Intelimax Media Inc. - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - Intelimax Media Inc.	Financial_Report.xls
EX-31.1 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 - Intelimax Media Inc.	ex31_1.htm
EX-32.1 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 - Intelimax Media Inc.	ex32_1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

[X]

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

For the quarterly period ended

December 31, 2011

[ ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number

000-53685

INTELIMAX MEDIA INC.

(Exact name of registrant as specified in its charter)

British Columbia

None

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

2320 – 555 West Hastings Street, Vancouver, British Columbia

V6B 4N4

(Address of principal executive offices)

(Zip Code)

(604) 742-1111

(Registrant’s telephone number, including area code)

N/A

(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.

[X]

YES

[ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[X]

YES

[ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “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]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

[ ]

YES

[ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

40,336,536 common shares issued and outstanding as of February 10, 2012.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		3
Item 1. Financial Statements		3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		4
Item 3. Quantitative and Qualitative Disclosures About Market Risk		10
Item 4. Controls and Procedures		11
PART II - OTHER INFORMATION		11
Item 1. Legal Proceedings		11
Item 1A. Risk Factors		11
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		11
Item 3. Defaults Upon Senior Securities		12
Item 4. Mining Safety Disclosures		12
Item 5. Other Information		12
Item 6. Exhibits		12
SIGNATURES		14

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

The consolidated financial statements of Intelimax Media Inc., included herein, were prepared without audit, pursuant to rules and regulations of the Securities and Exchange Commission.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in Canadian dollars (CDN$).

INTELIMAX MEDIA INC.

(A Development Stage Company)

Consolidated Financial Statements

(Expressed in Canadian dollars)

December 31, 2011

Financial Statement Index

Consolidated Balance Sheets		F–1

Consolidated Statements of Operations		F–2

Consolidated Statements of Cash Flows		F–3

Notes to the Consolidated Financial Statements		F–4

INTELIMAX MEDIA INC.

(A Development Stage Company)

Consolidated Balance Sheets

(Expressed in Canadian dollars)

	December 31, 2011 $			March 31, 2011 $
	(Unaudited)

Assets

Current Assets

Cash		335,803			777,273
Other receivable		44,874			7,649
Prepaid expenses		364,135			5,600

Total Current Assets		744,812			790,522

Equipment (Note 3)		16,208			9,310
Website development costs (Note 3)		277,264			–
Total Assets		1,038,284			799,832

Liabilities and Stockholders’ Equity

Current Liabilities

Accounts payable (Note 8)		89,745			173,958
Accrued liabilities (Note 8)		18,721			71,745
Notes payable (Note 4)		–			439,226
Due to related parties (Note 8)		–			11,200
Total Current Liabilities		108,466			696,129

Nature of Operations and Continuance of Business (Note 1)
Commitments (Note 9)

Stockholders’ Equity

Preferred Stock Authorized: 20,000,000 shares, par value US$0.00001 No shares issued and outstanding		–			–

Common Stock Authorized: 150,000,000 shares, par value US$0.00001 40,224,036 and 33,963,587 shares issued and outstanding, respectively		426			364

Additional paid-in capital		7,653,969			4,390,140

Common stock subscribed		44,960			–

Accumulated deficit during the development stage		(6,769,537	)		(4,286,801	)
Total Stockholders’ Equity		929,818			103,703
Total Liabilities and Stockholders’ Equity		1,038,284			799,832

(The accompanying notes are an integral part of these unaudited consolidated financial statements)

F-1

INTELIMAX MEDIA INC.

(A Development Stage Company)

Consolidated Statements of Operations

(Expressed in Canadian dollars)

(Unaudited)

	For the Three Months Ended December 31, 2011 $			For the Three Months Ended December 31, 2010 $			For the Nine Months Ended December 31, 2011 $			For the Nine Months Ended December 31, 2010 $			Accumulated from April 17, 2006 (Date of Inception) to December 31, 2011 $

Revenue		–			10			30			2,183			13,321

Expenses

Amortization		8,548			17,768			13,673			53,302			322,576
Advertising and promotion		29,474			–			38,500			28,127			220,087
Consulting fees		48,132			41,751			1,199,394			508,329			2,336,062
Foreign exchange (loss) gain		(8,680	)		(3,209	)		(11,036	)		869			1,317
General and administrative		88,562			32,716			155,362			96,826			593,769
Impairment of equipment		–			–			–			–			14,589
Impairment of website development costs		–			–			–			–			147,993
Investor relations		110			–			33,959			53,924			582,908
Management fees (Note 8)		61,500			10,000			104,500			70,452			591,863
Professional fees		45,896			26,689			101,042			69,435			366,513
Wages and benefits		14,799			15,159			41,053			170,594			558,928

Total Expenses		288,341			140,864			1,676,447			1,051,858			5,736,605

Operating Loss		(288,341	)		(140,864	)		(1,676,417	)		(1,049,675	)		(5,736,605	)

Other Income (Expense)

Gain (Loss) on settlement of debt		(208,164	)		46,042			(806,319	)		(48,942	)		(1,176,893	)
Interest income		–			–			–			–			1,705

		(208,164	)		(46,042	)		(806,319	)		(48,942	)		(1,175,188	)

Net Loss Before Income Taxes		(496,505	)		(94,822	)		(2,482,736	)		(1,098,617	)		(6,898,472	)

Income tax credits		–			–			–			104,773			181,265

Net Loss		(496,505	)		(94,822	)		(2,482,736	)		(993,844	)		(6,717,207	)

Net loss per share, basic and diluted		(0.01	)		–			(0.07	)		(0.04	)

Weighted average shares outstanding		38,934,000			28,887,000			37,377,000			27,519,000

(The accompanying notes are an integral part of these unaudited consolidated financial statements)

F-2

INTELIMAX MEDIA INC.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Expressed in Canadian dollars)

(Unaudited)

