Ias Energy (IASCA) 10-Q 2009 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2009

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________________ to _______________________

Commission File No. 0-21255

IAS Energy, Inc.

(Exact name of registrant in its Charter)

Oregon (State or Other Jurisdiction of incorporation or organization) 91-1063549 (I.R.S. Employer Identification No)

#240-11780 Hammersmith Way

Richmond, BC V7A 5E9 Canada

(Address of Principal Executive Offices)

(604) 278-5996

Registrant’s telephone number

(Former Name, former address and former fiscal year, if changed since last report)

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

 (1) Yes x No (2) Yes x No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filed, a non-accelerated filer, or a smaller reporting company.

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o       No x

ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Not applicable

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

March 19, 2009

Common – 70,013,817 shares

PART I - FINANCIAL INFORMATION

ITEM  1. FINANCIAL STATEMENTS

The unaudited interim consolidated financial statements of IAS Energy, Inc. (“we,” “us,” “our,” “the Company” and “IAS”) as of January 31, 2009 and for the nine months ended January 31, 2009 and January 31, 2008 are attached hereto. Our interim consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

It is the opinion of management that the interim consolidated financial statements for the nine months ended January 31, 2009 and January 31, 2008 include all adjustments necessary in order to ensure that the interim consolidated financial statements are not misleading. These statements reflect all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with accounting principles generally accepted in the United States of America. Except where noted, these interim consolidated financial statements follow the same accounting policies and methods of their application as the Company’s April 30, 2008 audited financial statements. All adjustments are of a normal recurring nature. It is suggested that these interim consolidated financial statements be read in conjunction with the Company’s April 30, 2008 audited financial statements.

Operating results for the nine months ended January 31, 2009 are not necessarily indicative of the results that can be expected for the year ending April 30, 2009.

-2-

IAS Energy, Inc.

(A Development Stage Company)

Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

IAS Energy, Inc.

(A Development Stage Company)

Interim Consolidated Balance Sheets

(Expressed in U.S. Dollars)

(Unaudited)

	As at 31 January 2009			As at 30 April 2008 (Audited)
	$			$
Assets
Current
Cash		459			785
Accounts receivable and other (Note 5)		28,683			72,261
Available-for-sale securities (Note 8)		78,092			162,589
Due from related parties (Note 6)		18,564			21,139
		125,798			256,774
Investment in and advances to Power Telecom (Note 3)		-			4,444,010
Goodwill (Note 3)		7,223,063			-
		7,348,861			4,700,784
Liabilities
Current
Bank indebtedness		-			6,004
Accounts payable and accrued liabilities		337,530			73,780
Debentures (Note 7)		25,000			25,000
Due to related parties (Note 6)		1,305,411			830,021
		1,667,941			934,805
Stockholders’ equity
Common stock and additional paid-in capital (Note 9)
Authorized
50,000 Preferred shares
100,000,000 Class A common shares, without par value
100,000,000 Class B non-voting common shares, without par value
Issued and outstanding
31 January 2009 – 70,013,817 Class A common shares
30 April 2008 – 58,409,039 Class A common shares		13,428,932			10,770,353
Obligation to issue shares (Note 12(a))		18,609			147,338
Accumulated other comprehensive income		(34,487	)		36,650
Deficit, accumulated during the development stage		(7,732,134	)		(7,188,362	)
		5,680,920			3,765,979
		7,348,861			4,700,784

Nature and Continuance of Operations (Note 1) and Commitments (Note 14)

The accompanying notes are an integral part of these interim consolidated financial statements. (F-1)

IAS Energy, Inc.

(A Development Stage Company)

Interim Consolidated Statements of Operations

(Expressed in U.S. Dollars)

(Unaudited)

	For the period from the date of commencement of development stage on 1 May 2005 to 31 January 2009			For the three month period ended 31 January 2009			For the three month period ended 31 January 2008			For the nine month period ended 31 January 2009			For the nine month period ended 31 January 2008
	$			$			$			$			$
Revenue
Petroleum and natural gas sales		89,303			8,780			5,121			17,094			17,785
Service revenue		2,575			2,575			-			2,575			-
		91,878			11,355			5,121			19,669			17,785
Operating expenses
Depletion and depreciation		5,897			-			192			-			793
Interest on convertible debentures		14,769			547			547			1,641			1,641
License		16,500			500			750			2,000			2,250
Office		713,186			116,319			128,660			364,721			145,968
Professional fees		643,437			20,746			61,509			128,101			114,140
Transfer agent and regulatory		34,065			2,852			2,059			9,297			5,737
Net loss before other items		(1,335,976	)		(129,609	)		(188,596	)		(486,091	)		(252,744	)
Other items
Gain on sale of available-for-sale securities (Note 8)		104,670			-			-			-			1,920
Gain on license obligation		1,000			-			-			-			-
Gain on write-off of payables		63,487			-			-			-			-
Gain on settlement of obligation to issue shares		54,750			-			-			1,000			-
Loss from equity accounted investment (Note 3)		(76,535	)		-			-			(40,072	)		-
Impairment gain (loss) – petroleum interest (Note 12(a))		(488,798	)		4,268			(24,590	)		(18,609	)		(58,078	)
Net loss before discontinued operations		(1,677,402	)		(125,341	)		(213,186	)		(543,772	)		(308,902	)
Discontinued operations		(6,054,732	)		-			-			-			-
Net loss		(7,732,134	)		(125,341	)		(213,186	)		(543,772	)		(308,902	)
Other comprehensive loss
Unrealized gain (loss) on available-for-sale securities		89,599			15,475			(18,021	)		(69,371	)		(2,092	)
Foreign company translation adjustment		(1,766	)		322			-			(1,766	)		-
Reclassification adjustment for gains included in net loss		(122,320	)		-			-			-			(2,320	)
Comprehensive loss		(7,766,621	)		(109,544	)		(231,207	)		(614,909	)		(313,314	)
Basic and diluted loss per common share					(0.002	)		(0.005	)		(0.008	)		(0.008	)
Weighted average number of common shares used in per share calculations					70,013,000			44,164,000			64,797,000			38,756,000

The accompanying notes are an integral part of these interim consolidated financial statements. (F-2)

IAS Energy, Inc.

(A Development Stage Company)

Interim Consolidated Statements of Cash Flows

(Expressed in U.S. Dollars)

(Unaudited) 

	For the period from the date of commencement of development stage on 1 May 2005 to 31 January 2009			For the nine month period ended 31 January 2009			For the nine month period ended 31 January 2008
Cash flows used in operating activities	$			$			$
Net loss for the period		(7,732,134	)		(543,772	)		(308,902	)
Adjustments to reconcile loss to net cash used by operating activities
Assets written-off		455,957			-			-
Depreciation		189,109			-			-
Foreign exchange on securities		-			-			(12,255	)
Gain on shares cancelled		(10	)		-			-
Gain on sale of available-for-sale securities		(104,670	)		-			(1,920	)
Gain on write-off of payables		(549,562	)		-			-
Shares issued for services		630,125			-			-
Shares issued for convertible debenture interest		18,786			-			-
Gain on settlement of obligation to issue shares		(54,750	)		(1,000	)		-
Additional paid-in capital on settlement of obligation to issue shares		107,500			-			-
Warrants issued for services		18,681			-			-
Stock-based compensation		239,863			100,482			111,941
Depletion		4,074			-			793
Loss from equity accounted investment		76,535			40,072			-
Impairment loss on oil and gas properties		488,798			18,609			58,078
Change in operating assets and liabilities
Accounts receivable, prepaid expenses and other		42,110			48,715			4,490
Inventory		(28,615	)		-			-
Accounts payable and accrued liabilities		872,805			(4,299	)		130,509
		(5,325,398	)		(341,193	)		(17,266	)
Cash flows used in investing activities
Acquisition, net of cash received		(346,753	)		(146,753	)		(100,000	)
Purchase of property and equipment		(99,626	)		-			-
Purchase of license		(250,000	)		-			-
Increase in patent protection costs		(266,822	)		-			-
Investment in oil and gas properties		(555,000	)		-			-
Recoveries to oil and gas properties		277,500			-			-
Proceeds from sale of available-for-sale securities		104,990			-			2,240
Purchase of securities		(115,878	)		-			-
		(1,251,589	)		(146,753	)		(97,760	)
Cash flows from financing activities
Advances from related parties		1,844,885			475,390			50,739
Proceeds from issuance of common stock		4,330,327			20,000			52,699
Proceeds from convertible debentures		400,000			-			-
Proceeds from common stock subscribed		4,000			-			-
		6,579,212			495,390			103,438
Effect of exchange rate changes on cash		(1,766	)		(1,766	)		-
Increase (decrease) in cash and cash equivalents		459			5,678			(11,588	)
Cash and cash equivalents, beginning of period		-			(5,219	)		12,285
Cash and cash equivalents, end of period		459			459			697

Supplemental Disclosures with Respect to Cash Flows (Note 15)

The accompanying notes are an integral part of these interim consolidated financial statements. (F-3)

IAS Energy, Inc.

