Unassociated Document
FORM 10-Q

x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED September 30, 2011

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

IFLI ACQUISITION CORP.
(Exact Name of Registrant as Specified in its Charter)
 
Delaware
  
04-2893483
(State or Other Jurisdiction of
  
(I.R.S. Employer
Incorporation or Organization)
  
Identification Number)
     
200 S.W. 1st Avenue, Suite 1250
    
Ft. Lauderdale, Florida
  
33301
(Address of Principal Executive Offices)
  
(ZIP Code)
  
(954) 767-6339
(Registrant’s Telephone Number, including Area Code)
 
3960 N. Andrews Avenue, Oakland Park, Florida 33304
(Former Name, former Address and former Fiscal Year, if changed since last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes  x     No  o

Indicate by check mark whether the registrant has submitted electronically and posted to its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes  x     No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. (See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.) (Check One):
 
Large accelerated filer o
Accelerated filer o
Non-accelerated filer o
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  x     No  o

As of October 14, 2011, there were 2,027,788 shares of Common Stock, par value $0.01 per share, outstanding.
 
 
 
 
 
IFLI Acquisition Corp.
(Formerly International Fight League, Inc)
Quarterly Report on Form 10-Q
For the Period Ended September 30, 2011

Table of Contents

     
Page
   
       
 
1
       
 
8
       
 
9
       
 
9
       
   
       
 
10
       
 
10
       
 
10
       
 
10
       
 
10
       
 
10
       
 
10
       
 
10
     
 
11
     
Exhibit 31.1
    
     
Exhibit 32.1
    

 
(i)
 
 
PART I – FINANCIAL INFORMATION

Item 1 Financial Statements

Certain information and footnote disclosures required under generally accepted accounting principles have been condensed or omitted from the following condensed financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. IFLI Acquisition Corp. (the “Registrant”, the “Company”, “IFL”, “IFLI”, “we”, “us”, or “our”) believes that the disclosures are adequate to assure that the information presented is not misleading in any material respect. The following condensed financial statements should be read in conjunction with the year-end financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2010.

The results of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the entire fiscal year, or for any other period.

When we refer to our fiscal year in this report, we are referring to the fiscal year ended December 31 of that year. Thus, we are currently operating in our fiscal 2011 year, which commenced on January 1, 2011. Unless the context expressly indicates a contrary intention, all references to years in this filing are to our fiscal years.
 
 
-1-
 
 
IFLI Acquisition Corp.
(Formerly International Fight League, Inc)
CONDENSED BALANCE SHEETS

   
SEPTEMBER 30,
    
DECEMBER 31,
  
   
2011
    
2010
  
   
(UNAUDITED)
        
             
ASSETS
            
CURRENT ASSETS:
            
Cash
  
$
3,321
    
$
151
  
Prepaid Expenses
    
85,080
      
101,033
  
                 
TOTAL CURRENT ASSETS
  
$
88,401
    
$
101,184
  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
                 
CURRENT LIABILITIES:
                
Accounts Payable
  
$
788
    
$
13,390
  
Accrued Expenses and Other Current Liabilities
    
17,500
      
27,500
  
Loan Payable
    
70,000
      
—
  
                 
TOTAL CURRENT LIABILITIES
    
88,288
      
40,890
  
                 
STOCKHOLDERS’ EQUITY:
                
Preferred Stock, $.01 Par Value; 5,000,000 Shares Authorized; No Shares of Series A Convertible Preferred Stock Issued and Outstanding at September 30, 2011 and 18,000 Shares Issued and Outstanding at December 31, 2010
    
—
      
180
  
                 
Common Stock, $.01 Par Value; 75,000,000 Shares Authorized; 2,027,788 Shares Issued and Outstanding at  September 30, 2011 and 1,982,788 Shares Issued and Outstanding  at December 31, 2010
    
20,278
      
19,828
  
                 
Additional Paid-In Capital
    
37,301,540
      
37,301,772
  
                 
Accumulated Deficit
    
(37,321,705
)
    
(37,261,486
)
                 
TOTAL STOCKHOLDERS’ EQUITY
    
113
      
60,294
  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  
$
88,401
    
$
101,184
  

The accompanying notes are an integral part of the condensed interim financial statements.

