UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

Commission file number: 000-26073

IMMEDIATEK, INC.

(Exact name of registrant as specified in its charter)

Nevada		86-0881193
(State or other jurisdiction of incorporation or		(IRS Employer Identification No.)
organization)
8600 Freeport Parkway, Suite 220
Irving, Texas		75063
(Address of principal executive offices)		(Zip code)

(888) 661-6565

320 South Walton, Dallas, Texas 75226

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer o		Non-accelerated filer o		Smaller reporting company þ
				(Do not check if a smaller reporting company)

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

As of November 12, 2010, the issuer had 15,865,641 shares of common stock outstanding.

 

 

IMMEDIATEK, INC.

TABLE OF CONTENTS

		Page
Introduction			1
Trademarks and Service Marks			1
Market and Industry Data and Forecasts			1
Forward-Looking Statements			1
Part I – Unaudited Financial Information			3
Item 1. Unaudited Financial Statements			3
Unaudited Condensed Consolidated Balance Sheets at September 30, 2010 and December 31, 2009			3
Unaudited Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2010 and 2009			4
Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and 2009			5
Notes to Unaudited Condensed Consolidated Financial Statements			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			13
Item 3. Quantitative and Qualitative Disclosures about Market Risk			18
Item 4. Controls and Procedures			19
Part II – Other Information			20
Item 6. Exhibits			20
Signatures			S-1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

INTRODUCTION

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

TRADEMARKS AND SERVICE MARKS

This Quarterly Report on Form 10-Q contains registered trademarks and servicemarks owned or licensed by entities and persons other than us.

MARKET AND INDUSTRY DATA AND FORECASTS

Market and industry data and other statistical information and forecasts used throughout this Quarterly Report on Form 10-Q are based on independent industry publications, government publications and reports by market research firms or other published independent sources. Some data also is based on our good faith estimates, which are derived from our review of internal surveys, as well as independent sources. Forecasts are particularly likely to be inaccurate, especially over long periods of time.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and the materials incorporated by reference into this Quarterly Report on Form 10-Q 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 “may,” “estimate,” “intend,” “plan,” “believe,” “expect,” “anticipate,” “will,” “should” or other similar expressions. Similarly, statements in this Quarterly Report on Form 10-Q 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 judiciously, 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-Q are made only as of the date of this report. We assume no obligation to update any forward-looking statements. 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 may continue;
	•		our inability to utilize the funds received in a manner that is accretive;
	•		our inability to generate sufficient funds from operating activities to fund operations;
	•		difficulties in developing and marketing new products;

	•		inability to integrate our recently acquired Officeware business;
	•		inability to execute our growth and acquisition strategy;
	•		dependence on third-party contractors, platforms, software, websites, and technologies used in the creation and maintenance of the FilesAnywhere service; and
	•		general economic conditions, including among others, the pronounced recession, rising unemployment and major bank failures and unsettled capital markets.

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 the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009, which was filed with the Securities and Exchange Commission, or SEC, on March 31, 2010.

In addition, these forward-looking statements are necessarily dependent upon assumptions and estimates that may prove to be incorrect. Accordingly, while we believe that the plans, intentions and expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these plans, intentions or expectations will be achieved. The forward-looking statements included in this report, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, are expressly qualified in their entirety by the risk factors and cautionary statements discussed in our filings under the Securities Act of 1933 and the Securities Exchange Act of 1934. We undertake no obligation to update any forward-looking statements to reflect future events or circumstances.

PART I — UNAUDITED FINANCIAL INFORMATION

Item 1.		Unaudited Financial Statements.

Immediatek, Inc.