	For the Nine Months Ended December 31, 2011 $			For the Nine Months Ended December 31, 2010 $			Accumulated from April 17, 2006 (Date of Inception) to December 31, 2011 $

Operating activities

Net loss for the period		(2,482,736	)		(993,844	)		(6,717,207	)

Adjustments to reconcile net loss to net cash used in operating activities:
Amortization		13,673			53,302			322,576
Loss on settlement of debt		806,319			48,942			1,188,984
Issuance of shares for services		769,360			235,926			1,684,100
Stock-based compensation		260,332			61,266			505,321
Impairment of equipment		–			–			14,589
Impairment of website development costs		–			–			147,993

Changes in operating assets and liabilities:
Other receivable		(37,226	)		419			(44,861	)
Prepaid expense		(358,535	)		50,525			(178,532	)
Accounts payable and accrued liabilities		(89,875	)		63,927			397,948
Due to related parties		(11,200	)		(1,200	)		–

Net Cash Used In Operating Activities		(1,129,887	)		(480,737	)		(2,679,091	)

Investing Activities

Cash acquired on acquisition		–			–			34,365
Purchase of equipment		(9,158	)		–			(48,122	)
Purchase of website development costs		(288,677	)		(800	)		(734,275	)

Net Cash Used In Investing Activities		(297,835	)		(800	)		(748,032	)

Financing activities

Common stock subscribed		44,960			–			44,960
Proceeds from issuance of common shares		523,726			409,396			2,908,173
Proceeds from loans payable		420,473			177,481			919,699
Repayment of loans payable		(2,906	)		(52,500	)		(62,906	)
Share issuance costs		–			–			(47,000	)

Net Cash Provided by Financing Activities		986,253			534,377			3,762,926

Increase (Decrease) in Cash		(441,470	)		52,840			335,803
Cash – Beginning of Period		777,273			1,444			–

Cash – End of Period		335,803			54,284			335,803

Non-cash investing and financing activities:
Shares issued for share issuance costs	–	–	28,800

Supplemental disclosures:
Interest paid	–	–	–
Income tax paid	–	–	–

(The accompanying notes are an integral part of these unaudited consolidated financial statements)

F-3

INTELIMAX MEDIA INC.

(A Development Stage Company)

Notes to the Unaudited Consolidated Financial Statements

Nine months ended December 31, 2011

(Expressed in Canadian dollars)

1.	Nature of Operations and Continuance of Business

The Company was formed as a result of the merger of Cicero Resources Corp. (“Cicero”) and Intelimax Media Inc. (“Intelimax”) effective May 28, 2009. Cicero was incorporated on October 19, 2007 under the laws of the State of Nevada and Intelimax was incorporated on April 17, 2006 under the laws of the Province of British Columbia. Intelimax was a private operating company, and Cicero was an inactive shell public company. The merger was accounted for as a “reverse merger” using the purchase method of accounting, with the former shareholders of Intelimax controlling 69% of the issued and outstanding common shares of the Company after the closing of the amalgamation transaction. Accordingly, Intelimax is deemed to be the acquirer for accounting purposes, and a continuation of Intelimax.

The Company is a Development Stage Company, as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage Entities and is an internet media and advertising company that specializes in the development and management of industry-specific websites and portals focusing on new media, online games, search, publishing, and media sales.

These consolidated financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at December 31, 2011, the Company has an accumulated deficit of $6,769,537. The continued operations of the Company are dependent on its ability to generate future cash flows from operations or obtain additional financing. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company be unable to continue as a going concern.

2.	Significant Accounting Policies

(a)	Basis of Presentation and Principles of Consolidation

The unaudited interim consolidated financial statements and the related notes of the Company are prepared in accordance with generally accepted accounting principles in the United States and are expressed in Canadian dollars. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Gamboozle Media Inc., and Global Climate Seek Inc. All inter-company accounts and transactions have been eliminated. The Company’s fiscal year-end is March 31.

(b)	Interim Financial Statements

The unaudited interim consolidated financial statements and the related notes of the Company have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended March 31, 2011, included in the Company’s Annual Report on Form 10-K filed on June 28, 2011, with the SEC.

The financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at December 31, 2011, and the results of its operations and cash flows for the three months and nine months ended December 31, 2011. The results of operations for the three months and nine months ended December 31, 2011, are not necessarily indicative of the results to be expected for future quarters or the full year.

F-4

INTELIMAX MEDIA INC.

(A Development Stage Company)

Notes to the Unaudited Consolidated Financial Statements

Nine months ended December 31, 2011

(Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

(c)	Use of Estimates

The preparation of these unaudited interim consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, fair value of share-based payments, and deferred income tax asset valuation allowances. 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.

(d)	Cash and Cash Equivalents

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

(e)	Website Development Costs

Website development costs consist of costs incurred to develop internet websites to promote, advertise, and earn revenue with respect to the Company’s business operations. Costs are capitalized in accordance with ASC 350-50, Intangible Assets – Goodwill and Other - Web Site Development Costs, and are amortized on a straight line basis over 3 years when the internet web site has been completed.

(f)

Equipment

Equipment is stated at cost and is amortized on a declining basis, at the following rates:

	Office Furniture and Equipment	20%
	Computer Hardware	30%
	Computer Software	100%

(g)	Impairment of Long-Lived Assets

In accordance with ASC 360, Property, Plant and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

F-5

INTELIMAX MEDIA INC.

(A Development Stage Company)

Notes to the Unaudited Consolidated Financial Statements

Nine months ended December 31, 2011

(Expressed in Canadian dollars)

2.	Significant Accounting Policies (continued)

(h)	Revenue Recognition

The Company recognizes revenue from online advertising sales in accordance with Securities and Exchange Commission ASC 605, Revenue Recognition. The Company accounts for revenue as a principal using the guidance in ASC 605. Revenue consists of the sale of online advertising and is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the product is shipped, and collectability is reasonably assured.

(i)	Comprehensive Loss

ASC 220, Comprehensive Income establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at December 31, 2011 and 2010, the Company had no items that affected comprehensive loss.

