##### Table of Contents



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 1934
 For the quarterly period ended June 30, 2007
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 For the transition period from  to
 000-26073
 IMMEDIATEK, INC.
 
  Nevada
    
    86-0881193(State or other jurisdiction of incorporation or
    
    (IRS Employer Identification No.)organization)
 320 South Walton
Dallas, Texas 75226
 
  (214) 744-8801
 
  
  þ o
 o þ
  o þ




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##### 



IMMEDIATEK, INC.
 TABLE OF CONTENTS
 PageIntroduction
    
    
    1Forward-Looking Statements
    
    
    2Part I  Financial Information
    
    
    3Item 1. Financial Statements
    
    
    3Condensed Consolidated Balance Sheet at June 30, 2007 (unaudited)
    
    
    3Condensed Consolidated Statements of Operations for the three and six months ended
June 30, 2007 (unaudited), the period from June 8, 2006 to June 30, 2006 (unaudited),
the period from April 1, 2006 to June 7, 2006 (unaudited) and the period from
January 1, 2006 to June 7, 2006 (unaudited)
    
    
    4Condensed Consolidated Statements of Cash Flows for the three and six months ended
June 30, 2007 (unaudited), the period from June 8, 2006 to June 30, 2006 (unaudited),
the period from April 1, 2006 to June 7, 2006 (unaudited) and the period from
January 1, 2006 to June 7, 2006 (unaudited)
    
    
    5Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    6Item 2. Managements Discussion and Analysis or Plan of Operation
    
    
    14Item 3. Controls and Procedures
    
    
    25Part II  Other Information
    
    
    26Item 1. Legal Proceedings
    
    
    26Item 4. Submission of Matters to a Vote of Security Holders
    
    
    26Item 6. Exhibits
    
    
    27Signatures
    
    
    S-1Agreement of Mutual Termination of Services AgreementCertification of Principal Executive Officer - Rule 13a-14(a)Certification of Principal Financial Officer - Rule 13a-14(a)Certification Required by 18 U.S.C. Section 1350
  i




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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
    Reverse Stock Split
  New Basis of Accounting
 Push Down Accounting
 
    
    adjustments to our fixed assets to reflect a step-up in basis of those assets to fair value;
    
    the recording of the fair value of our trade names, trademarks and covenants not to compete;
    
    adjustments to historical goodwill to reflect goodwill arising from the push down
accounting adjustments;
    
    the recording of the fair value of assets held for sale;
 1




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
    
    a decrease in additional paid-in capital from these adjustments; and
    
    elimination of the accumulated deficit.
  
    
    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.
   
 
 FORWARD-LOOKING STATEMENTS
  
    
    our inability to continue as a going concern;
    
    our history of losses, which are likely to continue;
    
    our inability to utilize the funds received in a manner that is accretive;
    
    our inability to locate lines of businesses to acquire or consummate an acquisition
or, if acquired, to integrate them;
    
    dependence on third-party contractors; and
    
    changes in conditions affecting the economy generally.
  2




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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Immediatek, Inc.
 
 Condensed Consolidated Balance Sheet
 June 30, 2007(unaudited)AssetsCurrent assets:Cash
    
    $
    858,709Accounts receivable
    
    
    4,151Prepaid expenses and other current assets
    
    
    50Total current assets
    
    
    862,910Fixed assets, net
    
    
    76,297Assets held for sale
    
    
    6,386Total Assets
    
    $
    945,593Liabilities and Stockholders DeficitCurrent liabilities:Accounts payable
    
    $
    10,715Accrued liabilities
    
    
    73,218Total current liabilities
    
    
    83,933Series A convertible preferred stock (conditionally redeemable); $0.001 par value
4,392,286 authorized, issued and outstanding at June 30, 2007;
redemption/liquidation preference of $0.68 per share
    
    
    3,000,000Stockholders deficit:Common stock, $0.001 par value, 500,000,000 shares
authorized, 474,807 shares issued and outstanding at June 30, 2007
    
    
    475Capital deficit
    
    
    (44,613
    )Accumulated deficit
    
    
    (2,094,202
    )Total stockholders deficit
    
    
    (2,138,340
    )Total Liabilities, Preferred Stock and Stockholders Deficit
    
    $
    945,593
  3




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Immediatek, Inc.
 
 Condensed Consolidated Statements of Operations
 For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(unaudited)
    
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)(see Note 3)
    
    
    
    
    
    
    (see Note 3)Successor
    
    
    
    Predecessor
    
    
    
    
    
    
    Successor
    
    
    
    PredecessorSuccessor
    
    
    June 8 - June 30
    
    
    
    April 1 - June 7
    
    
    Successor
    
    
    June 8 - June 30
    
    
    
    January 1 - June 7Revenues
    
    $
    4,955
    
    
    $
    19,740
    
    
    
    $
    2,425
    
    
    $
    18,557
    
    
    $
    19,740
    
    
    
    $
    19,451Cost of sales
    
    
    8,037
    
    
    
    7,472
    
    
    
    
    24,645
    
    
    
    20,151
    
    
    
    7,472
    
    
    
    
    43,584Gross (loss) margin
    
    
    (3,082
    )
    
    
    12,268
    
    
    
    
    (22,220
    )
    
    
    (1,594
    )
    
    
    12,268
    
    
    
    
    (24,133
    )Expenses:General and administrative expenses
    
    
    4,957
    
    
    
    5,459
    
    
    
    
    17,656
    
    
    
    16,908
    
    
    
    5,459
    
    
    
    
    34,903Consulting services
    
    
    1,852
    
    
    
    
    
    
    
    
    
    
    
    
    4,326
    
    
    
    
    
    
    
    
    Professional fees
    
    
    43,045
    
    
    
    20,259
    
    
    
    
    208,133
    
    
    
    96,698
    
    
    
    20,259
    
    
    
    
    328,347Salaries and benefits
    
    
    37,246
    
    
    
    31,524
    
    
    
    
    59,726
    
    
    
    103,024
    
    
    
    31,524
    
    
    
    
    89,130Non-cash stock compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,410Non-cash consulting expense  related party
    
    
    10,500
    
    
    
    
    
    
    
    
    
    
    
    
    21,000
    
    
    
    
    
    
    
    
    Depreciation and amortization
    
    
    12,364
    
    
    
    2,867
    
    
    
    
    1,418
    
    
    
    24,739
    
    
    
    2,867
    
    
    
    
    2,755Loss on sale of assets held for sale
    
    
    2,092
    
    
    
    
    
    
    
    
    
    
    
    
    3,172
    
    
    
    
    
    
    
    
    (Gain) loss on extinguishment of debt
    
    
    
    
    
    
    (69,219
    )
    
    
    
    43,056
    
    
    
    
    
    
    
    (69,219
    )
    
    
    
    43,056Gain on
change in estimate of payroll tax liability
    
    
    (159,994
    )
    
    
    
    
    
    
    
    
    
    
    
    (159,994
    )
    
    
    
    
    
    
    
    Loss on impairment of goodwill and intangibles
    
    
    1,792,570
    
    
    
    
    
    
    
    
    
    
    
    
    1,792,570
    
    
    
    
    
    
    
    
    Loss on impairment of fixed assets
    
    
    20,324
    
    
    
    
    
    
    
    
    
    
    
    
    20,324
    
    
    
    
    
    
    
    
    Settlement
    
    
    22,000
    
    
    
    
    
    
    
    
    
    
    
    
    22,000
    
    
    
    
    
    
    
    
    Gain on settlement of accounts payable
    
    
    
    
    
    
    
    
    
    
    
    (91,894
    )
    
    
    
    
    
    
    
    
    
    
    
    (140,525
    )Total expenses
    
    
    1,786,952
    
    
    
    (9,110
    )
    
    
    
    238,095
    
    
    
    1,944,767
    
    
    
    (9,110
    )
    
    
    
    361,076Net
operating (loss) income
    
    
    (1,790,038
    )
    
    
    21,378
    
    
    
    
    (260,315
    )
    
    
    (1,946,361
    )
    
    
    21,378
    
    
    
    
    (385,209
    )Other income (expense)Other income  related party
    
    
    5,839
    
    
    
    
    
    
    
    
    
    
    
    
    5,839
    
    
    
    
    
    
    
    
    Interest income (expense)
    
    
    7,289
    
    
    
    
    
    
    
    
    (35,244
    )
    
    
    15,315
    
    
    
    
    
    
    
    
    (73,276
    )Net (loss) income
    
    
    (1,776,910
    )
    
    
    21,378
    
    
    
    
    (295,559
    )
    
    
    (1,925,207
    )
    
    
    21,378
    
    
    
    
    (458,485
    )Deemed dividend related to beneficial
conversion feature on Series A convertible
preferred stock
    
    
    
    
    
    
    (3,000,000
    )
    
    
    
    
    
    
    
    
    
    
    
    (3,000,000
    )
    
    
    
    Net loss attributable to common stockholders
    
    $
    (1,776,910
    )
    
    $
    (2,978,622
    )
    
    
    $
    (295,559
    )
    
    $
    (1,925,207
    )
    
    $
    (2,978,622
    )
    
    
    $
    (458,485
    )Weighted average number of common shares
outstanding  basic and fully diluted
    
    
    474,807
    
    
    
    466,435
    
    
    
    
    466,435
    
    
    
    474,807
    
    
    
    394,877
    
    
    
    
    394,877Basic and diluted loss per common share attributable
to common stockholders
    
    $
    (3.74
    )
    
    $
    (6.38
    )
    
    
    $
    (0.63
    )
    
    $
    (4.05
    )
    
    $
    (7.54
    )
    
    
    $
    (1.16
    )
  4




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Immediatek, Inc.
 
