Global Technologies Ltd · S-3 · On 10/11/96

Filed On 10/11/96   ·   SEC Files 33-86926, 333-02044, 333-14013   ·   Accession Number 898430-96-4764

Registration Statement for Securities Offered Pursuant to a Transaction   ·   Form S-3
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-3         Registration Statement for Securities Offered         37    232K 
                          Pursuant to a Transaction                              
 2: EX-5.1      Legal Opinion of Irell & Manella Llp                   1      8K 
 3: EX-10.2     Employment Agreement for Steven M. Fieldman           10     55K 
 4: EX-23.2     Consent of Kpmg Peat Marwick Llp                       1      5K 
 5: EX-23.3     Consent of Consent of Richard A. Eisner                1      6K 

S-3   ·   Registration Statement for Securities Offered Pursuant to a Transaction
Document Table of Contents

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 11, 1996  
                                            REGISTRATION NO.
------------------------------------------------------------------------------- 
------------------------------------------------------------------------------- 

SECURITIES AND EXCHANGE COMMISSION  
WASHINGTON, D.C. 20549  

--------------- 

FORM S-3  
REGISTRATION STATEMENT  
UNDER 
THE SECURITIES ACT OF 1933  

--------------- 

INTERACTIVE FLIGHT TECHNOLOGIES, INC. 

                                                                · Download Table

        DELAWARE                                          11-3197148      
                                                                          
(STATE OF INCORPORATION)                               (I.R.S. EMPLOYER   
                                                    IDENTIFICATION NUMBER)

4041 N. CENTRAL AVENUE, SUITE 2000  
PHOENIX, ARIZONA 85012  
(602) 200-8900  

--------------- 

MICHAIL ITKIS 
INTERACTIVE FLIGHT TECHNOLOGIES, INC. 
4041 N. CENTRAL AVENUE, SUITE 2000  
PHOENIX, ARIZONA 85012  
(602) 200-8900  
(AGENT FOR SERVICE) 

--------------- 

It is requested that copies of communications be sent to: 

THEODORE E. GUTH, ESQ.  
IRELL & MANELLA LLP 
1800 AVENUE OF THE STARS  
SUITE 900 
LOS ANGELES, CALIFORNIA 90067 
(310) 277-1010  

--------------- 

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time  
to time after the effective date of the Registration Statement as determined    
by market conditions.                                                           

If the only securities being registered on this form are being offered      
pursuant to dividend or interest reinvestment plans, please check the           
following box. [_]                                                              

If any of the securities being registered on this form are to be offered on 
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of  
1933, other than securities offered only in connection with dividend or         
interest reinvestment plans, check the following box. [X]                       

--------------- 

CALCULATION OF REGISTRATION FEE 

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                                                      PROPOSED MAXIMUM                               
                                                       OFFERING PRICE  PROPOSED MAXIMUM  AMOUNT OF   
  TITLE OF EACH CLASS OF SECURITIES    AMOUNT TO BE    PER WARRANT OR     AGGREGATE     REGISTRATION 
           TO BE REGISTERED             REGISTERED       PER SHARE      OFFERING PRICE      FEE      
-----------------------------------------------------------------------------------------------------
                                                                                                     
Redeemable Class B Warrants...........    275,000(2)       $ 6.50(1)      $1,787,500(1)  $  616.38   
-----------------------------------------------------------------------------------------------------
Class A Common Stock ($.01 par                                                                       
 value)(3)............................    275,000(3)       $14.69(1)      $4,039,750(1)  $1,393.02   
-----------------------------------------------------------------------------------------------------
Class A Common Stock ($.01 par                                                                       
 value)(4)............................  8,775,000(4)       $  --          $      --            -- (4)
-----------------------------------------------------------------------------------------------------
Redeemable Class B Warrants(5)........  1,550,000(5)       $  --          $      --            -- (5)
-----------------------------------------------------------------------------------------------------
Class A Common Stock ($0.1 par                                                                       
 value)(5)............................  3,100,000(5)       $  --          $      --            -- (5)
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------

(1) Estimated solely for purpose of determining the registration fee pursuant   
 to Rule 457(c) on the basis of the average of the high and low prices per
share of the Redeemable Class B Warrants and the Class A Common Stock   
reported on the Nasdaq SmallCap Market on October 8, 1996.              
(2) Warrants issued in an April 1996 private placement and registered for       
resale hereunder by the holders thereof.                                
(3) Shares issuable upon exercise of the Redeemable Class B Warrants described  
in (2) above.                                                           
(4) Shares issuable upon exercise of up to 8,775,000 outstanding Class B        
Warrants issued in prior public offerings and previously registered on  
Form SB-2, Registration Nos. 33-86926 and 333-02044, for which          
registration fees were previously paid. Pursuant to Rule 429, no        
additional registration fee is due.                                     
(5) Represents 1,550,000 Class B Warrants and 1,550,000 shares of Class A       
 Common Stock held by certain securityholders, and an additional 1,550,000
  shares of Class A Common Stock issuable upon exercise of such warrants, in
 each case previously registered for resale by the Selling Securityholders
on Form SB-2, Registration Nos. 33-86926 and 333-02044, for which       
registration fees were previously paid. Pursuant to Rule 429, no        
additional registration fee is due.                                     
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR    
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT      
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS              
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH     
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT  
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID  
SECTION 8(A), MAY DETERMINE.                                                    

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EXPLANATORY NOTE  

Pursuant to Rule 429 of the Securities Act of 1933, as amended, this        
Registration Statement relates to three different offerings, as follows:        

OFFERING #1: This Registration Statement relates to (i) 275,000 of the      
Company's redeemable class B warrants ("Class B Warrants") acquired by certain  
selling securityholders in a private placement in April 1996, and (iii)         
275,000 shares of Class A Common Stock underlying such Class B Warrants, all    
for resale from time to time by the selling securityholders.                    

The complete Prospectus relating to Offering #1 follows immediately after   
this Explanatory Note.                                                          

OFFERING #2: This Registration Statement also relates to up to 8,775,000    
shares of Class A Common Stock (the "Class B Warrant Stock") issuable upon      
exercise of the Company's outstanding Class B Warrants (excluding Class B       
Warrants held by the selling securityholders in Offerings #1 and #3). The       
issuance of the Class B Warrant Stock was previously registered in the          
Company's Registration Statement on Form SB-2, Registration No. 333-02044 (the  
"SB-2"), and is included in this Registration Statement to satisfy the          
Company's undertaking to file a post-effective amendment to the SB-2.           

The complete Prospectus relating to Offering #1 follows immediately after   
this Explanatory Note. Following the Prospectus for Offering #1 are pages       
(denoted as Alternate Offering #2 Pages) of the Prospectus relating solely to   
the Class B Warrant Stock, including an alternative cover page, and sections    
entitled "Use of Proceeds," "Dilution," "Plan of Distribution," "Concurrent     
Offerings" and "Legal Matters" to be used in lieu of the sections entitled      
"Use of Proceeds," "Dilution," "Selling Securityholders," "Plan of              
Distribution," "Blair Commission," "Concurrent Offerings" and "Legal Matters"   
in the Prospectus relating to Offering #1.                                      

OFFERING #3: This Registration Statement also relates to (i) 1,550,000 Class
B Warrants and 1,550,000 shares of Class A Common Stock issued upon exercise    
of certain redeemable class A warrants acquired by certain selling              
securityholders in connection with the Company's 1994 Bridge Financing and      
(ii) an additional 1,550,000 shares of Class A Common Stock underlying the      
aforementioned Class B Warrants, all for resale from time to time by the        
selling securityholders. The resale of the selling securityholder securities    
offered in Offering #3 was previously registered in the Company's Registration  
Statement on the above-described SB-2, and is included in this Registration     
Statement to satisfy the Company's undertaking to file a post-effective         
amendment to the SB-2.                                                          

The complete Prospectus relating to Offering #1 follows immediately after   
this Explanatory Note. Following the Prospectus for Offering #1 are pages       
(denoted as Alternate Offering #3 Pages) of the Prospectus relating solely to   
the resale of the selling securityholder securities offered in Offering #3,     
including an alternative cover page, and sections entitled "Use of Proceeds,"   
"Dilution," "Selling Securityholders," "Concurrent Offerings" and "Legal        
Matters" to be used in lieu of the sections entitled "Use of Proceeds,"         
"Dilution," "Selling Securityholders," "Concurrent Offerings" and "Legal        
Matters" in the Prospectus relating to Offering #1.                             

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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A         +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE   +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY  +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT        +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR   +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE      +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE    +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF  +
+ANY SUCH STATE.                                                               +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED OCTOBER   , 1996 
PROSPECTUS

INTERACTIVE FLIGHT TECHNOLOGIES, INC. 

275,000 REDEEMABLE CLASS B WARRANTS 
275,000 SHARES OF CLASS A COMMON STOCK

This Prospectus relates to 275,000 Redeemable Class B Warrants (the "Class B
Warrants") of Interactive Flight Technologies, Inc., a Delaware corporation     
(the "Company"), held by two holders (the "Selling Securityholders"), and the   
275,000 shares of Class A Common Stock, $.01 par value ("Class A Common         
Stock"), issuable upon the exercise of such 275,000 Class B Warrants. The       
275,000 Class B Warrants held by the Selling Securityholders are sometimes      
referred to herein as the "Selling Securityholder Warrants" and, together with  
the shares of Class A Common Stock issuable upon exercise of the Selling        
Securityholder Warrants, the "Selling Securityholder Securities." The Selling   
Securityholder Warrants were issued to the Selling Securityholders in exchange  
for certain services rendered to the Company. See "Selling Securityholders" and 
"Plan of Distribution." Each Class B Warrant entitles the holder to purchase    
one share of Class A Common Stock, at an exercise price of $9.75, subject to    
adjustment, at any time until March 6, 2000. The Class B Warrants are subject   
to redemption by the Company for $.05 per Warrant, upon 30 days' written        
notice, if the average closing bid price of the Class A Common Stock exceeds    
$13.65 per share (subject to adjustment) for 30 consecutive business days       
ending within 5 days of the date of the notice of redemption.                   

----------- 

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" 
ON PAGE 6.

----------- 

The Class A Common Stock and the Company's Class B Common Stock, $.01 par   
value (the "Class B Common Stock"), are essentially identical, except that the  
Class B Common Stock has six votes per share and the Class A Common Stock has   
one vote per share on all matters upon which stockholders may vote. The holders 
of Class B Common Stock, the majority of whom are executive officers, directors 
and/or principal stockholders of the Company, control approximately 65% of the  
total voting power and therefore are able to elect all of the Company's         
directors and control the Company.                                              

The securities offered by the Selling Securityholders by this Prospectus may
be sold from time to time by the Selling Securityholders or by their            
transferees. The distribution of the Selling Securityholder Warrants and the    
Class A Common Stock offered hereby by the Selling Securityholders may be       
effected in one or more transactions that may take place on the over-the-       
counter market, including ordinary brokers' transactions, privately negotiated  
transactions or through sales to one or more dealers for resale of such         
securities as principals, at market prices prevailing at the time of sale, at   
prices related to such prevailing market prices or at negotiated prices. Usual  
and customary or specifically negotiated brokerage fees or commissions may be   
paid by the Selling Securityholders.                                            

The Selling Securityholders, and intermediaries through whom such securities
are sold, may be deemed underwriters within the meaning of the Securities Act   
of 1933, as amended (the "Securities Act"), with respect to the securities      
offered, and any profits realized or commissions received may be deemed         
underwriting compensation. The Company has agreed to indemnify the Selling      
Securityholders against certain liabilities, including liabilities under the    
Securities Act.                                                                 

The Company will not receive any of the proceeds from the sale of securities
by the Selling Securityholders. In the event all of the Selling Securityholder  
Warrants are exercised, the Company will receive gross proceeds of $2,681,250,  
less payment of applicable commissions to D.H. Blair Investment Banking Corp    
("Blair"). See "Selling Securityholders," "Plan of Distribution" and "Blair     
Commission."                                                                    

The Class A Common Stock and the Class B Warrants are traded on the Nasdaq  
SmallCap Market ("Nasdaq"). On October  , 1996, the closing sale price of the   
Class A Common Stock on Nasdaq was $   per share and the closing sale price of  
the Class B Warrants on Nasdaq was $  .                                         

THESE  SECURITIES HAVE NOT BEEN APPROVED  OR DISAPPROVED BY THE  SECURITIES AND 
EXCHANGE  COMMISSION  OR   ANY  STATE  SECURITIES  COMMISSION   NOR  HAS  THE 
SECURITIES  AND EXCHANGE  COMMISSION  OR  ANY  STATE SECURITIES  COMMISSION 
PASSED  UPON   THE  ACCURACY   OR  ADEQUACY   OF  THIS   PROSPECTUS.  ANY 
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.                     

The date of this Prospectus is     , 1996.

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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY      
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS   
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN   
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING  
BEEN AUTHORIZED BY THE COMPANY, THE SELLING SECURITYHOLDERS OR ANY              
UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE          
HEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE ANY IMPLICATION THAT THERE HAS    
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS        
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY        
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH  
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO    
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH SOLICITATION.                        

AVAILABLE INFORMATION 

The Company is subject to the informational requirements of the Securities  
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance        
therewith, files reports and other information with the Securities and          
Exchange Commission (the "Commission"). Reports and other information filed by  
the Company with the Commission pursuant to the informational requirements of   
the Exchange Act may be inspected and copied at the public reference            
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,   
Washington, D.C. 20549, and at its Regional Offices at (i) Northwest Atrium     
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, (ii) 7    
World Trade Center, 13th Floor, New York, New York 10048, and (iii) 5757        
Wilshire Boulevard, Suite 500, Los Angeles, California 90036. Copies of such    
material may be obtained from the Public Reference Section of the Commission    
at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The     
Commission also maintains a Web site that contains reports, proxy statements,   
information statements and other information regarding registrants that file    
electronically with the Commission. Such reports, proxy statements,             
information statements and other information may be found the Commission's      
site address, http://www.sec.gov. The Class A Common Stock and the Class B      
Warrants are listed on the Nasdaq SmallCap Market ("Nasdaq") and reports,       
proxy statements and other information regarding the Company can be inspected   
at the offices of such exchange.                                                

The Company has filed with the Commission a Registration Statement on Form  
S-3 (together with all amendments and exhibits thereto, the "Registration       
Statement") under the Securities Act, with respect to the Securities offered    
hereby. This Prospectus does not contain all of the information set forth in    
the Registration Statement and the exhibits thereto, as permitted by the rules  
and regulations of the Commission. For further information with respect to the  
Company and the Securities, reference is hereby made to the Registration        
Statement, including the exhibits filed or incorporated as a part thereof.      
Statements contained herein concerning the provisions of any document are not   
necessarily complete and in each instance reference is made to the copy of the  
document filed as an exhibit to the Registration Statement. Each such           
statement is qualified in its entirety by reference to the copy of the          
applicable documents filed with the Commission.                                 

