UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549FORM 10-Q

xQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the quarterly period ended February 28, 2010

OR

 ̈TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the transition period from ___________ to _____________

Commission file number: 000-25335

INTELLIGENT LIVING CORP.(Exact name of small business issuer as specified in its charter)

Nevada(State or other jurisdiction of incorporation or organization)

88-0409024(I.R.S. Employer Identification Number)

SUITE 221, 2323 QUEBEC STREET
Vancouver, BC
V5T 4S7(Address including zip code of principal executive offices)

Issuers telephone number: (604) 876-7494

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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes þ No  ̈



Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  ̈   No þ



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.



|Large accelerated filer |  ̈ |                                               | Accelerated filer         |  ̈
|----------------------- | - | --------------------------------------------- | ------------------------- | -
|Non-accelerated filer   |  ̈ | (Do not check if a smaller reporting company) | Smaller reporting company | x



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes  ̈ No þ



As of April 19, 2010, the registrant had outstanding 61,581,168 shares of its $.001 par value Common Stock.



Transitional Small Business Disclosure Format: Yes ̈  No þ



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INTELLIGENT LIVING CORP.

FORM 10Q

For the Quarterly period ended February 28, 2010



TABLE OF CONTENTS





PART  I.  FINANCIAL  INFORMATION

3

ITEM 1 - FINANCIAL STATEMENTS

3

CONSOLIDATED BALANCE SHEETS

3

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

4

CONSOLIDATED STATEMENTS OF CASH FLOW

5

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF CONTINUING AND FUTURE PLAN OF OPERATION

16

ITEM 3. QUANTATATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

21

ITEM 4T. CONTROLS AND PROCEDURES.

22

PART II. OTHER INFORMATION.

23

ITEM 1.  LEGAL PROCEEDINGS

23

ITEM 1A.  RISK FACTORS

23

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

23

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

23

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

23

ITEM 5.  OTHER INFORMATION

23

ITEM 6.  EXHIBITS.

23













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PART  I.  FINANCIAL  INFORMATION



ITEM 1 - FINANCIAL STATEMENTS



|INTELLIGENT LIVING CORP.               
|---------------------------------------
|CONSOLIDATED BALANCE SHEETS            
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|ASSETS                                 
|CURRENT ASSETS                         
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|OTHER ASSETS                           
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|LIABILITIES AND STOCKHOLDERS' (DEFICIT)
|CURRENT LIABILITIES                    
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|LONG-TERM LIABILITIES                  
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|STOCKHOLDERS' (DEFICIT)                
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See accompanying condensed notes to the interim consolidated financial statements



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|INTELLIGENT LIVING CORP.                                    
|------------------------------------------------------------
|CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
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|Revenues continuing operations                              
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|Cost of revenues                                            
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|Gross profit                                                
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|Expenses                                                    
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|Gain (loss) from continuing operations                      
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|Other income (expense)                                      
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|Net (loss) income from continuing operations                
|Gain (loss) on discontinued operations - net of Income tax  
|Net (loss) income - net of income tax                       
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|Net (loss) income                                           
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|Net (loss) income                                           
|Other comprehensive income                                  
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|Comprehensive gain (loss)                                   

See accompanying condensed notes to the interim consolidated financial statements



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|INTELLIGENT LIVING CORP.                    
|--------------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOW        
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|CASH FLOWS FROM OPERATING ACTIVITIES:       
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|CASH FLOWS FROM INVESTING ACTIVITIES:       
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|CASH FLOWS FROM FINANCING ACTIVITIES:       
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|Net increase (decrease)  in cash            
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|Cash, beginning of period                   
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|Cash, end of period                         
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|SUPPLEMENTAL DISCLOSURES:                   
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|NON-CASH INVESTING AND FINANCING ACTIVITIES:
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See accompanying condensed notes to the interim consolidated financial statements



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INTELLIGENT LIVING CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2010

(Unaudited)



NOTE 1  BASIS OF PRESENTATION



Intelligent Living Corp (ILC, the Company, we, us) formerly Elgrande International Inc., through its wholly owned subsidiary MCM Integrated Technologies, Ltd. (MCM), specializes in designing, supplying, installing, upgrading and servicing home automation and commercial presentation center solutions including: structured wiring, security and access control systems, internet access, lighting, HVAC and environmental controls, and distributed audio/video systems. The Company offers both wired and wireless technology for single and multi unit new construction and existing buildings, using both traditional component and Windows 7 based systems. The Company is expanding its service offerings to include home comfort and energy efficiency solutions integrated with and controlled by home automation applications.



In December 2006 the Company acquired MCM and with this acquisition, became a leading home automation provider. MCM has supplied custom IT solutions since 1994 and home automation and energy management solutions since 2003. Following the acquisition of MCM in December 2006, the Company has expanded its service offerings to include home comfort and energy efficiency solutions integrated with and controlled by home automation applications.



In response to the downturn in the US housing market and subsequent deep financial crisis the Company has increased its focus on the western Canadian housing market by expanding its marketing and project base and initiated technology cooperation with a leading security surveillance group in the Republic of Turkey for market development in Turkey and the Middle East. The Company has offices and demonstration suites in Phoenix Arizona and Vancouver British Columbia and is active with single family homes and multi-unit town homes and condominium projects in southwest BC.



Prior to the acquisition of MCM the Company was engaged in the import and distribution of home décor products for the North American market. This activity was pursued through its wholly owned subsidiary Cardinal Points Trading Corp. In July 2006, as a result of a breach of the Companys exclusivity agreement with its principal supplier by its principal supplier and other production related issues the board of directors began an evaluation of alternative business models and opportunities. In December 2006 the Company discontinued its activity in the home décor sector and began a process to dispose of assets and obligations related to the home décor import and distribution business. This process continued through the period ended February 28, 2010. Liquidation of the Companys home décor inventory has been slower than expected principally as a result of the slowdown of the US economy, dating of the Companys home décor inventory and competition from suppliers of similar product to the home décor wholesale market.



Results from ongoing operations reported for the 9 months ending February 28, 2010 and 2009 relate to sales of home automation and energy efficiency products and services including system design, equipment supply, installation and support. Results from discontinued operations relate to the Companys phase out activities in the home décor sector and include the costs of liquidating inventory, renting temporary warehouse space for remaining home décor inventory and office equipment, legal, professional and consultant time related to eliminating and reducing liabilities associated with discontinued operations and pursuing legal recourse against the Companys home décor supplier, accretion of beneficial conversion and financing fee discount and interest charges associated with historical financings related to home décor inventory support.