(j)	Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. As of December 31, 2011 and 2010, the Company did not have any amounts recorded pertaining to uncertain tax positions.

The Company files federal and provincial income tax returns in Canada, as applicable. For Canadian income tax returns, the open taxation years range from 2008 to 2010. Tax authorities of Canada have not audited any of the Company’s, or its subsidiaries’, income tax returns for the open taxation years noted above.

The Company recognizes interest and penalties related to uncertain tax positions in tax expense. During the three months and nine months ended December 31, 2011 and 2010, there were no charges for interest or penalties.

(k)	Stock-Based Compensation

The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation and ASC 505-50, Equity-Based Payments to Non-Employees. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

(l)	Foreign Currency Translation

The Company’s functional currency and its reporting currency is the Canadian dollar and foreign currency transactions are primarily undertaken in United States dollars. The financial statements of the Company are translated to Canadian dollars in accordance with ASC 830, Foreign Currency Translation Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

F-6

INTELIMAX MEDIA INC.

(A Development Stage Company)

Notes to the Unaudited Consolidated Financial Statements

Nine months ended December 31, 2011

(Expressed in Canadian dollars)

2.	Significant Accounting Policies (continued)

(m)	Basic and Diluted Net Loss Per Share

The Company computes net loss per share in accordance with ASC 260, Earnings Per Share which requires presentation of both basic and diluted earnings per share (EPS) on the face of the consolidated statement of operations. Basic EPS is computed by dividing net 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.

(n)	Financial Instruments and Fair Value Measures

The Company’s financial instruments consists of cash, other receivables, accounts payable and accrued liabilities, notes payable, and amounts due to related parties. Pursuant to ASC 820, Fair Value Measurements and Disclosures, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. Management believes that the recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

The Company’s operations are in Canada, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

(o)	Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

3.	Equipment and Website Development Costs

							December 31,		March 31
							2011		2011
			Accumulated				Net Carrying		Net Carrying
	Cost		Amortization		Impairment		Value		Value
		$		$		$		$		$

Computer Hardware		18,341		10,622		3,831		3,888		3,065
Computer Software		3,915		3,915		–		–		–
Office Furniture		25,867		9,052		4,495		12,320		6,245

		48,122		23,589		8,326		16,208		9,310
Website Development Costs		730,509		298,988		154,257		277,264		–
		778,631		322,577		162,583		293,472		9,310

F-7

INTELIMAX MEDIA INC.

(A Development Stage Company)

Notes to the Unaudited Consolidated Financial Statements

Nine months ended December 31, 2011

(Expressed in Canadian dollars)

4.	Notes Payable

a)	As at March 31, 2011, the Company had a short term note payable of $2,906 owing to a shareholder of the Company. The note is unsecured, due interest at 3.5% per annum, and due on demand. During the nine months ended December 31, 2011, the Company repaid the note payable.

On March 15, 2011, the Company issued a note payable of $440,402 (US$450,000). The note is unsecured, due interest at 15% per annum, and due on demand. On June 23, 2011, the Company issued 1,547,119 units to settle the outstanding debt of US$450,000, including accrued interest of US$14,136. Each unit consisted of one common share and one-half of one share purchase warrant. Each share purchase warrant entitles the holder to acquire an additional common share at an exercise price of US$0.75 per share. These warrants expire on June 23, 2013. The Company recorded a loss on the settlement of debt of $507,348 equal to the difference between the fair value of the common shares and warrants and the carrying value of the debt settled.

On May 2, 2011, the Company issued a note payable of $29,360 (US$30,000). The note is unsecured, due interest at 15% per annum, and due on demand. On June 23, 2011, the Company issued 103,142 units to settle the outstanding debt of US$30,000, including accrued interest of US$942. Each unit consisted of one common share and one-half of one share purchase warrant. Each share purchase warrant entitles the holder to acquire an additional common share at an exercise price of US$0.75 per share. These warrants expire on June 23, 2013. The Company recorded a loss on the settlement of debt of $33,824 equal to the difference between the fair value of the common shares and warrants and the carrying value of the debt settled.

On August 10, 2011, the Company issued a note payable of $20,964 (US$20,000). The note is unsecured, bears interest at 15% per annum and due on demand. On November 24, 2011, the Company issued 52,158 units to settle the outstanding debt of US$20,000 and accrued interest of US$863. Each unit consisted of one common share and one share purchase warrant. Each share purchase warrant entitles the holder to acquire an additional common share at an exercise price of US$0.70 per share. These warrants expire on November 24, 2013. The Company recorded a loss on the settlement of debt of $12,529 equal to the difference between the fair value of the common shares and warrants and the carrying value of the debt settled.

On September 15, 2011, the Company issued a note payable of $366,870 (US$350,000). The note is unsecured, bears interest at 15% per annum and due on demand. On November 24, 2011, the Company issued 900,530 units to settle the outstanding debt of US$350,000 and accrued interest of US$10,212. Each unit consisted of one common share and one share purchase warrant. Each share purchase warrant entitles the holder to acquire an additional common share at an exercise price of US$0.70 per share. These warrants expire on November 24, 2013. The Company recorded a loss on the settlement of debt of $216,323 equal to the difference between the fair value of the common shares and warrants and the carrying value of the debt settled.

5. Common Stock

Shares issued during the nine months ended December 31, 2011:

a)	On April 16, 2011, the Company issued 450,000 shares of the Company’s common stock with a fair value of $185,779 pursuant to a service agreement for the provision of marketing and promotional services.

b)	On April 29, 2011, the Company issued 500,000 shares of the Company’s common stock with a fair value of $198,744 pursuant to a service agreement for the provision of website development, design and marketing services.

c)	On April 29, 2011, the Company issued 110,000 units at US$0.20 per unit for proceeds of US$22,000. Each unit consists of one common share and one warrant to purchase one share of the Company’s common stock at US$0.30 per share until April 29, 2013.

