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EX-32.1 - CERTIFICATION - Celexus, Incexhibit32-1.htm
EX-31.1 - CERTIFICATION - Celexus, Incexhibit31-1.htm
EX-31.2 - CERTIFICATION - Celexus, Incexhibit31-2.htm
 
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Quarter Ended June 30, 2010

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________.

Commissions file number 000-52069

I-LEVEL MEDIA GROUP INCORPORATED
(Exact name of registrant as specified in its charter)

Nevada 98-0466350
(State or other jurisdiction of incorporation of organization) (I.R.S. Employer Identification No.)

902, B1, KangBao Huayuan, #8 Gongren Tiyuchang Donglu, Chaoyand District, Beijing, PRC 100020
(Address of Principal Executive Offices including Zip Code)

+86 10-65-911-544.
(Issuer's telephone number, including area code)

Suite 5B - 98 Liu He Road, Shanghai, PRC, 200001
 (Address of Former Principal Executive Offices including Zip Code)

+86 10-65-911-544
 (Issuer's former telephone number, including area code)

Indicate by check mark whether the registrant (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes   [X]    No   [  ]

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," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

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   [X]    No   [  ]

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. The registrant had 13,918,825 shares of common stock outstanding as of December 19, 2011.


INDEX

PART I - FINANCIAL INFORMATION 3
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk 9
Item 4. Controls and Procedures 9
PART II - OTHER INFORMATION 9
Item 1. Legal Proceedings 9
Item 1A. Risk Factors 10
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Securities Holders 10
Item 5. Other Information 10
Item 6. Exhibits 10

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Forward-looking statements in this quarterly report include, among others, statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve risks and uncertainties regarding the market price of copper, availability of funds, government regulations, permitting, common share prices, operating costs, capital costs, outcomes of ore reserve development, recoveries and other factors. Forward-looking statements are made, without limitation, in relation to operating plans, property exploration and development, availability of funds, environmental reclamation, operating costs and permit acquisition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined in our annual report on Form 10-KSB for the year ended December 31, 2009, this quarterly report on Form 10-Q, and, from time to time, in other reports that we file with the Securities and Exchange Commission (the "SEC"). These factors may cause our actual results to differ materially from any forward-looking statement. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.


PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

The following unaudited interim financial statements of i-Level Media Group Incorporated (sometimes referred to as "we", "us" or "our Company") are included in this quarterly report on Form 10-Q:

i-level Media Group Incorporated
(A Development Stage Company)
Balance Sheets as at June 30, 2010 (Unaudited) and December 31, 2009

    June 30,
2010
$
    December 31,
2009
$
 
Assets            
Current Assets            
     Cash   -     -  
Total Assets   -     -  
Liabilities and Stockholders’ Equity (Deficit)            
Current Liabilities            
     Accounts payable and accrued liabilities (Note 3)   346,864     485,468  
     Related party loans payable (Note 4)   332,332     347,332  
Total Current Liabilities   679,196     832,800  
     Nature and Continuance of Operations (Note 1)            
Stockholders' Equity (Deficit)            
Common Stock, (Notes 5 and 6) 14,642,857 shares authorized, $0.001 par value 918,825 and 847,891 issued and outstanding, respectively   919     848  
Additional Paid-in Capital   4,473,074     4,274,012  
Deficit Accumulated During the Development Stage   (5,153,189 )   (5,107,661 )
Total Stockholders' Equity (Deficit)   (679,196 )   (832,800 )
Total Liabilities and Stockholders' Equity (Deficit)   -     848  

(The Accompanying Notes are an Integral Part of These Financial Statements)

3


i-level Media Group Incorporated
(A Development Stage Company)
Statements of Operations
(Unaudited)

    Accumulated From August 23, 2005 (Inception) to June 30, 2010
$
    Three Months Ended June 30, 2010
$
    Three Months Ended June 30, 2009
$
    Six Months Ended June 30, 2010
$
    Six Months Ended June 30, 2009
$
 