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INTELLIGENT LIVING CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2010

(Unaudited)





The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements.  These unaudited interim financial statements should be read in conjunction with the audited financial statements for the period ended May 31, 2009. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.



The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company's financial position and results of operations.



The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has suffered material recurring losses from operations since inception. At February 28, 2010, the Company has a working capital deficit of approximately $1,857,900, an accumulated deficit of approximately $14,299,130 and negative cash flows from consolidated operations. These factors raise substantial doubt about the Company's ability to continue as a going concern.



Continuation of the Company is dependent on achieving sufficiently profitable operations and obtaining additional financing. Management has and is continuing to raise additional capital from various sources. There can be no assurances that the Company will be successful in raising additional capital. The financial statements do not include any adjustment relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Accounts Receivable

The Company carries its accounts receivable at net realizable value.  The Company is in the process of developing a policy for recognizing doubtful accounts.  A receivable is considered past due if the Company does not receive payment within 30 days. The Company estimates bad debts utilizing the allowance method, based upon past experience and current market conditions.  At February 28, 2010 and May 31 2009, there were accounts receivable allowances of $28,821 and $27,489 respectively.



Comprehensive Income

ASC 220, Comprehensive Incomeestablishes standards for the reporting and display of comprehensive loss and its components in the financial statements. ASC 220 is effective for periods beginning after December 15, 1997. The Company adopted this accounting standard as adopted this accounting standard and for the nine months ended February 28, 2010 reported a comprehensive loss of $20,134 resulting from the conversion of Canadian dollar subsidiaries into US dollars. For the nine months ended February 28, 2010 the accumulated comprehensive loss due to the conversion of Canadian dollar subsidiaries into US dollars was $74,549.



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INTELLIGENT LIVING CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2010

(Unaudited)







Earnings per Share

The Company has adopted ASC 260 Earnings Per Share.  Basic loss per share is computed using the weighted average number of common shares outstanding.  Diluted net loss per share is the same as basic net loss per share, as the inclusion of common stock equivalents would be antidilutive.



|                                                                      |  | For the Nine months Ended
February 28,
|--------------------------------------------------------------------- |  | --------------------------------------
|(in thousands)                                                        |  | 2010                                  
|Gain (Loss) from continuing operations                                |  | $                                     
|Gain (Loss) from discontinued operations                              |  | (105.2)                               
|Net gain (loss) income                                                |  | $                                     
|                                                                      |  |                                       
|Weighted average shares outstanding:                                  |  |                                       
|                                                                      |  |                                       
|basic and dilutive                                                    |  | 56,242,788                            
|Effect of dilutive securities:                                        |  |                                       
|stock options                                                         |  |                                      
|Convertible debt                                                      |  |                                      
|diluted                                                               |  | 56,242,788                            
|                                                                      |  |                                       
|Gain (Loss) per share from continuing
operations: basic and diluted   |  | $                                     
|Gain (Loss) per share from discontinued
operations: basic and diluted |  | $                                     
|Net (loss) income per share: basic and diluted                        |  | $                                     



The following potential common shares have been excluded from the computation of diluted net income per share for the period ended February 28, 2010 because their inclusion would have been antidilutive:



|                                              | For the Period Ended
February 28, 2010 |  | For the Period Ended
February 28, 2009
|--------------------------------------------- | -------------------------------------- |  | --------------------------------------
|Outstanding common stock options and warrants | Nil                                    |  | Nil                                   
|Convertible debt                              | 125,384,958                            |  | 76,550,200                            



Fair Value of Financial Instruments

On July 1, 2008, the Company adopted Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures (Topic 820).  Topic 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:



·

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

·

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

·

Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.



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INTELLIGENT LIVING CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2010

(Unaudited)





The fair value of the Company's cash and cash equivalents, accrued liabilities and payables, and loans payable approximate carrying value because of the short-term nature of these items.



Foreign currency translation

The Company has adopted ASC 830, Foreign Currency Matters. Monetary assets and liabilities denominated in foreign currencies are translated into United States dollars at rates of exchange in effect at the balance sheet date. Gains or losses are included in income for the year, except gains or losses relating to long-term debt, which are deferred and amortized over the remaining term of the debt. Non-monetary assets, liabilities and items recorded in income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction.



MCM Integrated Technologies, Ltd. and Cardinal Points Trading, Corp. use the Canadian Dollar as their functional currency. Transactions denominated in currencies other than the entitys functional currency are translated into the entitys functional currency at the exchange rate ruling on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate ruling on the balance sheet date. Currency translation differences are recognized in the statement of income for the period.



On consolidation, the results of operations and cash flows whose functional currency is other than the US dollar are translated into US dollars at the average exchange rate for the period and their assets and liabilities are translated into US dollars at the exchange rate ruling on the balance sheet date. Currency translation differences are recognized within other comprehensive income as a separate component of shareholders equity. In the event that such an operation is sold, the cumulative currency translation differences that are attributable to the operation are reclassified to income.



Goodwill

Goodwill is calculated as the excess of the fair value of consideration paid over the fair value of tangible and intangible assets acquired and liabilities assumed. Goodwill will be tested for impairment annually according to ASC 350-20. An impairment test would also be performed in any period in which events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment would be recognized at that time, to the extent that the carrying amount exceeds the undiscounted future net cash flows expected from its use. The Company recorded goodwill in the amount of $241,336 related to the acquisition of MCM Integrated Technologies, Ltd. Management reviewed Goodwill and found that there was no impairment for the period ended February 28, 2010 and no expense has been recognized.



Impairment of long-lived assets

We have adopted ASC 350 for the assessment of impairment of goodwill and indefinite life intangibles on an annual basis. The potential impairment of finite life intangibles is assessed whenever events or a change in circumstances indicate the carrying value may not be recoverable. Factors we consider important which could trigger an impairment review include the following:



·

significant underperformance relative to historical or expected projected future operating results;

·

significant changes in the manner of our use of the acquired assets or the strategy for our overall business;

·

significant negative industry or economic trends;

·

significant decline in our stock price for a sustained period of time; and

·

our market capitalization relative to net book value.