 Condensed Consolidated Statements of Cash Flow
 For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(unaudited)
    
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)(see Note 3)
    
    
    
    
    
    
    (see Note 3)Successor
    
    
    
    Predecessor
    
    
    
    
    
    
    Successor
    
    
    
    PredecessorSuccessor
    
    
    June 8 - June 30
    
    
    
    April 1 - June 7
    
    
    Successor
    
    
    June 8 - June 30
    
    
    
    January 1 - June 7Cash flows from operating activitiesNet (loss) income
    
    $
    (1,776,910
    )
    
    $
    21,378
    
    
    
    $
    (295,559
    )
    
    $
    (1,925,207
    )
    
    $
    21,378
    
    
    
    $
    (458,485
    )Depreciation and amortization
    
    
    12,364
    
    
    
    2,867
    
    
    
    
    1,418
    
    
    
    24,739
    
    
    
    2,867
    
    
    
    
    2,755Non-cash interest expense
    
    
    
    
    
    
    
    
    
    
    
    7,436
    
    
    
    
    
    
    
    
    
    
    
    
    12,353Non-cash
consulting expense  related party
    
    
    10,500
    
    
    
    
    
    
    
    
    
    
    
    
    21,000
    
    
    
    
    
    
    
    
    Non-cash stock compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,410Loss on sale of assets held for sale
    
    
    2,092
    
    
    
    
    
    
    
    
    
    
    
    
    3,172
    
    
    
    
    
    
    
    
    (Gain) loss on extinguishment of debt
    
    
    
    
    
    
    (69,219
    )
    
    
    
    43,056
    
    
    
    
    
    
    
    (69,219
    )
    
    
    
    43,056Gain on
change in estimate of payroll tax liability
    
    
    (159,994
    )
    
    
    
    
    
    
    
    
    
    
    
    (159,994
    )
    
    
    
    
    
    
    
    Loss on impairment of goodwill and intangibles
    
    
    1,792,570
    
    
    
    
    
    
    
    
    
    
    
    
    1,792,570
    
    
    
    
    
    
    
    
    Loss on impairment of fixed assets
    
    
    20,324
    
    
    
    
    
    
    
    
    
    
    
    
    20,324
    
    
    
    
    
    
    
    
    Adjustments to reconcile net (loss) income to net
cash used in operating activities:Accounts receivable
    
    
    (3,175
    )
    
    
    (145
    )
    
    
    
    
    
    
    
    2,527
    
    
    
    (145
    )
    
    
    
    (4,000
    )Prepaid expenses and other current assets
    
    
    1,451
    
    
    
    24,900
    
    
    
    
    81,265
    
    
    
    2,864
    
    
    
    24,900
    
    
    
    
    (26,000
    )Accounts payable
    
    
    (30,344
    )
    
    
    (134,060
    )
    
    
    
    (5,034
    )
    
    
    (10,837
    )
    
    
    (134,060
    )
    
    
    
    61,233Accrued liabilities
    
    
    31,619
    
    
    
    (196,635
    )
    
    
    
    37,188
    
    
    
    38,541
    
    
    
    (196,635
    )
    
    
    
    17,267Accrued interest
    
    
    
    
    
    
    
    
    
    
    
    16,969
    
    
    
    
    
    
    
    
    
    
    
    
    47,895Net cash used in operating activities
    
    
    (99,503
    )
    
    
    (350,914
    )
    
    
    
    (113,261
    )
    
    
    (190,301
    )
    
    
    (350,914
    )
    
    
    
    (300,516
    )Cash flows from investing activitiesPurchase of fixed assets
    
    
    
    
    
    
    
    
    
    
    
    (907
    )
    
    
    (3,549
    )
    
    
    
    
    
    
    
    (2,476
    )Net cash used in investing activities
    
    
    
    
    
    
    
    
    
    
    
    (907
    )
    
    
    (3,549
    )
    
    
    
    
    
    
    
    (2,476
    )Cash flows from financing activitiesCash overdraft
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,951Payments on notes payable
    
    
    
    
    
    
    (528,149
    )
    
    
    
    
    
    
    
    
    
    
    
    (528,149
    )
    
    
    
    (18,606
    )Proceeds from notes payable
    
    
    
    
    
    
    
    
    
    
    
    60,000
    
    
    
    
    
    
    
    
    
    
    
    
    347,000Proceeds from issuance of Series A convertible
preferred stock
    
    
    
    
    
    
    2,653,000
    
    
    
    
    
    
    
    
    
    
    
    
    2,653,000
    
    
    
    
    Net cash provided by financing activities
    
    
    
    
    
    
    2,124,851
    
    
    
    
    60,000
    
    
    
    
    
    
    
    2,124,851
    
    
    
    
    331,345Net (decrease) increase in cash
    
    
    (99,503
    )
    
    
    1,773,937
    
    
    
    
    (54,168
    )
    
    
    (193,850
    )
    
    
    1,773,937
    
    
    
    
    28,353Cash  beginning
    
    
    958,212
    
    
    
    28,353
    
    
    
    
    82,521
    
    
    
    1,052,559
    
    
    
    28,353
    
    
    
    
    Cash  ending
    
    $
    858,709
    
    
    $
    1,802,290
    
    
    
    $
    28,353
    
    
    $
    858,709
    
    
    $
    1,802,290
    
    
    
