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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, 2007
 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
(State or Other Jurisdiction of 
Incorporation or Organization)
    
    04-2893483
(I.R.S. Employer Identification Number)424 West 33 rd Street, Suite 650
New York, New York
    
    10001(Address of Principal Executive Offices)
    
    (ZIP Code)
 212.356.4000
  þ o
  o o þ
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PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets
September 30, 2007 (unaudited) and December 31, 2006
    
    
    4Condensed Consolidated Statements of Operations (unaudited)
Three and nine months ended September 30, 2007 and 2006
    
    
    5Condensed Consolidated Statements of Cash Flows (unaudited)
Nine months ended September 30, 2007 and 2006
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosure About Market Risk
    
    
    19Item 4. Controls and Procedures
    
    
    19PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    21Item 1A. Risk Factors
    
    
    21Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    21Item 3. Defaults Upon Senior Securities
    
    
    22Item 4. Submission of Matters to a Vote of Security Holders
    
    
    22Item 5. Other Information
    
    
    22Item 6. Exhibits
    
    
    22EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERIFICATIONEX-32.2: 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
 September 30, 2007
    
    
    December 31, 2006(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    9,342,595
    
    
    $
    16,623,159Accounts receivable, net of allowance for doubtful accounts of
$80,000 and $80,000, respectively
    
    
    188,913
    
    
    
    108,104Merchandise inventory
    
    
    92,319
    
    
    
    25,843Prepaid expenses
    
    
    200,671
    
    
    
    245,316Total current assets
    
    
    9,824,498
    
    
    
    17,002,422Property and equipment, net
    
    
    295,565
    
    
    
    303,869Other assets
    
    
    113,295
    
    
    
    121,346Total assets
    
    $
    10,233,358
    
    
    $
    17,427,637LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    664,256
    
    
    $
    1,036,444Accrued commission on private placement
    
    
    
    
    
    
    1,645,400Accrued expenses and other current liabilities
    
    
    211,116
    
    
    
    1,110,341Total current liabilities
    
    
    875,372
    
    
    
    3,792,185CommitmentsStockholders equity:Common stock: $.01 par value; 150,000,000 shares authorized;
78,931,232 and 53,500,448 shares issued and outstanding,
respectively
    
    
    789,312
    
    
    
    535,004Additional paid-in capital
    
    
    35,698,298
    
    
    
    23,996,851Subscriptions receivable
    
    
    
    
    
    
    (1,250,000
    )Accumulated deficit
    
    
    (27,129,624
    )
    
    
    (9,646,403
    )Total stockholders equity
    
    
    9,357,986
    
    
    
    13,635,452Total liabilities and stockholders equity
    
    $
    10,233,358
    
    
    $
    17,427,637
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INTERNATIONAL FIGHT LEAGUE, INC.
and Subsidiary (formerly International Fight League, LLC)
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006RevenuesLive and televised events:Advertising  sponsorships
    
    $
    195,846
    
    
    $
    20,239
    
    
    $
    337,070
    
    
    $
    254,549Live events  box office receipts
    
    
    588,987
    
    
    
    324,987
    
    
    
    1,994,550
    
    
    
    452,129Television rights
    
    
    1,075,000
    
    
    
    
    
    
    
    1,957,500
    
    
    
    Branded merchandise
    
    
    18,357
    
    
    
    17,604
    
    
    
    72,659
    
    
    
    18,946Total revenues
    
    
    1,878,190
    
    
    
    362,830
    
    
    
    4,361,779
    
    
    
    725,624Cost of revenuesLive and televised events:Advertising  sponsorships
    
    
    55,339
    
    
    
    374,369
    
    
    
    110,647
    
    
    
    544,060Live event costs
    
    
    3,102,319
    
    
    
    1,777,207
    
    
    
    15,104,605
    
    
    
    3,223,218Branded merchandise
    
    
    42,610
    
    
    
    10,562
    
    
    
    67,035
    
    
    
    11,242Total cost of revenues
    
    
    3,200,268
    
    
    
    2,162,138
    
    
    
    15,282,287
    
    
    
    3,778,520Selling, general and administrative
expenses
    
    
    2,161,541
    
    
    
    1,276,590
    
    
    
    6,604,486
    
    
    
    2,346,553Stock-based compensation expense
    
    
    247,691
    
    
    
    7,738
    
    
    
    277,368
    
    
    
    32,866Operating loss
    
    
    (3,731,310
    )
    
    
    (3,083,636
    )
    
    
    (17,802,362
    )
    
    
    (5,432,315
    )Other income (expenses):Dividend expense
    
    
    
    
    
    
    (47,580
    )
    
    
    
    
    
    
    (120,197
    )Interest expense
    
    
    (799
    )
    
    
    (14,795
    )
    
    
    (2,894
    )
    
    
    (14,795
    )Interest income
    
    
    87,896
    
    
    
    2,899
    
    
    
