UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                  FORM 10-QSB/A
                                (Amendment No. 1)

[X]  Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
     of 1934 for the quarterly period ended September 30, 1995.

[ ]  Transition Report under Section 13 or 15(d) of the Securities Exchange Act
     of 1934 for the transition period from _____________ to _______________.

Commission file number   0-23862  
                       --------------

                              fonix corporation
------------------------------------------------------------------------------
             (Exact name of small business issuer in its charter)

        Delaware                                                22-2994719
----------------------                                 -----------------------
(State of Incorporation)                                    (I.R.S. Employer
                                                           Identification No.)

                   60 East South Temple Street, Suite 1225
                          Salt Lake City, Utah 84111
------------------------------------------------------------------------------
             (Address of principal executive offices and zip code)

                               (801) 328-0161
                              -----------------
                         (Issuer's telephone number)

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or Section 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.  Yes [X] or
No [ ]

As of November 13, 1995, 26,589,355 shares of the issuer's Common Stock, par
value $.0001 per share, were issued and outstanding.

Transitional Small Business Disclosure Format (Check one):  Yes [ ] or No [X]  

<PAGE>

                  PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

     The financial statements required by item 310(b) of Regulation S-B
     follow immediately.





















                                       2
<PAGE>
                               fonix corporation
                        [A Development Stage Company]
			
                     CONDENSED CONSOLIDATED BALANCE SHEET
                                 [Unaudited]

                                    ASSETS               
                                                                 September 30, 
                                                                     1995
                                                                --------------
Current assets:			
     Cash                                                       $   3,568,804 
			
     Interest receivable                                               12,906 
                                                                --------------
          Total Current Assets                                      3,581,710 
			
Intangible assets, net                                                 23,346 
                                                                --------------
                                                                $   3,605,056
                                                                ==============
			
                    LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:			
     Notes payable                                              $   4,190,498 
     Accounts payable                                               1,424,947 
     Accrued expenses                                                 124,976 
                                                                --------------
          Total Current Liabilities                                 5,740,421 
                                                                --------------
Commitments and contingencies                                            -   

Stockholders' deficit:			
     Preferred stock                                                     -   
     Common stock                                                       2,359 
     Additional paid-in capital                                     8,773,633 
     Accumulated deficit                                          (10,911,357)
                                                                --------------
          Total stockholders' deficit                              (2,135,365)

                                                                $   3,605,055 
                                                                ==============


   See accompanying notes to condensed consolidated financial statements

                                       3
<PAGE>
                              fonix corporation
                       [A Development Stage Company]
     
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 [Unaudited]
<TABLE>
<CAPTION>

  
                                                                                                                  October 1,  
                                                  Three months ended                  Nine months ended              1993
                                                     September 30,                      September 30,           (Inception) to
                                            -------------------------------   -------------------------------    September 30,
                                                 1995            1994              1995             1994             1995
                                            --------------   --------------   --------------   --------------   --------------
<S>                                         <C>              <C>              <C>              <C>              <C>            
Revenues                                    $        -       $        -       $        -       $        -       $        -   
                                            --------------   --------------   --------------   --------------   --------------
Expenses:											
   General and administrative                   2,781,041          313,378        3,287,356          991,803        5,502,849 
   Research and development                       691,055          776,000        1,856,529        1,534,000        5,265,350 
                                            --------------   --------------   --------------   --------------   --------------
      Total expense                             3,472,096        1,089,378        5,143,885        2,525,803       10,768,199 
                                            --------------   --------------   --------------   --------------   --------------
Loss from operations                           (3,472,096)      (1,089,378)      (5,143,885)      (2,525,803)     (10,768,199)
                                            --------------   --------------   --------------   --------------   -------------- 

Other income (expense):
   Interest income                                 49,991              837          120,763              837          141,032 
   Interest (expense)                             (78,556)         (14,467)        (191,286)         (41,217)        (284,190)
                                            --------------   --------------   --------------   --------------   -------------- 
      Total other income (expense)                (28,565)         (13,630)         (70,523)         (40,380)        (143,158)
											