    $
    28,353Supplemental disclosures:Interest paid
    
    $
    
    
    
    $
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    $
    Income taxes paid
    
    $
    
    
    
    $
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    $
    Number of shares issued for settlement/termination
of agreements
    
    
    
    
    
    
    
    
    
    
    
    108,662
    
    
    
    
    
    
    
    
    
    
    
    
    108,662Value of shares issued for settlement/termination
of agreements
    
    $
    
    
    
    $
    
    
    
    
    $
    1,521,268
    
    
    $
    
    
    
    $
    
    
    
    
    $
    1,521,268Number of shares issued for conversion of notes payable
    
    
    
    
    
    
    
    
    
    
    
    42,040
    
    
    
    
    
    
    
    
    
    
    
    
    42,040Value of shares issued for conversion of notes payable
    
    $
    
    
    
    $
    
    
    
    
    $
    636,598
    
    
    $
    
    
    
    $
    
    
    
    
    $
    636,598
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IMMEDIATEK, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 JUNE 30, 2007
 (Unaudited)
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES
 Description of Business:
 Push Down Accounting: See
 Going Concern: See
 See
 Basis of Presentation:
  
    
    the three and six months ended June 30, 2007;
    
    the period from June 8, 2006 to June 30, 2006;
    
    the period from April 1, 2006 to June 7, 2006; and
    
    the period from January 1, 2006 to June 7, 2006,
  6




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IMMEDIATEK, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
JUNE 30, 2007
(Unaudited)
 Management Estimates and Significant Risks and Uncertainties:
  
    
    inability to continue as a going concern;
    
    history of losses, which are likely to continue;
    
    inability to utilize the funds received in a manner that is accretive;
    
    inability to locate lines of businesses to acquire or consummate an acquisition or,
if acquired, to integrate them;
    
    dependence on third-party contractors; and
    
    changes in conditions affecting the economy generally.
 Business Segments:
 Cash and Cash Equivalents:
 Fair Value of Financial Instruments:
 Fixed Assets: See
 Estimated Remaining
    
    
    Accumulated
    
    
    Net Book Value atCost
    
    
    Useful Lives
    
    
    Depreciation
    
    
    June 30, 2007Equipment
    
    $
    6,386
    
    
    Held for Sale
    
    $
    
    
    
    $
    6,386Computer equipment
    
    $
    18,211
    
    
    0.4 years
    
    $
    13,506
    
    
    $
    4,705Recording equipment
    
    
    82,271
    
    
    4 years
    
    
    17,586
    
    
    
    64,685Office furniture and equipment
    
    
    9,434
    
    
    2 years
    
    
    2,527
    
    
    
    6,907Total fixed assets
    
    $
    109,916
    
    
    
    
    
    
    $
    33,619
    
    
    $
    76,297
  7




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IMMEDIATEK, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
JUNE 30, 2007
(Unaudited)
 See
 Impairment of Long-Lived Assets:
  Revenue Recognition:
 Goodwill:
 Stock-Based Compensation:
 Net Loss per Share:
 8




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IMMEDIATEK, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
JUNE 30, 2007
(Unaudited)
  Comprehensive Loss:
 Income Taxes:
  Recently Adopted Accounting Pronouncements: Accounting for Uncertainty in Income Taxesan interpretation of FASB
Statement No. 109. Accounting for Income Taxes
 NOTE 2  CHANGE IN CONTROL
  See
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IMMEDIATEK, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
JUNE 30, 2007
(Unaudited)
 NOTE 3  NEW BASIS OF ACCOUNTING
  
    
    adjustments to the Companys fixed assets to reflect a step-up in basis of those
assets to fair value;
    
    the recording of the fair value of the Companys trade names, trademarks and
covenants not to compete;
    
    adjustments to historical goodwill to reflect goodwill arising from the push down
accounting adjustments;
    
    the recording of the fair value of assets held for sale;
    
    a decrease in additional paid-in capital from these adjustments; and
    
    elimination of the accumulated deficit.
  
    
    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.
   NOTE 4  GOING CONCERN
 See
  10




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##### Table of Contents



IMMEDIATEK, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
JUNE 30, 2007
(Unaudited)
    NOTE 5  WARRANTS AND OPTIONS
 Warrants to purchase Company common stock:
  Number of Shares
    
    
    WeightedUnderlying
    
    
    AverageWarrants
    
    
    Exercise PriceBalance, January 1, 2007
    
    
    37,425
    
    
    $
    23.28Warrants granted
    
    
    
    
    
    
    Warrants expired
    
    
    (33,925
    )
    
    
    20.27Warrants exercised
    
    
    
    
    
    
    Balance, June 30, 2007
    
    
    3,500
    
    
    $
    52.50Exercisable, June 30, 2007
    
    
    3,500
    
    
    $
    52.50
 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, 2007
    
    $
    30.00-75.00
    
    
    
    3,500
    
    
    0.20 years
    
    $
    52.50
    
    
    
    3,500
    
    
    $
    52.50
 11




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##### Table of Contents



IMMEDIATEK, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
JUNE 30, 2007
(Unaudited)
 Options to purchase Company common stock:
  Number of Shares
    
