10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended June 30, 2013

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

For the transition period from __________ to _________

Commission file number 000-54736

 IDLE MEDIA, INC.

(Exact name of registrant as specified in its charter)

Nevada	26-2818699
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

216 S. Centre Avenue, Leesport, PA	19533
(Address of principal executive offices)	(Zip Code)

(484) 671-2241

(Registrant’s telephone number, including area code)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☐    No ☒

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).

Yes ☐   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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Ruble 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 ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐    No ☒

The number of shares of Common Stock, $0.001 par value, outstanding on December 30, 2013 was 60,746,743 shares.

1

IDLE MEDIA, INC.

QUARTERLY PERIOD ENDED June 30, 2013

Index to Report on Form 10-Q

		Page No.
PART I - FINANCIAL INFORMATION
Forward-Looking Statements		3
Where You Can Find Other Information		3
Item 1.	Financial Statements (unaudited)	4
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	17
Item1A.	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Mine Safety Disclosures	17
Item 5.	Other Information	18
Item 6.	Exhibits	18
	Signatures	19

2

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) regarding, among other things, our results of operations, liquidity, cash flows and business prospects. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, among other things:

● our ability to diversify our operations;

● our ability to implement our business plan;

● our ability to attract key personnel;

● our ability to operate profitably;

● our ability to efficiently and effectively finance our operations, including capital expenditures and/or general working capital;

● inability to achieve future sales levels or other operating results;

● inability to raise additional financing on term acceptable to us for working capital or other corporate purposes;

● inability to efficiently manage our operations;

● the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain;

● the fact that we have had and continue to have material weaknesses in our internal control over financial reporting;

● deterioration in general or regional economic conditions;

● changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;

● state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

as well as other risks, including those set forth in Item 1A “Risk Factors,” discussed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2012. Forward-looking statements may appear throughout this Report, including without limitation, in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “will likely result,” and similar expressions. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Throughout this Report, references to “we,” “our,” “us,” “Idle,” “IDLM,” the “Company” and similar terms refer to Idle Media, Inc. and its subsidiaries, unless the context indicates otherwise.

WHERE YOU CAN FIND OTHER INFORMATION

Our website is www.idlemedia.com. Information contained on our website is not part of this Report. Information that we furnish or file with the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to, or exhibits included in, these reports are available for download, free of charge, on our website soon after such reports are filed with or furnished to the SEC. Our SEC filings, including exhibits filed therewith, are also available at the SEC’s website at www.sec.gov. You may obtain and copy any document we furnish or file with the SEC at the SEC’s public reference room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the SEC’s public reference facilities by calling the SEC at 1-800-SEC-0330. You may request copies of these documents, upon payment of a duplicating fee, by writing to the SEC at its principal office at 100 F Street, NE, Room 1580, Washington, D.C. 20549.

3

PART I – FINANCIAL INFORMATION

IDLE MEDIA, INC

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30, 2013			September 30, 2012
ASSETS
Current assets:
Cash and cash equivalents	$	430,000		$	383,546
Accounts receivable		261,553			399,220
Prepaid expenses		932			71,750
Total current assets		692,485			854,516
Fixed assets, net		180,847			188,952
Intangible assets, net		8,316			20,460
Total assets	$	881,648		$	1,063,928
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	70,655		$	111,252
Deferred revenue		14,552			16,630
Accrued expenses and other current liabilities		379,148			459,384
Total current liabilities		464,355			587,266
Total liabilities		464,355			587,266
Stockholders' equity:
Preferred stock, $.001 par value; 10,000,000 shares authorized, no shares issued and outstanding		-			-
Common stock, $.001 par value; 100,000,000 shares authorized, 64,746,743 shares issued at June 30, 2013 and September 30, 2012, respectively		64,746			64,746
Additional paid-in capital		2,960,901			2,079,583
Related party receivable		(260,298	)		(260,298	)
Accumulated deficit		(2,148,056	)		(1,207,369	)
Treasury stock		(200,000	)		(200,000	)
Total stockholders' equity		417,293			476,662
Total liabilities and stockholders' equity	$	881,648		$	1,063,928

The accompanying notes are an integral part of these consolidated financial statements.

4

IDLE MEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended June 30,						Nine months ended June 30,
	2013			2012			2013			2012
Advertising and sponsorship revenue	$	635,208		$	972,846		$	1,873,556		$	2,617,549
Subscription and gaming revenue		30,429			34,933			111,689			135,347
Other revenue		-			-			-			4,380
Total revenue		665,637			1,007,779			1,985,245			2,757,276
Cost of sales		315,661			435,452			775,703			999,437
Gross Profit		349,976			572,327			1,209,542			1,757,839
Operating expenses:
Selling, general and administrative		357,696			636,450			1,280,131			1,570,682
Employee stock-based compensation		101,525			-			881,318			-
Depreciation and amortization		6,910			5,180			20,250			14,172
Research and development		499			-			499			3,316
Total operating expenses		466,630			641,630			2,182,198			1,588,170
Income (loss) from operations		(116,654	)		(69,303	)		(972,656	)		169,669
Net income (loss) before provision for income taxes		(116,654	)		(69,303	)		(972,656	)		169,669
Income tax benefit (provision)		5,297			24,065			31,969			(59,398	)
Net income (loss)		(111,357	)		(45,238	)		(940,687	)		110,271
Income (loss) per common share - basic	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	0.00
Weighted average shares of common stock outstanding - basic		64,746,743			58,483,250			64,746,743			58,483,250

The accompanying notes are an integral part of these consolidated financial statements.

5

IDLE MEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the nine months ended June 30,
	2013			2012
Cash flows from operating activities:
Net income (loss)	$	(940,687	)	$	110,271
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization		20,250			14,172
Employee stock based compensation		881,318			-
Changes in operating assets and liabilities:
Accounts receivable		137,667			96,057
Related party receivable		-			(238,249	)
Prepaid expenses		70,818			(7,000	)
Accounts payable		(40,598	)		(45,121	)
Deferred revenue		(2,078	)		923
Accrued expenses and other current liabilities		(80,236	)		(174,734	)
Net cash (used in) provided by operating activities		46,454			(243,681	)
Cash flows from investing activities:
Purchase of fixed assets		-			(27,997	)
Net cash used in investing activities		-			(27,997	)
Cash flows from financing activities:
Deemed distribution to related party		-			(50,000	)
Net cash used in financing activities		-			(50,000	)
Net increase (decrease) in cash		46,454			(321,678	)
Cash and cash equivalents beginning of period		383,546			1,120,677
Cash and cash equivalents at end of period	$	430,000		$	798,999
Supplemental disclosure of cash flow information:
Interest paid	$	-		$	-
Income taxes paid	$	-		$	-
Non-cash investing and financing activities:
Accounts payable assumed by related party	$	-		$	(12,575	)

The accompanying notes are an integral part of these consolidated financial statements.

6

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The unaudited condensed consolidated interim financial statements included herein, presented in accordance with United States generally accepted accounting principles (“GAAP”) and stated in US dollars, have been prepared by Idle Media, Inc. (together with its subsidiaries, the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

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. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the fiscal year ended September 30, 2012 and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2012, filed with the SEC. The Company follows the same accounting policies in the preparation of interim reports.

Results of operations for interim periods are not necessarily indicative of results for the entire year.

Organization

The Company is a digital media company which develops and maintains a family of websites focused on the urban market. Foremost of these sites is DatPiff.com, a mixtape website launched in 2005 that features Rap and Hip-hop music. The Company’s other sites include HipHopEarly.com, which streams Hip-hop tracks of the day, and Clipcartel.com, a video site featuring music videos, artist interviews and viral clips. Additionally, the Company has a games division and has developed and maintains both web-based games and mobile apps.

The Company was incorporated under the laws of the State of Nevada on April 25, 2008 as “National Golf Emporium, Inc.”

On February 23, 2010, the Company amended its articles of incorporation and changed its name to Idle Media, Inc.

On March 18, 2010, the Company entered into a Stock Exchange Agreement and Plan of Reorganization (the “Exchange Agreement”) with Zoeter, LLC (formerly Idle Media, LLC) (“Zoeter”) to acquire 100% of the issued and outstanding membership units of DatPiff, LLC (“DatPiff”) in consideration for the issuance to Zoeter of 40,000,000 restricted shares of common stock of Idle Media, Inc. (the “Exchange”). Closing of the Exchange was contingent upon DatPiff supplying its audited financial statements as required by Regulation S-X of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) among other terms and conditions specified in the Exchange Agreement.