Loss before income taxes                       (3,500,661)      (1,103,008)      (5,214,408)      (2,566,183)     (10,911,357)
											
Current tax expense                                  -                -                -                -                -   
											
Deferred tax expense                                 -                -                -                -                -   
                                            --------------   --------------   --------------   --------------   --------------
Net Loss                                    $  (3,500,661)   $  (1,103,008)   $  (5,214,408)   $  (2,566,183)   $ (10,911,357)
                                            --------------   --------------   --------------   --------------   --------------
Loss per share                              $       (0.16)   $       (0.06)   $       (0.27)   $       (0.20)   $       (0.70)
                                            --------------   --------------   --------------   --------------   --------------
Weighted average shares                        21,580,689       17,064,631       19,638,187       12,741,186       15,696,700 
                                            ==============   ==============   ==============   ==============   ==============
</TABLE>

    See accompanying notes to condensed consolidated financial statements
                            
                                       4
<PAGE>
                               fonix corporation 
                         [A Development Stage Company]
 
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
              Increase (Decrease) in Cash and Cash Equivalents
                                  [Unaudited]
<TABLE>
<CAPTION>

                                                                                          
                                                                                                   October 1,
                                                                   Nine months ended                  1993
                                                                      September 30,              (Inception) to
                                                           ---------------------------------      September 30,
                                                                1995               1994               1995
                                                           --------------     --------------     --------------
<S>                                                        <C>                <C>                <C>
Cash flows from operating activities:
   Net loss                                                $  (5,214,407)     $  (2,566,183)       (10,911,357)
   Adjustments to reconcile net loss                                                                    
     to net cash used in operations:                                                                    
        Common stock issued for non-cash                       2,442,900            255,000          2,697,900 
        Write-off of assets received in                                                            
          acquisition                                               -                  -                 1,281 
        Depreciation                                                 708               -                   708 
        Changes in assets and liabilities:                                                         
           (Increase) in interest receivable                      (8,509)              (837)           (12,906)
           Increase (decrease) in accounts payable             1,363,274            477,851          2,842,046 
           Increase in accrued expenses                           59,103             31,364            131,881 
           (Decrease) in cash overdraft                             -                    (6)              -   
                                                           --------------     --------------     -------------- 
              Net cash used in operating activities           (1,356,931)        (1,802,811)        (5,250,447)
                                                           --------------     --------------     --------------

Cash flows from investing activities
           (Increase) in intangible assets                       (24,053)              -               (24,053)
                                                           --------------     --------------     --------------  
              Net cash used in investing activities              (24,053)              -               (24,053)
                                                           --------------     --------------     --------------   
Cash flows from financing activities:									
   Proceeds  from notes payable                                2,131,416          1,159,610          5,656,754 
   (Repayment) of notes payable                                 (514,268)          (801,989)        (1,316,257)
   Proceeds from issuance of                                                                  
     common stock                                              1,186,751          2,210,175          4,502,806 
                                                           --------------     --------------     -------------- 
              Net cash provided by                                                   
                financing activities                           2,803,899          2,567,796          8,843,304 
                                                           --------------     --------------     --------------  
              Net Increase in cash                             1,422,915            764,985          3,568,804 
									
Cash at beginning of period                                    2,145,889               -                  -   
                                                           --------------     --------------     -------------- 
Cash at End of Period                                      $   3,568,804      $     764,985          3,568,804 
                                                           ==============     ==============     ==============
</TABLE>

                                  [Continued]

                                       5
<PAGE>
                               fonix corporation 
                         [A Development Stage Company]
 
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
             Increase (Decrease) in Cash and Cash Equivalents
                                  [Unaudited]
<TABLE>
<CAPTION>

                                                                                          
                                                                                                   October 1,
                                                                   Nine months ended                  1993
                                                                      September 30,              (Inception) to
                                                           ---------------------------------      September 30,
                                                                1995               1994               1995
                                                           --------------     --------------     --------------
<S>                                                        <C>                <C>                <C>
Supplemental disclosure of cash flow information:
 
    Cash paid during the year for: 
 
          Interest paid                                     $    132,183      $        -         $     152,309 
											
          Income taxes paid                                 $       -         $        -         $        -   

Supplemental Schedule of Non-cash Investing and
   Financing Activities:
 
          For the Nine Months Ended September 30, 1995:
 
          The Company issued 3,700,000 warrants to purchase common stock, to a related company controlled by the
          majority shareholders of the Company, in payment of accrued management fees of $122,100 included in
          accounts payable.
 