    
    WeightedUnderlying Stock
    
    
    AverageOptions
    
    
    Exercise PriceBalance, January 1, 2007
    
    
    1,625
    
    
    $
    15.00Stock options granted
    
    
    
    
    
    
    Stock options expired
    
    
    
    
    
    
    Stock options exercised
    
    
    
    
    
    
    Balance, June 30, 2007
    
    
    1,625
    
    
    $
    15.00Exercisable, June 30, 2007
    
    
    1,625
    
    
    $
    15.00
 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, 2007
    
    $
    15.00
    
    
    
    1,625
    
    
    0.9 years
    
    $
    15.00
    
    
    
    1,625
    
    
    $
    15.00
 NOTE 6  ACCRUED LIABILITIES
  See
 NOTE 7  RELATED PARTY TRANSACTIONS
 Services Agreement:
 12




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##### Table of Contents



IMMEDIATEK, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
JUNE 30, 2007
(Unaudited)
 See
 NOTE 8  SUBSEQUENT EVENTS
 Resignation of Executive Officer:
 
    
    Director of DiscLive;
    
    Chief Executive Officer of Immediatek; and
    
    Chief Executive Officer, President and Secretary of DiscLive.
 Termination of Services Agreement:
 Appointment of Executive Officer:
  Payroll
Taxes Liability:
 Settlement of Dispute:
 13




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##### Table of Contents



Item 2. Managements Discussion and Analysis or Plan of Operation
 Overview
   
    
    Recent Developments  a description of important events that have recently occurred.
    
    Our Business  a general description of our business and our objectives and areas of focus.
    
    Critical Accounting Policies and Estimates  a discussion of accounting policies
that require critical judgments and estimates.
    
    Recent Accounting Standards and Pronouncements  a discussion of recently adopted
accounting standards and pronouncements applicable to us.
    
    Operations Review  an analysis of our condensed consolidated results of operations
for the periods presented 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
 Resignation of Executive Officer
  
    
    Director of DiscLive;
    
    Chief Executive Officer of Immediatek; and
    
    Chief Executive Officer, President and Secretary of DiscLive.
 Termination of Services Agreement
  Appointment of Executive Officer
  14




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##### Table of Contents



Payroll
Taxes Liability
  Settlement of Dispute
  Our Business
 General Overview
 See
  History of Losses
  For the Three Months Ended
    
    For the Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006(unaudited)
    
    (unaudited)
    
    (unaudited)
    
    (unaudited)(see Note 3)
    
    
    
    
    
    (see Note 3)Successor
    
    

    Predecessor
    
    
    
    
    
    Successor
    

    PredecessorSuccessor
    
    June 8 - June 30
    
    
    April 1 - June 7
    
    Successor
    
    June 8 - June 30
    

    January 1 - June 7Net (loss) income
    
    $
    (1,776,910
    )
    
    $
    21,378
    
    
    
    $
    (295,559
    )
    
    $
    (1,925,207
    )
    
    $
    21,378
    
    

    $
    (458,485
    )Net cash used in operating activities
    
    $
    (99,503
    )
    
    $
    (350,914
    )
    
    
    $
    (113,261
    )
    
    $
    (190,301
    )
    
    $
    (350,914
    )
    

    $
    (300,516
    )
 15




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##### Table of Contents



See
 Our Objectives and Areas of Focus
  DiscLive
 
    
    the prior poor performance of the DiscLive business (seeHistory of Losses
above);
    
    industry conditions, which include, among others, the resistance by record
labels to permit the recording of represented artists, increases in venue fees and
the movement from physical to digital product; and
    
    the departure of Mr. Hill.
  Acquisitions
 Critical Accounting Policies and Estimates
  16




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##### Table of Contents




    
    Recoverability of Non-Current Assets. We have certain non-current assets.
Management considers the useful life of the assets on an annual basis, or more
periodically as circumstances dictate, and assesses whether or not there is an
impairment. An assessment of recoverability involves comparing the carrying value of
the asset with its recoverable amount, typically the estimated future cash flows
expected to result from the use of the assets, including cash flows from disposition.
If the expected cash flows from a non-current asset were determined to be less than its
carrying value, an impairment would be charged to the income statement. During the
three months ended June 30, 2007, we recorded an impairment charge for fixed and
intangible assets of $20,324 and $27,077, respectively.
    
    Goodwill.Management evaluates goodwill for impairment on an annual basis, or more
frequently if events occur that provide indications of impairment. If indicators of
potential impairment exist, we perform a review to determine if the carrying value of
the recorded goodwill is impaired. The first step of this process is to identify
potential goodwill impairment by comparing the fair value of the single reporting unit
to its carrying value. We estimate fair value using the discounted cash flows method.
If the carrying value is less than the fair value, we would complete step two in the
impairment review process, which measures the amount of goodwill impairment. We test
the reasonableness of the inputs and outcomes of the discounted cash flow analysis.
During the three months ended June 30, 2007, we fully impaired goodwill and recorded an
impairment charge for goodwill of $1,765,493
    
    Convertible Securities.From time to time, we have issued, and in the future may
issue, convertible securities with beneficial conversion features. We account for
these convertible securities in accordance with Emerging Issues Task Force Issue 98-5,
Accounting for Convertible Securities with Beneficial Conversion Features or
Contingently Adjustable Conversion Ratios(EITF 98-5) and EITF 00-27, Application of
Issue No. 98-5 to Certain Convertible Instruments.
    
