**UNITED
      STATES**


**SECURITES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-QSB**










**(Mark
                One)**þ
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934For
                the quarterly period ended**June
                30, 2006** ̈
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACTFor
                the transition period fromtoCommission
                file number:**000-26073**








**IMMEDIATEK,
      INC** **.**










**Nevada**
            
            **86-0881193**(State
                or other jurisdiction of incorporation or organization)
            
            (IRS
                Employer Identification
                No.)







**10488
      Brockwood Road**


**Dallas,
      Texas 75238**








**(972)
      852-2876**

















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





Indicate
      by check mark whether the registrant is a shell company (as defined in
      Rule 12b-2 of the Exchange Act)  Yes o No þ





As
      of
      June 30, 2006 and August 10, 2006, the issuer had 474,807 shares of common
      stock
      outstanding.





Transitional
      Small Business Disclosure Format (check one):  Yes o No þ











**IMMEDIATEK,
      INC.**





**TABLE
      OF CONTENTS**








**Page****Introduction**
            1**Forward-Looking
                Statements**
            2**Part
                I - Financial Information**
            4Item
                1. Financial Statements
            4Condensed
                Consolidated Balance Sheet at June 30, 2006
            4Condensed
                Consolidated Statements of Operations for the period from April 1,
                2006 to
                June 7, 2006 (unaudited), the period from June 8, 2006 to June 30,
                2006
                (unaudited), the period from January 1, 2006 to June 7, 2006 (unaudited)
                and the three and six months ended June 30, 2005 (restated)
                (unaudited)
            5Condensed
                Consolidated Statements of Cash Flow for the period from April 1,
                2006 to
                June 7, 2006 (unaudited), the period from June 8, 2006 to June 30,
                2006
                (unaudited), the period from January 1, 2006 to June 7, 2006 (unaudited)
                and the three and six months ended June 30, 2005 (restated)
                (unaudited)
            6Notes
                to Condensed Consolidated Financial Statements (unaudited)
            7Item
                2. Management’s Discussion and Analysis or Plan of
                Operation
            27Item
                3. Controls and Procedures.
            38**Part
                II - Other Information**
            40Item
                6. Exhibits
            40








i


**INTRODUCTION**





*Unless
      the context otherwise indicates, all references in this Quarterly Report on
      Form
      10-QSB to the “Company,” “Immediatek,” “we,” “us,” “our” or “ours” or similar
      words are to Immediatek, Inc. and its direct, wholly-owned subsidiary, DiscLive,
      Inc. Accordingly, there are no separate financial statements for DiscLive,
      Inc.*





**Change
      in Control**





On
      June
      8, 2006, Immediatek issued and sold, and Radical Holdings LP purchased,
      4,392,286 shares of Series A Convertible Preferred Stock of Immediatek for
      an
      aggregate purchase price of $3.0 million, or $0.68 per share of
      Series A Convertible Preferred Stock, pursuant to the Securities Purchase
      Agreement, as amended, or the Purchase Agreement, by and among Immediatek,
      Radical Holdings LP, or Radical, and the other parties thereto. The
      Series A Convertible Preferred Stock is, at the option of the holders of
      the Series A Convertible Preferred Stock, convertible at any time into that
      aggregate number of full shares of Immediatek common stock representing 95%
      of
      the total common stock outstanding after giving effect to the
      conversion.





A
      holder
      of a share of the Series A Convertible Preferred Stock is entitled to vote
      on
      all matters required or permitted to be voted upon by the stockholders of
      Immediatek. Each holder of a share of the Series A Convertible Preferred
      Stock is entitled to the number of votes equal to the largest number of full
      shares of Immediatek common stock into which all shares of the Series A
      Convertible Preferred Stock held by that holder could be converted. As a result
      and as of June 8, 2006, a change in control of Immediatek occurred because
      Radical beneficially owns 95% of the outstanding securities entitled to vote
      on
      matters required or permitted to be submitted to the stockholders of
      Immediatek.





Additionally,
      for so long as any shares of the Series A Convertible Preferred Stock
      originally issued under the Purchase Agreement remain outstanding, the holders
      of a majority-in-interest of the shares of the Series A Convertible
      Preferred Stock originally issued under the Purchase Agreement then outstanding
      have the right to designate all the persons to serve as directors on the board
      of directors of Immediatek and its subsidiaries.





**Reverse
      Stock Split**





At
      the
      close of business on June 6, 2006, the Company effected a 100-for-1 reverse
      stock split of its then outstanding common stock. After giving effect to the
      reverse stock split, each stockholder of record immediately prior to the reverse
      stock split holds one one-hundredth of the shares they held before the reverse
      stock split. All fractional shares were rounded up to the next whole number.
      Accordingly, all references in this Quarterly Report on Form 10-QSB to numbers
      of shares of Company common stock, including those relating to prior periods,
      have been adjusted to reflect the reverse stock split.




**New
      Basis of Accounting**





As
      a
      result of the change in control of Immediatek by virtue of the purchase of
      the
      Series A Convertible Preferred Stock by Radical, we have “pushed down” our basis
      to a proportionate amount of our underlying assets and liabilities acquired
      based on the estimated fair market values of the assets and liabilities. The
      primary changes to the balance sheet reflect:





·
            adjustments
                to our fixed assets to reflect a step-up in basis of those
                assets;


·
            the
                recording of a value for our trade names, trade marks and covenants
                not to
                compete;


·
            adjustments
                to historical goodwill to reflect goodwill arising from the push
                down
                accounting adjustments;


·
            the
                recording of a value for assets held for
                sale;


·
            the
                recording of a value for our deferred tax asset and liability;
                and


·
            an
                increase in additional paid-in capital from these
                adjustments.





1


The
      primary changes to the statements of operations are:





·
            an
                increase in net operating loss due to a higher level of depreciation
                from
                the increase in the depreciable basis of fixed assets;
                and


·
            an
                increase in net operating loss due to a higher level of amortization
                related to the increase in the amortizable basis of intangible
                assets.





The
      primary changes to the statements of cash flow are:





·
            a
                decrease in net cash used in operating activities due to a higher
                level of
                depreciation from the increase in the depreciable basis of fixed
                assets;
                and


·
            a
                decrease in net cash used in operating activities due to a higher
                level of
                amortization related to the increase in the amortizable basis of
                intangible assets.





Due
      to
      the impact of the changes resulting from the “push down” accounting adjustments
      described above, the statements of operations and the statements of cash flow
      presentations separate our results and cash flows into two periods: (1) the
      period ending on June 7, 2006, which was the day prior to the consummation
      of
      the sale of the Series A Convertible Preferred Stock, and (2) the period
      beginning on June 8, 2006 utilizing the new basis of accounting. The results
      and
      cash flows are further separated by a heavy black line to indicate the effective
      date of the new basis of accounting.





**____________________________**





**FORWARD−LOOKING
      STATEMENTS**





This
      Quarterly Report on Form 10-QSB and the materials incorporated by reference
      into
      this Quarterly Report on Form 10-QSB include “forward-looking statements”
intended to qualify for the safe harbor from liability established by the
      Private Securities Litigation Reform Act of 1995. These forward-looking
      statements generally can be identified as such because the context of the
      statement includes words such as we “believe,” “expect,” “anticipate,” “will,”
“should” or other words of similar import. Similarly, statements in this
      Quarterly Report on Form 10-QSB that describe our objectives, plans or goals
      also are forward-looking statements. These statements include those made on
      matters such as our financial condition, litigation, accounting matters, our
      business, our efforts to grow our business and increase efficiencies, our
      efforts to use our resources judicially, our efforts to implement new financial
      software, our liquidity and sources of funding and our capital expenditures.
      All
      forward-looking statements are subject to certain risks and uncertainties that
      could cause actual results to differ materially from those in the
      forward-looking statements. The forward-looking statements included in this
      Quarterly Report on Form 10-QSB are made only as of the date of this report.
      Certain factors that could cause actual results to differ include, among
      others:





·
            our
                inability to continue as a going
                concern;


·
            our
                history of losses, which are likely to
                continue;


·
            our
                utilization of funds received in a manner that is
                accretive;


·
            our
                ability to generate sufficient funds from operating activities to
                fund our
                operations,


·
            our
                ability to obtain a sufficient number of contracts to record live
                content,


·
            changes
                in anticipated levels of sales of our
                products;


·
            competition,
                including competition from a substantial competitor that possesses
                greater
                resources, both financially and in the industry, than we
                do;


·
            dependence
                on third party manufacturers and
                contractors;


·
            changes
                in technology that may make our products less attractive or
                obsolete;


·
            the
                development of new products or innovations by our
                competitors;


·
            difficulties
                in developing and marketing new products;
                and


·
            changes
                in conditions affecting the economy
                generally.





2


For
      a
      discussion of these and other risks and uncertainties that could cause actual
      results to differ materially from those contained in our forward-looking
      statements, please refer to “Risk Factors” in our Annual Report on Form 10-KSB
      for the year ended December 31, 2005.








3


**PART
      I - FINANCIAL STATEMENTS**





**Item
      1. Financial Statements**





**Immediatek,
                Inc.****Condensed
                Consolidated Balance Sheet**




**June
                30, 2006**(unaudited)**Assets**Current
                assets:Cash
            
            $
            1,802,290Accounts
                receivable
            
            
            4,145Prepaid
                expenses and other current assets
            
            
            10,000Total
                current assets
            
            
            1,816,435Fixed
                assets, net
            
            
            132,025Assets
                held for sale
            
            
            30,810Intangible
                assets, net
            
            
            42,220Goodwill
            
            
            2,792,078Deferred
                tax asset, net
            
            
            64,464**Total
                Assets**
            
            $
            4,878,032**Liabilities
                and Stockholders' Equity**Current
                liabilities:Accounts
                payable
            
            $
            415,685Accrued
                liabilities
            
            
            328,709Accrued
                interest
            
            
            10,925Convertible
                notes payable
            
            
            100,000Total
                current liabilities
            
            
            855,319Deferred
                tax liability
            
            
            64,464**Total
                Liabilities**
            
            $
            919,783Series
                A Convertible Preferred Stock (conditionally redeemable) -4,392,286
                authorized, issued and outstanding
            
            $
            3,000,000Stockholders'
                Equity:Common
                stock, $0.001 par value, 500,000,000 sharesauthorized,
                474,807 shares issued and outstanding
            
            
            475Additional
                paid-in capital
            
            
            936,396Retained
                earnings
            
            
            21,378Total
                Stockholders' Equity
            
            
            958,249**Total
                Liabilities, Preferred Stock and Stockholders'
                Equity**
            
            $
            4,878,032





See
      accompanying notes to condensed consolidated financial
      statements


4


**Immediatek,
                Inc.****Condensed
                Consolidated Statements of
                Operations**




**For
                the Three Months Ended**
            
            **For
                the Six Months Ended****June
                30,**
            
            **June
                30,****2006**
            
            **2005**
            
            **2006**
            
            **2005**(restated)
            
            
            
            
            
            (restated)(unaudited)
            
            (unaudited)
            
            (unaudited)
            
            (unaudited)(see
                Note 4)
            
            
            
            (see
                Note 4)Successor
            
            Predecessor
            
            
            
            Successor
            
            PredecessorJune
                8 -
              June
                30
            
            April
                1 -
              June
                7
            
            Predecessor
            
            June
                8 -
              June
                30
            
            January
                1 - June 7
            
            PredecessorRevenues
            
            $
            19,740
            
            $
            2,425
            
            $
            56,000
            
            $
            19,740
            
            $
            19,451
            
            $
            76,795Cost
                of sales
            
            
            7,472
            
            
            24,645
            
            
            30,196
            
            
            7,472
            
            
            43,584
            
            
            52,606Gross
                Margin
            
            
            12,268
            
            
            (22,220
            )
            
            25,804
            
            
            12,268
            
            
            (24,133
            )
            
            24,189Expenses:General
                and administrative expenses
            
            
            5,459
            
            
            17,656
            
            
            19,297
            
            
            5,459
            
            
            34,903
            
            
            139,939Consulting
                services
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            18,210Professional
                fees
            
            
            20,259
            
            
            208,133
            
            
            31,504
            
            
            20,259
            
            
            328,347
            
            
            69,420Salaries
                and benefits
            
            
            31,524
            
            
            59,726
            
            
            68,817
            
            
            31,524
            
            
            89,130
            
            
            143,235Non-cash
                stock compensation
            
            
            -
            
            
            -
            
            
            16,197
            
            
            -
            
            
            3,410
            
            
            52,001Non-cash
                consulting expense
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            37,680Depreciation
                and amortization
            
            
            2,867
            
            
            1,418
            
            
            78,673
            
            
            2,867
            
            
            2,755
            
            
            117,715Gain
                on settlement of accounts payable
            
            
            -
            
            
            (91,894
            )
            
            -
            
            
            -
            
            
            (140,525
            )
            
            -Total
                expenses
            
            
            60,109
            
            
            195,039
            
            
            214,488
            
            
            60,109
            
            
            318,020
            
            
            578,200Net
                operating loss
            
            $
            (47,841
            )
            $
            (217,259
            )
            $
            (188,684
            )
            $
            (47,841
            )
            $
            (342,153
            )
            $
            (554,011
            )Other
                expense:Gain
                (loss) on extinguishment of debt
            
            
            69,219
            
            
            5,024
            
            
            -
            
            
            69,219
            
            
            5,024
            
            
            (46,000
            )Interest
                expense, net
            
            
            -
            
            
            (35,244
            )
            
            (43,614
            )
            
            -
            
            
            (73,276
            )
            
            (78,414
            )Net
                income (loss)
            
            $
            21,378
            
            $
            (247,479
            )
            $
            (232,298
            )
            $
            21,378
            
            $
            (410,405
            )
            $
            (678,425
            )Deemed
                dividend related to beneficialconversion
                feature on Series A convertiblepreferred
                stock
            
            
            (3,000,000
            )
            
            -
            
            
            -
            
            
            (3,000,000
            )
            
            -
            
            
            -Net
                loss attributable to common stockholders
            
            $
            (2,978,622
            )
            $
            (247,479
            )
            $
            (232,298
            )
            $
            (2,978,622
            )
            $
            (410,405
            )
            $
            (678,425
            )Weighted
                average number of common sharesoutstanding
                - basic and fully diluted
            
            
            466,435
            
            
            466,435
            
            
            309,373
            
            
            394,877
            
            
            394,877
            
            
            306,390Basic
                and diluted loss per common shareattributable
                to common stockholders
            
            $
            (6.39
            )
            $
            (0.53
            )
            $
            (0.75
            )
            $
            (7.54
            )
            $
            (1.04
            )
            $
            (2.21
            )




See
      accompanying notes to condensed consolidated
      financial statements


5





**Immediatek,
                Inc.****Condensed
                Consolidated Statements of Cash
                Flow**




**For
                the Three Months Ended**
            
            **For
                the Six Months Ended****June
                30,**
            
            **June
                30,****2006**
            
            **2005**
            
            **2006**
            
            **2005**(restated)
            
            
            
            
            
            (restated)(unaudited)
            
            (unaudited)
            
            (unaudited)
            
            (unaudited)(see
                Note 4)
            
            
            
            (see
                Note 4)Successor
            
            Predecessor
            
            
            
            Successor
            
            PredecessorJune
                8 -
              June
                30
            
            April
                1 -
              June
                7
            
            Predecessor
            
            June
                8 -
              June
                30
            
            January
                1 - June 7
            
            Predecessor**Cash
                flows from operating activities**Net
                income (loss)
            
            $
            21,378
            
            $
            (247,479
            )
            $
            (232,298
            )
            $
            21,378
            
            $
            (410,405
            )
            $
            (678,425
            )Depreciation
                and amortization
            
            
            2,867
            
            
            1,418
            
            
            78,673
            
            
            2,867
            
            
            2,755
            
            
            117,715Non-cash
                interest expense
            
            
            -
            
            
            7,436
            
            
            17,949
            
            
            -
            
            
            12,353
            
            
            29,563Non-cash
                consulting fees
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            37,680Non-cash
                stock compensation
            
            
            -
            
            
            -
            
            
            16,197
            
            
            -
            
            
            3,410
            
            
            52,001(Gain)
                loss on extinguishment of debt
            
            
            (69,219
            )
            
            (5,024
            )
            
            -
            
            
            (69,219
            )
            
            (5,024
            )
            
            46,000Adjustments
                to reconcile net income (loss) tonet
                cash used in operating activities:Accounts
                receivable
            
            
            (145
            )
            
            -
            
            
            -
            
            
            (145
            )
            
            (4,000
            )
            
            73,281Prepaid
                expenses and other current assets
            
            
            24,900
            
            
            81,265
            
            
            (14,202
            )
            
            24,900
            
            
            (26,000
            )
            
            (345
            )Accounts
                payable
            
            
            (134,060
            )
            
            (5,034
            )
            
            (1,677
            )
            
            (134,060
            )
            
            61,233
            
            
            (888
            )Accrued
                liabilities
            
            
            (196,635
            )
            
            37,188
            
            
            37,819
            
            
            (196,635
            )
            
            17,267
            
            
            57,096Accrued
                interest
            
            
            -
            
            
            16,969
            
            
            23,167
            
            
            -
            
            
            47,895
            
            
            23,037Net
                cash used in operating activities
            
            
            (350,914
            )
            
            (113,261
            )
            
            (74,372
            )
            
            (350,914
            )
            
            (300,516
            )
            
            (243,285
            )**Cash
                flows from investing activities**Purchase
                of fixed assets
            
            
            -
            
            
            (907
            )
            
            -
            
            
            -
            
            
            (2,476
            )
            
            -Net
                cash used in investing activities
            
            
            -
            
            
            (907
            )
            
            -
            
            
            -
            
            
            (2,476
            )
            
            -**Cash
                flows from financing activities**Cash
                deficit
            
            
            -
            
            
            -
            
            
            2,435
            
            
            -
            
            
            2,951
            
            
            2,435Payments
                on notes payable
            
            
            (528,149
            )
            
            -
            
            
            (6,200
            )
            
            (528,149
            )
            
            (18,606
            )
            
            (236,200
            )Proceeds
                from notes payable
            
            
            -
            
            
            60,000
            
            
            27,500
            
            
            -
            
            
            347,000
            
            
            455,500Proceeds
                from issuance of Series A convertiblepreferred
                stock
            
            
            2,653,000
            
            
            -
            
            
            -
            
            
            2,653,000
            
            
            -
            
            
            -Net
                cash provided by financing activities
            
            
            2,124,851
            
            
            60,000
            
            
            23,735
            
            
            2,124,851
            
            
            331,345
            
            
            221,735Net
                increase (decrease) in cash
            
            
            1,773,937
            
            
            (54,168
            )
            
            (50,637
            )
            
            1,773,937
            
            
            28,353
            
            
            (21,550
            )Cash
                - beginning
            
            
            28,353
            
            
            82,521
            
            
            50,637
            
            
            28,353
            
            
            -
            
            
            21,550Cash
                - ending
            
            $
            1,802,290
            
            $
            28,353
            
            $
            -
            
            $
            1,802,290
            
            $
            28,353
            
            $
            -Supplemental
                disclosures:Interest
                paid
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Income
                taxes paid
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Number
                of shares issued for consulting
              services
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            2,640Value
                of shares issued for consulting services
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            37,680Number
                of shares issued for settlement of
              contingencies
            
            
            -
            
            
            108,662
            
            
            -
            
            
            -
            
            
            108,662
            
            
            -Value
                of shares issued for settlement of
              contingencies
            
            $
            -
            
            $
            1,521,268
            
            $
            -
            
            $
            -
            
            $
            1,521,268
            
            $
            -Number
                of shares issued for conversion of
              notes
                payable
            
            
            -
            
            
            42,040
            
            
            -
            
            
            -
            
            
            42,040
            
            
            7,000Value
                of shares issued for conversion of
              notes
                payable
            
            $
            -
            
            $
            588,560
            
            $
            -
            
            $
            -
            
            $
            588,560
            
            $
            126,000Number
                of shares issued for acquisition of
              assets
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            16,000Value
                of shares issued for acquisition of assets
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            288,000




See
      accompanying notes to condensed consolidated
      financial statements





6





**IMMEDIATEK,
      INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2006**


**(Unaudited)**




**NOTE
      1 - RESTATEMENT OF PRIOR YEARS’ CONSOLIDATED FINANCIAL
      STATEMENTS**





In
      connection with the preparation of our audit of fiscal 2005 and a diligence
      process conducted by an investor, we determined that there were errors in
      accounting treatment and reported amounts in our previously filed consolidated
      financial statements for the years ended December 31, 2005, 2004 and 2003.
      As a
      result, we restated our consolidated financial statements for those years in
      amendments to our Annual Reports on Forms 10-KSB for the years ended December
      31, 2005 and 2004, which were filed on July 18, 2006 and July 20, 2006,
      respectively, with the Securities and Exchange Commission.





As
      a
      result of the restatement, we are designing internal procedures and controls
      for
      purposes of the preparation and certification of our consolidated financial
      statements going forward. In this process, we identified certain errors in
      accounting determinations and judgments, which have been reflected in the
      restated consolidated financial statements.





*Summary
      of Adjustments by Category*





The
      restated consolidated financial statements include adjustments related primarily
      to the following:





*Common
      Stock Issued to Officers for Intellectual Property* .
      During the first quarter of 2003, the Company issued 181,004 shares of its
      $0.001 par value common stock to its officers in  exchange
      for intellectual property. Pursuant to Statement
      of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” assets acquired independently are
      to be recorded at their current fair  values.
      At the time of the transaction, there was not a readily available fair value
      to
      the intellectual property acquired and,  therefore,
      value was assessed using the actual hard costs attributable to the asset based
      on documentation provided by the  officers.
      The fair value of the shares given as consideration for the intellectual
      property exceeded the asset value by  $2,335,081,
      which was recorded as compensation. Upon subsequent review of the transaction,
      the Company determined that  an
      independent valuation of the consideration paid was appropriate given the
      magnitude of the excess value received. Pursuant  to
      the aforementioned valuation, prepared by an independent third party, the
      Company restated its 2003 financial  statements
      with the filing of the 2005 financial statements, reflecting a decrease in
      compensation expense in the amount of $2,226,479 in order to reflect the new
      value  attributable
      to the consideration paid. It was subsequently determined that it was
      inappropriate to revalue this transaction. As a result, the restated accounting
      treatment has been rescinded and the amounts have been adjusted to the original
      accounting treatment based on fair market value of the underlying shares that
      were exchanged in the transaction.





*Warrants
      and Options* .
      During the year ended December 31, 2004, the Company issued warrants and options
      to purchase up to 49,756 shares of Company common stock to various individuals
      in exchange for consulting services provided to the Company.  As
      of December 31, 2005 and 2004, no expense had been recorded. The warrants and
      options were subsequently valued at  $1,272,522
      using the Black-Scholes option pricing model. The Company recorded the expense
      in its restated 2004 annual financial statements filed with the 2005 financial
      statements. Upon further review of the transactions, it was noted that the
      restated adjustments did not properly account for options and warrants issued
      to
      third-party consultants on the appropriate measurement date. Furthermore,
      certain of the warrants were issued in connection with a private placement
      memorandum and the sale of common stock. As such, the fair market value of
      the
      warrants issued with common stock should have been ascribed a value and recorded
      to additional paid-in capital accordingly. The amount originally recorded as
      the
      restatement, $1,272,522, has been reversed in the restated financial statements.
      See further discussions regarding the restated accounting treatment for options
      and warrants in separate paragraphs below.





7





**IMMEDIATEK,
      INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
      (Continued)**


**JUNE
      30, 2006**


**(Unaudited)**






*Payroll
      Tax* .
      The Company restated its 2003 and 2004 financial statements to reflect
      additional payroll tax liabilities resulting from  reclassification
      of compensatory disbursements. Historically, the Company has taken  the
      position whereby all compensation paid to individuals was non-employee
      compensation. Upon review of the Internal  Revenue
      Code and information located in IRS publication 15−A, the Company determined
      that it was appropriate to reclassify  all
      such payments as employee compensation reportable on form W−2 and accrue for all
      unpaid tax and related penalties and  interest
      associated with the reclassification. The resulting expense and addition to
      accrued liabilities totaled $12,833 and $52,926 for the years ended December
      31,
      2004  and
      2003, respectively.





*Sales
      Tax* .
      During 2006, the Company evaluated all state reporting requirements with respect
      to its revenue and  corresponding
      sales tax requirements. Deficiencies were identified during this process
      resulting in additional expense of  $22,990
      in 2005 and a reduction in the previously recorded expense for 2004 of
      $9,172.





*Mechanicals
      and Royalties* .
      During 2006, the Company determined that mechanicals and royalties had not
      properly been accrued for the related revenue transactions. As a result of
      this
      review, additional cost of sales expense and accrued liabilities were recorded
      in the amount of $20,550 and $13,731 for 2004 and 2005,
      respectively.





*Assets
      Acquired from Moving Records, LLC* .
      The
      Company erroneously recorded goodwill related to the assets acquired from Moving
      Records, LLC during 2005. Goodwill is not appropriate in an asset acquisition.
      As such, the amount was reclassified to Intellectual Property with a one year
      amortizable life based on the relative fair market value of the assets acquired.
      Amortization expense was recorded in the amount of $198,150 in the 2005 restated
      financial statements. There was, however, no impact on Retained Deficit for
      2005
      due to the fact that all the Moving Records, LLC assets were considered to
      be
      impaired at December 31, 2005. Thus, the impairment charge of the goodwill
      originally recorded offset the amortization expense that should have been
      recorded during the year.





*Loss
      on Forgiveness of Debt related to certain assets purchased* .
      On
      February 28, 2005, the Company issued 7,000 shares of common stock in exchange
      for the extinguishment of $80,000 of debt related to certain assets acquired
      from Moving Records, LLC. The fair market value of the shares was $126,000.
      A
      loss on extinguishment of debt in the amount of $46,000 was recorded in the
      restated 2005 financial statements.





*Common
      Stock Issued on Behalf of the Company for Consulting Services* .
      During
      2003, an employee stockholder of the Company transferred personally owned common
      stock of the Company to third party consultants. The transfer was assumed to
      be
      on behalf of the Company and was recorded as a deemed contribution and
      consulting expense in the restated financial statements. The resulting charge
      to
      accumulated deficit was $54,766, which represents the fair market value of
      the
      shares.





*Common
      Stock Issued on Behalf of the Company for Conversion of Note
      Payable* .
      During
      2003, an employee stockholder of the Company transferred personally owned common
      stock of the Company to a noteholder. The transfer was assumed to be on behalf
      of the Company and occurred in close proximity to the conversion of the debt
      by
      the noteholder to common stock. The transfer was recorded as a deemed
      contribution to the Company and as a further inducement for the conversion
      of
      debt. The fair market value of $15,900 was recorded in the restated financial
      statements as a loss on extinguishment of debt related to the
      transfer.





*Common
      Stock Issued on Behalf of the Company for Issuance of Note
      Payable* .
      During
      2004, an employee stockholder of the Company transferred personally owned common
      stock of the Company to a noteholder. The transfer was assumed to be on behalf
      of the Company and occurred in close proximity to the receipt of cash in
      exchange for a note payable. The transfer was recorded as a deemed contribution
      to the Company and as a cost of the note payable at the fair market value of
      the
      shares. Accordingly, $60,000 was recorded in the restated financial statements
      as debt issue costs related to the transfer and was amortized over the term
      of
      the note payable of eleven months. The amortization of the debt issue costs
      was
      charged to interest expense as $5,231 in 2004 and $54,769 in 2005.





8


**IMMEDIATEK,
      INC.** **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**


*Common
      Stock Issued on Behalf of the Company for Employee Compensation* .
      During
      2004, an employee stockholder of the Company transferred personally owned common
      stock of the Company to an employee. The transfer was assumed to be on behalf
      of
      the Company and was recorded as a deemed contribution and non-cash compensation
      expense in the restated financial statements. The resulting charge to
      accumulated deficit was $30,000 and was based on the fair market value of the
      shares.





*Warrants
      to Purchase Common Stock Issued on Behalf of the Company for Consulting
      Services* .
      During
      2004, two employee stockholders of the Company issued warrants to purchase
      personally owned shares of common stock of the Company directly from the
      stockholders to third party consultants. The issuance of the personal warrants
      was assumed to be on behalf of the Company and was recorded as a deemed
      contribution and consulting expense in the restated financial statements. The
      resulting charge of $48,860 to accumulated deficit was based on the fair market
      value of the shares determined using the Black-Scholes option pricing
      model.





*Conversion
      of Notes Payable to Common Stock with Warrants.* During
      2003, the Company issued 8,959 shares of common stock for the extinguishment
      of
      $107,500 in outstanding notes payable. In addition to the common stock, warrants
      to purchase 4,480 shares of common stock were issued to the noteholders. The
      extinguishment of the debt should have been recorded based on the underlying
      fair market value of the common stock issued. The difference between the fair
      market value of the shares and the carrying amount of the notes payable should
      have been recorded as a loss on extinguishment of debt. Additionally, the
      warrants should have been ascribed a value based on the relative fair market
      value of the warrants to the common stock issued. The fair market value of
      the
      common stock issued was determined to be $537,500. Thus, a loss on the
      extinguishment of debt in the amount of $430,000 was recorded in the 2003
      restated financial statements. The ascribed value of the warrants was determined
      to be $177,375 and was recorded to additional paid-in capital.





*Conversion
      of Notes Payable to Common Stock Upon Exercise of Warrants.* During
      2004, the Company issued 634 shares of common stock upon the exercise of
      warrants to effect the extinguishment of $9,500 in outstanding notes payable.
      The extinguishment of the debt should have been recorded based on the underlying
      fair market value of the common stock issued. The difference between the fair
      market value of the shares and the carrying amount of the notes payable should
      have been recorded as a loss on extinguishment of debt. The fair market value
      of
      the common stock issued was determined to be $19,633. Thus, a loss on the
      extinguishment of debt in the amount of $10,133 was recorded in the 2004
      restated financial statements.





*Legal
      Fees Related to Capital Transactions* .
      The
      Company had erroneously recorded legal expenses related to capital transactions
      as an expense in the financial statements. These amounts should have been
      recorded as a reduction of the proceeds received. As a result of the correction
      of the errors, $9,265, $25,815 and $64,045 was recorded as a reduction of legal
      expenses and a corresponding reduction of the capital proceeds in the 2003,
      2004
      and 2005 restated financial statements, respectively.





*Common
      Stock Issued with Warrants.* During
      2004, the Company issued warrants to purchase 1,667 shares of common stock
      in
      connection with common stock issued in exchange for cash. The warrants should
      have been ascribed a value of the proceeds based on the relative fair market
      value of the warrants to the common stock issued. The ascribed value of the
      warrants was determined to be $28,474 and was recorded to additional paid-in
      capital in the 2004 restated financial statements.





*Warrants
      to Purchase Common Stock Issued for Consulting Services* .
      During
      2004, the Company issued warrants to purchase 13,057 shares of common stock
      to
      third party consultants. The fair market value of the warrants was determined
      using the Black-Scholes option pricing model. As a result of the issuance of
      the
      warrants, $394,849 was recorded in the 2004 restated financial
      statements.





*Common
      Stock Issued with Warrants in a Private Placement.* During
      2003 and 2004, the Company issued warrants to purchase 2,500 and 27,524 shares
      of common stock, respectively, in connection with common stock issued in a
      private placement. The warrants should have been ascribed a value of the
      proceeds based on the relative fair market value of the warrants to the common
      stock issued. The ascribed value of the warrants for 2003 and 2004 was
      determined to be $30,000 and $326,690, respectively, and was recorded to
      additional paid-in capital in the restated financial statements.





9


**IMMEDIATEK,
        INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**




*Consulting
      Services Related to Capital Transactions* .
      The
      Company had erroneously recorded consulting expenses related to successful
      capital transactions as an expense in the financial statements. These amounts
      should have been recorded as a reduction of the proceeds received. As a result
      of the correction of the errors, $23,655 was recorded as a reduction of
      consulting expense and a corresponding reduction of the capital proceeds in
      the
      2004 restated financial statements.





*Common
      Stock Issued for Consulting Services* .
      During
      2003, 2004 and 2005, the Company issued 10,300, 15,942 and 2,640 shares of
      common stock, respectively, to third party consultants. The fair market value
      of
      the shares should have been determined based on the measurement date in
      accordance with SFAS 123, “Accounting for Stock-Based Compensation,” for shares
      issued to third party consultants. The Company erroneously determined the fair
      market value on the date of grant. The correction of the error resulted in
      $20,000 in additional non-cash consulting expense in the 2003 restated financial
      statements, a reduction of non-cash consulting expense of $31,299 in 2004 and
      additional consulting expense of $37,416 in 2005.





*Common
      Stock Issued to Employees* .
      During
      2003, 2004 and 2005, the Company issued 1,000, 6,250 and 500 shares of common
      stock, respectively, to employees. The fair market value of the shares should
      have been determined based on the date of the Board of Directors’ approval in
      accordance with SFAS 123, “Accounting for Stock-Based Compensation,” as the date
      that all necessary authorizations were obtained. The Company erroneously
      determined the fair market value on the date of grant. The correction of the
      error resulted in $11,000 in additional non-cash compensation expense in the
      2003 restated financial statements and a reduction of non-cash compensation
      expense of $200,850 and $135,180 in 2004 and 2005, respectively.





*Common
      Stock Options Granted to Employees* .
      During
      2004 and 2005, the Company granted options to purchase shares of common stock
      to
      employees. The fair market value of the shares should have been determined
      using
      the Black-Scholes option pricing model and amortized over the vesting period
      of
      the options. The correction of the error resulted in $101,445 and $40,856 in
      additional non-cash compensation expense in the 2004 and 2005 restated financial
      statements, respectively.





*Imputed
      Interest on Non-Interest Bearing Notes Payable* .
      During
      2004 and 2005, the Company issued non-interest bearing notes payable to
      stockholders in exchange for cash. Interest should have been imputed on these
      notes and amortized to interest expense over the term of the notes payable.
      Interest for these notes was recorded at 10% per annum in the restated 2004
      and
      2005 financial statements, resulting in additional non-cash interest expense
      of
      $3,352 and $5,844, respectively.





The
      foregoing adjustments did not affect our previously reported cash and cash
      equivalent balances in prior periods. The following tables present the effect
      of
      the restatement adjustments by financial statement line item for the
      Consolidated Balance Sheets, Consolidated Statements of Operations and
      Consolidated Statements of Cash Flow.





10


**IMMEDIATEK,
        INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**


*Consolidated
      Balance Sheets as of December 31, 2005, 2004 and 2003* :




**As
                of December 31,****2005**
            
            **2004**
            
            **2003****As
                Previously Reported**
            
            **Adjustments**
            
            **As
                Restated**
            
            **As
                Previously Restated**
            
            **Adjustments**
            
            **As
                Restated**
            
            **As
                Previously Restated**
            
            **Adjustments**
            
            **As
                Restated****Assets**Current
                assets:Cash
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            21,550
            
            $
            -
            
            $
            21,550
            
            $
            118,562
            
            $
            -
            
            $
            118,562Accounts
                receivable
            
            
            4,000
            
            
            -
            
            
            4,000
            
            
            73,281
            
            
            -
            
            
            73,281
            
            
            1,647
            
            
            -
            
            
            1,647Prepaid
                expenses and other current assets
            
            
            3,668
            
            
            -
            
            
            3,668
            
            
            20,678
            
            
            70,249
            
            
            90,927
            
            
            5,760
            
            
            -
            
            
            5,760Total
                current assets
            
            
            7,668
            
            
            -
            
            
            7,668
            
            
            115,509
            
            
            70,249
            
            
            185,758
            
            
            125,969
            
            
            -
            
            
            125,969Fixed
                assets, net
            
            
            18,599
            
            
            -
            
            
            18,599
            
            
            294,404
            
            
            (19,202
            )
            
            275,202
            
            
            6,576
            
            
            -
            
            
            6,576Intellectual
                property
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            65,601
            
            
            65,601Goodwill
            
            
            162,071
            
            
            -
            
            
            162,071
            
            
            324,142
            
            
            -
            
            
            324,142
            
            
            65,601
            
            
            (65,601
            )
            
            -**Total
                Assets**
            
            $
            188,338
            
            $
            -
            
            $
            188,338
            
            $
            734,055
            
            $
            51,047
            
            $
            785,102
            
            $
            198,146
            
            $
            -
            
            $
            198,146**Liabilities
                and Stockholders' Deficit**Current
                liabilities:Cash
                deficit
            
            $
            2,951
            
            $
            -
            
            $
            2,951
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Accounts
                payable
            
            
            488,512
            
            
            -
            
            
            488,512
            
            
            346,868
            
            
            -
            
            
            346,868
            
            
            67,706
            
            
            43,221
            
            
            110,927Accrued
                liablities
            
            
            480,991
            
            
            27,084
            
            
            508,075
            
            
            442,381
            
            
            (110,312
            )
            
            332,069
            
            
            60,907
            
            
            -
            
            
            60,907Accrued
                interest
            
            
            85,397
            
            
            5,220
            
            
            90,617
            
            
            -
            
            
            12,793
            
            
            12,793
            
            
            -
            
            
            -
            
            
            -Notes
                payable
            
            
            123,606
            
            
            -
            
            
            123,606
            
            
            3,000
            
            
            -
            
            
            3,000
            
            
            -
            
            
            9,500
            
            
            9,500Notes
                payable - related party
            
            
            43,000
            
            
            -
            
            
            43,000
            
            
            43,000
            
            
            -
            
            
            43,000
            
            
            -
            
            
            -
            
            
            -Convertible
                notes payable
            
            
            1,005,249
            
            
            -
            
            
            1,005,249
            
            
            640,000
            
            
            -
            
            
            640,000
            
            
            9,500
            
            
            (9,500
            )
            
            -Total
                current liabilities
            
            $
            2,229,706
            
            $
            32,304
            
            $
            2,262,010
            
            $
            1,475,249
            
            $
            (97,519
            )
            $
            1,377,730
            
            $
            138,113
            
            $
            43,221
            
            $
            181,334Stockholders'
              Deficit:Common
                stock, $0.001 par
              value,
                500,000,000
              sharesauthorized,
              324,105,
                297,965and
              229,737
                shares issued
              and
                outstanding in
              2005,
                2004and
                2003,
              respectively
            
            $
            388
            
            $
            (64
            )
            $
            324
            
            $
            298
            
            $
            -
            
            $
            298
            
            $
            230
            
            $
            -
            
            $
            230Additional
                paid-in capital
            
            
            5,153,844
            
            
            1,859,361
            
            
            7,013,205
            
            
            4,533,421
            
            
            2,017,786
            
            
            6,551,207
            
            
            1,429,355
            
            
            2,737,752
            
            
            4,167,107Accumulated
                Deficit
            
            
            (7,195,600
            )
            
            (1,891,601
            )
            
            (9,087,201
            )
            
            (5,274,913
            )
            
            (1,869,220
            )
            
            (7,144,133
            )
            
            (1,369,552
            )
            
            (2,780,973
            )
            
            (4,150,525
            )Total
                Stockholders' Deficit
            
            
            (2,041,368
            )
            
            (32,304
            )
            
            (2,073,672
            )
            
            (741,194
            )
            
            148,566
            
            
            (592,628
            )
            
            60,033
            
            
            (43,221
            )
            
            16,812**Total
                Liabilities and**
              **Stockholders'
                Deficit**
            
            $
            188,338
            
            $
            -
            
            $
            188,338
            
            $
            734,055
            
            $
            51,047
            
            $
            785,102
            
            $
            198,146
            
            $
            -
            
            $
            198,146








*Consolidated
      Statements of Operations for the years ended December 31, 2005, 2004 and
      2003* :




**For
                the Fiscal Year Ended December 31,****2005**
            
            **2004**
            
            **2003****As
                Previously Reported**
            
            **Adjustments**
            
            **As
                Restated**
            
            **As
                Previously Restated**
            
            **Adjustments**
            
            **As
                Restated**
            
            **As
                Previously Restated**
            
            **Adjustments**
            
            **As
                Restated**Revenues
            
            $
            140,912
            
            $
            -
            
            $
            140,912
            
            $
            1,098,680
            
            $
            73,281
            
            $
            1,171,961
            
            $
            133,485
            
            $
            1
            
            $
            133,486Cost
                of sales
            
            
            153,228
            
            
            13,732
            
            
            166,960
            
            
            919,295
            
            
            (81,166
            )
            
            838,129
            
            
            48,156
            
            
            -
            
            
            48,156Gross
                Margin
            
            
            (12,316
            )
            
            (13,732
            )
            
            (26,048
            )
            
            179,385
            
            
            154,447
            
            
            333,832
            
            
            85,329
            
            
            1
            
            
            85,330Expenses:General
                and administrative expenses
            
            
            329,425
            
            
            114
            
            
            329,539
            
            
            335,684
            
            
            870,459
            
            
            1,206,143
            
            
            340,676
            
            
            (109,192
            )
            
            231,484Consulting
                fees
            
            
            36,001
            
            
            (9,154
            )
            
            26,847
            
            
            1,190,224
            
            
            (1,055,130
            )
            
            135,094
            
            
            -
            
            
            54,766
            
            
            54,766Professional
                fees
            
            
            153,309
            
            
            (64,045
            )
            
            89,264
            
            
            284,183
            
            
            93,901
            
            
            378,084
            
            
            -
            
            
            -
            
            
            -Administrative
                salaries
            
            
            144,440
            
            
            40,145
            
            
            184,585
            
            
            465,611
            
            
            (34,375
            )
            
            431,236
            
            
            161,775
            
            
            23,855
            
            
            185,630Non-cash
                stock compensation
            
            
            32,833
            
            
            12,663
            
            
            45,496
            
            
            61,020
            
            
            145,425
            
            
            206,445
            
            
            38,000
            
            
            2,345,645
            
            
            2,383,645Non-cash
                consulting expense
            
            
            137,680
            
            
            (69,309
            )
            
            68,371
            
            
            1,573,191
            
            
            (806,335
            )
            
            766,856
            
            
            390,400
            
            
            20,000
            
            
            410,400Depreciation
                and amortization
            
            
            59,445
            
            
            198,150
            
            
            257,595
            
            
            71,881
            
            
            (24,269
            )
            
            47,612
            
            
            439
            
            
            -
            
            
            439Total
                costs and expenses
            
            
            893,133
            
            
            108,564
            
            
            1,001,697
            
            
            3,981,794
            
            
            (810,324
            )
            
            3,171,470
            
            
            931,290
            
            
            2,335,074
            
            
            3,266,364Net
                operating loss
            
            
            (905,449
            )
            
            (122,296
            )
            
            (1,027,745
            )
            
            (3,802,409
            )
            
            964,771
            
            
            (2,837,638
            )
            
            (845,961
            )
            
            (2,335,073
            )
            
            (3,181,034
            )Other
                (expense) income:Gain
                (Loss) on
              extinguishment
                of debt
            
            
            7,634
            
            
            (53,634
            )
            
            (46,000
            )
            
            -
            
            
            (50,043
            )
            
            (50,043
            )
            
            -
            
            
            (445,900
            )
            
            (445,900
            )Loss
                on impairment of assets
            
            
            (939,454
            )
            
            237,951
            
            
            (701,503
            )
            
            (68,700
            )
            
            -
            
            
            (68,700
            )
            
            -
            
            
            -
            
            
            -Interest
                (expense) income, net
            
            
            (83,418
            )
            
            (84,402
            )
            
            (167,820
            )
            
            (34,252
            )
            
            (2,975
            )
            
            (37,227
            )
            
            437
            
            
            -
            
            
            437Net
                loss
            
            $
            (1,920,687
            )
            $
            (22,381
            )
            $
            (1,943,068
            )
            $
            (3,905,361
            )
            $
            911,753
            
            $
            (2,993,608
            )
            $
            (845,524
            )
            $
            (2,780,973
            )
            $
            (3,626,497
            )Weighted
                average number ofcommon
                shares outstanding
              -basic
                and fully diluted
            
            
            328,544
            
            
            (94,619
            )
            
            233,925
            
            
            254,168
            
            
            (41,898
            )
            
            212,270
            
            
            177,736
            
            
            (6,057
            )
            
            171,679Net
                loss per share - basic and
              fully
                diluted
            
            $
            (5.85
            )
            $
            (2.46
            )
            $
            (8.31
            )
            $
            (15.37
            )
            $
            1.27
            
            $
            (14.10
            )
            $
            (4.76
            )
            $
            (16.36
            )
            $
            (21.12
            )








11


**IMMEDIATEK,
      INC.** **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**


Basic
      and
      diluted shares changed as a result of the rescission and return of shares issued
      in September 2005. See “Note 7 - Stockholders’ Equity” for a more detailed
      discussion. As a result, only 324,105 shares of Company common stock were
      outstanding at December 31, 2005. Outstanding options and warrants to purchase
      Company common stock were not included in the computation of diluted loss per
      share, as the effect of including the options and warrants in the calculation
      would be anti-dilutive.





*Consolidated
      Statements of Cash Flow for the years ended December 31, 2005, 2004 and
      2003* :




**For
                the Fiscal Year Ended December 31,****2005**
            
            **2004**
            
            **2003****As
                Previously Reported**
            
            **Adjustments**
            
            **As
                Restated**
            
            **As
                Previously Restated**
            
            **Adjustments**
            
            **As
                Restated**
            
            **As
                Previously Restated**
            
            **Adjustments**
            
            **As
                Restated****Cash
                flows from operating**
              **activities**Net
                loss
            
            $
            (1,920,687
            )
            $
            (22,381
            )
            $
            (1,943,068
            )
            $
            (3,905,361
            )
            $
            911,753
            
            $
            (2,993,608
            )
            $
            (845,524
            )
            $
            (2,780,973
            )
            $
            (3,626,497
            )Depreciation
                and amortization
            
            
            59,445
            
            
            198,150
            
            
            257,595
            
            
            71,881
            
            
            (24,269
            )
            
            47,612
            
            
            439
            
            
            -
            
            
            439Non-cash
                interest expense
            
            
            -
            
            
            37,902
            
            
            37,902
            
            
            -
            
            
            32,191
            
            
            32,191
            
            
            -
            
            
            -
            
            
            -Non-cash
                consulting fees
            
            
            137,680
            
            
            (69,309
            )
            
            68,371
            
            
            1,573,191
            
            
            (806,335
            )
            
            766,856
            
            
            390,400
            
            
            20,000
            
            
            410,400Non-cash
                stock compensation
            
            
            32,833
            
            
            12,663
            
            
            45,496
            
            
            61,020
            
            
            145,425
            
            
            206,445
            
            
            38,000
            
            
            2,345,645
            
            
            2,383,645(Gain)
                Loss on extinguishment
              of
                debt
            
            
            (7,634
            )
            
            53,634
            
            
            46,000
            
            
            -
            
            
            50,043
            
            
            50,043
            
            
            -
            
            
            445,900
            
            
            445,900Impairment
                loss on assets
            
            
            939,454
            
            
            (237,951
            )
            
            701,503
            
            
            68,700
            
            
            -
            
            
            68,700
            
            
            -
            
            
            -
            
            
            -Adjustments
                  to reconcile net
                loss
                  to netcash
                  used by
                operating
                  activities:Accounts
                receivable
            
            
            69,281
            
            
            -
            
            
            69,281
            
            
            (73,281
            )
            
            1,647
            
            
            (71,634
            )
            
            (1,205
            )
            
            -
            
            
            (1,205
            )Other
                assets
            
            
            40,124
            
            
            (7,633
            )
            
            32,491
            
            
            665
            
            
            (51,724
            )
            
            (51,059
            )
            
            (7,605
            )
            
            -
            
            
            (7,605
            )Accounts
                payable
            
            
            165,393
            
            
            (23,749
            )
            
            141,644
            
            
            324,279
            
            
            (88,338
            )
            
            235,941
            
            
            60,198
            
            
            -
            
            
            60,198Accrued
                liabilities
            
            
            38,610
            
            
            137,396
            
            
            176,006
            
            
            461,348
            
            
            (190,186
            )
            
            271,162
            
            
            132,643
            
            
            (30,572
            )
            
            102,071Accrued
                interest
            
            
            85,397
            
            
            (7,573
            )
            
            77,824
            
            
            -
            
            
            12,793
            
            
            12,793
            
            
            -
            
            
            -
            
            
            -Net
                cash used by operating
              activities
            
            
            (360,104
            )
            
            71,149
            
            
            (288,955
            )
            
            (1,417,558
            )
            
            (7,000
            )
            
            (1,424,558
            )
            
            (232,654
            )
            
            -
            
            
            (232,654
            )**Cash
                flows from investing**
              **activities**Purchase
                of fixed assets
            
            
            (13,646
            )
            
            -
            
            
            (13,646
            )
            
            (31,539
            )
            
            9,470
            
            
            (22,069
            )
            
            (3,129
            )
            
            -
            
            
            (3,129
            )Cash
                received in acquisition
            
            
            -
            
            
            -
            
            
            -
            
            
            20,662
            
            
            -
            
            
            20,662
            
            
            -
            
            
            -
            
            
            -Net
                cash used by investing
              activities
            
            
            (13,646
            )
            
            -
            
            
            (13,646
            )
            
            (10,877
            )
            
            9,470
            
            
            (1,407
            )
            
            (3,129
            )
            
            -
            
            
            (3,129
            )**Cash
                flows from financing**
              **activities**Cash
                deficit
            
            
            2,951
            
            
            -
            
            
            2,951
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Payments
                on notes payable
            
            
            (339,200
            )
            
            90,600
            
            
            (248,600
            )
            
            (54,000
            )
            
            (41,000
            )
            
            (95,000
            )
            
            (7,500
            )
            
            -
            
            
            (7,500
            )Proceeds
                from notes payable
            
            
            688,449
            
            
            (97,704
            )
            
            590,745
            
            
            528,000
            
            
            53,000
            
            
            581,000
            
            
            147,000
            
            
            -
            
            
            147,000Proceeds
                from issuance of
              common
                stock, net of fees
            
            
            -
            
            
            (64,045
            )
            
            (64,045
            )
            
            857,423
            
            
            (14,470
            )
            
            842,953
            
            
            210,000
            
            
            -
            
            
            210,000Net
                cash provided by financingactivities
            
            
            352,200
            
            
            (71,149
            )
            
            281,051
            
            
            1,331,423
            
            
            (2,470
            )
            
            1,328,953
            
            
            349,500
            
            
            -
            
            
            349,500Net
                increase in cash
            
            
            (21,550
            )
            
            -
            
            
            (21,550
            )
            
            (97,012
            )
            
            -
            
            
            (97,012
            )
            
            113,717
            
            
            -
            
            
            113,717Cash
                - beginning
            
            
            21,550
            
            
            -
            
            
            21,550
            
            
            118,562
            
            
            -
            
            
            118,562
            
            
            4,845
            
            
            -
            
            
            4,845Cash
                - ending
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            21,550
            
            $
            -
            
            $
            21,550
            
            $
            118,562
            
            $
            -
            
            $
            118,562Supplemental
                disclosures:Interest
                paid
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            2,698
            
            $
            2,698Income
                taxes paid
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Number
                of shares issued for
              consulting
                services
            
            
            64,890
            
            
            (62,250
            )
            
            2,640
            
            
            22,192
            
            
            (6,250
            )
            
            15,942
            
            
            10,300
            
            
            -
            
            
            10,300Value
                of shares issued for
              consulting
                services
            
            $
            137,680
            
            $
            (100,000
            )
            $
            37,680
            
            $
            385,996
            
            $
            (62,849
            )
            $
            323,147
            
            $
            390,400
            
            $
            20,000
            
            $
            410,400Number
                of shares issued for
              employee
                services
            
            
            -
            
            
            500
            
            
            500
            
            
            -
            
            
            6,250
            
            
            6,250
            
            
            181,014
            
            
            990
            
            
            182,004Value
                of shares issued for
              employee
                services
            
            $
            -
            
            $
            2,500
            
            $
            2,500
            
            $
            -
            
            $
            75,000
            
            $
            75,000
            
            $
            38,000
            
            $
            2,345,951
            
            $
            2,383,951Number
                of shares issued for
              conversion
                of notes payable
            
            
            -
            
            
            7,000
            
            
            7,000
            
            
            634
            
            
            -
            
            
            634
            
            
            9,559
            
            
            (600
            )
            
            8,959Value
                of shares issued for
              conversion
                of notes payable
            
            $
            -
            
            $
            126,000
            
            $
            126,000
            
            $
            9,500
            
            $
            10,133
            
            $
            19,633
            
            $
            137,500
            
            $
            400,000
            
            $
            537,500Number
                of shares issued for
              acquisitions
            
            
            -
            
            
            16,000
            
            
            16,000
            
            
            16,667
            
            
            -
            
            
            16,667
            
            
            -
            
            
            -
            
            
            -Value
                of shares issued for
              acquisitions
            
            $
            -
            
            $
            288,000
            
            $
            288,000
            
            $
            600,000
            
            $
            (124,196
            )
            $
            475,804
            
            $
            -
            
            $
            -
            
            $
            -Number
                of shares issued for
              assets
            
            
            25,000
            
            
            (25,000
            )
            
            -
            
            
            100
            
            
            -
            
            
            100
            
            
            2,084
            
            
            (750
            )
            
            1,334Value
                of shares issued for
              assets
            
            $
            450,000
            
            $
            (450,000
            )
            $
            -
            
            $
            3,000
            
            $
            -
            
            $
            3,000
            
            $
            48,500
            
            $
            -
            
            $
            48,500








**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND
      PROCEDURES**





**Push
      Down Accounting:** See
“Note 4 - New Basis of Accounting.”





**Going
      Concern:** These
      financial statements have been prepared on a going concern basis, which
      contemplates the realization of the assets of the Company and the satisfaction
      of its liabilities and commitments in the normal course of business. Management
      of the Company believes that, as a result of $3,000,000 in funding received
      on
      June 8, 2006 (see Notes 3 and 5), the Company has adequate resources to fund
      its
      operations until the conclusion of the second quarter of fiscal 2007 based
      on
      its current business plan. There can be no assurances, however, that there
      will
      not be delays or other unforeseen events that prevent the Company from achieving
      its current business plan.





