FORM 10-QSB/A

                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, 1996

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 Fork, Utah 84003
             (Address of principal executive offices)

Registrant's telephone number
including area code           (801)763-9965  

                    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, 1996, registrant had 9,186,100 shares
of common stock, no par value per share, issued and
outstanding after deducting shares held in the
corporate treasury. 




                                 
                                 
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
audit, 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, 1996, and the results of
its operations from June 30, 1995, through March 31,
1996, and from January 1,1996, through March 31, 1996,
and changes in its financial position from inception
through March 31, 1996, 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.  The financial statements in this
amendment have changed from those financial statements
included in the prior filing on Form 10-QSB/A for the
period ended March 31, 1996.  The primary changes were
caused by differing treatment of consulting services
which the Company performed for its major shareholder
during the periods shown in the financial statements.

     Registrant is a development stage company. 
Historically its primary activities have been research
and development for products based on high technology. 
Such development has significant risks.


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

     Liquidity and Capital Resources.  As of March 31,
1996, Registrant had cash of $236,142 compared to cash
of $10,049 as of June 30, 1995.  Cash increased because
of the sale of equity securities in the amount of
$706,000 yielding net proceeds after offering expenses
of approximately $680,000.  Inventory increased to
$189,650.  As of March 31, 1996, total current assets
were $455,064 and total assets were $626,043 compared
to total current assets $10,049 and total assets
$86,465 as of June 30, 1995.  As of March 31, 1996,
Registrant had total liabilities of $36,764 and
shareholders' equity of $497,526. As of June 30, 1995,
Registrant had total current liabilities of $153,964
and shareholders' equity of $(81,512).  The sale of
shares of common stock caused the increase in
shareholders' equity.  Funds from the sale of common
stock were used to pay expenses and reduce liabilities
including a note to a related party.  As of March 31,
1996, the ratio of current assets to current
liabilities was approximately 1.3 to one.  As of June
30, 1995, the Company was technically insolvent because
liabilities exceeded assets.

     
     Results of Operation.  For the quarter ended March
31, 1996, Registrant had total revenues of $46,200
compared to total revenues of $1,500 for the same
period a year earlier. The following comparisons all
relate to the three month period ended March 31, 1995. 
For the quarter ended March 31, 1996, Registrant had
total expenses of $213,963 compared to expenses of
$120,832 during the same quarter a year earlier.  The
increase in income reflects funds received from sales
of $44,700.  Cost of sales was  $24,987 and gross
profit was $21,213.  For the quarter ended March 31,
1996, Registrant had a net loss of $(185,616) compared
to a net loss of $(119,709) for the same quarter a year
earlier. The increase in net loss is attributable to
the increase in general and administrative expenses and
research and development expenses.  Net loss per share
was $(0.02) compared to $(0.01).  General and
administrative expenses were $51,692 and research and
development expenses were $161,197 compared to $109,589
and $10,781 respectively. Total expenses were $213,963
for the quarter compared to $120,832 for the same
quarter a year earlier.

For the nine period ended March 31, 1996, had total
revenues $68,721 compared total revenues of $4,500 for
the same period a year earlier.  Revenues increase
because of sales in the amount of $64,221.  Cost of
sales was $38,420.  Gross profit was $30,301.  All the
following comparisons relate to the nine month period
ended March 31, 1995, compared to the same nine month
period a year earlier.  Total expenses for nine month
period ended March 31, 1996, were $395,530 compared to
$152,545 for the same period a year earlier.  General
and administrative expenses declined to $94,705 from
$120,579 for the same period a year earlier.  Research
and development expenses increased significantly to
$298,467 compared to $30,579 for the same period a year
earlier.  The Company incurred substantial research and
development costs in its efforts to develop its
products.  For the nine month period the net loss was
$(358,766) compared to $(148,550) for the same period a
year earlier.  The loss for the ninth month period was
primarily attributable to the Company's increased
research and development expenses.  Net loss per share
was $(0.04) compared to $(0.02).  

Part II.
Item 1. Legal Proceedings.
     
     On July 2, 1996, the Company and its president
were
named as  defendants in a proposed class action lawsuit
filed on behalf of certain shareholders seeking damages
for violations of the federal securities laws.  The
Complaint was claims to be brought on behalf of all
persons and entities who purchased shares of common
stock of the Company during the period of May 13, 1996,
to June 27, 1996.  The suit seeks damages based on the
decrease in the Company's stock price in the trading
market because the Company made allegedly material
misrepresentations concerning new technology being
developed. On August 8, 1996, an amended complaint was
filed which increased the number of plaintiffs, added
and modified certain allegations, and changed the
proposed period from April 3, 1996, to June 27, 1996.
This lawsuit is in its preliminary stages.  The final
outcome of the litigation cannot be determined.  The
Company intends to defend vigorously the litigation. 
No provision for any liability that may result from any
adverse adjudication has been made in the accompanying
financial statements and any effect on future financial
statements is unknown.  The lawsuit is now captioned
Edouard Serfaty, David D. Baker, Michael Berry,
Margaret Moskes, Craig Swapp, Linda M. Baker, Robert H.
Baker, Kourosh Khalili and Ariel Tzadik, v.
International Automated Systems, Inc., and Neldon P.
Johnson, Civil No. 2:96 CV 0583 C, filed in the United
States District Court for the District of Utah, Central
Division.