F-8

INTELIMAX MEDIA INC.

(A Development Stage Company)

Notes to the Unaudited Consolidated Financial Statements

Nine months ended December 31, 2011

(Expressed in Canadian dollars)

5. Common Stock (continued)

d)	On May 1, 2011, the Company issued 250,000 shares of the Company’s common stock with a fair value of $99,372 pursuant to a consulting agreement for marketing and promotional services.

e)	On May 4, 2011, the Company issued of 250,000 units at US$0.20 per unit for proceeds of US$50,000. Each unit consists of one common share and one warrant to purchase one share of the Company’s common stock at US$0.30 per share until May 4, 2013.

f)	On May 5, 2011, the Company issued 150,000 shares of the Company’s common stock with a fair value of $69,710 pursuant to a service agreement for event and production services.

g)	On May 6, 2011, the Company issued 100,000 shares of the Company’s common stock with a fair value of $46,416 pursuant to a consulting agreement.

h)	On May 17, 2011, the Company issued 25,000 shares of the Company’s common stock with a fair value of $8,510 to an employee as a bonus for services rendered.

i)	On May 20, 2011, the Company issued 5,000 shares of the Company’s common stock with a fair value of $1,460 pursuant to a settlement and release agreement with a consultant.

j)	On May 27, 2011, the Company issued 500,000 shares of the Company's common stock upon the exercise of stock options for cash proceeds of $73,297 (Cdn$75,000).

On June 23, 2011, the Company issued 1,650,261 units to settle $469,762 of notes payable and $14,756 of accrued interest. Each unit consisted of one common share and one-half of one share purchase warrant. Each share purchase warrant entitles the holder to acquire an additional common share at an exercise price of US$0.75 per share. These warrants expire on June 23, 2013. The Company recorded a loss on the fair value of the debt of $541,172, equal to the difference between the fair value of the common shares and warrants and the debt settled.

l)	On August 16, 2011, the Company issued 100,000 shares of the Company’s common stock with a fair value of $58,926 pursuant to a consulting agreement.

m)	On September 23, 2011, the Company issued 30,000 shares of the Company’s common stock with a fair value of $15,441 pursuant to a consulting agreement.

On September 28, 2011, the Company issued 250,000 shares of the Company’s common stock with a fair value of $141,983 to settle $85,000 of accounts payable. The Company recorded a loss on the fair value of the debt of $56,983, equal to the difference between the fair value of the common shares and the debt settled.

On September 28, 2011, the Company issued 50,000 units at $0.50 per unit for proceeds of $25,000. Each unit consisted of one common share and one share purchase warrant. Each share purchase warrant entitles the holder to acquire an additional common share at an exercise price of US$0.50 per share. These warrants expire on September 28, 2013.

On November 17, 2011, the Company issued 10,000 units at US$0.50 per unit for proceeds of US$5,000. Each unit consisted of one common share and one share purchase warrant. Each share purchase warrant entitles the holder to acquire an additional common share at an exercise price of US$0.75 per share. These warrants expire on November 17, 2013.

On November 24, 2011, the Company issued 952,688 units to settle US$370,000 of notes payable and US$11,075 of accrued interest. Each unit consisted of one common share and one share purchase warrant. Each share purchase warrant entitles the holder to acquire an additional common share at an exercise price of US$0.70 per share. These warrants expire on November 24, 2013. The Company recorded a loss on the fair value of the debt of $228,853, equal to the difference between the fair value of the common shares and warrants and the debt settled.

F-9

INTELIMAX MEDIA INC.

(A Development Stage Company)

Notes to the Unaudited Consolidated Financial Statements

Nine months ended December 31, 2011

(Expressed in Canadian dollars)

5. Common Stock (continued)

On December 8, 2011, the Company issued 877,500 units at US$0.40 per unit for proceeds of US$351,000. Each unit consists of one common share and one common share purchase warrant. Each share purchase warrant entitles the holder to acquire an additional common share at an exercise price of US$0.70 per share. These warrants expire on December 8, 2013.

During the nine months ended December 31, 2011, the Company received subscriptions for 112,500 units at US$0.40 per unit for proceeds of $44,960 (US$45,000). Each unit consisted of one common share and one share purchase warrant. Each share purchase warrant entitles the holder to acquire an additional common share at an exercise price of US$0.70 per share. The amount is included in common stock subscribed at December 31, 2011. Refer to Note 10.

6. Stock Options

The Company adopted a Stock Compensation Plan (“Stock Plan”) and Stock Option Plan (“Option Plan”) dated December 11, 2009 under which the Company is authorized to grant up to a total of 1,000,000 shares of common stock and stock options to acquire up to a total of 1,000,000 shares of common stock. The Company will not issue any stock compensation under the Stock Plan or Option Plan for any services related to investor relations or capital raising activities. At December 31, 2011, the Company had 215,000 shares of common stock available to be issued under the Stock Plan and options to acquire 400,000 shares of common stock to be issued under the Option Plan.

The Company has adopted a Stock Option Plan (the “2011 Option Plan”) dated October 21, 2011, under which the Company is authorized to grant stock options to acquire up to 10% of the Company’s issued and outstanding common shares at the time of the option grant. Stock options granted under the 2011 Option Plan are exercisable up to a maximum period of five years, with the actual term of the option to be set by the Board at the time of grant. The exercise price of the stock options cannot be less than the greater of the closing market price of the Company’s common shares on (a) the trading day immediately prior to the date of grant of the stock option; and (b) the date of grant of the stock option. The stock options are non-assignable and non-transferable.

On May 6, 2011, the Company granted stock options to acquire 100,000 shares of common stock at an exercise price of US$0.35 for a period of two years. The Company recorded the fair value of the options of $33,207 as consulting expense.

On May 27, 2011, the Company granted stock options to acquire 500,000 shares of common stock at an exercise price of US$0.23 for two years. The Company recorded the fair value of the options of $125,807 as consulting expense.