          The Company issued 3,700,000 shares of common stock upon the conversion of warrants for non-cash
          cancellation of $1,295,000 in accounts payable.
 
          For the Nine Months Ended September 30, 1994: 

          During July, 1994 the Company converted $150,000 of notes payable and $6,905 of accrued interest
          payable to restricted common stock. 

          On June 17, 1994, Taris, Inc., issued 10,395,249 shares of common stock in exchange for all of the
          issued stock of Phonic Technologies, Inc.  Inasmuch as the 10,395,249 shares of common stock is deemed
          to have acquired Taris, Inc.  Taris, Inc. had the following assets and liabilities at the transaction date:

                    Total assets                             $    1,281
                                                             -----------
                    Net assets purchased                          1,281
                                                             -----------
                    Fair value of common stock issued        $    1,281
                                                             -----------
</TABLE>

          See accompanying notes to consolidated financial statements

                                       6
<PAGE>

                               fonix corporation
                        [A Development Stage Company]

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Basis of Presentation - The accompanying financial statements have been
     prepared by the Company without audit.  In the opinion of management, all
     adjustments (which included only normal recurring adjustments) necessary
     to present fairly the financial position, results of operations and cash
     flows for all periods presented, have been made.

     Certain information and footnote disclosures normally included in
     financial statements prepared in accordance with generally accepted
     accounting principles have been condensed or omitted in the accompanying
     interim financial statements.  It is suggested that these condensed
     consolidated financial statements be read in conjunction with the
     financial statements and notes thereto included in the Company's December
     31, 1994 audited financial statements.  The results of operations for the
     periods ended September 30, 1995 and 1994 are not necessarily indicative
     of the operating results for the full year.

     Research and Development - All monies that go to the unaffiliated research
     and development entity are considered research and development costs and
     are charged to research and development expense as incurred.  None of
     these costs are capitalized since the Company does not have a product that
     meets the capitalization requirements.  

NOTE 2 - NOTES PAYABLE

     The Company has the following notes payable at September 30, 1995:

         Revolving Note, $3,568,637 to a
         bank at an interest rate of 7.50% due
         December 1, 1995, secured by certificate
         of deposit in the amount of $3,568,800.            $ 3,568,637
     
         Note payable to an officer/shareholder
         at an interest rate of 6%, due 
         December 31, 1995, unsecured.                          286,493

         Note payable to a related company at an
         interest rate of 6%, due December 31, 1995,
         unsecured.                                             285,368

                                       7
<PAGE>
                               fonix corporation
                        [A Development Stage Company]

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          
NOTE 2 - NOTES PAYABLE (Continued)
          
         Note payable to an unrelated party at an
         interest rate of 10%, due December 1, 1995.             50,000
                                                            ------------ 
                                                            $ 4,190,498
                                                            ============
NOTE 3 - RELATED PARTIES

     The Company recorded the following expenses for services rendered and
     recorded the following balances which were payable to a company owned by
     the majority shareholders for the three months ended, and nine months
     ended, September 30, 1995

<TABLE>
<CAPTION>
     
                                                 Three months ended     Nine months ended
                                                 September 30, 1995     September 30, 1995
                                                 ------------------     ------------------
           <S>                                   <C>                    <C>
           Expenses:
                  Management fees expense        $      150,000         $       450,000
                  Interest expense                        4,860                   8,427
                  Rent expense                            6,000                  18,000 

           Payables:
                  Accounts payable               $      581,920         $       581,920
                  Accrued interest payable               19,298                  19,298
                  Notes payable                         285,368                 285,368
</TABLE>

     The Company rents office space from a company owned by the majority
     shareholders under a month-to-month lease for $2,000 per month.

