----

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| Utah                                                                | 87-0447580                             |
|---------------------------------------------------------------------|----------------------------------------|
| (State      or other jurisdiction of incorporation or organization) | (IRS      Employer Identification No.) |

  No

| o Large      accelerated filer | o Accelerated      filer | o Non-accelerated      filer | x Smaller      reporting company |
|-------------------------------------|-------------------------------|-----------------------------------|---------------------------------------|

  No x

| Class                           | Outstanding as of October 31,      2009 |
|---------------------------------|-----------------------------------------|
| Common      Stock, no par value | 38,846,140      shares                  |

----

| PART      I – FINANCIAL INFORMATION                                                                                                                       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                            |
| Item      1: Financial Statements                                                                                                                               |   |
|                                                                                                                                                            |   |
| Unaudited      Condensed Balance Sheets                                                                                                                         |   |
| As      of September 30, 2009 (unaudited) and June 30, 2009    (audited)                                                                                        | 1 |
|                                                                                                                                                            |   |
| Unaudited      Condensed Statements of Operations                                                                                                               |   |
| For      the three months ended September 30, 2009 and 2008 and for the Period from      September 26, 1986 (Date of Inception) through September 30,      2009 | 2 |
|                                                                                                                                                            |   |
| Unaudited      Condensed Statements of Cash Flows                                                                                                               |   |
| For      the three months ended September 30, 2009 and 2008 and for the Period from      September 26, 1986 (Date of Inception) through September 30,      2009 | 3 |
|                                                                                                                                                            |   |
| Notes      to Unaudited Condensed Financial Statements                                                                                                          | 4 |
|                                                                                                                                                            |   |
| Item      2:  Management’s Discussion and Analysis of Financial Condition      and Results of Operations                                        | 7 |
|                                                                                                                                                            |   |
| Item      4T:  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:  Submission of Matters to a Vote of Security      Holders                                                                                | 9 |
|                                                                                                                                                            |   |
| Item      5:  Other Information                                                                                                                       | 9 |
|                                                                                                                                                            |   |
| Item      6:  Exhibits                                                                                                                                | 10 |
|                                                                                                                                                            |   |
| Signatures                                                                                                                                                      | 10 |

----

INTERNATIONAL AUTOMATED SYSTEMS, INC.

|                                                                                                     |                                                                                                                                                                                                                           |   | September      30, |        |   | June      30, |      |
|----------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-------------|--------|---------------|-----------|
|                                                                                                     |                                                                                                                                                                                                                           |   | 2009               |        |   | 2009          |      |
|                                                                                                     |                                                                                                                                                                                                                           |   | (unaudited)        |        |   | (audited)     |      |
| ASSETS                                                                                                   |                                                                                                                                                                                                                           |
| CURRENT      ASSETS                                                                                      |                                                                                                                                                                                                                           |   |               |        |   |          |
|                                                                                                     | Cash      and cash equivalents                                                                                                                                                                                                 |   | $                  | 366,351     |   |          | $         | 47,537 |   |
|                                                                                                     | Prepaid      expenses                                                                                                                                                                                                          |   |               | 2,000       |   |          |      | 11,833 |   |
|                                                                                                     |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |   |
|                                                                                                     | Total      Current Assets                                                                                                                                                                                                      |   |               | 368,351     |   |          |      | 59,370 |   |
|                                                                                                     |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |   |
| Alternate      solar energy systems                                                                      |                                                                                                                                                                                                                           |   | 467,480            |        |   |          | 413,520   |   |
| Property      and Equipment, net of accumulated depreciation of $317,152 and      $291,390, respectively |                                                                                                                                                                                                                           |   | 457,984            |        |   |          | 481,512   |   |
| Patents,      net of accumulated amortization of $22,237 and $20,825,      respectively                  |                                                                                                                                                                                                                           |   | 73,789             |        |   |          | 75,201    |   |
|                                                                                                     |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |   |
|                                                                                                     | TOTAL      ASSETS                                                                                                                                                                                                              |   | $                  | 1,367,604   |   |          | $         | 1,029,603 |   |
|                                                                                                     |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |   |
| LIABILITIES      AND STOCKHOLDERS' DEFICIT                                                               |                                                                                                                                                                                                                           |
|                                                                                                     |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |   |
| CURRENT      LIABILITIES                                                                                 |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |
|                                                                                                     | Accounts      payable                                                                                                                                                                                                          |   | $                  | 372,243     |   |          | $         | 417,136 |   |
|                                                                                                     | Accrued      liabilities                                                                                                                                                                                                       |   |               | 234,784     |   |          |      | 181,327 |   |
|                                                                                                     | Related      party payable - Note 8                                                                                                                                                                                            |   |               | 623,343     |   |          |      | 505,382 |   |
|                                                                                                     | Customer      deposits - Note 9                                                                                                                                                                                                |   |               | 2,297,250   |   |          |      | 1,757,250 |   |
|                                                                                                     | Notes      payable-current portion                                                                                                                                                                                             |   |               | 53,384      |   |          |      | 52,543 |   |
|                                                                                                     |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |   |
|                                                                                                     | Total      Current Liabilities                                                                                                                                                                                                 |   |               | 3,581,004   |   |          |      | 2,913,638 |   |
|                                                                                                     |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |   |
| Long-term      notes payable                                                                             |                                                                                                                                                                                                                           |   | 83,834             |        |   |          | 96,682    |   |
|                                                                                                     |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |   |
| TOTAL      LIABILITIES                                                                                   |                                                                                                                                                                                                                           |   | 3,664,838          |        |   |          | 3,010,320 |   |
|                                                                                                     |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |   |
| Commitments      and contingencies - Note 6                                                              |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |
|                                                                                                     |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |   |
| STOCKHOLDERS'      EQUITY (DEFICIT)                                                                      |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |
|                                                                                                     |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |   |
|                                                                                                     | Preferred      stock, Class A, no par value; 22,000,000 shares authorized,      4,400,000 shares issued and outstanding                                                                                                        |   |               | 417,264     |   |          |      | 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,  34,666,022 and 34,501,322 issued and      outstanding,net of 4,180,118 and 4,344,818 shares held in escrow account,      respectively - Note 7 |   |               | 34,100,543  |   |          |      | 32,936,636 |   |
|                                                                                                     | Deficit      accumulated during the development stage                                                                                                                                                                          |   |               | (36,815,041 | )      |          |      | (35,334,617 | ) |
|                                                                                                     | Total      Stockholders' Deficit                                                                                                                                                                                               |   |               | (2,297,234  | )      |          |      | (1,980,717 | ) |
|                                                                                                     |                                                                                                                                                                                                                           |   |               |        |   |          |      |   |   |
|                                                                                                     | TOTAL      LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                                                                               |   | $                  | 1,367,604   |   |          | $         | 1,029,603 |   |