		September 30,				December 31,
		2010				2009
Assets
Current assets:
Cash		$	2,413,714			$	278,795
Accounts receivable, net			180,150				3,609
Prepaid expenses and other current assets			97,165				7,940
Total current assets			2,691,029				290,344
Fixed assets, net			486,685				3,872
Intangible assets, net			1,573,878				—
Goodwill			766,532				—
Other assets			4,784				—
Total Assets		$	5,522,908			$	294,216
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable		$	56,807			$	14,261
Accrued liabilities			108,257				26,043
Deferred revenue			688,333				—
Current portion of capital lease obligations			49,349				—
Note payable- related party			772,500				750,000
Total current liabilities			1,675,246				790,304
Capital lease obligations			25,414				—
Total liabilities			1,700,660				790,304
Series A convertible preferred stock (conditionally redeemable); $0.001 par value 4,392,286 authorized, issued and outstanding at September 30, 2010 and December 31, 2009; redemption/liquidation preference of $3,000,000			3,000,000				3,000,000
Series B convertible preferred stock (conditionally redeemable); $0.001 par value 69,726 authorized, issued and outstanding at September 30, 2010 and December 31, 2009; redemption/liquidation preference of $500,000			500,000				500,000
Stockholders’ equity (deficit):
Common stock, $0.001 par value, 500,000,000 shares authorized and 15,865,641 and 535,321 shares issued and outstanding at September 30, 2010 and December 31, 2009, respectively			15,865				535
Additional paid in capital			5,179,272				163,102
Accumulated deficit			(4,872,889	)			(4,159,725	)
Total stockholders’ equity (deficit)			322,248				(3,996,088	)
Total Liabilities, Preferred Stock and Stockholders’ Equity (Deficit)		$	5,522,908			$	294,216

See accompanying notes to unaudited condensed consolidated financial statements.

Immediatek, Inc.

		For the Three Months Ended								For the Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Revenues		$	705,774			$	45			$	1,388,671			$	347
Cost of revenues			(150,980	)			—				(317,641	)			—
Gross margin			554,794				45				1,071,030				347
Expenses:
Research and development			292,423				96,846				665,992				302,496
Sales and marketing			112,908				—				187,337				—
General and administrative			379,512				85,019				939,842				285,408
Total expenses			784,843				181,865				1,793,171				587,904
Net operating loss			(230,049	)			(181,820	)			(722,141	)			(587,557	)
Other income (expense):
Other income			10,208				—				10,266				—
Other income — related party			2,963				6,488				18,700				28,464
Interest income			418				—				1,090				518
Interest expense			(1,800	)			—				(3,835	)			—
Interest expense — related party			(5,841	)			(5,671	)			(17,244	)			(11,712	)
Net loss		$	(224,101	)		$	(181,003	)		$	(713,164	)		$	(570,287	)
Weighted average number of common shares outstanding — basic and fully diluted			15,865,641				535,321				10,518,978				535,321
Basic and diluted loss per common share attributable to common stockholders		$	(0.01	)		$	(0.34	)		$	(0.07	)		$	(1.07	)

See accompanying notes to unaudited condensed consolidated financial statements.

Immediatek, Inc.

		For the Nine Months Ended
		September 30
		2010				2009
Cash flows from operating activities
Net loss		$	(713,164	)		$	(570,287	)
Depreciation and amortization			238,882				3,502
Non-cash consulting fees — related party			31,500				31,500
Adjustments to reconcile net loss to net cash used in operating activities, net of effects of merger:
Accounts receivable			229,579				744
Prepaid expenses and other assets			(36,482	)			(7,704	)
Accounts payable			8,541				7,858
Accrued liabilities			12,078				12,397
Deferred revenue			256,029				—
Net cash provided by (used in) operating activities			26,963				(521,990	)
Cash flows from investing activities
Cash acquired with merger			1,243,806				—
Purchase of fixed assets			(107,407	)			(4,256	)
Proceeds from the sale of fixed assets			—				7,764
Net cash provided by investing activities			1,136,399				3,508
Cash flows from financing activities
Payments on capital leases			(28,443	)			—
Proceeds from the issuance of common stock			1,000,000				—
Proceeds from issuance of promissory note			—				750,000
Net cash provided by financing activities			971,557				750,000
Net increase in cash			2,134,919				231,518
Cash at the beginning of the period			278,795				223,651
Cash at the end of the period		$	2,413,714			$	455,169
Supplemental disclosures:
Interest paid		$	3,835			$	—
Income taxes paid		$	—			$	—
Number of shares issued for the merger			12,264,256				—
Value of shares issued for the merger		$	4,000,000			$	—

See accompanying notes to unaudited condensed consolidated financial statements.