When we determine that the carrying value of goodwill and indefinite life intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment, we measure



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INTELLIGENT LIVING CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2010

(Unaudited)





any potential impairment based on a projected discounted cash flow method using a discount rate determined by our management to be commensurate with the risk inherent in our current business model.



Inventories

The Company has adopted ASC 330 Inventory: Inventory at February 28, 2010 and May 31, 2009 consisted of a variety of home automation equipment and home décor products. Home décor inventories are recorded using the specific identification method and valued at the lower of recorded cost or market value. Home automation inventory consisting of manufactured products is recorded using the first in first out method and valued at the lower of recorded cost or market value. On May 31, 2008 the Company began recognizing a reserve for potential inventory obsolescence. The recorded cost of inventory was $166,547 at February 28, 2010, and $161,867 at May 31, 2009. Reserves of $100,228 at February 28, 2010 and $96,550 at May 31, 2009 were recorded to cover the full recorded cost of home décor product.



|Inventory                      | February 28
2010 | May 31
2009
|------------------------------ | ---------------- | -----------
|                               | Recorded Cost   
|Home automation equipment      | $66,319          | $65,317    
|Home décor products            | $100,228         | $96,550    
|Total Recorded Cost            | $166,547         | $161,867   
|                               | Reserve         
|Home automation equipment      | -                | -          
|Home décor products            | $100,228         | $96,550    
|                               | Net of Reserve  
|Total Inventory net of reserve | $66,319          | $65,317    



Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 605 Revenue Recognition in Financial Statements.  This statement established that revenue can be recognized when persuasive evidence of an arrangement exists, the services have been delivered, all significant contractual obligations have been satisfied, the fee is fixed or determinable and collection is reasonably assured.



Segment Reporting

ASC280, Segment Reporting, establishes standards for the reporting by business enterprises of information about operating segments, products and services, geographic areas and major customers. The method for determining what information to report is based on the way that management organizes the operating segments within ILC for making operational decisions and assessments of financial performance.

ILCs chief executive officer (CEO) is considered to be the chief operating decision-maker. The CEO reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance. ILC has determined that it operates in a single operating segment, specifically, marketing home automation products, technology and services.

New Accounting Standards

Effective September 15, 2009, the Financial Accounting Standards Codification Board TM (“Codification”) is a single official source of authoritative U.S. GAAP, except for certain authoritative rules and interpretive releases issued by the SEC. Since the codification did not alter existing U.S. GAAP, it did not have an impact on our Consolidated Financial Statements. All references to pre-codified U.S. GAAP have been removed from this Form 10-Q.





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INTELLIGENT LIVING CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2010

(Unaudited)





Recent accounting pronouncements

In May 2009, the FASB issued Accounting Standards Codification Topic 855 (ASC Topic 855) Subsequent Events. Topic 855  requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, that is, whether that date represents the date the financial statements were issued or available to be issued.  In accordance with this Statement, an entity should apply the requirements to interim or annual financial periods ending after June 15, 2009. The Company does not expect this pronouncement to have a material effect on its consolidated financial statements.

In June 2009, the Financial Accounting Standards Board (FASB) established the FASB Accounting Standards Codification (the Codification) to become the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. The Codification was effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Codification superseded all then-existing non-SEC accounting and reporting standards on July 1, 2009, and all other non- grandfathered non-SEC accounting literature not included in the Codification became non-authoritative. The adoption of the Codification did not have a material impact on the Companys consolidated financial statements and results of operations.

In June 2009, the FASB issued Accounting Standards Codification Topic 810 (ASC Topic 810) Accounting for Transfers of Financial Assets.  Topic 810 requires that a transferor recognize and initially measure at fair value all assets obtained (including a transferors beneficial interest) and liabilities incurred as a result of a transfer of financial assets accounted for as a sale. Topic 810 must be applied as of the beginning of each reporting entitys first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter.  Earlier application is prohibited.  This Statement must be applied to transfers occurring on or after the effective date. The adoption of this pronouncement did not have a material impact on the financial statements



In June 2009, the FASB issued Accounting Standards Codification Topic 810 (ASC Topic 810) Amendments to FASB Interpretation No. 46(R).  Topic 810 requires an additional reconsideration event when determining whether an entity is a variable interest entity when any changes in facts and circumstances occur such that the holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entitys economic performance.  It also requires ongoing assessments of whether an enterprise is the primary beneficiary of a variable interest entity.  Topic 810 shall be effective as of the beginning of each reporting entitys first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter.  Earlier application is prohibited.  The Company does not expect the adoption of this pronouncement to have a material effect on its financial statements.



In June 2009, the FASB issued Accounting Standards Codification (ASC Topic 105) The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles.  The FASB Accounting Standards Codification ("ASC") will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities.  Following Topic 105, the Board will not issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts.  Instead, it will issue Accounting Standards Updates.  This Statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009.  On the effective date of this Statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards.  All other nongrandfathered non-SEC accounting literature no included in the Codification will become nonauthoritative.  The



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INTELLIGENT LIVING CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2010

(Unaudited)





Company does not expect the adoption of this pronouncement to have a material effect on its financial statements.



In January 2010, the FASB issued updated guidance to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. This update requires new disclosures on significant transfers of assets and liabilities between Level 1 and Level 2 of the fair value hierarchy (including the reasons for these transfers) and the reasons for any transfers in or out of Level 3. This update also requires a reconciliation of recurring Level 3 measurements about purchases, sales, issuances and settlements on a gross basis. In addition to these new disclosure requirements, this update clarifies certain existing disclosure requirements. For example, this update clarifies that reporting entities are required to provide fair value measurement disclosures for each class of assets and liabilities rather than each major category of assets and liabilities. This update also clarifies the requirement for entities to disclose information about both the valuation techniques and inputs used in estimating Level 2 and Level 3 fair value measurements. This update will become effective for the interim and annual reporting period beginning January 1, 2010, except for the requirement to provide the Level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which will become effective for the interim and annual reporting period beginning January 1, 2011. We will not be required to provide the amended disclosures for any previous periods presented for comparative purposes. Other than requiring additional disclosures, adoption of this update will not have a material effect on our Consolidated Financial Statements.



The Company does not believe that any other recently issued, but not yet effective, accounting standards will have a material on the Companys consolidated financial position, results of operations or cash flow.



NOTE 3 - COMMON STOCK



During the nine months ended February 28, 2010 the Company issued 12,244,444 shares of its unregistered common stock for $228,000 of debt at an average price of $0.02 per share.



NOTE 4  COMMON STOCK OPTIONS



Since 1998 the Company has registered 6 stock option plans the most recent being the Intelligent Living Corp 2007 Stock Option Plan. Their purpose is to advance the business and development of the Company and its shareholders by enabling employees, officers, directors and independent contractors or consultants of the Company the opportunity to acquire a proprietary interest in the Company from the grant of options to such persons under the Plans' terms. The Plans provide that the Companys board of directors may exercise its discretion in awarding options under the Plans. The Board determines the per share option price for the stock subject to each option.



The Company has elected to account for the stock option plan in accordance with ASC 718-10 where the compensation to employees should be recognized over the period(s) in which the related services are rendered. In accordance with ASC 718-10 the fair value of a stock option granted is estimated using an option-pricing model.



For the year ended May 31, 2009 and the nine months ended February 28, 2010 the Company did not issue any common stock options or warrants and all options and warrants  previously granted expired.



NOTE 5  RELATED PARTIES (NOTES PAYABLE RELATED PARTY)



On August 24, 2006, we entered into a preliminary non-binding Letter of Intent (Letter of Intent) with MCM Integrated Technologies Ltd. (MCM), a Vancouver based company wholly owned by Murat



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INTELLIGENT LIVING CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2010

(Unaudited)





Erbatur, one of our directors.  The Letter of Intent provided for the acquisition of all of the assets and ongoing contracts of MCM for a price based on an independent third party evaluation of the fair market value of the acquired assets including current assets, liabilities and future value based on the pro forma three year business plan of MCM. On December 8, 2006 ILC acquired all of the outstanding capital stock of MCM for $280,695, which included 10,000,000 shares of ILC valued at $150,000 and $130,695 in the form of a note payable.



During the year ended May 31, 2007, one of the Companys officers loaned the Company $210,697 which was uncollateralized, due on demand and did not bear interest. The Company repaid $47,931 to its officer in cash during the year ended May 31, 2007.



During the year ended May 31, 2008, the Companys officers loaned the Company $58,484 which was uncollateralized and due on demand. The Company repaid $8,041 to its officers in cash and $4,093 of accrued interest in cash during the year ended May 31, 2008. The Company paid $45,000 of accrued interest in restricted common shares to related parties during the year ended May 31, 2008.



During the year ended May 31, 2009, the Companys officers loaned the Company $121,879 which is uncollateralized and due on demand. The Company repaid $572 in principal and $19,750 in interest to its officers in cash, accrued $9,385 of interest on related party loans and recorded an expense to Paid in Capital of $7,716 on subscription deposit imputed interest. The Company converted $1,119,883 in loans, subscription deposit and debenture principal, and paid $144,058 of accrued interest in restricted common shares to related parties and transferred $300,000 of principal and $26,773 of accrued interest to a third party debenture during the year ended May 31, 2009. All share issuances were at fair market value on the date of issuance. Outstanding related party short term note principal of $345,802and accrued interest of $2,876 for a total principal plus accrued interest of $348,678 was outstanding at the year ended May 31, 2009.



During the nine months ended February 28, 2010 the short term loans due to the Companys officers increased by $26,574. The Company had short-term loans outstanding to corporate officers at February 28, 2010 in the amount of $372,376. They are unsecured, bear interest at rates of 6% to 11% per annum and are due on demand. Accrued interest to February 28, 2010 was $4,222. The total outstanding related party debt [principal plus accrued interest] for the period ended February 28, 2010 was $376,598.



The following table summarizes the position of notes, and amounts due to related parties at February 28, 2010 and May 31, 2009:



|Related Parties                  |   | Principal
Outstanding
on Feb 28,
2010 | Interest
Accrued to
Feb 28,
2010 | Principal
Outstanding
on May 31,
2009 | Interest
Accrued to
May 31,
2009
|-------------------------------- | - | ------------------------------------- | -------------------------------- | ------------------------------------- | --------------------------------
|Non-convertible short
term notes | $ | 372,376                               | 4,222                            | 345,802                               | 2,876                           
|Total                            | $ | 372,376                               | 4,222                            | 345,802                               | 2,876                           



NOTE 6  NOTES AND DEBENTURES PAYABLE



During the twelve months ended May 31, 2009 the Company secured short term third party non-interest bearing funding for continuing operations in the amount $14,661.Total outstanding short term third party non-interest bearing funding outstanding at May 31, 2009 was $26,275





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INTELLIGENT LIVING CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2010

(Unaudited)





During the nine months ended February 28, 2010, the third party short term non-interest bearing notes increased by$35,734. The total principal outstanding on February 28, 2010 was $62,009.



In February 2008 the Company negotiated payment of accrued liabilities totaling $460,000 in the form of a debenture bearing an interest rate of 6% maturing on June 1, 2010. The debenture is convertible into shares of common stock at a conversion price for each share of common stock equal to the lowest closing bid price per share of the common stock for the 5 trading days immediately preceding the date of conversion.



In June 2008 the Company amalgamated existing related party debentures in the amount of $320,000 and $20,000 with short term notes totaling $223,973 and accrued interest of $36,027, and issued a new related party debenture in the amount $273,225 and a third party debenture in the amount $326,773. These debentures bear an interest rate of 6% maturing on June 1, 2010. The debentures are convertible into shares of common stock at a conversion price for each share of common stock equal to the lowest closing bid price per share of the common stock for the 20 trading days immediately preceding the date of conversion. The Company determined that there was no beneficial conversion associated with the new debentures.



The debenture principal, debenture balance sheet liability net of discounts and accrued interest outstanding at May 31, 2009 was $1,140,253, $1,085,007 and $189,216 respectively.



In the 9 months ended February 28, 2010 the Company converted $228,000 of debenture principal into 12,244,444 shares of the Companys common stock.