(A Development Stage Company)

Interim Consolidated Statements of Stockholders' Equity (Deficit)

(Expressed in U.S. Dollars)

(Unaudited)

	Class A Common Stock and Additional Paid-In Capital
	Shares #			Amount $			Obligation To issue Shares $		Deficit Accumulated During the Development Stage $			Total Stockholders’ Equity (Deficit) $
Balance – 13 December 1994 (Date of inception)		-			-			-		-			-
Shares issued for cash		100			10			-		-			10
Shares issued for technology		6,000,000			1			-		-			1
Stock issued for cash pursuant to:
Private placement		700,000			70,000			-		-			70,000
Public offering memorandum		336,333			252,250			-		-			252,250
Net loss for the period		-			-			-		(83,615	)		(83,615	)
Balance – 30 April 1995		7,036,433			322,261			-		(83,615	)		238,646
Shares previously issued, donated back and cancelled		(100	)		(10	)		-		-			(10	)
Shares issued for cash pursuant to options exercised		210,000			52,500			-		-			52,500
Net loss for the year		-			-			-		(480,298	)		(480,298	)
Balance – 30 April 1996		7,246,333			374,751			-		(563,913	)		(189,162	)
Shares issued for cash pursuant to:
Private placement		722,000			1,124,500			-		-			1,124,500
Options exercised		224,000			140,500			-		-			140,500
Shares issued for services		25,000			8,333			-		-			8,333
Net loss for the year		-			-			-		(1,044,516	)		(1,044,516	)
Balance – 30 April 1997		8,217,333			1,648,084			-		(1,608,429	)		39,655
Shares issued for cash pursuant to:
Public offering memorandum		263,667			197,750			-		-			197,750
Options exercised		87,500			26,875			-		-			26,875
Private placement		7,000			15,750			-		-			15,750
Private placement and foreign units offering		575,600			1,007,300			-		-			1,007,300
Shares issued for services		169,250			260,125			-		-			260,125
Net loss for the year		-			-			-		(1,633,047	)		(1,633,047	)
Balance – 30 April 1998		9,320,350			3,155,884			-		(3,241,476	)		(85,592	)
Shares issued for cash pursuant to:
Options exercised		2,000			500			-		-			500
Private placement and foreign units offering		95,000			166,250			-		-			166,250
Private placement		200,000			200,000			-		-			200,000
Exercise of warrants		48,000			84,000			-		-			84,000
Shares issued for services		132,000			230,640			-		-			230,640
Shares issued pursuant to conversion of convertible debentures including accrued interest		471,508			345,520			-		-			345,520
Net loss for the year		-			-			-		(1,219,435	)		(1,219,435	)
Balance – 30 April 1999		10,268,858			4,182,794			-		(4,460,911	)		(278,117	)

The accompanying notes are an integral part of these interim consolidated financial statements. (F-4)

IAS Energy, Inc.

(A Development Stage Company)

Interim Consolidated Statements of Stockholders' Equity (Deficit)

(Expressed in U.S. Dollars)

(Unaudited)

	Class A Common Stock and Additional Paid-In Capital
	Shares #		Amount $		Obligation To issue Shares $		Deficit Accumulated During the Development Stage $			Accumulated Other Comprehensive Income $		Total Stockholders’ Equity (Deficit) $
Balance – 30 April 1999		10,268,858		4,182,794		-		(4,460,911	)		-		(278,117	)
Shares issued for cash pursuant to:
Private placement		968,902		484,451		-		-			-		484,451
Options exercised		2,500		2,500		-		-			-		2,500
Warrants exercised		18,125		30,938		-		-			-		30,938
Shares issued pursuant to conversion of convertible debentures including accrued interest		62,854		38,266		-		-			-		38,266
Net loss for the year		-		-		-		(572,169	)		-		(572,169	)
Balance – 30 April 2000		11,321,239		4,738,949		-		(5,033,080	)		-		(294,131	)
Shares issued to settle debt		267,048		211,781		-		-			-		211,781
Shares issued pursuant to conversion of convertible debentures including accrued interest		12,358		10,875		-		-			-		10,875
Net loss for the year		-		-		-		(755,406	)		-		(755,406	)
Balance – 30 April 2001		11,600,645		4,961,605		-		(5,788,486	)		-		(826,881	)
Net loss for the year		-		-		-		(752,321	)		-		(752,321	)
Balance – 30 April 2002		11,600,645		4,961,605		-		(6,540,807	)		-		(1,579,202	)
Shares issued for cash pursuant to a private placement		944,250		188,850		-		-			-		188,850
Shares issued to settle related party debt		22,698,667		680,960		-		-			-		680,960
Net income for the year		-		-		-		304,576			-		304,576
Unrealized gain on available-for-sale securities		-		-		-		-			4,800		4,800
Balance – 30 April 2003		35,243,562		5,831,415		-		(6,236,231	)		4,800		(400,016	)
Net income for the year		-		-		-		119,993			-		119,993
Unrealized gain on available-for-sale securities		-		-		-		-			27,019		27,019
Balance – 30 April 2004		35,243,562		5,831,415		-		(6,116,238	)		31,819		(253,004	)
Net loss for the year		-		-		-		(42,726	)		-		(42,726	)
Unrealized gain on available-for-sale securities		-		-		-		-			44,178		44,178
Balance – 30 April 2005		35,243,562		5,831,415		-		(6,158,964	)		75,997		(251,552	)
Obligation to issue shares		-		-		53,425		-			-		53,425
Net loss for the year		-		-		-		(59,428	)		-		(59,428	)
Unrealized gain on available-for-sale securities		-		-		-		-			140,700		140,700
Balance – 30 April 2006		35,243,562		5,831,415		53,425		(6,218,392	)		216,697		(116,855	)

The accompanying notes are an integral part of these interim consolidated financial statements. (F-5)

IAS Energy, Inc.

(A Development Stage Company)

Interim Consolidated Stockholders' Equity (Deficit)

(Expressed in U.S. Dollars)

(Unaudited)

	Class A Common Stock and Additional Paid-In Capital
	Shares #		Amount $		Obligation To issue Shares $			Deficit Accumulated During the Development Stage $			Accumulated Other Comprehensive Income $			Total Stockholders’ Equity (Deficit) $
Balance – 30 April 2006		35,243,562		5,831,415		53,425			(6,218,392	)		216,697			(116,855	)
Shares issued pursuant to oil revenue agreement		279,477		53,425		(53,425	)		-			-			-
Shares issued for cash pursuant to a private placement		500,000		200,000		-			-			-			200,000
Obligation to issue shares		-		-		62,446			-			-			62,446
Stock-based compensation		-		48,710		-			-			-			48,710
Net loss for the year		-		-		-			(24,619	)		-			(24,619	)
Unrealized gain on available-for-sale securities		-		-		-			-			(18,332	)		(18,332	)
Reclassification adjustment on sale of available-for-sale securities		-		-		-			-			(120,000	)		(120,000	)
Balance – 30 April 2007		36,023,039		6,133,550		62,446			(6,243,011	)		78,365			31,350
Shares issued for cash pursuant to:
Private placement		58,000		21,903		-			-			-			21,903
Options exercised		137,500		27,500		-			-			-			27,500
Warrants exercised		40,000		16,000		-			-			-			16,000
Shares issued for services		149,500		74,075		-			-			-			74,075
Settlement of obligation to issue shares		-		107,500		-			-			-			107,500
Shares issued pursuant to exercise of option to purchase investment in Power Telecom (Note 3)		22,000,000		4,280,473		-			-			-			4,280,473
Fair value of warrants issued for services		-		18,681		-			-			-			18,681
Common stock subscribed		-		-		4,000			-			-			4,000
Obligation to issue shares		-		-		80,892			-			-			80,892
Stock-based compensation		-		90,671		-			-			-			90,671
Net loss for the year		-		-		-			(945,351	)		-			(945,351	)
Unrealized gain on available-for-sale securities		-		-		-			-			(39,395	)		(39,395	)
Reclassification adjustment on sale of available-for-sale securities		-		-		-			-			(2,320	)		(2,320	)
Balance – 30 April 2008		58,408,039		10,770,353		147,338			(7,188,362	)		36,650			3,765,979
Obligation to issue shares		-		-		38,609			-			-			38,609
Settlement of obligation to issue shares		605,778		167,338		(167,338	)		-			-			-
Shares issued pursuant to exercise of option to purchase investment in Power Telecom (Note 3)		11,000,000		2,390,759		-			-			-			2,390,759
Stock-based compensation		-		100,482		-			-			-			100,482
Net loss for the period		-		-		-			(543,772	)		-			(543,772	)
Foreign company translation adjustment		-		-		-			-			(1,766	)		(1,766	)
Unrealized loss on available-for-sale securities		-		-		-			-			(69,371	)		(69,371	)
Balance – 31 January 2009		70,013,817		13,428,932		18,609			(7,732,134	)		(34,487	)		5,680,920

The accompanying notes are an integral part of these interim consolidated financial statements. (F-6)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

 31 January 2009

1. Nature and Continuance of Operations

IAS Energy, Inc. was incorporated on 13 December 1994 pursuant to the Laws of the State of Oregon. The Company is a Development Stage Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No. 7, “Accounting and Reporting by Development Stage Enterprises”.  On 24 May 2007, the Company changed its name to IAS Energy, Inc.  The Company had been previously pursuing the development of oil and gas properties and, effective 1 February 2008, the Company changed its principal operations to acquiring and developing a videosharing website, as described in Note 3.