In connection with the Exchange Agreement, Bryan Sawarynski, the then principal shareholder of the Company, holding 69,000,000, or approximately 85%, of the 81,483,250 then total issued and outstanding shares of common stock of the Company, agreed to cancel his ownership of 63,000,000 common shares (the “Cancellation”). Subsequent to the Cancellation, Mr. Sawarynski held 6,000,000 shares of common stock of the Company.

On May 19, 2010, the Exchange and Cancellation were completed, resulting in a change in control of the Company, with Zoeter owning 40,000,000 shares of common stock of the Company, or 68.4% of the 58,483,250 then total issued and outstanding shares. As a result of the consummation of the Exchange, (i) DatPiff became a wholly-owned subsidiary of the Company and (ii) the Company succeeded to the business of DatPiff as its sole business. Also, Marcus Frasier (the sole member of Zoeter) and Kyle Reilly were elected directors of the Company and appointed as its executive officers.

For accounting purposes, the acquisition of DatPiff by Idle Media, Inc. has been recorded as a reverse acquisition of a public company and recapitalization of DatPiff based on the factors demonstrating that DatPiff represents the accounting acquirer. The Company changed its business direction and now develops and manages DatPiff.com, a website of free mixtapes for consumers to download music from new and upcoming Rap and Hip Hop artists, as well as other music, music video and game websites and mobile phone applications.

Principles of Consolidation

The unaudited consolidated financial statements include the accounts of Idle Media, Inc. (a Nevada corporation) and its wholly-owned subsidiary DatPiff, LLC (a Pennsylvania limited liability company). All significant inter-company balances and transactions have been eliminated. Idle Media, Inc. and DatPiff are collectively referred to herein as the “Company”.

7

Critical Accounting Policies

Use of estimates

The preparation of financial statements in conformity with GAAP 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 financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Revenue recognition

We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided; (3) the collection of our fees is reasonably assured; and (4) the amount of fees to be paid is fixed or determinable. For online sales, the products or services are considered delivered at the time the products or services are made available, digitally, to the end user.

We generate revenues through music download subscriptions available on our website, sales of virtual currency within our online gaming platforms, and the sale of advertising on the Company’s websites.

Music Subscriptions and Online Game

We operate our games as live services that allow players to play for free. Within these games, players can purchase virtual currency to obtain virtual goods to enhance their game-playing experience. Players can pay for our virtual currency using credits or other payment methods such as credit cards or PayPal. Payments received from our on-line customers are non-refundable. Revenue from sales of virtual currency is recognized at the time the product is made available, digitally, to the end user.

Artists and DJs pay for downloading of their music without restriction as well as more prominent placement on the Company’s websites (sponsorship/features). Our music subscriptions are paid in advance, typically for monthly, quarterly or annual duration. Subscription revenue is recognized ratably over the related subscription time period.

We estimate chargebacks from third-party payment processors to account for potential future chargebacks based on historical data and record such amounts as a reduction of revenue.

Advertising

We have contractual relationships with agencies, advertising brokers and certain advertisers for advertisements within certain of our games and websites. We recognize advertising revenue for branded virtual goods and sponsorships, engagement advertisements and offers, mobile advertisements and other advertisements as advertisements are delivered to customers as long as evidence of the arrangement exists, the price is fixed or determinable, and we have assessed collectability as reasonably assured. Price is determined to be fixed or determinable when there is a fixed price in the applicable evidence of the arrangement, which may include a master contract, insertion order, or a third-party statement of activity. For branded virtual goods and sponsorships, we determine the delivery criteria has been met based on delivery information from our internal systems. For engagement advertisements and offers, mobile advertisements, and other advertisements, delivery occurs when the advertisement has been displayed or the offer has been completed by the customer, as evidenced by third-party verification reports supporting the number of advertisements displayed or offers completed.

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.

Accounts receivable

The Company uses the allowance method to account for uncollectible accounts receivable. Accounts receivable are presented net of an allowance for doubtful accounts which was $-0- for both years. Accounts receivable balances were of $261,553 and $399,220 as of June 30, 2013 and September 30, 2012, respectively.

8

Intangible assets

The Company capitalizes the costs related to the purchase of software to be used for operations. Amortization is provided over the estimated useful lives of three years using the straight-line method for financial statement purposes.

The Company capitalizes the costs associated with the development of the Company’s websites pursuant to Accounting Standards Codification (“ASC”) 350. Other costs related to the maintenance of the websites are expensed as incurred. Amortization is provided over the estimated useful lives of three years using the straight-line method for financial statement purposes.

The Company reviews the carrying value of intangible assets for impairment whenever events and circumstances indicate that the carrying value may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to the amount by which the carrying value exceeds the fair value. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment there was no impairment as of March 31, 2013.

	June 30, 2013			September 30, 2012
Software	$	48,572		$	48,572
Less: accumulated amortization		(40,256	)		(28,112	)
Intangible assets, net	$	8,316		$	20,460

Amortization expense charged to operations was $12,143 and $12,143 for the nine months ended June 30, 2013 and 2012, respectively.

Fair value of financial instruments

The Company adopted the provisions of ASC 820, “Fair Value Measurements and Disclosures”. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, prepaid expenses, accounts payable and accrued expenses, and deferred revenue, approximate their fair market value based on the short-term maturity of these instruments. The Company did not identify any other assets or liabilities that are required to be presented in the consolidated balance sheets at fair value in accordance with ASC 820.

Stock-based compensation

The Company records stock-based compensation in accordance with the guidance in ASC 718, “Compensation – Stock Compensation,” which requires the Company to recognize expense related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

Earnings per share

The Company follows ASC 260. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted EPS calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the EPS computation.

9

As of June 30, 2013 and 2012, the Company’s common stock equivalents were anti-dilutive.

Concentrations

For the three months ended June 30, 2013, three customers accounted for 43% of sales. For the three months ended June 30, 2012, two customers accounted for approximately 32% of sales. As of June 30, 2013, three customers accounted for 69% of the accounts receivable balance.

Income taxes

The Company follows ASC 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of December 31, 2012, the Company reviewed its tax positions and determined there were no outstanding or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.

The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next 12 months.

The Company classifies tax-related penalties and net interest as income tax expense. The Company has recognized an income tax benefit of $5,297 and $31,969 for the three and nine month periods ended June 30, 2013, respectively.

Recent pronouncements 

In July 2012, the FASB issued authoritative guidance that is intended to simplify testing indefinite-lived intangible assets other than goodwill for impairment. The revised standard allows companies to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is “more-likely-than-not” that the asset is impaired. The guidance is effective for interim and annual impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of this guidance is not expected to have a material effect on the Company’s financial condition, results of operations or cash flows.

10

In February 2013, the FASB issued authoritative guidance on the reporting of reclassifications out of accumulated other comprehensive income. The guidance requires an entity to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount is reclassified to net income in its entirety in the same reporting period. The guidance is effective for fiscal years beginning after December 15, 2012, with early adoption permitted. The adoption of this guidance did not have a material effect on the Company’s financial condition, results of operations or cash flows.

In July 2013, the FASB issued Accounting Standards Update “ASU” 2013-11 on “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”.  The amendments in this ASU are to improve the current U.S. GAAP because they are expected to reduce diversity in practice by providing guidance on the presentation of unrecognized tax benefits and will better reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist.  Current U.S. GAAP does not include explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This Update applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013.  Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows.

NOTE 2 – DEFERRED REVENUE

As of June 30, 2013 and September 30, 2012, the Company had deferred revenue of $14,552 and $16,630, respectively. Deferred revenue is mainly related to subscription revenue which is recognized by the Company over the life of the subscription.

NOTE 3 – FIXED ASSETS, NET

Fixed assets, net, consisted of the following:

	June 30, 2013			September 30, 2012
Building	$	163,000		$	163,000
Computer equipment		31,136			31,136
Less: accumulated deprecation		(13,289	)		(5,184	)
Property, plant and equipment, net	$	180,847		$	188,952

Depreciation expense charged to operations was $8,105 and $2,028 for the nine months ended June 30, 2013 and 2012, respectively.