IMMEDIATEK, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010

NOTE 1 — DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business: Immediatek, Inc. (“Immediatek”) was originally organized as a corporation on August 6, 1998, under the laws of the State of Nevada. Prior to October 1, 2007, Immediatek, through its wholly-owned, operating subsidiary, DiscLive, Inc., recorded live content, such as concerts and conferences, for sale. On October 1, 2007, DiscLive, Inc. ceased retail sales of its products in conjunction with the decision not to further pursue that line of business. It was determined that Immediatek re-entered the development stage at that time. On August 29, 2007, Immediatek formed a wholly-owned subsidiary, IMKI Ventures, Inc. IMKI Ventures, Inc. acquired certain assets from a related party on August 31, 2007. Those acquired assets were developed into an e-commerce product called RadicalBuy, which was launched on October 23, 2007. As of September 30, 2010 we have determined that it is in the best interest of Immediatek to cease operation of the RadicalBuy product.

On December 16, 2009, Immediatek, Officeware Corporation (“Officeware”), Timothy Rice, Chetan Jaitly, Radical Holdings LP and Radical Investments LP entered into a Stock Exchange Agreement, or the Agreement. On April 1, 2010, Immediatek, Officeware, Timothy Rice, Chetan Jaitly, Radical Holdings LP, Radical Investments LP, Darin Divinia, Dawn Divinia, Robert Hart, Kimberly Hart, Martin Woodall and Officeware Acquisition Corporation (“Merger Sub”), entered into an Amendment to that Agreement dated December 16, 2009 (as so amended, the “Merger Agreement”). Under the Merger Agreement, Merger Sub, a wholly-owned subsidiary of Immediatek, merged with and into Officeware on April 1, 2010. As a result of such merger, Immediatek became the sole shareholder of Officeware and Officeware shareholders received 12,264,256 shares of Immediatek common stock for all of the outstanding shares of stock of Officeware. Due to the merger, it was determined that Immediatek ceased to be in the development stage as of April 1, 2010.

Officeware provides online back-up, file storage and other web-based services for individuals, businesses and governmental organizations. Officeware offers three primary services. First, Officeware operates the website FilesAnywhere.com, primarily designed for individuals and small businesses to allow them to establish a self-service account, enabling them to, among other things, store files on Officeware servers, share and collaborate on documents with other people online, and backup their computers to FilesAnywhere cloud storage. Second, for larger business users, Officeware offers three customized products, called the FilesAnywhere Private Site, Dedicated Server, and Enterprise Server. These corporate offerings are designed to meet the specific requirements of each business customer or organization. The Private Site, Dedicated Server, and Enterprise Server products provide flexible cloud storage and unlimited scalability for users, groups and internet applications, along with client-specific branding and web interfaces, customer data interfaces, and tailored security for mixed corporate environments. Third, Officeware also provides specialized information technology services related to the development of web based databases and data storage on a contract basis for clients.

Officeware’s operations are primarily based in Irving, Texas and additionally, Officeware has one employee and several consultants performing research and development in India. The cost of the India operations was approximately $88,611 and $191,082 for the three and nine months ended September 30, 2010 and is included in research and development expenses in Immediatek’s consolidated financial statements.

Basis of Presentation: The accompanying unaudited condensed consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and formatted disclosures normally included in financial statements prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) have been omitted pursuant to SEC rules and regulations. These condensed consolidated financial statements include the accounts of Immediatek’s wholly-owned subsidiaries, Officeware, DiscLive, Inc. and IMKI Ventures, Inc. (collectively, the “Company”). All significant intercompany accounts and transactions have been eliminated in these condensed consolidated financial statements. The Company follows the Financial Accounting Standard Board’s Accounting Standards Codification (the “Codification” or “ASC”). The Codification is the single source of authoritative accounting principles applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. The Codification does not change current GAAP, but is intended to simplify user access to GAAP by providing all the authoritative literature related to a particular topic in one place. As of the effective date, all existing accounting standard documents were superseded. Accordingly, this report references the Codification as the sole source of authoritative literature.

