~~UNITED~~FORM ~~STATES~~10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~FORM 10-Q~~Quarterly Report Under Section 13 or 15(d)

~~______________________~~Of the Securities Exchange Act of 1934

~~Quarterly~~For ~~Report~~Quarter ~~Pursuant~~Ended September to30, ~~Section 13 or 15(d) of the~~2014

Securities Exchange Act of 1934

For the Quarterly Period Ended March 31, 2011

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 incorporation or organization)	(IRS Employer Identification No.)

UTAH 87-0447580

~~326~~(State ~~North~~or SRother ~~198,~~jurisdiction ~~Salem, Utah 84653~~of

(~~Address~~IRS ~~of principal executive offices, including zip code)~~Employer

~~(801)~~incorporation ~~423-8132~~or organization)

~~(Registrant’s~~ Identification ~~telephone number, including area code~~No.)

~~Check~~55 ~~whether~~North ~~the~~Merchant ~~issuer~~Street ~~(1) filed~~608 all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

~~Indicate~~American ~~by check mark whether the registrant is a large accelerated filer~~Fork, anUtah accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Check one:84003

o(Address ~~Large~~of ~~accelerated~~principal ~~filer~~executive ~~o Accelerated filer o Non-accelerated filer x Smaller reporting company~~offices)

~~Indicate~~Registrant's bytelephone ~~check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x~~number

~~State~~including ~~the~~area ~~number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.~~code

Class	Outstanding as of May 3, 2011
Common Stock, no par value	46,971,797 shares

(801)423-8132

~~INTERNATIONAL~~ Not ~~AUTOMATED~~Applicable Former ~~SYSTEMS~~Address, ~~INC.~~if changed since last report

Indicate by check mark whether the registrant (A1) ~~Development~~has ~~Stage~~filed ~~Company~~all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the proceeding 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

~~TABLE OF~~No ~~CONTENTS~~x

~~PART~~As Iof –September ~~FINANCIAL~~30,2014, ~~INFORMATION~~registrant had 64,894,305 shares of common stock, no par value per share, issued and outstanding and 5,700,00 shares of preferred stock issued and outstanding.

Item 1: Financial Statements
Condensed Balance Sheets
As of March 31, 2011 (unaudited) and June 30, 2010 (audited)	1
Unaudited Condensed Statements of Operations
For the three and nine months ended March 31, 2011 and 2010 and for the Period from September 26, 1986 (Date of Inception) through March 31, 2011	2
Unaudited Condensed Statements of Cash Flows
For the nine months ended March 31, 2011 and 2010 and for the Period from September 26, 1986 (Date of Inception) through March 31, 2011	3
Notes to Unaudited Condensed Financial Statements	4
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 4: Controls and Procedures	9
PART II – OTHER INFORMATION
Item 1: Legal Proceedings	9
Item 2: Unregistered Sales of Securities and Use of Proceeds	9
Item 3: Defaults Upon Senior Securities	9
Item 4: Reserved	9
Item 5: Other Information	9
Item 6: Exhibits	10
Signatures	10

FORWARD-LOOKING STATEMENTS

~~INTERNATIONAL~~This ~~AUTOMATED~~report ~~SYSTEMS~~references to “International Automated Systems,” ~~INC~~the “Company,” “we,” “us,” and “our” refer to International Automated Systems, Inc.

(AIn ~~Development~~this ~~Stage~~report ~~Company)~~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.

~~Condensed~~We ~~Balance~~caution ~~Sheets~~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.

		March 31,			June 30,
		2011			2010
		(unaudited)			(audited)
ASSETS
CURRENT ASSETS
	Cash and cash equivalents	$	3,737		$	6,865
	Prepaid expenses		2,000			2,000
	Total Current Assets		5,737			8,865
Alternate solar energy systems			618,910			537,825
Property and Equipment, net of accumulated depreciation of $436,650 and $372,457, respectively			338,364			402,057
Patents, net of accumulated amortization of $30,710 and $26,474, respectively			65,316			69,553
	TOTAL ASSETS	$	1,028,327		$	1,018,300
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
	Accounts payable	$	324,284		$	94,525
	Accrued liabilities		396,268			350,622
	Related party payable		39,241			507,532
	Customer deposits		2,360,250			2,360,250
	Notes payable-current portion		16,185			30,881
	Total Current Liabilities		3,136,228			3,343,810
Long-term notes payable			70,231			83,834
TOTAL LIABILITIES			3,206,459			3,427,644
Commitments and contingencies
STOCKHOLDERS' EQUITY (DEFICIT)
	Preferred stock, Class A, no par value; 22,000,000 shares authorized,
	5,400,000 and 4,400,000 shares issued and outstanding, respectively		470,264			417,264
	Preferred stock, Class B, no par value, 3,000,000 shares
	authorized, 300,000 shares issued and outstanding		-			-
	Common stock, no par value, 225,000,000 shares
	authorized, 42,239,072 and 37,037,153 issued and outstanding,
	net of 3,922,725 and 3,538,118 shares held in escrow
	account, respectively		37,016,012			36,032,789
	Deficit accumulated during the development stage		(39,664,408	)		(38,859,397	)
	Total Stockholders' Deficit		(2,178,132	)		(2,409,344	)
	TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	1,028,327		$	1,018,300

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,

~~See~~PART ~~accompanying notes to condensed financial statements.~~I

1ITEM I - FINANCIAL STATEMENTS

~~INTERNATIONAL~~The ~~AUTOMATED~~condensed ~~SYSTEMS~~financial statements included herein have been prepared by International Automated Systems, ~~INC~~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.

(AIn ~~Development~~the ~~Stage~~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 30, 2014, and the results of its operations from June 30, 2014, through September 30, 2014. The results of its operations for such interim period is not necessarily indicative of the results to be expected for the entire year.

Unaudited Condensed Statements of Operations


INTERNATIONAL AUTOMATED SYSTEMS, INC
Balance Sheets

ASSETS
			September 30,			June 30,
			2014			2014
CURRENT ASSETS			(unaudited)

	Cash and cash equivalents		$	9,975		$	26,108
	Accounts receivable			-			-

		Total Current Assets		9,975			26,108

PROPERTY AND EQUIPMENT, net				280,326			280,832

		TOTAL ASSETS	$	290,301		$	306,940

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

	Accounts payable		$		9,028	$	2,677
	Related party payable				154,293		147,196

		Total Current Liabilities			163,321		149,873

Long-term notes payable					-		-

		TOTAL LIABILITIES			163,321		149,873

STOCKHOLDERS' EQUITY

	Preferred stock, no par value; 22,000,000 shares authorized,
		5,700,000 and 5,700,000 shares issued and outstanding, respectively			470,264		470,264
	Common stock, no par value, 225,000,000 shares authorized,
		64,894,305 and 64,894,305 issued and outstanding, respectively			39,650,775		39,650,775
	Accumulated deficit				(39,994,059)		(39,963,972)

		Total Stockholders' Equity			126,980		157,067

		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$		290,301	$	306,940

The accompanying notes are an integral part of these financial statements.