    322,035
    
    
    
    25,671Total other income (expenses)
    
    
    87,097
    
    
    
    (59,476
    )
    
    
    319,141
    
    
    
    (109,321
    )Net loss
    
    $
    (3,644,213
    )
    
    $
    (3,143,112
    )
    
    $
    (17,483,221
    )
    
    $
    (5,541,636
    )Net loss per common share  basic
and diluted
    
    $
    (0.05
    )
    
    $
    (0.17
    )
    
    $
    (0.30
    )
    
    $
    (0.32
    )Weighted average number of common
shares outstanding  basic and
diluted
    
    
    68,683,000
    
    
    
    18,582,000
    
    
    
    58,627,000
    
    
    
    17,556,000
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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, 2007
    
    
    September 30, 2006Cash flows from operating activitiesNet loss
    
    $
    (17,483,221
    )
    
    $
    (5,541,636
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation and amortization
    
    
    82,043
    
    
    
    13,743Stock-based compensation and cost of warrants included
..in selling, general and administrative expense
    
    
    466,168
    
    
    
    32,866Changes in operating assets and liabilities:Accounts receivable
    
    
    (80,809
    )
    
    
    (1,500
    )Merchandise inventory
    
    
    (66,476
    )
    
    
    Prepaid expenses
    
    
    44,645
    
    
    
    (41,588
    )Accounts payable
    
    
    (372,188
    )
    
    
    728,410Accrued expenses and other current liabilities
    
    
    (899,225
    )
    
    
    535,970Net cash used in operating activities
    
    
    (18,309,063
    )
    
    
    (4,273,737
    )Cash flows from investing activities:Refund (payment) of security deposits
    
    
    8,051
    
    
    
    (206,089
    )Purchase of property and equipment
    
    
    (73,739
    )
    
    
    (123,839
    )Net cash used in investing activities
    
    
    (65,688
    )
    
    
    (329,928
    )Cash flows from financing activities:Receipt of subscription receivable
    
    
    1,250,000
    
    
    
    Proceeds from exercise of stock options
    
    
    7,448
    
    
    
    Issuance of Series A preferred stock
    
    
    
    
    
    
    1,350,000Payment of accrued commission on private placement
    
    
    (1,645,400
    )Cash received on private placement of common stock and
warrants
    
    
    12,665,000
    
    
    
    Costs of December 2006 and August 2007 private placements
    
    
    (1,182,861
    )
    
    
    Proceeds of related party loan
    
    
    
    
    
    
    2,500,000Net cash provided by financing activities
    
    
    11,094,187
    
    
    
    3,850,000Net decrease in cash and cash equivalents
    
    
    (7,280,564
    )
    
    
    (753,665
    )Cash and cash equivalents at beginning of period
    
    
    16,623,159
    
    
    
    1,136,960Cash and cash equivalents at end of period
    
    $
    9,342,595
    
    
    $
    383,295Supplemental schedule of non-cash investing and financing
activities:Issuance of warrant to placement agent
    
    $
    518,959
    
    
    
    Conversion of investor advances to Series A preferred stock
    
    
    
    
    
    $
    1,175,000
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INTERNATIONAL FIGHT LEAGUE, INC
and Subsidiary (formerly International Fight League, LLC)
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 NOTE 1  BASIS OF PRESENTATION AND CONSOLIDATION AND BUSINESS DESCRIPTION
    NOTE 2  SEC COMMENT LETTER AND CHANGE IN ACCOUNTING PRACTICE
  NOTE 3  LIQUIDITY
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NOTE 4  LOSS PER SHARE
   NOTE 5  INCOME TAXES
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NOTE 6  RELATED PARTY TRANSACTIONS
 Transactions with Entities Controlled by Our Chief Executive Officer
  Lease and Other Guaranty Arrangements
   NOTE 7 -EQUITY COMPENSATION PLAN
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September 30, 2007Expected volatility
    
    
    226
    %Expected dividends
    
    
    0Expected term (in years)
    
    
    3Risk-free rate
    
    
    4.6
    %
  Weighted
    
    Weighted AverageAverage Exercise
    
    RemainingOptions
    
    Shares
    
    Price
    
    Contractual TermOutstanding at January 1, 2007
    
    
    1,925,376
    
    
    $
    0.20Exercised on April 5, 2007
    
    
    (43,333
    )
    
    $
    0.06Exercised on June 8, 2007
    
    
    (5,833
    )
    
    $
    0.30Exercised on July 31, 2007
    
    
    (51,618
    )
    
    $
    0.06Granted on August 24, 2007
    
    
    600,000
    
    
    $
    0.63Granted on September 21, 2007
    
    
    500,000
    
    
    $
    0.46Cancelled
    
    
    (89,660
    )
    