These interim consolidated financial statements include the accounts of the Company and its 60% owned subsidiary Power Telecom Limited (“Power Telecom”) since the date the Company acquired control on 3 September 2008.

The Company’s interim financial statements as at 31 January 2009 and for the nine month period then ended have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  The Company has a loss of $543,772 for the nine month period ended 31 January 2009 (31 January 2008 - $308,902) and has a working capital deficit of $1,542,143 at 31 January 2009 (30 April 2008 - $678,031).

Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital.  Management believes that the Company’s capital resources should be adequate to continue operating and maintaining its business strategy during the fiscal year ending 2009.  However, if the Company is unable to raise additional capital in the near future, due to the Company’s liquidity problems, management expects that the Company will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures.  These interim consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

At 31 January 2009, the Company has suffered losses from development stage activities to date.  Although management is currently attempting to implement its business plan, and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful.  Accordingly, the Company must rely on its president to perform essential functions without compensation until a business operation can be commenced.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  The interim consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

2. Summary of Significant Accounting Policies

The following is a summary of significant accounting policies used in the preparation of these interim consolidated financial statements.

Basis of accounting

These consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States and are presented in U.S. dollars.

(F-7)

IAS

IAS Energy, Inc.

(A Development Stage Company)

Notes to Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

Principles of consolidation

All significant inter-company balances and transactions have been eliminated.

Fiscal period

The Company’s fiscal year ends on 30 April.

Risks and uncertainties

The Company operates in an emerging industry that is subject to market acceptance and technological change.  The Company’s operations are subject to significant risks and uncertainties, including financial, operational, technological and other risks associated with operating an emerging business, including the potential risk of business failure.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  The Company regularly evaluates estimates and assumptions related to useful life and recoverability of long-lived assets, stock-based compensation and deferred income tax asset valuation allowances.  The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources.  The actual results experienced by the Company may differ materially and adversely from the Company’s estimates.  To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the time of issuance to be cash equivalents.

Available-for-sale securities

Available-for-sale securities are recorded at market. Unrealized gains and losses on such securities are reported in comprehensive income in the period they occur.

(F-8)

IAS

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

Basic and diluted net loss per share

The Company computes net loss per share in accordance with SFAS No. 128, “Earnings per Share”.  SFAS No. 128 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement.  Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period.  Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.  In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive.

Investment

Equity investments in other companies in which the Company exercises significant influence but not control and is not the primary beneficiary are accounted for using the equity method whereby the financial statements include the Company’s share of income (loss) of the investee.

Financial instruments

(i)	Fair Value The carrying values of cash, accounts receivable, available-for-sale securities, accrued revenues, accounts payable, accrued liabilities, due to/from related parties and debentures approximate their fair values because of the short-term maturity of these financial instruments.
(ii)	Interest Rate Risk The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary assets and liabilities.
(iii)	Credit Risk The Company’s financial asset that is exposed to credit risk consists primarily of cash. To manage the risk, cash is placed with major financial institutions.
(iv)	Currency Risk The Company’s functional and reporting currency is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

(F-9)

IAS

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

Stock-based compensation

Effective 1 January 2006, the Company adopted the provisions of SFAS No. 123(R), “Share-Based Payment,” which establishes accounting for equity instruments exchanged for employee services. Under the provisions of SFAS No. 123(R), stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employees’ requisite service period (generally the vesting period of the equity grant). Before 1 January 2006, the Company accounted for stock-based compensation to employees in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and complied with the disclosure requirements of SFAS No. 123, “Accounting for Stock-Based Compensation.”  The Company adopted SFAS No. 123(R) using the modified prospective method, which requires the Company to record compensation expense over the vesting period for all awards granted after the date of adoption, and for the unvested portion of previously granted awards that remain outstanding at the date of adoption. Accordingly, consolidated financial statements for the periods prior to 1 January 2006 have not been restated to reflect the fair value method of expensing share-based compensation. Adoption of SFAS No. 123(R) does not change the way the Company accounts for share-based payments to non-employees, with guidance provided by SFAS No. 123 (as originally issued) and Emerging Issues Task Force Issue No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.”

Long-lived assets

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable.  Circumstances that could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.

Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances.  An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

(F-10)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

Oil and gas properties

The Company utilizes the full-cost method of accounting for petroleum and natural gas properties. Under this method, the Company capitalizes all costs associated with acquisition, exploration and development of oil and natural gas reserves, including leasehold acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling of productive and non-productive wells into the full-cost pool on a country-by-country basis. When the Company obtains proven oil and gas reserves, capitalized costs, including estimated future costs to develop the proved reserves and estimated abandonment costs, net of salvage, are depleted on the units-of-production method using estimates of proved reserves. When proved reserves are not available, the Company uses the projected reserve estimates as provided by the operator. These reserve estimates are based upon the historical experience of similar wells in the same area.

The costs of unproved properties are not amortized until it is determined whether proved reserves can be assigned to the properties. Until such determination is made the Company assesses annually whether impairment has occurred, and includes in the amortization base drilling exploratory dry holes associated with unproved properties.

The Company applies a ceiling test to the capitalized cost in the full-cost pool. The ceiling test limits such cost to the estimated present value, using a ten percent discount rate, of the future net revenue from proved reserves, based on current economic and operating conditions. Specifically, the Company computes the ceiling test so that capitalized cost, less accumulated depletion and related deferred income tax, do not exceed an amount (the ceiling) equal to the sum of: (A) the present value of estimated future net revenue computed by applying current prices of oil and gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on current cost) to be incurred in developing and producing the proved reserves computed using a discount factor of ten percent and assuming continuation of existing economic conditions; plus (B) the cost of property not being amortized; plus (C) the lower of cost or estimated fair value of unproven properties included in the costs being amortized; less (D) income tax effects related to differences between the book and tax basis of the property. When proved reserves are not available, the Company uses the projected reserve estimates as provided by the operator. These reserve estimates are based upon the historical experience of similar wells in the same area.

For unproven properties, the Company excludes from capitalized costs subject to depletion all costs directly associated with the acquisition and evaluation of the unproved property until it is determined whether proved reserves can be assigned to the property. Until such a determination is made, the Company assesses the property at least annually to ascertain whether impairment has occurred. In assessing impairment the Company considers factors such as historical experience and other data such as primary lease terms of the property, average holding periods of unproved property, and geographic and geologic data. The Company adds the amount of impairment assessed to the cost to be amortized subject to the ceiling test.

(F-11)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

Asset retirement obligation

The Company is required to recognize a legal liability for obligations related to the retirement of property, plant and equipment and obligations arising from the acquisition, construction, development or normal operations of those assets.  Such asset retirement costs must be recognized at fair value when a reasonable estimate of fair value can be estimated in the period in which the liability is incurred.  A corresponding increase to the carrying amount of the related asset, when one is identifiable, is recorded and amortized over the life of the asset.  Where a related future value is not easily identifiable with a liability, the change in fair value over the course of the year is expensed.  The amount of the liability is subject to re-measurement at each reporting period.  The estimates are based principally on legal and regulatory requirements.  It is possible that the Company’s estimates of its ultimate reclamation and closure liabilities could change as a result of changes in regulations, changes in the extent of environmental remediation required, changes in the means of reclamation or changes in cost estimates.  Changes in estimates are accounted for prospectively commencing in the period the estimate is revised.

Revenue recognition

The Company recognizes oil and gas revenue when production is sold at a fixed or determinable price, persuasive evidence of an arrangement exists, delivery has occurred and title has transferred, and collectability is reasonably assured.

Comprehensive loss

SFAS No. 130, “Reporting Comprehensive Income”, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements.

Income taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not.  The Company has adopted SFAS No. 109, “Accounting for Income Taxes”, as of its inception.  Pursuant to SFAS No. 109, the Company is required to compute tax asset benefits for net operating losses carried forward.  Potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

Research and development

Research and development costs are expensed as incurred.

(F-12)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

Recent accounting pronouncements

In May 2008, the Financial Accounting Standards Board (the “FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – an interpretation of SFAS 60”.  SFAS 163 provides enhanced guidance on the recognition and measurement to be used to account for premium revenue and claim liabilities and related disclosures and is limited to financial guarantee insurance (and reinsurance) contracts, issued by enterprises included within the scope of SFAS 60, “Accounting and Reporting by Insurance Enterprises”.  SFAS 163 also requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation.  SFAS 163 is effective for financial statements issued for fiscal years and interim periods beginning after 15 December 2008, with early application not permitted.  The Company does not expect SFAS 163 to have an impact on its consolidated financial statements.

