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 September 30, 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 Identification No.)
     incorporation or organization)

                              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 September 30, 2003 Registrant had 24,798,140 shares of common stock, no
par value per share, which includes shares held in escrow accounts.

Transitional Small Business Disclosure Format (Check One) Yes X  No ___





<PAGE>

PART I

ITEM 1                  FINANCIAL STATEMENTS

INTERNATIONAL AUTOMATED SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS
(UNAUDITED)

<TABLE>
<CAPTION>
                                                       SEPTEMBER 30,   JUNE 30,
                                                                2003       2003

--------------------------------------------------------------------------------
<S>                                                        <C>        <C>

ASSETS

CURRENT ASSETS
Cash                                                        $ 51,982   $ 54,034
Other current assets                                           3,000          -
Equipment held for distribution                                    -     48,793
--------------------------------------------------------------------------------
  TOTAL CURRENT ASSETS                                        54,982    102,827
--------------------------------------------------------------------------------

PROPERTY AND EQUIPMENT
Computer and electronic equipment                             22,331     22,331
Automobiles                                                   51,514     51,514
Mobile office                                                 11,764     11,764
--------------------------------------------------------------------------------
  TOTAL PROPERTY AND EQUIPMENT                                85,609     85,609
  Accumulated depreciation                                   (63,343)   (61,277)
--------------------------------------------------------------------------------
  NET PROPERTY AND EQUIPMENT                                  22,266     24,332
--------------------------------------------------------------------------------

OTHER ASSETS - PATENTS, NET OF ACCUMULATED AMORTIZATION       94,897     95,732
--------------------------------------------------------------------------------

TOTAL ASSETS                                                $172,145   $222,891
================================================================================

</TABLE>


       See the accompanying notes to the condensed financial statements.


<PAGE>


INTERNATIONAL AUTOMATED SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS (CONTINUED)
(UNAUDITED)


<TABLE>
<CAPTION>
                                                        SEPTEMBER 30,        JUNE 30,
                                                                 2003            2003
--------------------------------------------------------------------------------------
<S>                                                      <C>             <C>

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Bank overdraft                                            $          -    $    28,441
Accounts payable                                               155,381        138,757
Accrued  payroll and related expenses                          207,606        238,000
Deposits from customers                                         30,000              -
Deposits from related parties                                   74,400        224,400
Notes payable-current portion                                    5,971          5,971
Obligations under capital leases                                 4,568         15,305
--------------------------------------------------------------------------------------
   TOTAL CURRENT LIABILITIES                                   477,926        650,874
--------------------------------------------------------------------------------------

NET LONG-TERM LIABILITIES - NOTES PAYABLE                        7,253          8,777
--------------------------------------------------------------------------------------

TOTAL LIABILITIES                                              485,179        659,651
--------------------------------------------------------------------------------------

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, 20,689,140 and 20,326,740 issued and
 outstanding, net 4,109,000 and 4,193,000 shares held in
 escrow account, respectively                                9,481,962      9,183,678
Deficit accumulated during the development stage           (10,089,782)    (9,915,224)
--------------------------------------------------------------------------------------

  TOTAL STOCKHOLDERS' DEFICIT                                 (313,034)      (436,760)
--------------------------------------------------------------------------------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT               $    172,145    $   222,891
======================================================================================

</TABLE>



       See the accompanying notes to the condensed financial statements.


<PAGE>



INTERNATIONAL AUTOMATED SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                            For the Period
                                                                            From Inception
                                               For the Three Months Ended   (September 26,
                                                       September 30,        1986) Through
                                               ---------------------------   September 30,
                                                   2003           2002            2003
------------------------------------------------------------------------------------------
<S>                                           <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                        111,350         61,182       5,100,992
 Research and development expense                   61,123         56,793       4,195,727
 Impairment of patents                                   -              -         110,082
 Amortization expense                                  835          2,935          89,325
 Litigation settlement expense                           -              -         170,634
------------------------------------------------------------------------------------------
   TOTAL OPERATING EXPENSES                        173,308        120,910       9,666,760
------------------------------------------------------------------------------------------

OPERATING LOSS                                    (173,308)      (120,910)     (9,821,299)
------------------------------------------------------------------------------------------