    $
    0.30Outstanding at September 30, 2007
    
    
    2,782,432
    
    
    $
    0.31Exercisable at September 30, 2007
    
    
    819,288
    
    
    $
    0.17
    
    
    8.8 years
   NOTE 8  WARRANTS
   September 30, 2007Expected volatility
    
    
    226
    %Expected dividends
    
    
    0Expected term (in years)
    
    
    0-5Risk-free rate
    
    
    4.6
    %
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NOTE 9  COMMITMENTS
  NOTE 10  TELEVISION RIGHTS AGREEMENTS
      NOTE 11  ARRANGEMENTS WITH CERTAIN OFFICERS
  11




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NOTE 12  RECENT ACCOUNTING PRONOUNCEMENTS
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NOTE 13  PRIVATE PLACEMENT OF COMMON STOCK AND WARRANTS
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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 2, 2007. 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. The words believe, may, might, estimate, continue,
anticipate, intend, expect, could, can, plans, possible, potential, predicts,
targets, objectives, goals, seeks, should, will, would and similar expressions are
intended to 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, 2006.
 Our Company
  Corporate History
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Company Filings
  Results of Operations
   Three and Nine Months Ended September 30, 2007 as compared to the Three and Nine Months Ended
September 30, 2006
    
    
    television rights of $1.1 million and $2 million, respectively, during the three
and nine months ended September 30, 2007, consisting of $675,000 and $1,557,500,
respectively, relating to our agreement with MNTV. We also recognized $400,000 of
revenue related to international television rights in the three month and nine-month
periods ended September 30, 2007. No television rights revenue
was recognized during the three and nine month periods ended
September 30, 2006;
    
    box office receipts and related revenue of $589,000 and $2.0 million, respectively,
during the three and nine month periods ended September 30, 2007 as compared to
$325,000 and $452,000 during the three and nine month periods ended September 30, 2006;
and
    
    sponsorships of $196,000 and $337,000, respectively, during the three and nine month
periods ended September 30, 2007 as compared to $20,000 and $255,000 during the three
and nine month periods ended September 30, 2006.
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\


    
    costs of branded merchandise of $42,600 and $67,000, respectively, during the
three and nine months ended September 30, 2007 and $10,600 and $11,200, respectively,
during the three and nine months ended September 30, 2006;
    
    live events costs of $3.1 million and $15.1 million, respectively, during the
three and nine months ended September 30, 2007. During 2006, we recorded $1.8
million of live events costs for the three months and $3.2 million for the three
months and nine months ended September 30, 2006, respectively; and
    
    sponsorship costs of $55,000 and $111,000, respectively, during the three and nine
month ended September 30, 2007 as compared to $374,000 and $544,000, respectively
recorded in the three and nine-month periods ended September 30, 2006.
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Liquidity and Capital Resources
  Future Capital Requirements
    Changes in Directors and Officers
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Off-Balance Sheet Arrangements
  Critical Accounting Policy
    Seasonality
   
 Item 3. Quantitative and Qualitative Disclosure About Market Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures:
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Changes in Internal Control Over Financial Reporting:
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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  Our mixed martial arts (MMA) content is being televised in the United States under a
letter of intent with Fox Sports Net (FSN) and MyNetworkTV, Inc. (MNTV), which could be
terminated at any time. If we do enter into a definitive agreement, FSN and MNTV will
require exclusive rights to telecast our MMA content in the U.S.
    
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
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SIGNATURES
  INTERNATIONAL FIGHT LEAGUE, INC.By:
    /s/
 Michael C. KeefeExecutive Vice President  23




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EXHIBIT INDEX
 Exhibits4.1
    
    
    Form of Warrant, dated August 6, 2007 (incorporated by reference
to Exhibit 4.3 to the Registrants Form 8-K filed on August 9,
2007).4.2
    
    
    Warrant, dated August 6, 2007 issued to placement agent
(incorporated by reference to Exhibit 4.3 to the Registrants
Registration Statement on Form S-1 (Commission File No.
333-146629) filed on October 11, 2007).10.1
    
    
    Securities Purchase Agreement, dated August 6, 2007 between
International Fight League, Inc. and the investors party thereto
(incorporated by reference to Exhibit 4.1 to the Registrants
Form 8-K filed on August 9, 2007).10.2
    
    
    Registration Rights Agreement, dated August 6, 2007 between
International Fight League, Inc. and the stockholders party
thereto (incorporated by reference to Exhibit 4.2 to the
Registrants Form 8-K filed on August 9, 2007).10.3
    
    
    Letter agreement, dated September 21, 2007, between International
Fight League, Inc. and Jay Larkin (incorporated by reference to
Exhibit 10.1 to the Registrants Report on Form 8-K filed on
September 27, 2007).10.4
    
    
    Description of compensation arrangement for non-employee
directors of Registrant (incorporated by reference to Exhibit
10.13 to the Registrants Registration Statement on Form S-1
(Commission File No. 333-146629) filed on October 11, 2007).31.1
    
    
    Certification of the Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of the Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of the Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of the Principal Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 24