NOTE 4 – ACCRUED EXPENSES AND OTHER CURRENT LIAIBILITIES   

Accrued expenses and other liabilities consisted of the following:

	June 30, 2013		September 31, 2012
Accrued payroll	$	24,752	$	45,584
Other accruals		-		27,434
Tax payable		354,396		386,366
Accrued expenses and other current liabilities	$	379,148	$	459,384

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NOTE 5 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue 10,000,000 shares of its $0.001 par value preferred stock. No shares of preferred stock have been issued by the Company.

Common Stock

The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock. There were no issuances of common or preferred stock during the reporting period

NOTE 6 – WARRANTS AND OPTIONS

There were no option or warrant grants during this reporting period

NOTE 7 – RELATED PARTY TRANSACTIONS

During the three months ended December 31, 2011, the Company recorded rent for its office space that was paid to the Chief Executive Officer and President of the Company. Monthly rent is $3,000. Rent expense of $9,000 was recorded for the three months ended December 31, 2011. In May 2012, the Company entered into an Agreement of Sale to purchase the office building from the Chief Executive Officer and President of the Company for the independently appraised value of $170,000. The sale closed on September 17, 2012.

As of June 30, 2013 and September 30, 2012, accounts receivable, related party were $260,298 and $260,298, respectively. Accounts receivable, related party consisted of $630,138 in allocated revenues offset by $245,505 in allocated cost of sales and $317,403 in allocated operating expenses; the remaining $193,068 relates to cash paid to Marcus Frasier, the Company's CEO primarily for income tax expenses relating to income generated by DatPiff, respectively. Because Zoeter is considered a related party, the Company has recorded the receivable from Zoeter as a reduction in stockholders’ equity in accordance with ASC 310-10-S99-3 (SAB Topic 4.G) and Rule 502.30 of Regulation SX.

NOTE 8 – CONTINGENCIES

On May 7, 2013, the Company received a subpoena from the Denver Regional Office of the SEC seeking information and documents concerning its financial statements, including the restatement of its financial statements in connection with an ongoing SEC investigation of the Company. The Company is cooperating fully with the SEC with respect to its requests.

NOTE 9 – SUBSEQUENT EVENTS

None

12

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

Except for the historical information, the following discussion contains forward-looking statements that are subject to risks and uncertainties. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this Report. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including the risks described in “Forward-Looking Statements” above and elsewhere in this Report. Our discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and related notes included herein and in our Annual Report on Form 10-K for the fiscal year ended September 30, 2012, and with the understanding that our actual future results may be materially different from what we currently expect.

References in the following discussion and throughout this quarterly report to “we”, “our”, “us”, “Idle”, “the Company”, and similar terms refer to Idle Media, Inc. and its subsidiaries unless otherwise expressly stated or the context otherwise requires.

Our Company

We are a digital media company which develops and maintains a family of websites focused on the urban market. Foremost of these sites is DatPiff.com, a mixtape website launched in 2005 that features Rap and Hip-hop music. Our other sites include HipHopEarly.com, which streams Hip-hop tracks of the day, and Clipcartel.com, a video site featuring music videos, artist interviews and viral clips. Additionally, we have a games division and have developed and maintained both web-based games and mobile apps.

Revenue Sources

We currently maintain and derive revenue from a network of websites and mobile applications. While our mobile applications do derive revenue, their primary goal is to keep the presence of our websites with our audience while on the go and to keep us on the cutting edge with our product offerings. We also maintain a network of web-based games and applications that derive revenue by means of micro transactions (virtual currency) for in-game items and advancement.

We currently have two revenue streams, advertising and subscriptions.

Advertising Revenues: We generate advertising revenues primarily from display, audio and video advertising. The Company generates the majority of its advertising revenue through the delivery of advertising impressions sold. In determining whether an arrangement exists, the Company ensures that a binding arrangement, such as an insertion order, is in place. The Company generally recognizes revenue based on delivery information from its campaign trafficking systems.

Subscriptions Revenues: Some of our websites generate revenues by offering premium subscriptions or virtual currency in exchange for a subscription cost.

For premium subscriptions, the Company gives users the option to pay a fee to bypass downloading restrictions on the site due to bandwidth restrictions. The Company generates subscription revenue from weekly, monthly, and annual premium subscriptions.

For virtual currency options, the Company utilizes virtual currency within its online games by allowing players to earn “virtual currency” through game play. Virtual currency can be purchased as well as earned while playing the game. The players then use their earned “virtual currency” to advance to higher levels. Virtual currency has no expiration date and has no cash value once purchased and we cannot track its usage.

Websites and Mobile Applications

We maintain several websites focusing on music, music videos and games. Our most notable sites are below with a brief description:

DatPiff.com

DatPiff.com is a Hip-hop mixtape website. Artists, DJs and music labels can upload their mixtapes onto the website. The Company provides free hosting on its platform and derives revenue from third-party advertising and upsells. The Company has mobile applications on the major mobile platforms and derives some revenue from them, but their primary purpose is to keep its brand with users on the go.

13

HipHopEarly.com

HipHopEarly.com is a website similar to DatPiff.com catering solely to Hip Hop singles as compared to mixtapes and revenue is derived solely from advertising.

Clipcartel.com

Clipcartel.com is an urban video site featuring music videos, artist interviews, funny urban videos and more, updated daily. The Company has mobile applications available on Nook, BlackBerry, Android and Google Play.

Prisonblock.com

PrisonBlock.com is an online game where players work and earn their way to control the prison. Through the use of virtual currency, players earn respect and gain strength. We derive revenue from in-game payments (no advertising). Users can buy or earn virtual currency and upgrade their accounts to gain advantages in the game.

Mafiablock.com

Similar to PrisonBlock.com, Mafiablock.com players work and earn their way to being the top mafioso in New York. We derive revenue from in-game payments (no advertising). Users can buy or earn virtual currency and upgrade their accounts to gain advantages in the game.

RESULTS OF OPERATIONS

Results of Operations for the Three Months Ended June 30, 2013 and June 30, 2012

REVENUES AND GROSS MARGINS

Revenues decreased $342,142 in the three months ended June 30, 2013 from $1,007,779 in the three months ended June 30, 2012, representing a 35% decrease. The decrease in revenues is mainly as a result of a decrease in advertising sales of $337,638 or 35%, coupled with a decrease in subscription and gaming revenue of $4,504 or 13%.

Cost of sales decreased $119,791, or 28%, to $315,661 in the three months ended June 30, 2013 from $435,452 for the three months ended June 30, 2012. The decrease in the cost of sales is a result of a decrease in developer expenses offset by increases in server costs and merchant fees.

For the three months ended June 30, 2013 and 2012, gross profit margins were 53% and 57%, respectively.

OPERATING LOSS

Selling, general and administrative expenses decreased $278,254, or 44%, to $357,696 for the three months ended June 30, 2013 from $636,450 for the three months ended June 30, 2012. The decrease was mainly the result of a decrease in advertising and promotion expense and legal and professional fees, and a decrease in server costs.

Stock based compensation expense increased $101,525 or 100% in the three months ended June 30, 2013. The increase was the result of options amortized over the three months ended June 30, 2013. The options were granted during the fiscal year ended September 30, 2012 in connection with the employment agreement entered into with the Company’s CEO with a fair market value of $1,686,600.

Depreciation and amortization expense increased $1,730, or 33%, to $6,910 in the three months ended June 30, 2013 from $5,180 for the three months ended June 30, 2012. The increase was the result of additional assets purchased and placed into service during the period.

The Company had $116,654 in loss from operations in the three months ended June 30, 2013, a decrease of $47,351 or 68%, from the loss from operations of $69,303 during the three months ended June 30, 2012. The increase was primarily the result of the decrease of revenue.

In the three months ended June 30, 2013, the Company generated a net loss of $111,357, a decrease of $66,119, or 146%, from a net loss of $45,238 for the three months ended June 30, 2012. This decrease was primarily attributable to an increase in selling, general and administrative expenses coupled with a decrease in revenue as explained above.