IMMEDIATEK, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010

The Company’s condensed consolidated balance sheet at September 30, 2010 and condensed consolidated statements of operations for the three months and nine months ended September 30, 2010 and 2009 and condensed consolidated statements of cash flows for the nine months ended September 30, 2010 and 2009 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. The results of operations for the periods presented in this Quarterly Report on Form 10-Q 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-K for the fiscal year ended December 31, 2009, which was filed with the SEC on March 31, 2010 and on Form 8-K filed by the Company on April 8, 2010 as amended on June 16, 2010 and should be read in conjunction with this Quarterly Report on Form 10-Q.

Management Estimates and Significant Risks and Uncertainties: The preparation of the condensed consolidated financial statements, in conformity with GAAP, 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. Significant assumptions are required in the calculation of the allowance for doubtful accounts receivable and deferred taxes. It is reasonably possible these estimates could be revised in the near term and the revisions could be material.

The Company is subject to a number of risks and can be affected by a variety of factors. 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:

	•		our inability to continue as a going concern;
	•		our history of losses, which may continue;
	•		our inability to utilize the funds received in a manner that is accretive;
	•		our inability to generate sufficient funds from operating activities to fund operations;
	•		difficulties in developing and marketing new products;
	•		inability to integrate our recently acquired Officeware business;
	•		inability to execute our growth and acquisition strategy;
	•		dependence on third-party contractors, platforms, software, websites, and technologies used in the creation and maintenance of the FilesAnywhere service; and
	•		general economic conditions, including among others, the pronounced recession, rising unemployment and major bank failures and unsettled capital markets.

Business Segments: The Company primarily operates in one business segment: e-commerce.

Cash and Cash Equivalents: The Company classifies all highly liquid investments with initial maturities of three months or less at the time of purchase as cash equivalents. At times, cash and cash equivalents may be in excess of the Federal Deposit Insurance Corporation insurance limit.

Fair Value of Financial Instruments: Unless otherwise disclosed, the fair values of financial instruments approximate their carrying amount due primarily to their short-term nature.

IMMEDIATEK, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010

Accounts Receivable, Net: Accounts receivable, net are recorded at the invoice amount and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. At September 30, 2010 and December 31, 2009, accounts receivable are net of the allowance of $41,876 and $0, respectively. In establishing the allowance, management considers historical losses experienced, as well as, trends, current receivables aging, and existing industry and national economic data. Account balances are charged off against the allowance for doubtful accounts after all means of collection have been exhausted and the potential for recovery is considered remote. Bad debt expense was $25,309 and $28,048 for the three and nine months ended September 30, 2010, respectively. There was no bad debt expense for the three and nine months ended September 30, 2009. The Company does not have any off balance sheet credit exposure related to its customers.

Goodwill and Intangible Assets: Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the acquired net tangible and intangible assets. Intangible assets primarily represent purchased intangible assets including customer relationships, developed technology, trade name and others. We currently amortize our intangible assets with definitive lives over periods ranging from six to ten years using the straight line method. Goodwill, which arose from the acquisition of Officeware, is not amortized, but will be reviewed annually for impairment based on the fair value of Officeware, or more frequently if certain indicators arise. Intangible assets will be evaluated for possible impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. We will evaluate the recoverability of these assets by comparison of the carrying amount to the future undiscounted cash flows we expect the asset to generate. If we consider the asset to be impaired, we measure the amount of any impairment as the difference between the carrying amount and the fair value of the impaired asset. The gross carrying amount and accumulated amortization, in total and by major intangible asset class, subject to amortization:

		Gross Carrying				Accumulated				Intangible
		Amount				Amortization				Assets, Net
Trade name		$	126,808			$	12,681			$	114,127
Developed technology			729,423				72,942				656,481
Customer relationships			842,413				42,121				800,292
Total		$	1,698,644			$	127,744			$	1,570,900

The aggregate amortization expense for the three and nine months ended September 30, 2010 was $64,095 and $127,744, respectively. The estimated aggregate amortization expense for each of the five succeeding fiscal years is as follows:

Fiscal Year		Amortization
Ending Dec 31,		Expense
2010		$	191,616
2011			255,488
2012			255,488
2013			255,488
2014			255,488

Intangible assets not subject to amortization include certain domain names owned by the Company at a carrying amount of $2,978 at September 30, 2010. There were no intangible assets at December 31, 2009.