DOCUMENTS INCORPORATED BY REFERENCE 

The following documents heretofore filed by the Company under the Exchange  
Act with the Commission are incorporated herein by reference: (1) the           
Company's Annual Report on Form 10-KSB for the fiscal year ended October 31,    
1995, and Amendment No. 1 to the Annual Report on Form 10-KSB/A for the fiscal  
year ended October 31, 1995; (2) the Company's Quarterly Reports on Form 10-    
QSB dated January 31, 1996, April 30, 1996 and July 31, 1996; and (3) the       
description of the Company's Common Stock as set forth in the Company's         
registration statement on Form 8-A filed with the Commission on December 31,    
1994, as amended by the Company's registration statement on Form 8-A/A filed    
with the Commission on March 8, 1995, and any other amendments or reports       
thereto filed with the Commission for the purpose of updating such              
description.                                                                    

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All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 
15(d) of the Exchange Act after the date of this Prospectus and prior to the    
termination of the offering of the shares of Common Stock made hereby shall be  
deemed to be incorporated in this Prospectus by reference and to be a part      
hereof from the date of filing of such documents. Any statement incorporated    
herein shall be deemed to be modified or superseded for purposes of this        
prospectus to the extent that a statement contained herein or in any other      
subsequently filed document that also is or is deemed to be incorporated by     
reference herein modifies or supersedes such statement. Any such statement so   
modified or superseded shall not be deemed, except as so modified or            
superseded, to constitute a part of this Prospectus.                            

The Company will provide, without charge, to each person to whom a copy of  
this Prospectus has been delivered, on the request of such person, a copy of    
any and all of the information that has been or may be incorporated by          
reference in this Prospectus, other than exhibits thereto. Written or oral      
requests for such copies should be directed to Interactive Flight               
Technologies, Inc., 4041 N. Central Avenue, Suite 2000, Phoenix, Arizona        
85012, Attention: Chief Financial Officer. The telephone number is (602) 200-   
8900.                                                                           

FORWARD-LOOKING INFORMATION 

Except for historical information contained herein, the matters discussed in
this Prospectus and in the documents incorporated by reference herein are       
forward-looking statements that are subject to certain risks and uncertainties  
that could cause actual results to differ materially from those set forth in    
such forward-looking statements. Such risks and uncertainties include, without  
limitation, the failure of passenger use of the Entertainment Network to        
generate sufficient revenues, the failure to execute definitive agreements      
with additional airlines (or, in the case of Swissair, with the Swiss lottery   
organization) on favorable terms or at all, the failure of the Company to       
receive sufficient financing to perform its obligations under its existing and  
contemplated agreements, the impact of competition and downward pricing         
pressures, the effect of changing economic conditions, risks in technology      
development, the risks involved in currency fluctuations, and the other risks   
and uncertainties detailed in "Risk Factors" below and in the Company's         
Registration Statement on Form SB-2 dated April 4, 1996, the Company's Annual   
Report on Form 10-KSB and Amendment No. 1 to the Annual Report on Form 10-      
KSB/A for the fiscal year ended October 31, 1995.                               

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THE COMPANY 

Interactive Flight Technologies, Inc. (the "Company") is engaged in the     
development, assembly, installation and operation of a computer-based in-       
flight entertainment network (the "Entertainment Network"). The first           
generation of the Entertainment Network provided aircraft passengers the        
opportunity to view movies, to play computer games and, in certain cases where  
permitted by applicable law, to gamble through a high-resolution video touch    
screen. The Company has also recently developed a second generation of the      
Entertainment Network (the "IFEN-2") which includes additional features such    
as secure casino gaming, in-flight shopping, a telephone interface system, the  
ability for passengers to pay for IFEN-2 usage through their credit cards, and  
increased video-on-demand capacity.                                             

To date, the Company has entered into contracts to install and operate the  
Entertainment Network on the aircraft of three airlines--Alitalia Airlines      
S.p.A. ("Alitalia"), Debonair Airlines ("Debonair"), and Swissair VKB           
("Swissair"). Under the Company's agreement with Alitalia (the "Alitalia        
Agreement"), the first generation of the Entertainment Network system was       
installed in November 1995 in the first class and business class seats of an    
Alitalia MD-11 aircraft. Following completion of the test period of this first  
installed Entertainment Network system, Alitalia accepted the remainder of the  
Alitalia Agreement and the Company accordingly delivered first generation       
Entertainment Network systems for installation on an additional four Alitalia   
MD-11 aircraft. The agreement provides for the Company to operate the           
Entertainment Networks on all five aircraft over a period of approximately      
eight years. The Alitalia Agreement does not presently provide for, and is not  
expected to provide for, passenger use of gambling features of the              
Entertainment Network. Under the Alitalia Agreement, Alitalia is to pay an      
aggregate of approximately $2.7 million for the hardware components of the      
five Entertainment Network systems, of which $1.1 million has been paid to      
date and $1.6 million is currently due and payable.                             

In March 1996, the Company entered into a second airline contract (the      
"Debonair Agreement") with Debonair, a start-up European airline. The Debonair  
Agreement provides for the Company to deliver and install IFEN-2 systems        
(including video casino style gambling) for all seats on Debonair's entire      
fleet, which consists of six RJ-146 aircraft. The aggregate purchase price to   
be paid by Debonair for the hardware components of the six IFEN-2 systems and   
related spare parts is approximately $5.8 million. However, the Debonair        
Agreement provides that, provided Debonair utilizes the casino gaming feature   
of the Entertainment Networks, Debonair is not required to pay any up-front     
funds to the Company for the six Entertainment Networks. Instead, payments to   
the Company will be made solely through a revenue-sharing arrangement, which    
provides that the Company will receive a percentage of revenues generated by    
the Entertainment Networks, principally casino gaming revenues, until the       
aggregate purchase price plus accrued interest for all six Entertainment        
Networks is paid, and thereafter the Company will receive a reduced percentage  
of such revenues. The Debonair Agreement further provides that if the use of    
the casino gaming features of the IFEN-2 systems is ordered by law to cease,    
then no further payments of purchase price for each installed system shall be   
due.                                                                            

Effective July 18, 1996, the Company entered into an agreement with Swissair
to provide for delivery and installation by the Company of IFEN-2 systems on    
sixteen Swissair MD-11 aircraft and five Swissair B-747 aircraft. The Company   
will also provide various maintenance and operational services for the          
installed IFEN-2 systems. Subject to execution of an agreement with             
Interkantonale Landeslotterie ("ILL"), the operator of the Swiss lottery based  
in Zurich, Switzerland, the IFEN-2 systems installed on Swissair aircraft will  
allow passengers to participate in various Swiss lottery games, but are not     
expected to allow use of the traditional casino style gaming features such as   
slots or poker. In the event that no agreement is reached with ILL, either      
Swissair or the Company may terminate the Swissair Agreement.                   

Under the Swissair Agreement, subject to the terms thereof, the Company is  
entitled to receive an aggregate of approximately $72 million for the IFEN-2    
hardware, plus the costs of installation and certain upgrades. The Company      
will also be reimbursed for its projected costs in connection with maintaining  
and operating the systems. However, the hardware purchase price and the         
operating expenses are payable only out of net revenues received from           
passenger participation in the aforementioned lottery games. Further, the       
Company may receive                                                             

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such amounts only after Swissair is first reimbursed from the net lottery       
revenues for certain expenses incurred in connection with the installation and  
operation of the IFEN-2 systems. Any amounts remaining after payment of the     
Company's operating costs and the IFEN-2 purchase price will be paid over to    
ILL. The Company will also receive a percentage of revenues and commissions     
from advertising and shopping services available on the installed IFEN-2        
systems.                                                                        

The Company is aggressively marketing the Entertainment Network to numerous 
additional airlines, focusing primarily on international carriers or domestic   
carriers with international routes. However, no there can be no assurance that  
definitive agreements will be executed with any other airlines. See "Risk       
Factors."                                                                       

On September 5, 1996, the Company signed a Letter of Intent to form a       
strategic alliance (the "Alliance") with interests of the Pritzker family of    
Chicago (the "Pritzker Interests"). The Letter of Intent contemplates that the  
Pritzker Interests would use their marketing resources to enhance IFT's         
relationship with international domestic air carriers. In addition, the Letter  
of Intent provides for the Pritzker Interests to help develop and coordinate    
financing sources for IFT.                                                      

Subject to the satisfaction of certain conditions, the Pritzker Interests   
would invest up to $20 million in a proposed Joint Venture in order to raise    
one-third of the money required for a potential future airline project          
currently under consideration (which amount would not be available to fund the  
Company's currently existing airline obligations). The Pritzker Interests       
would also have the option to invest in up to six similar ventures for future   
airline projects. Under the Alliance, the Pritzker Interests would purchase up  
to $1 million of IFT stock in the open market, and would receive warrants to    
purchase up to 10% of IFT (on a fully diluted basis). These warrants would be   
issued in specified increments as future airline contracts are executed by      
IFT. Finally, the Alliance would provide for John Pritzker, and one other       
Pritzker nominee to join the Board of Directors of IFT, and for additional      
Pritzker nominees if the size of the Board is increased.                        

Completion of the transaction and formation of the Alliance are subject to  
customary conditions precedent, including the negotiation and execution of      
definitive documentation. There can be no assurance that the parties will       
agree upon and execute such definitive documents or that the Alliance, if       
formed, will produce the desired results.                                       

Since commencement of operations, the Company has developed a substantial   
catalogue of proprietary technology and know-how relating to the Entertainment  
Network and its related systems. In addition, the Company has an exclusive      
license (the "FortuNet License") for technology for airline use from FortuNet,  
Inc. ("FortuNet"), a gaming equipment manufacturer that distributes video       
gaming networks to casinos and other gaming establishments. The Chief           
Executive Officer of the Company, who is also a director and principal          
stockholder of the Company, is a former employee of FortuNet and was a          
substantial contributor to the development of the technology licensed from      
FortuNet.                                                                       

In July 1996, the Company relocated its principal executive offices and its 
primary manufacturing and development facilities from Las Vegas, Nevada to      
Phoenix, Arizona.                                                               

The Company was incorporated in Delaware in August 1994 and is the successor
by merger to In-Flight Entertainment Services Corp., a New York corporation     
incorporated in February 1994. The Company completed an initial public          
offering of its securities in March 1995. Unless the context requires or as     
otherwise indicated, all references to the "Company" include the predecessor    
company. The Company's principal executive offices are located at 4041 N.       
Central Avenue, Suite 2000, Phoenix, Arizona 85012, and its telephone number    
is (602) 200-8900.                                                              

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RISK FACTORS  

An investment in the securities offered hereby involves a high degree of    
risk. In addition to the other information contained in this Prospectus,        
prospective investors should carefully consider the following risk factors      
before purchasing the securities offered hereby.                                

Limited Operating History; Unproven Viability of Entertainment Network. The 
Company was organized in February 1994 and completed its initial public         
offering in March 1995. To date, the Company has secured agreements with        
Alitalia (for the provision of five first generation Entertainment Network      
systems for a total purchase price of approximately $2.7 million plus amounts   
received from the sale of service parts, if any), with Debonair (for the        
provision of six IFEN-2 Entertainment Networks for a total purchase price of    
approximately $5.8 million) and with Swissair (for the provision of twenty-one  
IFEN-2 Entertainment Networks for a total purchase price of $72 million), in    
the last case subject to agreement with ILL (the Swiss lottery organization).   
However, as of the date hereof, the Company has installed systems and received  
revenues only under the Alitalia agreement and, with respect to the other       
agreements and any future agreements, may experience many of the problems,      
delays, expenses and difficulties commonly encountered by early stage           
companies, many of which are beyond the Company's control. These include, but   
are not limited to, unanticipated problems related to product development,      
regulatory compliance, manufacturing, marketing, additional costs and           
competition and technological obsolescence, as well as problems associated      
with sales or operations in foreign countries. There can be no assurance that   
the Company will be able to market the IFEN-2 Entertainment Network to          
additional airlines or that once installed, the IFEN-2 Entertainment Networks   
will function as intended, meet with customer acceptance or generate any        
revenue, or that the Company will ultimately achieve profitability. The         
Company has incurred significant development and marketing operating losses to  
date and there can be no assurance of future revenues or profits.               

The acceptance of the Entertainment Network is dependent on a number of     
factors, including the technological quality and features of such product       
compared to competitive products, the actual and the perceived ability of the   
Company to service the Entertainment Network, consumer demand and the           
purchasing patterns of airlines. Many of these factors are beyond the           
Company's control. As a result of all of these factors, as well as              
unanticipated problems which may be experienced by the Company, the Company is  
unable to predict when, if ever, the Entertainment Network will be              
commercially successful.                                                        

Accumulated Deficit; Operating Losses and Charges to Operations. At July 31,
1996, the Company had an accumulated deficit of approximately $13.3 million.    
The Company will be required to continue to expend significant funds in         
connection with continued development, manufacturing and marketing activities   
with respect to the Entertainment Network which to date have resulted in, and   
are expected to continue to result in, operating losses and reductions in       
working capital. The extent of future losses and the time required to achieve   
profitability are highly uncertain. There can be no assurance that the Company  
will be able to achieve profitability on a sustained basis, if at all.          