 
-2-
 
 
IFLI Acquisition Corp.
(Formerly International Fight League, Inc)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

   
FOR THE THREE MONTHS
ENDED SEPTEMBER 30,
    
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
  
   
2011
    
2010
    
2011
    
2010
  
REVENUES
  
$
—
    
$
—
    
$
—
    
$
—
  
                                 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    
17,661
      
25,542
      
60,174
      
99,359
  
                                 
OTHER INCOME (EXPENSES):
                                
Interest Expense
    
90
      
—
      
(45
)
    
(15
)
Interest Income
    
—
      
3
      
—
      
8
  
TOTAL OTHER INCOME (EXPENSES) – NET
    
90
      
3
      
(45
)
    
(7
)
                                 
NET LOSS
  
$
(17,571
)
  
$
(25,539
)
  
$
(60,219
)
  
$
(99,366
)
                                 
NET LOSS PER COMMON SHARE – BASIC AND DILUTED
  
$
(.01
)
  
$
(.02
)
  
$
(.03
)
  
$
(.20
)
                                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING –BASIC AND DILUTED
    
2,027,788
      
1,085,844
      
2,009,510
      
498,815
  
 
The accompanying notes are an integral part of the condensed interim financial statements.

 
-3-
 

IFLI Acquisition Corp.
(Formerly International Fight League, Inc)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

   
FOR THE
  
   
NINE MONTHS ENDED
  
   
SEPTEMBER 30
  
   
2011
    
2010
  
CASH FLOWS FROM OPERATING ACTIVITIES:
            
Net Loss
  
$
(60,219
)
  
$
(99,366
)
                 
Changes in Operating Assets and Liabilities:
                
Prepaid Expenses
    
15,952
      
15,952
  
Accounts Payable
    
(12,602
)
    
(750
)
Accrued Expenses and Other Current Liabilities
    
(10,000
)
    
(29,699
)
Proceeds From Loan Payable
    
70,000
      
—
  
                 
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    
3,131
      
(113,863
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
                
Sale of Series A Convertible Preferred Stock
    
—
      
100,000
  
Refund of S-1 Overpayment
    
39
      
—
  
                 
NET CASH PROVIDED BY FINANCING ACTIVITIES
    
39
      
100,000
  
                 
NET INCREASE (DECREASE) IN CASH
    
3,170
      
(13,863
) 
                 
CASH AT BEGINNING OF PERIOD
    
151
      
24,699
  
                 
CASH AT END OF PERIOD
  
$
3,321
    
$
10,836
  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
                
Cash Paid During the Period for Interest
  
$
—
    
$
15
  
 
The accompanying notes are an integral part of the condensed interim financial statements.
 
 
-4-
 
 
IFLI Acquisition Corp.
(Formerly International Fight League, Inc)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
(Unaudited)

NOTE A -
DESCRIPTION OF BUSINESS AND SUMMARY OF SELECTED ACCOUNTING POLICIES -
     
 
Description of Business:
   
IFLI Acquisition Corp., formerly International Fight League, Inc. (the “Company”), was incorporated in the State of Delaware on May 8, 1992. The Company’s offices are located in Ft. Lauderdale, Florida.
     
   
Effective January 15, 2010, the Company completed the liquidation of its wholly-owned subsidiary in accordance with the terms of the subsidiary’s bankruptcy proceedings. The Company presently has no business operations.
     
 
Basis of Presentation:
   
The accompanying condensed interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, since they are interim statements, the accompanying financial statements do not include all of the information and notes required by GAAP for a complete financial statement presentation. The condensed balance sheet as of December 31, 2010 was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP.
     
   
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted from these condensed interim financial statements. The Company believes the disclosures presented are adequate to make the information not misleading.
     
   
These interim financial statements reflect all normal adjustments that, in the opinion of management, are necessary for fair presentation of the information contained herein. The results of operations for the three months and nine months ended September 30, 2011 are not necessarily indicative of the results of operations expected for the full year ended December 31, 2011. These interim financial statements should be read in conjunction with the Company’s audited financial statements and accompanying notes for the year ended December 31, 2010.
     
