statements~~rates ~~and~~expected ~~notes~~to ~~thereto~~apply ~~included~~to taxable income in the ~~Company’s~~years ~~June~~those ~~30,~~temporary ~~2015~~differences ~~audited~~are ~~financial~~expected ~~statements~~to be recovered or settled. ~~The~~ ~~results~~Deferred oftax ~~operations~~assets ~~for~~are reduced by a valuation allowance to the ~~three~~extent ~~month~~that ~~and~~uncertainty exists as to whether the ~~nine~~deferred ~~month~~tax ~~periods~~assets ~~ended~~will ~~March~~ultimately ~~31,~~be ~~2015,~~realized. The Company’s policy for recording interest and ~~2014,~~penalties ~~are~~associated ~~not~~with ~~necessarily~~taxes ~~indicative~~is ofto ~~the~~recognize ~~operating~~it ~~results~~as ~~for~~a ~~the~~component ~~full~~of ~~year.~~income tax

~~Recent~~As ~~Accounting~~of ~~Pronouncements~~December ~~– The Company has reviewed all recently issued~~31, ~~but~~2015 ~~not~~and ~~yet~~June ~~adopted~~30, ~~accounting standards in order to determine their effects~~2015, ifthere ~~any,~~were onno ~~its~~deferred ~~results~~tax ofassets ~~operations, financial position~~ or ~~cash flows~~liabilities. ~~Based on that review, the Company believes that none of these pronouncements will have a significant effect on its financial statements.~~

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 at December 31, 2015 and June 30, 2015, results of operations, and cash flows at December 31, 2015 and 2014, have been made.

Certain information and footnote disclosures normally included in financial statements 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 periods ended December 31, 2015 and 2014 are not necessarily indicative of the operating results for the full year.

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 these financial statements.

NOTE 2 – BASIC AND DILUTED NET LOSS PER COMMON SHARE

Basic earnings/loss 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 $~~198~~149,~~293~~214 and $~~147~~163,~~196~~668 to ~~its~~officers ~~president~~of the Company for expenses paid on the Company’s behalf as of ~~March~~December 31, 2015, and June 30, ~~2014~~2015, 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~~historical cost value has been assigned to these patents as athey ~~result~~were ~~of them being~~ acquired from the president (a related party).

8As 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 proceeds related to income 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 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.

AsThe ~~consideration,~~agreement ~~the~~contains ~~Company~~a ~~authorized~~standard ~~and~~anti-dilution ~~issued~~clause ~~warrants~~that togives ~~purchase 100,000,000 shares of common stock to~~ the president ~~and~~the ~~agreed~~right to ~~pay~~purchase the ~~president~~same ~~royalties~~number inof ~~the~~shares ~~future equal to 10%~~ of ~~future~~common ~~sales proceeds from the technology. The warrants~~stock, ~~which~~given ~~were considered stock-based compensation for services to be rendered~~reclassification, ~~had~~reorganization noor ~~intrinsic~~change ~~value~~by ona ~~the grant date. The fair value of the warrants was $37~~stockholder,~~136,781,~~ ~~calculated~~as ~~on the grant date using the Black-Scholes model. The following assumptions~~ were ~~used~~purchasable ~~for~~prior ~~this~~to ~~grant:~~any ~~Average~~such ~~risk-free~~changes, ~~interest~~at ~~rate~~a oftotal ~~4.79%;~~price ~~expected~~equal ~~lives~~to ofthat 10payable ~~years;~~upon ~~expected~~the ~~dividend~~exercise ~~yield~~ of ~~zero~~the ~~percent; and expected volatility of 138~~options.~~76%.~~ Appropriate Onadjustments ~~July~~shall 1,be ~~2006,~~made to the ~~Company~~exercise ~~began~~price ~~recognizing~~so ~~stock-based compensation expense over~~ the ~~graded~~aggregate ~~exercisability~~purchase ~~period~~price of the ~~options~~shares ~~using~~will remain the ~~straight-line~~same. The ~~basis~~warrants ~~over~~have ~~the~~an ~~requisite~~exercise ~~service~~price ~~period~~of ~~for~~$0.40 ~~each~~per ~~separately~~share ~~exercisability~~and ~~portion~~are ofall ~~the~~exercisable ~~award~~ as ifof ~~the~~December ~~award was~~31, ~~in-substance, multiple awards~~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~~years ~~price~~ended soDecember ~~the 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 following table summarizes the stock option and warrant activity as of and for the nine month period ended March 31, 2015, and the years ended June 30, 2014, and 2013:


Detail	Options Warrants	Wtd Avg Exercise Prices	Wtd. Avg. Remaining Life in Years	Aggregate Intrinsic Value
Outstanding at June 30, 2013	92,300,000	$ 0.40	22.5	$ 36,920,000
Expired	-	-
Exercised	-	-
Outstanding at June 30, 2014	92,300,000	$ 0.40	21.5	$ 36,920,000
Expired	-	-
Exercised	-	-
Outstanding at June 30, 2015	92,300,000	$ 0.40	20.5	$ 36,920,000
Exercisable at June 20, 2015	92,300,000	$ 0.40	20.5	$ 36,920,000
Expired	-	-
Exercised	-	-
Outstanding at December 31, 2015	92,300,000	$ 0.40	20.0	$ 36,920,000
Exerciseable at December 31, 2015	92,300,000	$ 0.40	20.0	$ 36,920,000

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 ~~March~~December 31, 2015, and June 30, ~~2014~~2015, there were 5,400,000 Series A Preferred Stock issued and outstanding, respectively.

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 ~~issued~~exchanged. At ~~March~~December 31, 2015, and June 30, ~~2014~~2015, 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. The Company has received $3,077,838 from a related party as a prepayment for 11,762,038 shares of common stock that was subsequently issued on June 24, 2016. There were no additional material subsequent events that required recognition or additional disclosure in these financial statements.

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

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

~~CONDITION~~Liquidity ~~AND~~and ~~RESULTS~~Capital OFResources. As ~~OPERATIONS~~of December 31, 2015, Registrant had cash of $3,773,874. Cash increased from the June 30, 2015 balance due to proceeds of $800,000 received from a private placement of 2,500,000 shares of restricted common stock on August 13, 2015 and funds in the amount of $ received from a related party during the period ended December 31, 2015 . Funds spent on the development of the technology and products of the Company continued to decline during the quarter as the Company continues efforts to finalize a non-exclusive royalty license for the Solar Lens system with two private companies.

~~Liquidity~~Registrant ~~and~~has ~~Capital~~total ~~Resources~~liabilities at December 31, 2015 of $3,235,330 compared to the liabilities at June 30, 2015 of $214,462. The liabilities increased during the period ended December 31, 2015 due to the receipt of prepayment of $3,077,868 for 11,762,038 shares of common stock, which was recorded as a liability pending the issuance of the common stock. The shareholders' equity at December 31, 2015 increased to $822,229 from $86,045 at June 30, 2015 (reflecting the increased common stock placed during August of 2015). During the quarter the obligation to a related party in the amount of $163,668 as shown on the balance sheet dated June 30, 2015, decreased to $149,213 as of December 31, 2015.

~~The~~Registrant ~~results~~had ~~discussed~~cash ~~below~~and ~~are~~total ~~for~~current ~~the~~assets ~~three~~of $3,773,874 and ~~nine~~had ~~month~~current ~~periods~~liabilities ~~ended~~of ~~March~~$3,235,330 and shareholders' equity of $822,229 as of December 31, 2015, compared to cash of $16,822, current liabilities of $214,462 and ~~March~~stockholders’ equity of $86,045 as of June 30, 2015. As of December 31, ~~2014~~2015, ~~respectively~~the ratio of current assets to current liabilities (current ratio) was approximately 1.66.

~~Revenues~~Results of Operation. For the three and six months ended December 31, 2015 and 2014, Registrant had no revenues.. For the three and six months ended December 31, 2015, Registrant had expenses of $29,658 and $63,816; compared to expenses of $10,268 and $40,355 for the same periods a year earlier. The lack of revenues reflects management’s decision to focus on licensing the Solar Lens technology with an expectation of generating royalty income.