														For the Period
INTERNATIONAL AUTOMATED SYSTEMS, INC
														From Inception
(A Development Stage Company)
		For the Three Months Ended						For the Nine Months Ended						(September 26,
Statements of Operations
		March 31,						March 31,						1986) Through
(unaudited)
		2011			2010			2011			2010			March 31, 2011
			For the Three Months Ended
Revenues
			September 30,
Sales		$	-		$	-		$	-		$	-		$	111,226
			2014		2013
Income from related party			-			-			-			-			32,348
REVENUES			$	-	$	-
Total revenues			-			-			-			-			143,574
OPERATING EXPENSES
Costs of sales
	Research and development			2,254		43,376
Cost of sales			-			-			-			-			81,927
	Depreciation expense			506		10,778
Write down of carrying value
	General and administrative			27,327		502,270
of inventory			-			-			-			-			233,131
		Total Operating Expenses		30,087		556,424
Total costs of sales			-			-			-			-			315,058
NET LOSS			$	(30,087)	$	(556,424)
Gross loss			-			-			-			-			(171,484	)
BASIC AND DILUTED LOSS PER SHARE			$	(0.00)	$	(0.01)
Operating expenses
WEIGHTED AVERAGE NUMBER
General and administrative			148,730			284,128			543,398			2,825,025			31,811,200
OF SHARES OUTSTANDING				64,894,305		64,894,305
Research and development			84,278			118,297			256,525			334,668			8,372,914
The accompanying notes are an integral part of these financial statements
Impairment of patents			-			-			-			-			140,577
License fees			-			-			-			-			270,634
Total operating expenses			233,008			402,425			799,923			3,159,693			40,595,325
Loss from operations			(233,008	)		(402,425	)		(799,923	)		(3,159,693	)		(40,766,809	)
Other income (expenses)
Loss on impairment of assets			-			-			-			-			(583	)
Forfeiture of deposits			-			-			-			-			(236,803	)
Interest income			-			32			-			91			26,580
Interest expense			(1,468	)		(2,084	)		(4,798	)		(6,692	)		(36,276	)
Other income (expenses)			708			(293	)		(290	)		397			(32,540	)
Total other income (expenses)			(760	)		(2,345	)		(5,088	)		(6,204	)		(279,622	)
Loss before extraordinary gain			(233,768	)		(404,770	)		(805,011	)		(3,165,897	)		(41,046,431	)
Extraordinary gain on sale of patents			-			-			-			-			1,382,023
Net loss		$	(233,768	)	$	(404,770	)	$	(805,011	)	$	(3,165,897	)	$	(39,664,408	)
Net loss per common share
Basic and diluted		$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.09	)
Weighted average common shares outstanding
Basic and diluted			41,193,685			36,123,465			38,973,547			35,157,660

See accompanying notes to condensed financial statements.


INTERNATIONAL AUTOMATED SYSTEMS, INC
Statements of Cash Flows
(Unaudited)

				For the Three Months Ended
				September 30,
				2014		2013
CASH FLOWS FROM OPERATING ACTIVITIES
	Net loss			$	(30,087)	$	(556,424)
	Adjustments to reconcile net loss to net
		cash from operating activities:
		Depreciation and amortization			506		10,778
	Changes in current assets and liabilities:
		(Increase) / decrease in accounts receivable			-		275,993
		Increase / (decrease) in accounts payable			6,351		29,075

			Net cash used in operating activities		(23,230)		(240,578)

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				7,097		-

			Net cash provided by financing activities		7,097		-

Net change in cash					(16,133)		(240,578)
Cash at beginning of period					26,108		402,656

Cash at end of period				$	9,975	$	162,078

Supplemental cash flow information
	Cash payments for interest			$	-	$	-
	Cash payments for income taxes				-		-

Non Cash Financing Activities				$	-	$	-

2NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~INTERNATIONAL~~Organization ~~AUTOMATED~~- ~~SYSTEMS~~International Automated Systems, ~~INC~~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.

(AUse ~~Development~~of ~~Stage~~Estimates ~~Company)~~- 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.

~~Unaudited~~Basis ~~Condensed~~of ~~Statements~~Presentation / Going Concern - The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of ~~Cash~~assets ~~Flows~~and the satisfaction of liabilities in the normal course of business. As of September 30, 2014, the Company had $9,975 of available cash and a working capital deficit of $153,346. For the three months ended September 30, 2014 and 2013, the Company had no revenue, no operating income and used net cash for operating activities of $23,230 and $240,578, respectively. As of September 30, 2014 the Company’s losses accumulated from inception totaled $39,994,059. 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 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.

							For the Period
							From Inception
	For the Nine Months Ended						(September 26,
	March 31,						1986) Through
	2011			2010			March 31, 2011
Cash flows from operating activities
Net loss	$	(805,011	)	$	(3,165,897	)	$	(39,664,408	)
Adjustments to reconcile net loss to net
cash from operating activities:
Depreciation and amortization		68,430			69,933			745,585
Stock-based compensation		57,500			2,286,923			22,428,641
Forfeiture of deposits		-			-			236,803
Write down of carrying value of inventory		-			-			16,945
Write off of equipment to research and development		-			-			23,900
(Gain) / loss on disposal of equipment		-			-			18,679
Impairment of patents and abandonment of in-process
rights to technology		-			-			387,128
Extraordinary gain on sale of patents		-			-			(1,382,023	)
Gain on settlement of debt		-			-			(6,123	)
Operating expenses paid by principal stockholder		54,000			-			54,000
Stock issued for services		-			9,833			120,247
Changes in current assets and liabilities:
(Increase) / decrease in prepaid expenses		-			-			7,833
(Increase) / decrease in alternate solar energy systems		(81,085	)		(128,362	)		(618,910	)
Increase / (decrease) in customer deposits		-			603,000			2,360,250
Increase / (decrease) in accounts payable		229,759			(346,655	)		324,284
Increase / (decrease) in related party payable		(5,500	)		(8,001	)		68,001
Increase / (decrease) in accrued liabilities		45,646			117,659			496,267
Net cash used in operating activities		(436,261	)		(561,567	)		(14,382,901	)
Cash flows used in investing activities
Purchase of property and equipment		(500	)		(16,851	)		(772,635	)
Purchase of rights to technology		-			-			(706,643	)
Organization costs		-			-			(1,880	)
Net cash advanced to related party		-			-			(1,644,988	)
Commitments and contingencies - Note 6		-			-			44,220
Proceeds from sale of equipment		-			-			2,500
Repayment of cash loaned to related party		-			-			53,254
Net proceeds from sale of patents		-			-			1,382,023
Net cash used in investing activities		(500	)		(16,851	)		(1,644,149	)
Cash flows provided by financing activities
Proceeds from issuance of common stock		524,723			303,552			6,702,184
Proceeds from reissuance of treasury stock		-			-			751,573
Contributed capital		-			-			6,270,559
Payments for treasury stock		-			-			(3,325	)
Payments for stock offering costs		-			-			(56,509	)
Proceeds from cash advances from related party		176,877			373,082			3,074,080
Payments on cash advances from related party		(239,668	)		(71,228	)		(617,381	)
Proceeds from notes payable		-			-			29,857
Payments on notes payable and capital lease obligations		(28,299	)		(26,510	)		(275,910	)
Proceeds from related party deposits		-			-			224,400
Purchases of equipment held for distribution		-			-			(68,741	)
Net cash provided by financing activities		433,633			578,896			16,030,787
Net change in cash		(3,128	)		478			3,737
Cash at beginning of period		6,865			47,537			-
Cash at end of period	$	3,737		$	48,015		$	3,737
Supplemental non-cash flow information
Settlement of advances from related party in exchange
for exercise of warrants	$	400,000		$	400,000

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 $-0- and $-0- as of September 30, 2014 and June 30, 2014, respectively.

