SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                   Quarterly Report Under Section 13 or 15(d)
                     Of the Securities Exchange Act of 1934

                        For Quarter Ended March 31, 2003

                       Commission File Number  33-16531-D

                      INTERNATIONAL AUTOMATED SYSTEMS, INC.
             (Exact name of registrant as specified in its charter)

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

                               326 North Sr. 198 ,
                               Salem, Utah   84653
                    (Address of principal executive offices)

Registrant's telephone number including area code    (801) 423-8132

                                Not Applicable
                 Former Address, if changed since last report


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the proceeding 12 months (or such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes   x        No


As of May 20, 2003 Registrant had 19,976,740 shares of common stock, no par
value per share, issued and outstanding after deducting shares held in the
corporate treasury.


PART I

ITEM 1              FINANCIAL STATEMENTS

INTERNATIONAL AUTOMATED SYSTEMS, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
(Unaudited)

<TABLE>
<CAPTION>


                                                                March 31,    June 30,
                                                                  2003         2002
--------------------------------------------------------------------------------------
<S>                                                           <C>         <C>
ASSETS

Current Assets
 Cash                                                          $   7,375   $        -
 Inventory                                                        41,493            -
 Net investment in direct financing leases - related party
  - current portion                                                    -       39,478
--------------------------------------------------------------------------------------
   Total Current Assets                                           48,868       39,478
--------------------------------------------------------------------------------------

Property and Equipment
 Computer and electronic equipment                                43,255       40,215
 Automobiles                                                      51,514       51,514
 Mobile office                                                    11,764       11,764

   Total Property and Equipment                                  106,533      103,493
 Accumulated depreciation                                        (79,668)     (73,407)
--------------------------------------------------------------------------------------
    Net Property and Equipment                                     26,865      30,086
--------------------------------------------------------------------------------------

Other Assets - Patents, net of accumulated amortization
 of $86,322 and $77,516, respectively                             172,974     181,780
--------------------------------------------------------------------------------------

Total Assets                                                   $  248,707  $  251,344
======================================================================================

</TABLE>


See the accompanying notes to the condensed financial statements.






INTERNATIONAL AUTOMATED SYSTEMS, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS (CONTINUED)
(Unaudited)

<TABLE>
<CAPTION>

                                                               March 31,     June 30,
                                                                 2003          2002
--------------------------------------------------------------------------------------
<S>                                                          <C>          <C>
LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
 Funds drawn in excess of cash in bank                         $        -  $    5,084
 Accounts payable                                                 131,468     209,274
 Deposits from related parties                                    174,400           -
 Accrued  payroll and related expenses                            169,845     191,888
 Notes payable-current portion                                      5,971       5,971
 Obligations under capital leases - current portion                15,558      39,478
--------------------------------------------------------------------------------------
   Total Current Liabilities                                      497,242     451,695
--------------------------------------------------------------------------------------

Long-Term Liabilities - Notes payable                              10,295      14,895
--------------------------------------------------------------------------------------

Total Liabilities                                                 507,537     466,590
--------------------------------------------------------------------------------------

Stockholders' Deficit
 Preferred stock, Class A, no par value, 4,400,000 shares
  authorized, 3,400,000 shares issued and outstanding             294,786     294,786
 Preferred stock, Class B, no par value, 600,000 shares
  authorized, 300,000 shares issued and outstanding                     -           -
 Common stock, no par value, 45,000,000 shares
  authorized, 19,976,740 and 17,749,334 issued and
  outstanding, respectively                                     9,128,426   8,388,137
 Deficit accumulated during the development stage              (9,682,042) (8,898,169)
--------------------------------------------------------------------------------------
   Total Stockholders' Deficit                                   (258,830)   (215,246)
--------------------------------------------------------------------------------------

Total Liabilities and Stockholders' Deficit                    $  248,707  $  251,344
======================================================================================


</TABLE>


See the accompanying notes to the condensed financial statements.