Revenue   -     -     -              
Operating Expenses                              
     General and administrative   1,079,834     18,745     44,557     45,528     81,016  
Loss from Operations Before Other Items   (1,079,834 )   (18,745 )   (44,557 )   (45,528 )   (81,016 )
Gain from Wind-up of Subsidiaries   596,799     -     -              
Loss on Sale of Subsidiaries   (1,614,800 )   -     -              
Loss Before Discontinued Operations   (2,097,835 )   (18,745 )   (44,557 )   (45,528 )   (81,016 )
Discontinued Operations   (3,055,354 )   -     -              
Net Loss for the Period   (5,153,189 )   (18,745 )   (44,557 )   (45,528 )   (81,016 )
Net Loss Per Share From Operations - Basic and Diluted         (.02 )   (.05 )   (.05 )   (.10 )
Weighted Average Number of Shares Outstanding - Basic and Diluted         896,000     848,000     872,000     848,000  

(The Accompanying Notes are an Integral Part of These Financial Statements)

4


i-level Media Group Incorporated
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)

    Six Months Ended June 30, 2010
$
    Six Months Ended June 30, 2009
$
 
Operating Activities            
     Net loss   (45,528 )   (81,016 )
     Change in operating assets and liabilities            
          Increase in accounts payable and accrued liabilities   45,528     81,016  
Net Cash Used in Operating Activities   -     -  
Investing Activities            
Net Cash to Investing Activities   -     -  
Financing Activities            
Net Cash Provided by Financing Activities   -     -  
Increase in Cash   -     -  
Cash - Beginning of Period   -     -  
Cash - End of Period   -     -  
Supplemental Disclosures:            
     Interest paid   -     -  
     Income taxes paid   -     -  
Non-cash Financing and Investing Activities:   199,133     -  

(The Accompanying Notes are an Integral Part of These Financial Statements)

5


1.  Nature of Operations, Continuance of Business and Presentation

  The condensed interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

  These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein.  It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the period ended December 31, 2009 and notes thereto included in the Company's Form 10-K filed with the SEC on December 19, 2011.  The Company follows the same accounting policies in the preparation of interim reports.

  The Company was incorporated in the State of Nevada on August 23, 2005 under the name Jackson Ventures, Inc. The Company's initial operations included the acquisition and exploration of mineral resources. Management changed its primary business to that of developing and operating a proprietary, digital media network service in the transportation segment of the outdoor advertising market in China. On January 29, 2007 the Company entered into a Share Exchange Agreement to acquire the business of i-Level Media Systems Limited (“i-Level Systems”), a limited liability Company incorporated on May 23, 2003 under the International Business Act of the British Virgin Islands. I‑Level Systems owns 100% of i-Level SoftComm (Shanghai) Company Ltd. (“i-Level SoftComm”), a wholly foreign owned enterprise formed under the laws of the People's Republic of China (the “PRC”) on August 12, 2004. i-Level SoftComm was a development stage company devoting substantially all of its efforts to establishing a new business in the PRC, which involved selling out-of-home video advertising timeslots on its network of flat-panel video advertising display units installed in taxis. The acquisition of i-Level Systems was completed on March 20, 2007. See Note 7 for full disclosure of this transaction and related financing transactions. As control of the Company transferred to the shareholders of i-Level Systems on March 20, 2007 this acquisition was considered a recapitalization of i-Level Systems. The acquisition was accounted for using reverse merger accounting rules whereby the historical operations of i-Level Systems constituted the reported numbers prior to March 20, 2007 and the combined operations of the Company and i-Level Systems were reported from March 20, 2007 to December 1, 2008. On December 1, 2008 i-Level SoftComm ceased operations and its business was wound-up. Also on December 1, 2008 i-Level Systems, the parent company of i-Level SoftComm and a wholly-owned subsidiary of the Company was sold to the Company’s former Chief Executive Officer for $1. From December 1, 2008 the Company deconsolidated its subsidiary and reported a loss on discontinued operations of $573,932 and upon wind-up recorded a gain of $596,799 and upon sale recorded a loss of $1,614,800. The comparative balance sheet included the accounts of i-Level Systems and i-Level SoftComm. The Statement of Stockholders’ Equity was retroactively restated to account for the deconsolidation of i-Level Systems and the reversal of reverse merger accounting. Since December 1, 2008 the Company has no operations.

  In June, 2011 the Company’s Board of Directors approved a consolidation of its share capital. Each shareholder of record received 1 share for every 70 shares held. On the date of record there were 64,317,715 shares issued and outstanding. Upon consolidation there were 918,825 shares issued and outstanding. This consolidation has been applied retroactively to restate all share and per share amounts.