----

|                                                   |   |                            |       |   |                |   |       | For      the Period     |   |
|--------------------------------------------------------|--------|---------------------------------|------------|--------|---------------------|--------|------------|-------------------------|--------|
|                                                   |   |                            |       |   | From      Inception |   |
|                                                   |   | For      the Three Months Ended |       |   | (September      26, |   |
|                                                   |   | September      30,              |       |   | 1986)      Through  |   |
|                                                   |   | 2009                            |       |   | 2008                |   |       | September      30, 2009 |   |
| REVENUES                                               |   |                            |       |   |                |   |       |                    |   |
| Sales                                                  |   | $                               | -          |   |                | $      | -          |                    |   | $ | 111,226 |   |
| Income      from related party                         |   |                            | -          |   |                |   | -          |                    |   |   | 32,348 |   |
| Total      Revenues                                    |   |                            | -          |   |                |   | -          |                    |   |   | 143,574 |   |
|                                                   |   |                            |       |   |                |   |       |                    |   |   |   |   |
| COST      OF SALES                                     |   |                            |       |   |                |   |       |                    |   |   |   |   |
| Cost      of sales                                     |   |                            | -          |   |                |   | -          |                    |   |   | 81,927 |   |
| Write      down of carrying value of inventory         |   |                            | -          |   |                |   | -          |                    |   |   | 233,131 |   |
| Total      Costs of Sales                              |   |                            | -          |   |                |   | -          |                    |   |   | 315,058 |   |
|                                                   |   |                            |       |   |                |   |       |                    |   |   |   |   |
| GROSS      LOSS                                        |   |                            | -          |   |                |   | -          |                    |   |   | (171,484 | ) |
|                                                   |   |                            |       |   |                |   |       |                    |   |   |   |   |
| OPERATING      EXPENSES                                |   |                            |       |   |                |   |       |                    |   |   |   |   |
| General      and administrative                        |   |                            | 1,363,831  |   |                |   | 1,634,614  |                    |   |   | 29,592,766 |   |
| Research      and development                          |   |                            | 114,396    |   |                |   | 159,484    |                    |   |   | 7,737,235 |   |
| Impairment      of patents                             |   |                            | -          |   |                |   | -          |                    |   |   | 140,577 |   |
| License      fees                                      |   |                            | -          |   |                |   | -          |                    |   |   | 270,634 |   |
| Loss      (gain) on disposal of property and equipment |   |                            | -          |   |                |   | -          |                    |   |   | 16,901 |   |
| Total      Operating Expenses                          |   |                            | 1,478,227  |   |                |   | 1,794,098  |                    |   |   | 37,758,113 |   |
|                                                   |   |                            |       |   |                |   |       |                    |   |   |   |   |
| LOSS      FROM OPERATIONS                              |   |                            | (1,478,227 | )      |                |   | (1,794,098 | )                       |   |   | (37,929,597 | ) |
|                                                   |   |                            |       |   |                |   |       |                    |   |   |   |   |
| OTHER      INCOME (EXPENSES)                           |   |                            |       |   |                |   |       |                    |   |   |   |   |
| Loss      on impairment of assets                      |   |                            | -          |   |                |   | -          |                    |   |   | (583 | ) |
| Forfeiture      of deposits                            |   |                            | -          |   |                |   | -          |                    |   |   | (236,803 | ) |
| Interest      income                                   |   |                            | 59         |   |                |   | 36         |                    |   |   | 26,548 |   |
| Interest      expense                                  |   |                            | (2,530     | )      |                |   | (1,617     | )                       |   |   | (25,627 | ) |
| Other      income (expenses)                           |   |                            | 274        |   |                |   | -          |                    |   |   | (31,002 | ) |
| Total      Other Income (Expenses)                     |   |                            | (2,197     | )      |                |   | (1,581     | )                       |   |   | (267,467 | ) |
|                                                   |   |                            |       |   |                |   |       |                    |   |   |   |   |
| LOSS      BEFORE EXTRAORDINARY GAIN                    |   |                            | (1,480,424 | )      |                |   | (1,795,679 | )                       |   |   | (38,197,064 | ) |
|                                                   |   |                            |       |   |                |   |       |                    |   |   |   |   |
| Extraordinary      gain on sale of patents             |   |                            | -          |   |                |   | -          |                    |   |   | 1,382,023 |   |
|                                                   |   |                            |       |   |                |   |       |                    |   |   |   |   |
| NET      LOSS                                          |   | $                               | (1,480,424 | )      |                | $      | (1,795,679 | )                       |   | $ | (36,815,041 | ) |
|                                                   |   |                            |       |   |                |   |       |                    |   |   |   |   |
| Net      loss per common share                         |   |                            |       |   |                |   |       |                    |   |   |   |   |
| Basic      and diluted                                 |   | $                               | (0.04      | )      |                | $      | (0.06      | )                       |   |   |   |   |
|                                                   |   |                            |       |   |                |   |       |                    |   |   |   |   |
| Weighted      average common shares outstanding        |   |                            |       |   |                |   |       |                    |   |   |   |   |
| Basic      and diluted                                 |   |                            | 34,567,801 |   |                |   | 31,218,029 |                    |   |   |   |   |