Need for Additional Financing; Potential Cash Shortages. At July 31, 1996,  
the Company had working capital of approximately $25.0 million. The Company     
increased its working capital in May 1996 from the proceeds of its Class A      
Warrant Exercise Offer, its third financing, from which the Company received    
net proceeds of approximately $25.2 Million. However, the Company has incurred  
additional losses since the Exercise Offer which have again reduced working     
capital, and the Company expects that losses will continue for the foreseeable  
future. As a result, unless funds are received from additional financing,       
working capital is expected to continue to decrease following the initial       
increase attributable to receipt of proceeds from the aforementioned Exercise   
Offer.                                                                          

The Company's revenues have been generated, and are anticipated to be       
generated in the future, from sales, installation and servicing of the          
Entertainment Network aboard commercial and charter aircraft. The contracts     
the Company has executed and is currently negotiating generally provide for     
the Company to install the Entertainment Network on an aircraft and to be paid  
for the equipment and for its installation and maintenance out of revenue       
generated by passenger use of the installed network on the aircraft. As a       
result, the Company                                                             

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must expend significant capital amounts for the assembly, installation and      
maintenance of the Entertainment Network on each aircraft, but revenue as       
payment for the system will be received, if at all, only as a result of the     
use of the system over a potentially significant period of time. The Company    
will be required to incur substantial up-front costs required to perform the    
Debonair Agreement and the Swissair Agreement. Moreover, the Company may also   
enter into commitments to purchase equipment necessary for additional           
installations, even in the absence of a purchase commitment from an airline,    
if such action is determined to be necessary or desirable to pursue business    
opportunities. The Company also expects its cash requirements to increase in    
future periods due to higher expenses associated with increased sales and       
marketing activities and financing of inventory purchases, installations and    
accounts receivable.                                                            

As a consequence, the Company will need additional financing to perform     
under its existing contracts (i.e., the Alitalia Agreement, the Debonair        
Agreement and the Swissair Agreement) in addition to any future contracts that  
it may enter into, including those it is currently negotiating. Although the    
Company has been in discussions with a number of external sources of capital    
to raise portions of the funds needed, there can be no assurances that such     
funds will be available in the near future when they will be needed for the     
contracts involved. Without additional funding from external capital sources    
or from exercise of the Company's outstanding warrants, the Company will not    
have sufficient cash to complete all of its existing and pending contracts.     

Risks Relating to Growth and Expansion. Growth of the Company's business may
place significant pressure on the Company's management, operational and         
technical resources. The Company believes that for competitive reasons, it is   
important to obtain an installed customer base as early as possible and,        
accordingly, the failure to expand operations in the early years of the         
Company's business may hinder or preclude significant future growth. If the     
Company is successful in obtaining additional agreements with airlines          
relating to the installation of Entertainment Networks, the Company will be     
required to raise substantial additional funds and deliver large volumes of     
quality products to its airline customers on a timely basis at a reasonable     
cost to the Company. The Company has no experience in delivering large volumes  
of its products and does not have the capacity and may not have the capital     
resources to meet wide scale production requirements. The Company currently     
has contracts with domestic manufacturers for high-volume production, and may   
enter into additional contracts with such domestic and foreign manufacturers.   
However, there can be no assurance that any manufacturing arrangement will be   
entered into or will be successful, that the Company's efforts to conduct       
manufacturing activities will be successful or that the Company or any          
supplier will be able to satisfy commercial scale production requirements on a  
timely and cost-effective basis. The Company's success will also depend in      
part upon its ability to provide its airline customers with timely service and  
support. The Company will also be required to develop and improve operational,  
management and financial systems and controls. Failure to manage growth would   
have a material adverse effect on the business of the Company. Expenses         
arising from Company activities to increase market penetration and support      
growth will have a negative impact on operating results.                        

Risks Relating to the Debonair and Swissair Agreements. There are numerous  
risks associated with the Debonair Agreement and the Swissair Agreements of     
which investors should be aware. First, the Company will be required to incur   
substantial up-front costs to perform under these agreements in advance of      
receiving any significant payments from Debonair or Swissair. Further, the      
Debonair Agreement provides that the only funds to be received by the Company   
from Debonair will be in the form of revenue-sharing of the revenues from the   
six Entertainment Networks (primarily revenues from the casino gaming).         
Likewise, the Swissair Agreement provides that the purchase price for the       
hardware, as well as the Company's operating costs, will be paid only out of    
lottery revenues from the twenty-one Entertainment Networks (with ILL first     
receiving a portion thereof and Swissair then receiving first priority for its  
expenses prior to payment of the Company's expenses and the purchase price for  
the hardware). Thus, the Company's ability to recoup its up-front costs and/or  
derive any profit under the either of these agreements will be dependent upon   
a number of factors, including the success of the airlines' respective          
businesses, the extent to which passengers utilize the casino and lottery       
gaming features of the Entertainment Networks and numerous other factors, most  
of which are beyond the Company's control. In fact, Debonair is a start-up      
airline and, consequently, there is no assurance that it will ever commence     
operations or, if it does, that its operations will be successful. To the       
extent that there are any unanticipated problems                                

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relating to product development, regulatory compliance, manufacturing and       
other factors, the costs estimates described above to perform the Debonair      
Agreement and the Swissair Agreement may increase significantly, thereby        
utilizing a substantially higher amount of the Company's working capital than   
currently contemplated.                                                         

Second, since these agreements contemplate that the Entertainment Network   
will be installed in coach class and will feature casino gaming, the Company    
must install and operate the newly-developed IFEN-2 system on both Debonair     
and Swissair aircraft. These will represent the first commercial installations  
of the IFEN-2 system, and there can be no assurance that the IFEN-2 systems,    
once installed, will function properly or meet with customer acceptance.        

Third, both of the contracts are subject to the gaming laws of various      
jurisdictions. See "--Regulatory Restrictions on Gaming Devices."               

Dependence Upon Limited Number of Potential Customers. The sole market for  
the Company's products is expected to be commercial airlines. There are a       
limited number of major commercial airlines worldwide. Accordingly, even        
assuming a sustained commercial viability and the successful marketing of the   
Entertainment Network, the Company expects to have contracts with only a        
limited number of customers, each of which may account for a substantial        
portion of the Company's revenues. The inability to generate new contracts to   
replace completed contracts could result in substantial losses in future        
fiscal periods. Moreover, because gaming is prohibited on all United States     
air carriers and on aircraft operated to or from the United States by foreign   
carriers, the Entertainment Network may be commercially less attractive to a    
significant segment of the commercial airline market.                           

Regulatory Restrictions on Gaming Devices. United States law, with certain  
exceptions, currently prohibits the knowing transportation of gaming devices    
on aircraft operated in interstate air transportation. In addition, states may  
prohibit the transportation and use of gaming devices on flights operating      
between two points in a single state. Federal law also prohibits the            
installation, transportation or operation of gaming devices by any U.S. or      
foreign air carrier or for such carriers to permit their use on aircraft        
operated to or from the United States in foreign air transportation. The        
United States Secretary of Transportation has conducted a study and has         
reported to Congress in March 1996, regarding the safety, commercial and        
operational issues posed by gaming devices aboard commercial aircraft.          
However, this report did recommend that Congress take immediate action to       
modify Federal law regarding gaming devices on commercial aircraft and it is    
uncertain what effect the report will have, if any. Moreover, the laws          
regarding the transmission of gaming data into, out of, or within United        
States territory, even where such data was lawfully obtained in another         
jurisdiction, are unclear. As a result, there can be no assurance that the      
transmission of such data will not be restricted or prohibited. Because gaming  
can generally be expected to generate significantly greater revenues and        
profitability than other entertainment options expected to be available on the  
Entertainment Network, the inability to offer gaming on flights would have a    
material adverse impact on the Company's business and on the market acceptance  
by airlines of the Entertainment Network. The Company will also be subject to   
the laws of foreign jurisdictions which may similarly restrict or prohibit the  
gaming or other activities offered on the Entertainment Network.                

Requirement For and Uncertainty of Regulatory Approval of Entertainment     
Network. The installation and use of the Entertainment Network in each          
aircraft type will require prior certification and approvals from the Federal   
Aviation Administration ("FAA") and from aeronautical agencies of foreign       
governments. Prior to certification and approval, the Entertainment Network     
must be installed on an aircraft and tested, including an in-flight test. The   
Company has received FAA certification for the Entertainment Network on         
Alitalia MD-11 aircraft, and has completed delivery of the Entertainment        
Network for installation on five Alitalia MD-11 aircraft. The Company will      
require FAA and comparable foreign certification prior to installing the        
Entertainment Network on the Debonair RJ-146 and the Swissair MD-11 and B-747   
aircraft, and the aircraft of any other airlines with which the Company may     
execute agreements in the future. However, there can be no assurance that       
further FAA and foreign certifications and approvals will be obtained, or       
obtained in a timely fashion in connection with the Swissair Agreement or       
thereafter. In addition, even if FAA certification is obtained, federal         

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law grants to the FAA the authority to reexamine at any time the basis upon     
which certification and approval of the Entertainment Network may be granted    
and, if appropriate, to amend or revoke such certifications and approvals,      
subject to certain appeal rights.                                               

Risks of Patent Infringement. The use of the Company's technology, including
the patented technology licensed from FortuNet, may give rise to claims that    
the Company's products infringe the patents of others. The Company is aware of  
a number of United States and foreign patents which include claims relating to  
technologies similar to those included in the Entertainment Network. Although   
the Company is aware of a foreign patent (and a corresponding U.S.              
application) that may cover the Entertainment Network, the Company believes     
that this patent is currently unenforceable and cannot be revived because of    
the failure to pay certain renewal fees and that, even if this patent were to   
become enforceable, the Company can take steps to help ensure that its          
activities would not be infringing. However, in the event such patent became    
enforceable and an infringement claim were brought against the Company and any  
such claim were successful, in addition to any potential liability for          
damages, the Company could be required to obtain a license in order to          
continue to market the Entertainment Network. There can be no assurance that    
the Company would prevail against any such claim or that any license required   
would be made available on acceptable terms or at all. In addition, if the      
Company becomes involved in any such litigation, it could consume a             
substantial portion of the Company's resources and management time and any      
resulting liability of the Company may have a material adverse effect on the    
Company's results of operations and financial condition. The Company has        
agreed to pay all costs and damages associated with any patent infringement     
litigation initiated against Alitalia, Debonair, Swissair and ILL.              

Uncertainty of Patent Protection; No Assurance of Significant Competitive   
Advantage. The Entertainment Network is dependent upon unpatented proprietary   
technology and know-how developed by the Company and, to a lesser extent,       
patented technology that the Company has licensed from FortuNet. There can be   
no assurance that FortuNet's issued patents (or any issued to the Company in    
the future) will provide the Company with any significant competitive           
advantage or that challenges will not be instituted against the validity or     
enforceability of any patent licensed or owned by the Company or, if            
instituted, that such challenges will not be successful. The cost of            
litigation to uphold the validity and protect against infringement of patents   
can be substantial. FortuNet's obligations to indemnify the Company under the   
FortuNet License are limited to the amount of license fees payable to FortuNet  
under the FortuNet License. Furthermore, there can be no assurance that others  
will not independently develop substantially equivalent or more advanced        
proprietary information and techniques or otherwise gain access to the          
Company's trade secrets or obtain such technology or duplicate the              
Entertainment Network. In addition, to the extent that consultants (including   
FortuNet), key employees or other third parties apply technological             
information developed by them or by others to Company projects, disputes may    
arise as to the proprietary rights to such information which may not be         
resolved in favor of the Company. There can also be no assurance that the       
Company can meaningfully protect its intellectual property (particularly in     
countries where there are no patents corresponding to those patents licensed    
from FortuNet).                                                                 

Risks of Foreign Operations; Dependence on Foreign Sales                    
Representatives. Because the Company believes the Entertainment Network is      
commercially more viable on international flights, the Company's principal      
customers are expected to be foreign airlines. Moreover, the Company uses and   
intends to continue to use the services of sales representatives to negotiate   
contracts with foreign airlines. As a result, the Company may become obligated  
to pay significant fees to such representatives, who typically charge a         
percentage of the contract purchase price. Accordingly, the Company's control   
over the negotiating process may be reduced. Further, a substantial portion of  
the Company's operations will be subject to various factors characteristic of   
conducting business outside the United States, such as import duties, trade     
restrictions, work stoppages, foreign currency fluctuations, export controls    
or license requirements, political or economic instability, imposition of       
government controls and other factors, any or all of which could have a         
material adverse effect on the business of the Company. Agreements may also be  
more difficult to enforce and receivables more difficult to collect through a   
foreign country's legal or currency expatriation systems. In addition, the      
laws of certain countries relating to proprietary rights do not protect the     
Company's products and intellectual property rights to the same extent as do    
the laws of the United States.                                                  

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Capital Intensive Purchase; Extensive Sales Cycle; Fluctuations in Revenues 
and Operating Results. The outright purchase of an Entertainment Network by an  
airline would represent a significant capital investment by such airline.       
Airlines are generally faced with increasing pressures to cut costs,            
particularly in non-safety related areas, and their ability to pass increased   
costs to consumers is limited. Accordingly, the Company anticipates that an     
extensive time period will be involved in negotiating and obtaining any actual  
purchase commitments from airlines, which may include a test installation in    
addition to an evaluation of the technology. In addition, installations are     
expected to be conducted in incremental deployments and revenues expected to    
be recognized as the installations are completed, so that related receivables   
may not be collected for an extended period after installation. As a result,    
the Company is unable to predict whether or when any additional purchase        
agreements with airlines will be entered into, and the Company may experience   
significant fluctuations in revenue and cash flow or periods in which no        
revenues are recognized and cash flow shortages are experienced. In addition,   
if anticipated sales and installations do not occur when expected,              
expenditures and inventory levels could be disproportionately high and the      
Company's operating results for that quarter may be adversely affected.         
Particularly during the early years of operations, if the Company obtains any   
such additional purchase agreements, a limited number of customers may account  
for all or substantially all of the Company's revenues.                         

