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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from       to      .
 Commission file number: 000-21134
 International Fight League, Inc.
  Delaware
    
    04-2893483(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification Number)38 Park AvenueRutherford, New Jersey
    
    07070(Address of Principal Executive Offices)
    
    (ZIP Code)
 201-635-1799
  þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




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PageNumberPART IFINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    3Condensed Consolidated Balance Sheets as of September 30, 2008
(unaudited) and December 31, 2007
    
    
    4Condensed Consolidated Statements of Operations (unaudited) for the
three and nine months ended September 30, 2008 and 2007
    
    
    5Condensed Consolidated Statements of Cash Flows (unaudited)for the
nine months ended September 30, 2008 and 2007
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosure About Market Risk
    
    
    17Item 4. Controls and Procedures
    
    
    17PART IIOTHER INFORMATIONItem 1. Legal Proceedings
    
    
    18Item 1A. Risk Factors
    
    
    18Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    18Item 3. Defaults Upon Senior Securities
    
    
    18Item 4. Submission of Matters to a Vote of Security Holders
    
    
    18Item 5. Other Information
    
    
    18Item 6. Exhibits
    
    
    18EX-31.1: CERTIFICATIONEX-32.1: CERTIFICATION
  2




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PART I.
FINANCIAL INFORMATION
 
 Item 1. Financial Statements
    3




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INTERNATIONAL FIGHT LEAGUE, INC.
and Subsidiary (formerly International Fight League, LLC)
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2008
    
    
    2007(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    360,273
    
    
    $
    6,120,500Accounts receivable, net of allowance for doubtful accounts
    
    
    87,685
    
    
    
    670,990Prepaid expenses
    
    
    178,328
    
    
    
    457,361Total current assets
    
    
    626,286
    
    
    
    7,248,851Property and equipment, net of accumulated depreciation and amortization
    
    
    23,640
    
    
    
    266,967Other assets
    
    
    4,300
    
    
    
    113,295Total assets
    
    $
    654,226
    
    
    $
    7,629,113LIABILITIES AND STOCKHOLDERS EQUITYCurrent
liabilities not subject to compromise:Accounts payable
    
    $
    69,850
    
    
    $
    845,197Accrued liquidated damages
    
    
    
    
    
    
    456,045Accrued expenses and other current liabilities
    
    
    73,403
    
    
    
    504,915Total current liabilities  not subject to compromise
    
    
    143,253
    
    
    
    1,806,157Current liabilities subject to compromise:Accounts payable
    
    
    156,128
    
    
    
    Accrued expenses and other liabilities
    
    
    254,629
    
    
    
    Total current liabilities subject to compromise
    
    
    410,757
    
    
    
    Total current liabilities
    
    
    554,010
    
    
    
    1,806,157Commitments and ContingenciesStockholders equity:Common stock, $0.01 par value per share; 150,000,000 shares
authorized; 79,058,509 shares issued and outstanding at September 30,
2008 and December 31, 2007, respectively
    
    
    790,562
    
    
    
    790,562Additional paid-in capital
    
    
    36,265,931
    
    
    
    35,936,112Accumulated deficit
    
    
    (36,956,277
    )
    
    
    (30,903,718
    )Total stockholders equity
    
    
    100,216
    
    
    
    5,822,956Total liabilities and stockholders equity
    
    $
    654,226
    
    
    $
    7,629,113
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INTERNATIONAL FIGHT LEAGUE, INC.
and Subsidiary (formerly International Fight League, LLC)
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 Three months ended September 30,
    
    
    Nine months ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues:Live and television events:Advertisingsponsorships
    
    $
    1,727
    
    
    $
    195,846
    
    
    $
    340,408
    
    
    $
    337,070Live eventsbox office receipts
    
    
    345
    
    
    
    588,987
    
    
    
    397,074
    
    
    
    1,994,550Television rights
    
    
    117,952
    
    
    
    1,075,000
    
    
    
