##### Table of Contents



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 March 31, 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)424 West 33rd Street, Suite 650New York, New York
    
    10001(Address of Principal Executive Offices)
    
    (ZIP Code)
 212-356-4000
 
  þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer
o(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
 o þ




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PageNumberPART IFINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    
    3Condensed Consolidated Balance Sheets
March 31, 2008 (unaudited) and December 31, 2007
    
    
    4Condensed Consolidated Statements of Operations (unaudited)
Three months ended March 31, 2008 and 2007
    
    
    5Condensed Consolidated Statements of Cash Flows (unaudited)
Three months ended March 31, 2008 and 2007
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 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-31.2: CERTIFICATIONEX-32.1: CERTIFICATION




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PART I.
 FINANCIAL INFORMATION
 
 Item 1. Financial Statements
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INTERNATIONAL FIGHT LEAGUE, INC.
and Subsidiary (formerly International Fight League, LLC)
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31,
    
    
    December 31,2008
    
    
    2007(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    3,498,641
    
    
    $
    6,120,500Accounts receivable, net of allowance for doubtful accounts
    
    
    101,523
    
    
    
    670,990Prepaid expenses
    
    
    549,614
    
    
    
    457,361Total current assets
    
    
    4,149,778
    
    
    
    7,248,851Property and equipment, net of accumulated depreciation and amortization
    
    
    238,980
    
    
    
    266,967Other assets
    
    
    110,577
    
    
    
    113,295Total assets
    
    $
    4,499,335
    
    
    $
    7,629,113LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    576,637
    
    
    $
    845,197Accrued liquidated damages
    
    
    
    
    
    
    456,045Accrued expenses and other current liabilities
    
    
    292,338
    
    
    
    504,915Total current liabilities
    
    
    868,975
    
    
    
    1,806,157CommitmentsStockholders equity:Common stock, $0.01 par value per share; 150,000,000 shares authorized;
79,058,509 shares issued and outstanding at March 31, 2008 and December 31,
2007
    
    
    790,562
    
    
    
    790,562Additional paid-in capital
    
    
    36,055,114
    
    
    
    35,936,112Accumulated deficit
    
    
    (33,215,316
    )
    
    
    (30,903,718
    )Total stockholders equity
    
    
    3,630,360
    
    
    
    5,822,956Total liabilities and stockholders equity
    
    $
    4,499,335
    
    
    $
    7,629,113
  4




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INTERNATIONAL FIGHT LEAGUE, INC.
and Subsidiary (formerly International Fight League, LLC)
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited)
 For the Three Months EndedMarch 31,
    
    
    March 31,2008
    
    
    2007RevenuesLive and televised events:Advertisingsponsorships
    
    $
    155,725
    
    
    $
    67,045Live eventsbox office receipts
    
    
    78,825
    
    
    
    513,842Television rights
    
    
    39,277
    
    
    
    210,000Branded merchandise
    
    
    8,504
    
    
    
    19,470Total revenues
    
    
    282,331
    
    
    
    810,357Costs of revenuesLive and televised events:Advertisingsponsorships
    
    
    45,842
    
    
    
    33,034Live events costs
    
    
    951,722
    
    
    
    5,598,976Television distribution fees and production
    
    
    7,907
    
    
    
    Branded merchandise
    
    
    14,339
    
    
    
    7,742Total costs of revenues
    
    
    1,019,810
    
    
    
    5,639,752Selling, general and administrative expenses
    
    
    1,452,244
    
    
    
    2,278,931Share-based compensation expense
    
    
    166,658
    
    
    
    15,208Operating loss
    
    
    (2,356,381
    )
    
    
    (7,123,534
    )Other income (expense):Interest expense
    
    
    (1,432
    )
    
    
    (1,166
    )Interest income
    
    
    46,215
    
    
    
    162,492Other income (expense), net
    
    
    44,783
    
    
    
    161,326Net loss
    
    $
    (2,311,598
    )
    