The following table summarizes the outstanding principal and discounts associated with debentures and principal amounts of notes outstanding at February 28, 2010.



|Debentures                 | Notes               | Total                                
|-------------------------- | ------------------- | -------------------------------------
|Principal at end
of period | Remaining
Discounts | Balance Sheet
Amount net of
discounts
|$912,253                   | $20,917             | $891,336                             



The principal and accrued interest on notes and debentures as at February 28, 2010 are summarized in the following table:



|Notes and Debentures         |   | Principal
Amount at
Feb 28, 2010 | Weighted
Average
Interest Rate |   | Accrued Interest
to
Feb 28, 2010
|---------------------------- | - | -------------------------------- | ------------------------------ | - | --------------------------------
|Third Party short term Notes | $ | 62,009                           | nil                            | $ | nil                             
|Third Party Debentures       |   | 912,253                          | 6.4%                           |   | 238,223                         
|Total                        | $ | 974,262                          | 6.0%                           | $ | 238,223                         





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INTELLIGENT LIVING CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2010

(Unaudited)





Future principal payments on notes and debentures payable in the years ending May 31, 2010 through 2014 are as follows:

|Fiscal
Year | Principal | Discount as
applicable to
debenture portion of
principal | Balance
Sheet
|----------- | --------- | -------------------------------------------------------- | -------------
|2010        | $137,009  |                                                          | $137,009     
|2011        | $837,253  | $20,917                                                  | $816,336     
|2012        | -         | -                                                        | -            
|2013        | -         | -                                                        | -            
|2014        | -         | -                                                        | -            
|Total       | $974,262  | 20,917                                                   | $953,345     



NOTE 7  DISCONTINUED OPERATIONS



At February 28, 2010, assets and liabilities from discontinued operations consisted of:



|Description                                                    |  | February 28, 2010
|-------------------------------------------------------------- |  | -----------------
|                                                               |  |                  
|Inventory net of reserve                                       |  | $                
|Accounts receivable remaining from discontinued operations     |  | 2,102            
|Total assets net of reserve related to discontinued operations |  | 2,102            
|                                                               |  |                  
|Accounts Payable Trade                                         |  | 229,064          
|Total liabilities related to discontinued operations           |  | $                



At February 28, 2010 the Company continued to retain a reserve against the full recorded cost of residual inventory. The value of the reserve on February 28, 2010 was $100,228. The Company continues to believe that partial recovery of the inventory reserve can be realized on disposal and that outstanding accounts receivable are collectable. The noted accounts payable are substantially in dispute and the Company believes they will not be paid in full. However, the Company has reserved these payables at their full value. As the inventory is disposed, receivables collected, and payables reduced the Company will record a gain (loss) in the period of activity.



The loss from discontinued operations of $105,230, recorded for the 9 month period ended February 28, 2010, includes the costs of liquidating inventory, renting temporary storage space, disbursement costs related to eliminating and reducing liabilities associated with discontinued operations, accretion of beneficial conversion and financing fee discount and interest charges associated with historical financings related to home décor inventory support.



NOTE 8  INVESTMENTS



The Company has recorded an investment in a private company under long term assets. This investment is recorded at cost, was reviewed by the Companys management and found to be un-impaired.







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INTELLIGENT LIVING CORP.

FORM 10-Q

For the period ended February 28, 2010



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF CONTINUING AND FUTURE PLAN OF OPERATION



Cautionary Statement Regarding Forward-Looking Statements



This  quarterly  report  contains  forward-looking  statements  as that term is defined  in  the  Private  Securities  Litigation  Reform  Act  of 1995.  These statements relate to future events or our future financial performance.  Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number  of  important  factors  could  cause our actual results  to  differ  materially  from  those  expressed  in any forward-looking statements  made  by  us in this report. Forward-looking statements  are  often identified  by  words  like:  "believe",  "expect",  "estimate",  "anticipate", "intend", "project" and  similar  expressions  or words which, by their nature, refer to future events.



In some cases, you can also identify forward-looking  statements by terminology such as "may", "will", "should", "plans", "predicts", "potential" or "continue" or  the  negative  of  these  terms  or  other  comparable  terminology.  These statements   are  only  predictions  and  involve  known  and  unknown   risks, uncertainties  and  other  factors that may cause our actual results, levels of activity, performance or achievements  to  be  materially  different  from  any future  results,  levels  of activity, performance or achievements expressed or implied by these forward-looking statements.



Although we believe that the  expectations  reflected  in  the  forward-looking statements  are  reasonable,  we  cannot  guarantee  future results, levels  of activity or achievements. Except as required by applicable  law,  including the securities  laws  of the United States, we do not intend to update any  of  the forward-looking statements to conform these statements to actual results.



OVERVIEW



Intelligent Living Corp (ILC, the Company, we, us) formerly Elgrande International Inc., through its wholly owned subsidiary MCM Integrated Technologies, Ltd. (MCM), specializes in designing, supplying, installing, upgrading and servicing home automation and commercial presentation center solutions including: structured wiring, security and access control systems, internet access, lighting, HVAC and environmental controls, and distributed audio/video systems. The Company offers both wired and wireless technology for single and multi unit new construction and existing buildings, using both traditional component and Windows Media Center/Vista based systems. The Company is expanding its service offerings to include home comfort and energy efficiency solutions integrated with and controlled by home automation applications.



In December 2006 the Company acquired MCM and with this acquisition, became a leading home automation provider. MCM has supplied custom IT solutions since 1994 and home automation and energy management solutions since 2003. Following the acquisition of MCM in December 2006, the Company has expanded its service offerings to include home comfort and energy efficiency solutions integrated with and controlled by home automation applications.



In response to the downturn in the US housing market the Company has increased its focus on the western Canadian housing market by expanding its marketing and project base and initiated technology cooperation with a leading security surveillance group in the Republic of Turkey for market development in Turkey and the Middle East. The Company has offices and demonstration suites in Phoenix Arizona and Vancouver British Columbia and is active with single family homes and multi-unit town homes and condominium projects in southwest BC.





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Prior to the acquisition of MCM the Company was engaged in the import and distribution of home décor products for the North American market. This activity was pursued through its wholly owned subsidiary Cardinal Points Trading Corp. In July 2006, as a result of a breach of the Companys exclusivity agreement with its principal supplier by its principal supplier and other production related issues the board of directors began an evaluation of alternative business models and opportunities. In December 2006 the Company discontinued its activity in the home décor sector and began a process to dispose of assets and obligations related to the home décor import and distribution business. This process continued through the period ended February 28, 2010. Liquidation of the Companys home décor inventory has been slower than expected principally as a result of the slowdown of the US economy, dating of the Companys home décor inventory and competition from suppliers of similar product to the home décor wholesale market.