~~See~~Cash ~~accompanying~~Equivalents ~~notes~~- The Company considers all highly liquid investments with a maturity of three months or less when purchased to ~~condensed~~be ~~financial~~cash ~~statements~~equivalents.

3Fair 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.

~~International~~Impairment ~~Automated~~- ~~Systems~~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, ~~Inc~~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.

(ANOTE ~~Development~~1 ~~Stage~~– ~~Company)~~ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~Notes to Unaudited Condensed Financial Statements~~(CONTINUED)

~~March~~Research 31and Development - Research and development has been 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, ~~2011~~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 $181,792 and $144,617 for the fiscal years ended June 30, 2014 and 2013, respectively.

~~NOTE~~Advertising 1Costs –- ~~INTERIM~~Advertising ~~FINANCIAL~~costs ~~STATEMENTS~~are expensed when incurred. Advertising expense was $202 and $3,133 for the three months ended September 30, 2014 and 2013, respectively.

~~The~~Property ~~accompanying~~and ~~condensed~~Equipment ~~financial~~- ~~statements~~Property ~~have~~and ~~been~~equipment ~~prepared~~are ~~without~~recorded ~~audit. In~~at cost and are depreciated using the ~~opinion~~straight-line ofmethod ~~management,~~based ~~all~~on ~~adjustments~~the ~~(consisting~~expected ~~only~~useful lives of ~~normal~~the ~~recurring~~assets ~~adjustments)~~which ~~necessary~~range tofrom ~~present~~five ~~fairly~~to ~~the~~ten ~~Company’s~~years. ~~condensed~~Depreciation ~~financial~~expense ~~position,~~for ~~results~~the ofthree ~~operations~~months ~~and~~ended ~~cash~~September ~~flows~~30, as2014 ofand ~~the~~2013 ~~dates~~was $506 and ~~for~~$10,778, ~~the~~respectively. ~~periods~~The ~~presented~~major ~~herein~~classes ~~have~~of ~~been~~assets ~~made.~~are as follows:

~~Certain~~Income ~~information~~Taxes ~~and~~- ~~footnote~~The ~~disclosures~~Company ~~normally~~recognizes ~~included~~the inamount ~~financial~~of ~~statements~~income ~~prepared~~taxes inpayable ~~accordance~~or ~~with~~refundable ~~accounting~~for ~~principles generally accepted in~~ the ~~United~~current ~~States~~year ofand ~~America~~recognizes ~~have~~deferred ~~been~~tax ~~condensed~~assets orand ~~omitted~~liabilities ~~pursuant~~for tooperating ~~the~~loss ~~Securities~~carryforwards and ~~Exchange~~for ~~Commission’s~~the ~~rules~~future ~~and~~tax ~~regulations. These~~consequences ~~condensed~~attributable ~~financial~~to ~~statements~~differences ~~should~~between ~~be read in conjunction with~~ the financial ~~statements~~statement ~~and~~amounts ~~notes~~of ~~thereto~~certain ~~included~~assets inand ~~the~~liabilities ~~Company’s~~and ~~June~~their ~~30,~~respective ~~2010~~tax ~~Annual Report on Form 10-K~~basis. ~~The~~ ~~results~~Deferred oftax ~~operations~~assets ~~for~~and ~~the~~deferred ~~three~~liabilities ~~and~~are ~~nine~~measured ~~months~~using ~~ended~~enacted ~~March~~tax ~~31,~~rates ~~2011~~expected ~~are~~to ~~not~~apply ~~necessarily~~to ~~indicative~~taxable ofincome in the ~~operating~~years ~~results~~those ~~that~~temporary ~~may~~differences beare expected ~~for~~to ~~the~~be ~~year~~recovered ~~ending~~or ~~June 30, 2011~~settled. ~~The~~ ~~Company’s~~Deferred ~~significant~~tax ~~accounting~~assets ~~policies~~ are ~~set~~reduced ~~forth~~by ina ~~Note 1~~valuation allowance to the ~~financial~~extent ~~statements~~that inuncertainty exists as to whether the ~~June~~deferred ~~30,~~tax ~~2010~~assets ~~Annual~~will ~~Report~~ultimately onbe ~~Form 10-K~~realized.

~~NOTE~~Condensed 2Financial Statements - ~~BUSINESS~~The ~~CONDITION/GOING~~accompanying ~~CONCERN~~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 30, 2014 and 2013, and for all periods presented herein, have been made.

~~The~~NOTE ~~accompanying~~1 ~~financial~~– ~~statements~~ORGANIZATION ~~have~~AND ~~been~~SUMMARY ~~prepared~~OF onSIGNIFICANT aACCOUNTING ~~going~~POLICIES concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of March 31, 2011 the Company had $3,737 of cash available and had a working capital deficit of $3,130,491. The Company had no revenue and no operating income for the three and nine months ended March 31, 2011 and 2010. As of March 31, 2011 the Company’s losses accumulated from inception and cash used in operating activities from inception totaled $39,664,408 and $14,382,901, respectively. These factors, among others, indicate that the Company may be unable to continue as a going concern for a reasonable period of time. The financial statements do not include any adjustments relating to the recoverability and classification of 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 in the process of negotiating various sales agreements and is hopeful these sales will generate sufficient cash flow for the Company to continue 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 a source of funding or investment, it may substantially curtail or terminate its operations.(CONTINUED)

~~NOTE~~Certain 3information –and ~~ACCOUNTING~~footnote ~~PRONOUNCEMENTS~~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, 2014 audited financial statements. The results of operations for the periods ended September 30, 2014 and 2013 are not necessarily indicative of the operating results for the full year.

~~Adoption~~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 ~~New~~operation, ~~Accounting~~financial ~~Pronouncements~~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.

InNOTE ~~October~~2 ~~2009,~~– ~~the~~BASIC ~~FASB~~AND ~~revised~~DILUTED ~~its~~NET ~~accounting~~LOSS ~~guidance~~PER ~~related~~COMMON to revenue arrangements with multiple deliverables. The guidance applies to all deliverables in contractual arrangements in which a vendor will perform multiple revenue-generating activities. The guidance addresses how arrangement consideration should be allocated to the separate units of accounting, when applicable. The new guidance retains the criteria when delivered items in a multiple-deliverable arrangement should be considered separate units of accounting, but it removes the previous separation criterion that objective and reliable evidence of fair value of any undelivered items must exist for the delivered items to be considered a separate unit or separate units of accounting. The guidance was effective for us beginning on July 1, 2010. The adoption of this guidance did not have a significant impact on the Company’s financial statements. SHARE

~~NOTE~~Basic 4earnings –per ~~BASIC~~share ~~AND~~is ~~DILUTED~~computed ~~NET~~by ~~LOSS~~dividing ~~PER~~the ~~COMMON~~net ~~SHARE~~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.