IMMEDIATEK, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010

Concentration of Credit Risk: Financial instruments which could potentially expose the Company to concentration of credit risk, consist primarily of receivables. Our revenue and receivables are comprised principally of amounts due from customers throughout the United States. During the three months ended September 30, 2010, there were no sales to a single customer representing 10% or more of total sales. During the nine months ended September 30, 2010, sales to one customer amounted to approximately 10% of total sales. Receivables from that customer accounted for 26% and 0% of total receivables at September 30, 2010 and December 31, 2009, respectively. Another customer accounted for approximately 11% of total receivables at September 30, 2010. Officeware completed the project for this customer and concluded its contract. While the Company anticipates that it may provide additional work for this customer in the future, should that not be the case, the loss of this significant customer could cause a material impact to the Company’s results of operations and financial position.

Revenue Recognition and Deferred Revenue: Revenues are derived primarily from the service of data compilation, storage and related consulting. Revenues billed in advance are deferred and recognized as the service is provided. Revenues are presented net of sales taxes collected from customers.

Research and Development: Research and development costs related to present and future products and services are charged to operations in the period incurred. In accordance with authoritative guidance for the costs of computer software to be sold, leased or otherwise marketed, certain software development costs are capitalized after technological feasibility has been established. The Company has not capitalized any software development costs as of September 30, 2010.

Advertising Costs: Advertising costs are expensed as incurred in the financial statements. Advertising costs are included in sales and marketing expenses and were $11,439 and $31,269 for the three and nine months ended September 30, 2010, respectively. Advertising costs were not significant during 2009.

Income Taxes: The Company follows ASC Topic 740, 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 during 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 provided to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

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

The Company follows ASC Topic 740, Income Taxes related to uncertain tax positions. This guidance prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return and also provides guidance on various related matters such as derecognition, interest and penalties, and disclosure. The Company does not have any uncertain tax positions as of September 30, 2010 or December 31, 2009. No interest or penalties have been accrued or recorded.

Net Loss per Share: Net loss was used in the calculation of both basic and diluted loss per share. The weighted average number of shares of common stock outstanding was the same for calculating both basic and diluted loss per share. Series A and Series B Convertible Preferred Stock convertible into 14,794,999 shares of common stock outstanding at September 30, 2010 and December 31, 2009 were not included in the computation of diluted loss per share, as the effect of their inclusion would be anti-dilutive.

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

IMMEDIATEK, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010

NOTE 2 — MERGER WITH OFFICEWARE CORPORATION

On April 1, 2010, a wholly-owned subsidiary of Immediatek merged with and into Officeware. Officeware provides online back-up, file storage and other web-based services for individuals, businesses and governmental organizations. The merger with Officeware provides the Company increased operations and a source of operating cash flow. As a result of such merger, Immediatek became the sole shareholder of Officeware and Officeware shareholders received 12,264,256 shares of Immediatek common stock in exchange for all of the outstanding shares of common stock of Officeware. Radical Investments LP, an affiliate of Radical Holdings LP, owned 24.6% of the Officeware common stock. Radical Holdings LP owns the Company’s Series A and Series B preferred stock. The Immediatek common stock exchanged was valued at $4,000,000, or approximately $0.33 per share, as determined by negotiations among the parties and an independent third party valuation. Due to the closely held nature and extremely limited trading of the Company’s stock, management does not believe the quoted value of its common stock was indicative of the value of the restricted common shares issued in conjunction with the merger. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the date of the merger:

Cash		$	1,243,806
Accounts receivable, net			406,120
Prepaid expenses and other current assets			47,374
Fixed assets			486,544
Intangible assets			1,701,622
Goodwill			766,532
Other assets			10,153
Accounts payable			(34,005	)
Accrued liabilities			(92,636	)
Deferred revenue			(432,304	)
Capital lease obligations			(103,206	)
Net assets acquired with merger		$	4,000,000

Intangible assets consist of the following, including the estimated remaining useful lives:

Trade name		$	126,808			10 years
Developed technology			729,423			6 years
Customer relationships			842,413			7 years
Domain name			2,978			indefinite

The excess of purchase price over tangible net assets and identified intangible assets acquired has been allocated to goodwill in the amount of $766,532. The goodwill is the residual value after identified assets are separately valued and represents the result of the acquired workforce and expected future cash flows. Goodwill is not expected to be deductible for tax purposes.

Officeware actual results from the acquisition date, April 1, 2010, which are included in the consolidated statement of operations for the three and nine months ended September 30, 2010, are as follows:

		September 30, 2010
		For the Three				For the Nine
		Months Ended				Months Ended
Revenues		$	705,722			$	1,388,563
Net operating income			152				18,369
Net (loss) income			(783	)			16,130

IMMEDIATEK, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010

The unaudited pro forma consolidated financial information in the table below summarizes the results of operations of the Company as though the Officeware merger had occurred as of the beginning of the period presented. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the merger had taken place at the beginning of the period presented or that may result in the future. The pro forma adjustments made are based on certain assumptions that the Company believes are reasonable based on currently available information.

The unaudited pro forma financial information for the nine months ended September 30, 2010 combine the historical results of Immediatek and Officeware as follows:

Revenues		$	2,233,916
Net operating loss			(682,964	)
Net loss			(672,309	)
Basic and diluted net loss per share		$	(0.05	)

Presenting pro forma for the three months and nine months ended September 30, 2009 is impractical as prior year financial statements were prepared only on an annual basis.

NOTE 3 — ISSUANCE OF COMMON STOCK

On April 1, 2010, in conjunction with the merger with Officeware described in Note 2, the Company issued and sold 3,066,064 shares of common stock for an aggregate purchase price of $1.0 million, or approximately $0.33 per share, as determined by negotiations among the parties and an independent third party valuation. Due to the closely held nature and extremely limited trading of the Company’s stock, management does not believe the quoted value of its common stock was indicative of the value of the restricted common shares issued in this transaction. Of this amount, 230,661 shares were issued to executive officers of the Company for $75,230 and 2,775,403 shares were issued for $905,201 to Radical Holdings, LP, a related party.

NOTE 4 — RELATED PARTY TRANSACTIONS

Management Services Agreement. On December 31, 2009, the Company entered into a Management Services Agreement with Radical Ventures L.L.C., an affiliate of Radical Holdings LP. Pursuant to this Management Services Agreement, personnel of Radical Ventures L.L.C. will provide certain management services to the Company, including, among others, legal, financial, marketing and technology. These services are provided to us at a cost of $3,500 per month; however, the Company will not be required to pay these fees or reimburse expenses and, accordingly, will account for these costs of services and expenses as deemed contributions to the Company. This agreement will continue until the earlier of December 31, 2010 and the date on which Radical Holdings LP, its successors or their respective affiliates cease to beneficially own, directly or indirectly, at least 20% of the Company’s then outstanding voting power.

This agreement may be terminated upon 30 days’ written notice by Radical Ventures L.L.C. for any reason or by the Company for gross negligence. The Company also agreed to indemnify and hold harmless Radical Ventures L.L.C. for its performance of these services, except for gross negligence and willful misconduct. Further, the Company limited Radical Ventures L.L.C.’s maximum aggregate liability for damages under this agreement to the amounts deemed contributed to the Company by virtue of this agreement during twelve months prior to that cause of action. Prior to December 31, 2009, these services were provided by Radical Incubation, LP, another affiliate of Radical Holdings LP, under a separate agreement at the same cost. This agreement was terminated on December 31, 2009 and replaced with the agreement with Radical Ventures, L.L.C.