    New Basis of Accounting.In accordance with Emerging Issues Task Force Issue No.
D-97, Push Down Accounting, as a result of the change in control of us that occurred on
June 8, 2006, we applied push down accounting, which requires that the proportionate
basis of the assets acquired and liabilities assumed be pushed down to us based upon
their estimated fair market values. We made estimates and judgments in determining the
fair value of the acquired assets and liabilities. We based our determination on
independent appraisal reports, as well as our internal judgments based upon the
existing facts and circumstances. If we were to use different judgments or
assumptions, the amounts assigned to the individual assets or liabilities could be
materially different.
    
    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 ETIF 00-10, Accounting for Shipping and
Handling Fees and Costs, we include all shipping and handling fees charged to our
customers in gross revenue. All actual costs incurred by us for shipping and handling
are immaterial in nature and are included as direct costs of revenue.
  Recent Accounting Standards and Pronouncements
  17




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##### Table of Contents



Operations Review
  Three Months Ended June 30, 2007 Compared to the Three Months Ended June 30, 2006
 For the Three Months EndedJune 30,2007
    
    2006(unaudited)
    
    (unaudited)(see Note 3)Successor
    
    
    Predecessor
    
    2007 vs 2006Successor
    
    June 8 - June 30
    
    
    April 1 - June 7
    
    Change
    
    % ChangeRevenues
    
    $
    4,955
    
    
    $
    19,740
    
    
    
    $
    2,425
    
    
    $
    (17,210
    )
    
    
    (78)
    %Cost of sales
    
    
    8,037
    
    
    
    7,472
    
    
    
    
    24,645
    
    
    
    (24,080
    )
    
    
    (75
    )Gross (loss) margin
    
    
    (3,082
    )
    
    
    12,268
    
    
    
    
    (22,220
    )
    
    
    6,870
    
    
    
    69Gross (loss) margin percentage
    
    
    (62
    )%
    
    
    62
    %
    
    
    
    (916
    )%General and administrative expenses
    
    
    4,957
    
    
    
    5,459
    
    
    
    
    17,656
    
    
    
    (18,158
    )
    
    
    (79
    )Consulting services
    
    
    1,852
    
    
    
    
    
    
    
    
    
    
    
    
    1,852
    
    
    
    100Professional fees
    
    
    43,045
    
    
    
    20,259
    
    
    
    
    208,133
    
    
    
    (185,347
    )
    
    
    (81
    )Salaries and benefits
    
    
    37,246
    
    
    
    31,524
    
    
    
    
    59,726
    
    
    
    (54,004
    )
    
    
    (59
    )Non-cash consulting expense -
related party
    
    
    10,500
    
    
    
    
    
    
    
    
    
    
    
    
    10,500
    
    
    
    100Depreciation and amortization
    
    
    12,364
    
    
    
    2,867
    
    
    
    
    1,418
    
    
    
    8,079
    
    
    
    189Loss on sale of assets held for sale
    
    
    2,092
    
    
    
    
    
    
    
    
    
    
    
    
    2,092
    
    
    
    100(Gain) loss on extinguishment of
debt
    
    
    
    
    
    
    (69,219
    )
    
    
    
    43,056
    
    
    
    (26,163
    )
    
    
    (100
    )Gain on change in estimate of payroll tax liability
    
    
    (159,994
    )
    
    
    
    
    
    
    
    
    
    
    
    159,994
    
    
    
    100Loss on impairment of goodwill and
intangibles
    
    
    1,792,570
    
    
    
    
    
    
    
    
    
    
    
    
    1,792,570
    
    
    
    100Loss on impairment of fixed assets
    
    
    20,324
    
    
    
    
    
    
    
    
    
    
    
    
    20,324
    
    
    
    100Settlement
    
    
    22,000
    
    
    
    
    
    
    
    
    
    
    
    
    22,000
    
    
    
    100Gain on settlement of accounts
payable
    
    
    
    
    
    
    
    
    
    
    
    (91,894
    )
    
    
    (91,894
    )
    
    
    (100
    )Net operating (loss) income
    
    
    (1,790,038
    )
    
    
    21,378
    
    
    
    
    (260,315
    )
    
    
    1,551,101
    
    
    
    649Other income  related party
    
    
    5,839
    
    
    
    
    
    
    
    
    
    
    
    
    5,839
    
    
    
    100Interest income (expense)
    
    
    7,289
    
    
    
    
    
    
    
    
    (35,244
    )
    
    
    42,533
    
    
    
    121Net (loss) income
    
    
    (1,776,910
    )
    
    
    21,378
    
    
    
    
    (295,559
    )
    
    
    1,502,729
    
    
    
    548Deemed dividend related to
beneficial
conversion feature on Series A
convertible
preferred stock
    
    
    
    
    
    
    (3,000,000
    )
    
    
    
    
    
    
    
    (3,000,000
    )
    
    
    (100
    )Net loss attributable to common
stockholders
    
    $
    (1,776,910
    )
    
    $
    (2,978,622
    )
    
    
    $
    (295,559
    )
    
    $
    (1,497,271
    )
    
    
    (46
    )%Weighted average number of common
shares
outstanding  basic and fully
diluted
    
    
    474,807
    
    
    
    466,435
    
    
    
    
    466,435
    
    
    
    8,372
    
    
    
    2
    %Basic and diluted loss per common
share attributable
to common stockholders
    
    $
    (3.74
    )
    
    $
    (6.38
    )
    
    
    $
    (0.63
    )
    
    $
    (3.27
    )
    
    
    (41)
    %
 Revenues
  18




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##### Table of Contents



Cost of sales
  General and administrative expenses
  Consulting services.
 Professional fees
  Salaries and benefits
 Non-cash consulting expense
 Depreciation and amortization.
 Gain on settlement of accounts payable.
 19




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##### Table of Contents



Loss on sale of assets held for sale
 (Gain) loss on extinguishment of debt
 Gain on change in estimate of payroll tax liability
 Loss on impairment of goodwill and intangibles.
 Loss on impairment of fixed assets
 Settlement
 Other income.
 Interest income (expense), net
 Deemed dividend related to beneficial conversion feature on Series A convertible preferred
stock.
 20




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##### Table of Contents



Six Months Ended June 30, 2007 Compared to the Six Months Ended June 30, 2006
 For the Six Months EndedJune 30,2007
    
    2006(unaudited)
    
    (unaudited)(see Note 3)Successor
    
    
    Predecessor
    
    2007 vs. 2006Successor
    
    June 8 - June 30
    
    
    January 1 - June 7
    
    Change
    
    % ChangeRevenues
    
    $
    18,557
    
    
    $
    19,740
    
    
    
    $
    19,451
    
    
    $
    (20,634
    )
    
    
    (53)
    %Cost of sales
    
    
    20,151
    
    
    
    7,472
    
    
    
    
    43,584
    
    
    
    (30,905
    )
    
    
    (61
    )Gross (loss) margin
    
    
    (1,594
    )
    
    
    12,268
    
    
    
    
    (24,133
    )
    
    
    10,271
    
    
    
    87Gross (loss) margin percentage
    
    
    (9)
    %
    
    
    62
    %
    
    
    
    (124
    )%General and administrative expenses
    
    
    16,908
    
    
    
    5,459
    
    
    
    
    34,903
    
    
    
    (23,454
    )
    
    
    (58
    )Consulting services
    
    
    4,326
    
    
    
    
    
    
    
    
    
    
    
    
    4,326
    
    
    
    100Professional fees
    
    
    96,698
    
    
    
    20,259
    
    
    
    
    328,347
    
    
    
    (251,908
    )
    
    
    (72
    )Salaries and benefits
    
    
    103,024
    
    
    
    31,524
    
    
    
    
    89,130
    
    
    
    (17,630
    )
    
    
    (15
    )Non-cash stock compensation
    
    
    
    
    
    
    
    
    
    
    
    3,410
    
    
    
    (3,410
    )
    
    
    (100
    )Non-cash
consulting expense - related party
    
    
    21,000
    
    
    
    
    
    
    
    
    
    
    
    
    21,000
    
    
    
    100Depreciation and amortization
    
    
    24,739
    
    
    
    2,867
    
    
    
    
    2,755
    
    
    
    19,117
    
    
    
    340Loss on sale of assets held for sale
    
    
    3,172
    
    
    
    
    
    
    
    
    
    
    
    
    3,172
    
    
    
    100Gain (loss) on extinguishment of debt
    
    
    
    
    
    
    (69,219
    )
    
    
    
    43,056
    
    
    
    (26,163
    )
    
    
    (100
    )Gain on change in estimate of payroll tax liability
    
    
    (159,994
    )
    
    
    
    
    
    
    
    
    
    
    
    159,994
    
    
    
    100Loss on impairment of goodwill and
intangibles
    
    
    1,792,570
    
    
    
    
    
    
    
    
    
    
    
    
    1,792,570
    
    
    
    100Loss on impairment of fixed assets
    
    
    20,324
    
    
    
    
    
    
    
    
    
    
    
    
    20,324
    
    
    
    100Settlement
    
    
    22,000
    
    
    
    
    
    
    
    
    
    
    
    
    22,000
    
    
    
    100Gain on settlement of accounts payable
    
    
    
    
    
    
    
    
    
    
    
    (140,525
    )
    
    
    (140,525
    )
    
    
    (100
    )Net
operating (loss) income
    
    
    (1,946,361
    )
    
    
    21,378
    
    
    
    
    (385,209
    )
    
    
    1,582,530
    
    
    
    435Other income  related party
    
    
    5,839
    
    
    