  These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company had not generated revenues since inception and currently has no revenue generating operations. The Company has not paid dividends, and is unlikely to pay dividends in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the ability of the Company to reorganize its share capital, obtain equity financing and secure new business operations. As at June 30, 2010, the Company had a working capital deficit of $679,195 and had accumulated losses of $5,153,189 since inception. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company is currently sourcing a new business and equity financing to fund a business.

2.  Summary of Significant Accounting Policies

  a)  Use of Estimates

  The preparation of financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to stock-based compensation, deferred income tax asset valuations and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

  b)  Cash and Cash Equivalents

  The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

6


  c)  Basic and Diluted Net Earnings (Loss) Per Share

  The Company computes net income (loss) per share in accordance with SFAS No. 128, “Earnings per Share”. SFAS No. 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. Diluted loss per share is equal to basic loss per share as the Company does not have any dilutive instruments.

  d)  Financial Instruments

  The fair value of financial instruments, which include cash, accounts payable and accrued liabilities, short-term loans and capital lease obligations were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments.

3.  Accounts Payable and Accrued Liabilities

      June 30,
2010
$
(Unaudited)
    December 31,
2009
$
 
  Accounts payable   139,835     138,670  
  Accrued expenses   44,000     194,000  
  Accrued interest   88,628     71,998  
  Accrued wages to former senior officers   30,400     60,800  
  Accrued directors remuneration   44,000     20,000  
      346,863     485,468  

4.  Related Party Loans Payable

  In March and April, 2008 $347,332 was loaned to the Company by family members of the two former senior officers and directors of the Company. These loans are unsecured; bear interest at 12% per annum and due on demand. On May 12, 2010, the Company settled $15,000 of this debt plus $3,733 of accrued interest by issuing 10,705 post-consolidation shares. As at June 30, 2010 there was accrued interest of $88,628 owing. 

5.  Common Stock

  In June, 2011 the Company’s Board of Directors approved a consolidation of its share capital. Each shareholder of record received 1 share for every 70 shares held. On the date of record there were 64,317,715 shares issued and outstanding. Upon consolidation there were 918,825 shares issued and outstanding. This consolidation has been applied retroactively to restate all share and per share amounts.

  During April and May 2010 the Company settled accrued expenses of $150,000 by issuing 42,857 post-consolidation shares and accrued wages to a former senior officer of $30,400 by issuing 17,371 post-consolidation shares.

6.  Stock Options and Warrants Outstanding

  As at June 30, 2010 there were no stock options or warrants outstanding.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition, changes in financial condition and results of operations for the three months and six months ended June 30, 2010 and 2009 should be read in conjunction with our unaudited interim financial statements and related notes for the three months and six months ended June 30, 2010 and 2009. The following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.

Plan of Operations

On December 1, 2008 i-Level SoftComm ceased operations and its business was wound-up. Also on December 1, 2008 i-Level Systems, the parent company of i-Level SoftComm and a wholly-owned subsidiary of the Company was sold to the Company’s former Chief Executive Officer for $1. From December 1, 2008 the Company deconsolidated its subsidiary and reported a loss on discontinued operations of $573,932 and upon wind-up recorded a gain of $596,799 and upon sale recorded a loss of $1,614,800. The comparative balance sheet included the accounts of i-Level Systems and i-Level SoftComm. The Statement of Stockholders’ Equity was retroactively restated to account for the deconsolidation of i-Level Systems and the reversal of reverse merger accounting. Since December 1, 2008 the Company has no operations.

7


Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we acquire a business. There is no assurance we will ever acquire a suitable business.  We do not have sufficient funds to maintain our operations for the next 12 months.  We do not intend to hire additional employees at this time. All of the search for any business opportunity will be conducted by our sole officer and director and consultants he may hire to seek a new business venture

Need for Additional Capital

There is no historical financial information about us upon which to base an evaluation of our performance. We are a development stage corporation and have not generated any revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources.

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Additional equity financing could result in additional dilution to our existing shareholders.

Three Months and Six Months ended June 30, 2010 and 2009

The following table sets forth certain financial information relating to the Company for the three months and six months ended June 30, 2010 and June 30, 2009. The financial information presented has been rounded to the nearest thousand $ and is derived from the unaudited financial statements included under Item 1 in this Form 10-Q.

