**U.S.SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549**

 

**Form 10-QSB**

 

**(Mark One)**

 

| **ý** |   | **Quarterly  Report under Section 13 or 15(d) of the Securities Exchange Act of 1934**                                                                                                                                         |
|------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                           |
|       |   | **For  the quarterly period ended March 31, 2004.**                                                                                                                                                                            |
|       |   |                                                                                                                                                                                                                           |
| **o**      |   | **Transition  Report under Section 13 or 15(d)of the Exchange Act**                                                                                                                                                            |
|       |   |                                                                                                                                                                                                                           |
|       |   | **For the Transition Period from                  to                  ** |

 

**Commission File Number: 000-26073**

 

**Immediatek,Inc.**

(Exactname of small business issuer as specified in its charter)

 

| **Nevada**                                                |   | **86-0881193**                     |
|-----------------------------------------------------------|--------|------------------------------------|
| (State  or other jurisdiction  of incorporation)          |   | (I.R.S.  Employer  Identification) |
|                                                      |   |                               |
| **2435 N. Central Expressway Suite 1610, Richardson, TX** |   | **75080**                          |
| (Address  of principal executive offices)                 |   | (Zip  Code)                        |

 

Registrant’stelephone number, including area code: **(972)852-2876**

 

Check whether the issuer(1) filed all reports required to be filed by Section 13 or 15(d) of theExchange Act of 1934  during the past12  months  (or such shorter period that the registrant was required to filesuch reports),  and (2) has been subjectto such filing requirements for the past 90 days.

 

Yes ýNo o

 

APPLICABLEONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGDURING THE PRECEDING FIVE YEARS

 

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

 

Yes oNo o

 

APPLICABLEONLY TO CORPORATE ISSUERS

 

Common Stock, $0.001 parvalue per share, 500,000,000 shares authorized,  as of March 31, 2004, the issuer had 22,958,218 shares of commonstock outstanding.

 

Traditional SmallBusiness Disclosure Format (check one)

 

Yes oNo ý

 

 

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| PART I.    | FINANCIAL INFORMATION                                           |   |
|------------|-----------------------------------------------------------------|--------|
|       |                                                            |   |
| Item 1.    | Financial  Statements                                           |   |
|       | Balance Sheet (unaudited)                                       |   |
|       | Statements of Operations  (unaudited)                           |   |
|       | Statements of Cash Flows  (unaudited)                           |   |
|       | Notes  to Financial Statements                                  |   |
|       |                                                            |   |
| Item 2.    | Management’s  Discussion and Analysis of Plan of Operation |   |
|       |                                                            |   |
| Item 3.    | Controls  and Procedures                                        |   |
|       |                                                            |   |
| PART II.   | OTHER INFORMATION                                               |   |
|       |                                                            |   |
| Item 1.    | Legal Proceedings                                               |   |
|       |                                                            |   |
| Item 2.    | Changes in  Securities and Use of Proceeds                      |   |
|       |                                                            |   |
| Item 3.    | Defaults upon Senior  Securities                                |   |
|       |                                                            |   |
| Item 4.    | Submission  of Matters to a Vote of Security Holders            |   |
|       |                                                            |   |
| Item 5.    | Other  Information                                              |   |
|       |                                                            |   |
| Item 6.    | Exhibits  and Reports on Form 8-K                               |   |
|       |                                                            |   |
| Signatures |                                                            |

 

2

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PARTI. FINANCIAL INFORMATION

 

ITEM1.  FINANCIALSTATEMENTS AND EXHIBITS

 

Immediatek, Inc

(formerly ModernGroove Entertainment, Inc.)

(a Development Stage Company)