~~For~~The ~~the~~December ~~three~~31, ~~month~~2015 and ~~the~~2014 ~~nine~~basic ~~month~~and ~~periods~~diluted ~~ended~~loss ~~March~~per ~~31,~~share ~~2015,~~was $(0.00) for each three and ~~2014,~~six ~~there~~month ~~were~~period noincluded ~~revenues~~in the attached profit and loss statements.

~~Research~~The financial statements do not include any adjustments relating to the recoverability and ~~Development~~classification ~~Expenses~~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.

~~During~~Management ~~the~~is ~~three~~pursuing ~~months~~various ~~ended~~sales ~~March~~agreements ~~31,~~and ~~2015,~~is ~~research~~hopeful ~~and~~that ~~development~~these ~~expenses~~potential ~~declined~~agreements, ~~from $49~~which,~~478~~ toin ~~$851.~~addition ~~For~~to the ~~nine~~$3.77 ~~months~~million ~~ending~~cash on ~~March 31~~hand, ~~2015~~will ~~and~~generate ~~2014,~~sufficient ~~research~~cash ~~and~~flow ~~development~~for ~~expenses~~the ~~declined~~Company ~~from~~to ~~$92,854~~remain toa ~~$3,105~~going concern.

~~General~~Company’s ~~and Administrative Expenses~~Business.

~~During~~The products which the ~~three~~Company ~~months~~has ~~ended~~under ~~March~~development ~~31,~~are ~~2015,~~described ~~and~~in ~~2014,~~its ~~respectively,~~report on Form 10-K. Generally speaking the ~~general~~Company ~~and~~anticipates ~~administrative~~completing ~~expenses~~the ~~declined~~license ~~from~~agreement ~~$199,450~~allowing licensees to ~~$34~~develop,~~519~~ manufacture and sell products based upon the Alternate Solar Lens technology. ~~During~~Management and the ~~nine~~board ~~months~~of ~~ended~~directors ~~March~~plan ~~31,~~to ~~2015,~~consider options for researching and ~~2014,~~developing products based upon the ~~general~~various ~~and~~technologies ~~administrative~~which ~~expenses~~the ~~declined~~Company ~~from~~has ~~$956,393~~experience toin ~~$70~~creating core technology,~~767. The~~ ~~decline~~including ~~reflected~~opportunities afor ~~reduction~~products inbased ~~personnel.~~upon:

~~Net Loss~~1.

~~For~~Alternate ~~the~~Solar ~~three~~Energy ~~months~~Thermal ~~ended~~Lens ~~March 31, 2015, our net loss was $37,162 compared to a net loss of $252,438 for the three months ended March 31, 2014. The decrease was a result of reductions in expenses incurred.~~ Technology;

~~For the nine months ended March 31, 2015, our net loss was $77,526 compared to a net loss of $1,123,790~~2. ~~The decline in the net loss represented the combined reductions in expenses incurred.~~

~~Financial~~Bladeless ~~Condition,~~Propulsion ~~Liquidity~~Steam ~~and Capital Resources~~Turbine;

~~During the nine months ended March 31, 2015, the Company used cash in operations of $71,782 compared to $345,530 used during the comparable period of 2014~~3. The decrease in cash used was due to reduced expenditures for research and development costs and general and administrative costs net of the cash flow in 2014 arising from the collection of $668,258 of accounts receivable and the increase of $77,669 of accounts payable during the nine months ended March 31, 2014.

~~There~~Automated ~~was~~Fingerprint noIdentification ~~net cash used or provided by investing activities during either the nine months ended March 31, 2015 or 2014.~~Machine;

~~Net cash provided by financing activities during the nine months ended March 31, 2015 amounted to $51,097 representing payments made on the Company’s behalf by a related party~~4. ~~During the nine months ended March 31, 2014, there was no cash provided by financing activities.~~

AtDigital ~~March~~Wave 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.Modulation;

~~At March 31, 2015, our current assets were $4,423 and our current liabilities were $204,197 resulting in a working capital deficit of $199,774~~5. ~~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~~

~~Company’s~~Automatic ~~Business~~Self-Service Checkout System;

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 to develop these products. The Company is~~ incorporating the report on Form 10-K filed on ~~July~~March 1611, ~~2015~~2016, into this report by reference.