14

Results of Operations for the Nine Months Ended June 30, 2013 and June 30, 2012

REVENUES AND GROSS MARGINS

Revenues decreased $772,030 in the nine months ended June 30, 2013 from $2,757,276 in the nine months ended June 30, 2012, representing a 28% decrease. The decrease in revenues is mainly as a result of a decrease in advertising sales of $743,992 or 28%, coupled with a decrease in subscription and gaming revenue of $23,658 or 17% and other revenue of $4,380 or 100%.

Cost of sales decreased $223,735 or 22%, to $775,703 in the nine months ended June 30, 2013 from $999,437 for the nine months ended June 30, 2012. The decrease in the cost of sales is a result of a decrease in developer expenses offset by increases in server costs and merchant fees.

For the nine months ended June 30, 2013 and 2012, gross profit margins were 61% and 64%, respectively.

OPERATING INCOME (LOSS)  

Selling, general and administrative expenses decreased $290,548 or 18%, to $1,280,134 for the nine months ended June 30, 2013 from $1,570,682 for the nine months ended June 30, 2012. The decrease was mainly the result of a decrease in advertising and promotion expense and legal and professional fees, a decrease in server costs.

  Stock based compensation expense increased $881,318 or 100% in the nine months ended June 30, 2013. The increase was the result of options expense during the nine months ended June 30, 2013. The options were granted during the fiscal year ended September 30, 2012 in connection with the employment agreement entered into with the Company’s CEO with a fair market value of $1,686,600.

Depreciation and amortization expense increased $6,077 or 43%, to $20,249 in the nine months ended June 30, 2013 from $14,172 for the nine months ended June 30, 2012. The increase was the result of additional assets purchased and placed into service during the period.

Research and development expenses decreased $2,817, or 85%, in the nine months ended June 30, 2013 from $3,316 for the nine months ended June 30, 2012.

The Company had $972,656 in loss from operations in the nine months ended June 30, 2013, a decrease of $1,142,325 or 673%, from the income from operations of $169,669 during the nine months ended June 30, 2012. The decrease was primarily the result of the decrease of revenue coupled with an increase in general and administrative expenses.

In the nine months ended June 30, 2013, the Company generated a net loss of $940,687, a decrease of $1,050,958, or 953%, from a net income of $110,271 for the nine months ended June 30, 2012. This decrease was primarily attributable to an increase in selling, general and administrative expenses coupled with a decrease in revenue as explained above.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2013, we had $430,000 in cash and cash equivalents, $261,553 in accounts receivable, and $932 in prepaid expenses. The following table provides detailed information about our net cash flow for the nine months ended June 30, 2013 and 2012:

	Nine months ended June 30,
	2013		2012
Net cash provided by (used in) operating activities	$	46,454	$	(243,681	)
Net cash used in investing activities		-		(27,997	)
Net cash used in financing activities		-		(50,000	)
Net increase/(decrease) in cash		46,454		(321,678	)
Cash and cash equivalents, beginning of period		383,546		1,120,677
Cash and cash equivalents, end of period	$	430,000	$	798,999

15

OPERATING ACTIVITIES

Net cash provided in operating activities was $46,454 for the nine months ended June 30, 2013, as compared to net cash used by operating activities of $243,681 for the same period in 2012. The increase of cash during the nine months ended June 30, 2013 was primarily due to net loss of $940,687 and a decrease from September 30, 2012 in accrued expenses of $80,236, offset by a decrease in accounts receivable of $137,667, a decrease in prepaid expenses of $70,818, depreciation adjustments of $20,249, a decrease in deferred revenue of $2,078 and stock based compensation expense of $881,318.

Net cash used in operating activities was $243,681 for the nine months ended June 30, 2012, as compared to net cash provided by operating activities of $477,380 for the same period in 2011. The decrease in net cash during the nine months ended June 30, 2012 was primarily due to net income of $110,271 coupled with a decrease in accounts receivable of $96,057 and depreciation adjustments of $14,171, offset by an increase in accounts receivable, related party of $238,249, an increase in prepaid expenses of $7,000, a decrease in accrued expenses of $174,733 and a decrease in accounts payable of $45,121 for the nine months ended June 30, 2012, as compared to reported balances as of September 30, 2011.

INVESTING ACTIVITIES

There were no investing activities during the nine month period ended June 30, 2013.

For the nine months ended June 30, 2012, net cash used by investing activities was $27,997 due to the purchase of fixed assets.

FINANCING ACTIVITIES

There were no financing activities during the nine month periods ended June 30, 2013.

Net cash used in financing activities for the nine months ended June 30, 2012 was $50,000, as compared to $-0- for the same period of 2011. The increase of net cash used in financing activities was mainly attributable to a deemed distribution to a related party of $50,000 for the purchase of software. Since this transaction was with a related party and had a historical cash basis of $-0-, under United States generally accepted accounting principles (“GAAP”) rules, the transaction is recorded as a distribution.

INFLATION

We believe our operations have not been and, in the foreseeable future, will not be materially and adversely affected by inflation or changing prices.

OFF BALANCE SHEET ARRANGEMENTS

None.

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Report due to the material weaknesses identified in the Company’s internal control over financial reporting described below.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Based on this definition, management has concluded that the material weaknesses noted below existed in the Company’s internal control over financial reporting.

16

Management is continuing its review of our internal control over financial reporting as it believes the following material weaknesses, identified in connection with the restatement of our financial statements and described in Amendment No. 5 to our Registration Statement on Form 10 and our Annual Report on Form 10-K for the fiscal year ended September 30, 2012, each filed with the SEC, still exist: (i) a lack of senior management personnel who have the requisite GAAP experience to prepare financial statements in accordance with GAAP leading to, among other things, incorrectly consolidating Zoeter as a variable interest entity; (ii) failing to maintain an adequate financial reporting organizational structure to separate the revenues, expenses and other financial activities of Zoeter and the Company leading to, among other things, incorrectly allocating and reporting revenues and expenses of Zoeter an the Company.

In response to the material weaknesses identified above, management, under the supervision of the Chief Executive Officer and Chief Financial Officer, have commenced steps to address the material weaknesses, including completing the transfer of the bank and PayPal accounts from Zoeter to the Company in July 2011, implementing a review of all transactions and book entries from March 15, 2009 through and including June 30, 2012, and appointing Raphael P. Haddock to serve as Chief Financial Officer and Craig DeFranco to serve as Controller, allowing Mr. DeFranco to focus on remediating the identified material weaknesses and preparing restated financial statements. This remediation effort, which is ongoing, has been undertaken both to address the identified material weaknesses and to enhance the Company’s overall financial control environment. Additional remediation steps may be taken as deemed necessary by management.

Changes in Internal Control over Financial Reporting

Except as described above, there were no changes in our internal controls or in other factors that could significantly affect these controls, during the third quarter of fiscal year 2013 ended June 30, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II--OTHER INFORMATION

Item 1. Legal Proceedings.

On May 7, 2013, the Company received a subpoena from the Denver Regional Office of the SEC seeking information and documents concerning its financial statements, including the restatement of its financial statements in connection with an ongoing SEC investigation of the Company. The Company is cooperating fully with the SEC with respect to its requests.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Except as noted above, we are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.

Item 1A. Risk Factors. 