In May 2008, the FASB issued SFAS 162, “The Hierarchy of Generally Accepted Accounting Principles”.  SFAS 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. GAAP for nongovernmental entities.  Prior to the issuance of SFAS 162, GAAP hierarchy was defined in the American Institute of Certified Public Accountants (“AICPA”) Statement on Auditing Standards No. 69, “The Meaning of Present Fairly in Conformity with GAAP” (“SAS 69”).  SAS 69 has been criticized because it is directed to the auditor rather than the entity.  SFAS 162 addresses these issues by establishing that the GAAP hierarchy should be directed to entities because it is the entity, not its auditor, that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP.  SFAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles”.  The Company does not expect SFAS 162 to have a material effect on its consolidated financial statements.

In March 2008, the FASB issued SFAS 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133”, which amends and expands the disclosure requirements of SFAS 133 to provide an enhanced understanding of an entity’s use of derivative instruments, how they are accounted for under SFAS 133 and their effect on the entity’s financial position, financial performance and cash flows.  The provisions of SFAS 161 are effective for periods beginning after 15 November 2008.  The Company is currently reviewing the effect, if any, that the adoption of this statement will have the Company’s financial statements.

3. Acquisition

On 26 November 2007, the Company entered into an Equity Share Purchase Agreement (the “Agreement”) with all of the stockholders of Power Telecom, a corporation organized under the laws of Hong Kong. Pursuant to the Agreement the Company, at its option, has the right to purchase all of the issued and outstanding shares of capital stock of Power Telecom (the “Shares”).  The consideration to be paid under the Agreement consists of 55,000,000 Class A shares of common stock of the Company and stock options for the purchase of 1,000,000 Class A shares of common stock of the Company.  In addition, the Company is required to make cash payments to Power Telecom totaling $650,000 towards the further development of Power Telecom’s business.  Power Telecom owns the rights to the Chinese website www.video1314.com, an information sharing website.  The Company paid a non-refundable deposit of $50,000 to Power Telecom upon execution of the Agreement.

(F-13)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

Pursuant to the Agreement, the Company received a series of irrevocable exclusive options to purchase up to 100% of the shares of Power Telecom in stages as described below:

(i)   To purchase an initial 20% interest in Power Telecom, the Company must issue 10,000,000 Class A common shares, pay $50,000 to Power Telecom and issue 1,000,000 Class A common shares as a finder’s fee. The Company exercised this option on 26 November 2007. The 11,000,000 common shares issued were recorded at a fair value of $1,880,032.

(ii)   To purchase an additional 20% interest in Power Telecom, the Company must issue an additional 10,000,000 Class A common shares, pay a further $100,000 to Power Telecom, and issue an additional 1,000,000 Class A common shares as a finder’s fee. The Company exercised this option on 5 March 2008. The 11,000,000 common shares issued were recorded at a fair value of $2,400,441.

(iii)   To purchase an additional 20% interest in Power Telecom, the Company must issue an additional 10,000,000 Class A common shares, pay a further $150,000 to Power Telecom, and issue an additional 1,000,000 Class A common shares as a finder’s fee. The Company exercised this option on 3 September 2008. The 11,000,000 common shares issued were recorded at a fair value of $2,390,759.

(iv)   To purchase an additional 20% interest in Power Telecom, the Company must issue an additional 10,000,000 Class A common shares, pay a further $150,000 to Power Telecom, and issue an additional 1,000,000 Class A common shares as a finder’s fee.

(v)   To purchase an additional 20% interest in Power Telecom, the Company must issue an additional 10,000,000 Class A common shares, pay a further $150,000 to Power Telecom, and issue an additional 1,000,000 Class A common shares as a finder’s fee.

Upon execution of the Agreement, the Company granted 1,000,000 stock options to purchase 1,000,000 Class A common shares of the Company at a price of $0.33 per share for a period of five years. The 1,000,000 stock options were recorded at a fair value of $267,954. The options vest as to 12.5% upon grant date and an additional 12.5% every 90 days thereafter.

In accordance with SFAS No. 141, “Business Combinations”, acquisitions are accounted for under the purchase method of accounting.  Under the purchase method of accounting, assets acquired and liabilities assumed are recorded at their estimated fair values.  Goodwill is recorded to the extent the purchase price consideration, including certain acquisition and closing costs, exceeds the fair value of the net identifiable assets acquired at the date of the acquisition.

Effective 3 September 2008, the Company earned a 60% interest in Power Telecom by having issued 33,000,000 Class A shares of common stock of the Company, advancing $350,000 to Power Telecom for working capital purposes and having granted 1,000,000 stock options.

(F-14)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

Up until 2 September 2008, the Company’s 40% investment in Power Telecom was accounted for using the equity method with the Company’s share of losses being $76,535 since acquisition.  Upon earning the 60% interest, the acquisition was accounted for using the purchase method and the consolidated statements of operations and cash flows include the results of operations of Power Telecom from 3 September 2008 to 31 January 2009.  The losses applicable to the non-controlling interest of Power Telecom have been allocated only to the Company’s interest as the losses exceed the non-controlling interest in the common shares of Power Telecom.

A valuation of certain assets was completed and the Company internally determined the fair value of other assets and liabilities.  In determining the fair value of acquired assets, standard valuation techniques were used including the market and income approach.

The purchase price allocation has been determined as follows:

	$
Assets purchased:
Cash and cash equivalents		3,247
Receivables, prepaids and other current assets		2,562
Goodwill		7,223,063
Total assets acquired		7,228,872
Liabilities assumed:
Accounts payable and accrued liabilities		(284,177	)
Total liabilities assumed		(284,177	)
Purchase price		6,944,695

Goodwill recognized in the above transactions amounted to $7,223,063 and this amount is expected to be non-deductible for tax purposes.

The shares issued for the above investment have the following restrictions:

(a) Holding period of six months;

(b) After the six-month holding period, the number of shares to be sold during any 90-day period cannot exceed 1% of the outstanding shares of the same class;

(c) The sales must be handled as routine transactions with no solicitation; and

(d) A notice has to be filed with the SEC on Form 144 if the sale involves more than 500 shares or the aggregate dollar amount is greater than $10,000 in any 90-day period.

(F-15)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

The first tranche of 11,000,000 shares issued on 26 November 2007, used the five-day average trading price of $0.23, before the announcement was made 23 October 2007, in the calculation of the fair value.

The second tranche of 11,000,000 shares issued on 5 March 2008, used the five-day average trading price of $0.28 in the calculation of the fair value.

The third tranche of 11,000,000 shares issued on 3 September 2008, used the five-day average trading price of $0.24 in the calculation of the fair value.

Since these shares have trading restrictions, the aggregate fair value was calculated using the above prices, over the estimated time (based on trading restrictions) to achieve free trading status, using a 10% discount factor.

Pro forma information

The following unaudited consolidated pro forma financial information presents the combined results of operations of the Company and Power Telecom for the nine month period ended 31 January 2009 as if the acquisitions had occurred at 1 May 2008, including the issuance of the Company’s common shares as consideration for the acquisition of Power Telecom.

	Consolidated Pro Forma
��	Nine months ended 31 January 2009
	$
Revenues		22,235
Net loss		(653,942	)
Basic and diluted loss per common share		(0.006	)

The amounts of revenue and net loss of Power Telecom since the acquisition date included in the interim consolidated income statement for the nine month period ended 31 January 2009 are $5,141 and ($216,222), respectively.

The unaudited consolidated pro forma financial information does not include adjustments to remove certain private company expenses, which may not be incurred in future periods.  Similarly, the unaudited consolidated pro forma financial information does not include adjustments for additional expenses, such as rent, insurance, and other expenses that would have been incurred subsequent to the acquisition date.   The unaudited consolidated pro forma financial information does not necessarily reflect the results of operations that would have occurred had the Company and Power Telecom been a single entity during these periods.

(F-16)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

4.   Asset Retirement Obligation

The total future asset retirement obligation (“ARO”) was estimated by management based on the Company’s net ownership interest in all wells and facilities, estimated costs to reclaim and abandon the wells and facilities, and the estimated timing of the costs to be incurred in future periods.  Although the Company’s wells are producing, the Company has estimated the total ARO to be $Nil as at 31 January 2009 (30 April 2008 - $Nil) because the costs to be incurred in shutting down the wells are estimated to be minimal.

5.   Accounts Receivable and Other

	31 January 2009		30 April 2008
	$		$
Accounts receivable		5,156		-
Accrued revenues from petroleum interests		15,581		3,052
Prepaid expenses		7,946		69,209
Total		28,683		72,261

6.   Related Party Transactions

As at 31 January 2009, the Company owed related parties controlled or significantly influenced by the President of the Company $1,305,411 (30 April 2008 - $830,021) comprised of advances and/or expenses paid on behalf of the Company.  The amounts are non-interest bearing, unsecured and without specific terms of repayment.