~~The~~NOTE ~~basic~~3 ~~earnings~~– ~~per~~RELATED ~~common~~PARTY share is computed by dividing the net 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, using the treasury stock method and the average market price per share during the period.TRANSACTIONS

As a result of incurring a net loss for the three and nine months ended March 31, 2011 and 2010, no outstanding common stock equivalents are included in the calculation of diluted earnings per share because such effect would be anti-dilutive. The Company ~~had~~owes ~~outstanding stock options and warrants to purchase a total of 92~~$154,~~300,000~~293 and 94$147,~~900,000~~196 ~~shares~~to ofits ~~common~~president ~~stock~~for atexpenses ~~March~~paid ~~31,~~on ~~2011 and 2010, respectively, which are not included in~~ the ~~basic earnings per share calculation. The~~ Company’s ~~had~~behalf ~~3,922,725~~as ~~and 3,624,618 shares~~ of ~~stock~~September ~~held in trust at March 31~~30, ~~2011~~2014 and ~~2010~~June 30, ~~respectively~~2014, ~~which are not included in the basic earnings per share calculation~~respectively. The ~~Company~~liability ~~had~~is ~~300,000~~non ~~Series~~interest ~~B Preferred Shares that are convertible into options to purchase 600~~bearing,~~000~~ ~~shares~~unsecured ~~of common stock at March 31, 2011~~ and ~~2010,~~due ~~which~~upon ~~are not included in the basic earnings per share calculation~~demand.

NOTE 4 – STOCK BASED COMPENSATION

~~NOTE~~Options 5and –Warrants ~~STOCK-BASED COMPENSATION~~

The Company’s ~~accounts~~board ~~for~~of ~~stock-based~~directors ~~compensation~~authorized inthe ~~accordance~~Company ~~with~~to ~~Accounting~~enter ~~Standards~~into ~~Codification~~an ~~(“ASC’)~~agreement ~~Topic~~dated ~~718. The~~May ~~Company~~14, ~~estimated~~2004 ~~the~~and ~~fair~~amended ~~value~~October of13, ~~options~~2004, ~~and~~with ~~warrants~~the ~~granted~~Company’s ~~under~~president, ~~stock-based~~in ~~compensation~~which ~~arrangements~~the atCompany ~~the~~acquired ~~grant~~patents, ~~date~~patents ~~using~~pending, ~~the~~designs ~~Black-Scholes~~and ~~model. For~~contracts ~~the~~related ~~nine~~to ~~months~~certain ~~ended~~technology ~~March~~developed ~~31,~~by ~~2011~~the ~~and~~president ~~2010,~~from ~~total~~the ~~stock-based~~president. The ~~compensation~~direct ~~expense~~costs ~~recognized~~of ~~was~~developing ~~$57~~and obtaining the acquired patents,~~500~~ ~~and~~patents $2pending,~~286,923,~~ ~~respectively. For~~designs ~~the~~and ~~three~~contracts ~~months~~were ~~ended~~paid ~~March~~and ~~31,~~capitalized ~~2011~~by ~~and~~the ~~2010,~~Company. No ~~total~~additional ~~stock-based~~value ~~compensation~~has ~~expense~~been ~~recognized~~assigned ~~was~~to ~~$2,000~~these ~~and~~patents ~~$125,062,~~as ~~respectively. Stock-based~~a ~~compensation~~result ~~was~~of ~~included~~them inbeing ~~general~~acquired ~~and~~from ~~administrative~~the ~~expenses~~president.

~~During~~As consideration, the ~~nine~~Company ~~months~~authorized ~~ended~~and ~~March~~issued ~~31,~~warrants ~~2011,~~to ~~employees~~purchase ~~purchased 102~~100,~~381~~000,000 shares of ~~restricted~~common stock ~~for~~to ~~cash~~the atpresident aand ~~25%~~agreed ~~discount~~to ~~from~~pay the ~~price~~president ofroyalties in the ~~stock~~future onequal ~~the~~to ~~date~~10% of future sales proceeds from the ~~sale~~technology. The ~~Company~~warrants, ~~recorded~~which ~~the~~were ~~value~~considered ofstock-based ~~the~~compensation ~~25%~~for ~~discount~~services ofto $4be rendered,~~500~~ ashad ~~stock-based~~no ~~compensation. During~~intrinsic ~~the~~value ~~nine~~on ~~months~~the ~~ended~~grant ~~March~~date. The ~~31,~~fair ~~2011,~~value of the ~~Company~~warrants ~~issued~~was 1$37,~~000~~136,~~000~~781, ~~Series~~calculated Aon ~~Preferred~~the ~~Stock~~grant ~~entitled~~date tousing the ~~voting~~Black-Scholes ~~rights~~model. ofThe ~~100~~following ~~common~~assumptions ~~shares~~were used for ~~each~~this ~~preferred~~grant: ~~share,~~Average ~~valued~~risk-free atinterest ~~$53,000,~~rate toof ~~two~~4.79%; expected lives of ~~its~~10 ~~executives~~years; ~~which~~expected ~~was~~dividend ~~recorded~~yield asof 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

~~During~~NOTE ~~the~~4 ~~nine~~– ~~months~~STOCK ~~ended~~BASED ~~March~~COMPENSATION 31, 2010, the Company granted 300,000 shares of restricted stock, respectively, to employees, which vested immediately. The grant date fair value of the restricted stock awards was estimated using the closing market price of the Company’s common stock on the grant date, with the compensation expense being recognized immediately. The stock based compensation recognized during the nine months ended March 31, 2010 for the grants of restricted shares was $105,000, as included in the stock-based compensation expenses mentioned in the above paragraph. The weighted average grant date fair value of restricted stock awards granted during the nine months March 31, 2010 was $0.35.(CONTINUED)

~~During both~~ the ~~nine~~straight-line ~~months~~basis ~~ended~~over ~~March~~the ~~31,~~requisite ~~2011~~service ~~and~~period ~~2010,~~for ~~one~~each ~~million~~separately ~~warrants~~exercisability ~~were~~portion ~~exercised for settlement~~ of ~~cash advances. During~~ the ~~nine~~award as ~~months~~if ~~ended March 31, 2011 and 2010, there were no stock options or warrants granted and 1.6 million stock options expired during~~ the ~~nine~~award ~~months ended March 31, 2011. There~~ was ~~no unrecognized compensation cost at March 31~~, ~~2011 related to non~~in-~~vested~~substance, ~~stock~~multiple ~~based compensation~~ awards.

~~NOTE~~The 6agreement –contains ~~COMMITMENTS~~a ~~AND~~standard ~~CONTINGENCIES~~anti-dilution clause that gives the president the right to purchase the same 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 exercise of the options. Appropriate adjustments shall be made to the exercise price so 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 September 30, 2014.