There have been no material changes to the description of the risk factors associated with our business described in Part I, Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2012, filed with the SEC.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

17

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit Number	Exhibit Description
31.1	Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act
31.2	Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act
32.1	Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act
32.2	Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley Act
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase
101.DEF*	XBRL Taxonomy Extension Definition Linkbase
101.LAB*	XBRL Taxonomy Extension Label Linkbase
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase

* XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

18

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	IDLE MEDIA, INC.
Date: December 30, 2013	By:	/s/ Marcus Frasier
		Marcus Frasier President and Chief Executive Officer
Date: December 30, 2013	By:	/s/ Raphael P. Haddock
		Raphael P. Haddock Chief Operating Officer and Chief Financial Officer

19

EX-31

EXHIBIT 31.1

CERTIFICATION

I, Marcus Frasier, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of Idle Media, Inc. (the registrant):

2.        Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.        Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.        The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)      Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.       The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors of the registrant's board of directors (or persons performing the equivalent functions):

(a)      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:     December 30, 2013

 

/s/ Marcus Frasier

Marcus Frasier  

President and Chief Executive Officer  

EX-31

EXHIBIT 31.2

CERTIFICATION

I, Raphael P. Haddock, certify that:

1.        I have reviewed this quarterly report on Form 10-Q of Idle Media, Inc. (the registrant):

2.        Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.        Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.        The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)      Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.       The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors of the registrant's board of directors (or persons performing the equivalent functions):

(a)      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:     December 30, 2013

 

/s/ Raphael P. Haddock 

Raphael P. Haddock  

Chief Operating Officer and Chief Financial Officer  

EX-32

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Idle Media, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Marcus Frasier, Chief Executive Officer and Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Marcus Frasier 

Marcus Frasier

President and Chief Executive Officer

December 30, 2013

EX-32

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Idle Media, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Raphael Haddock, Chief Financial Officer and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Raphael P. Haddock 

Raphael P. Haddock

Chief Operating Officer and Chief Financial Officer

December 30, 2013

XML

Note 3 - Fixed Assets, Net (Tables)

9 Months Ended

Jun. 30, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

	June 30, 2013			September 30, 2012
Building	$	163,000		$	163,000
Computer equipment		31,136			31,136
Less: accumulated deprecation		(13,289	)		(5,184	)
Property, plant and equipment, net	$	180,847		$	188,952

XML

Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Advertising and sponsorship revenue	$ 635,208	$ 972,846	$ 1,873,556	$ 2,617,549
Subscription and gaming revenue	30,429	34,933	111,689	135,347
Other revenue				4,380
Total revenue	665,637	1,007,779	1,985,245	2,757,276
Cost of sales	315,661	435,452	775,703	999,437
Gross Profit	349,976	572,327	1,209,542	1,757,839
Operating expenses:
Selling, general and administrative	357,696	636,450	1,280,131	1,570,682
Employee stock-based compensation	101,525		881,318
Depreciation and amortization	6,910	5,180	20,250	14,172
Research and development	499		499	3,316
Total operating expenses	466,630	641,630	2,182,198	1,588,170
Income (loss) from operations	(116,654)	(69,303)	(972,656)	169,669
Net income (loss) before provision for income taxes	(116,654)	(69,303)	(972,656)	169,669
Income tax benefit (provision)	5,297	24,065	31,969	(59,398)
Net income (loss)	$ (111,357)	$ (45,238)	$ (940,687)	$ 110,271
Income (loss) per common share - basic (in Dollars per share)	$ 0.00	$ 0.00	$ (0.01)	$ 0.00
Weighted average shares of common stock outstanding - basic (in Shares)	64,746,743	58,483,250	64,746,743	58,483,250

XML

Note 5 - Stockholders' Equity

9 Months Ended

Jun. 30, 2013

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 5 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue 10,000,000 shares of its $0.001 par value preferred stock. No shares of preferred stock have been issued by the Company.

Common Stock

The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock. There were no issuances of common or preferred stock during the reporting period

XML

Note 4 - Accrued Expenses And Other Current Liabilities (Details) - Accrued expenses and other liabilities (USD $)	Jun. 30, 2013	Sep. 30, 2012
Accrued expenses and other liabilities [Abstract]
Accrued payroll	$ 24,752	$ 45,584
Other accruals		27,434
Tax payable	354,396	386,366
Accrued expenses and other current liabilities	$ 379,148	$ 459,384

XML

Note 4 - Accrued Expenses And Other Current Liabilities (Tables)

9 Months Ended

Jun. 30, 2013

Disclosure Text Block Supplement [Abstract]

Accrued Expenses And Other Liabilities

	June 30, 2013		September 31, 2012
Accrued payroll	$	24,752	$	45,584
Other accruals		-		27,434
Tax payable		354,396		386,366
Accrued expenses and other current liabilities	$	379,148	$	459,384

XML

Note 7 - Related Party Transactions (Details) (USD $)	3 Months Ended	9 Months Ended
	Dec. 31, 2011	Jun. 30, 2013	Sep. 30, 2012	May 31, 2012
Note 7 - Related Party Transactions (Details) [Line Items]
Operating Leases, Monthly Rent Expense	$ 3,000
Operating Leases, Rent Expense	9,000
Appraised Value Related Party Transaction				170,000
Accounts Receivable, Related Parties		260,298	260,298
Revenue from Related Parties		630,138
Related Parties Amount in Cost of Sales		245,505
Costs and Expenses, Related Party		317,403
Chief Executive Officer [Member]
Note 7 - Related Party Transactions (Details) [Line Items]
Related Party Transaction, Amounts of Transaction		$ 193,068

XML

Note 5 - Stockholders' Equity (Details) (USD $)	Jun. 30, 2013	Sep. 30, 2012
Stockholders' Equity Note [Abstract]
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Par or Stated Value Per Share (in Dollars per share)	$ 0.001	$ 0.001
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Par or Stated Value Per Share (in Dollars per share)	$ 0.001	$ 0.001

XML

Note 1 - Summary of Significant Accounting Policies

9 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The unaudited condensed consolidated interim financial statements included herein, presented in accordance with United States generally accepted accounting principles (“GAAP”) and stated in US dollars, have been prepared by Idle Media, Inc. (together with its subsidiaries, the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

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. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the fiscal year ended September 30, 2012 and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2012, filed with the SEC. The Company follows the same accounting policies in the preparation of interim reports.

Results of operations for interim periods are not necessarily indicative of results for the entire year.

Organization

The Company is a digital media company which develops and maintains a family of websites focused on the urban market. Foremost of these sites is DatPiff.com, a mixtape website launched in 2005 that features Rap and Hip-hop music. The Company’s other sites include HipHopEarly.com, which streams Hip-hop tracks of the day, and Clipcartel.com, a video site featuring music videos, artist interviews and viral clips. Additionally, the Company has a games division and has developed and maintains both web-based games and mobile apps.

The Company was incorporated under the laws of the State of Nevada on April 25, 2008 as “National Golf Emporium, Inc.”

On February 23, 2010, the Company amended its articles of incorporation and changed its name to Idle Media, Inc.

On March 18, 2010, the Company entered into a Stock Exchange Agreement and Plan of Reorganization (the “Exchange Agreement”) with Zoeter, LLC (formerly Idle Media, LLC) (“Zoeter”) to acquire 100% of the issued and outstanding membership units of DatPiff, LLC (“DatPiff”) in consideration for the issuance to Zoeter of 40,000,000 restricted shares of common stock of Idle Media, Inc. (the “Exchange”). Closing of the Exchange was contingent upon DatPiff supplying its audited financial statements as required by Regulation S-X of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) among other terms and conditions specified in the Exchange Agreement.

In connection with the Exchange Agreement, Bryan Sawarynski, the then principal shareholder of the Company, holding 69,000,000, or approximately 85%, of the 81,483,250 then total issued and outstanding shares of common stock of the Company, agreed to cancel his ownership of 63,000,000 common shares (the “Cancellation”). Subsequent to the Cancellation, Mr. Sawarynski held 6,000,000 shares of common stock of the Company.

On May 19, 2010, the Exchange and Cancellation were completed, resulting in a change in control of the Company, with Zoeter owning 40,000,000 shares of common stock of the Company, or 68.4% of the 58,483,250 then total issued and outstanding shares. As a result of the consummation of the Exchange, (i) DatPiff became a wholly-owned subsidiary of the Company and (ii) the Company succeeded to the business of DatPiff as its sole business. Also, Marcus Frasier (the sole member of Zoeter) and Kyle Reilly were elected directors of the Company and appointed as its executive officers.

For accounting purposes, the acquisition of DatPiff by Idle Media, Inc. has been recorded as a reverse acquisition of a public company and recapitalization of DatPiff based on the factors demonstrating that DatPiff represents the accounting acquirer. The Company changed its business direction and now develops and manages DatPiff.com, a website of free mixtapes for consumers to download music from new and upcoming Rap and Hip Hop artists, as well as other music, music video and game websites and mobile phone applications.

Principles of Consolidation

The unaudited consolidated financial statements include the accounts of Idle Media, Inc. (a Nevada corporation) and its wholly-owned subsidiary DatPiff, LLC (a Pennsylvania limited liability company). All significant inter-company balances and transactions have been eliminated. Idle Media, Inc. and DatPiff are collectively referred to herein as the “Company”.

Critical Accounting Policies

Use of estimates

The preparation of financial statements in conformity with GAAP 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 financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Revenue recognition

We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided; (3) the collection of our fees is reasonably assured; and (4) the amount of fees to be paid is fixed or determinable. For online sales, the products or services are considered delivered at the time the products or services are made available, digitally, to the end user.