OTHER INCOME AND (EXPENSES)
 Loss on disposal of property and equipment              -              -         (17,359)
 Forfeiture of deposits                                  -              -        (236,803)
 Interest income                                         -              -          22,444
 Interest expense                                   (1,250)        (1,104)        (36,765)
------------------------------------------------------------------------------------------
   NET OTHER EXPENSE                                (1,250)        (1,104)       (268,483)
------------------------------------------------------------------------------------------

NET LOSS                                       $  (174,558)   $  (122,014)   $(10,089,782)
==========================================================================================

BASIC AND DILUTED LOSS PER SHARE               $     (0.01)   $     (0.01)
==========================================================================

COMMON AND PREFERRED SHARES USED IN
 PER SHARE CALCULATION                          24,178,297     21,801,625
==========================================================================

</TABLE>



       See the accompanying notes to the condensed financial statements.


<PAGE>

INTERNATIONAL AUTOMATED SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASHFLOW
(UNAUDITED)


<TABLE>
<CAPTION>
                                                                                     For the Period
                                                                                     From Inception
                                                        For the Three Months Ended   (September 26,
                                                               September 30,         1986) Through
                                                        ---------------------------  September 30,
                                                            2003           2002           2003
---------------------------------------------------------------------------------------------------
<S>                                                    <C>            <C>            <C>

CASH FLOWS FROM OPERATING ACTIVITIES
 Net loss                                               $ (174,558)    $ (122,014)    $(10,089,782)
 Adjustments to reconcile net loss to net
  cash from operating activities:
 Amortization                                                  835          2,935           89,325
 Depreciation                                                2,066          2,203          216,121
 Stock based compensation                                        -          1,903        2,221,407
 Forfeiture of deposits                                          -              -          236,803
 Loss on disposal of fixed assets                                               -           17,359
 Impairment of patents and abandonment of in-process
   rights to technology                                          -              -          343,238
 Changes in current assets and liabilities:
  Other current assets                                      (3,000)             -           (3,000)
  Accounts payable                                          16,624        (75,706)         155,381
  Deposits from customers                                   30,000              -           30,000
  Accrued liabilities                                      (30,394)         2,696          207,605
---------------------------------------------------------------------------------------------------
   NET CASH FROM OPERATING ACTIVITIES                     (158,427)      (187,983)      (6,575,543)
---------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
 Purchases of property and equipment                             -           (678)        (242,908)
 Purchase of rights to technology                                -              -         (525,579)
 Organization costs                                              -              -           (1,880)
 Net cash advanced to related party                              -         (9,792)      (1,644,988)
 Proceeds from capital lease receivable                          -              -           44,220
 Repayment of cash loaned to related party                       -              -           53,254
---------------------------------------------------------------------------------------------------
   NET CASH FROM INVESTING ACTIVITIES                            -        (10,470)      (2,317,881)
---------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
 Proceeds from issuance of common stock                    200,080        196,204        2,580,071
 Cash from controlling shareholder                               -         23,818        6,270,559
 Payments for treasury stock                                     -              -           (3,325)
 Payments for stock offering costs                               -              -          (56,509)
 Decrease (increase) in bank overdraft                     (28,441)         5,084                -
 Proceeds from net borrowings from related party                 -              -           78,101
 Proceeds from notes payable                                     -              -           29,857
 Payments on note payable and obligations under                                                  -
  capital lease                                            (12,261)        (1,552)        (125,952)
 Proceeds from related party deposits                            -              -          224,400
 Purchases of equipment held for distribution               (3,003)             -          (51,796)
---------------------------------------------------------------------------------------------------
   NET CASH FROM FINANCING ACTIVITIES                      156,375        223,554        8,945,406
---------------------------------------------------------------------------------------------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS        (2,052)        25,101           51,982

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD            54,034              -                -
---------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD              $   51,982     $   25,101     $     51,982
===================================================================================================

SUPPLEMENTAL CASH FLOW INFORMATION
 Cash paid for interest                                 $    1,250     $    1,104

NON-CASH INVESTING AND FINANCING ACTIVITIES
 Convert equipment held for distribution and deposits
  from related parties to contributed capital           $   98,204     $        -


</TABLE>

       See the accompanying notes to the condensed financial statements.


<PAGE>



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,  2003.  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, 2004.