Balance Sheet

 
|                                                                                                      |   | **March 31,  2004** |    |
|-----------------------------------------------------------------------------------------------------------|--------|---------------------|---------|
| **Assets**                                                                                                |   |                |    |
|                                                                                                      |   |                |    |
| Current  assets:                                                                                          |   |                |    |
| Cash                                                                                                      |   | $                   | 126,237 |   |
| Accounts  receivable                                                                                      |   | 1,647               |    |
| Prepaid  rent                                                                                             |   | 5,760               |    |
| Total  current assets                                                                                     |   | 133,644             |    |
|                                                                                                      |   |                |    |
| Fixed  assets, net                                                                                        |   | 24,940              |    |
|                                                                                                      |   |                |    |
| Intellectual  property                                                                                    |   | 65,601              |    |
|                                                                                                      |   | $                   | 224,185 |   |
|                                                                                                      |   |                |    |
| **Liabilities and Stockholders’ (Deficit)**                                                          |   |                |    |
|                                                                                                      |   |                |    |
| Current  liabilities:                                                                                     |   |                |    |
| Accounts  payable                                                                                         |   | $                   | 96,731  |   |
| Accrued  liabilities                                                                                      |   | 18,540              |    |
| Subscriptions  payable                                                                                    |   | 305,300             |    |
| Total  current liabilities                                                                                |   | 420,571             |    |
|                                                                                                      |   |                |    |
| Convertible  debt                                                                                         |   | 9,500               |    |
|                                                                                                      |   |                |    |
| Stockholders’  (deficit):                                                                            |   |                |    |
| Common  stock, $0.001 par value, 500,000,000 shares authorized, 22,958,218 shares  issued and outstanding |   | 22,958              |    |
| Additional  paid-in capital                                                                               |   | 3,621,671           |    |
| (Deficit)  accumulated during development stage                                                           |   | (3,850,515          | )       |
|                                                                                                      |   | (205,886            | )       |
|                                                                                                      |   |                |    |
|                                                                                                      |   | $                   | 224,185 |   |

 

Theaccompanying notes are an integral part of these financial statements.

 

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Immediatek, Inc.

(formerly ModernGroove Entertainment, Inc.)

(a Development Stage Company)

Statements of Operations

 
|                                                                            |   | **Three months ended  March 31,** |     |
|---------------------------------------------------------------------------------|--------|-----------------------------------|----------|
|                                                                            |   | **2004**                          |     | **2003** |   |
|                                                                            |   |                              |     |   |   |
| Revenue,  net                                                                   |   | $                                 | 7,933    |   | $ | 8,965 |   |
|                                                                            |   |                              |     |   |   |
| Costs and  expenses:                                                            |   |                              |     |   |   |
| Direct  cost of services                                                        |   | 3,000                             |     | — |   |
| Network  and infrastructure                                                     |   | 1,753                             |     | — |   |
| Research  and development                                                       |   | 50,000                            |     | — |   |
| Sales and  marketing expenses                                                   |   | 58,118                            |     | — |   |
| Depreciation  expense                                                           |   | 734                               |     | — |   |
| General  and administrative expenses                                            |   | 108,784                           |     | 66,773 |   |
| Non-cash  consulting fees                                                       |   | —                            |     | 68,400 |   |
| Non-cash  compensation expense - related party                                  |   | —                            |     | 2,335,080 |   |
| Administrative  salaries                                                        |   | 18,900                            |     | — |   |
| Officer  salaries                                                               |   | 50,250                            |     | 5,992 |   |
| Total  expenses                                                                 |   | 291,539                           |     | 2,476,245 |   |
|                                                                            |   |                              |     |   |   |
| Net (loss)                                                                      |   | $                                 | (283,606 | ) | $ | (2,467,280 | ) |
|                                                                            |   |                              |     |   |   |
| Weighted  average number of common shares outstanding - basic and fully diluted |   | 22,958,218                        |     | 20,379,997 |   |
|                                                                            |   |                              |     |   |   |
| Net  (loss) per share - basic and fully diluted                                 |   | $                                 | (0.01    | ) | $ | (0.12 | ) |

 

The accompanying notes are an integral partof these financial statements.

 

4

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Immediatek, Inc.

(formerly ModernGroove Entertainment, Inc.)

(a Development Stage Company)

Statements of Cash Flow

 
|                                                                             |   | **Three  months ended  March 31,** |     |
|----------------------------------------------------------------------------------|--------|------------------------------------|----------|
|                                                                             |   | **2004**                           |     | **2003** |   |
|                                                                             |   |                               |     |   |   |
| **Cash flows  from operating activities**                                        |   |                               |     |   |   |
| Net (loss)                                                                       |   | $                                  | (283,606 | ) | $ | (2,467,280 | ) |
| Adjustments to reconcile net  (loss) to net cash (used) by operating activities: |   |                               |     |   |   |
| Depreciation                                                                     |   | 734                                |     | — |   |
| Shares issued for services                                                       |   | —                             |     | 68,400 |   |
| Shares issued as compensation  to related parties                                |   | —                             |     | 2,335,080 |   |
| (Increase) decrease in  accounts receivable                                      |   | —                             |     | 195 |   |
| (Decrease) in accounts payable                                                   |   | (14,196                            | )        | (6,189 | ) |
| Increase in accrued  liabilities                                                 |   | 18,540                             |     | — |   |
| Net cash (used) by operating  activities                                         |   | (278,528                           | )        | (69,794 | ) |
|                                                                             |   |                               |     |   |   |
| **Cash flows  from investing activities**                                        |   |                               |     |   |   |
| Purchase of fixed assets                                                         |   | (19,097                            | )        | — |   |
|                                                                             |   | (19,097                            | )        | — |   |
|                                                                             |   |                               |     |   |   |
| **Cash flows  from financing activities**                                        |   |                               |     |   |   |
| Payments on notes payable                                                        |   | —                             |     | (3,692 | ) |
| Proceeds from notes payable                                                      |   | —                             |     | 72,500 |   |
| Proceeds from subscriptions  payable                                             |   | 305,300                            |     | — |   |
| Net cash provided by financing  activities                                       |   | 305,300                            |     | 68,808 |   |
|                                                                             |   |                               |     |   |   |
| Net (decrease) in cash                                                           |   | 7,675                              |     | (986 | ) |
| Cash - beginning                                                                 |   | 118,562                            |     | 4,845 |   |
| Cash - ending                                                                    |   | $                                  | 126,237  |   | $ | 3,859 |   |
|                                                                             |   |                               |     |   |   |
| Supplemental disclosures:                                                        |   |                               |     |   |   |
| Interest paid                                                                    |   | $                                  | —   |   | $ | — |   |
| Income taxes paid                                                                |   | $                                  | —   |   | $ | — |   |
|                                                                             |   |                               |     |   |   |
| Number of shares issued for  services                                            |   | —                             |     | 380,000 |   |
| Number of shares issued for  services to related party                           |   | —                             |     | — |   |
| Number of shares issued as  compensation to related parties                      |   | —                             |     | 18,101,397 |   |

 

The accompanying notes are an integral partof these financial statements.

 

5

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Immediatek, Inc.

(formerly ModernGroove Entertainment, Inc.)

(a Development Stage Company)

Notes

 

**Note 1 - Basis of Presentation**

 

Theconsolidated interim financial statements included herein, presented inaccordance with United States generally accepted accounting principles andstated in US dollars, have been prepared by the Company, without audit,pursuant to the rules and regulations of the Securities and ExchangeCommission.  Certain information and footnotedisclosures normally included in financial statements prepared in accordancewith generally accepted accounting principles have been condensed or omittedpursuant to such rules and regulations, although the Company believes that thedisclosures are adequate to make the information presented not misleading.

These statements reflect all adjustments,consisting of normal recurring adjustments, which, in the opinion ofmanagement, are necessary for fair presentation of the information containedtherein.  It is suggested that theseconsolidated interim financial statements be read in conjunction with thefinancial statements of the Company for the year ended December 31, 2003 andnotes thereto included in the Company’s 10-KSB annual report.  The Company follows the same accountingpolicies in the preparation of interim reports.

Results of operations for the interim periodsare not indicative of annual results.

 

**Note 2 - Going concern**

 

The Company’sfinancial statements are prepared using the generally accepted accountingprinciples applicable to a going concern, which contemplates the realization ofassets and liquidation of liabilities in the normal course of business.  However, the Company has not generatedsignificant revenues.  In order toobtain the necessary capital, the Company has raised funds via privateplacement offering.  If the securitiesoffering does not provide sufficient capital, some of the shareholders of theCompany have agreed to provide sufficient funds as a loan over the nexttwelve-month period.  However, theCompany is dependent upon its ability to secure equity and/or debt financingand there are no assurances that the Company will be successful, withoutsufficient financing it would be unlikely for the Company to continue as a goingconcern.