     The Company had a note payable at September 30, 1995 to an officer and
     shareholder of the Company totaling $286,493.  Interest expense for the
     three months ended September 30, 1995 totaled  $5,273, and year to date
     interest expense was $17,098.  Accrued interest payable at September 30,
     1995 totaled $65,715.  Subsequent to September 30, 1995, the note payable
     of $286,493 along with the accrued interest of $65,715, were forgiven by
     the officer and shareholder of the Company, and accounted for as a
     contribution to additional paid in capital.  See Note 9.

     The Company had a note payable to a company owned by the majority
     shareholders at September 30, 1995 of $285,368.  Interest expense totaled
     $4,860 for the three months ended September 30, 1995, and year to date
     interest expense totaled $8,427.  Accrued interest totaled $19,298 at
     September 30, 1995.  Subsequent to September 30, 1995, $135,368 of the

                                       8
<PAGE>
                               fonix corporation
                        [A Development Stage Company]

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - RELATED PARTIES (Continued)

     $285,368 note payable, along with the accrued interest of $19,298, were
     forgiven by a majority shareholder of the Company, and accounted for as a
     contribution to additional paid in capital. See Note 9.

NOTE 4 - RESEARCH AND DEVELOPMENT

     On or about October 16, 1993, the Company entered into an agreement with
     a research and development entity whereby the entity is developing certain
     technology related to voice-activated computer hardware and software (the
     "VoiceBox Technology").  The president of the Company is one of seven
     members of the board of directors of the research and development entity,
     and the majority shareholders of the Company own less than five percent of
     the common stock of the research and development entity.  Under the terms
     of  the agreement, the Company owns all technology and technology rights
     that are developed by the entity.  The Company agreed to provide all
     funding necessary for the entity to develop a commercially viable product. 
     There is no minimum requirement or limit with respect to the amount of the
     funding to be provided by the Company.  However, under the terms of the
     agreement the Company is obligated to use its best efforts in raising the
     necessary funding for the development, manufacturing and marketing of the
     VoiceBox technology.  The Company has not yet completed the research and
     development of its product, and consequently, has not recorded any
     revenues from sales.  Under the terms of the agreement the Company paid
     $691,055 to the research and development entity for research and
     development for the three months ended September 30, 1995, and $1,856,529
     for the nine months ended September 30, 1995.

     The Company presently anticipates that it will complete alpha testing and
     begin beta testing of its voice-activated computer hardware and software
     sometime during the second quarter of 1996.  Following sufficient time for
     beta testing results to be collected and appropriate adjustments made, the
     Company presently projects that a viable product will be ready for market
     introduction by the end of 1996.  If and when sales of such a product
     commence, the Company will pay the unaffiliated research and development 
     entity a royalty fee amounting to ten percent (10%) of the sales price of
     each unit sold. 

NOTE 5 - STOCK OPTIONS AND WARRANTS

     As part of the September 30, 1994 restated stock purchase agreement, the
     Company granted a shareholder (Rolcan Finance, Ltd.) the right to purchase
     500,000 warrants for the purchase

                                       9
<PAGE>

                               fonix corporation
                        [A Development Stage Company]

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - STOCK OPTIONS AND WARRANTS (Continued)

     of Reg-S common stock, each warrant entitling the holder thereof to
     purchase one share of common stock.  The total purchase price for the
     500,000 warrants is $50,000.  If the 500,000 warrants are purchased, they
     can be exercised at any time after purchase at $1.00 per share of
     restricted common stock.  The warrants, as well as the right to purchase
     the warrants, expire in December 1995.

     In October 1994, the Company granted 150,000 warrants to purchase
     restricted common stock.  Due to the limited cash funds of the Company,
     these warrants were granted in lieu of cash for previous and future
     services.  The 150,000 outstanding warrants have an option price of $2.00
     per share and expire in December 1997.