INTERNATIONAL AUTOMATED SYSTEMS, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)


<TABLE>
<CAPTION>
                                                                                      For the Period
                                     For the Three Months     For the Nine Months     From Inception
                                             Ended                   Ended            (September 26,
                                           March 31,                March 31,          1986) Through
                                     ---------------------   -----------------------      March 31,
                                       2003        2002         2003         2002           2003
----------------------------------------------------------------------------------------------------
<S>                                 <C>        <C>          <C>          <C>          <C>
Revenue
 Sales                               $          $        -   $        -   $        -   $    111,226
 Income from related party                  -            -            -            -         32,348
----------------------------------------------------------------------------------------------------
   Total Revenue                            -            -            -            -        143,574
----------------------------------------------------------------------------------------------------

Cost of Sales
 Cost of sales                              -            -            -            -         81,927
 Write down of carrying
  value of inventories                      -            -            -            -        216,186
----------------------------------------------------------------------------------------------------
 Total Cost of Sales                        -            -            -            -        298,113
----------------------------------------------------------------------------------------------------

   Gross Loss                               -            -            -            -       (154,539)
----------------------------------------------------------------------------------------------------

Operating Expenses
 General and administrative            60,307       58,181      611,079      473,220      4,900,978
 Research and development              40,785       65,902      156,261      174,000      4,100,675
 Amortization                           2,936        2,646        8,806        7,940         88,202
 Litigation settlement                      -            -            -            -        170,634
----------------------------------------------------------------------------------------------------
   Total Operating Expenses           104,028      126,729      776,146      655,160      9,260,489
----------------------------------------------------------------------------------------------------

Operating Loss                       (104,028)    (126,729)    (776,146)    (655,160)    (9,415,028)
----------------------------------------------------------------------------------------------------

Other Income and (Expenses)
 Loss on disposal of property
  and equipment                             -            -            -            -        (17,359)
 Forfeiture of deposits                     -            -            -            -       (236,803)
 Interest income                            -          (41)           -           16         22,444
 Interest expense                      (2,852)        (822)      (7,727)      (2,166)       (35,296)
----------------------------------------------------------------------------------------------------
   Net Other Expense                   (2,852)        (863)      (7,727)      (2,150)      (267,014)
----------------------------------------------------------------------------------------------------

Net Loss                           $ (106,880)  $ (127,592)  $ (783,873)  $ (657,310)  $ (9,682,042)
----------------------------------------------------------------------------------------------------
Basic and Diluted Loss Per Share   $    (0.00)  $    (0.01)  $    (0.03)  $    (0.03)
=====================================================================================
Weighted Average Common and
 Preferred Shares Used In Per
 Share Calculation                 23,510,740   20,941,469   22,751,138   20,795,038
=====================================================================================

</TABLE>


See the accompanying notes to the condensed financial statements.



INTERNATIONAL AUTOMATED SYSTEMS, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)


<TABLE>
<CAPTION>
                                                                                  For the Period
                                                                                  From Inception
                                                      For the Nine Months Ended   (September 26,
                                                               March 31,          1986) Through
                                                      --------------------------     March 31,
                                                          2003          2002            2003
------------------------------------------------------------------------------------------------
<S>                                                  <C>           <C>            <C>
Cash Flows From Operating Activities
 Net loss                                             $   (783,873) $   (657,310)  $ (9,682,042)
 Adjustments to reconcile net income (loss) to
  net cash provided (used) by operating activities
   Amortization                                              8,806         7,940         88,202
   Depreciation                                              6,261        14,413        211,611
   Stock based compensation                                422,903       244,500      2,219,907
   Forfeiture of deposits                                        -             -        236,803
   Loss on disposal of fixed assets                              -             -         17,359
   Patents abandoned                                             -             -        227,308
   Changes in current assets and liabilities:
    Inventory                                              (41,493)            -
    Accounts payable                                       (77,806)      (34,010)       131,468
    Accrued liabilities                                    (22,043)      (28,240)       169,844
    Deposits from related party                            174,400             -        174,400
------------------------------------------------------------------------------------------------
   Net Cash From Operating Activities                     (312,845)     (452,707)    (6,205,140)
------------------------------------------------------------------------------------------------

Cash Flows From Investing Activities
 Purchases of property and equipment                        (3,040)       (1,434)      (242,997)
 Purchase of rights to technology                                -             -       (486,603)
 Organization costs                                              -             -         (1,880)
 Net cash advanced to related party                        (14,060)            -     (1,644,988)
 Proceeds from capital lease receivable                          -             -         44,220
 Repayment of cash loaned to related party                       -             -         53,254
------------------------------------------------------------------------------------------------
   Net Cash From Investing Activities                      (17,100)       (1,434)    (2,278,994)
------------------------------------------------------------------------------------------------