Seasonality. Because the installation of the Entertainment Network requires 
that the aircraft be taken out of service temporarily, and because the          
grounding of an aircraft represents a significant lost revenue opportunity for  
an airline, the Company believes that a significant portion of installations    
will occur during the winter months when air traffic is typically reduced.      
Additional variability in revenues and operating results may arise from         
budgeting and purchasing patterns of airlines.                                  

Competition. The Company currently competes and will compete with a number  
of companies offering in-flight entertainment systems, most of whom (including  
but not limited to Sony Transcom, Hughes Avicom, BE Aerospace, Matsushita and   
TNCI) have substantially greater financial, management, technical and other     
resources than the Company and who offer products, systems or services similar  
to the Entertainment Network. There can be no assurance that the Company will   
compete effectively with such other companies, or that other companies will     
not develop products which are superior to the Company's or which achieve       
greater market penetration.                                                     

Rapid Technological Change; Need to Introduce New Programming Software. The 
markets for in-flight entertainment systems and interactive products are        
characterized by rapid technological developments and changes in customer       
preferences and requirements. As a result, the Company's success is dependent   
upon its ability to update on a regular basis and enhance the Entertainment     
Network and to develop or acquire and introduce in a timely manner new          
entertainment options and programming software for incorporation in the         
Entertainment Network. There can be no assurance that the Company will be       
successful in developing or licensing and marketing enhancements of the         
Entertainment Network on a timely basis, or at all, that any enhancements will  
adequately address changing airline or passenger preferences and demands or     
gain the acceptance of the Company's customers or that the cost of licensing    
programming software from third parties or developing its own software will     
not become prohibitive. If the Entertainment Network does not incorporate       
newer technologies and programming software, the Company's business and         
operating results may be adversely affected.                                    

Dependence on Programming Software and Product Distributors. The Company    
will be required to obtain rights from vendors of programming software to       
include such programming software on the Entertainment Network. The Company     
has arrangements with certain movie distributors pursuant to which the Company  
chooses from lists of available movies from each distributor and compiles the   
lists for presentation to the airlines. In addition, in order to provide        
shopping channel services, the Company will be required to enter into           
arrangements with distributors capable of providing delivery of products        
throughout international markets. There can be no assurance that the Company    
will be able to negotiate any such agreements or that such agreements will be   
on terms favorable to the Company.                                              

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Dependence on Third Party Suppliers and Contractors. The Company assembles  
the hardware constituting its Entertainment Network from components purchased   
from third party suppliers, and its dependence on such suppliers will reduce    
its control over the manufacturing process. In addition, the Company currently  
uses single suppliers for certain of the hardware comprising the Entertainment  
Network. Although the Company believes that other sources of supply are         
available, delays or increased costs associated with locating and procuring     
such supplies could have a material adverse effect on the Company.              

Further, because the Company lacks the FAA authorization to perform these   
functions, the Company must contract with third parties to obtain FAA           
certifications of the Entertainment Network on each proposed type of host       
aircraft, and to install the Entertainment Networks on customers aircraft. The  
Company has contracted with Elsinore Aerospace Services ("Elsinore"), an FAA-   
designated engineering representative experienced in flight entertainment       
systems, to assist the Company in the application and approval process in       
connection with the Debonair systems. Similarly, the Company has contracted     
with Hollingsead International to assist with such process in connection with   
the Swissair systems and to perform the installation of the Entertainment       
Networks on Swissair aircraft. Any breach or delay in performance by either of  
these contractors could have a material adverse effect on the Company's         
results of operations and its relationships with its airline customers.         

Dependence on Key Personnel. The Company's success depends upon the         
continued contributions of its executive officers, most of whom are also        
principal stockholders of the Company. Because of a medical disability, Steven  
M. Fieldman, the Company's Vice President--Business Development, devotes        
approximately 20 hours per week to business activities, all of which relate to  
the affairs of the Company. The Company does not have key man insurance on Mr.  
Fieldman. The Company has obtained key man insurance on the life of Michail     
Itkis, the Company's Chief Executive Officer. The loss of services of, or a     
material reduction in the amount of time devoted to, the Company by its         
executive officers could adversely affect the business of the Company.          

Control by Existing Stockholders; Potential Anti-takeover Provisions. The   
Company's executive officers and/or directors (together with their relatives)   
control approximately 65% of the total voting power of the Company, reflecting  
the multiple votes afforded to the Class B Common Stock. As a result, such      
stockholders are able to elect all of the Company's directors and otherwise     
control the Company's operations. The Company and each of its principal         
stockholders have entered into a stockholders' agreement (the "Stockholders'    
Agreement") which grants to such stockholders certain rights with respect to    
the sale of shares by the other stockholders and the Company and other matters  
affecting corporate governance, including an agreement by such stockholders to  
vote for the current members of the Board of Directors of the Company or        
nominees of such stockholders. The existence of such rights will solidify the   
control over the Company by its executive officers and directors. The           
Company's Board of Directors is also authorized to issue from time to time,     
without stockholder authorization, shares of preferred stock, in one or more    
designated series or classes. The Company is also subject to a Delaware         
statute regulating business combinations. Any of these provisions could         
discourage, hinder or preclude an unsolicited acquisition of the Company and    
could make it less likely that stockholders would receive a premium for their   
shares as a result of any such attempt.                                         

Charge to Earnings in the Event of Release of Escrow Shares. Currently,     
3,200,000 shares of Class B Common Stock owned by officers, directors and       
principal stockholders of the Company are held in escrow (the "Escrow           
Shares"), and such shares will be released from escrow if the Company attains   
certain earnings levels over the next two years or if the Class A Common Stock  
trades at certain levels over the next year. In addition, in accordance with    
the terms of the governing escrow agreement, Blair has consented to the         
modification of the terms of such release of the Escrow Shares, subject to      
obtaining the approval therefor from the holders of a majority of the           
Company's Class A Common Stock (other than holders of Escrow Shares). The       
position of the Securities and Exchange Commission (the "Commission") with      
respect to such escrow arrangements provides that in the event any shares are   
released from escrow to the stockholders of the Company who are officers,       
directors, employees or consultants of the Company, a compensation expense to   
the Company will be recorded for financial reporting purposes. Accordingly,     
the Company will, in the event of the release of the Escrow Shares, recognize   
during the period in which the earnings thresholds are met or such stock        
levels achieved, a substantial                                                  

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noncash charge to earnings equal to the fair value of such shares on the date   
of their release, which would have the effect of significantly increasing the   
Company's loss or reducing or eliminating earnings, if any, at such time. The   
recognition of such compensation expense may have a depressive effect on the    
market price of the Company's securities. Notwithstanding the foregoing         
discussion, there can be no assurance that the Escrow Shares will be released   
from escrow.                                                                    

Outstanding Warrants and Options. The Company has outstanding (i) 10,590,209
Class B Warrants (including the Selling Securityholder Warrants) to purchase    
10,590,209 shares of Class A Common Stock; (ii) 165,000 Class C Warrants held   
by the Selling Securityholders, each of which entitles the holder to purchase   
one share of Class A Common Stock for an exercise price of $11.00; (iii)        
165,000 Class D Warrants held by the Selling Securityholders, each of which     
entitles the holder to purchase one share of Class A Common Stock for an        
exercise price of $14.00 and (iv) unit purchase options granted to Blair and    
its affiliates in connection with the Company's initial public offering (the    
"Unit Purchase Options") to purchase an aggregate of 1,120,000 shares of Class  
A Common Stock, assuming exercise of the underlying Warrants. In addition, as   
of August 6, 1996, the Company had 545,000 shares of Class A Common Stock       
reserved for issuance upon exercise of options granted under the Company's      
Stock Option Plan, and 492,000 options were then outstanding under the Stock    
Option Plan. Holders of such warrants and options are likely to exercise them   
when, in all likelihood, the Company could obtain additional capital on terms   
more favorable than those provided by warrants and options. Further, while      
these warrants and options are outstanding, the Company's ability to obtain     
additional financing on favorable terms may be adversely affected.              

Potential Adverse Effect of Redemption of Class B Warrants. The Class B     
Warrants are subject to redemption by the Company at a redemption price of      
$.05 per Warrant upon not less than 30 days' prior written notice if the        
closing bid price of the Class A Common Stock shall have averaged in excess of  
$13.65 per share for 30 consecutive trading days ending within 5 days of the    
notice. Redemption of the Class B Warrants could force the holders to exercise  
the Class B Warrants and pay the exercise price therefor at a time when it may  
be disadvantageous for the holders to do so, to sell the Class B Warrants at    
the then current market price when they might otherwise wish to hold the Class  
B Warrants, or to accept the redemption price which, at the time the Class B    
Warrants are called for redemption, is likely to be substantially less than     
the market value of the Class B Warrants.                                       

Current Prospectus and State Registration to Exercise Class B               
Warrants. Holders of Class B Warrants will only be able to exercise the Class   
B Warrants if (i) a current prospectus under the Securities Act relating to     
the securities underlying the Class B Warrants is then in effect, and (ii)      
such securities are qualified for sale or exempt from qualification under the   
applicable securities laws of the states in which the various holders of        
Class B Warrants reside. With respect to the Selling Securityholder Warrants,   
this Prospectus is the prospectus required to be in effect. Although the        
Company has undertaken and intends to use its best efforts to maintain a        
current prospectus covering the securities underlying the Class B Warrants to   
the extent required by Federal securities laws, there can be no assurance that  
the Company will be able to do so. The value of the Class B Warrants may be     
greatly reduced if a prospectus covering the securities issuable upon the       
exercise of the Class B Warrants is not kept current or if the securities are   
not qualified, or exempt from qualification, in the states in which the         
holders of Class B Warrants reside. If and when the Class B Warrants become     
redeemable by the terms thereof, the Company may exercise its redemption right  
even if it is unable to qualify the underlying securities for sale under all    
applicable state securities laws. Holders of Class B Warrants called for        
redemption residing in states where the underlying securities have not been     
qualified for sale would generally still be able to sell their Class B          
Warrants at the then market price thereof.                                      

Possible Delisting of Securities from the Nasdaq Stock Market. While the    
Company's Class A Common Stock and Class B Warrants are listed on the Nasdaq    
SmallCap Market, there can be no assurance that the Company will meet the       
criteria for continued listing. Continued inclusion on Nasdaq generally         
requires that (i) the Company maintain at least $2,000,000 in total assets and  
$1,000,000 in capital and surplus, (ii) the minimum bid price of the Class A    
Common Stock be $1.00 per share, (iii) there be at least 100,000 shares in the  
public float valued at $1,000,000 or more, (iv) the Class A Common Stock have   
at least two active market makers, and (v) the Class A Common Stock be held by  
at least 300 holders.                                                           

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If the Company is unable to satisfy Nasdaq's maintenance requirements, its  
securities may be delisted from Nasdaq. In such event, trading, if any, in the  
Class A Common Stock and Class B Warrants would thereafter be conducted in the  
over-the-counter market in the so-called "pink sheets" or the NASD's            
"Electronic Bulletin Board." Consequently, the liquidity of the Company's       
securities could be impaired, not only in the number of securities which could  
be bought and sold, but also through delays in the timing of transactions,      
reduction in security analysts' and the news media's coverage of the Company    
and lower prices for the Company's securities than might otherwise be           
attained.                                                                       

Possible Adverse Effect on Liquidity of the Company's Securities Due to the 
Investigation of D.H. Blair Investment Banking Corp. and D.H. Blair & Co.,      
Inc. by the Securities and Exchange Commission. The Commission is conducting    
an investigation concerning various business activities of Blair and D.H.       
Blair & Co., Inc. ("Blair & Co."), the dominant market maker in the Company's   
securities. The investigation appears to be broad in scope, involving numerous  
aspects of Blair's and Blair & Co.'s compliance with the Federal securities     
laws and compliance with the Federal securities laws by issuers whose           
securities were underwritten by Blair or Blair & Co., or in which Blair or      
Blair & Co. make over-the-counter markets, persons associated with Blair or     
Blair & Co., such issuers and other persons. The Company has been advised by    
Blair that the investigation has been ongoing since at least 1989 and that it   
is cooperating with the investigation. Blair cannot predict whether this        
investigation will ever result in any type of formal enforcement action         
against Blair or Blair & Co., or, if so, whether any such action might have an  
adverse effect on Blair or the Company's securities. An unfavorable resolution  
of the Commission's investigation could have the effect of limiting Blair &     
Co.'s ability to continue to make a market in the Company's securities, which   
could affect the liquidity or price of such securities.                         