~~The~~Summary 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.of ~~The~~Technologies ~~System~~Being ~~may use multiple concentrators to supply a single turbine.~~Developed

The Company has an ~~Automated~~Alternate ~~Fingerprint~~Solar ~~Identification~~Energy ~~Machine~~Thermal Lens (“~~AFIM~~Lens”), ~~designed~~which tois ~~have~~ the ~~capability~~subject of ~~verifying~~licensing ~~the~~efforts ~~identity~~with oftwo ~~individuals.~~private companies. The ~~AFIM~~lens ismay ~~able~~also tobe ~~identify~~incorporated awith ~~person~~the ~~utilizing~~Company’s ~~information~~bladeless ~~previously~~turbine ~~stored.~~as ~~The~~a ~~Company~~system ~~believes~~to ~~that~~generate itpower. ~~has~~The ~~the~~system ~~ability~~would tofocus ~~connect~~and aefficiently ~~series~~capture ofthe ~~AFIM’s~~solar toenergy onto a ~~single~~receiver ~~personal~~which ~~computer. The~~could ~~person~~then ~~whose identity will~~ be ~~verified~~used asto ~~the~~propel ~~AFIM reads~~ the ~~fingerprint~~bladeless turbine. The ~~fingerprint~~System ~~being~~may ~~verified~~use ~~has~~multiple ~~previously~~concentrators ~~been~~to ~~read~~supply ~~and~~a ~~stored~~single ~~within the system~~turbine.

The Company has ~~technology,~~an ~~referred~~Automated toFingerprint asIdentification ~~the~~Machine ~~Digital Wave Modulation~~ (“~~DWM~~AFIM”). ~~The~~which ~~Company~~is ~~believes~~designed ~~that~~to ~~this~~have ~~technology~~the ~~may~~capability ~~increase~~of verifying the ~~amount~~identity of ~~information~~individuals. ~~which~~The ~~may~~AFIM will be ~~transmitted~~able to identify a person utilizing information previously stored. ToThe ~~date~~Company believes that it has the ~~commercial~~ability ~~feasibility~~to connect a series of ~~this~~AFIM’s ~~technology~~to isa ~~uncertain~~single personal computer. The ~~There~~person iswhose ~~competition~~identity inwill ~~communication,~~be ~~data~~verified ~~transfer~~has ~~and~~the ~~storage~~AFIM ~~systems.~~read ~~There~~their ~~are~~fingerprint, ~~risks~~which ~~related~~is tothen ~~development~~stored ofin ~~commercially~~a ~~viable~~storage ~~products~~medium asand ~~well~~is asavailable anfor ~~uncertain~~subsequent ~~demand. The~~positive ~~Company~~identification of individuals via testing the person’s ~~development~~fingerprint isagainst ~~limited~~the byfingerprint ~~funds~~description ~~available~~stored ~~for~~within ~~development~~the AFIM protocol. .

The Company ~~has~~purports ~~patented~~that ait ~~propulsion~~has ~~steam~~developed ~~turbine. It uses the expansion of steam to be propulsion to create~~ a ~~rotational~~theoretical ~~force. The~~application ~~Company believes~~ that ~~its~~would ~~turbine~~transmit isinformation asand ~~effective~~data asusing ~~other~~different ~~turbines,~~wave ~~is smaller in size~~patterns, ~~requires~~configurations ~~less maintenance, is less expensive to manufacture, is mass producible,~~ and ~~does~~timing ~~not~~in ~~require~~the ~~cooling~~electromagnetic ~~towers~~spectrum. The ItCompany isrefers ~~more~~to ~~mobile~~this ~~and~~technology ~~water~~as ~~conserving~~Digital ~~than~~Wave ~~other~~Modulation ~~turbines~~(“DWM”). The Company ~~may~~believes ~~not~~that bethis ~~able~~technology tomay ~~successfully~~increase ~~manufacture~~the ~~because~~amount of ~~lack~~information ofwhich ~~sufficient~~can ~~funding,~~be ~~government~~transmitted ~~interference~~during ~~and~~discrete ~~regulation,~~time ~~lack~~periods of(increased ~~acceptance~~band-width indensity). ~~the~~The ~~industry, and many other conditions not under the Company’s control.~~