    
    
    
    
    
    
    
    
    
    5,839
    
    
    
    100Interest income (expense)
    
    
    15,315
    
    
    
    
    
    
    
    
    (73,276
    )
    
    
    88,591
    
    
    
    121Net (loss) income
    
    
    (1,925,207
    )
    
    
    21,378
    
    
    
    
    (458,485
    )
    
    
    1,488,100
    
    
    
    340Deemed dividend related to beneficial
conversion feature on Series A
convertible
preferred stock
    
    
    
    
    
    
    (3,000,000
    )
    
    
    
    
    
    
    
    (3,000,000
    )
    
    
    (100
    )Net loss attributable to common
stockholders
    
    $
    (1,925,207
    )
    
    $
    (2,978,622
    )
    
    
    $
    (458,485
    )
    
    $
    (1,511,900
    )
    
    
    (44)
    %Weighted average number of common shares
outstanding  basic and fully diluted
    
    
    474,807
    
    
    
    394,877
    
    
    
    
    394,877
    
    
    
    79,930
    
    
    
    20
    %Basic and diluted loss per common share
attributable
to common stockholders
    
    $
    (4.05
    )
    
    $
    (7.54
    )
    
    
    $
    (1.16
    )
    
    $
    (4.65
    )
    
    
    (53
    )%
 Revenues
  Cost of sales
  General and administrative expenses
 21




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##### Table of Contents



Consulting services.
 Professional fees
  Salaries and benefits
 Non-cash stock compensation
 Non-cash consulting expense
 Depreciation and amortization.
 Gain on settlement of accounts payable.
 Loss on sale of assets held for sale
 (Gain) loss on extinguishment of debt
 Gain on change in estimate of payroll tax liability
 22




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##### Table of Contents



Loss on impairment of goodwill and intangibles.
 Loss on impairment of fixed assets
 Settlement
 Other income.
 Interest income (expense), net
 Deemed dividend related to beneficial conversion feature on Series A convertible preferred
stock.
 Liquidity and Capital Resources and Financial Position
 General
  23




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##### Table of Contents



Operating Activities .
  Investing
Activities.
  Financing
Activities.
 Indebtedness
  Contractual Obligations and Commercial Commitments
  Payments due by periodContractual Obligations
    
    Total
    
    
    Less than 1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    More than 5 yearsManagement
Services
Agreement
(a)
    
    $
    63,000
    
    
    $
    42,000
    
    
    $
    21,000
    
    
    $
    
    
    
    $
    Sublease
    
    $
    7,200
    
    
    $
    7,200
    
    
    $
    
    
    
    $
    
    
    
    $
    Total:
    
    $
    70,200
    
    
    $
    49,200
    
    
    $
    21,000
    
    
    $
    
    
    
    $
    
 
 (a)
    
    On February 23, 2007, but effective as of January 1, 2007, we entered into a Management
Services Agreement with Radical Incubation LP, an affiliate of Radical Holdings LP. Pursuant
to this Management Services Agreement, personnel of Radical Incubation LP provide certain
management services to us, including, among others, legal, financial, marketing and
technology. These services are provided to us at a cost of $3,500 per month; however, we are
not required to pay these fees and, because the entity providing 24




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##### Table of Contents



these services is related
through common ownership, we account for these costs of services as a deemed contribution to
us. The Management Services Agreement continues in effect until the earlier of December 31,
2009 and the date on which Radical Holdings LP, its successors or their respective affiliates
shall cease to beneficially own, directly or indirectly, at least twenty percent (20%) of the
then outstanding voting power of us or our successors. Liquidity
  
 Item 3. Controls and Procedures
  An Audit of Internal Control Over Financial Reporting Performed in
Conjunction With an Audit of Financial Statements
 Plan for Remediation of Material Weaknesses
  25




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##### Table of Contents



Changes in Internal Controls
  Limitations on the Effectiveness of Controls
   
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
    
    the removal of Paul Marin from the board of directors of Immediatek;
    
    the election of Darin Divinia and Corey Prestidge to the board of directors of
Immediatek for one year terms; and
    
    the ratification of the appointment of KBA Group LLP as our independent registered
public accounting firm.
  26




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##### Table of Contents



Item 6. Exhibits.
  ExhibitNumber
    
    Description of Exhibit10.20.1
    
    Agreement of Mutual Termination of Services Agreement, dated as of
July 5, 2007, by and between DiscLive, Inc. and HDNet LLC.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).
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##### Table of Contents



SIGNATURES
  Date: August 13, 2007
    
    IMMEDIATEK, INC.,a Nevada corporationBy:
    
    /s/ DARIN DIVINIAName:
    
    Darin DiviniaTitle:
    
    Chief Executive Officer
(On behalf of the Registrant and as Principal
Executive Officer)
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##### Table of Contents



INDEX TO EXHIBITS
 ExhibitNumber
    
    Description of Exhibit10.20.1
    
    Agreement of Mutual Termination of Services Agreement, dated as of
July 5, 2007, by and between DiscLive, Inc. and HDNet LLC.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