Shares Eligible for Future Sale. Future sales of Class A Common Stock by    
existing stockholders pursuant to Rule 144 under the Securities Act of 1933,    
as amended (the "Securities Act"), or pursuant to a separate prospectus         
included a registration statement filed by the Company or otherwise, could      
have an adverse effect on the price of the Company's securities. In addition    
to the registration statement of which this Prospectus forms a part, the        
Company has filed a registration statement under the Securities Act for the     
benefit of certain other security holders and which currently covers the        
resale of 1,550,000 Class B Warrants and up to 3,100,000 shares of Class A      
Common Stock (including those shares purchasable upon exercise of the such      
1,550,000 Class B Warrants). In addition, the Company has registered for        
resale 545,000 shares of Class A Common Stock issuable upon exercise of         
options granted or to be granted under the Company's Stock Option Plan. As of   
August 6, 1996, 492,000 options were outstanding under the Stock Option Plan.   
Further, all of the shares of Class A Common Stock issuable upon conversion of  
the 3,960,000 shares of Class B Common Stock are eligible for resale under      
Rule 144, subject to volume and manner of sale limitations. Blair has demand    
and "piggy-back" registration rights covering the securities underlying the     
Unit Purchase Option, and the holders of Class C and Class D Warrants have      
"piggy-back" registration rights covering the shares underlying such warrants.  
Sales of Class A Common Stock, or the possibility of such sales, in the public  
market in any of the foregoing manners may adversely affect the market price    
of the securities offered hereby.                                               

USE OF PROCEEDS 

The Company will not receive any of the proceeds from the sale by the       
Selling Securityholders of the Selling Securityholder Securities offered        
hereby; however, to the extent that the Selling Securityholder Warrants are     
exercised, the Company will receive proceeds equal to the exercise price        
thereof multiplied by the number of warrants exercised. If all of the Selling   
Securityholder Warrants are exercised, the Company would receive gross          
proceeds of $2,681,250, less payment of the Blair Commission. The Company       
presently intends to use such proceeds for working capital and general          
corporate purposes.                                                             

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DILUTION  

The net tangible book value of the Company as of July 31, 1996 was          
$27,201,088 million or $2.27 per share. Net tangible book value per share       
represents the amount of total tangible assets less total liabilities of the    
Company, divided by the number of shares of Common Stock outstanding. After     
giving effect to the sale of the 275,000 shares of Common Stock offered hereby  
(and after deduction of estimated commissions and offering expenses), the pro   
forma net tangible book value of the Company at July 31, 1996 would have been   
$29,703,238 million, or $2.42 per share. This represents an immediate increase  
in such net tangible net book value of $0.15 per share to existing              
stockholders and an immediate dilution of $7.33 per share to new investors      
purchasing shares in this offering. The following table illustrates this per    
share dilution:                                                                 

                                                                · Download Table
                                                                          
Assumed offering price........................................       $9.75
  Net tangible book value before this offering................ $2.27      
  Increase attributable to new investors......................   .15      
                                                               -----      
Pro forma net tangible book value after this offering.........       $2.42
                                                                     -----
Dilution of net tangible book value to new investors..........       $7.33
                                                                     =====

The foregoing excludes 492,000 shares that are issuable upon the exercise of
outstanding employee options under the Company's Stock Option Plan as of        
August 6, 1996. To the extent that these and other options, stock awards or     
warrants that may be issued are exercised in the future, there will be further  
dilution to new investors.                                                      

The following table summarizes, on a pro forma basis as of August 31, 1996, 
the differences between existing stockholders and new investors with respect    
to the number of shares of Class A Common Stock purchased from the Company,     
the total consideration paid to the Company, and the average consideration      
paid per share (before deduction of underwriting discounts and commissions and  
estimated offering expenses):                                                   

                                                                · Download Table

                              SHARES PURCHASED  TOTAL CONSIDERATION  AVERAGE 
                              ----------------- -------------------   PRICE  
                               NUMBER   PERCENT   AMOUNT    PERCENT PER SHARE
                              --------- ------- ----------- ------- ---------
                                                                             
Existing stockholders........ 8,074,329   96.7% $44,129,000   94.3%   $5.47  
New investors................   275,000    3.3    2,681,250    5.7    $9.75  
                              ---------  -----  -----------  -----           
  Total...................... 8,349,329  100.0% $46,810,250  100.0%          
                              =========  =====  ===========  =====           

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SELLING SECURITYHOLDERS 

The Selling Securityholders are Banner Aerospace, Inc. ("Banner"), a        
Delaware corporation, and Leonard Toboroff ("Toboroff"). Banner and Toboroff    
received their respective Class B Warrants in exchange for certain services     
rendered to the Company in connection with the Company's proposals to           
Swissair, leading up to the execution of the Swissair Agreement.                

The following table sets forth the number of Class B Warrants and underlying
shares of Class A Common Stock beneficially owned by each of the Selling        
Securityholders and included herein. Because the Selling Securityholders may    
offer all or some of the Selling Securityholder Securities which they own       
pursuant to the offering contemplated by this Prospectus, and because there     
are currently no agreements, arrangements or understandings with respect to     
the sale of any of the Securityholder Securities, no estimate can be given as   
to the amount of Selling Securityholder Securities that will be held by the     
Selling Securityholders after completion of this offering. The Selling          
Securityholder Securities offered by this Prospectus may be offered from time   
to time by the Selling Securityholders named below.                             

                                                                · Download Table

                                                              NUMBER OF    
                                                          SHARES OF CLASS A
                                            NUMBER OF       COMMON STOCK   
                                        CLASS B WARRANTS    BENEFICIALLY   
                                        BENEFICIALLY HELD HELD AND MAXIMUM 
                                           AND MAXIMUM      AMOUNT TO BE   
NAMES OF SELLING SECURITYHOLDERS        AMOUNT TO BE SOLD      SOLD(1)     
--------------------------------        ----------------- -----------------
                                                                           
Banner Aerospace, Inc..................      187,500           187,500     
Leonard Toboroff.......................       87,500            87,500     

--------                                                                        
(1) Represents shares to be issued upon exercise of the Selling Securityholder  
Warrants.                                                               

PLAN OF DISTRIBUTION  

The sale of all or a portion of the Selling Securityholder Securities       
offered hereby by the Selling Securityholders may be effected from time to      
time on Nasdaq at prevailing prices at the time of such sales, at prices        
related to such prevailing prices or at negotiated prices. The Selling          
Securityholders may sell all or a portion of the Selling Securityholder         
Securities in private transactions or in the over-the-counter market at prices  
related to the prevailing prices of the Selling Securityholder Securities on    
Nasdaq at the time of the sale. The Selling Securityholders may effect such     
transactions by selling to or through one or more broker-dealers, and such      
broker-dealers may receive compensation in the form of underwriting discounts,  
concessions or commissions from the Selling Securityholders. For example, the   
Selling Securityholder Securities may be sold by one or more of the following   
without limitation: (a) a block trade in which the broker or dealer so engaged  
will attempt to sell the Selling Securityholder Securities as agent but may     
position and resell a portion of the block as principal to facilitate the       
transaction; (b) purchases by a broker or dealer as principal and resale by     
such broker or dealer for its account pursuant to this Prospectus; (c)          
ordinary brokerage transactions and transactions in which the broker solicits   
purchasers; and (d) face to face transactions between sellers and purchasers    
without a broker-dealer. In effecting sales, brokers or dealers engaged by the  
Selling Securityholders may arrange for other brokers or dealers to             
participate in the resales.                                                     

The Selling Securityholders and any broker-dealers that participate in the  
distribution may under certain circumstances be deemed to be "underwriters"     
within the meaning of the Securities Act, and any commissions received by such  
broker-dealers and any profits realized on the resale of shares by them may be  
deemed to be underwriting discounts and commissions under the Securities Act.   
To the extent required under the Securities Act, a supplemental prospectus      
will be filed disclosing (a) the name of any such broker-dealers, (b) the       
number of Selling Securityholder Securities involved, (c) the price at which    
such Selling Securityholder Securities are to                                   

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be sold, (d) the commissions paid or discounts or concessions allowed to such   
broker-dealers, where applicable, (e) that such broker-dealers did not conduct  
any investigation to verify the information set out or incorporated by          
reference in this prospectus, as supplemented, and (f) other facts material to  
the transaction.                                                                

The Company and the Selling Securityholders may agree to indemnify such     
broker-dealers against certain liabilities, including liabilities under the     
Securities Act. In addition, the Company has agreed to indemnify the Selling    
Securityholders and any underwriter with respect to the Selling Securityholder  
Securities against certain liabilities, including, without limitation, certain  
liabilities under the Securities Act, or, if such indemnity is unavailable, to  
contribute toward amounts required to be paid in respect of such liabilities.   

The Company has agreed to pay certain costs and expenses incurred in        
connection with the registration of the Selling Securityholder Securities,      
except that the Selling Securityholders shall be responsible for all selling    
commissions, transfer taxes and related charges in connection with the offer    
and sale of such Selling Securityholder Securities.                             

There is no assurance that any of the Selling Securityholders will sell any 
or all of the Selling Securityholder Securities. The Company has agreed to      
keep the registration statement relating to the offering and sale by the        
Selling Securityholders of the Selling Securityholder Securities continuously   
effective for a period of two (2) years from the date of this Prospectus.       

BLAIR COMMISSION  

Pursuant to the Warrant Agreement, the Company has agreed not to solicit    
Warrant exercises other than through Blair, unless Blair declines to make such  
solicitation. Blair has agreed to assist the Company in effecting the Exercise  
Offer. Upon any exercise of the Warrants, the Company will pay Blair a fee of   
5% of the aggregate Warrant exercise price (the "Blair Commission"), if (i)     
the market price of the Company's Class A Common Stock on the date the          
Warrants are exercised is greater than the then exercise price of the           
Warrants; (ii) the exercise of the Warrants was solicited by a member of the    
NASD as designated in writing on the Warrant Certificate subscription form;     
(iii) the Warrants are not held in a discretionary account; (iv) disclosure of  
compensation arrangements was made both at the time of the offering and at the  
time of exercise of the Warrants; and (v) the solicitation of exercise of the   
Warrant was not in violation of Rule 10b-6 promulgated under the Exchange Act.  

As of October 1, 1996, there were seven market makers in the Company's      
securities. Rule 10b-6 may prohibit Blair from engaging in any market making    
activities with regard to the Company's securities for the period from nine     
business days (or such other applicable period as Rule 10b-6 may provide)       
prior to any solicitation by Blair of the exercise of Class A Warrants until    
the later of the termination of such solicitation activity or the termination   
(by waiver or otherwise) of any right that Blair may have to receive a fee for  
the exercise of Warrants following such solicitation. As a result, Blair may    
be unable to provide a market for the Company's securities during certain       
periods while the Warrants are exercisable.                                     

CONCURRENT OFFERINGS  

Pursuant to the registration statement of which this Prospectus forms a     
part, the Company has registered (i) up to 8,775,000 shares of Class A Common   
Stock of the Company, which are issuable upon exercise of the Company's         
outstanding Class B Warrants issued in public offerings, (ii) the resale of     
1,550,000 Class B Warrants held by certain other selling securityholders and    
the 1,550,000 shares of Class A Common Stock underlying such Class B Warrants.  
Sales of such securities, or the potential of such sales, may have an adverse   
effect on the market price of the securities offered hereby.                    

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DESCRIPTION OF CAPITAL STOCK AND WARRANTS 

COMMON STOCK                                                                    

Class A Common Stock. Holders of Class A Common Stock have the right to cast
one vote for each share held of record on all matters submitted to a vote of    
holders of Class A Common Stock, including the election of directors. The       
Class A and Class B Common Stock vote together as a single class on all         
matters on which stockholders may vote, except when class voting is required    
by applicable law.                                                              

Holders of Class A Common Stock are entitled to receive such dividends,     
together with the holders of Class B Common Stock, pro rata based on the        
number of shares held, when, as and if declared by the Board of Directors,      
from funds legally available therefor, subject to the rights of holders of any  
outstanding Preferred Stock. In the case of dividends or other distributions    
payable in stock of the Company, including distributions pursuant to stock      
splits or division of stock of the Company, only shares of Class A Common       
Stock will be distributed. In the event of the liquidation, dissolution or      
winding up of the affairs of the Company, all assets and funds of the Company   
remaining after the payment of all debts and other liabilities, subject to the  
rights of the holders of any outstanding Preferred Stock, shall be              
distributed, pro rata, among the holders of the Class A and Class B Common      
Stock. Holders of Class A Common Stock are not entitled to preemptive,          
subscription, cumulative voting or conversion rights, and there are no          
redemption or sinking fund provisions applicable to the Class A Common Stock.   
All outstanding shares of Class A Common Stock are, and the shares of Class A   
Common Stock offered hereby will be when issued, fully paid and non-            
assessable.                                                                     

Class B Common Stock. Immediately prior to the date hereof there were       
3,960,000 shares of Class B Common Stock outstanding held by six stockholders   
of record. Each share of Class B Common Stock is entitled to six votes on all   
matters on which stockholders may vote, including the election of directors.    
The Class A and Class B Common Stock vote together as a single class on all     
matters on which stockholders may vote, except when class voting is required    
by applicable law.                                                              

Holders of Class B Common Stock are entitled to participate together with   
the holders of Class A Common Stock, pro rata based on the number of shares     
held, in the payment of cash dividends and in the liquidation, dissolution and  
winding up of the Company, subject to the rights of holders of any outstanding  
Preferred Stock. In the case of dividends, or other distributions payable in    
stock of the Company, including distributions pursuant to stock splits or       
divisions of stock of the Company, only shares of Class A Common Stock shall    
be distributed with respect to Class B Common Stock.                            

Shares of Class B Common Stock are automatically convertible into an        
equivalent number of fully paid and non-assessable shares of Class A Common     
Stock upon the sale or transfer of such shares by the original record holder    
thereof except to another holder of Class B Common Stock. Each share of Class   
B Common Stock also is convertible at any time upon the option of the holder    
into one share of Class A Common Stock. There are no preemptive, subscription,  
redemption, conversion or cumulative voting rights applicable to the Class B    
Common Stock except under the Stockholders' Agreement.                          

REDEEMABLE CLASS B WARRANTS                                                     

Each Class B Warrant entitles the registered holder to purchase one share of
Class A Common Stock at an exercise price of $9.75 at any time after issuance   
until 5:00 P.M., New York City Time, on March 6, 2000. Commencing March 7,      
1996, the Class B Warrants become redeemable by the Company on 30 days'         
written notice at a redemption price of $.05 per Class B Warrant, if the        
closing price of the Company's Class A Common Stock for any 30 consecutive      
trading days ending within 5 days of the notice of redemption averages in       
excess of $13.65 per share. All Class B Warrants must be redeemed if any are    
redeemed.                                                                       

The Class B Warrants are issued pursuant to the Warrant Agreement among the 
Company, Blair and American Stock Transfer & Trust Company, New York, New       
York, as Warrant Agent, and are evidenced by warrant certificates in            
registered form. The Class B Warrants provide for adjustment of the exercise    
price and for                                                                   

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a change in the number of shares issuable upon exercise to protect holders      
against dilution in the event of a stock dividend, stock split, combination or  
reclassification of the Class A Common Stock or upon issuance of shares of      
Class A Common Stock at prices lower than the market price of the Class A       
Common Stock, with certain exceptions.                                          

The exercise price of the Class B Warrants was determined by negotiation    
between the Company and the Underwriter in the Company's initial public         
offering and should not be construed to be predictive of or to imply that any   
price increases in the Company's securities will occur.                         