~~Sales~~The ~~Commitments~~following -table ~~During~~summarizes ~~December 2005,~~ the ~~Company~~stock ~~entered~~option ~~into a purchase~~ and ~~installation~~warrant ~~contract~~activity ~~with~~as ~~Solar~~of ~~Renewable Energy-1, LLC for a solar thermal power plant. The contract is contingent on several factors~~ and ~~provides~~ for ~~certain~~the ~~progress~~years ~~payments.~~ended AsJune ~~of March 31~~30, ~~2011,~~2014 ~~the Company has not provided any services or equipment required under this agreement~~ and ~~has recognized no revenues.~~2013:

~~The Company’s board of directors authorized the Company to enter into an agreement dated May 14~~36, ~~2004 and amended October 13~~920, 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. 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~~NOTE ~~Company’s~~5 ~~president~~– ~~has~~PREFERRED entered into several solar lease bonus fee contracts with many of the customers who made deposits on the alternate solar energy system. As additional consideration for making the deposit and making the solar alternate energy system available to the Company as a reference for marketing and sales purposes to show and demonstrate, the Company’s president has agreed to pay many of the customers a referral fee of .009%, for each System purchased, on the first one billion dollars of total gross sales revenue received by the Company for the sale of power generation equipment. The Company’s president plans to pay this fee from his future royalties mentioned in the above paragraph.STOCK

~~Notes~~Series ~~Payable~~A –Preferred The Company has entered into two notes payable with financing companies collateralized by a deed of trust covering the underlying property. The principal amount owed for the land notes payable at March 31, 2011 was $83,834. Both notes payable mature in fiscal year 2016.Stock

The ~~Company~~Series ~~entered~~A Preferred Stock has equal dividend rights to the common shares, is not convertible into acommon ~~note~~shares, ~~payable~~has ~~with~~no acumulative ~~company~~dividend torequirements ~~purchase~~and ~~equipment~~has ~~during~~liquidation ~~March~~preferences ~~2009~~equivalent to the common shares. ~~The~~ ~~note~~3,400,000 ~~payable~~of ~~bears~~the ~~interest~~Series atA aPreferred ~~weighted~~Stock ~~average~~are ~~interest~~entitled ~~rate~~to the voting rights of ~~4.65%. The~~10 ~~total~~common ~~amount~~shares, ~~owed~~and ~~for~~2,000,000 of the ~~equipment~~Series ~~note~~A ~~payable~~Preferred ~~was~~Stock $2are entitled to the voting rights of 100 common shares. At September 30,~~582~~ at2014 ~~March~~and 31June 30, ~~2011~~2014, there were 5,400,000 Series A Preferred Stock issued and outstanding, respectively.

NOTE 75 -– ~~STOCKHOLDERS~~PREFERRED ~~EQUITY~~STOCK (CONTINUED)

~~Common~~Series ~~Stock~~B ~~Issued~~Preferred for Cash— The Company has shares of common stock in escrow accounts. Proceeds from the sale of stock from these escrow accounts are placed in separate escrow accounts to be used at the Company’s and the trustee’s discretion. During the nine months ended March 31, 2011, 1,115,393 shares from escrow accounts were sold for proceeds of $176,188 at prices ranging from $0.10 to $0.26 per share. During the nine months ended March 31, 2010, 720,200 shares from escrow accounts were sold for proceeds of $278,551 at prices ranging from $0.24 to $.62 per share. The proceeds were used to pay professional fees, rent, and operating expenses. At March 31, 2011, there was a balance of 3,922,725 shares in the escrow accounts. These shares are not accounted for as issued or outstanding common shares.Stock

5The 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. At September 30, 2014 and June 30, 2014, there were 300,000, series B Preferred shares issued and outstanding.

The Company ~~entered into an agreement for engineering and consulting services in July 2010. As part of the agreement, the Company agreed to transfer in retainer 1,500,000 shares of the Company~~’s ~~restricted~~policy ~~stock to engineering consulting firm as a retainer. The engineering consulting firm will be entitled to have shares of the restricted stock sold as reasonably needed to generate funds to pay~~ for ~~engineering~~recording ~~and~~interest ~~consulting costs incurred by the engineering~~ and ~~consulting~~penalties ~~firm~~associated ~~for~~with ~~the~~taxes ~~Company.~~is ~~The~~to ~~restricted~~recognize ~~shares~~it ~~transferred were classified~~ as ~~shares~~a ~~held~~component ~~in escrow and are included in the balance~~ of ~~3,922,725~~income ~~shares~~tax ~~in escrow accounts. As of March 31, 2011, all of the 1,500,000 shares are still held in escrow.~~

~~During~~NOTE ~~the~~6 ~~nine~~– ~~months~~SUBSEQUENT ended March 31, 2011, the Company also issued 102,381 shares of restricted common stock to employees in exchange for $13,500 in cash at prices ranging from $0.09 to $0.21 per share and issued 2,984,145 shares of restricted common stock to third parties for $335,035 at prices ranging from $0.09 to $0.17 per share.EVENTS

~~Common~~In ~~Stock~~accordance ~~Issued~~with ~~for~~ASC ~~Settlement~~855, ofthe ~~Related~~Company ~~Party~~evaluated ~~Payable~~subsequent ~~- As~~events ~~described~~through ~~in Note 8, during~~ the ~~nine~~date ~~months~~these ~~ended~~financial ~~March~~statements ~~31,~~were ~~2011, the Company~~ issued. ~~1,000,000~~There ~~shares~~were ofno ~~common~~additional ~~stock~~material ~~upon~~subsequent ~~the~~events ~~exercise~~that ofrequired ~~warrants~~recognition ator ~~$0.40~~additional ~~per~~disclosure ~~share~~in ~~for~~these ~~settlement~~financial ~~of cash advances~~statements.

~~Series~~ITEM A2 ~~Preferred~~- ~~Stock~~MANAGEMENT'S –DISCUSSION ~~During~~AND ~~the~~ANALYSIS ~~nine~~OF months ended March 31, 2011, the Company issued 1,000,000 Series A Preferred Stock entitled to the voting rights of 100 common shares for each preferred share, valued at $53,000, to two of its executives for compensation.FINANCIAL

~~NOTE~~CONDITION 8AND –RESULTS ~~RELATED~~OF ~~PARTY TRANSACTIONS~~OPERATIONS

~~The~~Liquidity ~~Company~~and ~~received~~Capital ~~cash~~Resources. As ~~advances~~ of ~~$176~~September 30,~~877~~ ~~and $373~~2014,~~082~~ ~~from~~Registrant ~~its~~had ~~president~~cash ~~during~~of ~~the~~$9,975. Cash ~~nine~~declined ~~months~~because ~~ended~~of ~~March~~the ~~31,~~funds ~~2011~~spent ~~and~~on ~~2010~~the ~~and~~development ~~offset $28,759~~ of the ~~related~~technology ~~party~~and ~~rent~~products ~~with~~of the ~~cash advances~~Company. ~~The~~ Registrant's ~~advances~~has ~~are~~total ~~non-interest~~liabilities ~~bearing~~of $111,230 ~~payable upon demand~~ and ~~included~~shareholders' inequity ~~related~~of ~~party payables~~$91,806. During the ~~nine~~quarter ~~months~~the ~~ended~~obligation ~~March~~to ~~31,~~a ~~2011~~related ~~and~~party ~~2010,~~in the ~~Company~~amount ~~settled~~of $~~400~~147,~~000~~196 ofas shown on the ~~cash~~balance ~~advances~~sheet bydated ~~issuing~~September 130,~~000~~ 2014,~~000~~ ~~shares~~increased ofto ~~common~~$154,293 ~~stock~~as ~~upon the exercise~~ of ~~warrants~~September at30, $02014.40 ~~per~~As ~~share~~of ~~and~~June ~~settled~~30, ~~$239~~2014,~~668~~ ofRegistrant ~~the~~had cash ~~advances~~and bytotal ~~paying~~current ~~the~~assets ~~president’s~~of ~~personal~~$9,975 ~~legal~~and ~~expenses.~~had ~~During~~current ~~the~~liabilities ~~nine~~of ~~months~~$163,321 ~~ended~~and ~~March~~shareholders' ~~31,~~equity ~~2010~~of $126,980 ~~the~~as ~~Company~~of ~~settled~~September ~~$71~~30,~~228~~2014, ofcompared ~~the~~to cash ~~advances~~of by$26,108, ~~paying~~current ~~the~~liabilities ~~president’s~~of ~~personal~~$149,873 ~~legal~~and ~~expenses.~~stockholders’ Asequity of ~~March 31~~$157,067 ~~2011~~as ~~and~~of June 30, ~~2010,~~2014. ~~the~~As ~~cash~~of ~~advance~~September ~~balance~~30, ~~included~~2014, inthe ~~related~~ratio ~~party~~of ~~payable,~~current ~~was~~assets ~~zero~~to ~~and~~current aliabilities ~~payable~~was ofapproximately ~~$434,032,~~sixteen ~~respectively~~to one.