On August 16, 2011, the Company issued stock options to acquire 250,000 shares of common stock at an exercise price of US$0.45 for two years. The Company recorded the fair value of the options of $101,318 as consulting expense.

A summary of the changes in the Company’s stock options is presented below:

	Number of Options			Weighted Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
				$					$

Outstanding, March 31, 2010		500,000			0.15

Granted		350,000			0.14
Exercised		(100,000	)		0.25

Outstanding, March 31, 2011		750,000			0.13

Granted		850,000			0.31
Exercised		(500,000	)		0.15

Outstanding and Exercisable, December 31, 2011		1,100,000			0.26		1.28		70,000

F-10

INTELIMAX MEDIA INC.

(A Development Stage Company)

Notes to the Unaudited Consolidated Financial Statements

Nine months ended December 31, 2011

(Expressed in Canadian dollars)

6. Stock Options (continued)

The weighted average fair value of options granted during the nine months ended December 31, 2011 was $0.31 per option (2010 – $0.18). The fair value of the options granted was measured at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:

	2011			2010

Expected dividend yield		0	%		0	%
Risk-free interest rate		0.48	%		0.50	%
Expected volatility		135	%		153	%
Expected option life (in years)		1.97			1.71

At December 31, 2011 and 2010, the Company had no unvested options and no unrecognized compensation costs.

7. Share Purchase Warrants

The following table summarizes the continuity of share purchase warrants:

	Number of Warrants			Weighted Average Exercise Price $

Balance, March 31, 2010		2,107,000			0.53
Issued		5,448,520			0.31
Expired		(1,197,000	)		0.50

Balance, March 31, 2011		6,358,520			0.35
Issued		3,075,319			0.67
Balance, December 31, 2011		9,433,839			0.46

As at December 31, 2011, the following share purchase warrants were outstanding:

Number of Warrants		Exercise Price		Expiry Date

	300,000	$	US0.55	February 1, 2012
	250,000	$	US0.60	May 14, 2012
	12,500	$	US0.60	May 21, 2012
	610,000	$	US0.60	June 10, 2012
	150,000	$	US0.30	July 12, 2012
	55,000	$	US0.30	July 26, 2012
	25,000	$	US0.30	August 2, 2012
	600,000	$	US0.30	August 19, 2012
	222,000	$	US0.30	September 20, 2012
	20,000	$	US0.30	September 21, 2012
	250,000	$	US0.30	October 1, 2012
	50,000	$	US0.30	November 19, 2012
	3,800,620	$	US0.30	March 15, 2013
	13,400	$	US0.30	March 30, 2013
	110,000	$	US0.30	April 29, 2013
	250,000	$	US0.30	May 4, 2013
	825,131	$	US0.75	June 23, 2013
	50,000	$	US0.50	September 28, 2013
	10,000	$	US0.75	November 17, 2013
	952,688	$	US0.70	November 24, 2013
	877,500	$	US0.70	December 8, 2013

	9,433,839

F-11

INTELIMAX MEDIA INC.

(A Development Stage Company)

Notes to the Unaudited Consolidated Financial Statements

Nine months ended December 31, 2011

(Expressed in Canadian dollars)

7. Share Purchase Warrants (continued)

The share purchase warrants do not meet the characteristics of an embedded derivative in accordance with ASC 815-10-15-130, as the warrants are not readily convertible to cash given the number of common shares to be exchanged is significant relative to the normalized daily transaction volume of the Company’s common shares. The Company will continue to evaluate whether the Company’s common shares are readily convertible to cash and will account for a derivative if the Company meets the conditions of ASC 815 for derivative liabilities.

8.	Related Party Transactions

a)	During the nine months ended December 31, 2011, the Company incurred $104,500 (2010 - $55,952) of management fees to directors of the Company.

b)	As at December 31, 2011, accounts payable and accrued liabilities include $3,150 (March 31, 2011 - $52,391) owing to management, officers, and directors of the Company. The amounts are unsecured, non-interest bearing, and due on demand.

c)	As at December 31, 2011, the Company owed $nil (March 31, 2011 - $11,200) to two directors of the Company for general expenditures. The amount owing is unsecured, non-interest bearing, and due on demand.

9. Commitments

On April 12, 2011, the Company entered into a purchase and sale agreement as well as a software support agreement. Pursuant to the terms of the purchase and sale agreement, the Company will acquire world-wide, non-exclusive rights to certain source code used in the development of online gaming applications for total consideration of $344,412. The first payment of $291,912 is to be made within 5 days of the date of the agreement (paid), with the second payment, $52,500, being made within 10 business days of the seller meeting all of its obligations under the agreement, or the software being made available to the Company’s customers, or within 180 days of the Agreement, whichever is earlier.

Pursuant to the terms of the software support agreement, the Company shall pay a monthly fee of $25,000 (or more depending on the amount of users on the Company’s websites) in exchange for the seller supplying the hardware and hosting services necessary to operate the Company’s online gaming platforms, customer data and customer reporting services, customer support and client support, software modifications and upgrades, and website updates. The term of the agreement is 3 years and may be terminated by either party by providing 60 days notice.

b)	On October 18, 2011, the Company entered into an agreement with a consultant who will provide content and hosting services in exchange for $7,750 per month until November 1, 2012

On December 14, 2011, the Company entered into a development services agreement with a consultant who will provide development services for a period of one year in consideration for a monthly retainer of $15,000 and the reimbursement of expenses. The monthly retainer will be applied to the consultant’s hourly billings.

10. Subsequent Event

On January 5, 2011, the Company the Company issued 112,500 units at US$0.40 per unit for proceeds of $44,960 (US$45,000). Each unit consisted of one common share and one share purchase warrant. Each share purchase warrant entitles the holder to acquire an additional common share at an exercise price of US$0.70 per share. The warrants expire January 5, 2013.

F-12

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

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including "could", "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report.

Our financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in Canadian dollars, references to US$ refer to United States dollars and all references to “common shares” refer to the common shares in our capital stock.