     In November 1994, the Company granted the right to purchase warrants for
     the purchase of an aggregate of 155,000 shares of restricted common stock
     to certain individuals, including warrants for 30,000 shares to three
     directors.  In October 1995, certain of these individuals were granted the
     right to purchase warrants to purchase an additional 185,000 shares of
     restricted common stock.  In order to preserve the Company's limited cash,
     warrants were granted in lieu of cash for services rendered to the
     Company.  The  warrants can be purchased for $.033 per share of common
     stock and can be exercised at $.50 per share of common stock.  On October
     30, 1995, one of these individuals purchased and exercised 50,000 of these
     warrants for an exercise price of $.50 per share.  None of the other
     warrants have been purchased.  The warrants, as well as the right to
     purchase the warrants, expire in December, 1997.

     In April 1995, all of the disinterested directors of the Company approved
     the issuance of warrants to purchase 3,700,000 shares of common stock to
     an entity controlled by the majority shareholders of the Company with the
     right to convert that entity's accrued management fees due from the
     Company for the purchase of 3,700,000 warrants and the exercise price of
     the warrants.  The warrants were offered in April 1995, purchased on  July
     31, 1995 for a purchase price of $.033 per warrant and were then
     exercised on August 11, 1995 at $.35 per share.  The related entity
     controlled by the majority shareholders of the Company canceled invoices
     for $1,417,100 in management fees due from the Company as consideration
     for the warrants and the exercise price of the warrants.  The exercise
     price was less than the market price of the Company's common stock
     because, among other reasons, the shares issued upon exercise of the
     warrants are restricted shares.  In addition, the exercise price was
     offered as an incentive to help the Company in relieving debt and
     preserving limited cash by converting payables to common stock.

                                      10
<PAGE>
                               fonix corporation
                        [A Development Stage Company]

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - STOCK OPTIONS AND WARRANTS (Continued)

     On April 3, 1995 three non-related individuals were offered and purchased
     120,000 warrants for restricted common stock in connection with a stock
     purchase agreement.  The warrants were purchased at $.0033 per share with
     an exercise price of $2.00 per share.  The warrants are exercisable
     anytime prior to April 3, 1996.    
       
NOTE 6 - INCOME TAXES

     Income taxes are recorded in accordance with Statement of Financial
     Accounting Standards No. 109, Accounting for Income Taxes [FASB 109].  In
     accordance with FASB 109, the Company recognizes a liability or asset for
     the deferred tax consequences of all temporary differences between the tax
     bases of assets or liabilities and their reported amounts in the
     financial statements.

     The Company has available at September 30, 1995, unused operating loss
     carryforwards of approximately $8,700,000 which may be applied
     against future taxable income and which expire in various years beginning
     in 2000 through 2010.  The amount of and ultimate realization of the
     benefit from the operating loss carryforwards for income tax purposes is
     dependent, in part, upon the tax laws in effect, the future earnings of
     the Company, and other future events, the effects of which cannot be
     determined.  Because of the uncertainty surrounding the realization of the
     loss carryforwards the Company has established a valuation allowance of
     approximately $2,100,000 which is equal to the tax effect of the loss
     carryforwards and,therefore, no deferred tax asset has been recognized.

NOTE 7 - GOING CONCERN

     The accompanying consolidated financial statements of fonix corporation
     have been prepared on a going-concern basis, which contemplated profitable
     operations and the satisfaction of liabilities in the normal course of
     business.  There are uncertainties that raise substantial doubt about the
     ability of the Company to continue as a going concern.  As shown in the
     consolidated statements of operations, the Company reported a loss of
     $3,500,661 for the three months ended September 30, 1995, and $5,214,407
     for the nine months ended September 30, 1995.  As of September 30, 1995,
     the Company has a working capital deficit of $2,158,711.

     Management presently believes that the Company is in the final development
     stage of its voice-activated computer software and hardware.  Although
     there has been substantial

                                      11
<PAGE>
                               fonix corporation
                        [A Development Stage Company]

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - GOING CONCERN (Continued)

     progress in the development of this technology, the Company does not have
     a viable product, and has not had any sales and there can be no assurance
     that the Company will develop a viable product or have any sales. 
     Management plans to continue financing the development of the Company's
     technology through additional loans and/or sales of the Company's equity
     securities.