Cash Flows From Financing Activities
 Proceeds from issuance of common stock                    326,828       175,198      2,322,757
 Cash from controlling shareholder                          43,164       298,427      6,274,041
 Payments for treasury stock                                     -             -         (3,325)
 Payments for stock offering costs                               -             -        (56,509)
 Increase (decrease) in bank overdraft                      (5,084)      (14,860)             -
 Proceeds from net borrowings from related par                   -             -         78,101
 Proceeds from notes payable                                     -             -         29,857
 Payments on note payable and obligations under
  capital lease                                            (27,588)       (3,502)      (111,920)
------------------------------------------------------------------------------------------------
  Net Cash From Financing Activities                       337,320       455,263      8,533,002
------------------------------------------------------------------------------------------------

Net Increase In Cash and Cash Equivalents                    7,375         1,122         48,868

Cash and Cash Equivalents at Beginning of Per                    -             -              -
------------------------------------------------------------------------------------------------

Cash and Cash Equivalents at End of Period            $      7,375  $      1,122   $     48,868
================================================================================================

Supplemental Cash Flow Information
 Cash paid for interest                               $      7,727  $      1,344

Non-Cash Investing and Financing Activities
 Payment by U-Check of IAS lease                      $        932  $          -
 Impairment of U-Check receivable treated as a
  distribution to the controlling shareholder                52,606            -


</TABLE>


See the accompanying notes to the condensed financial statements.




INTERNATIONAL AUTOMATED SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS


NOTE 1-INTERIM FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company, and are
unaudited.  In  the opinion of management, the accompanying unaudited  financial
statements  contain all necessary adjustments for fair presentation,  consisting
of normal recurring adjustments except as disclosed herein.

The  accompanying  unaudited interim financial statements  have  been  condensed
pursuant to the rules and regulations of the Securities and Exchange Commission;
therefore,  certain information and disclosures generally included in  financial
statements have been condensed or omitted. These financial statements should  be
read  in  connection with the Company's annual financial statements included  in
the  Company's  annual report on Form 10-KSB as of June 30, 2002. The  financial
position  and  results of operations of the interim periods  presented  are  not
necessarily indicative of the results to be expected for the year ended June 30,
2003.

NOTE 2-BUSINESS CONDITION

The  accompanying  financial statements have been prepared on  a  going  concern
basis,  which  contemplates the realization of assets and  the  satisfaction  of
liabilities in the normal course of business. The Company has had no revenue and
has  incurred  net  losses of $783,873 and $657,310 for the  nine-month  periods
ended  March  31,  2003  and 2002, respectively.  As  of  March  31,  2003,  the
Company's  losses accumulated from inception totaled $9,682,042. These  factors,
among  others, indicate that the Company may be unable to continue  as  a  going
concern for a reasonable period of time. The financial statements do not include
any  adjustments relating to the recoverability and classification  of  recorded
asset  amounts  or the amount and classification of liabilities  that  might  be
necessary  should  the  Company be unable to continue as a  going  concern.  The
Company's  ability to continue as a going concern is dependent upon its  ability
to  generate sufficient cash flow to meet its obligations on a timely basis,  to
obtain  additional  financing  as  may be required,  and  ultimately  to  attain
successful operations. Management is in the process of negotiating various sales
agreements and is hopeful these sales will generate sufficient cash flow for the
Company to continue as a going concern.

NOTE 3-RELATED PARTY TRANSACTIONS

For  the  nine months ended March 31, 2003, the controlling shareholder,  Neldon
Johnson,  contributed  $43,164  as additional  paid-in  capital.  No  additional
preferred  or  common  stock  was issued to Mr. Johnson  in  relation  to  these
contributions.

For the nine months ended March 31, 2003, the Company advanced U-Check, Inc. (U-
Check), a corporation controlled by Mr. Johnson, $14,060.  As of March 31, 2003,
the  Company  had an outstanding lease receivable of $38,546 due  from  U-Check.
Due to economic conditions and financial difficulties experienced by U-Check the
Company  determined that the advances and lease receivable were  impaired.   All
amounts have been written off as a capital distribution to Mr. Johnson.

NOTE 4-CONTINGENCIES AND COMMITMENTS

Legal  Contingencies - On September 23, 1998, the Company was  notified  by  the
U.S.  Securities  and  Exchange Commission (SEC) of formal  action  against  the
Company,  its  president,  and  members of his family  for  possible  securities
violations.  The  action stems from alleged material misrepresentations  by  the
Company  and the Company's employees regarding new technology developed  by  the
Company. The SEC is seeking disgorgement of the proceeds from the sale of  stock
by the Company's principals that occurred between June 1995 and June 1996.

At the end of July 2001, the president of the Company, on behalf of the Company,
approved  a  settlement recommendation to be presented to  the  SEC  as  a  full
compromise of the matter.

During  December 2002, the Company received notification from the SEC  that  the
proposed  settlement  agreement had been rejected.   The  Company  is  currently
unaware  of how the SEC intends to pursue this action and any possible liability
resulting from this action is undeterminable.

The  Company's continued existence depends heavily on equity financing and  cash
contributions from the controlling shareholder.  These cash contributions result
from the controlling shareholder selling personal shares of common stock on  the
open  market.   Should this formal action be settled in a manner unfavorable  to
the  Company,  the  SEC  could  prohibit future  equity  transactions  and  cash
contributions from the controlling shareholder.

During  the  year ended June 30, 2002, the Company was notified of a  claim  for
fees  allegedly owed under a written agreement between the Company and a  public
relations  firm  for consulting services.  The claim seeks to recover  from  the
Company $60,700 for services rendered.  The Company disputes the claim based  on
an  alleged  breach  of the agreement due to a failure to  perform  its  service
obligations; additionally, the Company had made payments which it had  not  been
given credit for.  During the nine months ended March 31, 2003, the Company made
payments totaling $10,100, leaving an accrued balance of $24,556.

Payroll  Tax Contingency - During the year ended June 30, 2001, the Company  did
not  pay  payroll  taxes for several months, and has unpaid  federal  and  state
withholding  tax  liabilities as of March 31, 2003.  These  balances,  including
potential  penalties  and interest total approximately $167,000  and  have  been
reflected  in  the financial statements as part of accrued payroll  and  related
expenses.

NOTE 5-DEPOSITS FROM RELATED PARTIES

During  October 2002 and January 2003, the controlling shareholder  and  certain
officers  and  directors  of the Company ("controlling  members")  entered  into
agreements  with  two  separate individuals ("minority  members")  to  form  two
separate  limited liability companies ("LLC") for the development and management
of  restaurant  complexes  that will use the automated  self-service  restaurant
technology  developed  by  the  Company.   The  controlling  members  agreed  to
contribute a business plan utilizing this technology for a 51% interest  in  the
entities.  In consideration for 49% interests in the LLC's, the minority members
agreed to loan the respective LLC's $150,000 each.

As of March 31, 2003, these LLC's have advanced the Company $200,000 towards the
purchase  of the automated self-service restaurant technology and equipment  and
have committed to pay an additional $100,000.  The final payment will be made at
such  time as the equipment and technology are installed in the restaurants  and
the restaurants are opened for business.  When the LLC's make the final payments
to  the  Company,  the Company has agreed to pay one of the minority  members  a
$10,000 commission.  This commission will reduce the amount of payments  to  the
Company.

As part of these agreements, the Company agreed to issue 80,000 shares of common
stock  to  one of the minority members as an incentive to pursue the deal.   The
issuance  of  the 80,000 shares has been treated as a sale of common  stock  for
cash proceeds of $25,600 or $0.32 per share thus reducing the money advanced  to
the Company.

These  LLC's are considered related parties due to common ownership  and  common
control.   Accordingly, the funds advanced to the Company will  be  recorded  as
"deposits  from  related  parties" and the purchase of  the  equipment  will  be
recorded as inventory at the Company's cost.  At such time as the equipment  and
technology are installed, the inventory will be netted against the advances  and
any  funds  advanced  in  excess of these costs will be  considered  contributed
capital.

Should  the  LLC's be unable to repay the notes to the minority members,  Neldon
Johnson, one of the controlling members of the LLC's and controlling shareholder
of  the Company, has agreed to make the payments.  Historically, Mr. Johnson has
contributed  capital to the Company with no additional shares  being  issued  to
cover  the  Company's  operating  costs.  These additional  commitments  by  Mr.
Johnson  could limit the amount of funds he could contribute to the  company  in
the future.


NOTE 6-STOCKHOLDERS EQUITY

Common Stock - During the year ended June 30, 2002, the Company placed 5,000,000
shares  of common stock in escrow with an attorney to be sold. Proceeds  of  the
stock  sales from the escrow account are placed in a separate escrow account  to
be used at the Company's and the attorney's discretion. At March 31, 2003, there
was  a  balance of 4,433,000 shares left in escrow. During the nine months ended
March  31,  2003,  567,000 shares were sold for proceeds of $189,228  at  prices
ranging  from  $0.23  to  $0.61 per share. At March 31, 2003  there  was  $2,678
remaining in the escrow account.

During  the nine months ended March 31, 2003, the Company issued 546,600  shares
of  restricted common stock to individuals in exchange for $137,600 in cash,  at
prices ranging from $0.20 to $0.35 per share.

During the nine months ended March 31, 2003, the Company issued 68,806 shares of
restricted  common stock to individuals in exchange for services performed.  The
shares were valued at $24,653, at prices ranging from $0.35 to $0.50 per share.

In October 2002, the Company entered into consulting agreements with individuals
to  provide planning and development services.  The agreement is to be in effect
for  180  days.  As compensation for these services, the Company issued  865,000
shares  of common stock valued at $0.45 per share or $389,250. The Company  also
issued  20,000 common shares for legal services valued at $9,000  or  $0.45  per
share.  In  connection  with  these transactions,  the  Company  issued  an  S-8
registration statement to register the 885,000 shares.

During May and June 2002, the Company issued 400,000 shares of restricted common
stock to an individual in exchange for $100,000 in cash, or $0.25 per share.  As
part  of this transaction, the Company guaranteed that:  i) if the stock is  not
trading at $2.00 per share 75 days subsequent to the agreement date, the Company
will issue an additional 80,000 shares, or 20% of the original issuance; ii)  if
the stock is not trading at $2.00 per share 150 days subsequent to the agreement
date, the Company will issue an additional 80,000 shares, or 20% of the original
issuance  and;  iii)   if the stock is not trading at $1.00  per  share  1  year
subsequent  to the agreement date, the Company will issue an additional  100,000
shares.  As of March 31, 2003, the Company's stock was not trading at $2.00  per
share and the Company has agreed to issue an additional 160,000 shares of common
stock.  These shares will be issued with no additional value given.

As discussed in Note 3, the controlling shareholder contributed a net of $43,164
to  additional paid-in capital and took a capital distribution of $52,606  as  a
result of the impairment of receivables from his wholly owned company, U-check.




Item 2 - Management's Discussion and Analysis or Plan of Operation

Forward Looking Statements

This report contains forward looking statements regarding the Company's plans,
objectives, expectations and intentions.  All forward looking statements are
subject to risks and uncertainties that could cause the Company's actual results
and experience to differ materially from such projections.  Such risks include
delays in product development, the development of marketing and distribution
channels, and market acceptance of its products.  Other risks may be beyond the
control of the Company.

Liquidity and Capital Resources

As of March 31, 2003, total current assets were $48,868 and total assets were
$248,707 compared to total current assets $39,478 and total assets $251,344 as
of June 30, 2002.

As of March 31, 2003, Registrant had total liabilities of $517,766 and
shareholders' deficit of $269,059 as compared to total liabilities of $466,590
and shareholders' deficit of $215,246 as of June 30, 2002. The deficit
accumulated during the development stage was $9,682,042 as of March 31, 2003,
compared to $8,898,169 as of June 30, 2002.  At this time the Company is not
generating sufficient funds to sustain its operations.  The Company's operations
involve significant risks regarding the development of technology and products
that may not be commercially acceptable and profitable.  As of March 31, 2003,
the ratio of current assets to current liabilities was approximately 0.10 to
one.

The Registrant's contractual obligations include a note payable to a financing
company that is due in November 2005, and capital lease obligations for various
equipment. The lease obligations expire in May 2003. The following is a schedule
by year of the payments on these contractual obligations.


                              Payments Due by Period
                                          Less
  Contractual                            than 1        1 - 3
  Obligations               Total         year         years
------------------        --------      --------      --------
Long-term debt            $ 16,266      $  5,971      $ 10,295
Capital lease
  obligations               15,558        15,558            --
                          --------      --------      --------
Total Contractual
  Cash Obligations        $ 31,824      $ 21,529      $ 10,295
                          ========      ========      ========

Management is in the process of negotiating various sales agreements and is
hopeful these sales will generate sufficient cash flow for the Company to
continue. The Company's ability to continue is dependent upon its ability to
generate sufficient cash flow to meet its obligations, to obtain additional
financing as may be required, and ultimately to attain successful operations.