12


**IMMEDIATEK,
      INC.**


**NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**


See
      Note
      5 for a discussion of the Company’s ability to continue as a going concern and
      its plans for addressing those issues. The inability to obtain additional
      financing in the future, if and when needed, could have a material adverse
      effect on the Company.





**Description
      of Business:** Immediatek, through its wholly-owned, operating subsidiary, DiscLive, Inc.,
      records live content, such as concerts and conferences, and makes the recorded
      content available for delivery to attendees within fifteen minutes after the
      conclusion of the live event. The recorded content is made available for
      pre-sale and sale at the venue and on DiscLive’s website, www.disclive.com. The
      content is delivered primarily via compact disc.





**Basis
      of Presentation:** The
      condensed consolidated financial statements include the accounts of all
      wholly-owned subsidiaries of the Company, including DiscLive, Inc, which
      conducts primarily all of the Company’s operating activity. All significant
      intercompany accounts and transactions have been eliminated in the condensed
      consolidated financial statements.





The
      Company’s condensed consolidated balance sheet as of June 30, 2006 and condensed
      consolidated statements of operations and condensed consolidated statements
      of
      cash flow for:





(i)
            the
                period from April 1, 2006 to June 7,
                2006;


(ii)
            the
                period from June 8, 2006 to June 30,
                2006;


(iii)
            the
                period from January 1, 2006 to June 7, 2006;
                and


(iv)
            the
                three and six months ended June 30, 2005
                (restated),





are
      unaudited. Certain accounts have been reclassified to conform to the current
      period’s presentation. In the opinion of management, these financial statements
      have been prepared on the same basis as the audited consolidated financial
      statements and include all adjustments necessary for the fair presentation
      of
      the Company’s financial position, results of operations and cash flows. These
      adjustments were of a normal recurring nature, except as discussed above in
      “Note 1 - Restatement of Prior Years’ Consolidated Financial Statements.” The
      results of operations for the periods presented in this Quarterly Report on
      Form
      10-QSB are not necessarily indicative of the results that may be expected for
      the entire year. Additional information is contained in the Company’s Annual
      Report on Form 10-KSB/A (Amendment No. 1) for the fiscal year ended December
      31,
      2005, which was filed with the Securities and Exchange Commission, or SEC,
      on
      July 18, 2006, and which should be read in conjunction with this Quarterly
      Report on Form 10-QSB.





**Management
      Estimates and Significant Risks and Uncertainties:** The
      preparation of the condensed consolidated financial statements, in conformity
      with accounting principles generally accepted in the United States of America,
      requires management of the Company to make estimates and assumptions that affect
      the reported amounts of assets and liabilities, and the disclosure of contingent
      assets and liabilities, at the dates of the financial statements and the
      reported amounts of revenues and expenses during such reporting periods. Actual
      results could differ from these estimates.





The
      Company is subject to a number of risks and can be affected by a variety of
      factors. For example, management of the Company believes that the following
      factors, as well as others, could have a significant negative effect on the
      Company’s future financial position, results of operations or cash
      flows:





·
            inability
                to continue as a going concern;


·
            history
                of losses, which are likely to
                continue;


·
            utilizing
                funds received in a manner that is
                accretive;


·
            generating
                sufficient funds from operating activities to fund
                operations,


·
            obtaining
                a sufficient number of contracts to record live
                content,


·
            changes
                in anticipated levels of sales of
                products;


·
            competition,
                including competition from a substantial competitor that possesses
                greater
                resources, both financially and in the industry, than the Company
                does;


·
            dependence
                on third party manufacturers and
                contractors;


·
            changes
                in technology that may make the Company’s products less attractive or
                obsolete;


·
            the
                development of new products or innovations by the Company’s
                competitors;


·
            difficulties
                in developing and marketing new products;
                and


·
            changes
                in conditions affecting the economy
                generally.





13


**IMMEDIATEK,
      INC.** **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**




**Business
      Segments:** The
      Company has determined that it currently operates in one segment, the production
      and sale of live recordings of events. The Company follows Statement of
      Financial Accounting Standards No. 130, “Disclosures About Segments of an
      Enterprise and Related Information.” The Company will evaluate additional
      segment disclosure requirements as it expands its operations.





**Cash:** Cash
      consists principally of amounts held in demand deposit accounts and amounts
      invested in financial instruments with initial maturities of three months or
      less at the time of purchase. The Company places its temporary cash investments
      with quality financial institutions. At times such investments may be in excess
      of the Federal Deposit Insurance Corporation insurance limit. The Company does
      not believe that it is exposed to any significant credit risk on cash. There
      were no cash equivalents at June 30, 2006.





**Fair
      Value of Financial Instruments:** The fair
      value of financial instruments is determined by reference to various market
      data
      and other valuation techniques, as appropriate. Unless otherwise disclosed,
      the
      fair values of financial instruments approximate their recorded value due
      primarily to their short-term nature.





The
      estimated fair value of financial instruments has been determined by the Company
      based on available market information and appropriate valuation methodologies.
      Considerable judgment is required, however, in interpreting market data to
      develop the fair value estimates. The estimates, therefore, may not be
      indicative of the amount the Company might realize in a current market
      exchange.





**Fixed
      assets:** At
      June
      30, 2006, fixed assets are stated at their estimated fair market value based
      upon a valuation performed by an independent third-party, less depreciation
      from
      June 8, 2006 to June 30, 2006. This valuation was obtained in connection with
      the “push down” accounting performed as a result of the change in control of the
      Company. *See* “Note
      4
      -New Basis of Accounting” below for a more detailed discussion. The following
      table summarizes the fixed assets of the Company.





**Fair
                Market Value at**
              **June
                8, 2006**
            
            **Estimated
                Remaining Useful Lives**
            
            **Depreciation**
            
            **Net
                at**
              **June
                30, 2006**Transportation
                equipment
            
            $
            30,810
            
            
            Held
                for Sale
            
            $
            -
            
            $
            30,810Computer
                equipment
            
            
            12,972
            
            
            1.5
                years
            
            
            528
            
            
            12,444Recording
                equipment
            
            
            111,656
            
            
            5
                years
            
            
            1,365
            
            
            110,291Office
                furniture and equipment
            
            
            9,483
            
            
            3
                years
            
            
            193
            
            
            9,290**Total
                fixed assets**
            
            $
            134,111
            
            
            
            
            $
            2,086
            
            $
            132,025








Repair
      and maintenance expenditures are charged to operations as incurred. Major
      improvements and replacements, which extend the useful life of an asset, are
      capitalized and depreciated over the remaining estimated useful life of the
      asset. When assets are retired or sold, the costs and related accumulated
      depreciation and amortization are eliminated and any resulting gain or loss
      is
      reflected in operations.





14


**IMMEDIATEK,
        INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**


**Intangible
      assets:** At June
      30, 2006, intangible assets are stated at their estimated fair market value
      based upon a valuation performed by an independent third-party, less
      amortization from June 8, 2006 to June 30, 2006. This valuation was obtained
      in
      connection with the “push down” accounting performed as a result of the change
      in control of the Company. *See* “Note
      4
      -New Basis of Accounting” below for a more detailed discussion. The following
      table summarizes the intangible assets of the Company.




**Fair
                Market Value at**
              **June
                8, 2006**
            
            **Estimated
                Remaining Useful Lives**
            
            **Amortization**
            
            **Net
                at**
              **June
                30, 2006**Trade
                name and trademarks
            
            $
            29,100
            
            
            5
                years
            
            $
            355
            
            $
            28,745Covenants
                not-to-compete
            
            
            13,900
            
            
            2
                years
            
            
            425
            
            
            13,475**Total
                intangible assets**
            
            $
            43,000
            
            
            
            
            $
            780
            
            $
            42,220








These
      assets will be amortized over their respective remaining useful lives described
      above, and the amounts will be evaluated each reporting period for impairment
      in
      accordance with SFAS 144, “Accounting for the Impairment or Disposal of
      Long-Lived Assets.”





**Revenue
      recognition:** DiscLive
      primarily delivers products sold by it through shipment to the customer. Revenue
      is recognized upon shipment of the product to the customer. A smaller percentage
      of revenues are recognized at the point of sale at the event being recorded.
      Certain customers purchase and accept hand delivery of the product on-site
      at
      the event. Pursuant to Emerging Issues Task Force Issue No. 00-10, “Accounting
      for Shipping and Handling Fees and Costs,” (EITF 00−10), the Company includes
      all shipping and handling fees charged to its customers in gross revenue. All
      actual costs incurred by the Company for shipping and handling are immaterial
      in
      nature and are included as direct costs of revenue.





Revenues
      and costs of sales are as follows for the periods presented in the table
      below:





**For
                the Three Months Ended**
            
            **For
                the Six Months Ended****June
                30,**
            
            **June
                30,****2006**
            
            **2005**
            
            **2006**
            
            **2005**(restated)
            
            
            
            
            
            (restated)(unaudited)
            
            (unaudited)
            
            (unaudited)
            
            (unaudited)(see
                Note 4)
            
            
            
            (see
                Note 4)Successor
            
            Predecessor
            
            
            
            Successor
            
            PredecessorJune
                8 -
              June
                30
            
            April
                1 -
              June
                7
            
            Predecessor
            
            June
                8 -
              June
                30
            
            January
                1 -
              June
                7
            
            PredecessorRevenues
            
            $
            19,740
            
            $
            2,425
            
            $
            56,000
            
            $
            19,740
            
            $
            19,451
            
            $
            76,795Cost
                of sales
            
            $
            7,472
            
            $
            24,645
            
            $
            30,196
            
            $
            7,472
            
            $
            43,584
            
            $
            52,606








**Goodwill:** Due
      to
      the application of “push down” accounting, goodwill of the predecessor has been
      eliminated and goodwill of the successor is the difference between the aggregate
      purchase price of the Series A Convertible Preferred Stock issued and sold
      by
      the Company and the fair market value of the assets and liabilities of the
      Company at the date of the issuance and sale of the Series A Convertible
      Preferred Stock. *See* “Note
      4
      -New Basis of Accounting.” Goodwill will be evaluated in future periods for
      impairment in accordance with SFAS 142, “Goodwill and Other Intangible
      Assets.”





**Stock-Based
      Compensation:** For all
      periods presented, the Company has used the fair value based method of
      accounting for stock-based compensation, as defined in SFAS 123,
“Accounting for Stock-Based Compensation.” Under this method, stock-based
      compensation expense is determined on the measurement date based on the
      estimated fair value of the award. Stock-based compensation includes stock
      options and awards granted to both employees and consultants.





**Net
      loss per share:** Net loss
      attributable to common stockholders was used in the calculation of both basic
      and diluted loss per share. The weighted average number of shares of common
      stock outstanding also was the same for calculating both basic and diluted
      loss
      per share. Options to purchase 1,625 shares of common stock and warrants to
      purchase 37,425 shares of common stock outstanding at June 30, 2006, and options
      to purchase 11,000 shares of common stock and warrants to purchase 39,059 shares
      of common stock outstanding at June 30, 2005, were not included in the
      computation of diluted loss per share, as the effect of including the options
      and warrants in the calculation would be anti-dilutive.





15


**IMMEDIATEK,
      INC.** **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**


**Comprehensive
      Loss:** For all
      periods presented, comprehensive loss is equal to net loss.




**Income
      taxes:** The
      Company follows SFAS 109, “Accounting for Income Taxes,” 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.





**Recently
      Issued Accounting Pronouncements:** In July
      2006, the Financial Accounting Standards Board (“FASB”) issued FASB
      Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”
(“Interpretation No. 48” or “FIN No. 48”). FIN No. 48 clarifies the accounting
      for uncertainty in income taxes recognized in an enterprise’s financial
      statements in accordance with SFAS 109, “Accounting for Income Taxes.” This
      interpretation prescribes a recognition threshold and measurement attribute
      for
      the financial statement recognition and measurement of a tax position taken
      or
      expected to be taken in a tax return. FIN No. 48 also provides guidance on
      derecognition, classification, interest and penalties, accounting in interim
      periods, disclosure and transition. We are currently evaluating the impact
      this
      interpretation will have on our financial statements. This interpretation will
      be effective beginning January 1, 2007 for the Company.





**NOTE
      3 - CHANGE IN CONTROL AND SERIES A CONVERTIBLE PREFERRED
      STOCK**





**Change
      in Control.** In
      accordance with the Securities Purchase Agreement, as amended, by and among
      the
      Company, Radical Holdings LP and the other parties thereto, the Company issued
      and sold, and Radical Holdings LP purchased, 4,392,286 shares of the Series
      A
      Convertible Preferred Stock for an aggregate purchase price of $3,000,000,
      or
      $0.68 per share of Series A Convertible Preferred Stock, on June 8, 2006. The
      Series A Convertible Preferred Stock is, at the option of the holders of
      the Series A Convertible Preferred Stock, convertible at any time into that
      aggregate number of full shares of Company common stock representing 95% of
      the
      total common stock outstanding after giving effect to the
      conversion.





A
      holder
      of a share of Series A Convertible Preferred Stock is entitled to vote on
      all matters required or permitted to be voted upon by the stockholders of the
      Company. Each holder of a share of Series A Convertible Preferred Stock is
      entitled to the number of votes equal to the largest number of full shares
      of
      Company common stock into which all shares of Series A Convertible
      Preferred Stock held by that holder could be converted. As a result and as
      of
      June 8, 2006, Radical Holdings LP beneficially owns 95% of the outstanding
      securities entitled to vote on matters required or permitted to be submitted
      to
      the stockholders of the Company. Accordingly, a change in control of the Company
      occurred on June 8, 2006.





**Series
      A Convertible Preferred Stock.** The
      following is a summary of the material terms of the Series A Convertible
      Preferred Stock issued to Radical and established pursuant to the Certificate
      of
      Designation, Rights and Preferences filed by the Company with the Secretary
      of
      State of Nevada on June 5, 2006:





16


**IMMEDIATEK,
      INC.**


**NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**
  *Dividends*.
        The holders of the Series A Convertible Preferred Stock are not entitled to
        any preferential dividends. Holders of the Series A Convertible Preferred
        Stock, however, are entitled to participate on an as-converted basis in any
        cash
        dividends declared and paid on shares of Company common
        stock.





*Liquidation* .
      Upon
      the liquidation, dissolution or winding up of the Company, an acquisition of
      the
      Company that results in the sale of more than 50% of the outstanding voting
      power of the Company, or the sale or exclusive license of all or substantially
      all of the assets of the Company, the holders of the Series A Convertible
      Preferred Stock are entitled to receive, out of the legally available funds
      and
      assets of the Company, before any payment is made to any shares of Company
      common stock or other junior stock, an amount per share equal to the greater
      of:





·
            $0.683015632
                per share of Series A Convertible Preferred Stock;
                and




·
            The
                amount that the holder of that share of Series A Convertible
                Preferred Stock would have received had the holder converted that
                share
                into shares of Company common stock immediately prior to the liquidation
                event.





If
      the
      legally available funds and assets of the Company are insufficient to pay the
      holders of shares of the Series A Convertible Preferred Stock the full
      amount to which they are entitled, the holders of the shares of Series A
      Convertible Preferred Stock and the holders of capital stock of the Company
      that
      are on a parity with the Series A Convertible Preferred Stock will share
      ratably in any distribution of the remaining legally available funds and assets
      of the Company.





*Ranking* .
      The
      Series A Convertible Preferred Stock shall, with respect to rights on
      liquidation, winding up, corporate reorganization and dissolution, rank senior
      to the shares of Company common stock and other junior stock.





*Conversion* .
      The
      shares of Series A Convertible Preferred Stock are convertible into that
      aggregate number of full shares of Company common stock representing 95% of
      the
      total voting power of all outstanding shares of capital stock of the Company,
      including outstanding Company common stock, after giving effect to the
      conversion. Accordingly, in the event the Company should issue additional
      capital stock before conversion of the Series A Convertible Preferred
      Stock, the conversion price per share is subject to downward adjustments in
      order to cause the holders of the Series A Convertible Preferred Stock,
      collectively, to own 95% of the outstanding shares of Company common stock
      upon
      conversion of all Series A Convertible Preferred Stock. The conversion
      price of a share of Series A Convertible Preferred Stock into shares of
      Company common stock also is subject to adjustment, from time to time, for,
      among other reasons, stock splits, combinations, dividends and
      distributions.





The
      Series A Convertible Preferred Stock is convertible at any time into Company
      common stock. An intrinsic value exists for a beneficial conversion feature
      if
      the market value of the Company common stock that can be acquired by conversion
      of the Series A Convertible Preferred Stock is greater than the carrying value
      of those shares before issue costs.





The
      Company issued 4,392,286 shares of Series A Convertible Preferred Stock at
      a per
      share price of $0.68 to Radical Holdings LP for cash proceeds of $3,000,000.
      The
      fair market value of the preferred stock was determined to be $14, as it
      represents the price of Company common stock that was published on the
      Over-the-Counter Bulletin Board on June 8, 2006. The beneficial conversion
      feature represents the difference between the fair market value and the price
      received per share, as adjusted to represent 95% ownership by Radical Holdings
      LP. The Company recorded a deemed dividend due to the beneficial conversion
      price of $3,000,000, which represents the lesser of the proceeds or the
      beneficial conversion feature of $123,321,622.





*Voting* .
      The
      holders of the shares of Series A Convertible Preferred Stock are entitled
      to vote on all matters required or permitted to be voted upon by the
      stockholders of the Company. Each holder of a share of Series A Convertible
      Preferred Stock is entitled to the number of votes equal to the largest number
      of full shares of Company common stock into which all shares of Series A
      Convertible Preferred Stock held by that holder could be converted. Except
      as
      required by law on matters requiring class voting, the holders of the
      Series A Convertible Preferred Stock and Company common stock will vote
      together as a single class.