~~During~~Results ~~2003,~~of Operation. For the ~~Company~~quarter ~~commenced~~ended ~~leasing~~September ~~office~~30, ~~and~~2014, ~~research~~Registrant ~~and~~had ~~development~~no ~~space~~revenues oncompared ~~a month-~~to~~-month~~ ~~basis~~no ~~from~~revenues for the ~~president~~same ~~and~~period a ~~third~~year ~~party~~earlier. ~~The~~ For ~~lease~~the isquarter anended ~~operating~~September ~~lease~~30, ~~and~~2014, ~~rent~~Registrant ~~expense~~had ~~was~~expenses of $630,~~000~~087 ~~per~~compared ~~month~~ to ~~the~~expenses ~~President~~of ~~and~~ $6556,~~200~~424 ~~per~~for ~~month~~the tosame ~~the~~period ~~third~~a ~~party~~year earlier. ~~Effective~~ The ~~July~~lack 1of revenues reflects potential products were under development. For the quarter ended September 30, ~~2010~~2014, ~~the~~Registrant ~~president~~had ~~stopped~~a ~~charging~~net ~~the~~loss ~~Company~~of ~~rent.~~($33,370) ~~However~~compared to a net loss of $(556,424) ~~because~~for the ~~president~~same period a year earlier. The decrease in net loss is attributable to a ~~principal~~reduction ~~stockholder,~~in ~~rent~~research ~~expense~~and ofdevelopment expenses. Basic and diluted loss per share were $~~6,000~~(0.00) compared to basic and diluted loss per ~~month~~share of ~~has~~$(0.01) ~~been~~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 ~~credited~~classification of liabilities that might be necessary should the Company be unable to ~~equity~~continue as ~~contributed~~a ~~capital~~going concern. The ~~amount~~Company’s ~~payable~~ability to ~~the~~continue ~~president~~as ~~for~~a ~~rent~~going atconcern ~~March~~is ~~31,~~dependent ~~2011~~upon ~~and~~its ~~June~~ability 30to generate sufficient cash flow to meet its obligations on a timely basis, ~~2010~~to ~~was~~obtain ~~$39~~additional financing as may be required,~~241~~ and ~~$73,500,~~ultimately ~~respectively,~~to attain successful operations. Management is pursuing various sales agreements and is ~~included~~hopeful inthat ~~related~~these ~~party~~potential ~~payable. The~~agreements ~~amount~~will ~~recorded~~generate tosufficient ~~equity~~cash flow for ~~rent~~the ~~was~~Company ~~$54,000~~to ~~for~~remain and be as a going concern. If the ~~nine~~Company ~~months~~is ~~ended~~unsuccessful ~~March~~in 31these efforts and cannot attain sufficient sales to permit profitable operations or if it cannot obtain funding or investment, ~~2011~~it may substantially curtail or end its operations.

~~The~~ Company’s ~~has received deposits from officers of $81,000 for alternate solar energy systems, which are included in customer deposits at March 31, 2011 and June 30, 2010.~~Business

The ~~Company's~~products ~~president~~which ~~and~~the ~~two~~Company ofhas ~~his~~under ~~sons,~~development ~~who~~were ~~are~~described ~~also~~in ~~officers~~its ofreport ~~the~~on ~~Company,~~Form ~~control~~10-K ~~more~~which ~~than~~was ~~85%~~filed ofon ~~the~~or ~~voting~~about ~~rights~~July of16, 2015.Generally speaking the Company. Asis acontinuing ~~result,~~its ~~these~~development ~~three~~of ~~individuals~~these ~~control~~products. ~~the~~The Company’s ~~business~~is ~~operations~~incorporating ~~and~~the ~~policies~~report ~~and~~on ~~all~~Form ~~matters~~10-K ~~requiring~~filed ~~stockholder~~on ~~approval~~July 16, ~~including~~2015,into ~~the~~this ~~election~~report ofby ~~directors~~reference ~~and approval of significant corporate transactions.~~

~~NOTE~~The 9Company –has ~~DEPOSITS~~an ~~FROM~~Alternate ~~CUSTOMERS~~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.

~~During~~The ~~the~~Company ~~nine~~has ~~months~~a ~~ended~~an ~~March~~Automated ~~31,~~Fingerprint ~~2011~~Identification ~~and~~Machine ~~2010,~~(“AFIM”) which is designed to have the ~~Company~~capability ~~received~~to ~~deposits~~verify ~~from~~the ~~customer~~identity ~~totaling~~of $0individuals. ~~and~~The ~~$621,000,~~AFIM ~~respectively,~~is ~~and~~able ~~refunded~~to ~~deposits~~identify ~~totaling~~a $0person ~~and~~verifying ~~$18,000,~~the ~~respectively,~~identity ~~relating~~from information previously stored. The Company believes that it has the ability to ~~contract~~connect ~~agreements~~a series of AFIM’s to ~~build,~~a ~~install~~single ~~and~~personal ~~maintain~~computer. The ~~alternate~~person ~~solar~~whose ~~energy~~identity ~~systems~~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 ~~total~~Company ~~amount~~purports ofthat ~~customer~~it ~~deposits~~has atdeveloped ~~March~~technology ~~31,~~that ~~2011~~transmits ~~was~~information $2and data using different wave patterns,~~360,250~~ configurations and timing in the electromagnetic spectrum. The ~~agreements~~Company ~~provide~~refers ~~that~~to this technology as the Digital Wave Modulation (“DWM”). The Company ~~will~~believes ~~deliver,~~that ~~install~~this ~~and~~technology ~~startup~~may increase the ~~alternate~~amount ~~solar~~of ~~energy~~information ~~systems~~which ~~prior~~can tobe ~~June~~transmitted. ~~30,~~The ~~2010~~commercial feasibility of this technology has not been demonstrated. The Company ~~has~~is ~~and~~continuing ~~continues~~the totechnology’s ~~work~~feasibility. There ~~toward~~is ~~delivering,~~great ~~installing~~competition ~~and~~in ~~starting~~the upcommunication ~~the~~data ~~alternate~~transfer ~~solar~~and ~~energy~~storage systems,. ~~but~~There ~~the~~are ~~energy~~risks ~~output~~to ~~has~~commercially ~~not~~viable ~~been~~products ~~verified. Therefore,~~being ~~for~~developed ~~all~~and ofin ~~these~~demand. The ~~agreements,~~Company’s ~~the~~development ~~customers~~is ~~may~~limited ~~request~~by afunds ~~return~~available offor ~~their~~development. To ~~deposits~~be ~~since~~successful the Company ~~has~~must ~~not~~have ~~verified~~marketing ~~output~~capabilities ofand ~~the~~strategies ~~energy~~for each product developed or under development.

