ILLUMINATED MEDIA INC
424B3, 1997-11-04
ADVERTISING AGENCIES
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                      ILLUMINATED MEDIA INC.

                         SUPPLEMENT NO. 2        Rules 424(b)(3);
                         to Prospectus,                    424(c)
                       dated July 24, 1997.    File No. 333-22443    


1.   Effective October 22, 1997, Illuminated Media Inc. (the "Company") and
     Tuschner & Co., Inc. (the "Underwriter") agreed to extend the Company's
     offering for an additional period of 60 days until December 21, 1997,
     which is permitted under the Impoundment Agreement.  Through October
     22, 1997, $36,592.05, had been received from subscribers.  All such
     funds were returned to subscribers, or their accounts, on October
     22, 1997, by the Impoundment Agent, Bank Windsor.

2.   By virtue of its Registration Statement on Form SB-2 becoming effective on
     July 24, 1997, the Company has commenced preparing and filing periodic
     reports with the SEC. In that regard, the Company's unaudited financial
     statements for its first and second fiscal quarters ended May 31, and
     August 31, 1997, respectively, have now been reported on Forms 10-QSB,
     and are available through the SEC's EDGAR system (see third paragraph
     of "Available and Additional Information" in Prospectus).  The
     unaudited financial results for the second fiscal quarter, ended August
     31, 1997, were reported in capsule form in Supplement No. 1, and the
     full text of the Company's Form 10-QSB for that period is attached to
     this Supplement.

3.   The Company has been unable to make all required debt payments on a
     current basis and is negotiating with the holders of such debt for an
     extension and/or deferral of maturity dates and/or monthly payments.
     See Note 3 to the Company's unaudited financial statements for its
     second fiscal quarter ended August 31, 1997, and the "Subsequent
     Events" paragraph under Item 2, Management's Discussion and Analysis,
     contained in its Form 10-QSB for such period, which is attached to the
     Prospectus.  On October 30, 1997, the Lease Brothers waived any
     potential default and/or acceleration provisions in their Notes, as
     long as they are brought current by December 21, 1997.

4.   During the period July 24, 1997, through October 21, 1997, the Company
     sold an additional $31,000 of Debentures, accompanied by warrants for
     10,323 shares.

5.   Effective October 16, 1997, Richard D. Kothe, President, Chief Financial
     Officer and a director of the Company, resigned for personal reasons.
     Mr. Robert H. Blank, the Company's Chairman and CEO, assumed the
     additional duties of President and CFO.

6.   Effective October 16, 1997, the Company appointed Thomas J. dePetra to the
     positions of Chief Operating Officer and Director of Finance.  During the
     preceding five years, Mr. dePetra was a management consultant who
     assisted emerging companies in developing programs for marketing,
     planning and SEC compliance.  During the period January 1996, to April
     1997, he was CEO and a director of Nortech Forest Technologies, Inc., a
     publicly-held company.

           The date of this Supplement No. 2 is October 30, 1997.



             SECURITIES AND EXCHANGE COMMISSION 
                   Washington, D.C. 20549 
                               
                         FORM 10-QSB 
                                                              
 
   [X]    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF 
          THE SECURITIES EXCHANGE ACT OF 1934 FOR THE 
          QUARTERLY PERIOD ENDED AUGUST 31, 1997    
                               
                 Commission File Number 333-22443 
                                                                                
                               
                               
                               
                   ILLUMINATED MEDIA INC. 
(Exact Name of Small Business Issuer as specified in its charter) 
                           
                                                                   
 
 
          Minnesota                                       41-1744582            
 (State or other Jurisdiction of              (IRS Employer Identification No.) 
  Incorporation or Organization) 
 
 
               15 S. Fifth Street, Suite 715 
                   Minneapolis, MN 55402 
                       (612) 338-3554 
                    FAX: (612) 370-0381 
    (Address of Principal Executive Offices, including  
          Zip Code, and telephone and FAX numbers) 
 
Check whether the issuer (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for 
such shorter period that the registrant was required to file such 
reports), and (2) has been subject to such filing requirements for the past 
90 days.  Yes       No   x     
 
As of August 31, 1997, there were 305,000 shares of Common Stock outstanding, 
which does not include 204,999 shares of Preferred Stock that are 
automatically convertible into shares of Common Stock in connection with the 
Company's public offering, nor Stock Purchase Warrants outstanding for the 
purchase of up to 169,959 shares. 
 