In November 2009, the Company announced signing a non-binding letter of intent with North American Indian Charter of Shipping and Trade, Inc. (NAICST) to develop a definitive agreement defining terms under which NAICST would acquire an equity interest in ILVC based on a business plan to design, produce and deliver 300 units of First Nations reserve housing per year.



Results from ongoing operations reported for the 9 months ending February 28, 2010 and 2009 relate to sales of home automation and energy efficiency products and services including system design, equipment supply, installation and support. Results from discontinued operations relate to the Companys phase out activities in the home décor sector and include the costs of liquidating inventory, renting temporary warehouse space for remaining home décor inventory and office equipment, legal, professional and consultant time related to eliminating and reducing liabilities associated with discontinued operations and pursuing legal recourse against the Companys home décor supplier, accretion of beneficial conversion and financing fee discount and interest charges associated with historical financings related to home décor inventory support.



Foreign currency translation

MCM Integrated Technologies, Ltd. and Cardinal Points Trading, Corp. use the Canadian Dollar as their functional currency. Transactions denominated in currencies other than the entitys functional currency are translated into the entitys functional currency at the exchange rate ruling on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate ruling on the balance sheet date. Currency translation differences are recognized in the statement of income for the period.



On consolidation, the results of operations and cash flows whose functional currency is other than the US dollar are translated into US dollars at the average exchange rate for the period and their assets and liabilities are translated into US dollars at the exchange rate ruling on the balance sheet date. Currency translation differences are recognized within other comprehensive income as a separate component of shareholders equity. In the event that such an operation is sold, the cumulative currency translation differences that are attributable to the operation are reclassified to income.



Transactions with related parties

During Q3 2007, the Company purchased MCM Integrated Technologies, Ltd. a company owned by a Director of ILC, Inc. for an aggregate amount of less than $0.3 million. Prior to the acquisition, the board commissioned an independent fairness opinion on the transaction and the transaction was authorized by the board of directors, with the director involved in the transaction abstaining from voting on the approval resolution. The Company believed that these transactions represented fair value for the assets and liabilities purchased.



During the year ended May 31, 2008, the Companys officers loaned the Company $58,484 which was uncollateralized and due on demand. The Company repaid $8,041 to its officers in cash and $4,093 of accrued interest in cash during the year ended May 31, 2008. The Company paid $45,000 of accrued interest in restricted common shares to related parties during the year ended May 31, 2008.



During the year ended May 31, 2009, the Companys officers loaned the Company $121,879 which is uncollateralized and due on demand. The Company repaid $572 in principal and $19,750 in interest to its officers in



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cash, accrued $9,385 of interest on related party loans and recorded an expense to Paid in Capital of $7,716 on subscription deposit imputed interest. The Company converted $1,119,883 in loans, subscription deposit and debenture principal, and paid $144,058 of accrued interest in restricted common shares to related parties and transferred $300,000 of principal and $26,773 of accrued interest to a third party debenture during the year ended May 31, 2009. All share issuances were at fair market value on the date of issuance. Outstanding related party short term note principal of $345,802 and accrued interest of $2,876 for a total principal plus accrued interest of $348,678 was outstanding at the year ended May 31, 2009.



During the nine months ended February 28, 2010 the Companys officers loaned the Company $14,897. The Company had short-term loans outstanding to corporate officers at February 28, 2010 in the amount of $372,376. These are unsecured, bear interest at rates of 6% to 11% per annum and are due on demand. Accrued interest to February 28, 2010 was $4,222. The total outstanding related party debt [principal plus accrued interest] for the period ended February 28, 2010 was $376,598.



RESULTS OF OPERATIONS  for the nine months and three months ended February 28, 2010 and February 28, 2009



For the 9 months ended February 28, 2010, revenue from continuing operations was $188,543 compared to $149,963 in the same period ending last year, an increase of 26%. For the corresponding 2010 and 2009 three month periods ended February 28 revenue was $48,635 and $47,552, an increase of 2%. These revenues are a result of the sale of smart home products and services offered through the Companys subsidiary MCM.



For the 9 months ended February 28, 2010, gross profit was $113,279 compared to $81,422 in the same period in the prior year, an increase of 39%.  For the corresponding 2010 and 2009 three month periods ended February 28 gross profit was $26,517 and $19,777, an increase of 34%. Gross margin (gross profit as a percent of revenue) was 60%, compared to 54% for the  nine month period and 55% compared to 42% for the three month period in the prior year.



Operating expenses for the nine months ended February 28, 2010 were $150,158 versus $139,416 for the same period in the prior year, an increase of 8%, and $47,840 versus $42,717 for the three month periods ended February 28, 2010 and 2009, an increase of 12%.



The Company recorded an operating loss from continuing operations of ($36,879) for the nine month period ending February 28, 2010 compared to a loss on operations of ($57,994) for the same period in the prior year, a decrease of 36%. The Company recorded an operating loss from continuing operations of ($21,323) for the three month period ending February 28, 2010 compared to a loss from continuing operations of ($22,940) for the same period in the prior year, a decrease of 7%.



Total other expenses for the nine month period ending February 28, 2010 were $16,565. Total other expenses were $15,326 for the comparable period in the prior year. The net loss from continuing operations for the  nine month period ending February 28, 2010 was ($53,444) compared to a net loss of ($73,320) for the comparable period in the prior year, a decrease of 27%. Total other expenses for the three month period ending February 28, 2010 were $5,532. Total other expenses were $4,470 for the comparable period in the prior year. The Company recorded a net loss of ($26,855 from continuing operations for the three month period ending February 28, 2010 compared to a net loss of ($27,410) for the comparable period in the prior year.



During the nine months and three months ended February 28, 2010 the Company incurred expenses associated with its discontinued wholesale business. The net loss from discontinued operations was ($105,230) compared to a net loss of ($197,341), a decrease of 47% for the nine month period and ($36,422) versus ($60,136), a decrease of 39% for the three month period in the prior year.