    $
    (6,962,208
    )Net loss per common sharebasic and diluted
    
    $
    (0.03
    )
    
    $
    (0.13
    )Weighted average number of common shares outstandingbasic and diluted
    
    
    79,058,509
    
    
    
    53,500,448
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INTERNATIONAL FIGHT LEAGUE, INC.
and Subsidiary (formerly International Fight League, LLC)
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited)
 For the Three Months EndedMarch 31,
    
    
    March 31,2008
    
    
    2007Cash flows from operating activities:Net loss
    
    $
    (2,311,598
    )
    
    $
    (6,962,208
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    27,987
    
    
    
    26,783Share-based compensation expense
    
    
    166,658
    
    
    
    15,208Changes in operating assets and liabilities:Accounts receivable, net
    
    
    569,467
    
    
    
    (120,583
    )Merchandise inventory
    
    
    
    
    
    
    (28,749
    )Prepaid expenses
    
    
    (139,909
    )
    
    
    (135,932
    )Accounts payable
    
    
    (268,560
    )
    
    
    288,502Accrued liquidated damages
    
    
    (456,045
    )
    
    
    Accrued expenses and other current liabilities
    
    
    (212,577
    )
    
    
    (48,854
    )Net cash used in operating activities
    
    
    (2,624,577
    )
    
    
    (6,965,833
    )Cash flows from investing activities:(Payment)/refund of security deposits
    
    
    2,718
    
    
    
    (2,718
    )Purchase of property and equipment
    
    
    
    
    
    
    (68,746
    )Net cash provided by (used in) investing activities
    
    
    2,718
    
    
    
    (71,464
    )Cash flows from financing activities:Receipt of subscription receivable
    
    
    
    
    
    
    1,250,000Payment of accrued commission on private placement
    
    
    
    
    
    
    (1,645,400
    )Net cash used in financing activities
    
    
    
    
    
    
    (395,400
    )Net decrease in cash and cash equivalents
    
    
    (2,621,859
    )
    
    
    (7,432,697
    )Cash and cash equivalents at beginning of period
    
    
    6,120,500
    
    
    
    16,623,159Cash and cash equivalents at end of period
    
    $
    3,498,641
    
    
    $
    9,190,462Supplemental disclosure of cash flow information:Cash payments for interest
    
    $
    1,432
    
    
    $
    1,166
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INTERNATIONAL FIGHT LEAGUE, INC
and Subsidiary (formerly International Fight League, LLC)
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 NOTE 1BASIS OF PRESENTATION AND CONSOLIDATION AND BUSINESS DESCRIPTION
    NOTE 2GOING CONCERN
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INTERNATIONAL FIGHT LEAGUE, INC
and Subsidiary (formerly International Fight League, LLC)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
   NOTE
3 RECENTLY ADOPTED AND NEWLY ISSUED 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 4LOSS PER SHARE
   NOTE 5INCOME TAXES
   NOTE 6RELATED PARTY TRANSACTIONS
 Transactions with Entities Controlled by Our Chief Executive Officer
   Lease and Other Guaranty Arrangements
  9




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INTERNATIONAL FIGHT LEAGUE, INC
and Subsidiary (formerly International Fight League, LLC)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
  NOTE 7STOCK OPTION PLAN
      February 8,2008Expected volatility
    
    
    187.96
    %Expected dividends
    
    
    0Expected term (in years)
    
    
    3Risk-free rate
    
    
    3.6
    %
  10




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INTERNATIONAL FIGHT LEAGUE, INC
and Subsidiary (formerly International Fight League, LLC)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 WeightedAverageWeighted
    
    
    RemainingAverage
    
    
    ContractualOptions
    
    

Exercise Price
    
    

TermOutstanding at January 1, 2008
    
    
    2,637,919
    
    
    $
    0.32Granted
    
    
    270,000
    
    
    $
    0.12Cancelled
    
    
    (130,767
    )
    