Basic earnings per common  share are computed by dividing net loss available to
common stockholders by the weighted-average number of common shares outstanding
during the period.  Diluted  earnings per share reflects the potential dilution
which could occur if all contracts  to  issue  common  stock  were exercised or
converted  into  common stock or resulted in the issuance of common  stock.   A
total of 1,600,000  stock options were excluded from the calculation of diluted
loss per common share at September 30, 2003 and 2002, because the effects would
be antidilutive.


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  $174,558  and  $122,014  for  the  three-month
periods  ended September 30, 2003 and 2002, respectively.  As of September  30,
2003, the  Company's  losses  accumulated  from  inception totaled $10,089,782.
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-STOCK BASED COMPENSATION




The  Company  accounts  for  stock options issued to  directors,  officers  and
employees  under  Accounting  Principles  Board  Opinion  No.  25  and  related
interpretations ("APB 25").  Under  APB  25, compensation expense is recognized
if an option's exercise price on the measurement  date  is below the fair value
of the Company's common stock.  The Company accounts for  options  and warrants
issued  to non-employees at their fair value in accordance with SFAS  No.  123,
"Accounting for Stock-Based Compensation" ("SFAS 123").

No compensation  cost  has  been  recognized  for  its  stock  options  in  the
accompanying  financial  statements.   Had  the Company determined compensation
cost based on the fair value at the grant date for its stock options under SFAS
No. 123, the Company's net loss applicable to  common  shareholders  would have
been  increased  to the pro forma amounts indicated below for the three  months
ended September 30, 2003 and 2002:


<TABLE>
<CAPTION>

FOR THE THREE MONTHS ENDED SEPTEMBER 30,                  2003       2002
-------------------------------------------------------------------------------
<S>                                                 <C>         <C> <C>

Net loss, as reported                                 $ (174,558)  $ (122,014)
Deduct:  Total stock-based employee compensation
 expense determined under fair value based method
 for all awards                                          (65,928)     (89,828)
-------------------------------------------------------------------------------

PRO FORMA NET LOSS                                    $ (240,486)  $ (211,842)
===============================================================================

BASIC AND DILUTED LOSS PER COMMON SHARE AS REPORTED   $    (0.01)  $    (0.01)
===============================================================================

BASIC AND DILUTED LOSS PER COMMON SHARE PRO FORMA     $    (0.01)  $    (0.01)
===============================================================================

</TABLE>



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.  This matter is  set  for  trial  in  February  2004.  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.  Through September  30,  2003  the  Company  made  payments
totaling $10,100, leaving an accrued balance of $24,556.

PAYROLL TAX CONTINGENCY - During prior periods, the Company did not pay payroll
taxes for several  months,  and  has  unpaid  federal and state withholding tax
liabilities. The Company was also notified by the  IRS  that  there were errors
with the filing of their 1999 W-2's and assessed penalties. As of September 30,
2003,  the balance assessed by federal and state agencies, including  penalties
and interest total $207,606 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.

These LLC's are considered related parties  due  to common ownership and common
control.   Accordingly,  the  funds advanced to the Company  were  recorded  as
"deposits from related parties"  and  the  purchase  of  the  equipment will be
recorded  as  equipment held for distribution at the Company's cost.   At  such
time as the equipment  and  technology  are  installed,  the equipment held for
distribution  will  be  netted against the advances and any funds  advanced  in
excess of these costs will  be considered contributed capital. During the three
months ended September 30, 2003, one of the restaurants was opened for business
resulting  in  $150,000  of deposits  from  related  parties  less  $51,796  of
equipment held for distribution being reclassified as 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  ISSUED  FOR CASH - At June 30, 2003 the Company had a  total  of
4,193,000 shares held in  escrow with three different entities. Proceeds of the
stock sales from these escrow  accounts  are placed in separate escrow accounts
to  be  used at the Company's and the trustees  discretion.  During  the  three
months ended  September  30,  2003,  84,000  shares  were  sold for proceeds of
$60,880 at prices ranging from $0.67 to $0.83 per share. The proceeds were used
to  pay  professional  fees,  operating  expenses  and accrued liabilities.  At
September 30, 2003, there was a balance of 4,109,000 shares left in escrow with
$7,434 of cash remaining in the escrow accounts.

During the three months ended September 30, 2003, the  Company  issued  278,400
shares of common stock to individuals in exchange for $139,200 in cash at $0.50
per share.