    512,906
    
    
    
    1,957,500Branded merchandise
    
    
    13,135
    
    
    
    18,357
    
    
    
    68,017
    
    
    
    72,659Total revenues
    
    
    133,159
    
    
    
    1,878,190
    
    
    
    1,318,405
    
    
    
    4,361,779Costs of revenues:Live and televised events:Advertisingsponsorships
    
    
    
    
    
    
    55,339
    
    
    
    63,137
    
    
    
    110,647Live events costs
    
    
    152,769
    
    
    
    3,102,319
    
    
    
    2,869,911
    
    
    
    15,104,605Television distribution fees and production
    
    
    7,795
    
    
    
    
    
    
    
    94,094
    
    
    
    Branded merchandise
    
    
    
    
    
    
    42,610
    
    
    
    27,412
    
    
    
    67,035Total costs of revenues
    
    
    160,564
    
    
    
    3,200,268
    
    
    
    3,054,554
    
    
    
    15,282,287Selling, general and administrative expenses
    
    
    842,909
    
    
    
    2,161,541
    
    
    
    3,617,644
    
    
    
    6,604,486Share-based compensation expense
    
    
    140,758
    
    
    
    247,691
    
    
    
    472,658
    
    
    
    277,368Loss before reorganization items
    
    
    (1,011,072
    )
    
    
    (3,731,310
    )
    
    
    (5,826,451
    )
    
    
    (17,802,362
    )Reorganization item:Professional fees
    
    
    (285,000
    )
    
    
    
    
    
    
    (285,000
    )
    
    
    Operating loss
    
    
    (1,296,072
    )
    
    
    (3,731,310
    )
    
    
    (6,111,451
    )
    
    
    (17,802,362
    )Other income (expense):Interest expense
    
    
    (629
    )
    
    
    (799
    )
    
    
    (3,347
    )
    
    
    (2,894
    )Interest income
    
    
    3,017
    
    
    
    87,896
    
    
    
    62,238
    
    
    
    322,035Total other income, net
    
    
    2,388
    
    
    
    87,097
    
    
    
    58,891
    
    
    
    319,141Net loss
    
    $
    (1,293,684
    )
    
    $
    (3,644,213
    )
    
    $
    (6,052,560
    )
    
    $
    (17,483,221
    )Net loss per common sharebasic and diluted
    
    $
    (0.02
    )
    
    $
    (0.05
    )
    
    $
    (0.08
    )
    
    $
    $(0.30
    )Weighted-average number of common shares
outstandingbasic and diluted
    
    
    79,058,509
    
    
    
    68,683,000
    
    
    
    79,058,509
    
    
    
    58,627,000
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INTERNATIONAL FIGHT LEAGUE, INC.
and Subsidiary (formerly International Fight League, LLC)
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited)
 For the Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007Cash flows from operating activities:Net loss
    
    $
    (6,052,560
    )
    
    $
    (17,483,221
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    69,329
    
    
    
    82,043Loss on disposal of property and equipment
    
    
    151,158
    
    
    
    Share-based
compensation expense and cost of warrants in selling, general
and administrative expense
    
    
    472,658
    
    
    
    466,168Assignment of security deposit
    
    
    107,152Changes in operating assets and liabilities:Accounts receivable, net
    
    
    583,305
    
    
    
    (80,809
    )Merchandise inventory
    
    
    
    
    
    
    (66,476
    )Prepaid expenses
    
    
    136,195
    
    
    
    44,645Accounts payable
    
    
    (619,219
    )
    
    
    (372,188
    )Accrued liquidated damages
    
    
    (456,045
    )
    
    
    Accrued expenses and other current liabilities
    
    
    (176,883
    )
    
    
    (899,225
    )Net cash used in operating activities
    
    
    (5,784,910
    )
    
    
    (18,309,063
    )Cash flows from investing activities:Net refund of security deposits
    
    
    1,843
    
    
    
    8,051Purchase of property and equipment
    
    
    
    
    
    
    (73,739
    )Proceeds from sale of property and equipment
    
    
    22,840
    
    
    
    Net cash provided by (used in) investing activities
    
    
    24,683
    
    
    
    (65,688
    )Cash flows from financing activities:Receipt of subscription receivable
    
    
    
    
    
    
    1,250,000Proceeds from exercise of stock options
    
    
    
    
    
    
    7,448Payment of accrued commission on private placement
    
    
    
    
    
    
    (1,645,400
    )Cash received on private placement of common stock and warrants
    
    
    
    
    
    
    12,665,000Costs of private placements
    
    
    
    
    
    
    (1,182,861
    )Net cash provided in financing activities
    
    
    
    
    
    
    11,094,187Net decrease in cash and cash equivalents
    
    
    (5,760,227
    )
    
    
    (7,280,564
    )Cash and cash equivalents at beginning of period
    
    
    6,120,500
    
    
    
    16,623,159Cash and cash equivalents at end of period
    
    $
    360,273
    
    
    $
    9,342,595Supplemental disclosure of cash flow information:Cash payments of interest
    
    $
    3,347
    
    
    $
    2,894Issuance of warrant to placement agent
    
    $
    
    
    
    $
    518,959Supplemental disclosure of payments received and
expenses incurred in connection with reorganization:Professional fees
    
    $
    285,000
    
    
    $
    
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INTERNATIONAL FIGHT LEAGUE, INC
and Subsidiary (formerly International Fight League, LLC)
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 NOTE 1CESSATION OF OPERATIONS AND CHAPTER 11 BANKRUPTCY FILING
 In re IFL
Corp.
   
 NOTE 2BASIS OF PRESENTATION AND CONSOLIDATION
    7




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INTERNATIONAL FIGHT LEAGUE, INC
and Subsidiary (formerly International Fight League, LLC)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
   
 NOTE 3AGREEMENT TO SELL ASSETS AND SUBSEQUENT EVENTS
    
 NOTE 4 RECENT ACCOUNTING PRONOUNCEMENTS
    8




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INTERNATIONAL FIGHT LEAGUE, INC
and Subsidiary (formerly International Fight League, LLC)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
      NOTE 5LOSS PER SHARE
  9




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INTERNATIONAL FIGHT LEAGUE, INC
and Subsidiary (formerly International Fight League, LLC)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
   NOTE 6INCOME TAXES
  NOTE 7RELATED PARTY TRANSACTIONS
     10




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INTERNATIONAL FIGHT LEAGUE, INC
and Subsidiary (formerly International Fight League, LLC)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 8STOCK OPTION PLAN
      February 8,2008Expected volatility
    
    
    187.96
    %Expected dividends
    
    
    0Expected term (in years)
    
    
    3Risk-free rate
    
    
    3.6
    %
  WeightedAverageWeighted
    
    RemainingAverage
    
    ContractualOptions
    

Exercise Price
    
    TermOutstanding at January 1, 2008
    
    
    2,637,919
    
    
    $
    0.32Granted
    
    
    270,000
    
    
    $
    0.12Cancelled
    
    
    (413,486
    )
    
    $
    0.20Outstanding at September 30, 2008
    
    
    2,494,433
    
    
    $
    0.32
    
    
    7.7 yearsExercisable at September 30, 2008
    
    
    1,373,524
    
    
    $
    0.24
    
    
    7.2 years
 11




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INTERNATIONAL FIGHT LEAGUE, INC
and Subsidiary (formerly International Fight League, LLC)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
   Restricted Stock
   NOTE 9 WARRANTS
  NOTE 10TELEVISION RIGHTS AGREEMENTS
   12




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INTERNATIONAL FIGHT LEAGUE, INC
and Subsidiary (formerly International Fight League, LLC)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
    NOTE 11 TERMINATION OF CONTRACTS
  NOTE 12TERMINATION OF EMPLOYEES AND DIRECTORS
     NOTE 13COMMITMENTS AND CONTINGENCIES
  13