As at 31 January 2009, the Company was owed by related companies controlled or significantly influenced by the President of the Company $18,564 (30 April 2008 - $21,139) comprised of advances and/or expenses paid by the Company.  The amounts are non-interest bearing, unsecured and without specific terms of repayment.

During the period ended 31 January 2009, the Company paid fees to a professional law firm in which a partner of the firm is an officer and director of the Company for legal services amounting to $28,400 (2008 - $25,316).

On 7 April 2008, the Company entered into an agreement with Teryl Resources Corp. (“Teryl”), a related company, to sell to Teryl the remaining 40% working interest in the three gas wells located in Know and Laurel Counties, Kentucky.  In consideration, the Company received an initial payment of $25,000 and the balance will be determined after an independent valuation report prepared by a qualified petroleum geologist.  During the period, both parties agreed to indefinitely suspend the agreement due to the difficulty of obtaining an independent valuation report due to the vertical fracture of the wells.  As such, the $25,000 paid to the Company will be applied against future revenue until the balance is fully depleted.

The Company shares office space with companies with related directors and officers.  The Company occupied this space rent-free during the nine month period ended 31 January 2009.

(F-17)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

Debentures

On 15 June 1997, the Company offered three-year 8¾% interest debentures.  As at 31 January 2009, $25,000 of debentures remains outstanding.  Interest is due annually.

7.   Available-For-Sale-Securities

	31 January 2009
	Cost $		Gross Unrealized Gains/ (Losses) $			Fair Value $
124,710 common shares of Reg Technologys Inc. (“Reg”)		12,471		17,459			29,930
744,340 common shares of Teryl Resources Corp. (“Teryl”)		92,972		(44,810	)		48,162
Total		105,443		(27,351	)		78,092

The above available-for-sale securities have been accounted for using the fair value method. Reg and Teryl are companies that have certain directors in common with the Company.  During the nine month period ended 31 January 2009, the Company sold Nil common shares (31 January 2008 - 4,000 common shares) of Reg for proceeds of $Nil (31 January 2008 - $2,240) resulting in a gain of $Nil (31 January 2008 - $1,920).  During the nine month period ended 31 January 2009, the Company sold Nil common shares (31 January 2008 - Nil) of Teryl for proceeds of $Nil (31 January 2008 - $Nil) resulting in a gain of $Nil (31 January 2008 - $Nil).

8.   Common Stock

  (a) On 5 September 2008, the Company issued 100,000 units at $0.20 per unit pursuant to a private placement for cash proceeds of $20,000, received during the three month period ended 31 July 2008.  Each unit consists of one Class A common share and one share purchase warrant.  Each warrant enables the holder to purchase one additional share at an exercise price of $0.25 per share for one year, expiring on 5 September 2009.

  (b) On 3 September 2008, in accordance with the terms of the option agreement as described in Note 3, the Company issued 10,000,000 Class A common shares to acquire 20% of Power Telecom. In addition, 1,000,000 Class A common shares were issued as a finder’s fee. The fair value of the total shares issued is $2,390,759.

  (c) On 21 July 2008, the Company issued 495,778 Class A common shares to a private company controlled by the President of the Company to fulfill its obligation per agreement, as described in Note 12.

(F-18)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

  (d) On 28 May 2008, the Company issued 10,000 units at $0.40 per unit pursuant to a private placement for cash proceeds of $4,000, received during the 30 April 2008 year end.  Each unit consists of one Class A common share and one share purchase warrant.  Each warrant enables the holder to purchase one additional Class A common share at an exercise price of $0.50 per share for one year, expiring 28 May 2009.

  (e) On 5 March 2008, in accordance with the terms of the option agreement as described in Note 3, the Company issued 10,000,000 Class A common shares to acquire 20% of Power Telecom. In addition, 1,000,000 Class A common shares were issued as a finder’s fee. The fair value of the total shares issued is $2,400,441.

  (f) On 12 February 2008, the Company issued 33,000 units at $0.40 per unit pursuant to a private placement for cash proceeds of $12,704, net of issue costs of $496. Each unit consists of one Class A common share and one share purchase warrant.  Each warrant enables the holder to purchase an additional share at an exercise price of $0.50 per share for one year, expiring on 12 February 2009.

  (g) On 28 January 2008, the Company issued 25,000 units at $0.40 per unit pursuant to a private placement for cash proceeds of $9,199, net of issue costs of $801. Each unit consists of one Class A common share and one share purchase warrant.  Each warrant enables the holder to purchase on additional share at an exercise price of $0.50 per share for one year, expiring on 28 January 2009.

  (h) On 26 November 2007, in accordance with the terms of the option agreement as described in Note 3, the Company issued 10,000,000 Class A common shares to acquire 20% of Power Telecom. In addition, 1,000,000 Class A common shares were issued as a finder’s fee. The fair value of the total shares issued is $1,880,032.

  (i) On 29 October 2007, the Company issued 49,500 Class A common shares for services with a fair value of $42,075.

  (j) On 31 August 2007, the Company issued 100,000 units, each unit consisting of one Class A common share and one share purchase warrant, for services. Each warrant entitles the holder to acquire one additional Class A share for $0.40, until 31 August 2009. The fair value of the shares and warrants were $32,000 and $18,681, respectively.

  (k) During the year ended 30 April 2008, the Company issued 137,500 Class A common shares at $0.20 per share upon the exercise of stock options for proceeds of $27,500.

  (l) During the year ended 30 April 2008, the Company issued 40,000 Class A common shares at $0.40 per share upon the exercise of warrants for proceeds of $16,000.

9.   Stock Option Plan

The Company has a Stock Option Plan to issue up to 2,500,000 Class “A” common shares to certain key directors and employees, approved and registered 2 October 1996, as amended. Pursuant to the Plan, the Company has granted stock options to certain directors and employees.

(F-19)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

On 22 October 2007, the Company approved the 2007 Stock Option Plan to issue up to 2,000,000 Class “A” common shares to directors and employees and registered them on Form S-8 with the Securities and Exchange Commission.

The following table summarizes stock option plan activities:

	Options #			Weighted Average Exercise Price $		Weighted Average Remaining Contractual Life (in years) $		Aggregate Intrinsic Value $
Outstanding, 1 May 2008		2,212,500			0.29
Granted		-			-
Exercised		-			-
Expired		(37,500	)		0.20
Outstanding, 31 January 2009		2,175,000			0.29		3.27		-
Exercisable at end of period		850,000			0.32		3.51		-

The following options were outstanding at 31 January 2009:

Expiry Date	Exercise price $		Number of options		Remaining contractual life (years)
20 November 2011		0.20		1,075,000		2.80
23 October 2012		0.33		1,000,000		3.73
7 November 2012		0.96		100,000		3.77
Options Outstanding				2,175,000
Options Exercisable				850,000

At 31 January 2009, there was $301,425 of total unrecognized compensation costs related to non-vested stock options granted under the Plans, which are expected to be recognized over a weighted-average period of 48 months.  The total fair value of stock options vested during the nine months ended 31 January 2009 and 2008 was $100,482 and $57,177, respectively.

(F-20)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

A summary of the status of the Company’s non-vested stock options as of 31 January 2009 and changes during the nine months ended 31 January 2009 is presented below:

	Stock Options #			Weighted Average Grant Date Fair Value $
Non-vested at 1 May 2008		1,700,000			0.29
Granted		-			-
Vested		(375,000	)		0.27
Non-vested at 31 January 2009		1,325,000			0.30

10.   Share Purchase Warrants

The following table summarizes the continuity of the Company’s warrants:

	Warrants #			Weighted Average Grant Date Fair Value $
Balance – 30 April 2008		368,000			0.42
Issued		110,000			0.17
Exercised		-			-
Expired		(210,000	)		0.40
Balance – 31 January 2009		268,000			0.21

The following warrants were outstanding at 31 January 2009:

	Exercise Price $		Number of Warrants
14 February 2009		0.50		58,000
28 May 2009		0.50		10,000
31 August 2009		0.40		100,000
5 September 2009		0.50		100,000
Warrants outstanding				268,000

(F-21)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

11.   Oil and Gas Properties

	30 April 2008 Net Carrying Value $			Acquisition/ Impairment $			Depletion $		31 January 2009 Net Carrying Value $
Proved properties, Kentucky & Texas, USA		474,263			18,609			-		492,872
Depletion		(4,074	)		-			-		(4,074	)
Impairment		(470,189	)		(18,609	)		-		(488,798	)
Net carrying value		-			-			-		-

(a)   The Company entered into an agreement dated 6 April 2005 with a private company controlled by the President of the Company to acquire a working interest in two oil wells located in Burleson County, Texas. The Company agreed to issue up to 1,000,000 shares (issued - 775,255) of restricted common stock at the rate of one share for every $0.10 of revenue from the wells. To 31 January 2009, revenue from the wells was approximately $47,430. During the nine month period ended 31 January 2009, the Company received/accrued $6,918 of revenue from the wells. The approximately 134,887 shares of restricted common stock issuable at 31 January 2009 pursuant to this agreement have been recorded at the quoted market price prevailing at the time of receipt of the oil and gas revenues and are accrued in the amount of $18,609 in obligation to issue shares.