Transitional Small Business Disclosure Format: Yes   x   No       
 
 
INFORMATION REQUIRED IN QUARTERLY REPORT OF TRANSITIONAL SMALL 
BUSINESS 
                          ISSUERS. 
                               
                           PART I 
                               
                   FINANCIAL INFORMATION 
 
 
ITEM 1.  FINANCIAL STATEMENTS 
 
             "Illuminated Media, Inc "                       
Balance Sheet (Unaudited)                          
                          
                                  08/31/97     02/28/1997  
                                 -----------    ----------- 
Assets                         
Cash                                   2,361          7,651  
Accounts Receivable                   23,157         22,648      
Prepaid Expense                       45,563         49,646      
Other Receivables                      1,877            445   
                                    --------        ------- 
Total Current Assets                  72,958         80,390      
 
Property and Equipment, net           30,492         34,638      
Other Assets                             106            199   
                                    --------        ------- 
Total Assets                         103,556        115,227     
                                    ========        ======= 
 
Liabilities and Shareholders Deficit                         
Note Payable Bank                    135,000        135,000     
Note Payable shareholders             19,509         19,509      
Debentures Payable                    80,000         40,000      
Debentures Payable Related Parties   112,000        143,000     
Accounts Payable                     117,471        116,592     
Other accured Expenses                49,775         15,192      
Current Portion Long                          
Term Debt                             27,683         13,402      
Current Portion Long Term                          
Debt Related Parties                 168,276         21,085      
                                     -------        -------  
Total current liabilites             709,714        503,780     
 
Long term debt                             0         20,349      
Long term debt related party               0        149,719     
                                     -------        ------- 
Total Liabilities                    709,714        673,848     
                                     -------        ------- 
 
Redeemable Preferred Stock                         
Series A convertible preferred stock, 
 $.30 stated value; 110,000 shares 
 authorized and 99,999 shares issued 
 and outstanding                      30,000         30,000      
Series B convertible preferred stock, 
 $.30 stated value; 155,000 shares 
 authorized and 105,000 shares issued 
 and outstanding                      31,500         31,500      
                                     -------        ------- 
Total Preferred Stock                 61,500         61,500      
                                     -------        ------- 
Shareholders deficit                          
Common Stock $.01 par value 
 10,000,000 shares authorized 
 305,000 and 220,000 issued 
 and outstanding, respectively        10,700          2,200  
Additional Paid in Capital           148,829         72,329      
Accumulated Deficit                 (827,187)      (694,650)    
                                    --------       -------- 
Total shareholders Deficit          (667,658)      (620,121)    
                                    --------       -------- 
Total Liabilities redeemable 
 preferred stock & shareholders 
 deficit                             103,556        115,227 
                                     =======        ======= 
 
Illuminated Media Inc                         
Statement of Operations                       
Three Months Ended                       
(Unaudited) 
                                   08/31/97          08/31/96  
                                 -----------        ---------- 
                          
Revenues                            25,954             62,678 
                          
                          
Operating Expenses                       
General and Administrative          74,985             73,972 
                                   --------           -------- 
Loss From Operations               (49,031)           (11,294) 
                          
Other Income (Expenses)                       
Interest Exp                       (18,435)           (18,532) 
Misc Income                              0              4,160     
                                   --------           -------- 
Total other Expenses               (18,435)           (14,382)     
                               
Net Loss                           (67,466)           (25,676)     
                                   ========           ======== 
 
Net loss per share                  ($0.24)            ($0.12)    
                                   ========           ======== 
Weighted average                              
shares outstanding                  283,696            220,000     
                                   ========           ======== 
 
Illuminated Media Inc                         
Statement of Operations                       
Six Months Ended                       
(Unaudited) 
                                  08/31/97           08/31/96  
                                 ----------         ---------- 
                          
Revenues                            67,048            122,816 
                          
Operating Expenses                       
General and Administrative         168,253            150,784 
                                  --------           -------- 
Loss From Operations              (101,205)           (27,968) 
                          
Other Income (Expenses)                       
Interest Exp                       (31,333)           (24,056) 
Misc Income                              0              4,150            
                                   --------           -------- 
Total other Expenses               (31,333)           (19,906)     
                                   --------           --------      
Net Loss                          (132,538)           (47,874)     
                                  =========           ======== 
Net loss per share                  ($0.53)            ($0.22)    
                                  =========           ======== 
Weighted average                              
shares outstanding                 251,847             220,000 
                                  =========           ======== 
 
Illuminated Media Inc.                             
Statement of Cash Flows (Unaudited)                               
3 Month Period ended                    8/31/1997      8/31/1996 
                                       -----------    ----------- 
Cash Flows from Operating Activities                              
 
Net Loss                                 (67,466)        (25,676) 
Adjustments to reconcile net loss 
 to net cash used in operating 
 activities                            
Depreciation and Amortization              2,160           3,241 
Decrease (Increase) in Assets                           
Accounts Receivable                        1,285         (25,758) 
Prepaid Expenses                           4,083               0 
Other Receivable                            (150)           (352) 
 
Incease (Decrease)in Liabilities                             
Accounts Payable                           7,540          21,935 
Accrued Expense                           27,273           7,876 
                                         --------        -------- 
Net Cash Used Operating Activities       (25,275)        (18,734) 
                                         --------        -------- 
Cash Flows From Investing activities                              
Purchase of property and equipment             0               0 
                                         --------        -------- 
Cash Flows from financing acitivites                              
Debentures payable                        10,000                   
Debentures Related Parties                21,000               0 
Payment of long Term Debt                 (4,227)         (1,816) 
Payment of long term Debt Related Parties      0          (4,700) 
                                          -------         ------- 
Net Cash Provided by Financing                               
Activities                                26,773          (6,516) 
                                          -------         ------- 
Increase (Decrease) in cash                1,498         (25,250) 
Cash beginning of period                     863          29,695 
                                          -------         ------- 
Cash end of period                         2,361           4,445 
                                          -------         ------- 
 
Supplemental Schedule of Non-cash investing and financing Activities: 
During the three months ended August 31, 1997, $85,000 of debentures 
were converted to 85,000 shares of the Company's common stock.            
 
 
              FOOTNOTES TO THE INTERIM FINANCIAL STATEMENTS 
 
              (1) Basis of Presentation 
 
              The unaudited financial statements included in this Form 10-QSB 
have been prepared by the Company, pursuant to the rules and regulations of 
the Securities and Exchange Commission.  Certain information and footnote 
disclosures normally included in financial statements prepared in 
accordance with generally accepted accounting principles have been condensed, 
or omitted, pursuant to such rules and regulations, although management 
believes the disclosures are adequate to make the information 
presented not misleading.  The results of operations for any interim period 
are not necessarily indicative of results for a full year. These statements 
should be read in conjunction with the financial statements and related 
notes included in the Company's Registration Statement on Form SB-2, 
effective July 24, 1997, Registration No. 333-22443. 
 
              The unaudited financial statements presented herein as of 
August 31, 1997 and for the three months ended August 31, 1997 and 1996 
reflect, in the opinion of management, all material adjustments 
consisting only of normal recurring adjustments necessary for a fair 
presentation of the financial position, results of operations and cash flows 
for the interim periods.  
 
             (2) Public Offering of Securities 
 
As of August 31, 1997, the Company was making a public offering  
pursuant to a Registration Statement on Form SB-2, Registration No. 
333-22443, effective July 24, 1997, to raise a minimum of $650,000 to 
a maximum of $1,500,000 through the sale of units; but at August 31, 
1997, the minimum amount had not been sold. 
 
Subsequent to August 31, 1997, the Company and its underwriter 
agreed to extend the offering twice, first to September 22, 1997 and 
then until December 21, 1997.  On October 22, 1997, all funds received 
through that date, in the amount of $36,592 were returned by the 
Impoundment Agent, Bank Windsor, to subscribers, or their accounts. 
 
             (3) Loan Defaults 
 
             The Company defaulted on various debt agreements aggregating 
$522,959 at August 31, 1997.  These agreements were as follows: 
 
Debentures 
 
         As of August 31, 1997, the Company had debentures aggregating 
$192,000; of which $112,000 is to related parties.  The debentures accrue 
interest at 10% and matured August 31, 1997.  As of October 22, 1997, 
the Company has commenced negotiations with the debenture holders 
to extend the maturity date to December 31, 1997. 
 
Note Payable Bank 
 
         As of August 31, 1997, the Company had notes payable to the Bank 
aggregating $135,000, maturing on September 13, 1997.  As of October 22, 
1997, the Company is attempting to extend these obligations. 
 
Long-term Debt 
 
         As of August 31, 1997, the Company had a note payable to a credit 
union aggregating $27,683.  The note accrues interest at 13.5% and requires 
monthly payments of principal and interest.  Since August 1997, the 
Company has been unable to meet its monthly payment obligations 
and is attempting to obtain an extension or deferral of these monthly 
payments.  As a result of this default, this obligation is reflected as a 
current liability on the accompanying August 31, 1997 balance sheet. 
 
Long-Term Debt Related Parties 
 
         As of August 31, 1997, the Company had three notes with former 
officers/shareholders of the Company and their affiliate aggregating 
$168,276.  These notes accrue interest at 11% and require monthly 
payments of principal and interest. Since August 1997, the Company 
has been unable to meet its monthly payment obligations and is attempting 
to obtain an extension or deferral of these monthly payments.  As a result 
of this default, this obligation is reflected as a current liability on the 
accompanying August 31, 1997 balance sheet. 
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF 
         OPERATION 
          
              [The Registrant is a transitional small business issuer, but 
it has not previously filed, nor been required to file, an Annual Report on 
Form 10-KSB. However, the Registrant intends, when it does file its 
Form 10-KSB, to use and rely upon Alternative 2 under "Information Required 
in Annual Report of Transitional Small Business Issuers".  Accordingly, the 
Registrant chooses here to update the response to Item 6(a)(3)(i) to Model B 
of Form 1-A.  The following discussion concerning the Registrant's second 
fiscal quarter ended August 31, 1997, is intended to comply both with 
Item 303(b) of Regulation S-B, and Item 6(a)(3)(i) of Model B of Form 1-A.] 
 
              The Registrant is in the process of making a public offering 
pursuant to a Registration Statement on Form SB-2, File No. 333-22443, 
including a Prospectus, dated July 24, 1997, as supplemented, 
October 2, 1997.  That part of said Prospectus concerning Management's 
Discussion and Analysis is incorporated by reference. 
 
 Management's Discussion and Analysis of Financial Condition 
                   and Results of Operation 
 
              This discussion of the financial condition and the results of 
operations of the Company should be read in conjunction with, and is 
qualified in its entirety by, the financial statements and notes 
thereto included elsewhere within the Company's Prospectus, and the material 
contained in the "Risk Factors" and " Business" sections of such Prospectus, 
all of which are incorporated by reference. 
 
OVERVIEW 
 
         The Company is an advertising media company that started operations 
in 1993.  It leases space for its advertising platforms from buildings, to 
which it pays concessions, typically, 20% of advertising revenue.  Each 
platform has three panels, of which two are available for rent to 
advertisers and the third is used for public service purposes, such as a 
map, or an ad for a non-profit/charitable organization. 
 
         The Company intends, with the proceeds of the offering to expand 
its operations to several other metropolitan markets, to add enhanced 
features to its platforms, and to increase the percentage of 
panels rented to advertisers.  At August 31, 1997, the Company had 54 
advertising platforms in place in the Minneapolis-St. Paul Metropolitan area. 
 
         A single market is less attractive to national advertisers than if 
the Company could offer its medium in several markets.  Accordingly, the 
Company has explored and will attempt to expand into other cities with 
connecting skyway or underground concourse links ("networked cities") 
such as Des Moines, Dallas, Houston, Cincinnati, Rochester (NY and MN) and 
Duluth.  In addition, the Company plans to expand into three shopping 
malls (Miller Hill Mall, Duluth, MN; Newport Centre, Jersey City, NJ; and 
The Pavillion, San Jose, CA) managed by the same firm that manages the Mall 
of America.  The Company has discussed expansion and has conducted 
preliminary negotiations with the respective property managers, but no final 
agreement has been reached. 
 
         The Company plans to add features to its platforms, such as its 
computer touchscreen product, DISCOVERSCREEN, which can be used to find 
directions or information about retail and service providers, entertainment, 
traffic information and the like.  The Company's goal is to create a national 
network of DISCOVERSCREEN services for use by national as well as local 
advertisers. 
 
         The Company has formed a joint marketing venture with Skyway 
Publications Inc. ("SPI"), a Minneapolis-based publishing company, that sells 
advertising to businesses trying to reach individuals who use the skyway 
systems.  SPI would assist with DISCOVERSCREEN sales. 
 
RESULTS OF OPERATIONS 
 
COMPARISON OF THE THREE MONTH AND SIX MONTH FISCAL PERIODS ENDED 
AUGUST 31, 1997 WITH THE THREE MONTH AND SIX MONTH FISCAL PERIODS ENDED 
AUGUST 31, 1996 (UNAUDITED) 
 
Revenues 
 
         Revenues for the three month period ended August 31, 1997, decreased 
by 58.6% to $25,954 as compared to $62,678 for the three month period ended 
August 31, 1996. Revenues for the six month period ended August 31, 1997, 
decreased by 45.4% to $67,048 as compared to $122,816 for the six month 
period ended August 31, 1996.  Revenues for the two periods were less than 
expected because sales efforts by management  were interrupted by the public 
offering, and the efforts by two new sales employees had not begun to show 
results as of August 31, 1997.  All revenue was generated by the sale of ad 
space for the installed SKYWAY ADS platform. The number of platforms, and the 
per panel fees, remained relatively constant during these periods. 
 
Loss from Operations 
 
         The loss from operations for the three month period ended August 31, 
1997, increased by 334% to ($49,031) as compared to a loss of ($11,294) for the 
three month period ended August 31, 1996.  The loss from operations for the 
six month period ended August 31, 1997, increased by 262% to ($101,205) as 
compared to a loss of ($27,968) for the six month period ended August 31, 
1996.  The increased loss for the two periods resulted primarily from a 
decrease in revenues, and secondarily from  an increase of $17,469 or 11.6% 
in operating expenses, from $150,784 for the six months ended August 31, 
1996 to $168,253 for the six months ended August 31, 1997.  The increased 
operating expenses resulted primarily from the addition of two new 
salespersons who were hired (one in December, 1996, one in January, 1997) in 
anticipation of the completion of the Company's proposed public offering.  
 
Other Income and Expense 
 
         Other income (expense) for the three months ended August 31, 1997, 
increased by $4,053 or 28.2% to ($18,435) as compared to ($14,382) for the 
three months ended August 31, 1996 and for the six months ended August 31, 
1997, increased by $11,427, or 57.4%, to ($31,333) as compared to ($19,906) for 
the six months ended August 31, 1996.  The increased expense for the three 
month period ended August 31, 1997, resulted because miscellaneous income of 
$4,160 during the three month period ended August 31, 1996, did not recur in 
the later period.  The increased expense for the six month period ended August 
31, 1997, resulted primarily from increased interest expense of ($31,333) 
for the period ended August 31, 1997, as compared to ($24,056) for the 
period ended August 31, 1996.  This interest expense increase resulted from 
debt which was approximately $96,000 greater as of August 31, 1997, than August 
31, 1996, and which was incurred to fund operations pending the proposed 
public offering. 
 
LIQUIDITY AND CAPITAL RESOURCES 
 
         The Company's current capital resources have been derived from the 
private sale of debentures (which were accompanied by warrants for the 
purchase of Common Stock) and from loans provided by financial institutions. 
As of February 28, 1997, and August 31, 1997, the Company had approximately 
$7,651 and $2,361, respectively, in cash. 
 
         Since inception the Company incurred net losses because of start-up 
expenses, fixed costs and financing costs. The Company is currently 
experiencing negative cash flow from operations (see "Statement of Cash Flow") 
and expects that such situation will continue until its debt is reduced and 
until a combination of expanded marketing efforts and product enhancements, 
all of which will be financed from the proposed public offering, lead to 
positive cash flow.  As of August 31, 1997 the approximate break-even point 
for sales was $33,000 per month less one time expenses and less debt 
maintenance. 
 
         The Company's future capital requirements relate to two major goals, 
each of which is reflected in the structure of the proposed public offering. 
If the minimum offering is sold, the Company will be able to pay off much of 
its debt, and commence modest additional marketing efforts.  The Company 
expects that as a result of a minimum offering the Company can expand into 
a few new markets and put in place enough new units such that it would 
expect to generate cash flow sufficient to meet its on going operations 
and continue the modest expansion.  If the maximum offering is sold, the 
Company will be able to pay off all of its debt, significantly expand its 
marketing efforts and significantly expand its range of enhanced product 
improvements.  The Company's management expects that if the minimum offering 
is sold, proceeds will last a minimum of twelve months, and if the maximum 
offering is sold, proceeds will last a minimum of twenty-four months.  
 
         The Company does not currently have in place any financing 
arrangements for working capital needs nor does the Company have any unused 
sources of liquidity other than its cash reserves and on-going sales. 
There is no arrangement for the Company's future anticipated capital 
equipment purchases.  
 
         The Company does have sufficient unused capacity with its existing 
ad spaces such that, if more were rented, it could generate revenue 
sufficient to cover its operating expenses and make minor capital investments.  
However, management's primary goal is to acquire the capital which will 
enable the Company to acquire units, both standard and specialized, and 
place them in new markets, thereby expanding capacity and leading to 
greater revenues. 
 
         If the Company's proposed public offering is not completed in the 
near future, it will seek alternate sources of financing, such as a private 
placement of equity, to provide its capital resources. 
 
                                                      
Subsequent Events                 
                                                                  
             (a)  The Company started work in early 1996 on its public 
offering, but because of  various administrative and regulatory delays, the 
Company's Registration Statement, Registration No. 333-22443, did not become 
effective until July 24, 1997.  At August 31, 1997, the last day of the 
fiscal period, the minimum amount of securities offered had not been sold. 
Accordingly, on September 22, 1997,  the Company and the Underwriter extended 
the offering to October 22, 1997. 
 
             (b) Due to continuing delays, on October 22, 1997, the Company 
 and the Underwriter agreed to extend the offering for an additional period 
of 60 days until December 21, 1997, as permitted by the Impoundment 
Agreement.  On October 22, 1997, all funds received through that 
date, in the amount of $36,592.05, were returned by the Impoundment 
Agent, Bank Windsor, to subscribers, or their accounts. 
 
             (c) Subsequent to August 31, 1997, due to the aforementioned 
delays in completing the Company's public offering, the Company 
was unable to make all required debt payments on a current basis. 
Therefore: 
 
                   (i) The Company has commenced negotiations with its 
                       debenture holders, all of whom are individuals known 
                       personally to the Company's management, to extend the 
                       maturity date of such debentures to December 31, 1997. 
                       The Company does not anticipate any difficulty in 
                       obtaining any extensions of such debentures. 
                       Furthermore, approximately one-half of the outstanding 
                       debentures are held by former officers or directors 
                       of the Company, or their relatives. 
 
                  (ii) Further, the Company is attempting to secure extensions 
                       of the maturity dates (September 13, 1997) of its two 
                       promissory notes held by the Bank; and similarly, 
                       attempting to secure an extension or deferral of the 
                       monthly payments for August through October, 1997, 
                       due under its  note held by the Credit Union. 
 
                 (iii) In addition, the Company is seeking deferral of the 
                       August through October, 1997 payments due under its 
                       notes held by the Lease Brothers. 
 
                  (iv) Because the Company has continuously communicated 
                       the aforementioned administrative and regulatory 
                       delays to its debenture holders and other creditors, 
                       management expects that all such extensions or deferrals 
                       will be obtained in the normal course.  In connection 
                       with all of the debt payment matters described above, 
                       the Company has not received any notices of default or 
                       indications of other legal proceedings, pending or 
                       anticipated, from any of these creditors. Upon 
                       completion of the public offering, all such holders 
                       will be re-paid according to the terms of the applicable 
                       debt instruments and as described in the "Use of 
                       Proceeds" section of the Prospectus. 
           
                          PART II 
                               
 
ITEM 1.  LEGAL PROCEEDINGS  
 
              Not applicable. 
 
ITEM 2.  CHANGES IN SECURITIES 
 




              (c) Recent Sales of Unregistered Securities 
 
                  (i) During the period covered by this report, June 1, 1997 
                      through August 31, 1997, the Registrant sold an aggregate 
                      of $16,000 in principal amount of its Subordinated 
                      Debentures, at varying interest rates, together with an 
                      aggregate of 5,333 warrants to purchase Common Stock, to 
                      3 individual investors, all of whom were accredited 
                      investors. 
 
                 (ii) In June, 1997, the holders (all of whom were accredited 
                      investors) of an aggregate of $85,000 in principal amount 
                      of Subordinated Debentures converted and exchanged them 
                      for 85,000 restricted Units at the ratio of one Unit for 
                      each $1.00 in principal amount [Note: This conversion 
                      transaction was previously reported in Item 26(k) of the 
                      Registrant's Registration Statement on Form SB-2, 
                      Registration No. 333-22443.] 
 
                (iii) Subsequent to August 31, 1997, and prior to October 22, 
                      1997, the Registrant sold an aggregate of $15,000 in 
                      principal amount of its Subordinated Debentures, at 
                      varying interest rates, together with an aggregate of 
                      5,000 warrants to purchase Common Stock, to 2 individual 
                      investors, all of whom were accredited investors. 
 
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES 
 
              Not applicable. 
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OR SECURITIES HOLDERS 
 
              Not applicable. 
 
ITEM 5.  OTHER INFORMATION 
 
              Not applicable. 
 
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K 
 
              (a) Exhibits.   See the Index to Exhibits, below. 
              (b) Reports on Form 8-K.  Not applicable. 
 
INDEX TO EXHIBITS. 
 
              All of the items below are incorporated by reference to the 
Registrant's Registration Statement on Form SB-2, File No. 333-22443, 
effective July 24, 1997, except for Item 27.1, which is included with this 
filing. 
 
Number                         Description 
 
4.1    Form of Common Stock certificate. 
4.1A   Form of Warrant Agreement by and among the Registrant, Tuschner & Co., 
       Inc. and the Warrant Agent, as revised. 
4.2    Form of Warrant Agreement by and among the Registrant, the 
       Underwriter, and the Warrant Agent, including a Form of Warrant 
       Certificate. 
4.3    Form of the Registrant's 10% Subordinated Debenture Due September 30, 
       1996, and other dates. 
4.4    Form of the Registrant's Warrant to Purchase Common Shares, expiring 
       November 10, 1998, and other dates. 
4.5    Form of Maturity Extension Agreement for Debentures. 
10.1   Stock Redemption Agreement, dated November 28, 1995, between the 
       Regisrant and various Lease Brothers entities, together with exhibits 
       thereto, namely three promissory notes, a personal guaranty and a 
       security agreement. 
10.2   Bridge Financing Agreement, dated November 27, 1995, between the 
       Registrant and Norman Winer, together with exhibits thereto, namely 
       Promissory Note, Security Agreement, Guaranty of Re-Payment, form of 
       Subordination Agreement and form of Temporary Waiver of Right to Put. 
10.3   Form of lease with building for space for Skway Ad platform. 
10.4   Form of advertising contract for Skyway Ad. 
10.5   Lease Agreement between Registrant and its lessor. 
10.6   Registrant's Corporate Stock Option Plan. 
10.7   Form of Executive Employment Agreement. 
10.8   Letter Agreement with Simon Property Group. 
10.9   Letter Agreement with Lasertainment Productions International. 
10.10  Joint Marketing Agreement with Skyway Publications, Inc. 
10.11  Consulting Agreement with Sun Consulting, Inc. 
10.12  Bank Windsor Loan Documents. 
10.13  Agreement as to Change of Convertibility Terms, dated July 17, 1997, 
       between the Registrant and the Lease Brothers. 
27.1   Financial Data Schedule.* 
99.1   Registrant's Registration Statement on Form SB-2, Registration 
       No. 333-22443, as amended. 
99.2   Supplement, dated October 2, 1997, to Registrant's Prospectus, dated 
       July 24, 1997. 
 
 
       *    Included with this report.  All other items are incoporated by 
            reference to the Registrant's Registration Statement on Form 
            SB-2, File No. 333-22443, effective July 24, 1997. 
<PAGE>
 
                         SIGNATURES 
 
 
         In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.  
 
 
                                  ILLUMINATED MEDIA INC.   
 
 
Date:       October 24, 1997      By:                                           
                                  Robert H. Blank  
                                  Chairman, CEO, President, CFO  
                                  (Principal Executive Officer, Principal 
                                   Financial Officer, Principal Accounting 
                                   Officer)                  
     
 
 
 
                          SIGNATURES 
 
 
         In accordance with the requirements of the Exchange Act, the 
Registrant caused this report to be signed on its behalf by the undersigned, 
thereunto duly authorized.  
 
 
                                  ILLUMINATED MEDIA INC.   
 
 
Date:       October 24, 1997      By: /s/ Robert H. Blank                       
                                  Robert H. Blank  
                                  Chairman, CEO, President, CFO  
                                  (Principal Executive Officer, Principal 
                                   Financial Officer, Principal Accounting 
                                   Officer)                  
     
 
  
 




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