    $
    0.30Outstanding at March 31, 2008
    
    
    2,777,152
    
    
    $
    0.30
    
    
    8.2 yearsExercisable at March 31, 2008
    
    
    1,136,438
    
    
    $
    0.20
    
    
    7 years
  Restricted Stock
   NOTE 8 WARRANTS
  NOTE 9TELEVSION AGREEMENTS
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INTERNATIONAL FIGHT LEAGUE, INC
and Subsidiary (formerly International Fight League, LLC)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
  12




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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 that 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.
 Our Company
  Corporate History
    13




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Company Filings
  Results of Operations
  Three Months Ended March 31, 2008 Compared To Three Months Ended March 31, 2007
  Revenues:
  
    
    Revenue from live events of $79,000 in 2008 versus $514,000 in 2007, a
decrease of $435,000, or 85%. The decrease is due in large part to
the reduction in the number of events from four in 2007 to one in
2008;
    
    Television rights of $39,000 in 2008 versus $210,000 in 2007, a
decrease of $171,000 or 81%. The decrease is due revenue recognized
in 2007 from MyNetworkTV, which we do not have in 2008;
    
    Advertising revenues of $156,000 in 2008 versus $67,000 in 2007, an
increase of $89,000, or 133%, representing an increase in sponsorship
revenue resulting from the continuing development of our sponsorship
program; and
    
    Branded merchandise revenues of $8,000 in 2008 versus $19,000 in 2007,
a decrease of $11,000, or 58%, resulting from fewer events in 2008
versus 2007.
   14




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Cost of Revenues:
  
    
    Live event costs of $952,000 in 2008 versus $5,599,000 in 2007, a
decrease of $4,647,000, or 83%, with the decrease being primarily the
result of holding one event in 2008 versus four in 2007: 
    
    Talent costs decreased $1,283,000, to $404,000 in 2008 as compared to
$1,687,000 in 2007, a decrease of 76%, due to the decrease in the
number of events from four in 2007 to one in 2008;
    
    Travel, facility rental and other event costs decreased from
$1,125,000 in 2007 to $217,000 in 2008, a decrease of $908,000, or
81%, due to the decreased number of events; and
    
    Television production costs decreased $1,919,000 , or 88%, with the
2008 cost being $253,000 compared to $2,172,000 in 2007, due to the
decrease in the number of shows produced because of fewer events and a
general decrease in our per event and per show production costs as a
result of our cost reduction efforts;
    
    Advertising costs of $46,000 in 2008 versus $33,000 in 2007, an
increase of $13,000, or 39%, due to increased sponsorship costs;
 
    
    Branded merchandise costs of $14,000 in 2008 versus $8,000 in 2007, an
increase of $6,000, or 75%, due to the development of additional
revenue streams through the sale of merchandise.
 Selling, General and Administrative Expenses:
  
    
    Advertising and promotion of $82,000 in 2008 versus $191,000 in 2007,
a decrease of $109,000, or 57%, due to cost reduction efforts and
fewer events in 2008;
    
    Professional fees of $223,000 in 2008 versus $709,000 in 2007, a
decrease of $486,000, or 69%, primarily resulting from the additional
costs incurred in 2007 related to our becoming a public company and a
reduction in 2008 in the use of consultants;
    
    Payroll expense of $893,000 in 2008 versus $984,000 in 2007, a
decrease of $91,000, or 9%, due to a decrease in the number of employees;
and
    
    Travel expense of $6,000 in 2008 versus $110,000 in 2007, a decrease
of $104,000, or 95%, due to cost reduction efforts and cut backs in
travel.
 15




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Share-based Compensation:
  Other Income (Expense):
  Liquidity and Capital Resources
  Going Concern
  Future Capital Requirements
    16




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Off-Balance Sheet Arrangements
  Seasonality
  
 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
  
 Item 1A. Risk Factors
  
 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. KeefeExecutive Vice President
Acting Chief Financial Officer  19




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EXHIBIT INDEX
 Exhibits31.1
    
    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 2002.32.1
    
    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.
 20