NOTE 7 - DEPOSITS FROM CUSTOMER

During  the three months ended September 30, 2003, the Company received $30,000
deposit from  an  unrelated  person  to purchase equipment in relation to their
automated self-service restaurant technology. The Company was required to remit
a 10% commission as part of receiving  the  funds.  The  deposit and commission
will be reflected in income when the equipment is completed and installed.





<PAGE>



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  September  30, 2003, total current assets were $54,982 and total assets
were $172,145 compared  to  total  current  assets  $102,827  and  total assets
$222,891 as of June 30, 2003.

As  of  September  30,  2003, Registrant had total liabilities of $485,179  and
shareholders' deficit of  $313,034 as compared to total liabilities of $659,651
and  shareholders' deficit of  $436,760  as  of  June  30,  2003.  The  deficit
accumulated  during  the  development stage was $10,089,782 as of September 30,
2003, compared to $9,915,224  as of June 30, 2003.  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
September  30,  2003,  the  ratio  of current assets to current liabilities was
approximately 0.12 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 during  2004.  The  following  is  a
schedule by year of the payments on these contractual obligations.

<TABLE>
<CAPTION>
                                  Payments Due By Period
                                                           Less Than   One To Three
Contractual Obligations                      Total          One Year       Years
-----------------------------------------------------------------------------------
<S>                                       <C>            <C>            <C>

Long-term debt                             $  13,224      $   5,971      $   7,253
Capital lease obligations                  $   4,568      $   4,568      $       -
----------------------------------------------------------------------------------

TOTAL CONTRACTUAL CASH OBLIGATIONS         $  17,792      $  10,539      $   7,253
-----------------------------------------------------------------------------------
</TABLE>


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 September 30, 2003 compared to Three Months Ended September
30, 2002

For the  quarter  ended September 30, 2003, Registrant had total revenues of $0
compared to total revenues  of  $0 for the same period a year earlier.  For the
quarter ended September 30, 2003,  registrant  had  total operating expenses of
$173,308 compared to expenses of $120,910 during the  same  quarter  of  a year
earlier.  As of September 30, 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  $173,308 compared to a net loss of $122,014 for the same
quarter a year earlier. For the quarter, the net loss per share was
$0.01 compared to $0.01  for  the same quarter a year earlier.  For the quarter
ended September 30, 2003, general  and  administrative  expenses  were $111,350
compared to $61,182 and research development expenses were $61,123  compared to
$56,793  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) Evaluation of disclosure controls and procedures-Based on their  evaluation
of  the  Company's disclosure controls and procedures (as defined in Rule  13a-
15(e) under  the  Securities  Exchange  Act  of 1934 (the "Exchange Act")), the
Company's  principal  executive  officer and   principal financial officer have
concluded that as of the end of the period covered  by this Quarterly Report of
Form  10-Qsb such disclosure controls and procedures are  effective  to  ensure
that information  required  to  be  disclosed by the Company in reports that it
files or submits under the Exchange Act  is recorded, processed, summarized and
reported  within  the  time  periods  specified   in  Securities  and  Exchange
Commission rules and forms.

(b)  Changes  in internal control over financial reporting-During  the  quarter
under report, there  was  no  change  in  the  Company's  internal control over
financial  reporting that has materially affected, or is reasonably  likely  to
materially affect, the Company's internal control over financial reporting.

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  from  the  SEC  that the proposed settlement agreement  had  been
rejected.  This matter is set for  trial  in  February  2004.   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 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, 2003, the Company had 4,193,000 shares of common
stock  in  escrow  with  three entities to be sold. Proceeds of the stock sales
from the escrow accounts are  placed  in separate escrow accounts to be used at
the Company's and the attorney's discretion. At September 30, 2003, there was a
balance  of 4,109,000 shares left in escrow.  During  the  three  months  ended
September  30,  2003, 84,000 shares were sold for proceeds of $60,880 at prices
ranging from $0.67  to  $0.83 per share. At September 30, 2003 there was $7,434
remaining in the escrow account.

During the three months ended  September  30,  2003, the Company issued 278,400
shares of restricted common stock to individuals  in  exchange  for $139,200 in
cash, at prices ranging from $0.50 per share.


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: November 17, 2003

                               International Automated Systems, Inc.

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