----

----

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

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

| Class                      | Outstanding as of January 28, 2011 |
|----------------------------|------------------------------------|
| Common Stock, no par value | 44,528,251 shares                  |

----

| PART I – FINANCIAL INFORMATION                                                                           |   |
|----------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                           |   |
| Item 1: Financial Statements                                                                                   |   |
|                                                                                                           |   |
| Condensed Balance Sheets                                                                                       |   |
| As of December 31, 2010 (unaudited) and June 30, 2010 (audited)                                                | 1      |
|                                                                                                           |   |
| Unaudited Condensed Statements of Operations                                                                   |   |
| For the three and six months ended December 31, 2010 and 2009 and for the Period from                          |   |
| September 26, 1986 (Date of Inception) through December 31, 2010                                               | 2      |
|                                                                                                           |   |
| Unaudited Condensed Statements of Cash Flows                                                                   |   |
| For the six months ended December 31, 2010 and 2009 and for the Period from                                    |   |
| September 26, 1986 (Date of Inception) through December 31, 2010                                               | 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                                                                                    | 9      |
|                                                                                                           |   |
| Signatures                                                                                                     | 10     |

----

|                                                                                                                                                                                                    |   | December 31, |        |   | June 30,  |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|-----------|--------|
|                                                                                                                                                                                                    |   | 2010         |        |   | 2010      |   |
|                                                                                                                                                                                                    |   | (unaudited)  |        |   | (audited) |   |
| ASSETS                                                                                                                                                                                                  |   |
| CURRENT ASSETS                                                                                                                                                                                          |   |         |        |   |      |   |
| Cash and cash equivalents                                                                                                                                                                               |   | $            | 10,037      |   |      | $      | 6,865 |   |
| Prepaid expenses                                                                                                                                                                                        |   |         | 2,000       |   |      |   | 2,000 |   |
|                                                                                                                                                                                                    |   |         |        |   |      |   |   |   |
| Total Current Assets                                                                                                                                                                                    |   |         | 12,037      |   |      |   | 8,865 |   |
|                                                                                                                                                                                                    |   |         |        |   |      |   |   |   |
| Alternate solar energy systems                                                                                                                                                                          |   |         | 600,741     |   |      |   | 537,825 |   |
| Property and Equipment, net of accumulated depreciation of $415,715 and $372,457, respectively                                                                                                          |   |         | 358,799     |   |      |   | 402,057 |   |
| Patents, net of accumulated amortization of $29,298 and $26,474, respectively                                                                                                                           |   |         | 66,728      |   |      |   | 69,553 |   |
|                                                                                                                                                                                                    |   |         |        |   |      |   |   |   |
| TOTAL ASSETS                                                                                                                                                                                            |   | $            | 1,038,305   |   |      | $      | 1,018,300 |   |
|                                                                                                                                                                                                    |   |         |        |   |      |   |   |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                                                                   |   |
|                                                                                                                                                                                                    |   |         |        |   |      |   |   |   |
| CURRENT LIABILITIES                                                                                                                                                                                     |   |         |        |   |      |   |   |   |
| Accounts payable                                                                                                                                                                                        |   | $            | 327,311     |   |      | $      | 94,525 |   |
| Accrued liabilities                                                                                                                                                                                     |   |         | 376,587     |   |      |   | 350,622 |   |
| Related party payable                                                                                                                                                                                   |   |         | 97,182      |   |      |   | 507,532 |   |
| Customer deposits                                                                                                                                                                                       |   |         | 2,360,250   |   |      |   | 2,360,250 |   |
| Notes payable-current portion                                                                                                                                                                           |   |         | 16,185      |   |      |   | 30,881 |   |
|                                                                                                                                                                                                    |   |         |        |   |      |   |   |   |
| Total Current Liabilities                                                                                                                                                                               |   |         | 3,177,515   |   |      |   | 3,343,810 |   |
|                                                                                                                                                                                                    |   |         |        |   |      |   |   |   |
| Long-term notes payable                                                                                                                                                                                 |   |         | 70,231      |   |      |   | 83,834 |   |
|                                                                                                                                                                                                    |   |         |        |   |      |   |   |   |
| TOTAL LIABILITIES                                                                                                                                                                                       |   |         | 3,247,746   |   |      |   | 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,  40,083,579 and 37,037,153 issued and outstanding, net of 4,444,672 and 3,538,118 shares held in escrow account, respectively |   |         | 36,750,935  |   |      |   | 36,032,789 |   |
| Deficit accumulated during the development stage                                                                                                                                                        |   |         | (39,430,640 | )      |      |   | (38,859,397 | ) |
| Total Stockholders' Deficit                                                                                                                                                                             |   |         | (2,209,441  | )      |      |   | (2,409,344 | ) |
|                                                                                                                                                                                                    |   |         |        |   |      |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                                                             |   | $            | 1,038,305   |   |      | $      | 1,018,300 |   |