 

**Note 3 – Fixed assets**

 

The Companypurchased $19,097 worth of computer equipment during the three months endedMarch 31, 2004.  Depreciation expensetotaled $734 and $-0- for the three months ended March 31, 2004 and 2003,respectively.

 

**Note 4 – Subscriptions payable**

 

During the threemonths ended March 31, 2004, the Company received cash totaling $305,300 from 7individual investors who subscribed to 1,017,667 shares of the Company’s $0.001par value common stock.  The share certificateshad not been issued to the investors as of March 31, 2004.

 

**Note 5 – Stockholders’ equity**

 

The Company is authorizedto issue 500,000,000 shares of $0.001 par value common stock.

 

Therewere no issuances of common stock during the three months ended March 31, 2003.

 

**Note 6 – Relatedparty transactions**

 

Convertible debt

The Company owed$9,500 in convertible debt to a shareholder as of March 31, 2004

 

6

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Item2.  MANAGEMENT’SDISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS

 

Immediatek, Inc.,formerly called ModernGroove Entertainment, Inc., and originally calledBarrington Laboratories, Inc., and, is a developmental stage company,hereinafter referred to as (“the Company”), was organized by the filing ofArticles of Incorporation with the Secretary of State of the State of Nevada onAugust 6, 1998.  The Articles ofIncorporation of the Company were amended on December 9, 2002 to officiallychange the name of the Company to Immediatek, Inc, and increase the number ofauthorized shares to five hundred million (500,000,000) shares of common stock having a par value of $0.001.  The Corporation shall have the authority toissue and five million (5,000,000) shares of preferred stock at a par value of $0.001.

 

Forward-Looking Statements

 

This quarterly report on Form 10-QSB includes“forward-looking statements” within the meaning of Section 27A of theSecurities Act of 1933, as amended (the “Securities Act”), and Section 21E ofthe Securities Exchange Act of 1934, as amended, which can be identified by theuse of forward-looking terminology such as, “may,” “expect,” “could,” “plan,”“seek,” “anticipate,” “estimate,” or “continue” or the negative thereof orother variations thereon or comparable terminology.

 

These forward-looking statements are subjectto various risks and uncertainties that could cause actual results to differmaterially from those referred to in the forward-looking statements and aremade pursuant to the “safe-harbor” provisions of the Private Securities LitigationReform Act of 1995.  These statementsare made based on management’s current expectations or beliefs as well asassumptions made by, and information currently available to, management.

 

Avariety of factors could cause actual results to differ materially from thoseanticipated in the Company’s forward-looking statements, including thefollowing factors: changes from anticipated levels of sales, access to capital,future national or regional economic and competitive conditions, changes inrelationships with customers, difficulties in developing and marketing newproducts, marketing existing products, customer acceptance of existing and newproducts, validity of patents, technological change, dependence on keypersonnel, availability of key component parts, dependence on third partymanufacturers, vendors, contractors, product liability, casualty to or otherdisruption of the production facilities, delays and disruptions in the shipmentof the Company’s product, and the ability of the Company to meet its statedbusiness goals.  For a detaileddiscussion of these and other cautionary statements and factors that couldcause actual results to differ from the Company’s forward-looking statements,please refer to the Company’s filings with the Securities and ExchangeCommission, especially Item 1. Description of Business” (including the “RiskFactors” section of Item 1) and “Item 6. Management’s Discussion and Analysisor Plan of Operation” of the Company’s 2003 Annual Report on Form 10-KSB.

 

Readers are cautioned not to place unduereliance on these forward-looking statements, which reflect management’sanalysis only as of the date hereof. The Company does not undertake anyobligation to publicly revise these forward-looking statements to reflectevents or circumstances that arise after the date hereof. Readers shouldcarefully review the risk factors described in other documents the Companyfiles from time to time with the Securities and Exchange Commission.

 

Recent Developments:  GoingConcern and Liquidity Problems

 

Our auditors have included anexplanatory paragraph in their audit opinion with respect to our consolidatedfinancial statements at December 31, 2003. The paragraph states that ourrecurring losses from operations and resulting continued dependence on accessto external financing raise substantial doubts about our ability to continue asa going concern. Furthermore, the factors leading to and the existence of theexplanatory paragraph may adversely affect our relationship with customers andsuppliers and have an adverse effect on our ability to obtain financing.