We generate revenues through music download subscriptions available on our website, sales of virtual currency within our online gaming platforms, and the sale of advertising on the Company’s websites.

Music Subscriptions and Online Game

We operate our games as live services that allow players to play for free. Within these games, players can purchase virtual currency to obtain virtual goods to enhance their game-playing experience. Players can pay for our virtual currency using credits or other payment methods such as credit cards or PayPal. Payments received from our on-line customers are non-refundable. Revenue from sales of virtual currency is recognized at the time the product is made available, digitally, to the end user.

Artists and DJs pay for downloading of their music without restriction as well as more prominent placement on the Company’s websites (sponsorship/features). Our music subscriptions are paid in advance, typically for monthly, quarterly or annual duration. Subscription revenue is recognized ratably over the related subscription time period.

We estimate chargebacks from third-party payment processors to account for potential future chargebacks based on historical data and record such amounts as a reduction of revenue.

Advertising

We have contractual relationships with agencies, advertising brokers and certain advertisers for advertisements within certain of our games and websites. We recognize advertising revenue for branded virtual goods and sponsorships, engagement advertisements and offers, mobile advertisements and other advertisements as advertisements are delivered to customers as long as evidence of the arrangement exists, the price is fixed or determinable, and we have assessed collectability as reasonably assured. Price is determined to be fixed or determinable when there is a fixed price in the applicable evidence of the arrangement, which may include a master contract, insertion order, or a third-party statement of activity. For branded virtual goods and sponsorships, we determine the delivery criteria has been met based on delivery information from our internal systems. For engagement advertisements and offers, mobile advertisements, and other advertisements, delivery occurs when the advertisement has been displayed or the offer has been completed by the customer, as evidenced by third-party verification reports supporting the number of advertisements displayed or offers completed.

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.

Accounts receivable

The Company uses the allowance method to account for uncollectible accounts receivable. Accounts receivable are presented net of an allowance for doubtful accounts which was $-0- for both years. Accounts receivable balances were of $261,553 and $399,220 as of June 30, 2013 and September 30, 2012, respectively.

Intangible assets

The Company capitalizes the costs related to the purchase of software to be used for operations. Amortization is provided over the estimated useful lives of three years using the straight-line method for financial statement purposes.

The Company capitalizes the costs associated with the development of the Company’s websites pursuant to Accounting Standards Codification (“ASC”) 350. Other costs related to the maintenance of the websites are expensed as incurred. Amortization is provided over the estimated useful lives of three years using the straight-line method for financial statement purposes.

The Company reviews the carrying value of intangible assets for impairment whenever events and circumstances indicate that the carrying value may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to the amount by which the carrying value exceeds the fair value. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment there was no impairment as of March 31, 2013.

	June 30, 2013			September 30, 2012
Software	$	48,572		$	48,572
Less: accumulated amortization		(40,256	)		(28,112	)
Intangible assets, net	$	8,316		$	20,460

Amortization expense charged to operations was $12,143 and $12,143 for the nine months ended June 30, 2013 and 2012, respectively.

Fair value of financial instruments

The Company adopted the provisions of ASC 820, “Fair Value Measurements and Disclosures”. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, prepaid expenses, accounts payable and accrued expenses, and deferred revenue, approximate their fair market value based on the short-term maturity of these instruments. The Company did not identify any other assets or liabilities that are required to be presented in the consolidated balance sheets at fair value in accordance with ASC 820.

Stock-based compensation

The Company records stock-based compensation in accordance with the guidance in ASC 718, “Compensation – Stock Compensation,” which requires the Company to recognize expense related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

Earnings per share

The Company follows ASC 260. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted EPS calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the EPS computation.

As of June 30, 2013 and 2012, the Company’s common stock equivalents were anti-dilutive.

Concentrations

For the three months ended June 30, 2013, three customers accounted for 43% of sales. For the three months ended June 30, 2012, two customers accounted for approximately 32% of sales. As of June 30, 2013, three customers accounted for 69% of the accounts receivable balance.

Income taxes

The Company follows ASC 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of December 31, 2012, the Company reviewed its tax positions and determined there were no outstanding or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.

The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next 12 months.

The Company classifies tax-related penalties and net interest as income tax expense. The Company has recognized an income tax benefit of $5,297 and $31,969 for the three and nine month periods ended June 30, 2013, respectively.

Recent pronouncements 

In July 2012, the FASB issued authoritative guidance that is intended to simplify testing indefinite-lived intangible assets other than goodwill for impairment. The revised standard allows companies to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is “more-likely-than-not” that the asset is impaired. The guidance is effective for interim and annual impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of this guidance is not expected to have a material effect on the Company’s financial condition, results of operations or cash flows.

In February 2013, the FASB issued authoritative guidance on the reporting of reclassifications out of accumulated other comprehensive income. The guidance requires an entity to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount is reclassified to net income in its entirety in the same reporting period. The guidance is effective for fiscal years beginning after December 15, 2012, with early adoption permitted. The adoption of this guidance did not have a material effect on the Company’s financial condition, results of operations or cash flows.

In July 2013, the FASB issued Accounting Standards Update “ASU” 2013-11 on “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”.  The amendments in this ASU are to improve the current U.S. GAAP because they are expected to reduce diversity in practice by providing guidance on the presentation of unrecognized tax benefits and will better reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist.  Current U.S. GAAP does not include explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This Update applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013.  Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows.

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Note 3 - Fixed Assets, Net

9 Months Ended

Jun. 30, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

NOTE 3 – FIXED ASSETS, NET

Fixed assets, net, consisted of the following:

	June 30, 2013			September 30, 2012
Building	$	163,000		$	163,000
Computer equipment		31,136			31,136
Less: accumulated deprecation		(13,289	)		(5,184	)
Property, plant and equipment, net	$	180,847		$	188,952

Depreciation expense charged to operations was $8,105 and $2,028 for the nine months ended June 30, 2013 and 2012, respectively.

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Note 6 - Warrants And Options

9 Months Ended

Jun. 30, 2013

Warrants And Options [Abstract]

Warrants And Options

NOTE 6 – WARRANTS AND OPTIONS

There were no option or warrant grants during this reporting period

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Note 4 - Accrued Expenses And Other Current Liabilities

9 Months Ended

Jun. 30, 2013

Disclosure Text Block Supplement [Abstract]

Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block]

NOTE 4 – ACCRUED EXPENSES AND OTHER CURRENT LIAIBILITIES   

Accrued expenses and other liabilities consisted of the following:

	June 30, 2013		September 31, 2012
Accrued payroll	$	24,752	$	45,584
Other accruals		-		27,434
Tax payable		354,396		386,366
Accrued expenses and other current liabilities	$	379,148	$	459,384

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Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $)	Jun. 30, 2013	Sep. 30, 2012
Preferred stock par value (in Dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in Shares)	10,000,000	10,000,000
Preferred stock, shares issued (in Shares)	0	0
Preferred stock, shares outstanding (in Shares)	0	0
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in Shares)	100,000,000	100,000,000
Common stock, shares issued (in Shares)	64,746,743	64,746,743

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Note 9 - Subsequent Events

9 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 9 – SUBSEQUENT EVENTS

None

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Consolidated Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Net income (loss)	$ (940,687)	$ 110,271
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization	20,250	14,172
Employee stock based compensation	881,318
Changes in operating assets and liabilities:
Accounts receivable	137,667	96,057
Related party receivable		(238,249)
Prepaid expenses	70,818	(7,000)
Accounts payable	(40,598)	(45,121)
Deferred revenue	(2,078)	923
Accrued expenses and other current liabilities	(80,236)	(174,734)
Net cash (used in) provided by operating activities	46,454	(243,681)
Cash flows from investing activities:
Purchase of fixed assets		(27,997)
Net cash used in investing activities		(27,997)
Cash flows from financing activities:
Deemed distribution to related party		(50,000)
Net cash used in financing activities		(50,000)
Net increase (decrease) in cash	46,454	(321,678)
Cash and cash equivalents beginning of period	383,546	1,120,677
Cash and cash equivalents at end of period	430,000	798,999
Non-cash investing and financing activities:
Accounts payable assumed by related party		$ (12,575)