~~The~~commercial ~~Company~~feasibility ~~has~~of ~~developed~~this antechnology ~~Automatic~~has ~~Self-Service~~not ~~Check-out~~been ~~System~~demonstrated. The ~~check-out~~Company ~~system~~may iscontinue ~~referred~~investigating tocommercial asfeasibility ~~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~~technology. ~~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.~~

~~For~~There ~~the~~is ~~Self-Check~~great ~~System~~competition toin ~~operate~~communication atdata ~~least~~transfer ~~95%~~and ofstorage ~~the~~systems. ~~items~~There ~~must~~are ~~have~~risks ~~bar~~both ~~codes.~~to ~~The~~development ~~retailer~~and ~~may~~eventual ~~have~~demand tofor ~~purchase~~commercially ~~equipment~~viable toproducts. The beCompany’s ~~able~~development tois ~~put~~limited ~~bar~~by ~~codes~~funds onavailable ~~items~~and inapproved ~~the~~by ~~store~~management for DWM development. ~~The~~To ~~Company~~be ~~believes~~successful ~~that~~ the ~~Self-check~~Company ~~System~~must ~~may~~have ~~reduce~~necessary ~~thefts~~skilled ~~and~~personnel, ~~employees~~marketing ~~will~~capabilities beand ~~unable~~strategies tofor ~~circumvent~~each ~~the~~product ~~check-out~~under ~~systems~~development.

~~Another~~The ~~market~~Company ~~being~~has ~~tested~~patented isa ~~automatic~~bladeless ~~ordering~~propulsion ~~and~~steam ~~payment~~turbine. ~~The~~It ~~customers~~uses ~~would~~the ~~use~~expansion of steam to create a ~~touch~~rotational ~~screen~~force. The Company believes that its turbine is at least as effective as other turbines, is smaller in size, requires less maintenance, is less expensive to ~~initiate~~manufacture, anis ~~order~~mass producible, and ~~make~~does ~~payment~~not ~~using~~require ~~the~~cooling towers. It is relatively more mobile and water conserving than other turbines. The Company’s ~~AFIM~~believes ~~technology~~that its turbine will be marketable to the utility power industry, hydrogen production, and transportation. The ~~order~~Company ~~would~~may not be ~~sent~~able ~~automatically~~ to manufacture because of lack of sufficient funding, government interference and regulation, lack of acceptance in the ~~food~~industry, ~~preparers~~and many other conditions not under the Company’s control.

~~Patents~~The Company has developed an Automatic Self-Service Check-Out System. In retail operations the Self-Check-Out System would allow customers to personally check out and ~~Trade~~pay ~~Secrets~~for the items to be purchased. A scanner reads the bar codes on the items being purchased and a scale weighs the scanned items that are placed in the receiving baskets. The Self-Check-Out System is designed to replace or supplement clerk operated cashier registers. When fully implemented a store manager is able to maintain an accurate inventory of items on a contemporary basis.

~~The~~For ~~Company has been assigned or will be assigned~~ the ~~rights~~Self-Check-Out System to ~~several~~operate, ~~U.S.~~at ~~patents. Four~~least ~~patents~~95% ~~pertaining~~of to the ~~AFIM~~items ~~technology~~must ~~were~~have ~~granted~~bar incodes. ~~January~~The ~~1997,~~retailer ~~February~~may ~~2001,~~have ~~July~~to ~~2001,~~purchase ~~and~~equipment ~~September~~to ~~2002.~~be ~~Seven~~able ~~patents pertaining~~ to ~~the~~put ~~DWM~~bar ~~technology~~codes ~~were~~on ~~granted~~items in ~~May~~the ~~1996, June 1997, November 1997, July 2000, September 2000, October 2000, and May 2001~~store. AThe ~~patent~~Company ~~relating~~believes tothat ~~shelf tag was granted on September 2003. Four patents relating to~~ the ~~turbine~~Self-Check-Out ~~were~~System ~~granted~~may inreduce ~~March~~thefts ~~2003, January 2004, February 2006,~~ and ~~November~~employees ~~2007. A~~will ~~patent~~be ~~pertaining~~unable to ~~the~~circumvent ~~solar~~traditional ~~energy~~Check-Out ~~technology was granted in October 2007~~systems.

~~The~~Another ~~Company~~market ~~has~~being ~~not~~tested ~~sought~~is orautomatic ~~received~~ordering anand ~~opinion~~payment ~~from~~in ~~an independent patent attorney regarding~~ the ~~strength~~food ofservices ~~the~~industry. Customers ~~patents~~would oruse ~~patents~~a ~~pending~~touch ~~and~~screen ~~the ability of the Company~~ to ~~withstand~~initiate ~~any~~an ~~challenge~~order toand ~~the~~make ~~patent~~payment orusing ~~any future efforts by~~ the Company’s toAFIM ~~enforce its rights under a patent or patents against others~~technology. InThe ~~2008~~order awould ~~court~~be ~~held~~sent ~~that~~automatically ~~one~~to of the ~~AFIM~~food ~~patents was invalid~~preparers.

~~The~~Patents ~~Company believes that it has trade secrets~~ and itTrade 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.Secrets

The Company ~~relies~~has onbeen ~~its~~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 ~~development~~DWM oftechnology ~~its~~were ~~products~~granted in May 1996, June 1997, November 1997, July 2000, September 2000, October 2000, and May 2001. ~~There~~A ~~can~~patent berelating noto ~~assurance~~shelf ~~that~~tag ~~others~~was ~~may~~granted ~~not~~on ~~develop~~September ~~technology~~2003. ~~which~~Four ~~competes~~patents ~~with~~relating to the ~~Company’s~~turbine ~~products~~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.

~~Accounting~~The ~~Policies~~Company has not sought or received an opinion from an independent patent attorney regarding the strength of the patents or patents pending and ~~Estimates~~the ability of the Company to withstand any challenge to the patent or any future efforts by the Company to enforce its rights

Weunder ~~believe~~a ~~that~~patent ~~our~~or ~~financial~~patents ~~statements~~against 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 notesothers. ~~We identified certain accounting policies which are important in the financial statements’ reporting of financial condition, results of operations, or liquidity.~~ ~~Accounting~~In ~~policies~~2008 ~~cover~~a ~~accounting~~court ~~matters~~held that ~~are~~one ~~inherently~~of ~~uncertain because~~ the ~~future~~AFIM ~~resolution~~patents ofwas ~~such matters is unknown~~invalid.

~~Off-Balance~~The ~~Sheet~~Company ~~Arrangements~~believes that it also owns trade secrets and it makes 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.

11The Company relies to a great extent upon its proprietary technology for development of its products. There can be no assurance that others may not develop technology which competes with the Company’s products and technology.

~~Under~~Part 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 investorsII. 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

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.

Evaluation of Disclosure Controls and Procedures

Under the supervision and 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.

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 financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Our 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 March 31, 2015. 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 -- Integrated Framework. Based on this evaluation, our management, with the participation of the Chief Executive Officer and Chief Financial Officer, concluded that as of March 31, 2015 our internal control over financial reporting was not effective.

This report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this report.

Changes in Internal Control over Financial Reporting

During the most recent quarter ended March 31, 2015, 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 reporting.

Part II.

Item 1. Legal Proceedings.

~~There~~The isCompany ahas ~~lawsuit~~filed ~~pending. Refer~~two tolawsuits against Millard County and at least one of its employees seeking damages for incorrect disclosures and assertions regarding the ~~June~~Company ~~30,~~and ~~2013~~its ~~Form~~activities. ~~10K~~The lawsuits were filed onin orthe ~~about~~Fourth ~~July~~District ~~16,~~Court ~~2015~~of the State of Utah. Millard County asserted that the Company did not have the necessary and proper permits for its activities. The Company believes it has the necessary permits and the statements of Millard County are incorrect.

~~Item~~Litigation 2.to ~~Unregistered~~enforce ~~Sales~~patents, to protect proprietary information or to defend the Company against alleged infringement of ~~Equity~~the ~~Securities~~rights of others may occur. Such litigation could be costly, could divert our resources from other activities, and ~~Use~~could ofhave ~~Proceeds~~an adverse effect on our operations and financial condition.

OnThe ~~August~~Company ~~13,~~and ~~2015,~~its president have been named as a defendant in a complaint by the ~~Company~~United ~~sold~~States 2Justice Department (DOJ),~~500~~ dated November 23,~~000~~ ~~shares~~2015, alleging participation in the marketing of ~~restricted~~a ~~common~~non-compliant ~~stock~~tax atdeferral, ~~price~~tax ofdeduction ~~$0.32~~and ~~per~~a ~~share~~tax credit program. The ~~proceeds~~Company ~~were~~feels ~~received~~it has done its due diligence in receiving the exclusive rights to patents, obtaining reviews of the technologies by third party experts in their fields of study, obtained two tax opinion letters to ascertain that a business structure with specific tax benefits is available and legal under the ~~Company~~law, ondeveloped ~~August~~working 13prototypes, ~~2015~~and finally produced lenses with a manufacturing partner who is a global leader in the design, development and manufacture of acrylic based products.

Even with the two opinion letters, the Company contractually requires persons, planning to claim tax benefits arising from Company products, to seek independent legal and tax advice. The Company does not provide legal or tax advice and is not a law firm, nor does it hold itself out as such. The Company firmly and unequivocally denies the allegations made by the DOJ. The Company has obtained Legal Counsel and intends to pursue every legal means possible to protect its rights, the rights of potential customers and its shareholders in this matter. The final outcome and the effect of this case on the Company is yet to be determined but such litigation could be costly, could divert our resources from other activities, and could have an adverse effect on our operations and financial condition.

Item 2. Changes in Securities.

On August 13, 2015, the Company sold 2,500,000 restricted shares of unissued common stock and received $800,000.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Matters Submitted 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 electronic 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.

~~B. Reports on Form 8-K.~~ None

~~None~~Item 9A CONTROLS AND PROCEDURES

12Evaluation of Disclosure Controls and Procedures

~~Signatures~~Under the supervision and 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 not 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.

~~Pursuant~~Our tomanagement ~~the~~is ~~requirements~~responsible offor ~~the~~establishing ~~Securities~~and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). ofOur ~~1934,~~internal ~~the~~control ~~Registrant~~over ~~has~~financial ~~duly~~reporting ~~caused~~is ~~this~~a ~~report~~process designed to beprovide ~~signed~~reasonable onassurance ~~its~~regarding ~~behalf~~the byreliability of financial reporting and the ~~undersigned~~preparation ~~thereunto~~of ~~duly~~financial ~~authorized~~statements for external purposes of accounting principles generally accepted in the United States.

~~Date: October~~Because 1of inherent limitations, ~~2015~~(chiefly the limited number of available personnel) internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

~~International~~Our ~~Automated~~management, ~~Systems~~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 December 31, ~~Inc~~2015. 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 -- Integrated Framework. Based on this evaluation, our management, with the participation of the Chief Executive Officer and Chief Financial Officer, concluded that as of December 31, 2015 our internal control over financial reporting was not effective.

ByEvaluation ~~/s/Neldon~~of ~~Johnson~~Internal Control Over Financial Reporting by Outside Auditor

~~President~~This report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and ~~Chief~~Exchange ~~Executive~~Commission ~~Officer~~that permit the Company to provide only management’s report in this report.

~~October~~Changes 2,in ~~2015~~Internal Control Over Financial Reporting

13During the most recent quarter ended December 31, 2015, 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

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: March 1, 2017

International Automated Systems, Inc.

By s/Neldon Johnson

President and Chief Operating Officer

Filing Compare · INTERNATIONAL AUTOMATED SYSTEMS INC