The wells are producing but a value cannot be placed on them due to vertical fracture features that prevent the estimation of reserves. Accordingly, cumulative impairment loss of $207,633 equal to the investment in the oil wells that would have otherwise been recorded has been charged to operations. During the nine month period ended 31 January 2009, $18,609 (31 January 2008 - $58,078) of impairment loss was incurred.

(b)   On 4 May 2006, the Company entered into an agreement with Energy Source Inc. (“ESI”) to drill up to 24 gas wells located in Kentucky. The Company can earn a 100% working interest (60% net revenue interest) in four gas wells by paying $185,000 per well and has the option to acquire a 100% working interest (60% net revenue interest) in an additional 20 wells over an 18-month period at a price to be agreed upon. Each well is subject to a 12.5% net revenue interest to the landowner and a 27.5% interest to ESI.   On 18 May 2006, the Company entered into an agreement with Teryl, a public company related by common directors and officers, to farm-out a 40% working interest, outlined above, subject to a 12.5% net revenue interest to the landowner and a 27.5% interest to ESI, in consideration for paying 50% of the total costs of the wells.  The Company received $277,500 from Teryl during the year ended 30 April 2007, representing 50% of the cost of drilling the first, second and third wells.  On 28 September 2006, the Company assigned a 20% working interest (12% net revenue interest) in the third well drilled as part of a financing agreement.

(F-22)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

(c)   To 31 January 2009, the Company’s portion of the revenue from the wells was approximately $41,873. During the nine month period ended 31 January 2009, the Company received/accrued $10,176 of revenues from the wells.

12.   Income Tax

As at 31 January 2009, the Company has unused net operating losses for U.S. federal income tax purposes of approximately $7,732,134 that are available to offset future taxable income.  This unused net operating loss carry forward balance for income tax purposes expires between the years 2024 and 2029.

13.   Commitments

(i)   By sublicense agreements dated 10 July 1995, the Company was granted an exclusive worldwide sublicense by Integral Concepts Inc. (“ICI”) and West Virginia University Research Corporation (“WVURC”) to the Contrawound Toroidal Helical Antenna (“CTHA”) technology, excluding all military and governmental applications and resulting procurement interests. On 17 March 2005, the Company entered into settlement and release agreements with each of ICI and WVURC to terminate the 10 July 1995 agreements. Accordingly, the Company was released from all previously accrued royalty fees.

On 17 March 2005, the Company entered into a non-exclusive license agreement with WVURC for the development, manufacture, use and sale of the CTHA technology. The agreement was retroactively effective on 15 January 2005. The terms of the non-exclusive sublicense agreement are as follows:

 (i) The Company will pay a license fee of $3,000 for each calendar year, payable on or before January 15 of each year (paid).

 (ii) The Company will pay a royalty 10% of net sales.

(iii)	The Company will pay a royalty of 50% of all other sublicense revenues.
	All royalties in items (ii) and (iii) are payable within 30 days of each calendar quarter. The terms of the agreement remain in effect until the expiration of the last patent to expire that is included in the CTHA technology

(ii)   On 31 August 2007, the Company entered into an agreement with America West Pacific International Invest Corporation (“America West”) to provide public and investor relations for a period of eighteen months. America West was issued 100,000 common shares of the Company and 100,000 share purchase warrants to acquire 100,000 common shares at $0.40 per share for a period of two years, expiring on 31 August 2009. America West will also receive 15% of any funds they raise for the Company, which will be paid 10% in cash and 5% in common shares. The fair value of the 100,000 common shares and warrants issued was $50,681 of which $39,419 was charged to professional fees and $11,262 is included in prepaid expenses.

(F-23)

IAS Energy, Inc.

(A Development Stage Company)

Notes to the Interim Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

31 January 2009

14.   Supplemental Disclosures with Respect to Cash Flow

	Cumulative from 13 December 1994 (date of inception) to 31 January 2009 $			Nine months ended 31 January 2009 $		Nine months ended 31 January 2008 $
Non-cash investing and financing activities
Issue of common stock to settle related party debt		892,741			-		-
Issue of common stock for convertible debentures and accrued interest converted		394,661			-		-
Issue of common stock for technology		1			-		-
Issue of common stock to an officer donated back and cancelled		(10	)		-		-
Issue of common stock for services		573,173			-		27,000
Issue of common stock for revenue interest		196,763			143,338		-
Issue of common stock for investment		6,671,232			2,390,759		4,015,000
Supplemental disclosures
Interest paid on convertible debentures		14,222			1,094		1,641
Income tax paid		-			-		-
Cash and cash equivalents consists of
Cash		459			459		697
Bank indebtedness		-			-		-
		459			459		697

(F-24)

ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR RESULTS OF OPERATIONS.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q constitute "forward-looking statements." These statements, identified by words such as “plan,” "anticipate," "believe," "estimate," "should," "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth in our 10-KSB for the fiscal year ended April 30, 2008. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (the “SEC”), particularly our Annual Reports on Form 10-KSB or Form 10-K, our Quarterly Reports on Form 10-QSB or Form 10-Q and our Current Reports on Form 8-K.

As used in this Quarterly Report, the terms "we," "us," "our,” and “IAS” mean IAS Energy, Inc. unless otherwise indicated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

CORPORATE BACKGROUND AND OVERVIEW

IAS Communications, Inc. was incorporated on December 13, 1994 pursuant to the laws of the State of Oregon, USA.  On May 24, 2007, the name of the Company was changed to “IAS Energy, Inc.”. Our principal offices are located at 240-11780 Hammersmith Way, Richmond, British Columbia V7A 5E9, Canada. Our telephone number is (604) 278-5996 and our facsimile number is (604) 278-3409.  Our website is www.iasenergy.com.

We are a development stage company, formerly engaged in the acquisition and exploration of oil and gas interests in North America, and the commercialization of an antenna technology.

We have an interest in three producing oil and gas wells in Texas with Anadarko Petroleum Corporation as the operator, and three producing gas wells in Kentucky with Young Operating Company, of Kentucky, as operator. We have an option to drill up to 24 gas wells in Kentucky to earn a 60% net revenue interest. The Company does not plan to drill additional wells in Kentucky.

On November 26, 2007, we entered into an Option Agreement (the “Option Agreement”) with each of the two shareholders (the “Vendors”) of Power Telecom Limited (“Power Telecom”), a company incorporated in Hong Kong, for the option to acquire up to 100% of the outstanding shares of Power Telecom in consideration for the issuance of up to 50,000,000 Class A shares of common stock of the Company, the requirement to invest up to $650,000 towards the further development of Power Telecom’s business and the issuance of up to an additional 5,000,000 Class A shares of common stock as a finder’s fee. Power Telecom owns 100% of the rights to the Chinese website http://www.video1314.com.

On September 3, 2008, the Company completed the third option exercise, pursuant to the Option Agreement, and now holds an aggregate of 6,000 shares of Power Telecom’s common stock representing 60% of the issued and outstanding equity and voting interests of Power Telecom.  Following completion of the third option exercise, IAS has paid Power Telecom an aggregate of $350,000 cash, for working capital purposes, issued an aggregate of 30,000,000 shares of its common stock to the Vendors, and issued an aggregate of 3,000,000 shares of its common stock as a finders fee, for the first, second and third options.

Further options include the following:

1)   To purchase an additional 20% interest in Power Telecom, the Company must issue an additional 10,000,000 Class A common shares, pay a further $150,000 to Power Telecom, and issue an additional 1,000,000 Class A common shares as a finder’s fee.

2)   To purchase an additional 20% interest in Power Telecom, the Company must issue an additional 10,000,000 Class A common shares, pay a further $150,000 to Power Telecom, and issue an additional 1,000,000 Class “A common shares as a finder’s fee.

- 3 -

The Company does not intend to exercise the additional 40% interest in Power Telecom Limited of Hong Kong. Power Telecom Limited owns the rights to the Chinese web site www.video1314.com. Video1314 is a fast growing Chinese Web 2.0 platform (similar to www.youtube.com) that allows users to share videos, music, and audio as well as sell goods and services using videos in its marketplace. Since its launch, Video1314 has attracted millions of users and is fast becoming one of Asia’s top Web2.0 destinations. Video1314 currently serves the Greater China region, which includes Mainland China, Hong Kong, Macau and Taiwan. The features of the site are focused on free online photo, video and audio sharing; a marketplace to buy and sell goods using video, photo and audio technologies; and online educational gaming.