6The 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 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.

~~NOTE~~The 10Company –has ~~FAIR~~developed ~~VALUE~~an OFAutomatic ~~FINANCIAL~~Self-Service ~~INSTRUMENTS~~Check-out System. The 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 register. When fully implemented a store manager is able to maintain accurate inventory of items on a contemporary basis.

~~The~~For ~~Company’s~~the ~~financial~~Self-Check ~~instruments~~System ~~consist~~to ofoperate ~~cash~~at ~~and~~least ~~cash~~95% ~~equivalents,~~of ~~payables,~~the ~~and~~items ~~notes~~must ~~payable. The~~have ~~carrying~~bar ~~amount~~codes. ofThe ~~cash~~retailer ~~and~~may ~~cash~~have ~~equivalents~~to ~~and~~purchase ~~payables~~equipment ~~approximates~~to ~~fair~~be ~~value~~able ~~because~~to ofput ~~the~~bar ~~short-term~~coedes ~~nature~~on ~~of these~~ items~~. The~~ ~~carrying~~in ~~amount of~~ the ~~notes~~store. The ~~payable~~Company ~~approximates~~believes ~~fair~~that ~~value as~~ the ~~individual~~Self-check ~~borrowings~~System ~~bear~~may ~~interest~~reduce atthefts ~~rates~~and ~~that~~employees ~~approximate~~will ~~market~~be ~~interest~~unable ~~rates~~to ~~for~~circumvent ~~similar~~the ~~debt~~check-out ~~instruments~~systems.

~~NOTE~~Another 11market –being ~~SUBSEQUENT~~tested ~~EVENTS~~is automatic ordering and payment. The customers would use a touch screen to initiate an order, and make payment using the Company’s AFIM technology. The order would be sent automatically to the food preparers.

InPatents ~~April 2011, the Company sold 810,000 shares of restricted common stock, at a 25% discount, for $93,000 to a third party~~ and anTrade ~~employee.~~Secrets

~~Item~~The 2Company has been assigned or will be assigned the rights to several U. ~~Management’s~~S. ~~Discussion~~patents. Four patents pertaining to the AFIM technology were granted in January 1997, February 2001, July 2001, and ~~Analysis~~September of2002. ~~Financial~~Seven ~~Condition~~patents pertaining to the DWM technology were granted in May 1996, June 1997, November 1997, July 2000, September 2000, October 2000, and ~~Results~~May of2001. A ~~Operations~~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.

~~This~~The ~~Management’s~~Company ~~Discussion~~has and Analysis of Financial Condition and Results of Operations and other parts of this quarterly report on Form 10-Q contain forward-looking statements that involve risks and uncertainties. Forward-looking statements can also be identified by words such as “intends,” “anticipates,” “expects,” “believes,” “plans,” “predicts,” and similar terms. Forward-looking statements are not ~~guarantees~~sought ofor ~~future~~received ~~performance~~an ~~and~~opinion ~~our actual results may differ significantly~~ from ~~the~~an ~~results~~independent ~~discussed~~patent inattorney ~~the~~regarding ~~forward-looking statements. Factors that might cause such differences include, but are not limited to delays in product development,~~ the ~~development~~strength of ~~marketing~~the ~~and~~patents ~~distribution~~or ~~channel~~patents ~~and~~pending ~~market acceptance of its products~~ and ~~other risks that may be beyond~~ the ~~control~~ability of the Company. ~~The~~to ~~following~~withstand ~~discussion~~any ~~should~~challenge beto read in conjunction with our unaudited condensed financial statements and notes thereto included in this Form 10-Q and our audited financial statements included in our annual report on Form 10-K for the ~~year~~patent ~~ended~~or ~~June~~any ~~30,~~future ~~2010~~efforts ~~filed~~by ~~with~~ the ~~Securities~~Company ~~and~~to ~~Exchange~~enforce ~~Commission~~its ~~and~~rights ~~management’s~~under ~~discussion~~a ~~and~~patent ~~analysis~~or ~~contained~~patents ~~therein. All~~against ~~information presented herein is based on the three and nine months ended March 31, 2011 and 2010~~others. We In ~~assume~~2008 noa ~~obligation~~court toheld ~~revise~~that orone ~~update~~of ~~any~~the ~~forward-looking~~AFIM ~~statements~~patents ~~for~~was ~~any reason, except as required by law~~invalid.

~~LIQUIDITY~~The ~~AND~~Company ~~CAPITAL~~believes ~~RESOURCES~~that it has trade secrets and it has made effort 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.

~~Historically,~~The ~~the~~ Company’s ~~principal~~relies ~~use~~on ofits ~~cash~~proprietary ~~has~~technology ~~been~~in tothe ~~fund ongoing research and~~ development ~~activities and constructing the alternate solar energy systems. To date, the Company has primarily financed its operations by the receipt~~ of ~~cash advances from~~ its ~~president, through the private placement of equity securities and receipt of customer deposits for the alternate solar energy system~~products. There ~~The~~can ~~Company~~be ~~has~~ no ~~formal~~assurance ~~agreement~~that asothers tomay ~~any~~not ~~future~~develop ~~loans~~technology orwhich ~~advances,~~competes ~~but~~with the Company’s ~~does~~products ~~anticipate~~and ~~receiving additional advances from its president~~technology.

~~The~~Part ~~Company has shares of common stock in escrow accounts~~II. Proceeds from the sale of stock from these escrow accounts are placed in separate escrow accounts to be used at the Company’s and the trustee’s discretion. During the nine months ended March 31, 2011, 1,115,393 shares from escrow accounts were sold for proceeds of $176,188 at prices ranging from $0.10 to $0.26 per share. At March 31, 2011, there was a balance of 3,922,725 shares in the escrow accounts. The Company anticipates that a portion of these shares will be sold to help fund ongoing operations, but there is no assurance that there will be buyers for the shares.

~~During~~Item ~~the nine months ended March 31, 2011, the Company sold 3,086,526 shares of restricted common stock to employees and third parties for proceeds of $348,535 at prices ranging from $0~~1.09 toLegal $0Proceedings.~~21 per share. The Company anticipates selling additional restricted shares to help fund ongoing operations, but there is no assurance that there will be buyers for the shares.~~

The Company has no line of credit with any financial institution and it doesn’t believe it will be able to establish a line of credit from conventional sources until the Company has consistent revenue. Management is in the process of negotiating various sales agreements and is hopeful these sales will generate cash flow to help the Company fund continuing operations.

The Company's liquidity is substantially limited given the current rate of expenditures. More funds will be required to support ongoing building of the alternate solar energy systems, product development, finance any marketing programs and establish any distribution networks. The Company had $3,737 in cash as of March 31, 2011, representing a decrease of $3,128 from June 30, 2010. The decrease relates to net cash used in operations of $436,261 and net cash used in investing activities of $500 offset by net cash provided from financing activities of $433,633, primarily related to cash advances received from the Company’s president and proceeds from issuance of restricted common stock.

As of March 31, 2011, the Company had current assets of $5,737 and total assets of $1,028,327. Current liabilities were $3,136,228 and total liabilities of $3,206,459. The ratio of current assets to current liabilities is approximately 0.002 to one. If the Company continues to need advances from its president, proceeds from the sale of restricted stock or if the Company is unable to generate sufficient revenues to meet its operating expenses, the Company will continue to experience liquidity difficulties. The Company's ability to continue its activities is dependent on it receiving funds from advances or the sale of equity. As noted previously, the Company’s president has provided funds from advances, but there is no formal agreement between the Company and the president to continue providing advances in the future. There is also no assurance that there will be buyers for the sale of equity. If the Company had to seek funds from another source, there is no assurance that funds would be available at all or on terms acceptable to the Company.

PLAN OF OPERATION

The Company’s plan of operation for the next 12 months is to: (i) continue to build its alternate solar energy system and get the system operational to begin producing energy; (ii) market and sell the solar energy technology system once it is operational; and (iii) continue to develop marketable products for its technologies.

During the next 12 months, additional financing will be required to fund the building of the alternate solar energy system and the development of marketable products. To date, the Company has primarily financed operations by the receipt of advances from the Company’s president, deposits from customers for the alternate solar energy system and through the private placement of equity securities. The president and the Company have no formal agreement as to any future advances. However, it is anticipated that the Company will continue to receive additional financing from receipt of advances from its president to help fund continuing operations. The Company also anticipates receiving additional financing through the private placement of equity securities.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2011 compared to the Three Months Ended March 31, 2010

For the three months ended March 31, 2011 and 2010, the Company had no revenue and no cost of sales. Operations during the three months ended March 31, 2011 and 2010, primarily pertained to research and development and other activities. Research and development expenses decreased by $34,019 or 29% to $84,278 for the three months ended March 31, 2011 from $118,297 for the three months ended March 31, 2010. The decrease is primarily due to purchasing less research and development materials for the alternate solar energy system and bladeless turbine.

General and administrative expenses decreased by $135,398 or 48% from $284,128 for the three months ended March 31, 2010 to $148,730 for the three months ended March 31, 2011. The decrease in general and administrative expenses is primarily due to a decrease in stock-based compensation since all of the options fully vested in fiscal year 2010 and restricted shares were granted to employees during the three months ended March 31, 2010.

Net loss decreased by $171,002 from $404,770 for the three months ended March 31, 2010 to $233,768 for the three months ended March 31, 2011 due to the items noted above. Net loss per common share was $0.01 for the three months ended March 31, 2011 and 2010.

Nine Months Ended March 31, 2011 compared to the Nine Months Ended March 31, 2010

For the nine months ended March 31, 2011 and 2010, the Company had no revenue and no cost of sales. Operations during the nine months ended March 31, 2011 and 2010, primarily pertained to research and development and other activities. Research and development expenses decreased by $78,143 or 23% to $256,525 for the nine months ended March 31, 2011 from $334,668 for the nine months ended March 31, 2010. The decrease is primarily due to purchasing less research and development materials for the alternate solar energy system and bladeless turbine.

General and administrative expenses decreased by $2,281,627 or 81% from $2,825,025 for the nine months ended March 31, 2010 to $543,398 for the nine months ended March 31, 2011. The decrease in general and administrative expenses is primarily due to a decrease in stock-based compensation since all of the options fully vested in fiscal year 2010.

Net loss decreased by $2,360,886 from $3,165,897 for the nine months ended March 31, 2010 to $805,011 for the nine months ended March 31, 2011 due to the items noted above. Net loss per common share was $0.02 and $0.09 for the nine months ended March 31, 2011 and 2010, respectively.

CONTRACTUAL OBLIGATIONS AND CONTINGENT LIABILITIES AND COMMITMENTS

Sales Commitments - During December 2005, the Company entered into a purchase and installation contract with Solar Renewable Energy-1, LLC for a solar thermal power plant. The contract is contingent on several factors and provides for certain progress payments. As of March 31, 2011, the Company has not provided any services or equipment required under this agreement and has recognized no revenues. 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. 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 Company’s president has entered into several solar lease bonus fee contracts with many of the customers who made deposits on the alternate solar energy system. As additional consideration for making the deposit and making the solar alternate energy system available to the Company as a reference for marketing and sales purposes to show and demonstrate, the Company’s president has agreed to pay many of the customers a referral fee of .009%, for each System purchased, on the first one billion dollars of total gross sales revenue received by the Company for the sale of power generation equipment. The Company’s president plans to pay this fee from his future royalties mentioned in the above paragraph.

Notes Payable – The Company has entered into two notes payable with financing companies collateralized by a deed of trust covering the underlying property. The principal amount owed for the land notes payable at March 31, 2011 was $83,834. Both notes payable mature in fiscal year 2016.

The Company entered into a note payable with a company to purchase equipment during March 2009. The note payable bears interest at a weighted average interest rate of 4.65%. The total amount owed for the equipment note payable was $2,582 at March 31, 2011.

ITEM 4: CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. Under the supervision and with the participation of our 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) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting. During the most recent fiscal quarter covered by this report, there has been no change in our internal control over financial reporting (as defined in Rule 13a-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 - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is a party to one law suit that the Company believes the result will have an immaterial effect on our operations, even if the Company does not prevail.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company has shares of common stock in escrow accounts. Proceeds from the sale of stock from these escrow accounts are placed in separate escrow accounts to be used at the Company’s and the trustee’s discretion. During the three months ended March 31, 2011, 521,947, shares were sold for proceeds of $75,677 at prices ranging from $0.11 to $0.21 per share. The Company also sold 1,566,879 shares of restricted common stock to third parties for $163,400 at prices ranging from $0.09 to $0.14 per share. The proceeds were used to pay professional fees, operating expenses and accounts payable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

~~ITEM~~Item 42. ~~RESERVED~~Changes in Securities.

ITEM 5. OTHER INFORMATION.

None.

9Item 3. Defaults upon Senior Securities.

~~ITEM 6~~None. ~~EXHIBITS AND REPORTS ON FORM 8-K~~

aItem 4. ~~Exhibits~~Matters Submitted to a Vote of the Company's Shareholders.

31None.~~1 Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

31Item 5.2 ~~Certification~~Other ~~by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~Information.

~~32.1~~ Our ~~Certification~~shares byof ~~the~~common ~~Chief~~stock ~~Executive~~are ~~Officer~~quoted ~~Pursuant~~on tothe 18over-the-counter ~~U.S.C.~~electronic ~~Section~~bulletin ~~1350~~board ~~Adopted~~under ~~Pursuant to Section 906 of~~ the ~~Sarbanes-Oxley~~symbol ~~Act of 2002~~“IAUS.”.

32Item 6.2 ~~Certification~~Exhibits, ~~by the Chief~~ Financial ~~Officer~~Statements, ~~Pursuant~~Schedules toand 18Reports ~~U.S.C.~~on ~~Section~~Form ~~1350 Adopted Pursuant to Section 906 of the Sarbanes~~10-~~Oxley Act of 2002~~Q.

~~SIGNATURES~~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

Item 9A 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 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 -- 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.

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 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 reporting.

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.

~~INTERNATIONAL~~Date: ~~AUTOMATED~~September ~~SYSTEMS~~1, ~~INC.~~2015

Date: May 13, 2011	By	/s/ Neldon Johnson
		Neldon Johnson
		President, Chief Executive Officer, Director
Date: May 13, 2011	By	/s/ LaGrand Johnson
		LaGrand Johnson
		Chief Financial Officer

International Automated Systems, Inc.

10By s/Neldon Johnson

President and Chief Operating Officer

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