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Consolidated Balance Sheets (Unaudited) (USD $)	Jun. 30, 2013	Sep. 30, 2012
Current assets:
Cash and cash equivalents	$ 430,000	$ 383,546
Accounts receivable	261,553	399,220
Prepaid expenses	932	71,750
Total current assets	692,485	854,516
Fixed assets, net	180,847	188,952
Intangible assets, net	8,316	20,460
Total assets	881,648	1,063,928
Current liabilities:
Accounts payable	70,655	111,252
Deferred revenue	14,552	16,630
Accrued expenses and other current liabilities	379,148	459,384
Total current liabilities	464,355	587,266
Total liabilities	464,355	587,266
Stockholders' equity:
Preferred stock, $.001 par value; 10,000,000 shares authorized, no shares issued and outstanding	0	0
Common stock, $.001 par value; 100,000,000 shares authorized, 64,746,743 shares issued at June 30, 2013 and September 30, 2012, respectively	64,746	64,746
Additional paid-in capital	2,960,901	2,079,583
Related party receivable	(260,298)	(260,298)
Accumulated deficit	(2,148,056)	(1,207,369)
Treasury stock	(200,000)	(200,000)
Total stockholders' equity	417,293	476,662
Total liabilities and stockholders' equity	$ 881,648	$ 1,063,928

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Note 3 - Fixed Assets, Net (Details) - Fixed Assets (USD $)	Jun. 30, 2013	Sep. 30, 2012
Property, Plant and Equipment [Line Items]
Less: accumulated deprecation	$ (13,289)	$ (5,184)
Property, plant and equipment, net	180,847	188,952
Building [Member]
Property, Plant and Equipment [Line Items]
Property Plant and Equipment	163,000	163,000
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property Plant and Equipment	$ 31,136	$ 31,136

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Note 8 - Contingencies

9 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE 8 – CONTINGENCIES

On May 7, 2013, the Company received a subpoena from the Denver Regional Office of the SEC seeking information and documents concerning its financial statements, including the restatement of its financial statements in connection with an ongoing SEC investigation of the Company. The Company is cooperating fully with the SEC with respect to its requests.

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Note 1 - Summary of Significant Accounting Policies (Tables)

9 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	June 30, 2013			September 30, 2012
Software	$	48,572		$	48,572
Less: accumulated amortization		(40,256	)		(28,112	)
Intangible assets, net	$	8,316		$	20,460

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Note 7 - Related Party Transactions

9 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 7 – RELATED PARTY TRANSACTIONS

During the three months ended December 31, 2011, the Company recorded rent for its office space that was paid to the Chief Executive Officer and President of the Company. Monthly rent is $3,000. Rent expense of $9,000 was recorded for the three months ended December 31, 2011. In May 2012, the Company entered into an Agreement of Sale to purchase the office building from the Chief Executive Officer and President of the Company for the independently appraised value of $170,000. The sale closed on September 17, 2012.

As of June 30, 2013 and September 30, 2012, accounts receivable, related party were $260,298 and $260,298, respectively. Accounts receivable, related party consisted of $630,138 in allocated revenues offset by $245,505 in allocated cost of sales and $317,403 in allocated operating expenses; the remaining $193,068 relates to cash paid to Marcus Frasier, the Company's CEO primarily for income tax expenses relating to income generated by DatPiff, respectively. Because Zoeter is considered a related party, the Company has recorded the receivable from Zoeter as a reduction in stockholders’ equity in accordance with ASC 310-10-S99-3 (SAB Topic 4.G) and Rule 502.30 of Regulation SX.

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Note 2 - Deferred Revenue

9 Months Ended

Jun. 30, 2013

Deferred Revenue Disclosure [Abstract]

Deferred Revenue Disclosure [Text Block]

NOTE 2 – DEFERRED REVENUE

As of June 30, 2013 and September 30, 2012, the Company had deferred revenue of $14,552 and $16,630, respectively. Deferred revenue is mainly related to subscription revenue which is recognized by the Company over the life of the subscription.

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Note 1 - Summary of Significant Accounting Policies (Details) (USD $)	3 Months Ended			9 Months Ended								3 Months Ended		9 Months Ended			9 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Mar. 31, 2010	Jun. 30, 2013	Jun. 30, 2012	Sep. 30, 2012	Mar. 18, 2010 Zoerter LLC [Member] DatPiff [Member]	Mar. 18, 2010 Bryan Sawarynski [Member] National Golf Emporium, Inc. [Member] Cancel [Member]	May 19, 2010 Bryan Sawarynski [Member] National Golf Emporium, Inc. [Member]	Mar. 18, 2010 Bryan Sawarynski [Member] National Golf Emporium, Inc. [Member]	May 19, 2010 Idle Media, LLC [Member] National Golf Emporium, Inc. [Member]	Jun. 30, 2013 Customer Concentration Risk [Member]	Jun. 30, 2012 Customer Concentration Risk [Member]	Jun. 30, 2012 Credit Concentration Risk [Member]	May 19, 2010 National Golf Emporium, Inc. [Member]	Mar. 18, 2010 National Golf Emporium, Inc. [Member]	Jun. 30, 2013 Computer Software, Intangible Asset [Member]	Jun. 30, 2013 Website Development Costs [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired							100.00%
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Shares Issued (in Shares)			40,000,000
Common Stock, Shares, Issued (in Shares)	64,746,743			64,746,743		64,746,743		63,000,000	6,000,000	69,000,000	40,000,000				58,483,250	81,483,250
Percentage of Interest Held by Investor										85.00%
Allowance for Doubtful Accounts Receivable (in Dollars)	$ 0			$ 0
Accounts Receivable, Net, Current (in Dollars)	261,553			261,553		399,220
Finite-Lived Intangible Asset, Useful Life																	3 years	3 years
Amortization of Intangible Assets (in Dollars)				12,143	12,143
Number of Customers												3	2	3
Concentration Risk, Percentage												43.00%	32.00%	69.00%
Income Tax Expense (Benefit) (in Dollars)	$ (5,297)	$ (24,065)		$ (31,969)	$ 59,398

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Accounting Policies, by Policy (Policies)

9 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of presentation

The unaudited condensed consolidated interim financial statements included herein, presented in accordance with United States generally accepted accounting principles (“GAAP”) and stated in US dollars, have been prepared by Idle Media, Inc. (together with its subsidiaries, the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

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. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the fiscal year ended September 30, 2012 and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2012, filed with the SEC. The Company follows the same accounting policies in the preparation of interim reports.

Results of operations for interim periods are not necessarily indicative of results for the entire year.

Organization [Policy Text Block]

Organization

The Company is a digital media company which develops and maintains a family of websites focused on the urban market. Foremost of these sites is DatPiff.com, a mixtape website launched in 2005 that features Rap and Hip-hop music. The Company’s other sites include HipHopEarly.com, which streams Hip-hop tracks of the day, and Clipcartel.com, a video site featuring music videos, artist interviews and viral clips. Additionally, the Company has a games division and has developed and maintains both web-based games and mobile apps.

The Company was incorporated under the laws of the State of Nevada on April 25, 2008 as “National Golf Emporium, Inc.”

On February 23, 2010, the Company amended its articles of incorporation and changed its name to Idle Media, Inc.

On March 18, 2010, the Company entered into a Stock Exchange Agreement and Plan of Reorganization (the “Exchange Agreement”) with Zoeter, LLC (formerly Idle Media, LLC) (“Zoeter”) to acquire 100% of the issued and outstanding membership units of DatPiff, LLC (“DatPiff”) in consideration for the issuance to Zoeter of 40,000,000 restricted shares of common stock of Idle Media, Inc. (the “Exchange”). Closing of the Exchange was contingent upon DatPiff supplying its audited financial statements as required by Regulation S-X of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) among other terms and conditions specified in the Exchange Agreement.

In connection with the Exchange Agreement, Bryan Sawarynski, the then principal shareholder of the Company, holding 69,000,000, or approximately 85%, of the 81,483,250 then total issued and outstanding shares of common stock of the Company, agreed to cancel his ownership of 63,000,000 common shares (the “Cancellation”). Subsequent to the Cancellation, Mr. Sawarynski held 6,000,000 shares of common stock of the Company.