As of 31 January 2009, the Company has advanced a total of $350,000 and issued 33,000,000 shares to acquire a 60% interest in Power Telecom.

In a development stage company, management devotes most of its activities to establishing a new business. Planned principal activities have not yet produced significant revenues and we have suffered recurring operating losses as is normal in development stage companies. We also have a working capital deficiency of $1,542,143 as at January 31, 2009, which our auditors have stated raises substantial concern on our ability to meet planned business objectives and ongoing operations for the next twelve months. Our ability to emerge from the development stage with respect to our planned principal business activity is dependent upon our successful efforts to raise additional equity financing, receive funding from affiliates and controlling shareholders.

The following discussion of our financial condition, changes in financial condition and results of operations for the nine-month periods ended January 31, 2009 and January 31, 2008 should be read in conjunction with our most recent audited annual financial statements for the financial year ended April 30, 2008, the unaudited interim consolidated financial statements included herein, and, in each case, the related notes.

PLAN OF OPERATION

The following contains forward-looking statements relating to revenues, expenditures and sufficiency of capital resources. Actual results may differ from those projected in the forward-looking statements for a number of reasons, including those described in this quarterly report.

The interim consolidated financial statements for the nine months ended January 31, 2009 have been prepared assuming that the Company will continue as a going-concern. As discussed in note 1 to the interim consolidated financial statements, the Company has minimal revenues and limited capital, which together raise substantial doubt about its ability to continue as a going-concern. Management’s plans in regard to these matters are also described in note 1. The interim consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

RESULTS OF OPERATIONS

Nine months ended January 31, 2009 compared to the nine months ended January 31, 2008

Summary

	Nine Months Ended 31 January
							Percentage
							Increase/
	2009			2008			(Decrease)
	$			$			%
Revenue		19,669			17,785			10.6	%
Expenses		(505,760	)		(270,529	)		87.0	%
Other Income (Loss)		(57,681	)		(56,158	)		2.7	%
Net Income (Loss)		(543,772	)		(308,902	)		76.0	%

- 4 -

Expenses

Our expenses for the nine months ended January 31, 2009 and 2008 consisted of the following:

	Nine Months Ended January 31,
					Percentage
					Increase /
	2009		2008		(Decrease)
	$		$		%
General and administrative:
Depletion and depreciation		-		793		(100.0	%)
Interest on convertible debentures		1,641		1,641		0.0	%
License		2,000		2,250		(11.1	%)
Office		364,721		145,968		149.7	%
Professional fees		128,101		114,140		12.2	%
Transfer agent and regulatory		9,297		5,737		62.1	%
Total		505,760		270,529		87.0	%

The increase of $235,231 in our administrative expenses for the nine months ended January 31, 2009 as compared to the nine months ended January 31, 2008 was attributable to the increase in office expenses of $218,753; an increase of  $13,961 in professional fees; and an increase of $3,560 in transfer agent and regulatory due to additional administration and regulatory costs associated with the acquisition of Video1314.com.

Revenues

We earned $17,094 in revenue from our oil and gas wells, and $2,575 in service revenue from Video1314.com during the nine months ended January 31, 2009.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital
	At January 31, 2009			At April 30, 2008
Current Assets	$	125,798		$	256,774
Current Liabilities		(1,667,941	)		(934,805	)
Working Capital (Deficit)	$	(1,542,143	)	$	(678,031	)

Cash Flows
	Nine Months Ended January 31,
	2009			2008
Cash Flows (Used In) Operating Activities	$	(341,193	)	$	(17,266	)
Cash (Used In) Investing Activities		(146,753	)		(97,760	)
Cash Flows From Financing Activities		495,390			103,438
Effect of Exchange Rate Changes on Cash		(1,766	)		-
Net (Decrease) In Cash During Period	$	5,678		$	(11,588	)

During the nine months ended January 31, 2009, we financed our operations by receiving $20,000 from subscriptions for our common stock as compared to $52,699 in 2008.  During the nine months ended January 31, 2009, we received financial support from related parties in the amount of $475,390 compared to $50,739 for the same period in 2008. These amounts are unsecured, non-interest bearing and without specific terms of repayment.

During the nine months ended January 31, 2009, we paid $150,000 to Power Telecom to complete the option payment for the exercise of the third option.

- 5 -

Our cash position as at the end of January 31, 2009 was $459 (deficit of $5,219 at April 30, 2008), and our working capital deficit as at January 31, 2009 was $1,542,143 compared to $678,031 as at April 30, 2008.  We anticipate that we will need $500,000 to finance our operations over the next 12 months and anticipate that we will obtain said financing by receiving financial support from related parties or through the sale of our securities. Working capital is not adequate to meet development costs for the next twelve months.

There were no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Financing Requirements

Working capital is not adequate to meet development costs for the next twelve months.  We will require additional financing if we are to continue as a going concern.

The Company receives interim support from affiliated companies and plans to raise additional capital through debt and/or equity financings. The Company may also raise additional funds through the exercise of warrants and stock options, if exercised.  We have been successful in the past in acquiring capital through the issuance of shares of our Common Stock, and through advances from related parties. We do not have any arrangements in place for the sale of any of our securities and there is no assurance that we will be able to raise the additional capital that we require to continue operations.

We anticipate that our cash requirements for the next twelve months ending January 31, 2010 will remain consistent with those for the previous twelve months.

OFF-BALANCE SHEET ARRANGEMENTS

There were no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

CRITICAL ACCOUNTING POLICIES

We have identified certain accounting policies, described below, that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are disclosed in Note 2 of the interim consolidated financial statements for the nine months ended January 31, 2009, attached hereto this Form 10-Q.

Basis of accounting

The interim consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States and are presented in U.S. dollars.

Principles of consolidation

All significant inter-company balances and transactions have been eliminated.

Fiscal period

The Company’s fiscal year ends on 30 April.

Risks and uncertainties

The Company operates in an emerging industry that is subject to market acceptance and technological change.  The Company’s operations are subject to significant risks and uncertainties, including financial, operational, technological and other risks associated with operating an emerging business, including the potential risk of business failure.

- 6 -

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  The Company regularly evaluates estimates and assumptions related to useful life and recoverability of long-lived assets, stock-based compensation and deferred income tax asset valuation allowances.  The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about he carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources.  The actual results experienced by the Company may differ materially and adversely from the Company’s estimates.  To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the time of issuance to be cash equivalents.

Available-for-sale securities

Available-for-sale securities are recorded at market. Unrealized gains and losses on such securities are reported in comprehensive income in the period they occur.

Basic and diluted net loss per share

The Company computes net loss per share in accordance with SFAS No. 128, “Earnings per Share”.  SFAS No. 128 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement.  Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period.  Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.  In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive.

Investment

Equity investments in other companies in which the Company exercises significant influence but not control and is not the primary beneficiary are accounted for using the equity method whereby the financial statements include the Company’s share of income (loss) of the investee.

Financial instruments

(i)Fair Value

The carrying values of cash, accounts receivable, available-for-sale securities, accrued revenues, accounts payable, accrued liabilities, due to/from related parties and debentures approximate their fair values because of the short-term maturity of the financial instruments.

(ii)           Interest Rate Risk

The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary assets and liabilities.

(iii)           Credit Risk

The Company’s financial asset that is exposed to credit risk consists primarily of cash. To manage the risk, cash is placed with major financial institutions.

(iv)           Currency Risk

- 7 -

The Company’s functional and reporting currency is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of the financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Stock-based compensation

Effective 1 January 2006, the Company adopted the provisions of SFAS No. 123(R), “Share-Based Payment,” which establishes accounting for equity instruments exchanged for employee services. Under the provisions of SFAS No. 123(R), stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employees’ requisite service period (generally the vesting period of the equity grant). Before 1 January 2006, the Company accounted for stock-based compensation to employees in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and complied with the disclosure requirements of SFAS No. 123, “Accounting for Stock-Based Compensation.”  The Company adopted SFAS No. 123(R) using the modified prospective method, which requires the Company to record compensation expense over the vesting period for all awards granted after the date of adoption, and for the unvested portion of previously granted awards that remain outstanding at the date of adoption. Accordingly, consolidated financial statements for the periods prior to 1 January 2006 have not been restated to reflect the fair value method of expensing share-based compensation. Adoption of SFAS No. 123(R) does not change the way the Company accounts for share-based payments to non-employees, with guidance provided by SFAS No. 123 (as originally issued) and Emerging Issues Task Force Issue No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.”

Long-lived assets

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable.  Circumstances that could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.

Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances.  An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Oil and gas properties

The Company utilizes the full-cost method of accounting for petroleum and natural gas properties. Under this method, the Company capitalizes all costs associated with acquisition, exploration and development of oil and natural gas reserves, including leasehold acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling of productive and non-productive wells into the full-cost pool on a country-by-country basis. When the Company obtains proven oil and gas reserves, capitalized costs, including estimated future costs to develop the proved reserves and estimated abandonment costs, net of salvage, are depleted on the units-of-production method using estimates of proved reserves. When proved reserves are not available, the Company uses the projected reserve estimates as provided by the operator. These reserve estimates are based upon the historical experience of similar wells in the same area.