Demand Promissory Note. On March 25, 2009, the Company received $750,000 from Radical Holdings LP, a related party, under an unsecured Demand Promissory Note bearing interest, calculated on the basis of a 365-day year, at a rate per annum equal to three percent (3%) due on March 24, 2010. On March 24, 2010, this note was refinanced through the issuance of a new Amended and Restated Demand Promissory Note. The principal amount of this new Amended and Restated Demand Promissory Note was $772,500 and included accrued interest through the date of the amendment. This note bears interest, calculated on the basis of a 365-day year, at a rate per annum equal to three percent (3%). The new Amended and Restated Demand Promissory Note must be repaid within 30 days of receiving a demand for repayment or on March 23, 2012, whichever comes earlier.

IMMEDIATEK, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010

Accrued liabilities include $12,127 and $17,384 at September 30, 2010 and December 31, 2009, respectively, for accrued interest related to this note. Additionally, $5,841 and $5,671 was expensed in the financial statements for the three months ended September 30, 2010 and 2009 and $17,244 and $11,712 for the nine months ended September 30, 2010 and 2009 related to this note.

Officeware Service. The Company provided services to a related party in the amount of $6,246 and $21,983 during the three and nine months ended September 30, 2010. There are no receivables related to this amount at September 30, 2010 as it was paid in full.

Consulting Agreements. On February 6, 2009, the Company entered into an Agreement for Project Staffing Services with Silver Cinemas Acquisition Co., an entity affiliated with Radical Holdings LP. Pursuant to this agreement the Company provides personnel, as independent contractors on an hourly-fee basis, to perform computer software programming, system analysis, design, project management, consulting, and education and training for Silver Cinemas Acquisition Co. As of October 31, 2010, we do not anticipate performing further services under this agreement.

On February 28, 2008, the Company entered into an Agreement for Project Staffing Services with HDNet Fights, Inc., an affiliate of Radical Holdings LP. This agreement provides that the Company provides personnel, as independent contractors on an hourly-fee basis, to perform computer software programming, system analysis, design, project management, consulting, and education and training for HDNet Fights, Inc. As of October 31, 2010, we do not anticipate performing further services under this agreement.

For the three months ended September 30, 2010 and 2009, we earned $2,963 and $6,488, respectively, under these agreements. For the nine months ended September 30, 2010 and 2009, we earned $18,700 and $28,464, respectively, under these agreements.

Accounts receivable, net includes $2,963 at September 30, 2010 and $2,413 at December 31, 2009 from these related parties. These receivables are related to the consulting services provided to the related parties included in Other Income — Related Party in the income statement.

Office Space. On December 31, 2009, DiscLive, Inc., a wholly-owned subsidiary of the Company, entered into a letter agreement amending the sublease with HDNet LLC, an affiliate of Radical Holdings LP. Pursuant to the letter agreement, DiscLive, Inc. assigned the sublease to IMKI Ventures, Inc., another wholly-owned subsidiary of the Company and IMKI Ventures, Inc. subleased from HDNet LLC approximately 600 square feet of office space. The rent was $900 per month, utilities included. Lease expense for the three and nine months ending September 31, 2010 was $2,700 and $8,100, respectively. During October 2010, the sublease was terminated. As of September 30, 2010, future lease payments required are $900 for 2010.

Merger Agreement. Refer to “Note 2 — Merger with Officeware Corporation” and “Note 3 — Issuance of Common Stock” for a description of the merger of a wholly-owned subsidiary of Immediatek with and into Officeware, effective April 1, 2010 and the accompanying stock issuance.

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

Overview

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 consolidated financial statements and the notes accompanying those financial statements, which are included in this Quarterly Report on Form 10-Q. MD&A includes the following sections:

	•		Our Business — a general description of our business, our objectives, 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 this Quarterly Report on Form 10-Q.
	•		Liquidity, Capital Resources and Financial Position — an analysis of our cash flows and debt and contractual obligations; and an overview of our financial condition.

Our Business

General

Immediatek is a Nevada corporation. Our principal executive offices are located at 8600 Freeport Parkway, Suite 220, