FORM 10-QSB

                      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, 2000

Commission File Number 33-16531-D

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


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

                              512 South 860 East
                          American Fort, Utah 84003
                   (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 March 31, 2000, Registrant had 15,546,361 shares of common stock, no
par value per share, issued and outstanding after deducting shares held in
the corporate treasury.

<PAGE>


PART I

ITEM I - FINANCIAL STATEMENTS


        The condensed financial statements included herein have been
prepared by International Automated Systems, Inc. (the "Company" or the
"Registrant"), without pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that
the disclosures are adequate to make the information presented not misleading.

        In the opinion of the Company, all adjustments, consisting of only
normal recurring adjustments, necessary to present fairly the financial
position of the Company as of March 31, 2000, and the results of its
operations and changes in its financial position from June 30, 1999, through
March 31, 2000, and from inception through March 31, 2000, have been made.
The results of its operations for such interim period is not necessarily
indicative of the results to be expected for the entire year.

        Registrant is a development stage company. Historically its primary
activities have been research and development of technology which can be
applied to develop commercial products. Such development has significant risk.

<PAGE>

                    INTERNATIONAL AUTOMATED SYSTEMS, INC.
                        (A Development Stage Company)



                              TABLE OF CONTENTS



                                                                      Page


        Condensed Balance Sheet - March 31, 2000 and June 30, 1999     F-1

        Condensed Statements of Operations for the Three and Nine
           Months Ended March 31, 2000 and 1999, and for the Period
           From September 26, 1986 (Date of Inception) Through
           March 31, 2000                                              F-3

        Condensed Statements of Cash Flows for the Three and Nine
           Months Ended March 31, 2000 and 1999, and for the Period
           From September 26, 1986 (Date of Inception) Through
           March 31, 2000                                              F-4


        Notes to the Condensed Financial Statements                    F-5


<PAGE>


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

                                    ASSETS

                                                    March 31,        June 30,
                                                         2000            1999
                                                  -----------      ----------
                                                   (Unaudited)
Current Assets
    Cash and cash equivalents                     $    17,697      $        -
    Net investment in direct financing leases -
       related party - current portion                 24,261          23,523
                                                  -----------      ----------

     Total Current Assets                              41,958          23,523
                                                  -----------      ----------

Property and Equipment
    Computer and electronic equipment                 151,978         148,864
    Furniture and fixtures                             20,982          20,982
    Automobiles                                        22,051          21,657
    Leasehold improvements                             18,238          18,238
    Mobile office                                      11,764          11,764
                                                  -----------      ----------

     Total Property and Equipment                     225,013         221,505
    Accumulated depreciation                         (174,389)       (145,035)
                                                  -----------      ----------
     Net Property and Equipment                        50,624          76,470
                                                  -----------      ----------
Other Assets
    Related party receivable                          778,390         454,063
    Net investment in direct financing
      leases - related party                           69,705          88,292
    Patents, net of accumulated amortization          250,346         257,808
                                                  -----------      ----------

     Total Other Assets                             1,098,441         800,163
                                                  -----------      ----------
Total Assets                                      $ 1,191,023      $  900,156
                                                  ===========      ==========

See the accompanying notes to the condensed financial statements.

<PAGE>
                                   F-1



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


                                                    March 31,        June 30,
                                                         2000            1999
                                                  -----------    ------------
                                                   (Unaudited)

                    LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
    Funds drawn in excess of cash in bank         $     5,414    $      7,084
    Accounts payable                                  120,344          65,279
    Accrued liabilities                                54,926          21,906
    Note payable - current portion                      5,790           7,131
    Obligation under capital leases - current
      portion                                          24,261          23,523
                                                  -----------    ------------

     Total Current Liabilities                        210,735         124,923
                                                  -----------    ------------

Long-Term Liabilities
    Notes payable                                           -           4,424
    Obligation under capital leases                    69,705          88,292
                                                  -----------    ------------

     Total Long-Term Liabilities                       69,705          92,716
                                                  -----------    ------------

Total Liabilities                                     280,440         217,639
                                                  -----------    ------------

Stockholders' Equity
    Preferred stock, Class A, no par value,
      5,000,000 shares authorized, 1,000,000
      shares issued and outstanding                   292,786         292,786
    Common stock, no par value, 45,000,000
      shares  authorized,15,546,361 shares
      issued and outstanding                        6,088,132       5,348,195
    Deficit accumulated during the development
    stage                                          (5,470,335)     (4,958,464)
                                                  -----------    ------------

     Total Stockholders' Equity                       910,583         682,517
                                                  -----------    ------------

Total Liabilities and Stockholders' Equity        $ 1,191,023    $    900,156
                                                  ===========    ============

See the accompanying notes to the condensed financial statements.

<PAGE>

                                   F-2

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


<TABLE>
<CAPTION>                                                                               For the Period
                                                                                        From Inception
                                                                                     (September 26, 1986)
                                For the Three Months          For the Nine Months         Through
                                   Ended March 31,               Ended March 31,          March 31,
                              --------------------------    --------------------------
                                     2000           1999           2000           1999       2000
                              -----------    -----------    -----------    -----------    -----------
<S>                           <C>            <C>            <C>            <C>            <C>
Revenue
  Sales                       $         -    $         -    $         -    $         -    $   111,226
  Equipment lease income
    from related party                  -          1,078              -         13,510         32,348
                              -----------    -----------    -----------    -----------    -----------
     Total Revenue                      -          1,078              -         13,510        143,574
                              -----------    -----------    -----------    -----------    -----------
Cost of Sales
  Cost of sales                         -             62              -             62         81,927
  Write down of carrying value
  of inventories of $108,093
  during 1998 and 1997                  -              -              -              -        216,186
                              -----------    -----------    -----------    -----------    -----------

     Total Cost of Sales                -             62              -             62        298,113
                              -----------    -----------    -----------    -----------    -----------
Gross Profit/(Loss)                     -          1,016              -         13,448       (154,539)
                              -----------    -----------    -----------    -----------    -----------

Operating Expenses
  General and administrative       98,242        119,394        219,532        343,937       2,406,767
  Research and development
   expense                         87,928        129,396         83,911        448,668       2,682,064
  Amortization expense              5,507          3,550          7,875         10,651          55,575
                              -----------    -----------    -----------    -----------    ------------

     Total Operating
      Expenses                    191,677        252,340        511,318        803,256       5,144,406
                              -----------    -----------    -----------    -----------    ------------
Loss From Operations             (191,677)      (251,324)      (511,318)      (789,808)     (5,298,945)
                              -----------    -----------    -----------    -----------    ------------

Other Income and (Expense)
  Interest income                       -            193             46            898          21,291
  Interest expense                   (132)          (172)          (599)        (1,713)        (22,050)
  Stockholder class action
   settlement expense                   -       (170,631)             -       (170,631)       (170,631)
                              -----------    ------------   -----------    -----------    ------------

     Net Other Income
      (Expense)                      (132)      (170,610)          (553)      (171,446)       (171,390)
                              -----------    -----------    -----------    -----------    ------------

Net Loss                      $  (191,809)   $  (421,934)   $  (511,871)   $  (961,254)   $ (5,470,335)
                              ===========    ===========    ===========    ===========    ============

Basic and Diluted Loss
  Per Share                   $     (0.01)   $     (0.03)   $     (0.03)   $     (0.06)   $      (0.37)
                              ===========    ===========    ===========    ===========    ============

Common and Preferred
 Shares Used in Per Share
 Calculation                   16,546,361     16,546,361     16,546,361     16,546,361      14,856,556
                              ===========    ===========    ===========    ===========    ============

<FN>
See the accompanying notes to the condensed financial statements.
</FN>
</TABLE>

<PAGE>
                                   F-3


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

<TABLE>                                                                       For the Period
<CAPTION>                                                                      From Inception
                                                       Ended March 31,      (September 26, 1986)
                                                  ------------------------       March 31,
                                                       2000           1999         2000
                                                  ---------      ---------      -----------
<S>                                               <C>            <C>            <C>

Cash Flows From Operating Activities
  Net loss                                        $(511,871)     $(961,254)     $(5,470,335)
  Adjustments to reconcile net income to
    net cash provided by operating activities:
     Allowance for doubtful accounts                      -              -                -
     Amortization                                     7,866         10,651           55,576
     Depreciation                                    29,354         26,970          174,389
     Stock based compensation                             -              -          338,497
 Change in assets and liabilities:
     Prepaid expenses                                  (400)         2,241            (400)
     Accounts payable                                55,465         48,650         120,744
     Accrued liabilities                             32,620          3,715          54,526
     Accrual for stockholder class action
       settlement expense                                 -        170,631               -
                                                  ---------      ---------      ----------
     Net Cash Used In Operating Activities         (386,956)      (698,396)     (4,727,003)
                                                  ---------      ---------      ----------
Cash Flows From Investing Activities
  Purchase of property and equipment                 (3,508)        (1,180)       (193,892)
  Purchase of rights to technology                      (14)       (30,528)       (303,642)
  Organization costs                                      -              -          (1,880)
  Prodeeds from capital lease receivable             17,849              -          40,217
  Cash loaned to related party                     (330,091)       (81,703)       (837,408)
  Repayment of cash loaned to related party               -              -          53,254
                                                  ---------      ---------      ----------
     Net Cash Used In Investing Activities         (315,764)      (113,411)     (1,243,351)
                                                  ---------      ---------      ----------
Cash Flows From Financing Activities
  Proceeds from issuance of common stock                  -              -       1,262,346
  Cash from controlling shareholder                 739,937        731,000       4,761,808
  Payments for treasury stock                             -              -          (3,325)
  Payments for stock offering costs                       -              -         (56,509)
  Bank overdraft                                     (1,670)             -           5,414
  Proceeds from net borrowings from related
    party                                                 -              -          78,101
  Payments on note payable and capital lease
    obligations, net                                 (17,850)       (2,919)        (59,784)
                                                  ----------     ---------      ----------
     Net Cash Provided By Financing Activities       720,417       728,081       5,988,051
                                                  ----------     ---------      ----------
     Net Increase (Decrease) In Cash
        and Cash Equivalents                          17,697       (83,726)         17,697

Cash and Cash Equivalents at Beginning/
  of Period                                                -        92,030              -
                                                  ----------     ---------      ---------
Cash and Cash Equivalents at End of Period        $   17,697     $   8,304      $  17,697
                                                  ==========     =========      =========

<FN>
See the accompanying notes to the condensed financial statements.
</FN>
</TABLE>

<PAGE>

                                   F-4




                    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,
       1999. 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, 2000.

       NOTE 2--RELATED PARTY TRANSACTIONS

               For the nine months ending March 31, 2000 and
       1999, the controlling shareholder, Neldon Johnson,
       contributed $739,937 and $731,000 for research as
       additional paid-in capital, respectively. No
       additional preferred or common stock was issued.

               As of June 30, 1999, the company advanced a
       corporation controlled by the Company's majority
       shareholder $454,063. For the nine months ended March
       31, 2000, the Company has advanced this same
       corporation an additional $330,091 and the corporation
       paid Company debts totaling $5,764 for net
       advancements of $324,327. Total advances are $778,390.
       No terms for repayment have been established.

               In June 1998, the Company entered into capital
       lease obligations with a leasing company for various
       equipment. Immediately after entering into the
       obligations, the Company subleased the equipment to a
       company related through common ownership under the
       same terms as the original leases signed by the
       Company. The Company has ultimate responsibility to
       make all payments regarding the leases. A total of
       $134,183 of equipment was acquired and subsequently
       subleased under these capital leases. These leases
       expire in May 2003. As of March 31, 2000 the Company's
       total receivable and payable relating to these lease
       obligations were $93,966.

       NOTE 3--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 regarding
       new technology developed by the Company. The SEC is
       seeking disgorgement of the proceeds from the sale of
       stock by the company and its principles that occurred
       between June 1995 and June 1996. This figure is
       believed to be in excess of $3,000,000. The SEC is
       also seeking the imposition of fines and attorney's
       fees. The ultimate outcome of the action cannot
       presently be determined. Accordingly, no provision for
       any liability that may result has been made in the
       accompanying financial statements, and the possible
       effect that action will have on future financial
       statements is unknown.

<PAGE>
                                   F-5

       NOTE 4--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. During the three month periods ended March
       31, 2000 and 1999, the Company incurred net losses of
       $191,809 and $421,934, respectively. During the nine
       month periods ended March 31, 2000 and 1999, the
       Company incurred net losses of $511,871 and $961,254,
       respectively. As of March 31, 2000, the Company's
       losses accumulated from inception totaled $5,470,335.
       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.

<PAGE>
                                   F-6


 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS


      Liquidity and Capital Resources. As of March 31 , 2000, Registrant had
cash of $17,697 compared to cash of $0 as of June 30, 1999. Cash increased
because of contributions by the majority shareholder. As of March 31, 2000,
total current assets were $41,958 and total assets were $1,191,023 compared
to total current assets $23,523 and total assets $900,156 as of June 30,
1999.

   As of March 31, 2000, Registrant had total liabilities of  $280,440 and
shareholders' equity of $910,583 as compared to total liabilities of
$217,639 and shareholders' equity of $682,517 as of June 30, 1999. The
deficit accumulated during the development stage was $5,470,335 as of March
31, 2000, compared to $4,958,464 as of June 30, 1999. For the near term the
Company's ability to continue its operations and activities is dependent
upon the Company's major shareholder providing funds to the Company. At this
time the Company is not generating sufficient funds to sustain its
operations. The decrease in shareholders' equity is attributable primarily
to the continuing operating losses. These activities have significant risks
involving the development of technology and the development of products that
may be commercially acceptable and profitable. As of March 31, 2000,  the
ratio of current assets to current liabilities was approximately .20 to one.


   Results of Operation. For the quarter ended March 31, 2000, Registrant
had total revenues of $0 compared to total revenues of $1,078 for the same
period a year earlier. For the quarter ended March 31, 2000, Registrant had
total operating expenses of $191,677 compared to expenses of $252,340 during
the same quarter a year earlier. As of March 31, 2000, cost of sales was $0
as compared to cost of sales of $62 during the same  quarter a year earlier.
For the quarter Registrant had a net loss of $191,809 compared to a net loss
of $421,934 for the same quarter a year earlier. The  decrease  in net loss
is attributable to the decrease in general and administrative  expenses and
a decrease in research and development expenses due to downsizing to meet
the Company's current financial position. For the quarter, the net loss per
share was $(0.01) compared to $(.03) for the same quarter a year earlier.
For the quarter ended March 31, 2000, general and administrative expenses
were  $98,242 compared to $119,394 and research and development expenses
were $87,928  compared to $129,396 a year earlier.


   For the nine months ended March 31, 2000, Registrant had total revenues
of $0 compared to total revenues of $13,510 for the same period a year
earlier. For the nine months ended March 31, 2000, Registrant had total
operating expenses of $511,318 compared to total operating expenses of
$803,256 during the same period a year earlier. For the nine months ending
March 31, 2000, cost of sales was $0 as compared to cost of sales of $62
during  the same period a year earlier. For the nine months ended March 31,
2000, Registrant had a net loss of $511,871 compared to a net loss of
$961,254 for  the same period a year earlier. The decrease in net loss is
attributable to the decrease in general and administrative expenses and
research and development  expenses due to downsizing to meet the Company's
current financial position.  For the nine months ended March 31, 2000 the
net loss per share was $(0.03)  compared to $(0.06) for the same quarter a
year earlier. For the nine month  period ended March 31, 2000, general and
administrative expenses were $219,532 compared to $343,937 and research and
development expense were $283,911 compared to $448,668 a year earlier.

   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. PART 88.

<PAGE>

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
regarding new technology developed by the Company. The SEC is seeking
disgorgement of the proceeds from the sale of stock by the Company and its
principles that occurred between June 1995 and June 1996. This figure is
believed to be in excess of $3,000,000. The SEC is also seeking the
imposition of fines and attorney's fees. The ultimate outcome of the action
cannot presently be determined. Accordingly, no provision for any liability
that may result has been made in the accompanying financial statements, and
the possible effect that action will have on future financial statements is
unknown.

   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.  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.,
section 271, 281, 283, 284, and 285.

Item 2.  Changes in Securities.

   None.

Item 3.  Defaults Upon Senior Securities.

   None.

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


   None.

Item 5.  Other Information.

   None.

Item 6.  Exhibits, Financial Statements, Schedules and Reports on Form 8-K.


       A.    Exhibits.

               Ex. 27 Financial Data Summary.

       B.    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  5-10-00

International Automated Systems, Inc.

By /S/  Neldon Johnson

-------------------------------------------
Neldon Johnson
President and Chief Executive Officer

<PAGE>