Results of Operations

Three Months Ended March 31, 2003 compared to Three Months Ended March 31, 2002.

For the quarter ended March 31, 2003, Registrant had total revenues of
$0 compared to total revenues of $0 for the same period a year earlier.  For the
quarter ended March 31, 2003, registrant had total operating expenses of
$104,028 compared to expenses of $126,729 during the same quarter of a year
earlier.  As of March 31, 2003, cost of sales was $0 as compared to cost of
sales of $0 during the same quarter a year earlier.  For the quarter Registrant
had a net loss of $106,880 compared to a net loss of $127,592 for the same
quarter a year earlier. For the quarter, the net loss per share was
$0.00 compared to $0.01 for the same quarter a year earlier.  For the quarter
ended March 31, 2003, general and administrative expenses were $60,307 compared
to $58,181 and research development expenses were $40,785 compared to $65,902 a
year earlier. The decrease in net loss is primarily due to a decrease in
research and development expenses.

Nine Months Ended March 31, 2003 compared to Nine Months Ended March 31, 2002.

For  the  nine  months  ended  March 31, 2003 and 2002  the  Registrant  had  no
revenues.  For the nine months ended March 31, 2003, registrant had total
operating expenses of $776,146 compared to expenses of $655,160 during the same
nine month period for a year earlier. For the nine months ended March 31,
2003, general and administrative expenses were $611,079 compared to $473,220 and
research and development expenses were $156,261 compared to $174,000 a year
earlier. For the nine months, the Registrant had a net loss of $783,873 compared
to a net loss of $657,310 for the same nine month period a year earlier.  For
the nine months ended March 31, 2003 the net loss per share was $0.03 compared
to $0.03 for the same period a year earlier. The increase in net loss is
primarily due to an increase in general and administrative expenses.

Future Business

The Company's ability to continue its activities is dependent on it receiving
funds either as loans, advances, or sales of equity. Previously, the major
shareholder has provided funds, but there is no formal agreement between the
Company and the majority shareholder to continue providing funds in the future.
If the Company had to seek funds from another source, there is no assurance that
funds would be available at all or on terms acceptable to the Company.

Item 3: Controls and Procedures

(a)       The Company maintains controls and procedures designed to ensure that
information required to be disclosed in the reports that the Company files or
submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the Securities and Exchange Commission. Based upon their evaluation of those
controls and procedures performed within 90 days of the filing date of this
report, the chief executive officer and the principal financial officer of the
Company concluded that the Company's disclosure controls and procedures were
adequate.

(b)  Changes in internal controls. The Company made no significant changes in
its internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation of those controls by the chief
executive officer and principal financial officer.

Part II - OTHER INFORMATION

Item 1.  Legal Proceedings

On September 23, 1998, the Company was notified by the U.S. Securities and
Exchange Commission (SEC) of formal action against the Company, its president,
and members of his family for possible securities violations. The action stems
from alleged material misrepresentations by the Company and the Company's
employees regarding new technology developed by the Company. The SEC is seeking
disgorgement of the proceeds from the sale of stock by the Company's principals
that occurred between June 1995 and June 1996.

At the end of July 2001, the president of the Company, on behalf of the Company,
approved a settlement recommendation to be presented to the SEC as a full
compromise of the matter. During December 2002, the Company received
notification that the SEC had rejected the settlement agreement offered by the
Company's President.  The Company is currently unaware of how the SEC intends to
pursue this action and any possible liability resulting from this action is
undeterminable.

The Company's continued existence depends heavily on equity financing and cash
contributions from the controlling shareholder.  These cash contributions result
from the controlling shareholder selling personal shares of common stock on the
open market.  Should this formal action be settled in a manner unfavorable to
the Company, the SEC could prohibit future equity transactions and cash
contributions from the controlling shareholder.

During the year ended June 30, 2002, the Company was notified of a claim for
fees allegedly owed under a written agreement between the Company and a public
relations firm for consulting services. The claim seeks to recover from the
Company $60,700 for services rendered.  The Company disputes the claim based on
an alleged breach of the agreement due to a failure to perform its service
obligations; additionally, the Company had made payments which it had not been
given credit for. The Company has paid $10,100 toward the settlement of this
claim.

The Company has filed a civil action complaint in the United States District
Court for the District of Utah Central Division against Optimal Robotics Corp.
and PSC, Inc. alleging patent infringement arising under the patent laws of the
United States, and more specifically, under Title 35, U.S.C. Sections 271, 281,
283, 284 and 285. Discovery is presently in progress.

The Company has filed a civil action complaint in the United States District
Court for the district of Utah Central division against The Kroger
Company alleging patent infringement arising under the patent infringement
arising under the patent laws of the United States, and more specifically, under
Title 35, U.S.C., sections 271, 281, 283, 284, and 285.

Item 2.  Changes in Securities

During the year ended June 30, 2002, the Company placed 5,000,000 shares of
common stock in escrow with an attorney to be sold. Proceeds of the stock sales
from the escrow account are placed in a separate escrow account to be used at
the Company's and the attorney's discretion. At March 31, 2003, there was a
balance of 4,433,000 shares left in escrow. During the nine months ended March
31, 2003, 567,000 shares were sold for proceeds of $189,228 at prices ranging
from $0.23 to $0.61 per share. At March 31, 2003 there was $2,678 remaining in
the escrow account.

During the nine months ended March 31, 2003, the Company issued 546,600 shares
of restricted common stock to individuals in exchange for $137,600 in cash, at
prices ranging from $0.20 to $0.35 per share.

During the nine months ended March 31, 2003, the Company issued 68,806 shares of
restricted common stock to individuals in exchange for services performed. The
shares were valued at $24,653, at prices ranging from $0.35 to $0.50 per share.

In October 2002, the Company entered into consulting agreements with individuals
to provide planning and development services.  The agreement is to be in effect
for 180 days.  As compensation for these services, the Company issued 865,000
shares of common stock valued at $0.45 per share or $389,250. The Company also
issued 20,000 common shares for legal services valued at $9,000 or $0.45 per
share. In connection with these transactions, the Company issued an S-8
registration statement to register the 885,000 shares.

During May and June 2002, the Company issued 400,000 shares of restricted common
stock to an individual in exchange for $100,000 in cash, or $0.25 per share.  As
part of this transaction, the Company guaranteed that:  i) if the stock is not
trading at $2.00 per share 75 days subsequent to the agreement date, the Company
will issue an additional 80,000 shares, or 20% of the original issuance; ii)  if
the stock is not trading at $2.00 per share 150 days subsequent to the agreement
date, the Company will issue an additional 80,000 shares, or 20% of the original
issuance and; iii)  if the stock is not trading at $1.00 per share 1 year
subsequent to the agreement date, the Company will issue an additional 100,000
shares.  As of March 31, 2003, the Company's stock was not trading at $2.00 per
share and the Company has agreed to issue an additional 160,000 shares of common
stock.  These shares will be issued with no additional value given.


Item 3.  Defaults Upon Senior Securities.

     None.

Item 4.  Matters Submitted to a Vote of the Company's Shareholders.

     None.

Item 5.  Other Information.

The Controlling Shareholder and certain officers and directors of the Company
have formed agreements with two separate individuals ("minority members") to
form two separate limited liability companies (`LLC"), which will open
restaurants utilizing Company's self-service restaurant equipment. Each LLC has
agreed to purchase the self-service restaurant equipment from Company for
$150,000 per LLC. As of March 31, 2003, these LLC's have advanced the Company
$200,000 towards the purchase of the automated self-service restaurant
technology and equipment and have committed to advance an additional $100,000.
The final advances will be made at such time as the equipment and technology are
installed in the restaurants and the restaurants are opened for business.

As part of these agreements, the Company agreed to issue 80,000 shares of common
stock to one of the minority members as an incentive to pursue the deal.

Should  the  LLC's be unable to repay the notes to the minority members,  Neldon
Johnson, one of the controlling members of the LLC's and controlling shareholder
of  the Company, has agreed to make the payments.  Historically, Mr. Johnson has
contributed  capital to the Company with no additional shares  being  issued  to
cover  the  Company's  operating  costs.  These additional  commitments  by  Mr.
Johnson  could limit the amount of funds he could contribute to the  company  in
the future.


Item 6.  Exhibits and Reports on Form 8-K.

     None.


SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.


     Date: May 19, 2003

                               International Automated Systems, Inc.