   
On July 8, 2010, the Company’s stockholders approved a 1 for 400 reverse stock split of the Company’s Common Stock (see Note F). All of the share and per share amounts discussed in this Quarterly Report on Form 10-Q have been adjusted to reflect the effect of this reverse split.
     
 
Going Concern:
   
The Company has suffered recurring losses, has no current revenue producing operations, and will continue to incur operating expenses in the future. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is presently seeking acceptable merger or acquisition candidates. The accompanying condensed interim financial statements have been prepared on the basis of a going concern, and do not reflect any adjustments from an alternative assumption.
     
 
Use of Estimates:
   
The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period. Actual results may differ from the estimates and assumptions used in preparing the financial statements.
     
 
Fair Value of Assets and Liabilities:
   
The carrying amounts of the Company’s assets and liabilities at September 30, 2011 and December 31, 2010 approximate fair value.
 
 
-5-
 
 
IFLI Acquisition Corp.
(Formerly International Fight League, Inc)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
(Unaudited)

 
Income Taxes:
   
Income taxes are determined based upon income and expenses recorded for financial reporting purposes. Deferred taxes are recorded for estimated future tax effects of differences between the basis of assets and liabilities for financial reporting and income tax purposes giving consideration to enacted tax laws. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized.
     
 
Earnings (Loss) Per Share:
   
Basic earnings (loss) per share are computed by dividing income (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted earnings (loss) per share is similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. The potentially dilutive securities have been excluded from the calculation because their effect would be anti-dilutive.
 
NOTE B -
PREPAID EXPENSES –
   
 
Prepaid expenses consist of officers’ and directors’ errors and omission insurance. Costs are amortized ratably over the term of the policy using the straight line method.
 
NOTE C -
DEMAND LOAN OBLIGATION –
   
 
In January 2011, the Company entered into an interest-free, demand loan agreement with Amerifirst Trading Corp. to borrow up to $50,000 to fund the Company’s operations. In May 2011, the Company entered into an interest-free, demand loan agreement with Amerifirst Trading Corp. to increase that loan agreement to $75,000 to fund the Company’s operations.  Amerifirst Trading Corp. is controlled by the Company’s sole officer and director, Mr. C. Leo Smith. As of September 30, 2011, $70,000 of the $75,000 principal amount of that loan has been funded and advanced to the Company.
 
NOTE D -
INCOME TAXES –
   
 
At September 30, 2011, the Company has a net operating loss carry-forward of approximately $38 million. The ultimate utilization of the net operating loss resulting from the change in majority ownership, which has no effect on the condensed interim financial statements at September 30, 2011, has not been determined.
 
NOTE E -
SALE OF PREFERRED STOCK –
   
 
On January 11, 2010, the Company sold 730,941 shares of its Series ‘A’ Convertible Preferred Stock (the “Preferred Stock”) to Insurance Marketing Solutions, LLC, a Florida limited liability corporation (“IMS”), pursuant to the terms of the Series ‘A’ Preferred Stock Purchase Agreement (the “Agreement”). Mr. C. Leo Smith was then and is currently the sole and Managing Member of IMS, and is currently also the sole officer and director of the Company. Pursuant to the terms of the Agreement, IMS acquired the shares of Preferred Stock in consideration of $100,000.
   
 
Each share of Preferred Stock was convertible into 2.5 shares of the Company’s common stock (the “Common Stock”) and was entitled to 2.5 votes on all transactions submitted to the stockholders of the Company. In addition, in connection with any vote or written consent with respect to the election of directors of the Company, the holders of record of the shares of Preferred Stock, and as a separate class, were entitled to elect the majority of directors of the Company. Accordingly, the former holders of Preferred Stock possess control over the Company.

 
-6-
 

IFLI Acquisition Corp.
(Formerly International Fight League, Inc)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
(Unaudited)

 
During August, September and November 2010, 712,941 outstanding shares of the Company’s Series ‘A’ Convertible Preferred Stock, $.01 par value, were converted by stockholders into 1,782,353 shares of the Company’s Common Stock, $.01 par value.  During April and May 2011, 18,000 shares of the Company’s Series ‘A’ Convertible Preferred Stock, $.01 par value, were converted by stockholders into 45,000 shares of the Company’s Common Stock, $.01 par value.  Accordingly, at September 30, 2011, no shares of the Company’s Series ‘A’ Convertible Preferred Stock, $ .01 par value, remained issued and outstanding.

NOTE F -
REVERSE STOCK SPLIT –
   
 
On July 8, 2010, the Company amended and restated its Certificate of Incorporation to (a) effect a one (1) for four hundred (400) reverse split of the outstanding shares of Common Stock, and (b) decrease the authorized shares of Common Stock from 150,000,000 shares to 75,000,000 shares, par value $.01 per share, and (c) increase the authorized shares of Preferred Stock from 1,000,000 shares to 5,000,000 shares, par value $.01 per share, and (d) change the name of the Company to “IFLI Acquisition Corp.” Each four hundred (400) shares of Common Stock outstanding at 4:00 P.M. EDT on June 30, 2010 were deemed to be one (1) share of Common Stock of the Company. Fractional shares have been rounded up to the next whole share. All share and per share amounts have been restated to reflect the above referenced actions.
 
NOTE G -
STOCK OPTIONS –
   
 
At January 1, 2010, the Company had 1,629 options outstanding to purchase Common Stock, relating to the previously adopted 2006 Equity Incentive Plan. All remaining options were cancelled during the three months ended March 31, 2010. On April 12, 2010, all outstanding stock options expired.
 
NOTE H -
WARRANTS –
   
 
At September 30, 2010, the Company had 36,528 stock purchase warrants outstanding entitling holders to purchase the same number of shares of Common Stock at prices from $120.00 to $500.00 per share. All costs for the issuance of these warrants have been recognized in prior periods; therefore no charges were recognized during the nine months ended September 30, 2011 or during 2010.
 
NOTE I -
RESTRICTED STOCK –
   
 
The fair value of restricted stock awards is determined based upon the number of shares awarded and the quoted price of our Common Stock on the date of the grant. The fair value of the award is recognized as an expense over the service or investing period, net of forfeiture, using the straight-line method under GAAP. Because the Company does not have historical data on forfeitures and has made only one (1) grant of restricted stock, forfeitures are calculated based upon the actual forfeitures, not estimates or assumptions. There was no compensation expense in connection with the restricted stock awards during 2011 or 2010, as all of the shares of the previously issued award were vested. Three hundred thirteen (313) shares of such restricted stock are currently outstanding.
 
NOTE J -
LETTER OF INTENT
   
  On September 27, 2011, the Company entered into a non-binding letter of intent with a privately held operating company to effect a merger, acquisition or other form of business combination, subject to due diligence examination of one another and the negotiation and execution of a definitive agreement between them. The Company would issue an as yet unknown number of shares of its common stock from  treasury in order to effectuate the transaction. Further, simultaneous with the closing of the transaction, the Company would repurchase 1,012,353 shares of its common stock that are currently held by Insurance Marketing Solutions, LLC, the Company’s majority shareholder, for  $ 335,000.   The parties are in the due diligence process at the time of the filing of this report. No assurance may be given that the transaction will in fact close.
 
NOTE K -
SUBSEQUENT EVENTS –
   
 
The Company has evaluated the need to disclose events subsequent to the balance sheet date through the filing date of this Form 10-Q and have no events to report.

 
-7-
 
 
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 unaudited condensed financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended December 31, 2010. 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 a 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 our Annual Report on Form 10-K for the year ended December 31, 2010 and elsewhere in this Quarterly Report on Form 10-Q.