 

7

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We do not have sufficient workingcapital to sustain our operations.  Wehave been unable to generate sufficient revenues to sustain our operations. Wewill have to obtain funds to meet our cash requirements through businessalliances, such as strategic or financial transactions with third parties, thesale of securities or other financing arrangements, or we may be required tocurtail our operations, seek a merger partner, or seek protection under federalbankruptcy laws. Any of the foregoing may be on terms that are unfavorable tous or disadvantageous to existing stockholders. In addition, no assurance maybe given that we will be successful in raising additional funds or enteringinto business alliances.

##### *** ***

##### ***Liquidity and Capital Resources***

 

Since inception, we have utilizedthe proceeds from a number of private sales of our equity securities, theexercise of options and warrants to meet our working capital requirements. AtMarch 31, 2004, we had working capital of $126,237.

 

Our operations generated lossesin 2003 and continue to generate losses in 2004. Our cash increased $7,675during the three months ended March 31, 2004 with operating activities using$278,528 of cash. We funded operations primarily through cash on hand fromborrowings and equity offerings over the last couple of years.  No assurance can be given that suchactivities will continue to be available to provide funding to us.  Our business plan for 2004 is predicatedprincipally upon the successful marketing of our music software products andsales of concert CD’s from our new wholly owned subsidiary, DiscLive, Inc.. Weanticipate that our existing working capital resources and revenues fromoperations will not be adequate to satisfy our funding requirements in 2004.

 

Our working capital requirementswill depend upon many factors, including the extent and timing of our productsales, our operating results, the status of competitive products, and actualexpenditures and revenues compared to our business plan. We are currentlyexperiencing declining liquidity, losses from operations and negative cashflows, which make it difficult for us to meet our current cash requirements,including payments to vendors, and may jeopardize our ability to continue as agoing concern. We intend to address our liquidity problems by controllingcosts, seeking additional funding (through capital raising transactions andbusiness alliances) and maintaining focus on revenues and collections.

 

Ifour losses continue, we will have to obtain funds to meet our cash requirementsthrough business alliances, such as strategic or financial transactions withthird parties, the sale of securities or other financing arrangements, or wemay be required to curtail our operations, seek a merger partner, or seekprotection under federal bankruptcy laws. Any of the foregoing may be on termsthat are unfavorable to us or disadvantageous to existing stockholders. Inaddition, no assurance may be given that we will be successful in raisingadditional funds or entering into business alliances.

 

Results of Operations

 

During the three months ended March 31, 2004, the Company generated $7,933 in revenues, this compares to $8,965 in revenues for the same period last year.  In its most recent three month operatingperiod ended March 31, 2004, the Company experienced a net loss of $283,606versus a net loss of $2,467,280 for 

 

8

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the same period last year.  Thebulk of this loss came from general and administrative expenses of $108,784;sales and marketing expenses of $58,118 and research and development of$50,000. During the first three months, the Company continued to seek new strategiesfor marketing its business plan.

 

For the quarter ended March 31, 2004, approximately 42% of sales werederived from one customer, SOLD-RITE, LLC.

 

The major components to expenses faced by the company in its day-to-dayoperations includes auditor fees, legal fees, developing software, databases,marketing its internet site, and general administrative expenses.  If the Company becomes profitable, thecompany will access salaries and adding additional personnel to thepayroll.  Management intends to continueminimize costs until such a time in its discretion it believes expansion wouldbe prudent.  One element in making thisdetermination is positive cash flow on a quarterly basis.  If or when the company is successful inachieving this quarterly positive cash flow, it is likely that the company willconsider expanding its personnel which will increase costs.

 

Plan of Operation

 

Management does not believe that the Company will be able to generatesignificant profit during the coming year, unless the company can expand itscustomer base for its NetBurn (tm) products and it can operate its new whollyowned subsidiary, DiscLive, Inc. at a profit. NetBurn (tm) is a patent- pending digital delivery system which allowsweb and NetBurn Station(tm) users to download and burn fully licensed musictracks by utilizing a simple “one- click” interface, while at the same timeprotecting the copyright holders who own the material. DiscLive is a companywhich records live concerts, manufactures and sell CD recordings of the eventwithin minutes of the concert’s ending. Management does not believe the companywill generate any significant profit in the near future, as developmental andmarketing costs will most likely exceed any anticipated revenues.