----

|                                                                               |   |                            |       |   |                |   |       | For      the Period     |   |
|------------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|---------------------|--------|------------|-------------------------|--------|
|                                                                               |   |                            |       |   | From      Inception |   |
|                                                                               |   | For      the Three Months Ended |       |   | (September      26, |   |
|                                                                               |   | September      30,              |       |   | 1986)      Through  |   |
|                                                                               |   | 2009                            |       |   | 2008                |   |       | September      30, 2009 |   |
| Cash      flows from operating activities                                          |   |                            |       |   |                |   |       |                    |   |
| Net      loss                                                                      |   | $                               | (1,480,424 | )      |                | $      | (1,795,679 | )                       |   | $ | (36,815,041 | ) |
| Adjustments      to reconcile net loss to net cash      from operating activities: |   |                            |       |   |                |   |       |                    |   |   |   |   |
| Depreciation      and amortization                                                 |   |                            | 27,174     |   |                |   | 23,069     |                    |   |   | 602,822 |   |
| Stock      based compensation                                                      |   |                            | 1,082,765  |   |                |   | 1,291,146  |                    |   |   | 21,145,983 |   |
| 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                                        |   |                            | -          |   |                |   | -          |                    |   |   | 17,484 |   |
| 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 | ) |
| Stock      issued for services                                                     |   |                            | -          |   |                |   | -          |                    |   |   | 120,247 |   |
| Changes      in current assets and liabilities:                                    |   |                            |       |   |                |   |       |                    |   |   |   |   |
| (Increase)      / decrease in prepaid expenses                                     |   |                            | 9,833      |   |                |   | (2,000     | )                       |   |   | 7,833 |   |
| (Increase)      / decrease in alternate solar energy systems                       |   |                            | (53,960    | )      |                |   | -          |                    |   |   | (467,480 | ) |
| Increase      / (decrease) in customer deposits                                    |   |                            | 540,000    |   |                |   | 45,000     |                    |   |   | 2,297,250 |   |
| Increase      / (decrease) in accounts payable                                     |   |                            | (44,893    | )      |                |   | 66,722     |                    |   |   | 372,243 |   |
| Increase      / (decrease) in related party payable                                |   |                            | -          |   |                |   | 18,000     |                    |   |   | 65,001 |   |
| Increase      / (decrease) in accrued liabilities                                  |   |                            | 53,457     |   |                |   | 20,803     |                    |   |   | 334,783 |   |
| Net      cash provided by (used in) operating activities                           |   |                            | 133,952    |   |                |   | (332,939   | )                       |   |   | (13,042,245 | ) |
|                                                                               |   |                            |       |   |                |   |       |                    |   |   |   |   |
| Cash      flows used in investing activities                                       |   |                            |       |   |                |   |       |                    |   |   |   |   |
| Purchase      of property and equipment                                            |   |                            | (2,234     | )      |                |   | -          |                    |   |   | (756,770 | ) |
| Purchase      of rights to technology                                              |   |                            | -          |   |                |   | (756       | )                       |   |   | (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                                         |   |                            | (2,234     | )      |                |   | (756       | )                       |   |   | (1,628,284 | ) |
|                                                                               |   |                            |       |   |                |   |       |                    |   |   |   |   |
| Cash      flows provided by financing activities                                   |   |                            |       |   |                |   |       |                    |   |   |   |   |