A Class B Warrant may be exercised upon surrender of the Class B Warrant    
certificate on or prior to its expiration date (or earlier redemption date) at  
the offices of American Stock Transfer & Trust Company, New York, New York,     
the Warrant Agent, with the form of "Election to Purchase" on the reverse side  
of the Class B Warrant certificate completed and executed as indicated,         
accompanied by payment of the full exercise price (by certified or bank check   
payable to the order of the Company) for the number of shares with respect to   
which the Class B Warrant is being exercised. Shares issued upon exercise of    
Class B Warrants and payment in accordance with the terms of the Class B        
Warrants will be fully paid and non-assessable.                                 

The Class B Warrants do not confer upon the Class B Warrantholder any voting
or other rights of a stockholder of the Company. Upon notice to the Class B     
Warrantholders, the Company has the right to reduce the exercise price or       
extend the expiration date of the Class B Warrants.                             

LEGAL MATTERS 

The validity of the securities offered hereby will be passed upon for the   
Company by the law firm of Irell & Manella LLP, Los Angeles, California.        

EXPERTS 

The financial statements of Interactive Flight Technologies, Inc., as of    
October 31, 1995 and for the year then ended, and the cumulative statements of  
operations, stockholders' equity (deficiency), and cash flows for the period    
February 1, 1994 (inception) through October 31, 1995, have been incorporated   
by reference herein and in the registration statement in reliance upon the      
reports of KPMG Peat Marwick LLP and Richard A. Eisner & Company LLP,           
independent certified public accountants incorporated by reference herein       
(insofar as such report of Richard A. Eisner & Company LLP relates to the       
amounts included for the period from February 1, 1994 (inception) to October    
31, 1994), and upon the authority of said firms as experts in accounting and    
auditing.                                                                       

The balance sheet of the Company at October 31, 1994 and the related        
statements of operations, stockholders' equity (deficiency) and cash flows for  
the period from inception (February 1, 1994) through October 31, 1994           
incorporated herein by reference have been audited by, and are incorporated     
herein by reference in reliance upon the report of, Richard A. Eisner &         
Company LLP, independent certified public accountants, given on the authority   
of that firm as experts in accounting and auditing.                             

Effective May 10, 1995, the Company changed its independent accountants from
Richard A. Eisner & Company LLP ("Eisner") to KPMG Peat Marwick LLP ("Peat      
Marwick"). Prior to the retention of Peat Marwick, neither the Company, nor     
any person on its behalf, consulted with Peat Marwick regarding the             
application of accounting principles to any transaction or the types of audit   
opinion that might be rendered on the Company's financial statements. The       
decision to change accountants was recommended by the Board of Directors of     
the Company. There were no disagreements with Eisner on any matter of           
accounting principles or practices, financial statement disclosure or auditing  
scope or procedures, which disagreements, if not resolved to their              
satisfaction, would have caused them to make reference in connection with       
their opinion to the subject matter of the disagreement.                        

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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A         +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE   +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY  +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT        +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR   +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE      +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE    +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF  +
+ANY SUCH STATE.                                                               +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED OCTOBER   , 1996 
                                                              ALTERNATE OFFERING
                                                                        #2 PAGES

PROSPECTUS

INTERACTIVE FLIGHT TECHNOLOGIES, INC. 

UP TO 8,775,000 SHARES OF CLASS A COMMON STOCK
UNDERLYING REDEEMABLE CLASS B WARRANTS

This Prospectus relates to up to 8,775,000 shares of Class A Common Stock   
issuable upon exercise of the Company's outstanding redeemable class B warrants 
(the "Class B Warrants") which were issued in previous public offerings. Each   
Class B Warrant entitles the holder to purchase one share of the Company's      
Class A Common Stock, $.01 par value (the "Class A Common Stock") at an         
exercise price of $9.75, subject to adjustment, at any time until March 6,      
2000. The Class B Warrants are subject to redemption by the Company for $.05    
per Warrant, upon 30 days' written notice, if the average closing bid price of  
the Class A Common Stock exceeds $13.65 per share (subject to adjustment) for   
30 consecutive business days ending within 5 days of the date of the notice of  
redemption.                                                                     

----------- 

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" ON PAGE 6. 

----------- 

The Class A Common Stock and the Company's class B common stock, $.01 par   
value (the "Class B Common Stock"), are essentially identical in all respects,  
except that the Class B Common Stock has six votes per share and the Class A    
Common Stock has one vote per share. The Class B Common Stock is convertible    
into Class A Common Stock on a share for share basis. The holders of the Class  
B Common Stock, all of whom are executive officers, directors and/or principal  
stockholders of the Company, control approximately 65% of the total voting      
power of the Company and are therefore able to elect all of the Company's       
directors and to control the Company.                                           

On March 14, 1995, the Company completed an initial public offering (the    
"IPO") of 3,220,000 Units (the "Units"), each Unit consisting of one share of   
Class A Common Stock, one redeemable class A warrant (each, a "Class A          
Warrant") and one Class B Warrant. The Class A Warrants were exercisable for    
one share of Class A Common Stock and one Class B Warrant for an exercise price 
of $7.00. The components of the Units were transferrable separately upon        
issuance. On May 17, 1996, the Company completed an Exercise Offer pursuant to  
which the Company offered holders of its redeemable Class A Warrants who        
exercised their Class A Warrants (i) to issue an extra 1/2 of a Class B Warrant 
for each Class A Warrant exercised by such holder on or prior to May 17, 1996   
(in addition to the one share of Class A Common Stock and one Class B Warrant   
issuable upon exercise of the Class A Warrants pursuant to the terms of the     
Class A Warrants), and (ii) to reduce the exercise price of the Class A         
Warrants to $5.75 per share (from $7.00 per share) with respect to any such     
exercise.                                                                       

The securities offered hereby represent shares underlying the Class B       
Warrants issued in the IPO or upon exercise of Class A Warrants issued in the   
IPO (including exercises in the Exchange Offer).                                

The Class A Common Stock and the Class B Warrants are traded on the Nasdaq  
SmallCap Market ("Nasdaq"). On October   , 1996, the closing sale price of the  
Class A Common Stock on Nasdaq was $      per share and the closing sale price  
of the Class B Warrants on Nasdaq was $     .                                   

THESE SECURITIES  HAVE NOT BEEN APPROVED  OR DISAPPROVED BY  THE SECURITIES AND 
EXCHANGE  COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS  THE SECURITIES 
AND EXCHANGE  COMMISSION OR ANY  STATE SECURITIES COMMISSION  PASSED UPON THE 
ACCURACY OR  ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION  TO THE CONTRARY 
IS A CRIMINAL OFFENSE.                                                      

The date of this Prospectus is       , 1996.

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USE OF PROCEEDS 

The net proceeds to the Company from the exercise of the Warrants will be   
added to the Company's working capital and will be available for any general    
corporate purposes.                                                             

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DILUTION  

The net tangible book value of the Company as of July 31, 1996 was          
$27,201,088 million or $2.27 per share. Net tangible book value per share       
represents the amount of total tangible assets less total liabilities of the    
Company, divided by the number of shares of Common Stock outstanding. After     
giving effect to the sale of the 8,775,000 shares of Common Stock offered       
hereby (and after deduction of estimated commissions and offering expenses),    
the pro forma net tangible book value of the Company at July 31, 1996 would     
have been $108,434,438  million, or $5.22 per share. This represents an         
immediate increase in such net tangible net book value of $2.95 per share to    
existing stockholders and an immediate dilution of $4.53 per share to new       
investors purchasing shares in this offering. The following table illustrates   
this per share dilution:                                                        

                                                                · Download Table
                                                                            
Assumed offering price...........................................      $9.75
  Net tangible book value before this offering................... 2.27      
  Increase attributable to new investors......................... 2.95      
                                                                  ----      
Pro forma net tangible book value after this offering............       5.22
Dilution of net tangible book value to new investors.............      $4.53
                                                                       =====

The foregoing excludes 492,000 shares that are issuable upon the exercise of
outstanding employee options under the Company's Stock Option Plan as of        
August 6, 1996. To the extent that these and other options, stock awards or     
warrants that may be issued are exercised in the future, there will be further  
dilution to new investors.                                                      

The following table summarizes, on a pro forma basis as of August 31, 1996, 
the differences between existing stockholders and new investors with respect    
to the number of shares of Class A Common Stock purchased from the Company,     
the total consideration paid to the Company, and the average consideration      
paid per share (before deduction of underwriting discounts and commissions and  
estimated offering expenses):                                                   

                                                                · Download Table

                             SHARES PURCHASED  TOTAL CONSIDERATION   AVERAGE 
                            ------------------ --------------------   PRICE  
                              NUMBER   PERCENT    AMOUNT    PERCENT PER SHARE
                            ---------- ------- ------------ ------- ---------
                                                                             
Existing stockholders......  8,074,329   47.9% $ 44,129,000   34.0%   $5.47  
New investors..............  8,775,000   52.1    85,556,250   66.0    $9.75  
                            ----------  -----  ------------  -----           
  Total.................... 16,849,329  100.0% $129,685,250  100.0%          
                            ==========  =====  ============  =====           

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PLAN OF DISTRIBUTION  

Holders of outstanding Warrants can exercise their Warrants for the         
applicable underlying securities upon payment of the exercise prices therefor   
to the Company. The Company has agreed not to solicit Warrant exercises other   
than through D. H. Blair Investment Banking Corp., the underwriter of the IPO   
("Blair"), unless Blair declines to make such solicitation. Upon any exercise   
of the Warrants after March 7, 1996, the Company will pay Blair a fee of 5% of  
the aggregate Warrant exercise price if (i) the market price of the Company's   
Class A Common Stock on the date the Warrants are exercised is greater than     
the then exercise price of the Warrants; (ii) the exercise of the Warrants was  
solicited by a member of the NASD as designated in writing on the Warrant       
Certificate subscription form; (iii) the Warrants are not held in a             
discretionary account; (iv) disclosure of compensation arrangements was made    
both at the time of the offering and at the time of exercise of the Warrants;   
and (v) the solicitation of exercise of the Warrant was not in violation of     
Rule 10b-6 promulgated under the Securities Exchange Act of 1934, as amended.   

On May 17, 1996, the Company completed the Exercise Offer pursuant to which 
the Company offered holders of Class A Warrants who exercised their Class A     
Warrants (i) to issue an extra 1/2 of a Class B Warrant for each Class A        
Warrant exercised by such holder on or prior to May 17, 1996 (in addition to    
the one share of Class A Common Stock and one Class B Warrant issuable upon     
exercise of the Class A Warrants pursuant to the terms of the Class A           
Warrants), and (ii) to reduce the exercise price of the Class A Warrants to     
$5.75 per share (from $7.00 per share) with respect to any such exercise. In    
connection with the Exercise Offer, Blair received an aggregate fee of          
approximately $1,400,000 in respect of the exercise of Class A Warrants.        

As of October 1, 1996, there were two market makers in the Company's        
securities. Blair & Co., which is substantially owned by family members of J.   
Morton Davis, the sole stockholder of the parent company and sole stockholder   
of Blair, currently makes a market in the Company's securities. Rule 10b-6 may  
prohibit Blair & Co. from engaging in any market making activities with regard  
to the Company's securities for the period from nine business days (or such     
other applicable period as Rule 10b-6 may provide) prior to any solicitation    
by Blair of the exercise of Warrants until the later of the termination of      
such solicitation activity or the termination (by waiver or otherwise) of any   
right that the Blair may have to receive a fee for the exercise of Warrants     
following such solicitation. As a result, Blair & Co. may be unable to provide  
a market for the Company's securities during certain periods while the          
Warrants are exercisable.                                                       

In connection with the IPO the Company sold to Blair or its designees, for  
nominal consideration, the Unit Purchase Option to purchase up to 280,000       
Units substantially identical to the Units sold in the IPO, except that the     
warrants included therein are not subject to redemption by the Company unless,  
on the redemption date, the Unit Purchase Option has been exercised and the     
underlying warrants are outstanding. The Unit Purchase Option is exercisable    
during the three year period commencing March 7, 1997 at an exercise price of   
$6.00 per Unit, subject to adjustment in certain events, and the Unit Purchase  
Option and the underlying securities are not transferable until March 7, 1998   
except to officers of the Underwriter or to members of the selling group. The   
Unit Purchase Option includes a provision permitting the Underwriter or its     
designees to elect a cashless exercise. The Company has agreed to register      
during the four-year period commencing March 7, 1996, on two separate           
occasions, the securities issuable upon exercise thereof under the Securities   
Act, the initial such registration to be at the Company's expense and the       
second at the expense of the holders. The Company has also granted certain      
"piggy-back" registration rights to holders of the Unit Purchase Option.        

In connection with the IPO, the Company agreed to indemnify Blair against   
certain liabilities, including liabilities under the Securities Act.            

Blair has the right to designate one director to the Company's Board of     
Directors for a period of five years from the completion of the IPO. Such       
designee may be a director, officer, partner, employee or affiliate of Blair.   

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During the five-year period from March 7, 1995, in the event Blair          
originates a financing or a merger, acquisition or transaction to which the     
Company is a party, Blair will be entitled to receive a finder's fee in         
consideration for origination of such transaction. The fee is based on a        
percentage of the consideration paid in the transaction ranging from 7% of the  
first $1,000,000 to 2 1/2% of any consideration in excess of $9,000,000.        

Blair acted as Placement Agent for the Bridge Financing in October and      
November 1994 for which it received a Placement Agent fee of $310,000 and a     
non-accountable expense allowance of $93,000.                                   

