<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
-------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter ended July 31, 1996
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to _______
Commission File No. 0-25668
INTERACTIVE FLIGHT TECHNOLOGIES, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
DELAWARE 11-319748
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation of Organization) Identification Number)
4041 NORTH CENTRAL AVENUE
SUITE 2000
PHOENIX, ARIZONA 85012
(Address of Principal Executive Offices)
(602) 200-8900
(Issuer's Telephone Number, Including Area Code)
3070 WEST POST ROAD
LAS VEGAS, NEVADA 89118
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No ___
---
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Class Outstanding at August 31, 1996
----- ------------------------------
Class A Common Stock, $.01 par value 8,063,329 shares
Class B Common Stock, $.01 par value 3,960,000 shares
Transitional Small Business Disclosure Format
Yes ___ No X
---
<PAGE>
INTERACTIVE FLIGHT TECHNOLOGIES, INC.
INDEX TO FORM 10-QSB/A
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as at July 31, 1996 and 1995
(unaudited)....................................... 3
Statement of Operations for the Three and Nine
Months ended July 31, 1996 and 1995 (unaudited)... 4
Statement of Cash Flows for the Nine Months
ended July 31, 1996 and 1995 (unaudited).......... 5
Notes to Financial Statements.......................... 6
Item 2. Results of Operations......................... 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings............................. 11
Item 5. Other Information............................. 11
Item 6. Exhibits and Reports on Form 8-K.............. 11
SIGNATURES............................................. 12
</TABLE>
Page 2 of 14
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
INTERACTIVE FLIGHT TECHNOLOGIES, INC.
BALANCE SHEET
UNAUDITED
<TABLE>
<CAPTION>
July 31, July 31,
1996 1995
----------- -----------
<S> <C> <C>
ASSETS
------
Current Assets:
Cash and cash equivalents 22,684,009 7,765,454
Accounts receivable 1,860,115 -
Inventory 1,983,442 1,964,932
Prepaid expenses and other current
assets 336,180 341,089
----------- -----------
Total current assets 26,863,746 10,071,475
Machinery and equipment net of
accumulated depreciation of $334,585
and $32,564 1,770,223 461,858
Deferred costs of securities
registration - -
Deposits 385,611 155,449
----------- -----------
TOTAL 29,019,580 10,688,782
=========== ===========
LIABILITIES
-----------
Current Liabilities:
Accounts payable 1,568,790 739,400
Accrued expenses 249,702 76,170
Accrued severance costs 112,500 -
Accrued product warranties 1,166,010 -
----------- -----------
Total current liabilities 3,097,002 815,570
Noncurrent accrued product warranties 505,035 -
Commitments/Contingencies (Note B)
STOCKHOLDERS' EQUITY (NOTE A)
-----------------------------
Preferred stock, par value $0.01 per
share, 5,000,000 shares authorized,
none issued - -
Class B common stock, six votes per
share, par value $0.01 per share,
3,960,000 shares authorized, issued
and outstanding including
3,200,000 shares placed in escrow 39,600 40,000
Class A common stock, one vote per
share, par value $0.01 per share,
40,000,000 shares authorized, 8,046,610
issued and outstanding 80,466 32,200
Capital in excess of par value 41,941,272 14,230,432
Accumulated Deficit (16,643,795) (4,429,420)
----------- -----------
Total stockholders' equity 25,417,543 9,873,212
----------- -----------
TOTAL 29,019,580 10,688,782
=========== ===========
</TABLE>
Page 3 of 14
<PAGE>
INTERACTIVE FLIGHT TECHNOLOGIES, INC.