17


**IMMEDIATEK,
      INC.** **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**




*Protective
      Provisions.* Unless
      the directors designated by the holders of the shares of the Series A
      Convertible Preferred Stock originally issued under the Securities Purchase
      Agreement control the board of directors of the Company with respect to all
      actions, for so long as any shares of the Series A Convertible Preferred
      Stock originally issued under the Securities Purchase Agreement remain
      outstanding, except where the vote or written consent of the holders of a
      greater number of shares of the Company is required by law or by the Company’s
      articles of incorporation, and in addition to any other vote required by law
      or
      by the Company’s articles of incorporation, the Company cannot, and the Company
      shall cause its subsidiaries not to, as applicable, without the prior vote
      or
      written consent of the holders of at least 75% of the shares of the
      Series A Convertible Preferred Stock originally issued under the Securities
      Purchase Agreement then outstanding:





(a)  amend
      the
      articles or bylaws in any manner that would alter or change any of the rights,
      preferences, privileges or restrictions of the Series A Convertible
      Preferred Stock or the shares issuable upon conversion of the Series A
      Convertible Preferred Stock;




(b)  reclassify
      any outstanding securities into securities having rights, preferences or
      privileges senior to, or on a parity with, the Series A Convertible
      Preferred Stock;




(c)  authorize
      or issue any additional shares of capital stock (other than to holders of the
      Series A Convertible Preferred Stock);




(d)  merge
      or
      consolidate with or into any corporation or other person;




(e)  sell
      all
      or substantially all their respective assets in a single transaction or series
      of related transactions;




(f)  license
      all or substantially all of their respective intellectual property in a single
      transaction or series of related transactions;




(g)  liquidate
      or dissolve;




(h)  alter
      any
      rights of the holders of the Series A Convertible Preferred Stock or change
      the size of the Board of Directors;




(i)  declare
      or pay any dividends (other than dividends payable to the Company or its
      subsidiaries) on or declare or make any other distribution, directly or
      indirectly, on account of any shares of Company common stock now or hereafter
      outstanding;




(j)  repurchase
      any outstanding shares of capital stock;




(k)  approve
      or modify by 10% or more the aggregate amount of any annual or other operating
      or capital budget, or approve or modify by 50% or more any single line item
      of
      any such operating or capital budget;




(l)  increase
      the salary of any officer or employee or pay any bonus to any officer, director
      or employee not contemplated in a budget or bonus plan approved by directors
      designated by the holders of the shares of the Series A Convertible
      Preferred Stock originally issued under the Purchase Agreement then
      outstanding;




(m)  retain,
      terminate or enter into any salary or employment negotiations or employment
      agreement with any employee or any future employee;




(n)  incur
      indebtedness (other than trade payables) or enter into contracts or leases
      that
      require payments in excess of $5,000 in the aggregate;




(o)  make
      or
      incur any single capital expenditure;




18


**IMMEDIATEK,
      INC.** **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**


(p)  award
      stock options, stock appreciation rights or similar employee benefits or
      determine vesting schedules, exercise prices or similar features;




(q)  make
      any
      material change in the nature of its business or enter into any new line of
      business, joint venture or similar arrangement;




(r)  pledge
      its assets or guarantee the obligations of any other individual or
      entity;




(s)  recommend
      approval of any new equity incentive plan;




(t)  form
      or
      acquire any subsidiary, joint venture or similar business entity;
      or




(u)  directly
      or indirectly enter into, or permit to exist, any material transaction with
      any
      affiliate of the Company, any director or officer or any affiliate of a director
      or officer, or transfer, pay, loan or otherwise obligate the Company to give
      cash, services, assets or other items of value to affiliates, officers or
      directors or any affiliate of a officer or director or commit to do any of
      the
      preceding after the date hereof, except for employee compensation or for
      reimbursement of ordinary business expenses.





*Board
      of Directors* .
      For so
      long as any shares of the Series A Convertible Preferred Stock originally
      issued under the Securities Purchase Agreement remain outstanding, the holders
      of a majority-in-interest of the shares of the Series A Convertible
      Preferred Stock originally issued under the Securities Purchase Agreement then
      outstanding have the right to designate all the persons to serve as directors
      on
      the Board of Directors of the Company and its subsidiaries. If the holders
      of
      the shares of the Series A Convertible Preferred Stock originally issued
      under the Securities Purchase Agreement then outstanding choose not to designate
      any directors, the holders of a majority-in-interest of the shares of the
      Series A Convertible Preferred Stock originally issued under the Securities
      Purchase Agreement then outstanding may appoint a designee to serve as an
      observer at all meetings of the Company’s or its subsidiaries’ Board of
      Directors and committees thereof.





*Investor’s
      Rights Agreement* .
      In
      connection with, and as a condition to, the purchase and sale of the Series
      A
      Convertible Preferred Stock, the Company, Radical, Zach Bair and Paul Marin
      entered into an Investor’s Rights Agreement. The Investor’s Rights Agreement
      grants Radical certain demand, piggy-back and shelf registration rights and
      sets
      forth the procedures pursuant to which those rights may be exercised and
      effected. The Investor’s Rights Agreement also grants Radical rights of first
      refusal to purchase any or all of the securities of the Company that Messrs.
      Bair or Marin propose to sell or otherwise transfer on the same terms and
      conditions as the proposed sale or transfer by them. In addition, the Investor’s
      Rights Agreement provides that Messrs. Bair and Marin are prohibited from
      selling or otherwise transferring any securities of the Company owned by them
      for a period of three years. After three years, they can sell or otherwise
      transfer only half of the securities owned by them. If, however,
      Messrs. Bair or Marin is terminated for a reason other than cause, upon his
      termination he can sell a total of 10% of the securities owned by him in any
      given month. Further, in the Investor’s Rights Agreement, the Company covenanted
      with Radical to certain matters, including, the protective provisions described
      above.





**Classification.** Since
      the
      redemption right with respect to the Series A Convertible Preferred Stock
      is conditional, the Series A Convertible Preferred Stock is not a liability
      under SFAS No. 150, “Accounting for Certain Financial Instruments with
      Characteristics of both Liabilities and Equity,” but should be classified as
      equity. Based on the guidance in EITF D-98, “Classification and Measurement of
      Redeemable Securities,” however, the Series A Convertible Preferred Stock
      is classified outside of permanent stockholders’ equity.  Except in the
      case of an ordinary liquidation event that involves the redemption and
      liquidation of all equity securities, EITF D-98 provides that if a security
      is
      subject to any event that could trigger a redemption and that event is not
      solely within the control of the Company, regardless of its probability, then
      the preferred stock is to be classified outside of permanent equity. Radical
      controls over 50% of the voting securities of the Company since the
      Series A Convertible Preferred Stock held by Radical can vote on all
      matters in which the common stockholders are required or permitted to
      vote.  Therefore, Radical would be able to control a vote to redeem the
      Series A Convertible Preferred Stock if such a measure were brought to a
      vote of stockholders and, thus, the Series A Convertible Preferred Stock
      could be redeemable at the option of the holder and any redemption event would
      be outside the control of the issuer.




19


**IMMEDIATEK,
      INC.** **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**


NOTE
      4 - NEW BASIS OF
      ACCOUNTING




As
      a
      result of the change in control of the Company by virtue of the purchase of
      the
      Series A Convertible Preferred Stock by Radical, the Company has “pushed down”
its basis to a proportionate amount of its underlying assets and liabilities
      acquired based on the estimated fair market values of the assets and
      liabilities. The primary changes to the balance sheet reflect:





·
            adjustments
                to the Company’s fixed assets to reflect a step-up in basis of those
                assets;


·
            the
                recording of a value for the Company’s trade names, trade marks and
                covenants not to compete;


·
            adjustments
                to historical goodwill to reflect goodwill arising from the push
                down
                accounting adjustments;


·
            the
                recording of a value for assets held for
                sale;


·
            the
                recording of a value for the Company’s deferred tax asset and liability;
                and


·
            an
                increase in additional paid-in capital from these
                adjustments.





The
      primary changes to the statements of operations are:





·
            an
                increase in net operating loss due to a higher level of depreciation
                from
                the increase in the depreciable basis of fixed assets;
                and


·
            an
                increase in net operating loss due to a higher level of amortization
                related to the increase in the amortizable basis of intangible
                assets.





The
      primary changes to the statements of cash flow are:





·
            a
                decrease in net cash used in operating activities due to a higher
                level of
                depreciation from the increase in the depreciable basis of fixed
                assets;
                and


·
            a
                decrease in net cash used in operating activities due to a higher
                level of
                amortization related to the increase in the amortizable basis of
                intangible assets.





Due
      to
      the impact of the changes resulting from the “push down” accounting adjustments
      described above, the statements of operations and the statements of cash flow
      presentations separate the Company’s results and cash flows into two periods:
      (1) the period ending on June 7, 2006, which was the day prior to the
      consummation of the sale of the Series A Convertible Preferred Stock, and (2)
      the period beginning on June 8, 2006 utilizing the new basis of accounting.
      The
      results and cash flows are further separated by a heavy black line to indicate
      the effective date of the new basis of accounting.





**NOTE
      5 - GOING CONCERN**





As
      shown
      in the accompanying financial statements, as of June 30, 2006, the Company
      has
      retained earnings of $21,378. The retained earnings balance represents 23 days
      of activity, including a gain on extinguishment of debt of $69,219, and is
      not
      indicative of expected future results. Prior to the new basis of accounting,
      the
      Company had an accumulated deficit of $9,497,606. Accordingly, this raises
      substantial doubt about the Company’s ability to continue as a going
      concern.





Prior
      to
      the issuance and sale of the Series A Convertible Preferred Stock, the Company
      had been attempting to raise adequate capital to be able to continue its
      operations and implement its business plan, and management had to devote a
      significant amount of time to raising capital rather than to operations. Due
      to
      the lack of adequate funds in the second half of 2005 and the first five months
      of 2006, management of the Company took certain steps to reduce cash
      expenditures while pursuing additional financing. In January 2006, the Company
      entered into the Securities Purchase Agreement with Radical Holdings LP. This
      transaction was consummated on June 8, 2006, and provided the Company with
      an
      aggregate of $2,653,000 in funds, which is net of $347,000 of funds previously
      loaned to the Company by Radical and credited towards the purchase price of
      the
      Series A Convertible Preferred Stock. In accordance with the Securities Purchase
      Agreement, the proceeds from the issuance and sale of the Series A Convertible
      Preferred Stock were, and are first being, utilized to pay all outstanding
      liabilities, including, among others, accounts payable and indebtedness. After
      satisfying all of the Company’s liabilities, management of the Company estimates
      that it will have $900,000 of operating funds, which management anticipates
      will
      sustain the Company’s operations until the conclusion of second quarter of
      fiscal 2007. At the end of the second quarter of fiscal 2007, the Company will
      be required to obtain additional funds if it does not generate sufficient cash
      from operating activities to fund its future operations.





20


**IMMEDIATEK,
      INC.**


**NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**
  In
        that
        regard, the Company is undertaking various plans and measures, which it believes
        will increase funds generated from operating activity. No assurances, however,
        can be given that those plans and measures will be successful in increasing
        funds generated from operating activity.





The
      accompanying financial statements have been prepared on a going concern basis,
      which contemplates the realization of assets and the satisfaction of liabilities
      in the normal course of business. These financial statements do not include
      any
      adjustments to the recoverability and classification of recorded asset amounts
      or the amount and classification of liabilities that might be necessary should
      the Company be unable to continue as a going concern.





**NOTE
      6 - ASSET ACQUISITION**




On
      February 28, 2005, the Company entered into an Asset Purchase Agreement with
      Moving Records, LLC, a private Minnesota corporation (“MR”). Pursuant to the
      Asset Purchase Agreement, the Company acquired assets and assumed certain
      liabilities in exchange for 16,000 shares of Company common stock. A summary
      of
      the fair market value of assets acquired and the liabilities assumed recorded
      in
      the financial statements is as follows:





Equipment
            
            $
            288,998Intellectual
                property
            
            
            237,781Accounts
                payable
            
            
            (13,973
            )Note
                payable due to bank
            
            
            (24,806
            )Note
                payable - commercial vehicle
            
            
            (80,000
            )Note
                payable - sellers
            
            
            (120,000
            )Net
                fair market value
            
            $
            288,000




In
      connection with the Asset Purchase Agreement, the Company issued 7,000 shares
      of
      its common stock in exchange for the extinguishment of the note payable for
      the
      commercial vehicle in the amount of $80,000. The fair market value of the common
      stock was $126,000. The difference between the fair market value of the common
      stock in exchange for the note payable was $46,000 and was recorded as a loss
      on
      extinguishment of debt in the financial statements.





**NOTE
      7 - STOCKHOLDERS’ EQUITY**





The
      Company is authorized to issue 500,000,000 shares of common stock, $0.001 par
      value per share, and 5,000,000 shares of preferred stock, $0.001 par value
      per
      share. Of the preferred stock, 4,392,286 shares have been designated as Series
      A
      Convertible Preferred Stock. All shares of common stock issued prior to June
      6,
      2006, are subject to preemptive rights, which entitles the holder of that common
      stock to purchase
      additional shares of commonstock
      with respect to issuances of common stock, or any security convertible into
      shares of common stock, prior to June 6, 2006 in certain
      circumstances.





21


**IMMEDIATEK,
        INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**




At
      the
      close of business on June 6, 2006, the Company effected a 100-for-1 reverse
      stock split of its then outstanding common stock. After giving effect to the
      reverse stock split, each stockholder of record immediately prior to the reverse
      stock split holds one one-hundredth of the shares they held before the reverse
      stock split. All fractional shares were rounded up to the next whole number.
      As
      a result, all references in this Quarterly Report on Form 10-QSB to numbers
      of
      shares of Company common stock, including those relating to prior periods,
      have
      been adjusted to reflect the reverse stock split.





During
      2005, the Company issued 2,640 shares of its common stock for consulting
      services. The fair market value of the shares was determined to be $37,680
      as of
      the measurement dates and was charged to consulting expense
      accordingly.





During
      2005, the Company issued 500 shares of its common stock to employees for
      services rendered. The fair market value of the underlying shares was determined
      to be $2,500 on the respective grant dates, as no further services were required
      by the employees.





On
      February 28, 2005, the Company issued 16,000 shares of its common stock in
      exchange for certain assets acquired and the liabilities assumed from Moving
      Records, LLC. Additionally, in connection with the asset purchase, the Company
      issued 7,000 shares of its common stock in exchange for the extinguishment
      of
      the note payable for the commercial vehicle in the amount of $80,000. See a
      further discussion regarding the Moving Records, LLC transaction in Note 6
      above.





On
      September 15, 2005, the Company issued 30,000, 22,750 and 5,000 shares of
      Company common stock to Zach Bair, Paul Marin and Gary Blum, respectively.
      On
      March 2, 2006, Zach Bair, Paul Marin and Gary Blum agreed with the Company
      to
      rescind these shares effective as of the date of issue. The certificates
      evidencing these shares were returned to the transfer agent and cancelled in
      March 2006.





On
      September 23, 2005, the Company issued 6,000 shares of its common stock to
      Paul Marin valued at $12,000. Effective September 2005, Mr. Marin returned
      these
      shares of Company common stock to the transfer agent because they were issued
      to
      him in error.





On
      June
      7, 2006, pursuant to agreements with holders of instruments evidencing Company
      indebtedness, the Company issued an aggregate of 42,040 shares of Company common
      stock upon conversion of $525,500 aggregate principal amount of that
      indebtedness. The fair market value of the common stock was determined to be
      $588,560 on the date of conversion.





On
      June
      7, 2006, pursuant to an Agreement, Settlement and Release with each of Jess
      Morgan & Company, or Jess Morgan, and Phil McMorrow, the Company issued
      98,783 and 9,879 shares of Company common stock to Jess Morgan and Mr. McMorrow,
      respectively.





On
      June
      8, 2006, the Company issued and sold 4,392,286 shares of Series A Convertible
      Preferred Stock to Radical Holdings LP for an aggregate cash purchase price
      of
      $3,000,000. *See* “Note
      3 -
      Change in Control and Series A Convertible Preferred Stock” above.





22


**IMMEDIATEK,
      INC.** **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**


**NOTE
      8 - WARRANTS AND OPTIONS**





**Warrants
      to Purchase Common Stock:**





The
      following table summarizes the information with respect to warrants for the
      six
      months ended June 30, 2006 and 2005:




**2006**
            
            **2005****Number
                of Shares****Underlying
                Warrants**
            
            **Weighted
                Average Exercise Price**
            
            **Number
                of Shares****Underlying
                Warrants**
            
            **Weighted
                Average Exercise Price**Balance,
                beginning of year
            
            
            38,759
            
            $
            23.51
            
            
            45,559
            
            $
            20.10Warrants
                granted
            
            
            -
            
            
            -
            
            
            -
            
            
            -Warrants
                expired
            
            
            1,334
            
            
            30.00
            
            
            6,500
            
            
            100.00Warrants
                exercised
            
            
            -
            
            
            -
            
            
            -
            
            
            -Balance,
                June 30
            
            
            37,425
            
            $
            23.28
            
            
            39,059
            
            $
            23.45Exercisable,
                June 30
            
            
            37,425
            
            $
            23.28
            
            
            39,059
            
            $
            23.45





Shares
                UnderlyingShares
                Underlying Warrants Outstanding
            
            Warrants
                ExercisableWeightedShares
            
            Average
            
            Weighted
            
            Shares
            
            WeightedUnderlying
            
            Remaining
            
            Average
            
            Underlying
            
            AverageRange
                of
            
            Warrants
            
            Contractual
            
            Exercise
            
            Warrants
            
            ExerciseDate
            
            Exercise
                Prices
            
            Outstanding
            
            Life
            
            Price
            
            Exercisable
            
            PriceJune
                30, 2005
            
            $
            15.00
                - 75.00
            
            
            
            
            39,059
            
            
            1.8
                years
            
            $
            23.45
            
            
            
            39,059
            
            
            $
            23.45June
                30, 2006
            
            $
            20.00-75.00
            
            
            
            
            37,425
            
            
            0.8
                years
            
            $
            23.28
            
            
            
            37,425
            
            
            $
            23.28











**Options
      to Purchase Common Stock:**





On
      February 14, 2006, the Company terminated its consulting relationship with
      a
      consultant to whom it granted an option to purchase 6,500 shares of Company
      common stock. Pursuant to the agreement evidencing the option, shares vested
      in
      36 equal monthly installments at the end of each calendar month, commencing
      in
      May 2005, so long as the consulting arrangement was in effect. As a result
      of
      the termination of this consulting arrangement and in accordance with the option
      agreement, the shares acquirable pursuant to this option ceased to vest after
      nine monthly installments, which resulted in 1,625 vested shares under this
      option. The term of this option for vested shares expires on May 5,
      2008.