     The Company's continuation as a going concern is dependent upon its
     ability to satisfactorily meet its debt obligations, meet its product
     development goals, secure adequate new financing and generate sufficient
     cash flows from operations.  The financial statements do not include any
     adjustments that might result from the outcome of these uncertainties.

NOTE 8 - CONTINGENCIES

     Prior to the merger in June 1994, the former attorney of the Company
     caused the transfer agent to issue a certificate for 138,389 shares of
     common stock.  The Company did not approve or properly authorized the
     issuance of  this certificate or the shares represented by the
     certificate, nor did the Company  receive consideration from the attorney. 
     These shares are not included as issued and outstanding shares in the
     accompanying financial statements.

NOTE 9 - SUBSEQUENT EVENTS

     Issuance of Stock and Debenture - In October 1995, the Company entered
     into a funding arrangement with a private investment entity.  Under terms
     of the agreement, the investor agreed to fund the Company with $6,050,000
     over an 11 month period. $500,000 of the $6,050,000 was paid to the
     Company on October 23, 1995 as consideration for the issuance of a Series
     A Subordinated Convertible Debenture, due on October 23, 1996, with an
     annual interest rate of 5%.  This debenture may be converted to Series A
     Preferred Stock at $3.00 per share any time after the Company's
     shareholders and board of directors authorize the issuance of the
     Company's Series A Preferred Stock but before the maturity date of the
     Debenture.  The remaining $5,550,000 will be paid as consideration for a
     total of 11,562,500 shares of the Company's common stock.  Of that
     $5,550,000 amount, $1,040,000 was paid by the investment entity on October
     23, 1995, in exchange for which the Company issued 2,166,667 shares of
     common stock.  The remainder of the purchase price for the common stock is
     payable over a period of 11 months as the Company meets certain
     development achievements.  Shares of common stock will be issued in
     amounts corresponding to the dollar amount of payments made to the Company
     during that 11 month payment period.

                                      12
<PAGE>
                               fonix corporation
                        [A Development Stage Company]

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - SUBSEQUENT EVENTS (Continued)  

     Also, subsequent to September 30, 1995, the Company issued an additional
     566,039 shares of common stock to a private investor pursuant to a stock
     purchase agreement for total proceeds of $300,000.

     Forgiveness of Debt - In October, 1995 two related parties forgave debts
     owed by the Company totaling $506,874.  Such debt was payable in full on
     or before December 31, 1995.  (See Note 3 - Related Parties)

NOTE 10 - RESTATEMENT OF FINANCIAL STATEMENTS

     As discussed in Note 5, the company issued 3,700,000 shares of common
     stock to an affiliated corporation upon exercise of stock warrants.  The
     exercise price was paid for through the cancellation of debt which had
     previously been accrued for management fees by the corporation.  In
     retrospect, Management believes that the provisions of APB Opinion No. 25,
     which applies to stock issued to employees for services, should be
     extended to cover this transaction.  Accordingly, the Company has recorded
     an additional compensation expense of $2,282,900 and adjusted additional
     paid in capital on the financial statements for 1995.  Management believes
     this adjustment is necessary to be consistent with current attitudes and
     policies in effect in subsequent years.  This adjustment has no effect on
     total stockholders' equity but does result in an increase to net loss for
     the three months ended September 30, 1995.





                                      13
<PAGE>

Item 2.  Management's Plan of Operation.

     The Company is a development stage business which has been involved in the
research and development of proprietary computer natural language voice
recognition hardware, software and firmware technology.  Because the Company
still is in the research and development stage of its business, the Company has
not yet marketed or distributed its voice recognition product.  Therefore, the
Company has had no revenue from its operations and has not had revenue from
operations during the past two fiscal years.