STATEMENT OF OPERATIONS
UNAUDITED
<TABLE>
<CAPTION>
Nine Months Three Months
Ended July 31, Ended July 31,
------------------------ ------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES
Sales 2,813,754 - 1,200,378 -
Video service fees 107,081 - 52,052 -
----------- ---------- ---------- ----------
Total 2,920,835 - 1,252,430 -
COSTS AND EXPENSES
Cost of goods sold 4,542,006 - 2,135,585 -
Research and development expenses 2,910,603 1,836,607 1,248,602 837,263
Marketing and administrative expenses 6,597,080 1,571,485 2,951,992 762,957
Unusual items 112,500 - 112,500 -
Interest and amortization of debt issue
costs - 851,218 - -
----------- ---------- ---------- ----------
Total 14,162,189 4,259,310 6,448,679 1,600,220
OTHER INCOME
Interest income 331,116 232,172 255,980 144,347
----------- ---------- ---------- ----------
NET LOSS 10,910,238 4,027,138 4,940,269 1,455,873
=========== ========== ========== ==========
Net loss per share of common stock $ (2.05) $ (1.64) $ (0.63) $ (0.36)
=========== ========== ========== ==========
Weighted average shares outstanding 5,325,487 2,448,205 7,866,028 4,020,000
=========== ========== ========== ==========
</TABLE>
Page 4 of 14
<PAGE>
INTERACTIVE FLIGHT TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
Nine Months
Ended July 31,
-------------------------
1996 1995
----------- ----------
<S> <C> <C>
Cash Flows From Operating Activities:
Net loss (10,910,238) (4,027,138)
Adjustment to reconcile net loss to
net cash used in operating activities:
Depreciation 264,488 30,598
Amortization of Debt Discount and
Deferred Costs Financing - 741,168
Expense recognized upon issuance of
options and warrants 1,949,522 -
Changes in operating assets and
liabilities:
Increase in accounts receivable (1,825,202) -
(Increase)/decrease in inventory 62,782 (1,964,932)
Decrease in deferred costs 300,000 -
Increase in prepaid expenses
and other current assets (105,213) (323,515)
Increase in accounts payable 983,093 739,400
Increase/(decrease) in accrued
expenses 89,668 (37,861)
Increase in accrued severance costs 112,500 -
Increase in accrued product warranties 1,671,045 -
----------- ----------
Net cash used in operating
activities (7,407,555) (4,842,280)
Cash flows from investing activities:
Capital expenditure (397,539) (482,546)
Deposits (356,667) (140,551)
----------- ----------
Net cash used in investing
activities (754,206) (623,097)
Cash flows from financing activities:
Net proceeds from issuance of common stock 25,809,188 13,824,634
Proceeds from bridge notes - (2,025,000)
----------- ----------
Net cash provided by financing
activities 25,809,188 11,799,634
Net increase in cash 17,647,427 6,334,257
Cash - beginning of period 5,036,582 1,431,197
----------- ----------
Cash - end of period 22,684,009 7,765,454
=========== ==========
</TABLE>
Page 5 of 14
<PAGE>
INTERACTIVE FLIGHT TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
The financial statements of Interactive Flight Technologies, Inc. included
herein have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission for Form 10-QSB and reflect all adjustments
(consisting of normal recurring accruals) and disclosures which, in the opinion
of management, are necessary for a fair statement of results for the interim
period presented. It is suggested that these financial statement be read in
conjunction with the financial statements and notes thereto for the fiscal year
ended October 31, 1995, included in 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.
The results of operations for the nine months ended July 31, 1996 are not
necessarily indicative of the results to be expected for the entire fiscal year.
NOTE A - CLASS A WARRANT EXERCISE OFFER:
The Company filed a registration statement with the SEC with respect to an
Exercise Offer on April 12, 1996 pursuant to which the Company offered the
holders of the Company's Class A Redeemable Stock Purchase Warrants who exercise
their Class A Warrants pursuant to the Exercise Offer, (i) to issue an extra 1/2
Class B Redeemable Stock Purchase Warrant (in addition to the securities
currently underlying the Class A Warrants) for each Class A Warrant so exercised
and (ii) to reduce the exercise price of Class A Warrants to $5.75 per share
(from $7.00 per share) for each Class A Warrant exercised.
The Company completed its exercise offer on May 17, 1996 and received net
proceeds of approximately $25,160,000 net of the underwriter's commissions and
expenses of approximately $1,609,000.
The Company called all of its outstanding Redeemable Class A Warrants for
redemption on July 25, 1996 at a price of $.05 per Warrant. There were 114,680
Class A Warrants outstanding at the time of the call. On July 25, 1996, 96,422
Class A Warrants had been exercised for a share of Class A Common Stock at a
price of $7.00 per share. The Company received approximately $635,000 net of
expenses of approximately $40,000.
NOTE B - COMMITMENTS/CONTINGENCIES
The Company is a defendant in an action entitled Andrew Maxon v.
Interactive Flight Technologies, Inc. brought in the United States District
Court for the Eastern District of New York. The action was filed in February
1995 by an individual who performed certain services for the Company and with
whom the Company had been engaged in negotiations to become an officer of the
Company. The plaintiff claims breach of an alleged contract and wrongful
discharge and is seeking damages of approximately $250,000 plus options to
purchase 25,000 shares of the Company's stock. The Company believes that the
claims are without merit and intends to defend them vigorously.