Overview, Discontinued Operations and Sale of Assets

Our former business was founded in 2005 to organize, host and promote live and televised professional mixed martial arts (“MMA”) sporting events under the name “International Fight League” or “IFL” and to capitalize on the growing popularity of MMA in the United States and around the world. In June 2008, we announced that our event scheduled for August 15, 2008 had been canceled, and on September 15, 2008, our wholly-owned subsidiary, “IFLC”, through which we conducted our operations and which held substantially all of our assets, voluntarily filed a petition for reorganization relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (the “Court”). IFLC’s bankruptcy case is docketed as In re IFL Corp., Case No. 08-13589 (MG). On November 17, 2008, IFLC sold substantially all of its assets to HD Net LLC (“HD Net”) for $650,000 cash and the assumption by HD Net of certain obligations, pursuant to a sale under Section 363 of the Bankruptcy Code, which was approved by the Court on October 28, 2008. On September 14, 2009, the Court entered an order (the “Confirmation Order”) confirming a plan of liquidation of IFLC (the “Plan”). Pursuant to the Plan, IFLC’s remaining assets were used to satisfy its creditors, and all of IFLI’s equity interests in IFLC were terminated with no payment to IFLI. The liquidation of IFLC was completed on January 15, 2010. As a result, all balance sheets and statements of operations after January 1, 2010 include only the financial information of IFLI Acquisition Corp. (formerly International Fight League, Inc.).

In January 2010 we sold a controlling equity interest in us to Insurance Marketing Solutions, LLC (“IMS”), a company owned by C. Leo Smith. Upon the closing of such sale, Mr. Smith became our sole officer and director. Mr. Smith, through IMS, possesses control over us and our future business.

With the sale of substantially all of our assets to HD Net, the termination of our interests in IFLC, and with no active business operations or business assets, we became a “shell company” as defined by the rules of the SEC under the Securities Exchange Act of 1934. Our Board of Directors, on a time available basis, will search for, review and engage in due diligence for potential merger or acquisition proposals for which the Board of Directors would deem to be suitable acquisition candidates.  On September 27, 2011, the Company executed a non-binding letter of intent with a privately held operating company to enter into a merger, acquisition or other form of business combination, subject to due diligence examination of one another and the negotiation and execution of a definitive agreement between them.  (See Note J to the financial statements herewith for a fuller description of the proposed transaction.)  No assurance may be given that the transaction will close.

We will continue to incur ongoing losses, which, however, have been greatly reduced due to the inactive nature of our business. Nevertheless, losses will be incurred to pay ongoing reporting expenses, including for legal and accounting services, as necessary to maintain the Company as a public entity, as well as some other minimal operating expenses, while searching for merger or acquisition candidates. In January 2011 we entered into an interest-free demand loan obligation, subsequently amended in May 2011, with Amerifirst Trading Corp. (“Amerifirst”), a company controlled by our sole officer and director, Mr. C. Leo Smith. Under the loan agreement, we are able to borrow up to $75,000 to fund our operations. At the date of this report, $70,000 has been advanced to the Company by Amerifirst.

On July 8, 2010, we amended and restated our Certificate of Incorporation (a) to effect a one (1) for four hundred (400) reverse split of our outstanding shares of Common Stock on such date; and (b) to decrease our total authorized capital shares to 80,000,000 shares, of which 75,000,000 shares are classified as Common Stock, par value $.01 per share, and 5,000,000 shares are classified as Preferred Stock, par value $.01 per share, and (c) to change the name of the Company to “IFLI Acquisition Corp.” We amended our Certificate of Incorporation accordingly.

 
-8-
 
 
Results of Operations

We had no revenue for the three months ended September 30, 2011, and a loss of $17,571, as compared to no revenue for the three months ended September 30, 2010 and a loss of $25,539. The decrease in the loss in the 2011 third quarter compared to the loss in the 2010 third quarter was due to reduced G&A expenses. Selling, general and administrative expenses were $17,661 and $25,542 for the three month periods ended September 30, 2011 and September 30, 2010, respectively. The decrease in selling, general and administrative expenses in the 2011 third quarter compared to the 2010 third quarter was primarily due to the reduction in professional fees necessary to maintain the Company as a reporting company.
 