As used in this current report and unless otherwise indicated, the terms "we", "us", "our" and "our company" mean Intelimax Media Inc., unless otherwise stated.

General Overview

We are the resulting entity of the merger of Cicero Resources Corp. and Intelimax Media Inc., Cicero Resources Corp. was incorporated on October 19, 2007 under the laws of the State of Nevada. Intelimax Media Inc. was incorporated on April 17, 2006 under the laws of the Province of British Columbia. On May 28, 2009 the two companies merged and we are the resulting entity existing under the laws of British Columbia. We are an Internet media company focusing on social media entertainment, online games, publishing, and product sales. We are a development stage company that has generated only nominal revenues and has had limited operations to date.

Our principal executive office is located at 2320 – 555 West Hastings Street, Vancouver, British Columbia, Canada, V6B 4N4. Our telephone number is (604) 742-1111.

Development of Business

We are an Internet media company focusing on social media entertainment, online games, and product sales. Our major current and planned products and services are as follows:

Gamboozle.com Gaming Platform: We have developed and acquired software which allows users to play free and subscription based multi-player poker, blackjack, roulette, casual games as well as social media games online. Currently, our new online gaming software is being integrated into our Gamboozle.com website platform as well as our pages on Facebook, MySpace and Bebo, which are social networking websites and are provided free of charge. Our gaming platform is being developed to the point where we are able to provide premium content. We intend to offer it to users on a monthly subscription basis which, if sufficient interest is developed, will produce revenues through subscription payments as well as product placement ads in the games. We anticipate developing additional games, creating a licensable version and revising it for use on third party websites. Once the new gaming platform is fully integrated and upgraded there can be no assurance that these improvements will result in additional revenue as we face significant competition in this market.

Gamboozle.com Fantasy Sports: The term fantasy sports describes multi-player games in which users act as fantasy owners and build a team that competes against other fantasy teams based on the statistics generated by individual players or teams of a professional sport. We have developed software which allows users to create teams from the rosters of actual sports players and then use their teams to compete against other users in various categories such as points scored, yards gained or home runs registered, depending on the specific sport. We hope to attract a subscriber base which will provide us with the users we need to generate revenues through monthly subscription entry fees. Our new fantasy sports software is being integrated into our Gamboozle.com website on free and paid subscription bases. This new software is in the development stage, but we anticipate launching the new site and enhancing the content during the next two months to include all the major sports (football, basketball, hockey, baseball and soccer). There can be no assurance that these improvements will result in additional revenue as we face significant competition in this market.

On April 6, 2011, we entered into a master services agreement with Friedman360, LLC. Pursuant to the terms of the agreement, Friedman360 will provide our company with website and multimedia development services for compensation of $250,000. The website and multimedia development work will relate to the design, navigation, look and feel of our company’s Gamboozle.com website.

On April 12, 2011, we entered into a purchase and sale agreement as well as a software support agreement with Las Vegas From Home.com Entertainment Inc. Pursuant to the terms of the purchase and sale agreement, our company will acquire world-wide, non-exclusive rights to certain source code used in the development of online gaming applications for total consideration of CAD $344,412.50 plus 12% Canadian harmonized sales tax (“HST”). The first payment of $291,912.50 plus HST was made within 5 days of the date of the agreement, with the second payment, $52,500 plus HST, being made within 10 business days of Las Vegas From Home meeting all of its obligations under the agreement, or the software being made available to our customers, or within 180 days of the agreement, whichever is earlier. We are still outstanding $26,000 to Las Vegas From Home, which will be due when they complete the software. Payment is still outstanding due to the software not being completed.

Pursuant to the terms of the software support agreement, our company shall pay Las Vegas from Home a monthly fee of CAD $25,000 (or more depending on the amount of users on our company’s websites) in exchange for Las Vegas From Home supplying the hardware and hosting services necessary to operate our company’s online gaming platforms, customer data and customer reporting services, customer support and client support, software modifications and upgrades, and website updates. The term of the agreement is 3 years and may be terminated by either party by providing 60 days notice.

Effective December 14, 2011, we entered into a development services agreement with Arizona Bay, LLC, a California Limited Liability Company, for a term of one year. Our company retained Arizona Bay to perform consulting services by assisting our company with software development enhancements and technology platform recommendations. As compensation Arizona Bay will be paid a monthly retainer of $15,000, an hourly rate of $150 to its principal engineer(s) and an hourly rate of $120 to its senior engineer(s). In addition, Arizona Bay will be reimbursed all pre-approved out-of-pocket expenses. Pursuant to the terms, either party may terminate the agreement with a 30 day written notice for any reason at any time, with or without cause. Arizona Bay may terminate the agreement for non-payment charges, provided that Arizona Bay will present our company with a written notice of breach of payment and will allow our company 30 days to cure the breach.

Results of Operations

Three and Nine Month Periods Ended December 31, 2011 and December 31, 2010.

	Three Months Ended December 31,						Nine Months Ended December 31,						Period from April 17, 2006 (Date of Inception) to December 31,
	2011			2010				2011			2010			2011
Revenue	$	Nil		$	10		$	30		$	2,183		$	13,321
Operating Expenses	$	288,341		$	140,874		$	1,676,447		$	1,051,858		$	5,736,605
Net Loss	$	(496,505	)	$	(94,822	)	$	(2,482,736	)	$	(933,844	)	$	(6,717,207	)

We have had limited operations since our inception on April 17, 2006 to December 31, 2011 and we have generated only nominal revenues of $13,321. We generated $Nil in revenues for the three months ended December 31, 2011 compared to revenues of $10 during the same period in 2010. We generated $30 in revenues for the nine months ended December 31, 2011 compared to revenues of $2,183 during the same period in 2010. Since April 17, 2006 (inception) to December 31, 2011, we have an accumulated deficit of $6,717,207 during the development stage. We anticipate that we will incur substantial losses over the next year. Our ability to generate any revenues in the next 12 months remains uncertain.

Net Loss

From April 17, 2006 (inception) to December 31, 2011 we incurred a net loss of $6,717,207. For the three months ended December 31, 2011 we incurred a net loss of $496,505 compared to $94,822 for the same period in 2010. For the nine months ended December 31, 2011 we incurred a net loss of $2,482,736 compared to $933,844 for the same period in 2010. The increase in net loss for the nine month period ended December 31, 2011 was primarily due to increases in advertising and promotion, consulting fees, general and administrative expenses, management fees and professional fees.

Expenses

	Three Months Ended December 31,						Nine Months Ended December 31,						Period from April 17, 2006 (Date of Inception) to December 31,
	2011			2010			2011			2010			2011
Amortization	$	8,548		$	17,768		$	13,673		$	53,302		$	322,576
Advertising and promotion	$	29,474		$	Nil		$	38,500		$	28,127		$	220,087
Consulting fees	$	48,132		$	41,751		$	1,199,394		$	508,329		$	2,336,062
Foreign exchange (loss) gain	$	(8,680	)	$	(3,209	)	$	(11,036	)	$	869		$	1,317
General and administrative	$	88,562		$	32,716		$	155,362		$	96,826		$	593,769
Investor relations	$	110		$	Nil		$	33,959		$	53,924		$	582,908
Management fees	$	61,600		$	10,000		$	104,500		$	70,452		$	591,863
Professional fees	$	45,896		$	26,689		$	101,042		$	69,435		$	366,513
Wages and benefits	$	14,799		$	15,159		$	41,053		$	170,594		$	558,928
Gain (loss) on forgiveness of debt	$	(208,164	)	$	46,042		$	(806,319	)	$	(48,942	)	$	(1,176,893	)

We accumulated total operating expenses of $5,736,605 from April 17, 2006 (inception) to December 31, 2011. Total operating expenses for the three months ended December 31, 2011 were $288,341 compared to $140,874 during the same period in 2010. Total operating expenses for the nine months ended December 31, 2011 were $1,676,447 compared to $1,051,858 during the same period in 2010.

Liquidity and Capital Resources

Working Capital
	At December 31, 2011		At March 31, 2011		Percentage Increase/ (Decrease)
Current Assets	$	744,812	$	790,522		(5.78	) %
Current Liabilities	$	108,466	$	696,129		(84.42	) %
Working Capital	$	636,346	$	94,393		574.15	%

Cash Flows
	Nine Months Ended December 31, 2011			Nine Months Ended December 31, 2010
Net Cash used in Operating Activities	$	(1,129,887	)	$	(480,737	)
Net Cash used in Investing Activities	$	(297,835	)	$	(800	)
Net Cash Provided by Financing Activities	$	986,253		$	534,377
Increase (Decrease) in Cash During the Period	$	(441,470	)	$	(52,840	)

At December 31, 2011, we had cash of $335,803 in our bank accounts and working capital of $636,346. Our net loss from April 17, 2006 (inception) to December 31, 2011 was $6,717,207. Our net loss was funded mostly through existing cash proceeds from issuance of common shares, and notes payable.

Since April 17, 2006 (inception) to December 31, 2011, we raised gross proceeds of $2,908,173 in cash from the sale of our securities and $919,699 from loans payable. We also incurred share issuance costs of $47,000 and repayment of loans payable of $62,906. During the nine months ended December 31, 2011, we raised $523,726 from the sale of our common stock and $420,473 from loans payable. In comparison, we raised $409,396 from the issuance of common shares and $177,481 from loans payable during the same period in 2010 and repaid $52,500 in loans.

For the nine months ended December 31, 2011, we used net cash of $1,129,887 in operating activities compared to $480,737 during the same period in 2010. The increase in cash used for operating activities is attributed primarily to loss on settlement of debt, issuance of shares for services and stock based compensation.

For the nine months ended December 31, 2011 we required approximately $32,038 per month to fund our operating expenses compared to $15,652 during the same period in 2010. Since we only have minimal cash in our bank account as of December 31, 2011 we are unable to fund even one month of operations without raising additional capital, if future cash flow use is consistent with the current period.

We estimate that our expenses over the next 12 months will be approximately $1,940,000 as described in the table below. These estimates may change significantly depending on the nature of our future business activities and our ability to raise capital from shareholders or other sources.

Description	Target completion date or period	Estimated expenses (CAD $)
Legal and accounting fees	12 months		100,000
Further development of Gamboozle.com	12 months		40,000
Maintenance and refinement of InteliGaming Platform	12 months		350,000
Marketing and advertising	12 months		600,000
Investor relations and capital raising	12 months		300,000
Management and operating costs	12 months		250,000
Consulting fees	12 months		100,000
Hardware purchases	12 months		100,000
General and administrative	12 months		100,000
Total			1,940,000

At present, our cash requirements for the next twelve months outweigh the funds available to maintain or develop our operations. In order to fully carry out our business plan for the next 12 months, we need additional financing of approximately $1,940,000. We intend to negotiate with our management and consultants to pay parts of salaries and fees with stock and stock options instead of cash. There can be no assurance we will be successful in our efforts to secure additional equity financing. If we are unable to raise equity or obtain alternative financing, we may be unable to continue operations with respect to the continued development and marketing of our company and our business plan may fail.

If cash flow improves through these efforts, management believes that we can continue to operate. However, no assurance can be given that management's actions will result in profitable operations or improve our liquidity.

Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Critical Accounting Policies

Our financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 2 of our unaudited consolidated financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by management.

Use of Estimates

The preparation of these unaudited interim consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Our company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, fair value of share-based payments, and deferred income tax asset valuation allowances. Our 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 our company may differ materially and adversely from our company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Website Development Costs

Website development costs consist of costs incurred to develop internet websites to promote, advertise, and earn revenue with respect to our company’s business operations. Costs are capitalized in accordance with ASC 350-50, Intangible Assets – Goodwill and Other - Web Site Development Costs, and are amortized on a straight line basis over 3 years when the internet web site has been completed.