23


**IMMEDIATEK,
        INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**


The
      following table summarizes the information with respect to stock options for
      the
      six months ended June 30, 2006 and 2005:





**2006**
            
            **2005****Number
                of Shares**
              **Underlying
                Options**
            
            **Weighted
                Average Exercise Price**
            
            **Number
                of Shares**
              **Underlying
                Options**
            
            **Weighted
                Average Exercise Price**Balance,
                beginning of year
            
            
            11,000
            
            $
            35.45
            
            
            4,500
            
            $
            65.00Options
                granted
            
            
            -
            
            
            -
            
            
            6,500
            
            
            15.00Options
                expired
            
            
            9,375
            
            
            39.00
            
            
            -
            
            
            -Options
                exercised
            
            
            -
            
            
            -
            
            
            -
            
            
            -Balance,
                June 30
            
            
            1,625
            
            $
            15.00
            
            
            11,000
            
            $
            35.45Exercisable,
                June 30
            
            
            1,625
            
            $
            15.00
            
            
            4,861
            
            $
            61.29





Shares
                UnderlyingShares
                Underlying Options Outstanding
            
            Options
                ExercisableWeightedShares
            
            Average
            
            Weighted
            
            Shares
            
            WeightedUnderlying
            
            Remaining
            
            Average
            
            Underlying
            
            AverageRange
                of
            
            Options
            
            Contractual
            
            Exercise
            
            Options
            
            ExerciseDate
            
            Exercise
                Prices
            
            Outstanding
            
            Life
            
            Price
            
            Exercisable
            
            PriceJune
                30, 2005
            
            $
            15.00
                - 65.00
            
            
            
            
            11,000
            
            
            2.0
                years
            
            $
            35.45
            
            
            
            4,861
            
            
            $
            61.29June
                30, 2006
            
            $
            15.00
            
            
            
            
            1,625
            
            
            1.9
                years
            
            $
            15.00
            
            
            
            1,625
            
            
            $
            15.00








**NOTE
      9 - NOTES PAYABLE**





Pursuant
      to the Securities Purchase Agreement, Radical Holdings LP loaned funds to the
      Company to pay outstanding liabilities, accounts payable or other obligations
      and to provide necessary funds to operate the Company’s business prior to the
      consummation of the sale of the Series A Convertible Preferred Stock. These
      funds loaned to the Company were required to be applied in strict accordance
      with the uses approved by Radical Holdings LP and be fully credited towards
      the
      aggregate purchase price of the Series A Convertible Preferred Stock. As of
      June 7, 2006, Radical Holdings LP had loaned the Company an aggregate of
      $347,000, which was applied to the purchase price of the Series A Convertible
      Preferred Stock.





Effective
      January 31, 2006, the Company made an Amended and Restated Consolidated Secured
      Convertible Promissory Note in the aggregate principal amount of $330,749 in
      favor of a noteholder. This note revised the conversion terms of the Secured
      Convertible Promissory Notes previously made by the Company in favor of the
      noteholder and consolidated all of the Secured Convertible Promissory Notes
      previously made by the Company in favor of the noteholder and advances to the
      Company previously made by the noteholder.





24


**IMMEDIATEK,
        INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**


On
      June
      7, 2006, the Company issued 42,040 shares of common stock upon the conversion
      of
      $525,500 of outstanding principal indebtedness at a conversion price of $12.50
      per share as follows:





**Principal**
            
            **Principal****Description**
            
            **Outstanding**
            
            **Converted**Amended
                & Restated Consolidated Secured Convertibe Promissory
                Note,bearing
                interest at 10% per annum, due on June 30, 2006
            
            $
            330,749
            
            $
            300,500Secured
                Convertible Promissory Notes, bearing interest at 10% per
                annumdue
                April 1, 2006
            
            
            175,000
            
            
            150,000Secured
                Convertible Promissory Notes, bearing interest at 10% per
                annumdue
                April 1, 2006
            
            
            25,000
            
            
            25,000Secured
                Convertible Promissory Notes, bearing interest at 10% per
                annumdue
                April 1, 2006
            
            
            50,000
            
            
            50,000$
            580,749
            
            $
            525,500





These
      noteholders waived all accrued and unpaid interest on this outstanding principal
      indebtedness. The fair market value of Company common stock on the date of
      conversion was $14 per share. As a result of the conversion, $5,024 was recorded
      as a gain on conversion of debt in the financial statements. The remaining
      principal balance on these notes of $55,249 was paid during June 2006 subsequent
      to the closing of the Securities Purchase Agreement with Radical Holdings
      LP.





In
      addition to the remaining principal balance on the convertible notes payable,
      the Company paid $472,900 on various notes payable outstanding during June
      2006
      subsequent to the closing of the Securities Purchase Agreement with Radical
      Holdings LP. These noteholders waived all accrued and unpaid interest on the
      notes, which resulted in a gain on extinguishment of debt in the amount of
      $69,219.





At
      June
      30, 2006, $100,000 of principal remains outstanding on a promissory note bearing
      interest at 7% per annum that was due April 1, 2006. The noteholder has agreed
      to waive all accrued and unpaid interest on this note.





**NOTE
      10 - ACCOUNTS PAYABLE**





As
      of
      June 30, 2006, the Company had outstanding accounts payable in the amount of
      $415,685, of which $322,730, or 78%, had been outstanding over 90 days. The
      carrying value of accounts payable approximates fair value due to the short-term
      nature of the obligations.





The
      Company has negotiated reductions and settled with certain accounts payable
      vendors. The settlements resulted in a reduction of accounts payable of $140,525
      for the six months ended June 30, 2006. This amount was primarily related to
      legal and consulting expenses incurred in prior years. The settlements were
      recorded in the financial statements upon acceptance of payment in full by
      the
      vendors.





**NOTE
      11 - INCOME TAXES**





While
      the
      Company had generated substantial tax loss carryforwards in prior years, the
      ability to use these loss carryforwards has been substantially affected as
      a
      result of an ownership change (as defined in the Internal Revenue Code of 1986,
      as amended) that occurred in connection with the issuance and sale of the Series
      A Convertible Preferred Stock.  The Company believes that the use of loss
      carryforwards generated prior to the issuance and sale of the Series A
      Convertible Preferred Stock will be limited to approximately $133,500 per year
      for the next 20 years. The Company, however, has recorded a valuation allowance
      due to the uncertainty of the utilization of the net operating loss carryforward
      in future periods.





25


**IMMEDIATEK,
        INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        (Continued)**
 **JUNE
        30, 2006**
 **(Unaudited)**


The
      following table presents the components of the deferred tax asset and liability
      at June 30, 2006:





Deferred
                Tax Asset:Net
                operating loss
            
            $
            2,670,000Valuation
                allowance
            
            
            (2,605,536
            )Deferred
                tax asset, net
            
            $
            64,464Deferred
                Tax Liability:Depreciation
            
            $
            49,844Amortization
            
            
            14,620$
            64,464







**NOTE
      12 - RELATED PARTY TRANSACTIONS**





**License
      Agreement:** On June
      22, 2006, the Company entered into a License Agreement with Radical Incubation
      Management LLC, which is an affiliate of Radical Holdings LP. The License
      Agreement permits Radical Incubation Management LLC to use, as long as it or
      its
      affiliates own a ten percent or greater interest in the Company, the marks,
      names and logos of the Company to promote the Company. Radical Incubation
      Management LLC and its affiliates are not entitled to receive any compensation
      for their efforts and are not required to pay the Company for the use of those
      materials.





**NOTE
      13 - SUBSEQUENT EVENTS**





**Restatements
      of Fiscal Years Ending December 31, 2005, 2004 and 2003**





The
      Company filed amendments to its annual reports for the years ended December
      31,
      2005 and 2004 on July 18, 2006 and July 20, 2006, respectively, to restate
      its
      previously issued consolidated financial statements for fiscal years ended
      December 31, 2005, 2004 and 2003, because of accounting errors in reporting
      financing and other transactions. Further information on the restatements and
      the corresponding adjustments can be found in “Note 1 - Restatement of Prior
      Years’ Consolidated Financial Statements” above and in those filings with the
      Securities and Exchange Commission.





The
      Company has not amended, and does not intend to amend, its previously filed
      Quarterly Reports on Form 10-QSB for the quarterly periods in years 2005,
      2004 and 2003; however, the Company has shown, and will continue to show,
      restated comparative financial statements for the quarterly periods in fiscal
      2005 in the Quarterly Reports on Forms 10-QSB that it files during fiscal year
      2006. For this reason, the consolidated financial statements and related
      financial information for the affected periods contained in such previously
      filed Quarterly Reports on 10-QSB should no longer be relied upon.








26





**Item
      2.**  **Management’s
      Discussion and Analysis or Plan of Operation**





**Overview**





Unless
      the context otherwise indicates, the words “we,” “our,” “ours,” “us” and the
“Company” refer to Immediatek, Inc., or Immediatek, and its subsidiaries,
      including DiscLive, Inc., or DiscLive, collectively.





The
      following Management’s Discussion and Analysis, or MD&A, is intended to aid
      the reader in understanding us, our operations and our present business
      environment. MD&A is provided as a supplement to, and should be read in
      conjunction with, our condensed consolidated financial statements and the notes
      accompanying those financial statements, which are included in this Quarterly
      Report on Form 10-QSB. Additionally, MD&A should be read in conjunction with
      our Annual Report on Form 10-KSB/A (Amendment No. 1) for the year ended December
      31, 2005. MD&A includes the following sections:





·
            Recent
                Developments - a description of important events that have recently
                occurred.


·
            Our
                Business - a general description of our business; our objective,
                our areas
                of focus; and the challenges and risks of our
                business.


·
            Critical
                Accounting Policies and Estimates - a discussion of accounting policies
                that require critical judgments and
                estimates.


·
            Operations
                Review - an analysis of our consolidated results of operations for
                the
                periods presented in our condensed consolidated financial statements
                included in this Quarterly Report on Form
                10-QSB.


·
            Liquidity,
                Capital Resources and Financial Position - an analysis of our cash
                flows
                and debt and contractual obligations; and an overview of our financial
                position.





**Recent
      Developments**





***Sale
      of Preferred Stock and Change in Control***





On
      January 24, 2006, we entered into a Securities Purchase Agreement, or Purchase
      Agreement, with Radical Holdings LP, or Radical, which was subsequently amended
      on March 3, 2006. On June 8, 2006, pursuant to the Purchase Agreement, we issued
      and sold, and Radical purchased, 4,392,286 shares of the Series A Convertible
      Preferred Stock for an aggregate purchase price of $3,000,000, or $0.68 per
      share of Series A Convertible Preferred Stock.





The
      Series A Convertible Preferred Stock is, at the option of the holders of
      the Series A Convertible Preferred Stock, convertible at any time into that
      aggregate number of full shares of our common stock representing 95% of the
      total common stock outstanding after giving effect to the conversion. A holder
      of a share of Series A Convertible Preferred Stock is entitled to vote on
      all matters required or permitted to be voted upon by our stockholders. Each
      holder of a share of Series A Convertible Preferred Stock is entitled to
      the number of votes equal to the largest number of full shares of our common
      stock into which all shares of Series A Convertible Preferred Stock held by
      that holder could be converted. As a result and as of June 8, 2006, Radical
      beneficially owns 95% of the outstanding securities entitled to vote on matters
      required or permitted to be submitted to our stockholders. Accordingly, a change
      in control of us occurred on June 8, 2006.





Additionally,
      for so long as any shares of the Series A Convertible Preferred Stock
      originally issued under the Purchase Agreement remain outstanding, the holders
      of a majority-in-interest of the shares of the Series A Convertible
      Preferred Stock originally issued under the Purchase Agreement then outstanding
      have the right to designate all the persons to serve as directors on the board
      of directors of the Company and its subsidiaries. If the holders of the shares
      of Series A Convertible Preferred Stock originally issued under the
      Purchase Agreement then outstanding choose not to designate any directors,
      the
      holders of a majority-in-interest of the shares of Series A Convertible
      Preferred Stock originally issued under the Purchase Agreement then outstanding
      may appoint a designee to serve as an observer at all meetings of the Company’s
      or its subsidiaries’ board of directors and committees thereof.





27


***New
      Basis of Accounting***





As
      a
      result of the change in control of us by virtue of the purchase of the Series
      A
      Convertible Preferred Stock by Radical, we have “pushed down” our basis to a
      proportionate amount of our underlying assets and liabilities acquired based
      on
      the estimated fair market values of the assets and liabilities. The primary
      changes to the balance sheet reflect:





·
            adjustments
                to our fixed assets to reflect a step-up in basis of those
                assets;


·
            the
                recording of a value for our trade names, trade marks and covenants
                not to
                compete;


·
            adjustments
                to historical goodwill to reflect goodwill arising from the push
                down
                accounting adjustments;


·
            the
                recording of a value for assets held for
                sale;


·
            the
                recording of a value for our deferred tax asset and liability;
                and


·
            an
                increase in additional paid-in capital from these
                adjustments.





The
      primary changes to the statements of operations are:





·
            an
                increase in net operating loss due to a higher level of depreciation
                from
                the increase in the depreciable basis of fixed assets;
                and


·
            an
                increase in net operating loss due to a higher level of amortization
                related to the increase in the amortizable basis of intangible
                assets.





The
      primary changes to the statements of cash flow are:





·
            a
                decrease in net cash used in operating activities due to a higher
                level of
                depreciation from the increase in the depreciable basis of fixed
                assets;
                and


·
            a
                decrease in net cash used in operating activities due to a higher
                level of
                amortization related to the increase in the amortizable basis of
                intangible assets.





Due
      to
      the impact of the changes resulting from the “push down” accounting adjustments
      described above, the statements of operations and the statements of cash flow
      presentations separate our results and cash flows into two periods: (1) the
      period ending on June 7, 2006, which was the day prior to the consummation
      of
      the sale of the Series A Convertible Preferred Stock, and (2) the period
      beginning on June 8, 2006 utilizing the new basis of accounting. The results
      and
      cash flows are further separated by a heavy black line to indicate the effective
      date of the new basis of accounting.





***Resignation
      and Appointment of Officers and Directors***





Effective
      July 12, 2006, Zach Bair resigned from all positions held with us. Specifically,
      those positions he resigned from are:





·
            Director
                of Immediatek and DiscLive;


·
            Chief
                Executive Officer and President of Immediatek;
                and


·
            Chief
                Executive Officer and President of
                DiscLive.





On
      July
      12, 2006, the boards of directors of Immediatek and DiscLive appointed Darin
      Divinia to fill the vacancy created by the resignations of Mr. Bair from the
      respective boards of directors. Mr. Divinia will serve for the unexpired terms.
      For so long as any shares of the Series A Convertible Preferred Stock
      originally issued under the Purchase Agreement remain outstanding, the holders
      of a majority-in-interest of the shares of Series A Convertible Preferred
      Stock originally issued under the Purchase Agreement then outstanding have
      the
      right to designate all the persons to serve as directors on the board of
      directors of Immediatek and its subsidiaries. In connection with that right,
      Radical, as the sole stockholder of the Series A Convertible Preferred Stock,
      nominated Mr. Divinia to be appointed, and the Immediatek and DiscLive boards
      of
      directors appointed Mr. Divinia, to the respective board of directors. Mr.
      Divinia is currently employed by Radical Incubation LP, an affiliate of Radical
      Holdings LP.





28


Additionally,
      on July 12, 2006, the boards of directors of Immediatek and DiscLive appointed
      Travis Hill as Chief Executive Officer of Immediatek and DiscLive. Mr. Hill
      previously served as Vice President - Artist Relations of DiscLive. Further,
      on
      July 12, 2006, the boards of directors of Immediatek and DiscLive appointed
      Paul
      Marin as President and Secretary. Mr. Marin currently serves, and will continue
      to serve, as a director of Immediatek and DiscLive. Prior to being appointed
      as
      President and Secretary of Immediatek and DiscLive, Mr. Marin served as Vice
      President, Chief Operating Officer and Secretary of Immediatek since 2003 and
      DiscLive since 2004.





**Our
      Business**





***General***





Immediatek,
      through its wholly-owned, operating subsidiary, DiscLive, records live content,
      such as concerts and conferences, and makes the recorded content available
      for
      delivery to attendees within fifteen minutes after the conclusion of the live
      event. The recorded content is made available for pre-sale and sale at the
      venue
      and on our website, www.disclive.com. The content is delivered primarily via
      compact disc.





DiscLive
      has recorded live events for Billy Idol, Jefferson Starship, the Pixies, The
      Fixx, George Clinton (DVD) and Vertical Horizon, among others. During the three
      and six months ended June 30, 2006, we recorded **** two **** live
      events, one of which was a music festival, and ten live events, respectively,
      and sold, or delivered under contract, approximately 860 and 1,760 recordings
      of
      those events and prior events during the three and six months ended June 30,
      2006, respectively.





***History
      of Operating Losses***





The
      following table presents our net income and losses and cash used in
      operating activities for the periods indicated.





**For
                the Three Months Ended**
            
            
            
            **For
                the Six Months Ended****June
                30,**
            
            
            
            **June
                30,****2006**
            
            **2005**
            
            **2006**
            
            **2005****(restated)**
            
            
            
            
            
            **(restated)****(unaudited)**
            
            **(unaudited)**
            
            **(unaudited)**
            
            **(unaudited)****(see
                Note 4)**
            
            
            
            **(see
                Note 4)****Successor**
            
            **Predecessor**
            
            
            
            **Successor**
            
            **Predecessor****June
                8 -**
              **June
                30**
            
            **April
                1 -**
              **June
                7**
            
            **Predecessor**
            
            **June
                8 -**
              **June
                30**
            
            **January
                1 -**
              **June
                7**
            
            **Predecessor**Net
                income (loss)
            
            $
            21,378
            
            $
            (247,479
            )
            $
            (232,298
            )
            $
            21,378
            
            $
            (410,405
            )
            $
            (678,425
            )Net
                cash used in operating activities
            
            $
            (350,914
            )
            $
            (113,261
            )
            $
            (74,372
            )
            $
            (350,914
            )
            $
            (300,516
            )
            $
            (243,285
            )








Our
      net
      income during the period from June 8, 2006 to June 30, 2006, however, is
      attributable to the gain on the extinguishment of debt of $69,219 and not the
      result of net income from operations. Our existence and operations are dependent
      upon our ability to generate sufficient funds from operations to fund operating
      activities.





The
      reports of our independent registered public accounting firm on our financial
      statements for the years ended December 31, 2005 (restated) and 2004 (restated),
      included an emphasis paragraph, in addition to their audit opinion, stating
      that
      our recurring losses from operations and working capital deficiency raise
      substantial doubt about our ability to continue as a going concern. The
      financial statements do not include any adjustments to reflect the possible
      effects on recoverability and classification of assets or the amounts and
      classification of liabilities that may result from our inability to continue
      as
      a going concern.





We
      funded
      our operations during the three and six months ended June 30, 2006 primarily
      through borrowings from Radical Holdings LP. During the three and six months
      ended June 30, 2006, we borrowed $60,000 and $347,000 aggregate principal
      amount, respectively, to cover operations and repay indebtedness. These
      borrowings were credited in full towards the aggregate purchase price of the
      Series A Convertible Preferred Stock. *See* “Liquidity
      and Capital Resources and Financial Position” below.





29


***Our
      Objective***





Our
      objective is to utilize our assets - brand name, unique concept and people
      - to
      increase live recordings and sales of those recordings. Our vision to achieve
      that objective includes:





·
            Increase
                in Recordings: Market and expand our services to a number of different
                live events, including those other than concerts, in order to increase
                the
                sales of our product.


·
            Profit:
                Maximizing our profit on live events by controlling costs and utilizing
                our assets efficiently. We are refining our strategy on the deployment
                of
                assets to record live events in order to make most efficient use
                of those
                assets, while reducing costs. Additionally, we believe by expanding
                our
                services outside of concert recordings that we can more effectively
                maximize profit by reducing sales
                risk.





***Areas
      of Focus***





*Revitalizing
      the Company.* We
      are
      focused on revitalizing the Company using the proceeds from the sale of the
      Series A Convertible Preferred Stock. We believe that we have the necessary
      people to support and manage our operations. Further, utilizing the proceeds
      from the sale of the Series A Convertible Preferred Stock to repay all of our
      outstanding liabilities, which is required by the Purchase Agreement, we believe
      that we will have better relationships with vendors and more creditability
      with
      customers.





*Realizing
      on Our Business Plan and Potential.* Our
      management is now able to direct substantially all of its attention to
      implementing the business plan and to operations rather than attempts to secure
      additional funding to continue operations with the consummation of the
      transaction evidenced by the Purchase Agreement. We further believe that our
      existing employees, together with our new employees, will be able to better
      market our products, expend more time analyzing and procuring contracts to
      record live events and better manage costs and assets in performing under those
      contracts.





***Challenges
      and Risks***





Operating
      in this industry provides unique opportunities; however, challenges and risks
      accompany those opportunities. Our management has identified the following
      material challenges and risks that will require substantive attention from
      our
      management.





*Utilizing
      the new funds in a manner that is accretive* .
      If we
      do not manage our assets aggressively and apply the additional capital received
      judicially, we may not generate sufficient cash from our operating activities
      to
      fund our operations going forward, which would require us to seek additional
      funding in the future.





*Obtaining
      Contracts to Record Live Content that are Profitable* .
      While
      obtaining contracts to record live events creates challenges in itself, our
      ability to obtain contracts to record live events that generate sufficient
      sales
      of our products is even more challenging. Prior to entering into recording
      contracts, we perform an analysis of the costs to be incurred and the amount
      of
      our product that we estimate will be sold. These analyses contain many
      assumptions, many of which are beyond our control. If our analysis of a number
      of recording contracts proves to be incorrect, we will not generate sufficient
      cash from our operating activities to sustain operations and, therefore, will
      require additional funding to continue our business.





*Competing
      with a Substantial Competitor.* Our
      major competitor, InstantLive, LLC, which is a subsidiary of Live Nation, Inc.,
      formerly a part of Clear Channel Communications Inc., has substantially more
      resources than us, both financially and in the industry. According to Live
      Nation, for the year ended December 31, 2005, it promoted, produced or
      hosted over 29,500 events, including music concerts, theatrical performances,
      specialized motor sports and other events, with total attendance nearing
      60 million, and as of December 31, 2005, it owned or operated 119
      venues, consisting of 77 domestic and 42 international venues, which include
      37
      amphitheaters, 61 theaters, 15 clubs, four arenas and two festival sites.
      As a result of Live Nation’s ownership of the venues and production of the
      events, we believe that InstantLive has a substantial competitive position
      to us
      in obtaining live event recording contracts.





30


*Maintaining
      a Quality Product.* Our product is relatively new and continues to evolve. In early 2004, the speed
      of compact disc duplicators increased to a point where our product could be
      produced efficiently. As technology improves and better quality recordings
      are
      necessary, we will be required to improve our products to maintain a market
      for
      our products and compete with our competitors. In that regard, we have already
      transitioned to multi-track recording, which provides a more quality
      product.





Additionally,
      see “Risk Factors” in Part I of our Annual Report on Form 10-KSB for the year
      ended December 31, 2005 concerning other risks and uncertainties facing
      us.





Challenges
      and risks, including those described above, if not properly addressed or
      managed, may have a material adverse effect on our business. Our management,
      however, is endeavoring to properly manage and address these challenges and
      risks.





**Critical
      Accounting Policies and Estimates**





Our
      condensed consolidated financial statements are prepared in accordance with
      generally accepted accounting principles in the United States, which requires
      management to make estimates, judgments and assumptions that the amounts
      reported in the condensed consolidated financial statements and in the notes
      accompanying those financial statements. Certain information and footnote
      disclosures normally included in financial statements prepared in accordance
      with generally accepted accounting principles, however, have been condensed
      or
      omitted pursuant to rules and regulations promulgated by the Securities and
      Exchange Commission. We believe that the most critical accounting policies
      and
      estimates relate to the following:





·
            **Recoverability
                of Non-Current Assets.**The Company has certain non-current assets, including goodwill, intangible
                assets and tangible fixed assets. Management considers the life of
                goodwill on an annual basis and is assessed for recoverability if
                events
                occur that provide indications of impairment. An assessment of
                recoverability involves comparing the carrying value of the asset
                with its
                recoverable amount, typically its value in use. If the value in use
                of a
                non-current asset were determined to be less than its carrying value,
                an
                impairment would be charged to the income
                statement.


·
            **Revenue
                Recognition.**DiscLive primarily delivers products sold by it through shipment
                to the
                customer. Revenue is recognized upon shipment of the product to the
                customer. A smaller percentage of revenues are recognized at the
                point of
                sale at the event being recorded. Certain customers purchase and
                accept
                hand delivery of the product on-site at the event. Pursuant to Emerging
                Issues Task Force Issue No. 00-10, “Accounting for Shipping and Handling
                Fees and Costs,” (EITF 00−10), the Company includes all shipping and
                handling fees charged to its customers in gross revenue. All actual
                costs
                incurred by the Company for shipping and handling are immaterial
                in nature
                and are included as direct costs of
                revenue.





While
      our
      estimates and assumptions are based on our knowledge of current events and
      actions we may undertake in the future, actual results may ultimately differ
      from those estimates and assumptions. For a discussion of our significant
      accounting policies, see Note 2 of Notes to Condensed Consolidated Financial
      Statements commencing on page 12.





***Recent
      Accounting Standards and Pronouncements***





Refer
      to
      Note 2 of the condensed consolidated financial statements commencing on page
      12
      for a discussion of recent accounting standards and pronouncements.





31


**Operations
      Review**





As
      a
      result of the push down accounting adjustments described in “Recent
      Developments—New Basis of Accounting,” above, the activity for the period June
      8, 2006 through June 30, 2006, or the “post-push down” period, is reported under
      the new basis of accounting, while the activity for the periods April 1, 2006
      through June 7, 2006 and January 1, 2006 through June 7, 2006, or the “pre-push
      down” period, is reported on the historical basis of accounting, which was used
      in 2005. For the post-push down period, the primary changes to the income
      statement reflect an increase in net operating loss due to a higher level of
      depreciation from the increase in the depreciable basis of fixed assets and
      an
      increase in net operating loss due to a higher level of amortization related
      to
      the increase in the amortizable basis of intangible assets.





***Three
      Months Ended June 30, 2006 Compared to Three Months Ended June 30, 2005
      (restated)***


**For
                  the Three Months Ended June 30,****2006**
              
              
              **2005**(restated)(unaudited)
              
              
              (unaudited)(see
                  Note 4)Successor
              
              
              PredecessorJune
                  8 -
                June
                  30
              
              
              April
                  1 -
                June
                  7
              
              
              Predecessor**Revenues**
              
              $
              19,740
              
              $
              2,425
              
              $
              56,000Cost
                  of sales
              
              
              7,472
              
              
              24,645
              
              
              30,196**Gross
                  Profit**
              
              
              12,268
              
              
              (22,220
              )
              
              25,804**Gross
                  Profit Margin**
              
              
              62
              %
              
              (916
              )%
              
              46
              %General
                  and administrative expenses
              
              
              5,459
              
              
              17,656
              
              
              12,297Consulting
                  services
              
              
              -
              
              
              -
              
              
              -Professional
                  fees
              
              
              20,259
              
              
              208,133
              
              
              31,504Salaries
                  and benefits
              
              
              31,524
              
              
              59,726
              
              
              68,817Non-cash
                  stock compensation
              
              
              -
              
              
              -
              
              
              16,197Non-cash
                  consulting expense
              
              
              -
              
              
              -
              
              
              -Depreciation
                  and amortization
              
              
              2,867
              
              
              1,418
              
              
              78,673Gain
                  on settlement of accounts payable
              
              
              -
              
              
              (91,894
              )
              
              -**Net
                  operating loss**
              
              $
              (47,841
              )
              $
              (217,259
              )
              $
              (188,684
              )Gain
                  on extinguishment of debt
              
              
              69,219
              
              
              5,024
              
              
              -Interest
                  expense, net
              
              
              -
              
              
              (35,244
              )
              
              (43,614
              )**Net
                  income (loss)**
              
              $
              21,378
              
              $
              (247,479
              )
              $
              (232,298
              )Deemed
                  dividend related to beneficialconversion
                  feature on Series A convertiblepreferred
                  stock
              
              
              (3,000,000
              )
              
              -
              
              
              -**Net
                  loss attributable to common stockholders**
              
              $
              (2,978,622
              )
              $
              (247,479
              )
              $
              (232,298
              )Basic
                  and diluted loss per common shareattributable
                  to common stockholders
              
              $
              (6.39
              )
              $
              (0.53
              )
              $
              (0.75
              )






*Revenues* .
      Revenues for the post-push down period primarily relate to sales of compact
      discs of a music festival recorded in June 2006. For the pre-push down period
      during the three months ended June 30, 2006, revenues consisted of sales of
      compact discs related to live events recorded in prior periods, as there were
      no
      recordings made of live events during that period that were revenue generating.
      For the three months ended June 30, 2005, revenues related primarily to the
      sale
      of recordings made of three live events during that period, one of which was
      a
      music festival.





32


We
      expect
      revenues in the second half of 2006 to be higher than the first half of 2006,
      as
      we are ramping up our operations, which were limited in the second half of
      fiscal 2005 and the first five months of fiscal 2006 due to the lack of
      necessary operating funds. The Company currently has two live events under
      contract for the third quarter of 2006 and is actively pursuing six live events
      for the remainder of the year.





*Cost
      of Sales* .
      The
      decrease in costs of sales for the post-push down period compared to the
      pre-push down period in the three months ended June 30, 2006 is attributable
      to
      the costs incurred in recording a non-revenue event in April 2006, as well
      as
repair
      and transport costs for moving our commercial vehicle to our corporate offices.
      Additionally, the costs in the post-push down period are lower than expected
      due
      to the music festival recorded in June 2006 being located near our offices.
      Thus, no travel costs were incurred to record this live event. The
      increase in costs of sales for the three months ended June 30, 2006 compared
      to
      the three months ended June 30, 2005 is related to costs of our commercial
      vehicle.





We
      expect
      costs of sales to increase if our revenues increase; however, we continue to
      evaluate and implement plans to reduce the costs associated with our products,
      which we anticipate will offset a portion of any increase in cost of
      sales.





*General
      and Administrative Expense* .
      The
      increase in general and administrative expense for the three months ended June
      30, 2006, as compared to the three months ended June 30, 2005, is
      attributable to
      improvements made to our website during 2006.





We
      anticipate that general and administrative expense will increase over the next
      six months as costs associated with the implementation of new procedures and
      policies, which will assist us in operating more efficiently and may be required
      by the Sarbanes-Oxley Act of 2002, or Sarbanes Oxley.





*Consulting
      Services.* During
      the remainder of the 2006 fiscal year, consulting services expense will
      increase, as we have retained individuals and companies to repair our
      information systems and equipment, and potentially design and implement new
      information systems.





*Professional
      Fees* .
      The
      increase in professional fees is attributable to the fees incurred in connection
      with the restatement of our financial statements for the years ended December
      31, 2005, 2004 and 2003, together with the legal fees for the consummation
      of
      the Series A Convertible Preferred Stock transaction.





We
      anticipate that professional fees for the remainder of year 2006 will decrease
      due to the completion of the restatement of our financial statements for the
      years ended December 31, 2005, 2004 and 2003 and the consummation of the Series
      A Convertible Preferred Stock transaction . The decrease will, however, be
      offset by anticipated increases in audit fees, fees resulting from
      implementation of the Sarbanes-Oxley requirement for the audit of our internal
      controls, and other professional fees incurred as we ramp up our
      operations.





*Salaries
      and Benefits* .
      Salaries and benefits increased as the result of the employment contracts
      entered into with our officers in March 2006, the addition of new employees
      and
      the retention of benefit plans. Salaries and benefits will be approximately
      $135,000 for the remainder of 2006, which has been reduced from prior reported
      amounts due the resignation of Zach Bair from all positions with the
      Company.





*Depreciation
      and Amortization.* This
      decrease is attributable to the impairment of fixed assets and intangible assets
      recognized at December 31, 2005, which was offset by the step-up in basis
      resulting from the application of “push down” accounting. *See* “Recent
      Developments—New Basis of Accounting” above.





33


*Gain
      on Settlement of Accounts Payable* .
      This
      amount results from the discounts that we negotiated and settled during the
      period on certain outstanding accounts payable. We are continuing to negotiate
      with vendors on past due amounts. Favorable settlements, however, may not be
      obtained in future periods. The amount recorded in accounts payable represents
      the current amounts outstanding per invoices received from vendors.





*Gain
      on Extinguishment of Debt* .
      This
      relates solely to the forgiveness of interest payable on notes payable that
      were
      settled in cash during the post-push down period. For the pre-push down period
      during the three months ended June 30, 2006, this relates to the conversion
      of
      certain notes payable into Company common stock.





*Interest
      Expense* .
      Interest expense decreased as a result of the conversion of notes payable on
      June 7, 2006 and the subsequent repayment of notes payable during June
      2006.





*Income
      Taxes.* There
      was
      no Federal income tax expense recorded for the three months ended June 30,
      2005
      and the pre-push down period during the three months ended June 30, 2006, due
      to
      a net loss in each period. There was no Federal income tax expense recorded
      for
      the post-push down period due to the utilization of the net operating loss
      carryforward.





***Six
      Months Ended June 30, 2006 Compared to Six Months Ended June 30, 2005
      (restated)***


**For
                  the Six Months Ended June
                  30,****2006**
              
              
              **2005**(restated)(unaudited)
              
              
              (unaudited)(see
                  Note 4)Successor
              
              
              PredecessorJune
                  8 -
                June
                  30
              
              
              January
                  1 -
                June
                  7
              
              
              Predecessor**Revenues**
              
              $
              19,740
              
              $
              19,451
              
              $
              76,795Cost
                  of sales
              
              
              7,472
              
              
              43,584
              
              
              52,606**Gross
                  Profit**
              
              
              12,268
              
              
              (24,133
              )
              
              24,189**Gross
                  Profit Margin**
              
              
              62
              %
              
              (124
              )%
              
              31
              %General
                  and administrative expenses
              
              
              5,459
              
              
              34,903
              
              
              139,939Consulting
                  services
              
              
              -
              
              
              -
              
              
              18,210Professional
                  fees
              
              
              20,259
              
              
              328,347
              
              
              69,420Salaries
                  and benefits
              
              
              31,524
              
              
              89,130
              
              
              143,235Non-cash
                  stock compensation
              
              
              -
              
              
              3,410
              
              
              52,001Non-cash
                  consulting expense
              
              
              -
              
              
              -
              
              
              37,680Depreciation
                  and amortization
              
              
              2,867
              
              
              2,755
              
              
              117,715Gain
                  on settlement of accounts payable
              
              
              -
              
              
              (140,525
              )
              
              -**Net
                  operating loss**
              
              $
              (47,841
              )
              $
              (342,153
              )
              $
              (554,011
              )Gain
                  (loss) on extinguishment of debt
              
              
              69,219
              
              
              5,024
              
              
              (46,000
              )Interest
                  expense, net
              
              
              -
              
              
              (73,276
              )
              
              (78,414
              )**Net
                  income (loss)**
              
              $
              21,378
              
              $
              (410,405
              )
              $
              (678,425
              )Deemed
                  dividend related to beneficialconversion
                  feature on Series A convertiblepreferred
                  stock
              
              
              (3,000,000
              )
              
              -
              
              
              -**Net
                  loss attributable to common stockholders**
              
              $
              (2,978,622
              )
              $
              (410,405
              )
              $
              (678,425
              )Basic
                  and diluted loss per common shareattributable
                  to common stockholders
              
              $
              (7.54
              )
              $
              (1.04
              )
              $
              (2.21
              )





34


*Revenues* .
      The
      decrease in revenues is attributable to fewer sales of the recordings made,
      as
      we recorded the same number of live events during the six months ended June
      30,
      2006 and 2005.





We
      expect
      revenues in the second half of 2006 to be higher than the first half of 2006,
      as
      we are ramping up our operations, which were limited in the second half of
      fiscal 2005 and the first five months of fiscal 2006 due to the lack of
      necessary operating funds. The
      Company currently has two live events under contract for the third quarter
      of
      2006 and is actively pursuing six live events for the remainder of the
      year.





*Cost
      of Sales* .
      Costs
      of sales remained
      relatively consistent with the prior year primarily due to the recording of
      approximately the same number of live events in each period.





We
      expect
      costs of sales to increase if our revenues increase; however, we continue to
      evaluate and implement plans to reduce the costs associated with our products,
      which we anticipate will offset a portion of any increase in cost of
      sales.




*General
      and Administrative Expense* .
      The
      decrease in general and administrative expense for the six months ended June
      30,
      2006, as compared to the six months ended June 30, 2005, is attributable to
      the
      reduction of rent for office space, a decrease in travel and other measures
      we
      undertook to reduce operations due to a lack of sufficient operating
      funds.





We
      anticipate that general and administrative expense will increase over the next
      six months for costs associated with the implementation of new procedures and
      policies, which will assist us in operating more efficiently and may be required
      by Sarbanes Oxley.





*Consulting
      Services.* The
      decrease in consulting services expense is the result of the termination of
      all
      our prior consultants. During the remainder of the 2006 fiscal year, consulting
      services expense will increase, as we have retained individuals and companies
      to
      repair our information systems and equipment, and potentially design and
      implement new information systems.





*Professional
      Fees* .
      The
      increase in professional fees is attributable to fees incurred in connection
      with the restatement of our financial statements for the years ended December
      31, 2005, 2004 and 2003, together with the legal fees for the consummation
      of
      the Series A Convertible Preferred Stock transaction.





We
      anticipate that professional fees for the remainder of year 2006 will decrease
      due to the completion of the restatement of our financial statements for the
      years ended December 31, 2005, 2004 and 2003 and the consummation of the Series
      A Convertible Preferred Stock transaction . The decrease will, however, be
      offset by anticipated increases in audit fees, fees resulting from
      implementation of the Sarbanes-Oxley requirement for the audit of our internal
      controls, and other professional fees incurred as we ramp up our
      operations.




*Salaries
      and Benefits* .
      Salaries and benefits decreased
      due to the lack of operating funds in the first quarter of 2006 and the
      reduction of personnel, as compared to the prior year.Salaries and
      benefits will be approximately $135,000 for the remainder of 2006, which has
      been reduced from prior reported amounts due the resignation of Zach Bair from
      all positions with the Company.





*Depreciation
      and Amortization.* This
      decrease is attributable to the impairment of fixed assets and intangible assets
      recognized at December 31, 2005, which was offset by the step-up in basis
      resulting from the application of “push down” accounting. *See* “Recent
      Developments—New Basis of Accounting” above.





35


*Gain
      on Settlement of Accounts Payable* .
      This
      amount results from the discounts that we negotiated and settled during the
      period on certain outstanding accounts payable. We are continuing to negotiate
      with vendors on past due amounts. Favorable settlements, however, may not be
      obtained in future periods. The amount recorded in accounts payable represents
      the current amounts outstanding per invoices received from vendors.





*Gain
      on Extinguishment of Debt* .
      This
      relates to the forgiveness of interest payable on notes payable and to the
      conversion of certain notes payable into Company common stock.





*Interest
      Expense* .
      Interest expense increased as a result of a higher amount of notes payable
      outstanding during 2006 than in 2005.





*Income
      Taxes.* There
      was
      no Federal income tax expense recorded for the six months ended June 30, 2005
      and the pre-push down period during the six months ended June 30, 2006, due
      to a
      net loss in each period. There was no Federal income tax expense recorded for
      the post-push down period due to the utilization of the net operating loss
      carryforward.





**Liquidity
      and Capital Resources and Financial Position**





Prior
      to
      the issuance and sale of the Series A Convertible Preferred Stock, we had been
      attempting to raise adequate capital to be able to continue our operations
      and
      implement our business plan, and management had to devote a significant amount
      of time to raising capital rather than to operations. Due the lack of adequate
      funds in the second half of 2005 and the first five months of 2006, our
      management took certain steps to reduce cash expenditures while pursuing
      additional financing. In January 2006, the Company entered into the Securities
      Purchase Agreement with Radical. This transaction was consummated on June 8,
      2006, and provided us with an aggregate of $2,653,000 in funds, which is net
      of
      $347,000 funds previously loaned to us by Radical and credited towards the
      purchase price of the Series A Convertible Preferred Stock. In accordance with
      the Securities Purchase Agreement, the proceeds from the issuance and sale
      of
      the Series A Convertible Preferred Stock were, and are first being, utilized
      to
      pay all outstanding liabilities, including, among others, accounts payable
      and
      indebtedness. After satisfying all of our liabilities, our management estimates
      that we will have $900,000 of operating funds, which management anticipates
      will
      sustain our operations until the conclusion of the second quarter of fiscal
      2007. At the end of the second quarter of fiscal 2007, we will be required
      to
      obtain additional funds if we do not generate sufficient cash from operating
      activities to fund our future operating activities. In that regard, we
      undertaking various plans and measures, which we believe will increase funds
      generated from operating activity. No assurances, however, can be given that
      those plans and measures will be successful in increasing funds generated from
      operating activity.





As
      a
      result of the push down accounting adjustments described in “Recent
      Developments—New Basis of Accounting” above, the activity for the period June 8,
      2006 through June 30, 2006, or the “post-push down” period, is reported under
      the new basis of accounting, while the activity for the periods April 1, 2006
      through June 7, 2006 and January 1, 2006 through June 7, 2006, or the “pre-push
      down” period, is reported on the historical basis of accounting, which was used
      in 2005. For the post-push down period, the primary changes to the statements
      of
      cash flow reflect a decrease in net cash used in operating activities due to
      a
      higher level of depreciation from the increase in the depreciable basis of
      fixed
      assets and a decrease in net cash used in operating activities due to a higher
      level of amortization related to the increase in the amortizable basis of
      intangible assets.





*Operating
      Activities.* Cash
      used
      in operations was $350,914 and $113,261 for the post-push down and pre-push
      down
      periods, respectively, in the three months ended June 30, 2006. Cash used in
      operations was $74,372 for the three months ended June 30, 2005. The increase
      in
      cash used in operations is primarily attributable to the payment of accounts
      payable and accrued liabilities. Payment of these amounts was deferred during
      2005 due to the lack of funds.





Cash
      used
      in operations was $350,914 and $300,516 for the post-push down and pre-push
      down
      periods, respectively, in the six months ended June 30, 2006, as compared to
      $243,285 of cash used in operations for the six months ended June 30, 2005.
      The
      additional cash used in operations is attributable to the payment of a large
      portion of outstanding accounts payable and accrued liabilities. Payment of
      these amounts was deferred in 2005 due to the lack of funds.





36


*Investing
      Activities.* There
      were no investing activities during the post-push down period. Cash used in
      investing activities was $907 for the pre-push down period during the three
      months ended June 30, 2006. There were no investing activities for the
      three months ended June 30, 2005. The cash used in investing activities during
      2006 consisted of purchases of fixed assets.





Cash
      used
      in investing activities was $2,476 for the pre-push down period during the
      six
      months ended June 30, 2006. There were no investing activities for the six
      months ended June 30, 2005. The cash used in investing activities during 2006
      consisted of purchases of fixed assets.





*Financing
      Activities* .
      Cash
      from financing activities was $2,124,851 for the post-push down period and
      $60,000 for the pre-push down period in the three months ended June 30, 2006.
      Cash from financing activities was $23,735 for the three months ended June
      30,
      2005. The increase from 2005 is attributable to the issuance and sale of the
      Series A Convertible Preferred Stock to Radical that resulted in proceeds of
      $2,653,000. This increase was offset by the repayment of $528,149 of notes
      payable in the post-push down period.





Cash
      from
      financing activities was $2,124,851 for the post-push down period and $331,345
      for the pre-push down period in the six months ended June 30, 2006. Cash from
      financing activities was $221,735 for the six months ended June 30, 2005. The
      increase from 2005 is attributable to the issuance and sale of the Series A
      Convertible Preferred Stock to Radical that resulted in proceeds of $2,653,000.
      This increase was offset by the repayment of $528,149 of notes payable in the
      post-push down period.





*Indebtedness*





At
      June
      30, 2006, notes payable consisted of a promissory note for $100,000 that was
      due
      on April 1, 2006 and bears interest at seven percent per year. This noteholder
      has agreed to waive all accrued and unpaid interest. The Company expects to
      pay
      this promissory note in full prior to September 30, 2006 and is making every
      attempt to pay it in full prior to that date.





*Accounts
      Payable*





As
      of
      June 30, 2006, the Company had outstanding accounts payable in the amount of
      $415,685, of which $322,730, or 78%, had been outstanding over 90 days. The
      decrease in accounts payable is attributable to the utilization of the proceeds
      from the issuance and sale of the Series A Convertible Preferred Stock under
      the
      Securities Purchase Agreement to satisfy those accounts payable, as well as
      the
      favorable settlement of amounts due for a reduction of accounts payable in
      the
      amount of $140,525. We are continuing to negotiate with vendors on past due
      amounts. Favorable settlements, however, may not be obtained in future periods.
      The amount recorded in accounts payable represents the current amounts
      outstanding per invoices received from vendors.





*Contractual
      Obligations and Commercial Commitments*





The
      following table highlights, as of June 30, 2006, our contractual obligations
      and
      commitments by type and period:





**Payments
                due by Period****Contractual
                Obligations**
            
            **Total**
            
            **Less
                than 1 Year**
            
            **1-3
                Years**Short-Term
                Debt(1)
            
            $
            100,000
            
            $
            100,000
            
            
            -Lease
            
            
            16,000
            
            
            16,000
            
            
            -**Total:**
            
            $
            116,000
            
            $
            116,000
            
            
            -




(1)
            This
                noteholder has agreed to waive any and all accrued but unpaid interest
                on
                this note.





37


*Liquidity*





We
      will
      utilize approximately $450,000 of funds to operate our business at the desired
      level during the remainder of 2006. We presently do not generate sufficient
      cash
      from operations to fund our operating activities and, until the issuance and
      sale of the Series A Convertible Preferred Stock, limited operations to that
      which we deemed to be critical.





We
      believe that the funds received from the consummation of the issuance and sale
      of the Series A Convertible Preferred Stock on June 8, 2006, will provide us
      with the necessary funds to operate our business until the conclusion of the
      second quarter of fiscal 2007. At the end of the second quarter of fiscal 2007,
      we will be required to obtain additional funds if we doe not generate sufficient
      cash from operating activities to fund our future operating activities. In
      that
      regard, we undertaking various plans and measures, which we believe will
      increase funds generated from operating activity. No assurances, however, can
      be
      given that those plans and measures will be successful in increasing funds
      generated from operating activity.





**Item
      3.**  **Controls
      and Procedures**





Our
      chief
      executive officer and chief financial officer are responsible for establishing
      and maintaining disclosure controls and procedures (as defined in Rules
      13a−15(e) and 15d−15(e) promulgated under the Securities Exchange Act of 1934)
      for the Company. Accordingly, our chief executive officer and chief financial
      officer designed such disclosure controls and procedures, or caused such
      disclosure controls and procedures to be designed under their supervision,
      to
      ensure that material information relating to the Company, including our
      consolidated subsidiaries, is made known to our chief executive officer and
      chief financial officer by others within those entities. We regularly evaluate
      the effectiveness of disclosure controls and procedures and report our
      conclusions about the effectiveness of the disclosure controls quarterly on
      our
      Forms 10-QSB and annually on our Forms 10−KSB. Based upon the evaluation for the
      period ended June 30, 2006, for the reasons described below, our chief executive
      officer and chief financial officer concluded that our disclosure controls
      and
      procedures were not effective, as of the end of the period covered by this
      Report (June 30, 2006), in ensuring that material information relating to the
      Company required to be disclosed by the Company in reports that it files or
      submits under the Exchange Act is recorded, processed, summarized and reported
      within the time periods specified in the SEC’s rules and forms and that such
      information is accumulated and communicated to management, including the chief
      executive officer and the chief financial officer, as appropriate, to allow
      timely decisions regarding required disclosure. Notwithstanding the material
      weaknesses described below, the Company’s management has concluded that the
      condensed consolidated financial statements included in this Report on Form
      10-QSB fairly state, in all material respects, the Company’s financial
      condition, results of operations and cash flows for the periods presented in
      conformity with generally accepted accounting principles.





Based
      on
      the definition of “material weakness” in the Public Company Accounting Oversight
      Board’s Auditing Standard No. 2, An Audit of Internal Control Over Financial
      Reporting Performed in Conjunction With an Audit of Financial Statements,
      restatement of financial statements in prior filings with the SEC is a strong
      indicator of the existence of a “material weakness” in the design or operation
      of internal control over financial reporting. The Company has concluded that
      it
      did not maintain effective controls. The Company determined that because
      effective controls were not in place, the recognition of certain items was
      inconsistent with its accounting policies and that a material weakness existed
      in the Company’s internal control over financial reporting, and disclosed this
      to the Board of Directors and to the independent registered public accountants.
      In addition, the Company has determined that a material weakness exists in
      the
      Company’s internal controls over financial reporting related to the limited
      number of accounting personnel in the Company. The Company disclosed this to
      its
      Board of Directors and to its independent registered public
      accountants.





**Plan
      for Remediation of Material Weaknesses**





The
      Company is in the process of designing and instituting new policies that
      substantially improve these controls. Also, the Company has retained qualified
      personnel and consultants for its accounting and reporting
      functions.





38


**Changes
      in Internal Controls**





Changes
      in our internal controls are currently being designed and will be implemented
      on
      an ongoing basis as designed.





**Limitations
      on the Effectiveness of Controls**





Our
      management, including our chief executive officer and chief financial officer,
      does not expect that our disclosure controls and internal controls will prevent
      all error and all fraud. A control system, no matter how well conceived and
      operated, can provide only reasonable, not absolute, assurance that the
      objectives of the control system are met. Further, the design of a control
      system must reflect the fact that there are resource constraints, and the
      benefits of controls must be considered relative to their costs. Due to the
      inherent limitations in all control systems, no evaluation of controls can
      provide absolute assurance that all control issues and instances of fraud,
      if
      any, within the Company have been detected. These inherent limitations include
      the realities that judgments in decision making can be faulty, and that
      breakdowns can occur because of simple error or mistake. Additionally, controls
      can be circumvented by the individual acts of some persons, by collusion of
      two
      or more people, or by management override of the control.





The
      design of any system of controls is also based in part upon certain assumptions
      about the likelihood of future events occurring. There can be no assurance
      that
      any design will succeed in achieving its stated goals under all potential future
      conditions; over time, a control may become inadequate because of changes in
      conditions, or the degree of compliance with the policies or procedures may
      deteriorate. Due to the inherent limitations in a cost−effective control system,
      misstatements due to error or fraud may occur and not be detected.





39


**PART
      II — OTHER INFORMATION**





**Item
      6.**  **Exhibits**





The
      following exhibits are filed in accordance with the provisions of Item 601
      of Regulation S-B.





**Exhibit**
              **Number**
            
            **Description
                of Exhibit**10.18
            
            Employment,
                Confidential Information and Invention Assignment Agreement, dated
                as of
                April 3, 2006, by and between DiscLive, Inc. and Travis
                Hill.14.1
            
            Immediatek,
                Inc. Code of Business Conduct and Ethics.31.1
            
            Certification
                of Principal Executive Officer pursuant to Rule 13a-14(a) of the
                Securities Exchange Act.31.2
            
            Certification
                of Principal Financial Officer pursuant to Rule 13a-14(a) of the
                Securities Exchange Act.32.1
            
            Certification
                Required by 18 U.S.C. Section 1350 (as adopted pursuant to
                Section 906 of the Sarbanes-Oxley Act of
                2002).








40


**SIGNATURES**





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








Date: August 11, 2006****
            ****
            **IMMEDIATEK, INC.**a
                Nevada corporationBy:
            /s/
                PAUL MARINName:
            Paul
                MarinTitle:
            President
                and Secretary(On
                behalf of the Registrant and as PrincipalFinancial
                Officer)





S-1


**INDEX
      TO EXHIBITS**





**Exhibit**
              **Number**
            
            **Description
                of Exhibit**10.18
            
            Employment,
                Confidential Information and Invention Assignment Agreement, dated
                as of
                April 3, 2006, by and between DiscLive, Inc. and Travis
                Hill.14.1
            
            Immediatek,
                Inc. Code of Business Conduct and Ethics.31.1
            
            Certification
                of Principal Executive Officer pursuant to Rule 13a-14(a) of the
                Securities Exchange Act.31.2
            
            Certification
                of Principal Financial Officer pursuant to Rule 13a-14(a) of the
                Securities Exchange Act.32.1
            
            Certification
                Required by 18 U.S.C. Section 1350 (as adopted pursuant to
                Section 906 of the Sarbanes-Oxley Act of
                2002).





Exhibit
          Index