The Commission is conducting an investigation concerning various business   
activities of Blair and Blair & Co. The investigation appears to be broad in    
scope, involving numerous aspects of the Underwriter's and Blair & Co.'s        
compliance with the Federal securities laws and compliance with the Federal     
securities laws by issuers whose securities were underwritten by Blair or       
Blair & Co., or in which Blair or Blair & Co. made over-the-counter markets,    
persons associated with Blair or Blair & Co., such issuers and other persons.   
The Company has been advised by Blair that the investigation has been ongoing   
since at least 1989 and that it is cooperating with the investigation. Blair    
cannot predict whether this investigation will ever result in any type of       
formal enforcement action against Blair or Blair & Co. or, if so, whether any   
such action might have an adverse effect on Blair or the securities offered     
hereby. The Company has been advised that Blair & Co. will make a market in     
the securities following this offering. An unfavorable resolution of the        
Commission's investigation could have the effect of limiting such firm's        
ability to make a market in the Company's securities, which could affect the    
liquidity or price of such securities.                                          

CONCURRENT OFFERINGS  

The Company has registered for resale by certain securityholders (the       
"Selling Securityholders") an aggregate of 1,550,000 shares of Class A Common   
Stock and 1,825,000 Class B Warrants (and the 1,825,000 shares of Class A       
Common Stock issuable upon exercise of such Class B Warrants). Sales of such    
securities, or the potential of such sales, may have an adverse effect on the   
market price of the securities offered hereby.                                  

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LEGAL MATTERS 

The validity of the securities offered hereby has been passed upon for the  
Company by Baer Marks & Upham LLP, New York, New York.                          

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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A         +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE   +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY  +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT        +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR   +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE      +
+SECURITIES IN ANY STATEIN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE     +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF  +
+ANY SUCH STATE.                                                               +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                                                              ALTERNATE OFFERING
                                                                        #3 PAGES

PROSPECTUS

INTERACTIVE FLIGHT TECHNOLOGIES, INC. 

1,550,000 SHARES OF CLASS A COMMON STOCK
1,550,000 REDEEMABLE CLASS B WARRANTS AND 
1,550,000 SHARES OF CLASS A COMMON STOCK ISSUABLE 
UPON EXERCISE OF THE REDEEMABLE CLASS B WARRANTS

This Prospectus relates to up to 1,550,000 shares of Class A Common Stock,  
$.01 par value ("Class A Common Stock") and up to 1,550,000 Redeemable Class B  
Warrants (the "Class B Warrants") of Interactive Flight Technologies, Inc., a   
Delaware corporation (the "Company"), held by 51 holders (the "Selling          
Securityholders"), and up to 1,550,000 additional shares of Class A Common      
Stock issuable upon exercise of such Class B Warrants. The 1,550,000 Class B    
Warrants held by the Selling Securityholders are sometimes referred to herein   
as the "Selling Securityholder Warrants" and, together with the 1,550,000       
shares of Class A Common Stock held by the Selling Security Holders and the     
1,550,000 shares of Class A Common Stock issuable upon exercise of the Selling  
Securityholder Warrants, the "Selling Securityholder Securities." The Selling   
Securityholder Warrants and the 1,550,000 shares of Class A Common Stock held   
by the Selling Securityholders were acquired upon exercise of redeemable class  
A warrants ("Class A Warrants") which were issued to the Selling                
Securityholders in exchange for warrants they received in a private placement   
by the Company in October and November 1994 (the "Bridge Financing"). See       
"Selling Securityholders" and "Plan of Distribution." Each Class B Warrant      
entitles the holder to purchase one share of Class A Common Stock, at an        
exercise price of $9.75, subject to adjustment, at any time until March 6,      
2006. The Class B Warrants are subject to redemption by the Company for $.05    
per Warrant, upon 30 days' written notice, if the average closing bid price of  
the Class A Common Stock exceeds $13.65 share (subject to adjustment) for 30    
consecutive business days ending within 5 days of the date of the notice of     
redemption.                                                                     

----------- 

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" 
ON PAGE 6.

----------- 

The Class A Common Stock and the Company's class B common stock, $.01 par   
value (the "Class B Common Stock"), of the Company are essentially identical,   
except that the Class B Common Stock has six votes per share and the Class A    
Common Stock has one vote per share on all matters upon which stockholders may  
vote. The holders of Class B Common Stock, the majority of whom are executive   
officers, directors and/or principal stockholders of the Company, control       
approximately 65% of the total voting power and therefore are able to elect all 
of the Company's directors and control the Company.                             

The securities offered by the Selling Securityholders by this Prospectus may
be sold from time to time by the Selling Securityholders or by their            
transferees. The distribution of the Selling Securityholder Warrants and the    
Class A Common Stock offered hereby by the Selling Securityholders may be       
effected in one or more transactions that may take place on the over-the-       
counter market, including ordinary brokers' transactions, privately negotiated  
transactions or through sales to one or more dealers for resale of such         
securities as principals, at market prices prevailing at the time of sale, at   
prices related to such prevailing market prices or at negotiated prices. Usual  
and customary or specifically negotiated brokerage fees or commissions may be   
paid by the Selling Securityholders.                                            

The Selling Securityholders, and intermediaries through whom such securities
are sold, may be deemed underwriters within the meaning of the Securities Act   
of 1933, as amended (the "Securities Act"), with respect to the securities      
offered, and any profits realized or commissions received may be deemed         
underwriting compensation. The Company has agreed to indemnify the Selling      
Securityholders against certain liabilities, including liabilities under the    
Securities Act.                                                                 

The Company will not receive any of the proceeds from the sale of securities
by the Selling Securityholders. In the event all of the Selling Securityholder  
Warrants are exercised, the Company will receive gross proceeds of $15,112,500, 
less payment of applicable commissions to D.H. Blair Investment Banking Corp    
("Blair"). See "Selling Securityholders," "Plan of Distribution" and "Blair     
Commission."                                                                    

The Class A Common Stock and the Class B Warrants are traded on the Nasdaq  
SmallCap Market ("Nasdaq"). On October   , 1996, the closing sale price of the  
Class A Common Stock on Nasdaq was $      per share and the closing sale price  
of the Class B Warrants on Nasdaq was $     .                                   

THESE  SECURITIES HAVE NOT BEEN APPROVED  OR DISAPPROVED BY THE  SECURITIES AND 
EXCHANGE  COMMISSION  OR   ANY  STATE  SECURITIES  COMMISSION   NOR  HAS  THE 
SECURITIES  AND EXCHANGE  COMMISSION  OR  ANY  STATE SECURITIES  COMMISSION 
PASSED  UPON   THE  ACCURACY   OR  ADEQUACY   OF  THIS   PROSPECTUS.  ANY 
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.                     

The date of this Prospectus is       , 1996.

SUBJECT TO COMPLETION, DATED OCTOBER   , 1996 

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USE OF PROCEEDS 

The Company will not receive any of the proceeds from the sale by the       
Selling Securityholders of the Selling Securityholder Securities offered        
hereby; however, to the extent that the Selling Securityholder Warrants are     
exercised, the Company will receive proceeds equal to the exercise price        
thereof multiplied by the number of warrants exercised. If all of the Selling   
Securityholder Warrants are exercised, the Company would receive gross          
proceeds of $15,112,500, less payment of the Blair Commission. The Company      
presently intends to use such proceeds for working capital and general          
corporate purposes.                                                             

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DILUTION  

The net tangible book value of the Company as of July 31, 1996 was          
$27,201,088 million or $2.27 per share. Net tangible book value per share       
represents the amount of total tangible assets less total liabilities of the    
Company, divided by the number of shares of Common Stock outstanding. After     
giving effect to the sale of the 1,550,000 shares of Common Stock underlying    
the Selling Securityholder Warrants (and after deduction of estimated           
commissions and offering expenses), the pro forma net tangible book value of    
the Company at July 31, 1996 would have been $41,512,963 million, or $3.06 per  
share. This represents an immediate increase in such net tangible net book      
value of $.79 per share to existing stockholders and an immediate dilution of   
$6.69 per share to new investors purchasing shares in this offering. The        
following table illustrates this per share dilution:                            

                                                                · Download Table
                                                                            
Assumed offering price..........................................       $9.75
  Net tangible book value before this offering.................. $2.27      
  Increase attributable to new investors........................   .79      
                                                                 -----      
Pro forma net tangible book value after this offering...........        3.06
                                                                       -----
Dilution of net tangible book value to new investors............       $6.69
                                                                       =====

The foregoing excludes 492,000 shares that are issuable upon the exercise of
outstanding employee options under the Company's Stock Option Plan as of        
August 6, 1996. To the extent that these and other options, stock awards or     
warrants that may be issued are exercised in the future, there will be further  
dilution to new investors.                                                      

The following table summarizes, on a pro forma basis as of August 31, 1996, 
the differences between existing stockholders and new investors with respect    
to the number of shares of Class A Common Stock purchased from the Company,     
the total consideration paid to the Company, and the average consideration      
paid per share (before deduction of underwriting discounts and commissions and  
estimated offering expenses):                                                   

                                                                · Download Table

                              SHARES PURCHASED  TOTAL CONSIDERATION  AVERAGE 
                              ----------------- -------------------   PRICE  
                               NUMBER   PERCENT   AMOUNT    PERCENT PER SHARE
                              --------- ------- ----------- ------- ---------
                                                                             
Existing stockholders........ 8,074,329   83.9% $44,129,000   74.5%   $5.47  
New investors................ 1,550,000   16.1   15,112,500   25.5    $9.75  
                              ---------  -----  -----------  -----           
  Total...................... 9,624,329  100.0% $59,241,500  100.0%          
                              =========  =====  ===========  =====           

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SELLING SECURITYHOLDERS 

The Selling Securityholders are various investors who received redeemable   
Class A Warrants of the Company in exchange for warrants received in the        
Company's 1994 Bridge Financing. The Selling Securityholder Securities were     
acquired upon exercise of those Class A Warrants.                               

The following table set forth certain information with respect to each      
Selling Securityholder for whom the Company is registering the Selling          
Securityholder Securities for resale to the public. The Company will not        
receive any of the proceeds from the sale of such securities. Except for the    
relationships noted in footnotes (2) and (3) below, to the Company's knowledge  
there are no material relationships between any of the Selling Securityholders  
and the Company, nor have any such material relationships existed within the    
past three years.                                                               

                                                                · Download Table

                                                              NUMBER OF CLASS B 
                                                             WARRANTS AND SHARES
                                                              OF CLASS A COMMON 
                                                             STOCK BENEFICIALLY 
                                                              OWNED AND MAXIMUM 
                                                                NUMBER TO BE    
SELLING SECURITYHOLDERS                                            SOLD(1)      
-----------------------                                      -------------------
                                                                                
Alan S. Abrams..............................................        12,500      
Jeffrey W. Abrams and Josette M. Abrams, JTWROS.............        12,500      
Jerome Ansel................................................        50,000      
Michael A. Asch.............................................        12,500      
Arthur F. Backal............................................         6,250      
James J. Binns, Esq. IRA Rollover...........................         6,250      
Andrew Bressman.............................................        25,000      
Michael Cantor..............................................        18,750      
Chesed Congregation.........................................       150,000      
Kenneth Cohen and Sherry Cohen, JTWROS......................        12,500      
Isaac Dweck.................................................        50,000      
Raymond Drapkin, M.D........................................        12,500      
Jules H. Dreyfuss...........................................        31,250      
EBLW Associates.............................................        12,500      
Steven M. Fieldman and Marjorie Fieldman, JTWROS(2).........        25,000      
Robert A. Foisie............................................        50,000      
Sandy Frank.................................................        25,000      
William Frankel.............................................        12,500      
Dr. Harvey Glicker..........................................        25,000      
Donald H. Goldman(3)........................................        25,000      
Morton Goulder..............................................        25,000      
Steven R. Hurlburt..........................................        37,500      
Boris Itkis(2)..............................................        25,000      
Michail Itkis and Lauren Snopkowski, JTWROS(2)..............        25,000      
Leonard Keller and Eileen Keller, JTWROS....................        75,000      
Robert E. Kirby.............................................        37,500      
Harmat Capital Corp.........................................        50,000      
David Hoffman and Jerri Hoffman, JTWROS.....................        75,000      
Lenny Corp..................................................        12,500      
Phil Lifschitz..............................................        25,000      
Gary Lustberg...............................................        12,500      
Harvey Mininberg and Susan Mininberg, JTWROS................        12,500      
Momentum Enterprises Inc. Money Purchase Trust..............        12,500      
Richard A. Nelson and Elaine M. Nelson, JTWROS..............        50,000      
Marc Roberts and Ron Cantor, JTWROS.........................        50,000      
The Rubin Family Foundation, Inc............................        18,750      

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                                                                · Download Table

                                                              NUMBER OF CLASS B 
                                                             WARRANTS AND SHARES
                                                              OF CLASS A COMMON 
                                                             STOCK BENEFICIALLY 
                                                              OWNED AND MAXIMUM 
                                                                NUMBER TO BE    
  SELLING SECURITYHOLDERS                                          SOLD(1)      
  -----------------------                                    -------------------
                                                                                
E. Donald Shapiro...........................................          6,250     
Dr. George Spiegel..........................................         37,500     
Gary J. Strauss.............................................         12,500     
Morris Talansky.............................................         50,000     
Ervin Tausky................................................         50,000     
Henry G. Warner.............................................         18,750     
Henry G. Warner Special No. 2...............................         12,500     
Adam R. Wolfensohn..........................................         18,750     
Naomi R. Wolfensohn.........................................         18,750     
Sara R. Wolfensohn..........................................         18,750     
Joel Wolff..................................................         75,000     
Aaron Wolfson...............................................         25,000     
Abraham Wolfson.............................................         25,000     
Morris Wolfson..............................................         50,000     
Seth Zachary................................................         12,500     
                                                                  ---------     
  Total.....................................................      1,550,000     
                                                                  =========     

--------                                                                        
(1) Does not include shares of Class A Common Stock issuable upon exercise of   
the Class B Warrants. Except for the individuals set forth in footnotes 
(2) and (3), none of the Selling Securityholders beneficially own in    
excess of 1% of the outstanding shares of Common Stock.                 

(2) Each of Steven M. Fieldman, Michail Itkis and Boris Itkis are directors     
  and, with the exception of Boris Itkis, executive officers of the Company.

(3) Mr. Goldman is a former director and executive officer of the Company.      

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CONCURRENT OFFERINGS  

Pursuant to the registration statement of which this Prospectus forms a     
part, the Company has registered (i) up to 8,775,000 shares of Class A Common   
Stock of the Company, which are issuable upon exercise of the Company's         
outstanding Class B Warrants issued in public offerings, (ii) the resale of     
275,000 Class B Warrants acquired by certain other selling securityholders in   
a private placement and the 275,000 shares of Class A Common Stock underlying   
such Class B Warrants. Sales of such securities, or the potential of such       
sales, may have an adverse effect on the market price of the securities         
offered hereby.                                                                 

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LEGAL MATTERS 

The validity of the securities offered hereby has been passed upon for the  
Company by Baer Marks & Upham LLP, New York, New York.                          

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PART II 

INFORMATION NOT REQUIRED IN PROSPECTUS  

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION                            

The expenses to be paid by the Company in connection with the distribution  
of securities being registered (for all three offerings) are estimated as       
follows:                                                                        

                                                                · Download Table
                                                                         
Accounting Fees and Expenses................................ $  15,000   
Legal Fees and Expenses.....................................    25,000   
Miscellaneous Expenses......................................     5,000   
Blair Commission............................................ 5,167,625(1)
                                                             ---------   
  Total..................................................... 5,212,625   
                                                             =========   

--------                                                                        
(1) Represents commissions on exercise of all Class B Warrants in Offerings     
#1, #2 and #3 of $134,100, $4,277,900 and $755,625, respectively.       

The Selling Securityholders will be responsible for all selling commissions,
transfer taxes and related charges in connection with the offer and sale of     
the Selling Securityholder Securities.                                          

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS                              

Section 145 of the Delaware General Corporation Law empowers a corporation  
to indemnify any person who was or is a party or is threatened to by made a     
party to any threatened, pending or completed action, suit or proceeding,       
whether civil, criminal, administrative or investigative (other than a suit by  
or in the right of the corporation) by reason of the fact that he or she is or  
was a director, officer, employee or agent of the corporation or is or was      
serving at the request of the corporation as an officer, employee or agent of   
another corporation or enterprise. Depending on the character of the            
proceeding, a corporation may indemnify against expenses (including attorneys'  
fees), judgments, fines and amounts paid in settlement actually and reasonably  
incurred in connection with such action, suit or proceeding if the person       
indemnified acted in good faith and in a manner he or she reasonably believed   
to be in and not opposed to the best interests of the corporation, and, with    
respect to any criminal action or proceeding, had no cause to believe his or    
her conduct was unlawful. In the case of an action by or in the right of the    
corporation, no indemnification may be made with respect to any claim, issue    
or manner as to which such person has been adjudged to be liable to the         
corporation unless the Court of Chancery or the court in which such action or   
suit was brought determines that despite the adjudication of liability, such    
person is fairly and reasonably entitled to indemnity for such expenses which   
the court deems proper. Section 145 further provides that to the extent a       
director or officer of a corporation has been successful in the defense of any  
action, suit or proceeding referred to above or in the defense of any claim     
issue or manner therein, he or she shall be indemnified against expenses        
(including attorneys' fees) actually and reasonably incurred by him or her in   
connection therewith. Corporations may also advance expenses incurred in        
defending proceedings against corporate agents upon receipt of an undertaking   
that the agent will reimburse the corporation if it is ultimately determined    
that the agent is not entitled to be indemnified against expenses reasonably    
incurred.                                                                       

The Company's Certificate of Incorporation provides, in effect, that, to the
extent and under the circumstances permitted by Section 145 of the Delaware     
General Corporation Law, the Company shall indemnify any person who was or is   
a party or is threatened to be made a party to any action, suit or proceeding   
of the type described above by reason of the fact that he or she is or was a    
director, officer, employee or agent of the Company or is or was serving at     
the request of the Company as director, officer, employee or agent of another   
corporation or enterprise.                                                      

As permitted by the Delaware General Corporation Law, the Company's         
Certificate of Incorporation limits the personal liability of its directors     
for violations of their fiduciary duty. This eliminates each director's         
liability to the corporation or its stockholders for monetary damages except    
(i) for any breach of the director's duty of loyalty; (ii) for acts or          
omissions not in good faith or which involve intentional misconduct or a        
knowing                                                                         

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violation of law; (iii) pursuant to Section 174 of the Delaware General         
Corporation Law providing for liability of directors for unlawful payment of    
dividends or unlawful stock purchases or redemptions; or (iv) for any           
transaction from which a director derived an improper personal benefit. The     
effect of this provision is to eliminate the personal liability of directors    
for monetary damages for actions involving a breach of their fiduciary duty of  
care, including any such actions involving gross negligence.                    

ITEM 16. EXHIBITS                                                               

                                                                · Download Table

EXHIBIT                                                                       
NUMBER                                DESCRIPTION                             
-------                               -----------                             
                                                                              
 1.1(1)  Revised Form of Underwriting Agreement                               
 3.1(1)  Certificate of Ownership and Merger                                  
 3.2(1)  Amended and Restated Certificate of Incorporation of the Registrant  
 3.3(1)  Certificate of Amendment of Amended and Restated Certificate of      
         Incorporation of Registrant                                          
 3.4(1)  By-laws of the Registrant                                            
 4.1(1)  Form of Bridge Note                                                  
 4.2(1)  Revised Form of Warrant Agreement                                    
 4.3(1)  Revised Form of Underwriter's Unit Purchase Option                   
 4.4(1)  Specimen of Class A Common Stock Certificate                         
 4.5(1)  Specimen of Class B Common Stock Certificate                         
 4.6**   Specimen of Class B Warrant Certificate                              
 4.7(3)  Specimen of Class C Warrant Certificate                              
 4.8(3)  Specimen of Class D Warrant Certificate                              
 5.1     Legal Opinion of Irell & Manella LLP                                 
 5.2(4)  Legal Opinion of Baer Marks & Upham LLP                              
10.1(1)  1994 Stock Option Plan                                               
10.2     Employment Agreement between Registrant and Steven M. Fieldman dated 
         as of August 27, 1996                                                
10.3(1)  Employment Agreement between Registrant and Michail Itkis dated as of
         October 31, 1994                                                     
10.4(2)  Employment Agreement between the Registrant and Robert J. Aten dated 
         as of April 1, 1995                                                  
10.5(2)  Employment Agreement between the Registrant and Lance Fieldman dated 
         as of May 1, 1995                                                    
10.6(1)  Amended and Restated Shareholders' Agreement by and among Yuri Itkis,
         Michael Itkis, Boris Itkis, Steven M. Fieldman, Donald H. Goldman,   
         Lance Fieldman and Registrant dated as of October 6, 1994            
10.7(1)  Intellectual Property License and Support Services Agreement by and  
         between FortuNet, Inc. and Registrant dated as of October 6, 1994    
10.8(1)  Amended and Restated Consulting Agreement by and between Registrant  
         and Yuri Itkis dated as of October 6, 1994                           
10.9(1)  Amended and Restated Escrow Agreement by and between the Registrant, 
         American Stock Transfer & Trust Company, Yuri Itkis, Michael itkis,  
         Boris Itkis, Steven M. Fieldman, Donald H. Goldman and Lance Fieldman
10.10(1) Sublease between Registrant and Key Products Co., Inc.               
10.11(2) Lease between Registrant and 44 West 55th Street Associates dated as 
         of May 1, 1995                                                       
10.12(1) Form of Indemnification Agreement                                    
10.13(1) Form of International Sales Representative Agreement                 
10.14(4) Form of Amendment of Amended and Restated Escrow Agreement           
23.1     Consent of Irell & Manella LLP (included in legal opinion filed as   
         Exhibit 5.1)                                                         
23.2     Consent of KPMG Peat Marwick LLP                                     
23.3     Consent of Richard A. Eisner & Company LLP                           
23.4(1)  Consent of Baer Marks & Upham LLP (included in Exhibit 5.2)          
24.1     Power of Attorney (included on signature page)                       

--------                                                                        
(1) Incorporated by Reference from the Registrant's Registration Statement on   
Form SB-2, Registration No. 33-86928.                                   

(2) Incorporated by reference from the Registrant's Annual Report on Form 10-   
 KSB for the fiscal year ended October 31, 1995, filed with the Securities
and Exchange Commission on February 13, 1996, File No. 0-25668.         

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(3) Incorporated by reference from the Registrant's Quarterly Report on Form    
 10-QSB for the fiscal year ended July 31, 1996, filed with the Securities
and Exchange Commission on September 16, 1996, File No. 0-25668.        

(4) Incorporated by Reference from the Registrant's Registration Statement on   
Form SB-2, Registration No. 333-02044.                                  

**  To be filed by amendment                                                    

ITEM 17. UNDERTAKINGS                                                           

(a) The undersigned registrant hereby undertakes:                           

 (1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:                    

(i) To include any prospectus required by section 10(a)(3) of the   
Securities Act of 1933;                                                 

(ii) To reflect in the prospectus any facts or events arising after 
the effective date of the registration statement (or the most recent    
post-effective amendment thereof) which, individually or in the         
aggregate, represent a fundamental change in the information set forth  
in the registration statement;                                          

 (iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or  
any material change to such information in the registration statement;  

provided, however, that paragraphs 1(i) and 1(ii) do not apply if the       
information required to be included in a post-effective amendment by those  
paragraphs is contained in periodic reports filed by the registrant         
pursuant to section 13 or section 15(d) of the Securities Exchange Act of   
1934 that are incorporated by reference in the registration statement.      

(2) That, for the purpose of determining any liability under the        
Securities Act of 1933, each such post-effective amendment shall be deemed  
to be a new registration statement relating to the securities offered       
therein, and the offering of such securities at that time shall be deemed   
to be the initial bona fide offering thereof.                               

(3) To remove from registration by means of a post-effective amendment  
any of the securities being registered which remain unsold at the           
termination of the offering.                                                

(b) The undersigned registrant hereby undertakes that, for purposes of      
determining any liability under the Securities Act of 1933, each filing of the  
registrant's annual report pursuant to section 13(a) or section 15(d) of the    
Securities Exchange Act of 1934 (and, where applicable, each filing of an       
employee benefit plan's annual report pursuant to section 15(d) of the          
Securities Act of 1934) that is incorporated by reference in the registration   
statement shall be deemed to be a new registration statement relating to the    
securities offered therein, and the offering of such securities at that time    
shall be deemed to be the initial bona fide offering thereof.                   

(c) Insofar as indemnification for liabilities arising under the Securities 
Act may be permitted to directors, officers and controlling persons of the      
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant   
has been advised that in the opinion of the Commission such indemnification is  
against public policy as expressed in the Securities Act and is, therefore,     
unenforceable. In the event that a claim for indemnification against such       
liabilities (other than the payment by the registrant of expenses incurred or   
paid by a director, officer or controlling person of the registrant in the      
successful defense of any action, suit or proceeding) is asserted by such       
director, officer or controlling person in connection with the securities       
being registered, the registrant will, unless in the opinion of its counsel     
the matter has been settled by controlling precedent, submit to a court of      
appropriate jurisdiction the question whether such indemnification by it is     
against public policy as expressed in the Securities Act and will be governed   
by the final adjudication of such issue.                                        

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SIGNATURES  

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT  
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE    
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION       
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY         
AUTHORIZED, IN THE CITY OF LOS ANGELES, STATE OF CALIFORNIA, ON THE 10TH DAY    
OF OCTOBER, 1996.                                                               

                                    INTERACTIVE FLIGHT TECHNOLOGIES,
          INC.

                              By:      /s/ Michail Itkis
                                            __________________________________
                                           Michail Itkis
                                           Chief Executive Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears    
below constitutes and appoints each of Michail Itkis and Steven M Fieldman,     
jointly and severally, as his true and lawful attorneys-in-fact and agents,     
each with full power of substitution for him and in his name, place and stead,  
in any and all capacities, to sign any and all amendments and post-effective    
amendments to this Registration Statement, and to file the same, with all       
exhibits thereto, and other documents in connection therewith, with the         
Securities and Exchange Commission, granting unto each said attorney-in-fact    
and agent full power and authority to do and perform each and every act and     
thing requisite and necessary to be done in and about the premises, as fully    
to all intents and purposes as he might or could do in person, thereby          
ratifying and confirming all that each said attorney-in-fact and agent, or his  
substitutes, may lawfully do or cause to be done by virtue thereof.             

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS            
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE          
CAPACITIES AND ON THE DATES INDICATED.                                          

                                                                · Download Table

             SIGNATURE                           TITLE                  DATE      
             ---------                           -----                  ----      

                                                                                  
        /s/ Michail Itkis            Chief Executive Officer and  October 10, 1996
____________________________________  Director                                    
            Michail Itkis                                                         

     /s/ Steven M. Fieldman          Director                     October 10, 1996
____________________________________                                              
        Steven M. Fieldman                                                        

         /s/ Yuri Itkis              Director                     October 10, 1996
____________________________________                                              
            Yuri Itkis                                                            

        /s/ Boris Itkis              Director                     October 10, 1996
____________________________________                                              
           Boris Itkis                                                            

       /s/ James H. Zukin            Director                     October 10, 1996
____________________________________                                              
           James H. Zukin                                                         

   /s/ Alexander M. Haig, Jr.        Director                     October 10, 1996
____________________________________                                              
   General Alexander M. Haig, Jr.                                                 

       /s/ Robert A. Aten            Chief Financial Officer      October 10, 1996
____________________________________  (Principal Financial and                    
           Robert A. Aten             Accounting Officer)                         

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Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This S-3 Filing		Date		First		Last			Other Filings
		2/1/94		20
		10/6/94		35
		10/31/94		20		35
		12/31/94		4
		3/7/95		25
		3/8/95		4
		3/14/95		21
		4/1/95		35
		5/1/95		35
		5/10/95		20
		10/31/95		4		35
		1/31/96		4
		2/13/96		35
		3/7/96		19		24
		4/4/96		5
		4/30/96		4					10QSB, 10QSB/A
		5/17/96		21		24			SC 13E4/A
		7/18/96		6
		7/31/96		4		36			10QSB, 10QSB/A
		8/6/96		14		29
		8/27/96		35
		8/31/96		16		29
		9/5/96		7
		9/16/96		36					10QSB
		10/1/96		18		24
		10/8/96		1
		10/10/96		37
Filed On / Filed As Of		10/11/96		1
		3/7/97		24
		3/7/98		24
		3/6/0		3		21
		3/6/6		27
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