Item 2. Changes in Securities.
     During the quarter Registrant issued 176,500
shares
of common stock, no par value per share.  The shares
were sold to a approximately nineteen investors at
$4.00 per share and the Company realized total proceeds
of $706,000 and net proceeds of approximately $680,000. 
In addition, the Company issued 3,000 shares for
services.

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


                                                     
March 31,                 June 30,
                                                        
  1996                     1995
                                              
                              ASSETS
Current Assets
     Cash                                     
$236,142                      $10,049
     Accounts receivable                                
22,013                     -   
     Inventory                                         
189,650                     -   
     Prepaid expenses                                   
 7,259                     -   
          Total Current Assets                         
455,064                   10,049

Property and Equipment
     Computer and electronic equipment                  
88,786                   51,302
     Furniture and fixtures                             
11,176                    3,591
     Automobiles                                        
21,657                   21,657
          Total Property and Equipment                 
121,619                   76,550

     Less: Accumulated depreciation                    
(31,563)                 (18,373)
          Net Property and Equipment                    
90,056                   58,177

Other Assets
     Rights to technology                               
96,458                   31,416
     Accumulated amortization                          
(15,535)                 (13,177)
          Other Assets, Net                             
80,923                   18,239

Total Assets                                            
     $     626,043            $     86,465

          LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)

Current Liabilities
     Accounts payable                         $         
 8,000     $              8,482
     Accrued expenses                                   
21,862                     -   
     Deferred revenue                                   
 3,500                    8,000
     Current portion - Long-term debt                   
 3,453                    3,453
     Note payable - related party                      
312,057                  134,029
          Total Current Liabilities                    
348,872                  153,964

Long Term Debt                                          
11,449                   14,013

Stockholders' (Deficit)
     Preferred stock, Class A, no par value, 5,000,000
         shares authorized, no shares issued or
outstanding               -                  -   
     Common stock, no par value, 45,000,000 shares
         authorized, 9,189,956 and 9,013,456 shares
issued
         and outstanding at March 31, 1996 and June 30,
1995,
         respectively.                               
1,078,599                  372,599
     Less: Treasury stock                               
(3,325)                  (3,325)
     Deficit accumulated during the development stage   
           (809,552)           (450,786)
          Total Stockholders' Equity (Deficit)          
  265,722               (81,512)

Total Liabilities and Stockholders' Equity (Deficit)    
     $     626,043            $     86,465

See the accompanying notes to the condensed financial
statements.
                 INTERNATIONAL AUTOMATED SYSTEMS, INC.
                     (A Development Stage Company)
                  CONDENSED STATEMENTS OF OPERATIONS
                              (Unaudited)


                                                        
                                                        
 For the Period
                                                        
                                                        
 From Inception
                                                        
                                                        
     (September
                                                        
                                                        
            26,
1986)
                                             Three
Months Ended                                           
Nine Months Ended                       Through
                                             March 31,  
                                                   
March 31,                           March 31,
                                        1996            
1995              1996                1995              
           1996
Revenue
  Sales                    $          44,700 $          
- - -    $          64,221     $          -        $        
         64,221
  Equipment lease income               1,500           
1,500             4,500               4,500             
          16,500
     Total Revenue                    46,200           
1,500            68,721               4,500             
          80,721

Cost of Sales                         24,987            
- - -               38,420                -                 
         38,420

Gross Profit                          21,213           
1,500            30,301               4,500             
          42,301

Expenses
  General and administrative                 51,692     
            109,589            94,705            
120,579               330,162
  Research and development           161,197          
10,781           298,467              30,579            
          496,910
  Amortization                         1,074            
 462             2,358               1,387              
         17,415
     Total Expenses                  213,963         
120,832           395,530             152,545           
           844,487

Other Income/(Expense)
  Interest income                      7,444            
- - -                7,444                -                 
          9,356
  Interest expense                      (310)           
  (377)                     (981)                   
(505)                        (16,722)
     Net Other Income/(Expense)              7,134      
     (377)                 6,463                        
     (505)                    (7,366)

Net Loss                   $        (185,616)      $  
(119,709)     $           (358,766)         $     
(148,550)    $                   (809,552)

Net Loss Per Common Share  $           (0.02)      $    
 (0.01)     $              (0.04)         $        
(0.02)    $                   (0.11)

Weighted Average Shares Outstanding               
9,158,089                   9,002,156               
9,056,729                 8,937,987               
7,199,279
 
See the accompanying notes to the condensed financial
statements.   
     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   8-14-96   

International Automated Systems, Inc.


By   Neldon Johnson   
President and Chief Executive Officer

By   Neldon Johnson  
Chief Financial Officer