Equipment

Equipment is stated at cost and is amortized on a declining basis, at the following rates:

	Office Furniture and Equipment	20%
	Computer Hardware	30%
	Computer Software	100%

Impairment of Long-Lived Assets

In accordance with ASC 360, Property, Plant and Equipment, our company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Stock-Based Compensation

Our company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation and ASC 505-50, Equity-Based Payments to Non-Employees. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

Foreign Currency Translation

Our company’s functional currency and its reporting currency is the Canadian dollar and foreign currency transactions are primarily undertaken in United States dollars. The financial statements of our company are translated to Canadian dollars in accordance with ASC 830, Foreign Currency Translation Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

Basic and Diluted Net Loss Per Share

Our company computes net loss per share in accordance with ASC 260, Earnings Per Share which requires presentation of both basic and diluted earnings per share (EPS) on the face of the consolidated statement of operations. Basic EPS is computed by dividing net 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.

Financial Instruments and Fair Value Measures

Our company’s financial instruments consists of cash, other receivables, accounts payable and accrued liabilities, notes payable, and amounts due to related parties. Pursuant to ASC 820, Fair Value Measurements and Disclosures, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. Management believes that the recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

Our company’s operations are in Canada, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to our company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, our company does not use derivative instruments to reduce its exposure to foreign currency risk.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer (our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer (our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our chief executive officer and chief financial officer (our principal executive officer, principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing 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 any of our directors, officers or affiliates, or any registered beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors

As a “smaller reporting company”, we are not required to provide the information required by this Item.

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

On November 17, 2011, we issued 10,000 units at US$0.50 per unit for proceeds of US$5,000. Each unit consisted of one common share and one share purchase warrant. Each share purchase warrant entitles the holder to acquire an additional common share at an exercise price of US$0.75 per share. These warrants expire on November 17, 2013. We have issued all of these shares to one US person (as that term is defined in Regulation S of the Securities Act of 1933) relying on Regulation S of the Securities Act of 1933.

Effective November 24, 2011, we issued 952,688 units at $0.40 per unit, in settlement of shareholder loans in the amount of $381,075. Each unit consists of one common share and one non-transferable share purchase warrant. Each whole warrant will entitle the holder to purchase one share of our company’s common stock, for a period of twenty-four month, at a purchase price of $0.70. These securities were issued to one US investor based on exemptions from registration found in Section 4(2) of the Securities Act of 1933, as amended.

On December 8, 2011, we issued 877,500 units at US$0.40 per unit for proceeds of US$351,000. Each unit consists of one common share and one common share purchase warrant. Each share purchase warrant entitles the holder to acquire an additional common share at an exercise price of US$0.70 per share. These warrants expire on December 8, 2013. We have issued all of these shares to one US person (as that term is defined in Regulation S of the Securities Act of 1933) relying on Regulation S of the Securities Act of 1933.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mining Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Number	Description
(3)	(i) Articles of Incorporation

3.1	Articles of Incorporation for Intelimax Media Inc. (incorporated by reference to our Current Report on Form 8-K filed on May 29, 2009).

3.2	Amalgamation Application Filed with the British Columbia Registrar of Companies on May 28, 2009 (incorporated by reference to our Current Report on Form 8-K filed on May 29, 2009).

(4)	Instruments defining the rights of security holders, including indentures

4.1	Instrument defining the rights of holders – form of share certificate (incorporated by reference to our Current Report on Form 8-K filed on May 29, 2009).

(10)	Material Contracts

10.1	Master Services Agreement between our company and Friedman360, LLC dated April 6, 2011 (incorporated by reference to our Current Report filed on Form 8-K on April 11, 2011).

10.2	Purchase and Sale Agreement between our company and Las Vegas From Home.com Entertainment Inc. dated April 12, 2011 (incorporated by reference to our Current Report filed on Form 8-K on April 15, 2011).

10.3	Software Support Agreement between our company and Las Vegas From Home.com Entertainment Inc. dated April 12, 2011 (incorporated by reference to our Current Report filed on Form 8-K on April 15, 2011).

10.4	2011 Stock Option Plan (incorporated by reference to our Current Report filed on Form 8-K on October 27, 2011).

10.5	Form of Debt Settlement and Subscription Agreement (incorporated by reference to our Current report filed on Form 8-K on November 29, 2011).

Exhibit Number	Description
10.6	Development Services Agreement between our company and Arizona Bay, LLC dated December14, 2011 (incorporated by reference to our Current report filed on Form 8-K on December 21, 2011).

(31)	Rule 13a-14(a)/15d-14(a) Certifications

31.1*	Section 302 Certification under Sarbanes-Oxley Act of 2002 of Glenn Little (principal executive officer, principal financial officer and principal accounting officer).

(32)	Section 1350 Certifications

32.1*	Section 906 Certifications under Sarbanes-Oxley Act of 2002 of Glenn Little (principal executive officer, principal financial officer and principal accounting officer).

101**	Interactive Data File
101.INS 101.SCH 101.CAL 101.DEF 101.LAB 101.PRE	XBRL Instance Document XBRL Taxonomy Extension Schema Document XBRL Taxonomy Extension Calculation Linkbase Document XBRL Taxonomy Extension Definition Linkbase Document XBRL Taxonomy Extension Label Linkbase Document XBRL Taxonomy Extension Presentation Linkbase Document

*	Filed herewith.

Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.

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.

	INTELIMAX MEDIA INC.
	(Registrant)


Date: February 14, 2012	/s/ Glenn Little
	Glenn Little
	President, Chief Executive Officer, Chief Financial Officer, Secretary and Director
	(Principle Executive Officer, Principle Financial Officer and Principal Accounting Officer)

Intelimax Media Inc. - FORM 10-Q - February 14, 2012

Attached files

Intelimax Media Inc. Reports