| Proceeds      from issuance of common stock                                        |   |                            | 81,142     |   |                |   | 86,173     |                    |   |   | 5,870,373 |   |
| 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                                |   |                            | 138,000    |   |                |   | 163,001    |                    |   |   | 2,537,121 |   |
| Payments      on cash advances from related party                                  |   |                            | (20,039    | )      |                |   | (12,693    | )                       |   |   | (293,320 | ) |
| Proceeds      from notes payable                                                   |   |                            | -          |   |                |   | -          |                    |   |   | 29,857 |   |
| Payments      on notes payable and capital lease obligations                       |   |                            | (12,007    | )      |                |   | (11,190    | )                       |   |   | (225,108 | ) |
| Proceeds      from related party deposits                                          |   |                            | -          |   |                |   | -          |                    |   |   | 224,400 |   |
| Purchases      of equipment held for distribution                                  |   |                            | -          |   |                |   | -          |                    |   |   | (68,741 | ) |
| Net      cash provided by financing activities                                     |   |                            | 187,096    |   |                |   | 225,291    |                    |   |   | 15,036,880 |   |
|                                                                               |   |                            |       |   |                |   |       |                    |   |   |   |   |
| Net      change in cash                                                            |   |                            | 318,814    |   |                |   | (108,404   | )                       |   |   | 366,351 |   |
| Cash      at beginning of period                                                   |   |                            | 47,537     |   |                |   | 144,429    |                    |   |   | - |   |
| Cash      at end of period                                                         |   | $                               | 366,351    |   |                | $      | 36,025     |                    |   | $ | 366,351 |   |

----

----

In April 2009, the FASB issued guidance under ASC 820, Fair Value Measurements andDisclosures, (FSP SFAS 157-4, “Determining Whether a Market Is Not Activeand a Transaction Is Not Distressed”).  This guidance provides guidelinesin determining whether a market for a financial asset is not active and atransaction is not distressed for fair value measurement purposes as defined inthe previous standard SFAS 157, “Fair Value Measurements.”  Thisguidance is effective for interim periods ending after June 15, 2009, and theCompany has adopted its provisions for first fiscal quarter2010.  This guidance did not have a significant impact on theCompany’s financial statements.

In August 2009, the FASB issued guidance under Accounting StandardsUpdate (“ASU”) No. 2009-05, “Measuring Liabilities at FairValue”.  This guidance clarifies how the fair value a liability shouldbe determined.  This guidance is effective for the first reportingperiod after issuance.  The Company will adopt this guidance for itssecond fiscal quarter 2010.  The Company does not expect the adoptionof this guidance to have a material impact on its financialstatements.

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|   | 31.1 | Certification      by the Chief Executive Officer Pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002 |
|--------|------|------------------------------------------------------------------------------------------------------------------|

|   | 31.2 | Certification      by the Chief Financial Officer Pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002 |
|--------|------|------------------------------------------------------------------------------------------------------------------|

|   | 32.1 | Certification      by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 Adopted      Pursuant to Section 906 of the Sarbanes-Oxley Act of  2002 |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.2 | Certification      by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 Adopted      Pursuant to Section 906 of the Sarbanes-Oxley Act of  2002 |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| INTERNATIONAL AUTOMATED      SYSTEMS, INC.   |   |
|----------------------------------------------|--------|
|                                         |   |
| Date:  November 13,      2009 | By     |   /s/ Neldon    Johnson |   |
|                                         |   | Neldon      Johnson |   |
|                                         |   | President,      Chief Executive Officer, Director |   |
|                                         |   |   |   |
|                                         |   |   |   |
| Date:      November 13, 2009                 | By     |   /s/ LaGrand    Johnson |   |
|                                         |   | LaGrand      Johnson |   |
|                                         |   | Chief      Financial Officer |   |

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