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INTERNATIONAL FIGHT LEAGUE, INC
and Subsidiary (formerly International Fight League, LLC)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
  NOTE 14TERMINATION OF REAL ESTATE LEASE
   NOTE 15RETENTION OF ADVISORS
   14




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
 The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our condensed consolidated financial
statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q
and our Annual Report on Form 10-K filed on April 15, 2008. In addition to
historical information, this discussion and analysis contains forward-looking statements
that are based on current expectations, estimates, forecasts and projections about us,
our future performance and the industries in which we operate as well as on our
managements assumptions. These forward-looking statements involve risks and uncertainties.
When used in this Quarterly Report on Form 10-Q the words anticipate, objective,
may, might, should, could, can, intend, expect, believe, estimate,
predict, targets, goals, projects, seeks, potential, plan, is designed to
or the negative of these and similar expressions identify forward-looking statements.
While we believe our plans, intentions and expectations reflected in those
forward-looking statements are reasonable, we cannot assure you that these plans,
intentions or expectations will be achieved. Other than as required by applicable
securities laws, we are under no obligation to update any forward-looking statement,
whether as result of new information, future events or otherwise. Our actual results
may differ materially from those anticipated in these forward-looking statements as a
result of certain factors, including but not limited to, those set forth under Item
1A, Risk Factors, and elsewhere in this Quarterly Report on Form 10-Q and in our
Annual Report on Form 10-K for the year ended December 31, 2007.
 Bankruptcy and Sale of Assets
 In re IFL Corp.
    Corporate History
  15




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Results of Operations
    Selling, General and Administrative Expenses:
  Share-based Compensation:
  Reorganization Expenses:
  16




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Other Income (Expense):
  Liquidity, Capital Resources and Going Concern
    Off-Balance Sheet Arrangements
  Item 3. Quantitative and Qualitative Disclosure About Market Risk
  Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedure
 Changes in Internal Control Over Financial Reporting
 17




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PART IIOTHER INFORMATION
 
 Item 1. Legal Proceedings
 In re IFL Corp.
 
 Item 1A. Risk Factors
  In re
IFL Corp.
   
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
  18




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SIGNATURES
  INTERNATIONAL FIGHT LEAGUE, INC.By:
    /s/  Michael  C.  KeefeMichael  C.  KeefePresident,  Chief  Financial  Officer
and 
 General  Counsel  19




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EXHIBIT INDEX
 Exhibits10.1
    
    Asset Purchase Agreement, dated September 19, 2008,
between IFL Corp. and HDNet LLC (filed as Exhibit 10.1
to the Current Report on Form 8-K filed by the
registrant on September 24, 2008 and incorporated by
reference).10.2
    
    Agreement and General Release dated November 10, 2008,
between Jay Larkin and the registrant (filed as Exhibit
10.1 to the Current Report on Form 8-K filed by the
registrant on November 14, 2008 and incorporated by
reference).10.3
    
    Name Use Agreement between HDNet LLC and the registrant (included as Exhibit F to Asset Purchase Agreement in
Exhibit 10.1 to this report and incorporated herein by reference).31.1
    
    Certification of the Principal Executive Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Principal Financial Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
(included in and incorporated by reference to Exhibit
31.1 of this report).32.1
    
    Certification of the Principal Executive Officer and
Principal Financial Officer Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.99.1
    
    Sale Motion filed with the U.S. Bankruptcy Court for the
Southern District of New York on September 19, 2008
(filed as Exhibit 99.1 to the Current Report on Form
8-K filed by the registrant on September 24, 2008 and
incorporated by reference).99.2
    
    Sale Order entered by the U.S. Bankruptcy Court for the
Southern District of New York on October 28, 2008 (filed
as Exhibit 99.1 to the Current Report on Form 8-K
filed by the registrant on October 30, 2008 and
incorporated by reference).
 20