The costs of unproved properties are not amortized until it is determined whether proved reserves can be assigned to the properties. Until such determination is made the Company assesses annually whether impairment has occurred, and includes in the amortization base drilling exploratory dry holes associated with unproved properties.

The Company applies a ceiling test to the capitalized cost in the full-cost pool. The ceiling test limits such cost to the estimated present value, using a ten percent discount rate, of the future net revenue from proved reserves, based on current economic and operating conditions. Specifically, the Company computes the ceiling test so that capitalized

- 8 -

cost, less accumulated depletion and related deferred income tax, do not exceed an amount (the ceiling) equal to the sum of: (A) the present value of estimated future net revenue computed by applying current prices of oil and gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on current cost) to be incurred in developing and producing the proved reserves computed using a discount factor of ten percent and assuming continuation of existing economic conditions; plus (B) the cost of property not being amortized; plus (C) the lower of cost or estimated fair value of unproven properties included in the costs being amortized; less (D) income tax effects related to differences between the book and tax basis of the property. When proved reserves are not available, the Company uses the projected reserve estimates as provided by the operator. These reserve estimates are based upon the historical experience of similar wells in the same area.

For unproven properties, the Company excludes from capitalized costs subject to depletion all costs directly associated with the acquisition and evaluation of the unproved property until it is determined whether proved reserves can be assigned to the property. Until such a determination is made, the Company assesses the property at least annually to ascertain whether impairment has occurred. In assessing impairment the Company considers factors such as historical experience and other data such as primary lease terms of the property, average holding periods of unproved property, and geographic and geologic data. The Company adds the amount of impairment assessed to the cost to be amortized subject to the ceiling test.

Asset retirement obligation

The Company is required to recognize a legal liability for obligations related to the retirement of property, plant and equipment and obligations arising from the acquisition, construction, development or normal operations of those assets.  Such asset retirement costs must be recognized at fair value when a reasonable estimate of fair value can be estimated in the period in which the liability is incurred.  A corresponding increase to the carrying amount of the related asset, when one is identifiable, is recorded and amortized over the life of the asset.  Where a related future value is not easily identifiable with a liability, the change in fair value over the course of the year is expensed.  The amount of the liability is subject to re-measurement at each reporting period.  The estimates are based principally on legal and regulatory requirements.  It is possible that the Company’s estimates of its ultimate reclamation and closure liabilities could change as a result of changes in regulations, changes in the extent of environmental remediation required, changes in the means of reclamation or changes in cost estimates.  Changes in estimates are accounted for prospectively commencing in the period the estimate is revised.

Revenue recognition

The Company recognizes oil and gas revenue when production is sold at a fixed or determinable price, persuasive evidence of an arrangement exists, delivery has occurred and title has transferred, and collectability is reasonably assured.

Comprehensive loss

SFAS No. 130, “Reporting Comprehensive Income”, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements.

Income taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not.  The Company has adopted SFAS No. 109, “Accounting for Income Taxes”, as of its inception.  Pursuant to SFAS No. 109, the Company is required to compute tax asset benefits for net operating losses carried forward.  Potential benefits of net operating losses have not been recognized in the financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

Research and development

Research and development costs are expensed as incurred.

Recent accounting pronouncements

In May 2008, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 163, “Accounting for Financial Guarantee Insurance Contracts – an interpretation of

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SFAS 60”.  SFAS 163 provides enhanced guidance on the recognition and measurement to be used to account for premium revenue and claim liabilities and related disclosures and is limited to financial guarantee insurance (and reinsurance) contracts, issued by enterprises included within the scope of SFAS 60, “Accounting and Reporting by Insurance Enterprises”.  SFAS 163 also requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation.  SFAS 163 is effective for financial statements issued for fiscal years and interim periods beginning after 15 December 2008, with early application not permitted.  The Company does not expect SFAS 163 to have an impact on its consolidated financial statements.

In May 2008, the FASB issued SFAS 162, “The Hierarchy of Generally Accepted Accounting Principles”.  SFAS 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. GAAP for nongovernmental entities.  Prior to the issuance of SFAS 162, GAAP hierarchy was defined in the American Institute of Certified Public Accountants (“AICPA”) Statement on Auditing Standards No. 69, “The Meaning of Present Fairly in Conformity with GAAP” (“SAS 69”).  SAS 69 has been criticized because it is directed to the auditor rather than the entity.  SFAS 162 addresses these issues by establishing that the GAAP hierarchy should be directed to entities because it is the entity, not its auditor, that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP.  SFAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles”.  The Company does not expect SFAS 162 to have a material effect on its consolidated financial statements.

In March 2008, the FASB issued SFAS 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133”, which amends and expands the disclosure requirements of SFAS 133 to provide an enhanced understanding of an entity’s use of derivative instruments, how they are accounted for under SFAS 133 and their effect on the entity’s financial position, financial performance and cash flows.  The provisions of SFAS 161 are effective for periods beginning after 15 November 2008.  The Company is currently reviewing the effect, if any, that the adoption of this statement will have the Company’s financial statements.

Progress Report from November 1, 2008 to March 19, 2009

Video1314.com

On November 26, 2007 we entered into an option agreement (“Option Agreement”) with each of the two shareholders of Power Telecom Limited, (Mr. Samuel Kam [“Kam”] and Biotonus Clinique Bon Port (Hong Kong) Limited [“Biotonus”]; together Kam and Biotonus shall be referred to as the “Vendors”) and Power Telecom Limited, to acquire up to a 100% interest in Power Telecom.

Pursuant to the Option Agreement, the Vendors granted the Company a series of irrevocable exclusive options to purchase up to 100% of the shares of Power Telecom. The Company may issue up to 55 million shares of common stock of the Company in exchange for up to all outstanding shares of Power Telecom held by the Vendors, and finder’s fees. Additionally, the Company may invest up to an aggregate of $650,000 cash in Power Telecom as a capital contribution.

Effective September 3, 2008, we completed the exercise of the third option, made a payment of $150,000, and issued 10,000,000 common shares to acquire a further 20% interest in Power Telecom for a total holding of 60%. Additionally, we issued one million shares of our common stock to Ramon Mabanta as a finder’s fee.

In September 2008, the board of directors of IAS Energy appointed Samuel Kam as Chairman of IAS Energy, Inc.  Additionally, during the week of September 22, 2008, Video1314.com received a record 934,147 hits to its web site in a single day, which is close to the goal of 1,000,000 hits per day.

During January 2009, Video1314.com received record web site traffic with over 23 million monthly hits to its site.  The previous report announced 14.3 million hits in June 2008.  Even though we are seeing a slowdown in the global and Asian economies, our website traffic continues to grow substantially.  We are now averaging close to a million clicks to our site each day and with the added traffic, we anticipate more revenue opportunities to arise.

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ITEM 3.               QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is a smaller reporting company and is not required to provide the disclosure under this item.

ITEM 4(T).          CONTROLS AND PROCEDURES.

(a) Disclosure controls and procedures.

We carried out an evaluation, under the supervision and with the participation of our management, including the President and Chief Executive Officer, and the Chief Financial Officer, of the effectiveness of the design and operation of our “disclosure controls and procedures” [as defined in the Exchange Act Rule 13a-15(e)] as of the end of the period covered by this report. Based upon the evaluation of the effectiveness of the disclosure controls and procedures as of the end of the period covered by this quarterly report, our officers concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable, and not absolute assurance, of achieving the desired control objectives, and management necessarily was required to apply its judgement in evaluating the cost-benefit relationship of possible controls and procedures.

(b) Changes in internal control over financial reporting.

There was no significant change in our internal control over financial reporting that occurred during the nine months ended January 31, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Nor were there any significant deficiencies or material weaknesses in our internal controls requiring corrective actions.

PART II   OTHER INFORMATION

ITEM 1.                      LEGAL PROCEEDINGS

 None.

ITEM 1A. RISK FACTORS.

 The Company is a smaller reporting company and is not required to provide the disclosure under this item.

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

 None.

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ITEM 3.                      DEFAULTS UPON SENIOR SECURITIES

 None.

ITEM 4.                      SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

 None.

ITEM 5.                      OTHER INFORMATION

 None.

ITEM 6.                      EXHIBITS

Exhibits:

31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of John G. Robertson, President and Chief Executive Officer (Principal Executive Officer), pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification of James Vandeberg, Chief Operating Officer and Chief Financial Officer (Principal Financial Officer), pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: March 19, 2009                                                              IAS Energy, Inc.

By:           /s/ John G. Robertson

John G. Robertson, President and Chief Executive Officer

(Principal Executive Officer)

By:           /s/ James Vandeberg

James Vandeberg, Chief Operating Officer and

Chief Financial Officer

(Principal Financial Officer)

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