The total net loss for the nine months ended February 28, 2010 was ($158,674) compared to a total net loss of ($270,661) for the corresponding period in the prior year. The total net loss decreased 41% compared to the corresponding nine month period in the prior year. A loss of ($20,134) was realized as a result of foreign currency



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translation and the resulting comprehensive loss the period ending February 28, 2010 was $(178,808) compared to a gain of $42,489 as a result of foreign currency translation and a comprehensive loss of ($228,172) for the corresponding period in the prior year. The comprehensive loss decreased 28% compared to the corresponding period in the prior year.



For the three months ended February 28, 2010 the total net loss was ($63,277) compared to ($87,546) for the corresponding period in the prior year, a decrease of 28%. The three month loss on foreign currency translation for the three month period ended February 28, 2010 was ($2,040) compared to a gain of $3,324 for the same period in the prior year. The comprehensive loss for the three months ended February 28, 2010 was ($65,317) versus ($84,222) for the corresponding period in the prior year, a decrease of 22%



LIQUIDITY AND CAPITAL RESOURCES



Liquidity

As of February 28, 2010, our principal sources of liquidity included cash and cash equivalents, and operating cash flow from our operating subsidiary, and shareholder and related party loans. At February 28, 2010, cash and cash equivalents totaled $4,289 compared to $3,022 at May 31, 2009.



Our business is in transition and our liquidity must be considered in light of the risks, expenses and difficulties frequently encountered by companies in our stage of re-development. The decisions to discontinue operations in the wholesale home décor sector and acquire the assets and ongoing business of MCM have directly impacted sales and liquidity. Discontinuation of the home décor business has resulted in a substantial loss of revenue, and significant un-anticipated costs associated with the shutdown of the home décor operation. These events resulted in a substantial negative impact on cash flow.



The transition to the home automation sector through the acquisition of MCM Integrated Technologies created a new revenue and cost structure and occurred at the same time that the North American housing market entered the current period of substantially reduced activity, house prices declined and a sever contraction in the availability of consumer credit occurred.



The Company operates in both the U.S. and Canadian home automation markets. The impact on the Canadian market as a result of the U.S. led recession was delayed and did not appear in strength until the beginning of calendar year 2008. The impaired U.S. and Canadian economies and financial markets have and will continue to impact the Companys sales and liquidity in the present and near term.  Risk factors relevant to these events and decisions include, but are not limited to: the Companys ability to secure ongoing product supply, foreign exchange fluctuations, continued acceptance of the Companys products and services, changes in technology and consumer adoption of technology, the strength of the North American housing market and consumer economy in general, and cannot be credibly quantified by the Company at this time.



Internal and External Sources of Capital

For the 9 month period ending February 28, 2010 the Company realized a loss on operations of ($53,444) and a net loss of ($158,674). As of February 28, 2010 the Company had a working capital deficit of $1,857,900 and limited assets to sell in order to create short or long term liquidity. Therefore, we are dependent on external sources for funding until such time as the Company develops positive net cash flow to maintain liquidity. Until such time as we have positive cash flow on a sustained basis, the dependence on external capital will remain. There are no guarantees that we will be able to raise external capital in sufficient amounts or on terms acceptable to us.



Investing Activities

Investing activities for the period from inception through February 28, 2010 consisted primarily of the purchase of inventory, property and equipment and soft costs associated with the development of our areas of business activities and supporting infrastructure.



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Financing Activities

Since inception, we financed operations through proceeds from the issuance of equity and debt securities and loans from shareholders and others. To date, we raised approximately $12.76 million from the sale of common stock and as at February 28, 2010 we have borrowings of approximately $1.33 million from investors and shareholders.  Funds from these sources were used as working capital to fund the development of the Company.



The Company executed a securities purchase agreement dated as of December 7, 2005 (the "Purchase Agreement") with certain accredited investors under which we agreed to sell to these investors our convertible Debentures due three years from the final Closing Date under the Purchase Agreement in the aggregate principal amount of up to $600,000 bearing interest at the rate of 6% per annum and convertible into restricted shares of our Common Stock at a conversion price for each share of Common Stock equal to 75% of the lowest closing bid price per share (as reported by Bloomberg, LP) of our Common Stock for the fifteen trading days immediately preceding the date of conversion. At the close of the offering the company the company completed the sale of an aggregate of $555,000 in Debentures under the Purchase Agreement which resulted in net proceeds of $424,850. In February 2008 the debenture holders extended the maturity date of the debentures to February 28, 2011.



The Company secured additional debenture financing from an accredited investor in the amount of $50,000 under terms similar to the December 7, 2005 purchase agreement. In February 2008 the debenture holder extended the maturity date of this debenture to May 2009



For the year ended May 31, 2009, loans and repayments to related parties netted to approximately $121,307. The net total of financing activities for the year ended May 31, 2009 was approximately $135,968



In the nine months period closing February 28, 2010 the Company negotiated short term loans from its officers ($14,897) and third parties ($35,000) totaling $49,897. These loans are interest bearing and due on demand



FUTURE PLAN OF OPERATIONS



On December 8, 2006 the Company acquired all of the outstanding capital stock of, and entered into an Agreement and Plan of Reorganization with MCM Integrated Technologies, Ltd. (MCM). At the time of the acquisition MCM had ongoing projects, prospects and outstanding proposals for work in the greater Phoenix area, the Okanagan area of south central British Columbia and the greater Vancouver area.  As of December 8, 2006, the Company reorganized and focused primarily in the areas of smart home technology.



Following the acquisition of MCM in December 2006, the Company has expanded its service offerings to include home comfort and energy efficiency solutions integrated with and controlled by home automation applications.



Since 2007 and through 2009, the U.S. credit markets began to experience serious disruption due to a deterioration in residential property values, defaults and delinquencies in the residential mortgage market (particularly, subprime and non-prime mortgages) and a decline in the credit quality of mortgage backed securities. These problems led to a dramatic and prolonged slow-down in residential housing market transactions in the U.S.



In response to the downturn in the U.S. housing market the Company has increased its focus on the western Canadian housing market by expanding its marketing and project base and has initiated technology cooperation with a leading security surveillance group in the Republic of Turkey for market development in Turkey and the middle East. The opportunities in the middle east and Turkey.  This effort will continue through the fiscal year ending May 31, 2010.



The Company is actively evaluating opportunities to expand its business activities through both vertical expansion within the Companys current green building, home automation and energy conservation sectors and horizontally within related sectors. The western Canadian housing market, and in particular, the southwestern British Columbia housing market has been significantly less impacted than the U.S. market and the opportunities for the Companys products and services have been less negatively affected. In November 2009 the Company executed a non-binding



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letter of intent with North American Indian Charter of Shipping and Trade, Inc. to explore first nations housing development opportunities.