Page 6 of 14
<PAGE>
ITEM 2: RESULTS OF OPERATIONS
GENERAL
Interactive Flight Technologies, Inc. (the "Company") is engaged in
the development, manufacture, installation and operation of a computer-based
network in-flight entertainment network (the "Entertainment Network"), which
provides aircraft passengers the opportunity to view movies, to purchase goods
and services, to play computer games and, in certain cases where permitted by
applicable law, to gamble through a high-resolution video touch screen.
The Company entered into its first airline contract (the "Alitalia
Contract") with Alitalia Airlines S.p.S. ("Alitalia") in 1995, and Alitalia
accepted the contract following early completion of a trial period on February
1, 1996. The Alitalia Contract provides for the delivery of The Entertainment
Network for installation on five MD-11 aircraft and the operation of The
Entertainment Network on those aircraft over a period of approximately eight
years. However, the Alitalia Contract does not presently provide for, and is
not expected to provide for, passenger use of The Entertainment Network
gambling features. In February 1996, an agreement was also signed with Debonair
(the "Debonair Contract") to install and operate The Entertainment Network
(including video casino style gambling) on Debonair's entire fleet, which
consists of six RJ-146 aircraft.
In July 1996, an agreement was signed with Swissair (the "Swissair
Contract") to install and operate the second generation of The Entertainment
Network (the "IFEN-2") on Swissair's entire [LONGHAUL] fleet, which consists of
sixteen MD-11 aircraft and five 747's. Subject to the 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. However, under current U.S. law, these lottery games cannot be
operated on flights which depart or land in the United States. In the event
that no agreement is reached with ILL, either Swissair or the Company may
terminate the Swissair agreement.
Under the Swissair Contract, the Company will 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 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.
In August 1996, a nonbinding letter of intent was signed with PetrolAir
S.A. ("Petrol") to install The Entertainment Network (including video casino
style gambling) on two PetrolAir aircraft. There can be no assurance that the
Company will successfully negotiate definitive agreements with PetrolAir.
Revenues during the first nine months ended July 31, 1996 were
$2,920,835, comprised of sales revenue of $2,813,756 for Entertainment Networks
delivered under the Alitalia Contract. Revenues also included $107,081 of Video
service fees.
Page 7 of 14
<PAGE>
The Company incurred a net loss of $4,940,269 during the quarter ended
July 31, 1996, an increase of $3,484,396 (or 239%) from a net loss of $1,455,873
for the quarter ended July 31, 1995. The Company incurred a net loss of
$10,910,238 during the nine months ended July 31, 1996, an increase of
$6,883,100 (or 171%) from a net loss of $4,027,138 for the nine months ended
July 31, 1995. The increased losses were due to increasing of staff and building
of facilities to fulfill the Company's requirements under the Alitalia Contract,
the Debonair Contract, the Swissair Contract and other contracts under
negotiation, increased marketing fees in connection with the issuance of
warrants for services provided in connection with sales to Swissair, and
increased professional and administrative fees and research and development
expenses. The Company expects to continue to incur losses for the foreseeable
future. At July 31, 1996, the Company's accumulated deficit was $16,643,795.
Costs of goods sold were $4,542,006 (156% of sales) and $2,135,585
(171% of sales), respectively, for the nine month and three month periods ended
July 31, 1996. Although the Company hopes to reduce the cost of goods sold as a
percentage of sales for future periods, these percentages are likely to remain
high over the next few quarters since the Company's business plan is to derive a
substantial portion of its revenues from future passenger use of The
Entertainment Network.
Research and development expenses during the quarter ended July 31,
1996 were $1,248,602, an increase of $411,339 (or 49%) from $837,263 during the
quarter ended July 31, 1995. Research and development expenses during the nine
months ended July 31, 1996 were $2,910,603, an increase of $1,073,996 (or 59%)
from $1,836,607 during the nine months ended July 31, 1995. These increases
reflect expenses incurred in the continuing development of The Entertainment
Network. The Company anticipates that research and development expenses will
increase during the remainder of fiscal 1996.