We had no revenue for the nine months ended September 30, 2011, and a loss of $60,219, as compared to no revenue for the nine months ended September 30, 2010 and a loss of $99,366. The decrease in the loss in the 2011 nine month period compared to the loss in the 2010 nine month period was due to reduced G&A expenses. Selling, general and administrative expenses were $60,174 and $99,359 for the nine month periods ended September 30, 2011 and September 30, 2010, respectively. The decrease in selling, general and administrative expenses in the 2011 nine month period compared to the 2010 nine  month period was primarily due to the reduction in professional fees necessary to maintain the Company as a reporting company.
 
Liquidity, Capital Resources and Going Concern

At September 30, 2011, our cash was $3,321.

Our Board of Directors, on a time available basis, is exploring options to realize value for our stockholders, which may include seeking a reverse merger transaction with a party having on-going operations. We have no present avenues of financing, no source of revenues, and no present plans to obtain interim financing while continuing to explore our options.

As a result of the foregoing, our lack of liquidity and funding sources poses a substantial risk to our ongoing viability. The condensed interim financial statements in this report have been prepared on an on-going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The forgoing conditions raise substantial doubt about our ability to continue as a going concern.

Off-Balance Sheet Arrangements

As of September 30, 2011, we had no off-balance sheet arrangements.

Item 3 Quantitative and Qualitative Disclosure about Market Risk

Not Applicable

Item 4 Controls and Procedures

Evaluation of Disclosure Controls and Procedures- The Company did not generate any revenues during the period covered by this Report. During the period from January 11, 2010 through the end of the period covered by this Report, the Company’s financial information was maintained by C. Leo Smith, its Chief Financial Officer and Chief Executive Officer. Mr. Smith has employed the services of accounting and legal professionals to assist him in this regard. The Company believes that it maintained disclosure controls and procedures that were designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information was accumulated and communicated to Mr. Smith, the Company’s Chief Financial Officer and Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-15(e) and 15d-15(e). Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15 (b) and 15d-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective as of the end of the period covered by this report.

Changes in Internal Controls Over Financial Reporting- There have been no changes in the Company’s internal controls or in other factors that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting during the quarter covered by this Report. During the first quarter of 2010, when Mr. Smith assumed the positions of Chief Executive Officer and Chief Financial Officer of the Company, he directed the Company to employ the services of accounting and financial individuals to assist him in implementing internal controls over our financial reporting. Under the supervision and with the participation of Mr. Smith, our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our internal controls over financial reporting as required by Exchange Act Rule 13a-15 (d) and 15d-15(d) as of the end of the period covered by this report. Based on that evaluation, Mr. Smith has concluded that these internal controls over financial reporting are effective as of the end of the period covered by this report.

 
-9-
 

PART II-OTHER INFORMATION

Item 1 Legal Proceedings

On September 15, 2008, our former wholly-owned subsidiary, IFLC, through which we previously conducted our operations, voluntarily filed a petition for reorganization relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. IFLC’s bankruptcy case is docketed as In re IFL Corp. , Case No. 08-13589 (MG). On August 5, 2009, the Court approved a disclosure statement (the “Disclosure Statement”) filed by IFLC, which described its plan of liquidation (the “Plan”), which is attached to the Disclosure Statement. Pursuant to the Plan, IFLC’s remaining assets were used to satisfy its creditors, and IFLI’s equity interest in IFLC was terminated with no payment to IFLI. A hearing to confirm the Plan was held on September 14, 2009, at which time the Court confirmed the Plan. This resulted in termination of our interest in IFLC with no payment to us. The liquidation of IFLC was completed on January 15, 2010.

Item 1A Risk Factors

There have been no material changes in the risk factors that were previously disclosed in Item 1A, “Risk Factors,” of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3 Defaults upon Senior Securities

None

Item 4 (Removed and Reserved)

Item 5 Other Information

None

Item 6 Exhibits

See the Exhibit Index on the following page for a description of the documents that are filed as Exhibits to this Quarterly Report on Form 10-Q, or incorporated by reference herein.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
IFLI Acquisition Corp.
     
 
By:
/s/ C. Leo Smith
   
C. Leo Smith, Principal Executive Officer and Principal Financial Officer
     
Date: October 17, 2011
    

 
-10-
 

EXHIBIT INDEX

Exhibits
    
     
31.1
  
Certification of the Principal Executive Officer and 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

 
-11-