On May 19, 2010, the Exchange and Cancellation were completed, resulting in a change in control of the Company, with Zoeter owning 40,000,000 shares of common stock of the Company, or 68.4% of the 58,483,250 then total issued and outstanding shares. As a result of the consummation of the Exchange, (i) DatPiff became a wholly-owned subsidiary of the Company and (ii) the Company succeeded to the business of DatPiff as its sole business. Also, Marcus Frasier (the sole member of Zoeter) and Kyle Reilly were elected directors of the Company and appointed as its executive officers.

For accounting purposes, the acquisition of DatPiff by Idle Media, Inc. has been recorded as a reverse acquisition of a public company and recapitalization of DatPiff based on the factors demonstrating that DatPiff represents the accounting acquirer. The Company changed its business direction and now develops and manages DatPiff.com, a website of free mixtapes for consumers to download music from new and upcoming Rap and Hip Hop artists, as well as other music, music video and game websites and mobile phone applications.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The unaudited consolidated financial statements include the accounts of Idle Media, Inc. (a Nevada corporation) and its wholly-owned subsidiary DatPiff, LLC (a Pennsylvania limited liability company). All significant inter-company balances and transactions have been eliminated. Idle Media, Inc. and DatPiff are collectively referred to herein as the “Company”.

Use of Estimates, Policy [Policy Text Block]

Use of estimates

The preparation of financial statements in conformity with GAAP 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 financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Revenue Recognition, Policy [Policy Text Block]

Revenue recognition

We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided; (3) the collection of our fees is reasonably assured; and (4) the amount of fees to be paid is fixed or determinable. For online sales, the products or services are considered delivered at the time the products or services are made available, digitally, to the end user.

We generate revenues through music download subscriptions available on our website, sales of virtual currency within our online gaming platforms, and the sale of advertising on the Company’s websites.

Music Subscriptions and Online Game

We operate our games as live services that allow players to play for free. Within these games, players can purchase virtual currency to obtain virtual goods to enhance their game-playing experience. Players can pay for our virtual currency using credits or other payment methods such as credit cards or PayPal. Payments received from our on-line customers are non-refundable. Revenue from sales of virtual currency is recognized at the time the product is made available, digitally, to the end user.

Artists and DJs pay for downloading of their music without restriction as well as more prominent placement on the Company’s websites (sponsorship/features). Our music subscriptions are paid in advance, typically for monthly, quarterly or annual duration. Subscription revenue is recognized ratably over the related subscription time period.

We estimate chargebacks from third-party payment processors to account for potential future chargebacks based on historical data and record such amounts as a reduction of revenue.

Advertising

We have contractual relationships with agencies, advertising brokers and certain advertisers for advertisements within certain of our games and websites. We recognize advertising revenue for branded virtual goods and sponsorships, engagement advertisements and offers, mobile advertisements and other advertisements as advertisements are delivered to customers as long as evidence of the arrangement exists, the price is fixed or determinable, and we have assessed collectability as reasonably assured. Price is determined to be fixed or determinable when there is a fixed price in the applicable evidence of the arrangement, which may include a master contract, insertion order, or a third-party statement of activity. For branded virtual goods and sponsorships, we determine the delivery criteria has been met based on delivery information from our internal systems. For engagement advertisements and offers, mobile advertisements, and other advertisements, delivery occurs when the advertisement has been displayed or the offer has been completed by the customer, as evidenced by third-party verification reports supporting the number of advertisements displayed or offers completed.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.

Receivables, Policy [Policy Text Block]

Accounts receivable

The Company uses the allowance method to account for uncollectible accounts receivable. Accounts receivable are presented net of an allowance for doubtful accounts which was $-0- for both years. Accounts receivable balances were of $261,553 and $399,220 as of June 30, 2013 and September 30, 2012, respectively.

Intangible Assets, Finite-Lived, Policy [Policy Text Block]

Intangible assets

The Company capitalizes the costs related to the purchase of software to be used for operations. Amortization is provided over the estimated useful lives of three years using the straight-line method for financial statement purposes.

The Company capitalizes the costs associated with the development of the Company’s websites pursuant to Accounting Standards Codification (“ASC”) 350. Other costs related to the maintenance of the websites are expensed as incurred. Amortization is provided over the estimated useful lives of three years using the straight-line method for financial statement purposes.

The Company reviews the carrying value of intangible assets for impairment whenever events and circumstances indicate that the carrying value may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to the amount by which the carrying value exceeds the fair value. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment there was no impairment as of March 31, 2013.

	June 30, 2013			September 30, 2012
Software	$	48,572		$	48,572
Less: accumulated amortization		(40,256	)		(28,112	)
Intangible assets, net	$	8,316		$	20,460

Amortization expense charged to operations was $12,143 and $12,143 for the nine months ended June 30, 2013 and 2012, respectively.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair value of financial instruments

The Company adopted the provisions of ASC 820, “Fair Value Measurements and Disclosures”. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, prepaid expenses, accounts payable and accrued expenses, and deferred revenue, approximate their fair market value based on the short-term maturity of these instruments. The Company did not identify any other assets or liabilities that are required to be presented in the consolidated balance sheets at fair value in accordance with ASC 820.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-based compensation

The Company records stock-based compensation in accordance with the guidance in ASC 718, “Compensation – Stock Compensation,” which requires the Company to recognize expense related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

Earnings Per Share, Policy [Policy Text Block]

Earnings per share

The Company follows ASC 260. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted EPS calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the EPS computation.

As of June 30, 2013 and 2012, the Company’s common stock equivalents were anti-dilutive.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentrations

For the three months ended June 30, 2013, three customers accounted for 43% of sales. For the three months ended June 30, 2012, two customers accounted for approximately 32% of sales. As of June 30, 2013, three customers accounted for 69% of the accounts receivable balance.

Income Tax, Policy [Policy Text Block]

Income taxes

The Company follows ASC 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of December 31, 2012, the Company reviewed its tax positions and determined there were no outstanding or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.

The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next 12 months.

The Company classifies tax-related penalties and net interest as income tax expense. The Company has recognized an income tax benefit of $5,297 and $31,969 for the three and nine month periods ended June 30, 2013, respectively.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent pronouncements 

In July 2012, the FASB issued authoritative guidance that is intended to simplify testing indefinite-lived intangible assets other than goodwill for impairment. The revised standard allows companies to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is “more-likely-than-not” that the asset is impaired. The guidance is effective for interim and annual impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of this guidance is not expected to have a material effect on the Company’s financial condition, results of operations or cash flows.

In February 2013, the FASB issued authoritative guidance on the reporting of reclassifications out of accumulated other comprehensive income. The guidance requires an entity to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount is reclassified to net income in its entirety in the same reporting period. The guidance is effective for fiscal years beginning after December 15, 2012, with early adoption permitted. The adoption of this guidance did not have a material effect on the Company’s financial condition, results of operations or cash flows.

In July 2013, the FASB issued Accounting Standards Update “ASU” 2013-11 on “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”.  The amendments in this ASU are to improve the current U.S. GAAP because they are expected to reduce diversity in practice by providing guidance on the presentation of unrecognized tax benefits and will better reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist.  Current U.S. GAAP does not include explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This Update applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013.  Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows.

XML

Note 3 - Fixed Assets, Net (Details) (USD $)	9 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Property, Plant and Equipment [Abstract]
Depreciation	$ 8,105	$ 2,028

XML

Note 1 - Summary of Significant Accounting Policies (Details) - Intangible Assets, Net (USD $)	Jun. 30, 2013	Sep. 30, 2012
Intangible Assets, Net [Abstract]
Software	$ 48,572	$ 48,572
Less: accumulated amortization	(40,256)	(28,112)
Intangible assets, net	$ 8,316	$ 20,460

XML

Document And Entity Information	9 Months Ended
	Jun. 30, 2013	Dec. 30, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	Idle Media, Inc.
Document Type	10-Q
Current Fiscal Year End Date	--09-30
Entity Common Stock, Shares Outstanding		60,746,743
Amendment Flag	false
Entity Central Index Key	0001451520
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

XML

Note 2 - Deferred Revenue (Details) (USD $)	Jun. 30, 2013	Sep. 30, 2012
Deferred Revenue Disclosure [Abstract]
Deferred Revenue, Current	$ 14,552	$ 16,630