----

|                                       |   |                       |       |   |                     |   |       |           |   |   |           |   |   | For the Period    |       |
|--------------------------------------------|--------|----------------------------|------------|--------|--------------------------|--------|------------|----------------|--------|--------|----------------|--------|--------|-------------------|------------|
|                                       |   |                       |       |   |                     |   |       |           |   |   | From Inception |   |
|                                       |   | For the Three Months Ended |       |   | For the Six Months Ended |   |       | (September 26, |   |
|                                       |   | December 31,               |       |   | December 31,             |   |       | 1986) Through  |   |
|                                       |   | 2010                       |       |   | 2009                     |   |       | 2010           |   |   | 2009           |   |   | December 31, 2010 |       |
| Revenues                                   |   |                       |       |   |                     |   |       |           |   |   |           |   |   |              |       |
| Sales                                      |   | $                          | -          |   |                     | $      | -          |           |   | $      | -              |   |   | $                 | -          |   |   | $ | 111,226 |   |
| Income from related party                  |   |                       | -          |   |                     |   | -          |           |   |   | -              |   |   |              | -          |   |   |   | 32,348 |   |
| Total revenues                             |   |                       | -          |   |                     |   | -          |           |   |   | -              |   |   |              | -          |   |   |   | 143,574 |   |
|                                       |   |                       |       |   |                     |   |       |           |   |   |           |   |   |              |       |   |   |   |   |   |
| Costs 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                 |   |                       | 233,780    |   |                     |   | 1,177,066  |           |   |   | 394,668        |   |   |              | 2,540,897  |   |   |   | 31,662,470 |   |
| Research and development                   |   |                       | 58,586     |   |                     |   | 101,975    |           |   |   | 172,247        |   |   |              | 216,371    |   |   |   | 8,288,636 |   |
| Impairment of patents                      |   |                       | -          |   |                     |   | -          |           |   |   | -              |   |   |              | -          |   |   |   | 140,577 |   |
| License fees                               |   |                       | -          |   |                     |   | -          |           |   |   | -              |   |   |              | -          |   |   |   | 270,634 |   |
| Total operating expenses                   |   |                       | 292,366    |   |                     |   | 1,279,041  |           |   |   | 566,915        |   |   |              | 2,757,268  |   |   |   | 40,362,317 |   |
|                                       |   |                       |       |   |                     |   |       |           |   |   |           |   |   |              |       |   |   |   |   |   |
| Loss from operations                       |   |                       | (292,366   | )      |                     |   | (1,279,041 | )              |   |   | (566,915       | )      |   |              | (2,757,268 | ) |   |   | (40,533,801 | ) |
|                                       |   |                       |       |   |                     |   |       |           |   |   |           |   |   |              |       |   |   |   |   |   |
| Other income (expenses)                    |   |                       |       |   |                     |   |       |           |   |   |           |   |   |              |       |   |   |   |   |   |
| Loss on impairment of assets               |   |                       | -          |   |                     |   | -          |           |   |   | -              |   |   |              | -          |   |   |   | (583 | ) |
| Forfeiture of deposits                     |   |                       | -          |   |                     |   | -          |           |   |   | -              |   |   |              | -          |   |   |   | (236,803 | ) |
| Interest income                            |   |                       | -          |   |                     |   | -          |           |   |   | -              |   |   |              | 59         |   |   |   | 26,580 |   |
| Interest expense                           |   |                       | (1,467     | )      |                     |   | (2,078     | )              |   |   | (3,330         | )      |   |              | (4,608     | ) |   |   | (34,808 | ) |
| Other income (expenses)                    |   |                       | (998       | )      |                     |   | 416        |           |   |   | (998           | )      |   |              | 690        |   |   |   | (33,248 | ) |
| Total other income (expenses)              |   |                       | (2,465     | )      |                     |   | (1,662     | )              |   |   | (4,328         | )      |   |              | (3,859     | ) |   |   | (278,862 | ) |
|                                       |   |                       |       |   |                     |   |       |           |   |   |           |   |   |              |       |   |   |   |   |   |
| Loss before extraordinary gain             |   |                       | (294,831   | )      |                     |   | (1,280,703 | )              |   |   | (571,243       | )      |   |              | (2,761,127 | ) |   |   | (40,812,663 | ) |
|                                       |   |                       |       |   |                     |   |       |           |   |   |           |   |   |              |       |   |   |   |   |   |
| Extraordinary gain on sale of patents      |   |                       | -          |   |                     |   | -          |           |   |   | -              |   |   |              | -          |   |   |   | 1,382,023 |   |
|                                       |   |                       |       |   |                     |   |       |           |   |   |           |   |   |              |       |   |   |   |   |   |
| Net loss                                   |   | $                          | (294,831   | )      |                     | $      | (1,280,703 | )              |   | $      | (571,243       | )      |   | $                 | (2,761,127 | ) |   | $ | (39,430,640 | ) |
|                                       |   |                       |       |   |                     |   |       |           |   |   |           |   |   |              |       |   |   |   |   |   |
| Net loss per common share                  |   |                       |       |   |                     |   |       |           |   |   |           |   |   |              |       |   |   |   |   |   |
| Basic and diluted                          |   | $                          | (0.01      | )      |                     | $      | (0.04      | )              |   | $      | (0.02          | )      |   | $                 | (0.08      | ) |   |   |   |   |
|                                       |   |                       |       |   |                     |   |       |           |   |   |           |   |   |              |       |   |   |   |   |   |
| Weighted average common shares outstanding |   |                       |       |   |                     |   |       |           |   |   |           |   |   |              |       |   |   |
| Basic and diluted                          |   |                       | 38,696,160 |   |                     |   | 34,802,711 |           |   |   | 37,887,610     |   |   |              | 34,685,256 |   |   |   |   |   |

----

|                                                                           |   |                     |     |   |           |   |       | For the Period    |   |
|--------------------------------------------------------------------------------|--------|--------------------------|----------|--------|----------------|--------|------------|-------------------|--------|
|                                                                           |   |                     |     |   | From Inception |   |
|                                                                           |   | For the Six Months Ended |     |   | (September 26, |   |
|                                                                           |   | December 31,             |     |   | 1986) Through  |   |
|                                                                           |   | 2010                     |     |   | 2009           |   |       | December 31, 2010 |   |
| Cash flows from operating activities                                           |   |                     |     |   |           |   |       |              |   |
| Net loss                                                                       |   | $                        | (571,243 | )      |           | $      | (2,761,127 | )                 |   | $ | (39,430,640 | ) |
| Adjustments to reconcile net loss to net                                       |   |                     |     |   |           |   |       |              |   |   |   |   |
| cash from operating activities:                                                |   |                     |     |   |           |   |       |              |   |   |   |   |
| Depreciation and amortization                                                  |   |                     | 46,083   |   |           |   | 48,384     |              |   |   | 723,238 |   |
| Stock-based compensation                                                       |   |                     | 55,500   |   |           |   | 2,161,861  |              |   |   | 22,426,641 |   |
| 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                               |   |                     | 36,000   |   |           |   | -          |              |   |   | 36,000 |   |
| 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                        |   |                     | (62,916  | )      |           |   | (97,695    | )                 |   |   | (600,741 | ) |
| Increase / (decrease) in customer deposits                                     |   |                     | -        |   |           |   | 603,000    |              |   |   | 2,360,250 |   |
| Increase / (decrease) in accounts payable                                      |   |                     | 232,786  |   |           |   | (299,115   | )                 |   |   | 327,311 |   |
| Increase / (decrease) in related party payable                                 |   |                     | (5,500   | )      |           |   | (5,000     | )                 |   |   | 68,001 |   |
| Increase / (decrease) in accrued liabilities                                   |   |                     | 25,965   |   |           |   | 57,958     |              |   |   | 476,586 |   |
| Net cash provided by (used in) operating activities                            |   |                     | (243,325 | )      |           |   | (281,901   | )                 |   |   | (14,189,965 | ) |
|                                                                           |   |                     |     |   |           |   |       |              |   |   |   |   |
| Cash flows used in investing activities                                        |   |                     |     |   |           |   |       |              |   |   |   |   |
| Purchase of property and equipment                                             |   |                     | -        |   |           |   | (15,937    | )                 |   |   | (772,135 | ) |
| 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                                          |   |                     | -        |   |           |   | (15,937    | )                 |   |   | (1,643,649 | ) |
|                                                                           |   |                     |     |   |           |   |       |              |   |   |   |   |
| Cash flows provided by financing activities                                    |   |                     |     |   |           |   |       |              |   |   |   |   |
| Proceeds from issuance of common stock                                         |   |                     | 279,646  |   |           |   | 199,464    |              |   |   | 6,457,107 |   |
| 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  |   |           |   | 278,000    |              |   |   | 3,074,080 |   |
| Payments on cash advances from related party                                   |   |                     | (181,727 | )      |           |   | (56,387    | )                 |   |   | (559,440 | ) |
| Proceeds from notes payable                                                    |   |                     | -        |   |           |   | -          |              |   |   | 29,857 |   |
| Payments on notes payable and capital lease obligations                        |   |                     | (28,299  | )      |           |   | (14,904    | )                 |   |   | (275,910 | ) |
| Proceeds from related party deposits                                           |   |                     | -        |   |           |   | -          |              |   |   | 224,400 |   |
| Purchases of equipment held for distribution                                   |   |                     | -        |   |           |   | -          |              |   |   | (68,741 | ) |
| Net cash provided by financing activities                                      |   |                     | 246,497  |   |           |   | 406,173    |              |   |   | 15,843,651 |   |
|                                                                           |   |                     |     |   |           |   |       |              |   |   |   |   |
| Net change in cash                                                             |   |                     | 3,172    |   |           |   | 108,335    |              |   |   | 10,037 |   |
| Cash at beginning of period                                                    |   |                     | 6,865    |   |           |   | 47,537     |              |   |   | - |   |
| Cash at end of period                                                          |   | $                        | 10,037   |   |           | $      | 155,872    |              |   | $ | 10,037 |   |
|                                                                           |   |                     |     |   |           |   |       |              |   |   |   |   |
| Supplemental non-cash flow information                                         |   |                     |     |   |           |   |       |              |   |   |   |   |
| Settlement of advances from related party in exchange for exercise of warrants |   | $                        | 400,000  |   |           | $      | -          |              |   |   |   |   |

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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 |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------|

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| INTERNATIONAL AUTOMATED SYSTEMS, INC.   |   |                                                                                                                                                                                                                                                                           |
|-----------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                    |   |                                                                                                                                                                                                                                                                           |
| Date:  February 18, 2011 | By     |   /s/ Neldon Johnson                                         |
|                                    |   | Neldon Johnson                                                                                                                                                                                                                                                                 |
|                                    |   | President, Chief Executive Officer, Director                                                                                                                                                                                                                                   |
|                                    |   |                                                                                                                                                                                                                                                                           |
| Date: February 18, 2011            | By     |   /s/ LaGrand Johnson                                             |
|                                    |   | LaGrand Johnson                                                                                                                                                                                                                                                                |
|                                    |   | Chief Financial Officer                                                                                                                                                                                                                                                        |

----