    For the Three Months Ended June 30, 2010
$
    For the Three Months Ended June 30, 2009
$
    For the Six Months Ended June 30, 2010
$
    For the Six Months Ended June 30, 2009
$
 
Revenue   -     -     -     -  
Operating Expenses                        
     General and administrative   19,000     45,000     46,000     81,000  
Net Loss for the Period   (19,000 )   (45,000 )   (46,000 )   (81,000 )
Net Loss Per Share   (.02 )   (.05 )   (.05 )   (.10 )
Weighted Average Number of Shares Outstanding - Basic and Diluted   896,000     848,000     872,000     848,000  

The following discussion should be read in conjunction with the unaudited financial statements (including the notes thereto) included under Item 1 in this Form 10-Q.

Revenue

The Company's initial operations included the acquisition and exploration of mineral resources. Management changed its primary business to that of developing and operating a proprietary, digital media network service in the transportation segment of the outdoor advertising market in China until this business ceased operations on December 1, 2008 and is considered a discontinued operation. As of December 1, 2008 the Company does not have any revenues or a business to generate revenues.

Operating Expenses

The Company's initial operations included the acquisition and exploration of mineral resources. Management changed its primary business to that of developing and operating a proprietary, digital media network service in the transportation segment of the outdoor advertising market in China until this business ceased operations on December 1, 2008 and is considered a discontinued operation. The Company’s ongoing expenses are solely related to being a public company, now a shell public company.

During the three months ended June 30, 2010 expenses relating to ongoing operations are general and administrative which decreased by $27,000 to $19,000 (2009 - $45,000). This decrease was a result of having no operations except for being a public company.

During the six months ended June 30, 2010 expenses relating to ongoing operations are general and administrative which decreased by $35,000 to $46,000 (2009 - $81,000). This decrease was a result of having no operations except for being a public company.

8


Net Loss

During the three months ended June 30, 2010 the net loss included net loss from ongoing operations of $19,000 (2008 - $45,000) which was made up of general and administrative costs.

During the six months ended June 30, 2010 the net loss included net loss from ongoing operations of $46,000 (2008 - $81,000) which was made up of general and administrative costs.

Liquidity and Capital Resources

Currently, we have no cash and have not made any arrangements to raise additional cash. We currently need additional funds and if we are unable to source them we will either have to suspend operations until we do raise the cash, or cease operations entirely. As of June 30, 2010 our total assets were $nil and our total liabilities were $679,000 made up of accounts payable of $347,000 and related party debt of $332,000. Our net working capital deficiency was $679,000. The Company settled $180,400 of accounts payable by issuing 60,228 post-consolidation common shares and settled $18,733 of related party debt by issuing 10,705 post-consolidation common shares.

Cash to Operating Activities

During 2010 the Company had an increase in accounts payable of $46,000 (2009 - $81,000) as the entire net loss was funded by its creditors.

Cash to Investing Activities

The Company had no investing activities during 2010 and 2009.

Cash from Financing Activities

The Company had no financing activities during 2010 and 2009.

Off-Balance Sheet Arrangements

There are no off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, which individually or in the aggregate is material to our investors.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report, being June 30, 2010. This evaluation was carried out under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer.  Based upon that evaluation, our chief executive officer and our chief financial officer concluded that our disclosure controls and procedures are effective as at the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director and officer or affiliates, or any registered or beneficial shareholder is an adverse party or has a material interest adverse to our interest.

9


Item 1A. Risk Factors

Not applicable because we are a smaller reporting company.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

On May 12, 2010, the Company settled $15,000 of related party debt plus $3,733 of accrued interest by issuing 10,705 post-consolidation shares.

During April and May 2010 the Company settled accrued expenses of $150,000 by issuing 42,857 post-consolidation shares and accrued wages to a former senior officer of $30,400 by issuing 17,371 post-consolidation shares.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Submission of Matters to a Vote of Securities Holders

None.

Item 5.  Other Information

None

Item 6.  Exhibits

Exhibit No.   Description of Exhibit
31.1   Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a)/15d-14(a)
31.2   Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a)/15d-14(a)
32.1   Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350

SIGNATURES

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

I-LEVEL MEDIA GROUP INCORPORATED

By:  "Francis Chiew"
Francis Chiew
President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and sole director
Date:  December 19, 2011