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EX-32 - INTERNATIONAL AUTOMATED SYSTEMS INCexhibit321.htm
EX-31 - INTERNATIONAL AUTOMATED SYSTEMS INCexhibit312.htm
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EX-31 - INTERNATIONAL AUTOMATED SYSTEMS INCexhibit311.htm

FORM 10-Q


SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Quarterly Report Under Section 13 or 15(d)

Of the Securities Exchange Act of 1934


For Quarter Ended  September 30, 2014


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.)


55 North Merchant Street 608

American Fork, Utah 84003

(Address of principal executive offices)


Registrant's telephone number

including area code

(801)423-8132


                    Not Applicable                                      Former Address, if changed since last report



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the proceeding 12 months (or such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.Yes    

No x    



As of September 30,2014, 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.









FORWARD-LOOKING STATEMENTS



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


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


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


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






PART I

ITEM I - FINANCIAL STATEMENTS



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


In the opinion of the Company, all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the financial position of the Company as of September 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.

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.



INTERNATIONAL AUTOMATED SYSTEMS, INC

(A Development Stage Company)

Statements of Operations

(unaudited)




For the Three Months Ended




September 30,




2014


2013









REVENUES

$

                   -   


$

                   -   









OPERATING EXPENSES















Research and development


              2,254



            43,376


Depreciation expense


                506



            10,778


General and administrative

 

            27,327


 

          502,270











Total Operating Expenses

 

            30,087


 

          556,424









NET LOSS

$

           (30,087)


$

         (556,424)









BASIC AND DILUTED LOSS PER SHARE

$

(0.00)


$

(0.01)









WEIGHTED AVERAGE NUMBER






  OF SHARES OUTSTANDING

 

      64,894,305


 

      64,894,305









The accompanying notes are an integral part of these financial statements




INTERNATIONAL AUTOMATED SYSTEMS, INC

Statements of Cash Flows

(Unaudited)












For the Three Months Ended





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

$

                 -


 $

                 -






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 Companys activities to date have consisted of developing a business plan, raising capital through the issuance of debt and equity instruments, developing power generation equipment and obtaining the rights to certain technology related to electronic security and communication equipment.


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


Basis of Presentation / Going Concern - The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.   As of September 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 Companys 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 Companys 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.


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.


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


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

NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





(CONTINUED)


Research and 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 Companys research and development of the Solar Power Plant technology, Steam Turbine technology, Automated Fingerprint Identification Machine technology, Digital Wave Modulation Technology and other various projects. These costs, which consist primarily of monies paid for consulting expenses, materials and supplies and compensation costs amounted to $181,792 and $144,617 for the fiscal years ended June 30, 2014 and 2013, respectively.


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


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




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


Condensed Financial Statements - The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at September 30, 2014 and 2013, and for all periods presented herein, have been made.





NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


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 Companys 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.


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


NOTE 2 BASIC AND DILUTED NET LOSS PER COMMON SHARE


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


NOTE 3 RELATED PARTY TRANSACTIONS


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


NOTE 4 STOCK BASED COMPENSATION


Options and Warrants


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


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





NOTE 4 STOCK BASED COMPENSATION (CONTINUED)


the straight-line basis over the requisite service period for each separately exercisability portion of the award  as if the award was, in-substance, multiple awards.


The agreement contains a standard 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.


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

36,920,000



NOTE 5 PREFERRED STOCK


Series A Preferred Stock


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





NOTE 5 PREFERRED STOCK (CONTINUED)


Series B Preferred Stock


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


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


NOTE 6 SUBSEQUENT EVENTS


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






ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS


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



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


Companys Business


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


The Company has an Alternate Solar Energy Thermal System (System) which can be used with the Companys 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.


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


The Company purports that it has developed technology that transmits information and data using different wave patterns, configurations and timing in the electromagnetic spectrum.  The Company refers to this technology as the Digital Wave Modulation (DWM). The Company believes that this technology may increase the amount of information which can be transmitted. The commercial feasibility of this technology has not been demonstrated. The Company is continuing the technologys feasibility.  There is great competition in the communication data transfer and storage systems. There are risks to commercially viable products being developed and in demand.  The Companys development is limited by funds available for development.  To be successful the Company must have marketing capabilities and strategies for each product developed or under development.


The 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 Companys control.


The Company has developed an Automatic Self-Service 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.


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


Another market being tested is automatic ordering and payment.  The customers would use a touch screen to initiate an order, and make payment using the Companys AFIM technology.  The order would be sent automatically to the food preparers.  

Patents and Trade Secrets



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


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


The Company believes 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.


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







Part II.

Item 1. Legal Proceedings.

None.


Item 2. Changes in Securities.

None.


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 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.

        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 SECs 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 Companys 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 Companys registered public accounting firm regarding internal control over financial reporting.  Managements report was not subject to attestation by the Companys registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only managements 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.




Date: September 1, 2015


International Automated Systems, Inc.


By s/Neldon Johnson

President and Chief Operating Officer