 

Liquidity and Capital Resources

 

During the first quarter, the Company sold 1,017,667 shares of its$0.001 par value common stock to seven accredited investors for the sum of$305,300.  The shares will be issued inthe second quarter.

 

The Company could be required to secure additional financing to fullyimplement its entire business plan. There are no guarantees that such financing will be available to theCompany, or if available, will be on terms and conditions satisfactory to management.

 

The Company has no current commitments or other long-term debt.  Additionally,  the Company has and may in the future invest in short-terminvestments from time to time.  Therecan be no assurance that these investments will result in profit or loss.

 

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Employees

 

The Company currently has nine full time employees and three part timeemployees. The Company has no material commitments for capital expenditures nordoes it foresee the need for such expenditures over the next year.

 

Market For Company’s Common Stock

 

Market Information

 

On September 14, 1999, the Company’s common stock was initially clearedfor trading on the OTC Bulletin Board system under the symbol BRRT.  The Company subsequently changed its name toModernGroove Entertainment, Inc., and its trading symbol to:  MODG. On January 7, 2003, the Company changed its name to Immediatek, Inc. andits trading symbol to IMDK.  On February25, 2003, the Company initiated a 1 for 250 reverse stock split and changed ittrading symbol to ITEK.  A very limitedmarket exists for the trading of the Company’s common stock.

 

As of March 31, 2004 there were approximately 4,556,698 warrants topurchase the Company’s common stock. The following chart reflects the number ofwarrants, exercise price and expiration date for the warrants outstanding 

 
| **# of Warrants** |   | **Exercise Price** |   | **Expiration** |   |
|-------------------|--------|--------------------|--------|----------------|--------|
| 3,002,302         |   |               | $      | 020            |   | March 22, 2007 |   |
| 300,230           |   |               | $      | 0.20           |   | March 22, 2007 |   |
| 200,000           |   |               | $      | 1.00           |   | March 20, 2005 |   |
| 166,667           |   |               | $      | 0.30           |   | February 19, 2006 |   |
| 270,833           |   |               | $      | 0.15           |   | April 30, 2004 |   |
| 145,833           |   |               | $      | 0.15           |   | April 30, 2004 |   |
| 20,833            |   |               | $      | 0.15           |   | April 30, 2004 |   |
| 450,000           |   |               | $      | 0.65           |   | April 14, 2006 |   |

 

All warrants set to expire on April 30, 2004 have been exercised andcertificates will be issued by the Company shortly. The Warrants may not besold or transferred without complying with Rule 144 in the absence of aneffective registration or other compliance under the Securities Act.  There is currently no Common Stock, which issubject to outstanding options to purchase, or securities convertible into, theCompany’s common stock.

 

Other than affiliates, there is currently no common stock of theCompany which could be sold under Rule 144 under the Securities Act of 1933 asamended.

 

Dividends

 

Holders of common stock are entitled to receive such dividends as theboard of directors may from time to time declare out of funds legally availablefor the payment of dividends. No dividends have been paid on our common stock,and we do not anticipate paying any dividends on our common stock in theforeseeable future.

 

Item3. Controls and Procedures

 

Within the 90 days priorto the date of this report, we carried out an evaluation,  under the supervision and with theparticipation of our management, including our Chief Executive Officer andChief Financial Officer, of the effectiveness of the design and operation ofour disclosure controls and procedures pursuant to Securities Exchange ActRule  13a-14.  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded thatour disclosure controls and procedures are effective in timely alerting them tomaterial information relating to us (including our consolidatedsubsidiaries)  required to be includedin our periodic SEC filings.  There havebeen no significant changes in our internal controls or in other factors thatcould significantly affect internal controls subsequent to the date of theirevaluation, including any corrective actions with regard to significantdeficiencies and material weaknesses.

 

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PART II OTHER INFORMATION

 

ITEM 1.  Legal Proceedings

 

The Company as plaintiffinitiated a lawsuit in Texas State District Court on October 2,2003 againstFRANK MERHIB, SCOTT WILDING,JENNIFER MERHIB, J & SON CONSULTING, a FloridaCorporation, and RESEARCH INVESTMENT GROUP, a Florida Corporation alleging thatthe aforementioned defendants engaged jointly and severally in activityamounting to, among other causes of action, business disparagement of Immediatekand its president, Zach Bair. The lawsuit has demanded certain damages from thedefendants and the court has granted temporary injunctions against the severaldefendants. The parties have entered into settlement discussions.

 

ITEM 2.  Changesin Securities and Use of Proceeds

 

We have initiated aRegulation D, Rule 506 private placement whereby the company is offering up to2,000,000 shares of its common stock at $0.30 per share for a total offering ofup to $600,000. As of March 31, 2004 we have sold 1,017,667 shares for the sumof $305,300.

 

ITEM 3.  Defaultsupon Senior Securities

 

None.

 

ITEM4.  Submission ofMatters to a Vote of Security Holders

 

During the quarter endedMarch 31, 2004, no matters were submitted to the Company’s security holders.

 

ITEM5.  Other Information

 

OnApril 9, 2004 Immediatek, Inc. entered into an Acquisition Agreementto acquire all of the issued and outstanding capital stock of DiscLive, Inc., aDelaware corporation. In exchange for the DiscLive capital stock we gave eachof the DiscLive stockholders their pro rata share of 1,666,667 shares of ourcommon stock. The agreement provides that delivery of the Immediatek commonstock and DiscLive capital stock will be delayed for a period of six (6) monthsto provide for adjustments or an unwinding if certain circumstances, asdescribed in the agreement, occur or fail to occur. Upon completion of thetransaction DiscLive will become a wholly owned subsidiary of Immediatek.

 

DiscLiveprovides a service to concert goers whereby DiscLive contracts with an artistor recording company, records a live concert and then offers for sale limitedaddition recordings of the concert within minutes after the

 

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concerthas ended.

 

Wehave recently completed a round of exempt financing including certain venturecapital purchases of our common stock and completion of a Regulation D, Rule506 private placement offering.  Thelargest single investment was by Jess Morgan & Co., Inc. in the amount ofapproximately $600,000 which resulted in the issuance to Jess Morgan ofapproximately 2,000,000 shares of our common stock. Our financing activitieshave raised a total of approximately $1,095,860 and resulted in our issuance of3,652,866 shares of our common stock and 3,669,199 warrants. The warrantsexpire at various times with an average exercise price of $0.27 per share.

 

ITEM6.  Exhibits andReports on Form 8-K

 

(a)  Exhibits

 
| **Exhibit  Number** |   | **Title of  Document**                                                                               |
|---------------------|--------|------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                 |
| 31.1                |   | Chief Executive  Officer-Section 302 Certification pursuant to Section 302 Sarbanes-Oxley Act.       |
| 31.2                |   | Chief Financial Officer  Section 302 Certification pursuant to Section 302 Sarbanes-Oxley Act        |
| 32.1                |   | Chief Executive  Officer-Section 906 Certification pursuant to Section 902 Sarbane-Oxley Act.        |
| 32.2                |   | Chief Financial Officer  Section 906 Certification pursuant to Section 902 of the Sarbanes-Oxley Act |

 

(b)  Reports on Form 8-K

 

1. Report on Form8K filed with the Commission on April 20, 2004 concerning items 2,5 and 7.

 

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SIGNATURES

 

In accordance withSection 12 of the Securities Exchange Act of 1934,  the registrant caused this registration statement to be signed onits behalf by the undersigned, thereunto duly authorized.

 
|                | Immediatek, Inc.         |   |
|---------------------|--------------------------|--------|
|                | (Registrant)             |   |
|                |                     |
| Dated: May 14, 2004 | By:  /s/ Zach  Bair |   |
|                | Zach Bair                |
|                | Chairman of the Board    |
|                | President, Secretary     |
|                | Chief Executive Officer  |
|                     |                          |        |  |

 

In accordance with theExchange Act, this report has been signed below by the following persons on behalfof the Registrant and in the capacities and on the dates indicated.

 

 
|               | IMMEDIATEK,  INC.       |   |
|--------------------|-------------------------|--------|
|               |                    |
|               |                    |
| Date: May 14, 2004 | By:  /s/ Zach Bair |   |
|               | Zach Bair               |
|               | Chief Executive Officer |
|                    |                         |        |  |

 

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