     In October 1993, the Company entered into an agreement with a research and
development entity.  The president of the Company is one of seven members of the
board of directors of the research and development entity, and the majority
shareholders of the Company own less than five percent of the common stock of 
the research and development entity.  Under the terms of this agreement, the 
entity is wholly responsible for the development of the computer voice 
recognition technology.  If and when the product is completed and sold, the 
entity will receive a royalty of 10% of total sales.  The Company owns all the 
technology and all the rights associated with the technology that is developed 
by the entity. The Company is responsible for providing the funding for the 
development of the product.  There is no minimum requirement or limit with 
respect to the amount of funding.  However, the Company is obligated to use its
best efforts in raising the necessary funding for the development, manufacturing
and marketing of the fonix technologies, hereafter referred to as "VoiceBox."  
The amounts of payments sent to the entity pursuant to the agreement are 
determined as it submits weekly work orders and required budgets, which are then
 reviewed and approved by the Company.  All monies sent to the entity are 
accounted for strictly as research and development expense, since the product 
has not yet been completed.

     The Company has incurred research and development expenses of $691,055 and
$776,000 for the three months ended, September 30, 1995 and 1994 respectively. 
General and administrative expenses (which consist primarily of management fees
and legal fees), for the same three month periods were $2,781,041 and $313,378
in 1995 and 1994 respectively.  Due to these significant research and 
development and general and administrative expenses, with no revenue, the 
Company incurred losses of $3,500,661 and $1,103,008 for the three months ended 
September 30, 1995 and 1994 respectively.  At September 30, 1995, the Company 
had an accumulated deficit of $10,911,357 and a  stockholders' deficit of 
$2,135,365.  The Company anticipates similar losses in the future as it 
continues the development of VoiceBox and expects such losses to continue until 
the Company's product is completed and significant sales revenues are realized. 
There can be no assurance, however, that the Company will successfully complete 
the development of a product incorporating its voice recognition technology or 
that such product, if completed, can be successfully marketed.

     The Company presently expects to finish the alpha testing and to begin beta
testing of the voice recognition technology sometime during the second quarter
of 1996.  Upon completion of the alpha and beta testing, the Company intends to
begin manufacturing and marketing of VoiceBox through OEM contracts and directly

                                      14
<PAGE>
to distributors.  However, significant amounts of capital will be necessary to
complete the alpha testing and to begin beta testing prior to the manufacturing
and distribution of the product.  In addition, increased expenditures for sales
and marketing and other administrative areas will also be necessary for the
expansion of  the Company's business.  Accordingly, the Company expects that it
will continue to incur significant losses.

     From its inception, the Company's principal source of operating capital has
been borrowing from related parties and private sales of  the Company's equity
securities.  Outstanding debt and accrued interest from related parties totaled
$656,874 at September 30, 1995.  This debt consists of two revolving promissory
notes which accrue interest at an annual rate of 6%.  As part of an investment
agreement between the Company and a private investment entity, in October, 1995,
$506,874 of the $656,874 outstanding related-party debt was forgiven by the
related parties.  This transaction took place at the request of the private
investment entity to, among other things,  alleviate the Company's debt
obligations and to make the arrangement more attractive for the investor. 
Private sales of the Company's equity securities resulted in net proceeds of
$162,128 for the third quarter of 1995.

     The Company has a relationship with a local bank pursuant to which the
Company has entered into an agreement allowing it to borrow against its own 
funds on deposit with the bank.  At September 30, 1994, the Company had funds on
deposit of $818,000 and owed the bank a total of $775,860.  As of September 30,
1995, the Company has funds on deposit of $3,568,800 and the Company owes
$3,568,637 to the bank, which obligation matures December 1, 1995.  This
agreement is negotiated every three months, and at maturity, (December 1, 1995),
the Company will attempt to arrange for an additional three month term at a
similar, competitive interest rate.  The annual interest rate presently
applicable to this banking arrangement is 7.50%.  Interest is payable monthly 
and the principal amount is payable in full at maturity.

     In October 1995, the Company entered into a funding arrangement with a
private investment entity.  The terms of this agreement provide for $6,050,000
in funding over an eleven month term.  $500,000 of the $6,050,000 was received
on October 23, 1995 from the investment entity as consideration for the issuance
of a Series A Subordinated Convertible Debenture that is convertible into Series
A Preferred Stock at $3.00 per share any time after the Company's shareholders
and board of directors authorize the issuance of the Company's Series A 
Preferred Stock but before the maturity date of the Debenture.  The preferred 
stock may be converted to common shares on a one-for-one basis.  The Debenture 
is also presently convertible into shares of the Company's common stock at the 
rate of $3.00 per share.  The remaining $5,550,000 will be  for the purchase of
a total of 11,562,500 shares of the Company's common stock.  To date, $1,540,000
of the $6,050,000 has been received by the Company.  Of the $1,540,000 received 
to date, $500,000, was for the purchase of the Series A Subordinated Convertible
Debenture and $1,040,000 was for the issuance of 2,166,667 shares of the 
Company's common stock.  The remaining $4,510,000 of funding will be received on
a monthly basis over the an eleven month period as the Company  achieves certain
milestones which 

                                      15
<PAGE>
were agreed upon in the funding arrangement.  The remaining 9,395,833 shares of
the Company's common stock will be issued to the investor  as the remaining
$4,510,000 is received.  Under the terms of the contract, if the Company does 
not achieve the milestones which are specified in the contract, the investor is
not obligated to continue the funding.  In the event the investor stops funding,
the investor will receive an equal number of shares commensurate to the total 
funding invested.  Provided, however, that the Company timely achieves the 
developmental milestones set forth in the contract, the Company presently 
anticipates that it will be able to satisfy its cash requirements over the next 
12 months.
     
     Presently, since the Company has no operating revenue, the Company intends
to rely primarily on financing through the sale of its equity and debt
securities.  For so long as the Company continues to pursue the alpha and beta
testing, including additional research and development which may be required to
complete its voice recognition technology, the Company will continue to require
such debt and equity financing on a regular and continuing basis.  If and when
the Company successfully completes the development of the VoiceBox product, the
Company will seek to enter into either OEM or licensing agreements pursuant to
which royalty or other payments by third parties could provide a significant
amount of the financing necessary to manufacture and market the VoiceBox 
product. Such funds might alleviate the need for financing through additional 
sales of the Company's debt or equity securities.  Absent such OEM or licensing 
agreements,the Company anticipates it will need a significant amount of 
additional capital investment to finance the manufacturing, distribution and 
marketing of its VoiceBox product.  There can be no assurance that the Company 
will receive the necessary financing to develop and market its product from 
either OEM or licensing contracts or by the offer and sale of the Company's debt
or equity securities.

     The Company presently has a need for twelve additional engineers with
specific expertise in linguistic processing and neural net development.  These
persons will be hired as technology milestones are achieved which results in the
release of the additional funding from the private investment entity.  In
addition, if and when the product completes the alpha and beta testing,
approximately thirty more employees will be required for sales and marketing and
customer support services.  
     
     The Company has no plans to purchase any new plants or expand any existing
facilities.  However, new testing equipment is required and will be purchased as
sufficient capital is raised for its acquisition.


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<PAGE>

                          PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

      (a)     Exhibits required by Item 601 of Regulation S-B.

      Exhibit No              Description                       Page
      ----------              -----------                       ----
        (10)        Securities Purchase Agreement     Incorporated by reference
                    by and among the Company.         (Exhibit 99 to Current
                    Beesmark Investments, L.C.,       Report on Form 8-K
                    a Utah limited liability          dated as of October
                    company and Alan C. Ashton,       23, 1995)
                    dated as of October 23, 1995

      (b)     Reports on Form 8-K

          During the quarter ended September 30, 1995, the Company filed no
          Current Report on Form 8-K.



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<PAGE>

                                   SIGNATURES

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

          fonix corporation



 Date:    April 10, 1997                      /s/ Roger D. Dudley
      --------------------------          ---------------------------------- 
                                          Roger D. Dudley
                                          Chief Financial Officer 






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