Marketing and administrative expenses during the quarter ended July
31, 1996 were $2,951,992, an increase of $2,189,035 (or 287%) from $762,957 for
the quarter ended July 31, 1995. Marketing and administrative expenses during
the nine months ended July 31, 1996 were $6,597,080, an increase of $5,025,595
(or 320%) from $1,571,485 for the nine months ended July 31, 1995. These
increases were primarily due to substantially increased marketing activities
(such as attendance at trade shows and travel relating to sales to airlines),
increased sales commissions, increased administrative staff and related
expenses, and the issuance of warrants to Banner Aerospace, Inc., and Leonard
Toboroff as described in "Item 5 - Other Information."
Expense for unusual items during the nine months ended July 31, 1996
was $112,000, reflecting a severance accrual in connection with the resignation
of the Company's former President.
The Company incurred no interest expense during the quarter and the
nine months ended July 31, 1996, as compared to interest expense of $0 and
$851,218, respectively, for the three months and nine months ended July 31,
1995. The elimination of interest expense was due to the repayment by the
Company in February 1995 of the remaining indebtedness under its 1994 $3,100,000
bridge financing.
The Company received interest income of $255,980 during the quarter
ended July 31, 1996, an increase of $111,633 (or 77%) from interest income of
$144,347 for the quarter ended July 31, 1995. The Company received interest
income of $331,116 during the nine months ended July 31, 1996, an increase of
$98,944 (or 43%) from interest income of $232,172 for the nine months ended July
31, 1995. This interest income arose principally out of short term investments
of working capital, and the increase was primarily attributable to increased
funds available for such investments as a consequence of the Company's Class A
Warrant Exercise Offer in May 1996 and the subsequent redemption of remaining
Class A Warrants in July 1996.
The Company relocated its principal executive offices and its design
and assembly facilities to Phoenix, Arizona and, in connection with this move,
executed three separate three-year leases for office and industrial space in
Phoenix during the current quarter. Under these leases, the Company occupies
24,781 sq. ft., 17,524 sq. ft. and 15,591 sq. ft., respectively (or an aggregate
of approximately 57,900 square feet), in exchange for monthly rents of $31,952,
$23,453 and
Page 8 of 14
<PAGE>
$8,677, respectively (or an aggregate of approximately $64,000).
LIQUIDITY AND CAPITAL RESOURCES
At July 31, 1996 the Company had working capital of approximately
$25.0 Million and has incurred losses since that date. 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 proceeds
(net of expenses of $1.6 Million) of approximately $25.2 Million. The Company
further increased its working capital in July 1996 from Class A Warrant
exercises (prompted by the Company's notice of redemption of the remaining Class
A Warrants), from which the Company received proceeds of approximately $635,000
(net of expenses of approximately $40,000). The Company expects that losses will
continue for the foreseeable future and, as a result, unless funds are received
from additional financing, working capital is expected to decrease again
following the initial increase attributable to receipt of proceeds from the
aforementioned Exercise Offer. The Company's principal sources of funds to date
have been through debt and equity financing.
At August 29, 1996, the Company's only material capital commitments
were purchase orders of approximately $14.0 Million relating primarily to
inventory purchases.
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 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. 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 Contract, the Debonair
Contract and the Swissair Contract) 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 it 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.
Moreover, although the Company's model of being paid out of revenues from the
operation of The Entertainment Network provides it with substantial potential
upside if such revenues are high, it also subjects the Company to substantial
risk if passengers fail to make sufficient use of The Entertainment Network.
The Company intends to use a substantial portion of its cash resources
to fund its plan of operations, which includes the following elements, for
approximately the next 12 months:
. Completing the development of The Entertainment Network, including
reconfiguring hardware components to meet the requirements of the FAA
and airlines with which the Company has contracts, and developing
certain software interfaces.
. Performing under the Debonair Contract, including manufacturing,
assembling and
Page 9 of 14
<PAGE>
delivering the balance of The Entertainment Network for the six
RJ-146 aircraft.
. Performing under the Swissair Contract, including manufacturing,
assembling and delivering The Entertainment Network for sixteen MD-11
and five 747 aircraft.
. Finalizing and performing under a contract (if executed) with
PetrolAir to install The Entertainment Network on PetrolAir's two
aircraft.
. Marketing The Entertainment Network to additional airlines, primarily
to international carriers, and performing under any contracts which
the Company may execute with such airlines.
. Updating and enhancing the programming software initially included in
The Entertainment Network and developing or acquiring from third
parties new programming software. Because the technology
incorporated in The Entertainment Network is rapidly developing,
the Company will also continue to develop hardware and software
enhancements to meet market and customer demand.
