FORM 10-QSB/A
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 December 31, 1995
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.)
512 South 860 East
American Fork, Utah 84003
(Address of principal executive offices)
Registrant's telephone number
including area code (801)763-9965
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 x No
As of December 31, 1995, registrant had 9,006,600
shares of common stock, no par value per share, issued
and outstanding after deducting shares held in the
corporate treasury.
<PAGE>
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 December 31, 1995, and the results of
its operations from June 30, 1995, through December 31,
1995, and from October 1, 1995, through December 31,
1995, and changes in its financial position from
inception through December 31, 1995, have been made.
The results of its operations for such interim period
is not necessarily indicative of the results to be
expected for the entire year. The financial statements
in this amendment have changed from those financial
statement included in the prior filing on Form 10-QSB
for the same period. The primary changes were caused
by different treatment of consulting services which the
Company performed for its major shareholder during the
periods shown in the financial statements.
Registrant is a development stage company.
Historically its primary activities have been research
and development for products based on high technology.
Such development has significant risks.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources. As of December
31, 1995, Registrant had cash of $6,933 compared to
cash of $10,049 as of June 30, 1995. Cash decreased
because of increases in inventory and pre-paid
expenses. Total current assets were $70,081 and total
assets were $192,728 compared to $10,049 and $86,465
respectively as of June 30, 1995. As of December 31,
1995 Registrant had total liabilities of $447,390 and
negative shareholders' equity of $(254,662) compared to
total liabilities of $167,977 and total shareholders'
deficit of $(81,512) as of June 30, 1995. Note payable
to a related party increased from $134,029 to $418,616.
The increase in the note payable represents cash
advances from a shareholder in the form of short-term
borrowings which are non-interest bearing and are due
upon demand. During the period inventory increased
from zero to $55,889 as the Company commenced to
manufacture its Automatic Fingerprint Identification
Machine. As of December 31, 1995, the ratio of current
assets to current liabilities was approximately .16 to
one. As of December 31, 1995, and June 30, 1995, the
Company was technically insolvent because liabilities
exceeded assets.
Results of Operation. For the quarter ended
December 31, 1995, Registrant had total revenues of
$14,655 compared to total revenues of $1,500 for the
same period a year earlier and gross profit of $3,675
and $1,500 respectively. For the quarter ended
December 31, 1995, Registrant had expenses of $101,763
compared to expenses of $21,312 for the same period a
year earlier. The increase in income was cause by the
Company's first sales. For the quarter ended December
31, 1995, Registrant had net loss of $(98,415) compared
to a net loss of $(19,941) for the same period a year
earlier. The increase in net loss is attributable to
the increase in general and administrative expenses and
research and development expenses. General and
administrative expenses for the same period a year
earlier were $8,111 compared to $25,924 for the quarter
ended December 31, 1995, for an increase of $17,813.
Research and development expenses were $12,739 a year
earlier compared to $75,105 for the quarter ended
December 31, 1995, an increase of $62,366.
For the six month period ended December 31, 1995, the
Company had total revenues of $22,520 compared to
$3,000 for the same period a year earlier. The Company
had sales of $19,520 and equipment lease income of
$3,000 and gross profit of $9,087 and $3,000
respectively. Total expenses were $181,566 compared to
$31,713 for the same period a year earlier. General
and administrative expenses for the period increased
from $10,991 to $43,012. These expenses increased
because of operational activities and start up costs
the Company incurred in connection with the initial
production of its Automatic Fingerprint Identification
Machine. Net loss for the six month period was
$(173,150) compared to net loss a year earlier of
$(28,842). The net loss per share for the period was
$(.02) compared to $(0.00) a year earlier.
<PAGE>
Part II.
Item 1. Legal Proceedings.
On July 2, 1996, the Company and its
president
were named as defendants in a proposed class action
lawsuit filed on behalf of certain shareholders seeking
damages for violations of the federal securities laws.
The Complaint was claims to be brought on behalf of all
persons and entities who purchased shares of common
stock of the Company during the period of May 13, 1996,
to June 27, 1996. The suit seeks damages based on the
decrease in the Company's stock price in the trading
market because the Company made allegedly material
misrepresentations concerning new technology being
developed. On August 8, 1996, an amended complaint was
filed which increased the number of plaintiffs, added
and modified certain allegations, and changed the
proposed period from April 3, 1996, to June 27, 1996.
This lawsuit is in its preliminary stages. The final
outcome of the litigation cannot be determined. The
Company intends to defend vigorously the litigation.
No provision for any liability that may result from any
adverse adjudication has been made in the accompanying
financial statements and any effect on future financial
statements is unknown. The lawsuit is now captioned
Edouard Serfaty, David D. Baker, Michael Berry,
Margaret Moskes, Craig Swapp, Linda M. Baker, Robert H.
Baker, Kourosh Khalili and Ariel Tzadik, v.
International Automated Systems, Inc., and Neldon P.
Johnson, Civil No. 2:96 CV 0583 C, filed in the United
States District Court for the District of Utah, Central
Division.
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.
None.
Item 6. Exhibits, Financial Statements, Schedules and
Reports on Form 8-K.
A. Exhibits.
Ex. 27 Financial Data Summary.
INTERNATIONAL AUTOMATED
SYSTEMS, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
(Unaudited)
December 31, June 30,
1995 1995
ASSETS
Current Assets
Cash $
6,933 $ 10,049
Inventory
55,889 -
Prepaid expenses
7,259 -
Total Current Assets
70,081 10,049
Property and Equipment
Computer and electronic equipment
84,091 51,302
Furniture and fixtures
3,591 3,591
Automobiles
21,657 21,657
Total Property and Equipment
109,339 76,550
Less: Accumulated depreciation
(26,675) (18,373)
Net Property and Equipment
82,664 58,177
Other Assets
Rights to technology
54,444 31,416
Accumulated amortization
(14,461) (13,177)
Other Assets, Net
39,983 18,239
Total Assets $
192,728 $ 86,465
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $
8,000 $ 8,482
Deferred revenue
5,000 8,000
Current portion - long term debt
3,453 3,453
Note payable - related party
418,616 134,029
Total Current Liabilities
435,069 153,964
Long Term Debt
12,321 14,013
Stockholders' Deficit
Preferred stock, Class A, no par value, 5,000,000
shares authorized, no shares issued or
outstanding - -
Common stock, no par value, 45,000,000 shares
authorized, 9,013,456 shares issued and
outstanding
at December 31, 1995 and June 30, 1995,
respectively 372,599 372,599
Less: Treasury stock
(3,325) (3,325)
Deficit accumulated during the development stage
(623,936) (450,786)
Total Stockholders' Deficit
(254,662) (81,512)
Total Liabilities and Stockholders' Deficit $
192,728 $ 86,465
See the accompanying notes to the condensed financial
statements.<PAGE>
INTERNATIONAL AUTOMATED SYSTEMS, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
For the Period
From Inception
(September
26, 1986)
Three
Months Ended
Six Months Ended Through
December
31,
December 31, December 31,
1995
1994 1995 1994
1995
Revenue
Sales $ 13,155 $
- - - $ 19,520 $ - $
19,520
Equipment lease income 1,500
1,500 3,000 3,000
15,000
Total Revenue 14,655
1,500 22,520 3,000
34,520
Cost of Sales 10,980
- - - 13,433 -
13,433
Gross Profit 3,675
1,500 9,087 3,000
21,087
Expenses
General and administrative 25,924
8,111 43,012
10,991 278,469
Research and development 75,105
12,739 137,270 19,798
335,713
Amortization 734
462 1,284 924
16,341
Total Expenses 101,763
21,312 181,566 31,713
630,523
Other Income/(Expense)
Interest income -
- - - - -
1,912
Interest expense (327)
(129) (671)
(129) (16,412)
Net Other Income/(Expense) (327)
(129) (671)
(129) (14,500)
Net Loss $ (98,415) $
(19,941) $ (173,150) $
(28,842) $ (623,936)
Net Loss Per Common Share $ (0.01) $
(0.00) $ (0.02) $
(0.00) $ (0.09)
Weighted Average Shares Outstanding 9,006,600
8,906,600 9,006,600
8,906,600 7,146,588
See the accompanying notes to the condensed financial
statements.
B. Reports on Form 8-K.
None.
<PAGE>
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 8-14-96
International Automated Systems, Inc.
By s/Neldon Johnson
President and Chief Executive Officer
By s/Neldon Johnson
Chief Financial Officer