The far eastern European and west Asian areas of Turkey are experiencing a housing boom, supported by Middle Eastern oil revenues, that has remained buoyant through the ongoing global credit crisis. The Company has historical ties to this area and plans to continue to pursuing technology cooperation and marketing activities within Turkey and the Middle East. In November 2009 the Company became a designated distributor of Home Automation International products within Turkey.



On December 8, 2006 the Company discontinued its activity in the home décor sector and began a process to liquidate its residual inventory of home décor products and to fully wind down its home décor business. This process continued through the period ended February 28, 2010 and will continue into the future until such time as this inventory is liquidated and liabilities associated with the discontinued operation are eliminated or mitigated to the maximum extent possible.



Cash flow from ongoing MCM business activities, the sale of residual home décor inventory combined with loans from related parties are estimated to be sufficient to sustain the current level of operations and planned activities through to the end of May 2010.



OFF BALANCE-SHEET ARRANGEMENTS



During year ended May 31, 2009, and the nine months ended February 28, 2010, the Company did not engage in any off-balance sheet arrangements as defined in Item 303(c) of the SEC's Regulation S-B.



ITEM 3. QUANTATATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Interest Rate Risk



Our exposure to market risk for changes in interest rates relates primarily to our bank credit facility because borrowings under the facility are variable rate borrowings.  At the current time all of the borrowings under our credit agreements accrue interest at the Prime Rate plus the applicable margin.  Assuming that the balance on our line of credit as of February 28, 2010, was the same throughout the entire quarter, each 1.0% increase in the prime interest rate on our variable rate borrowings would result in an increase in annual interest expense and a decrease in our cash flows and income before taxes of approximately $3,388 per year.



Foreign Currency Exchange Risks



Our home automation subsidiary (MCM) and discontinued home décor subsidiary (Cardinal Points) have operations in Canada, both have assets and liabilities in Canadian dollars and both use the Canadian Dollar as a functional currency.  Each financial period, all assets, including goodwill, and liabilities of MCM and Cardinal Points are translated into U.S. Dollars, our reporting currency, using the closing rate method. In addition, we routinely purchase goods in Canadian dollars for resale in US dollars and goods in US dollars for resale in Canadian dollars. Recently, we have purchased goods in both US dollars and Canadian dollars for resale in Euros.



There are principally two types of foreign exchange risk: transaction risks and translation risks. Transaction risks may impact the results of operations and translation risks may impact comprehensive income.  These are discussed more fully below.



Transaction risks



Transactions in currencies other than the functional currency are translated at either an average exchange rate used for the reporting period in which the transaction took place (to approximate to the exchange rate at the date of transactions for that period) or in some cases the rate in effect at the date of the transaction.  Differences in exchange



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rates during the period between the date a transaction denominated in a foreign currency is consummated and the date on which it is settled or translated, are recognized in the consolidated statements of operations as foreign exchange transaction gains and losses.



MCMs and Cardinal Points cash balances consist of Canadian Dollars and U.S. Dollars. This exposes us to foreign currency exchange rate risk in the Statement of Operations. The change in exposure from period to period is related to the change in the balance of the bank accounts based on timing of event receipts and payments.  For the period ended February 28, 2010, MCM purchased approximately $9,600 of goods valued in US dollars for sales in Canadian dollars. For the period ended February 28, 2010, a 10% increase or decrease in the level of the U.S. Dollar exchange rate against the Canadian Dollar with all other variables held constant would result in a realized gain or loss of approximately $864.



Translation risks



The financial statements of MCM and Cardinal Points, with a functional currency of Canadian dollars, are translated into U.S. dollars using the current rate method.  Accordingly, assets and liabilities are translated at period-end exchange rates while revenue, expenses and cash flows are translated at reporting period weighted average exchange rates.  Adjustments resulting from these translations are accumulated and reported as the principal component of other comprehensive loss in stockholders equity.



The fluctuation in the exchange rates resulted in foreign currency translation gains reflected in comprehensive loss in stockholders equity of ($74,549) at February 28, 2010.  Future changes in the value of the U.S. dollar to Canadian dollar could have a material impact on our financial position.



ITEM 4T. CONTROLS AND PROCEDURES.



In connection with the preparation of this quarterly report on Form 10-Q, an evaluation was carried out by our management, with the participation of the Chief Executive and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")) as of February 28, 2010. Based on that evaluation the Chief Executive and Principal Financial Officer has concluded that as of the end of the period covered by this report, the Companys disclosure controls and procedures were adequately designed and effective in ensuring that: (i) information required to be disclosed by the Company in reports that it files or submits to the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our Chief Executive and Principal Financial Officer, to allow for accurate and timely decisions regarding required disclosure.



In addition, based on that evaluation, there has been no change in the Companys internal control over financial reporting that occurred during the Companys last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



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PART II. OTHER INFORMATION.



ITEM 1.  LEGAL PROCEEDINGS



We are not currently involved in any litigation, nor do we know of any threatened litigation against us that would have a material effect on our financial condition.



ITEM 1A.  RISK FACTORS



Not applicable.



ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS



During the period ended February 28 the Company converted $228,000 of debenture debt to 12,244,444 shares of its unregistered common stock at an average price of approximately $0.02 per share.



The Company offered and sold the securities in reliance on an exemption from federal registration under Section 4(2) of the Securities Act of 1933, as amended (the Securities Act), and Rule 506 promulgated thereunder, or alternatively, under Regulation S promulgated under the Securities Act .



ITEM 3.  DEFAULTS UPON SENIOR SECURITIES



None.



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



None.



ITEM 5.  OTHER INFORMATION



None



ITEM 6.  EXHIBITS.



No.

Description

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

31

Certification of Michael Holloran Pursuant to

Section 302 of the -Sarbanes-Oxley Act of 2002, filed herewith

32

Certification of Michael F. Holloran Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002, filed herewith





23



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Table of Contents





SIGNATURES





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







INTELLIGENT LIVING CORP.



By: /s/ Michael F. Holloran

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

Michael F. Holloran

President, Chief Executive Officer, and

Principal Financial Officer



Dated:  April 19, 2010







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