The foregoing represents the Company's current plan of operation for
the next 12 months. Future events, including changes in technological,
economic, regulatory or competitive conditions or the results of the Company's
sales and marketing activities, may require changes in the Company's plans.
FORWARD-LOOKING INFORMATION
Except for historical information contained herein, the matters
discussed in this Quarterly Report on Form 10-QSB/A 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 ILL (and,
consequently, Swissair) and/or PetrolAir 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 from Registration
Statement on Form SB-2 dated March 7, 1995, 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.
Page 10 of 14
<PAGE>
PART II. OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
Reference is made to the information set forth under "Legal Proceedings" in
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.
ITEM 5: OTHER INFORMATION
During the quarter, the Company entered into commitments to issue an
aggregate of 275,000 of its Class B Warrants to Banner Aerospace, Inc.
("Banner") and Leonard Toboroff ("Toboroff"), with Banner to receive 187,500
Class B Warrants and Toboroff to receive 87,500 Class B Warrants. The Company
also issued to Banner and Toboroff an aggregate of 165,000 of its newly-
designated Class C Warrants and 165,000 of its newly-designated Class D
Warrants, with 112,500 of each such class being issued to Banner and 52,500 of
each such class being issued to Toboroff. Each Class C Warrant entitles the
holder thereof to purchase one share of Class A Common Stock for an exercise
price of $11.00, and each Class D Warrant entitles the holder thereof to
purchase one share of Class A Common Stock for an exercise price of $14.00.
Banner and Toboroff received the Class C and Class D Warrants, and the
commitment to issue the 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.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
<TABLE>
<S> <C>
3.2* - Amended and Restated Certificate of Incorporation of the Registrant
3.3* - Certificate of Amendment of Amended and Restated Certificate of
Incorporation of Registrant
3.4* - By-laws of the Registrant
4.5** - Form of Class C Warrant
4.6** - Form of Class D Warrant
27 - Financial Data Schedules
</TABLE>
___________________
* Incorporated by Reference from the Registrant's Registration Statement
on Form SB-2, Registration No. 33-86928.
** Previously filed.
(B) REPORTS ON FORM 8-K
The Company did not file any reports on Form 8-K during the quarter
ending July 31, 1996.
Page 11 of 14
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: January 22, 1997 INTERACTIVE FLIGHT TECHNOLOGIES, INC.
By: /s/ Michail Itkis
----------------------------------
Michail Itkis
Chief Executive Officer
By: /s/ John W. Alderfer
----------------------------------
John W. Alderfer
Chief Financial Officer
Page 12 of 14
<PAGE>
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
- ----------- ----------- --------
<C> <S> <C>
3.2 Amended and Restated Certificate of *
Incorporation of the Registrant
3.3 Certificate of Amendment of Amended and *
Restated Certificate of Incorporation
of Registrant
3.4 By-laws of the Registrant *
4.5 Form of Class C Warrant **
4.6 Form of Class D Warrant **
27 Financial Data Schedule 14
</TABLE>
___________________________
* Incorporated by Reference from the Registrant's Registration Statement on
Form SB-2, Registration No. 33-86928.
** Previously filed.
Page 13 of 14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 3-MOS
<FISCAL-YEAR-END> OCT-31-1996 OCT-31-1996
<PERIOD-START> NOV-01-1995 MAY-01-1996
<PERIOD-END> JUL-31-1996 JUL-31-1996
<CASH> 22,684,009 7,765,454
<SECURITIES> 0 0
<RECEIVABLES> 1,860,115 0
<ALLOWANCES> 0 0
<INVENTORY> 1,983,442 1,964,932
<CURRENT-ASSETS> 26,863,747 10,071,475
<PP&E> 1,770,223 461,858
<DEPRECIATION> 334,585 32,564
<TOTAL-ASSETS> 29,019,580 10,688,782
<CURRENT-LIABILITIES> 3,097,002 815,570
<BONDS> 0 0
0 0
0 0
<COMMON> 120,066 72,200
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 29,019,580 10,688,782
<SALES> 2,813,756 1,200,378
<TOTAL-REVENUES> 2,920,835 1,252,430
<CGS> 4,542,006 2,135,585
<TOTAL-COSTS> 14,162,187 6,448,679
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (10,910,238) (4,940,269)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (10,910,238) (4,940,269)
<EPS-PRIMARY> (2.05) (0.63)
<EPS-DILUTED> (2.05) (0.63)
</TABLE>