                               By: /s/ Neldon Johnson
                               ----------------------
                               Neldon Johnson
                               President and Chief Executive Officer






                                  Attachment A

                      Form of Certification for Form 10-QSB

                                 CERTIFICATIONS*

I, Neldon Johnson, certify that:

   1.   I have reviewed this quarterly report on Form 10-QSB of
          International Automated Systems, Inc.;

   2.   Based on my knowledge, this quarterly report does not contain
        any untrue statement of a material fact necessary to make the
        statements made, in light of the circumstances under which such
        statements were made, not misleading with respect to the period
        covered by this quarterly report;

   3.      Based on my knowledge, the financial statements, and other financial
        information included in this quarterly report, fairly present in all
        material respects the financial condition, results of operations and
        cash flows of the registrant as of, and for, the periods presented in
        this quarterly report;

   4.    The registrant's other certifying officers and I am responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
          and we have:

        a) designed such disclosure controls and procedures to ensure that
           material information relating to the registrant, including its
           consolidated subsidiaries, is made known to us by others within
           those entities, particularly during the period in which this
           quarterly report is being prepared;

        b) evaluated the effectiveness of the registrant's disclosure controls
           and procedures as of a date within 90 days prior to the filing date
           of this quarterly report (the "Evaluation Date"); and

        c) presented in this quarterly report our conclusions about the
           effectiveness of the disclosure controls and procedures based on our
           evaluation as of the Evaluation Date;

   5.    The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation, to the registrant's auditors and the
          audit committee of registrant's board of directors (or persons
          performing the equivalent function):

        a) all significant deficiencies in the design or operation of
           internal controls which could adversely affect the registrant's
           ability to record, process, summarize and report financial data
           and have identified for the registrant's auditors any material
           weaknesses in internal controls; and

        b) any fraud, whether or not material, that involves management or
           other employees who have a significant role in the registrant's
           internal controls; and

   6.    The registrant's other certifying officers and I have indicated in
          this quarterly report whether or not there were significant change in
          internal controls or in other factors that could significantly affect
          internal controls subsequent to the date of our most recent
          evaluation, including any corrective actions with regard to
          significant deficiencies and material weaknesses.


Date:  May 19, 2003


/s/ Neldon Johnson
_____________________________________
Neldon Johnson
President and Chief Executive Officer








                                  Attachment A

                      Form of Certification for Form 10-QSB

                                 CERTIFICATIONS*

I, LaGrand Johnson, certify that:

        1. I have reviewed this quarterly report on Form 10-QSB of
          International Automated Systems, Inc.;

        2.        Based on my knowledge, this quarterly report does not contain
        any untrue statement of a material fact necessary to make the
        statements made, in light of the circumstances under which such
        statements were made, not misleading with respect to the period covered
        by this quarterly report;

   3.      Based on my knowledge, the financial statements, and other financial
        information included in this quarterly report, fairly present in all
        material respects the financial condition, results of operations and
        cash flows of the registrant as of, and for, the periods presented in
        this quarterly report;

   4.    The registrant's other certifying officers and I am responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
          and we have:

        a) designed such disclosure controls and procedures to ensure that
           material information relating to the registrant, including its
           consolidated subsidiaries, is made known to us by others within
           those entities, particularly during the period in which this
           quarterly report is being prepared;

        b) evaluated the effectiveness of the registrant's disclosure controls
           and procedures as of a date within 90 days prior to the filing date
           of this quarterly report (the "Evaluation Date"); and

        c) presented in this quarterly report our conclusions about the
           effectiveness of the disclosure controls and procedures based on our
           evaluation as of the Evaluation Date;

   5.    The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation, to the registrant's auditors and the
          audit committee of registrant's board of directors (or persons
          performing the equivalent function):

        a) all significant deficiencies in the design or operation of
           internal controls which could adversely affect the registrant's
           ability to record, process, summarize and report financial data
           and have identified for the registrant's auditors any material
           weaknesses in internal controls; and

        b) any fraud, whether or not material, that involves management or
           other employees who have a significant role in the registrant's
           internal controls; and

   6.    The registrant's other certifying officers and I have indicated in
          this quarterly report whether or not there were significant change in
          internal controls or in other factors that could significantly affect
          internal controls subsequent to the date of our most recent
          evaluation, including any corrective actions with regard to
          significant deficiencies and material weaknesses.




Date:  May 19, 2003


/s/  LaGrand Johnson
_____________________________________
LaGrand Johnson
Chief Financial Officer and Director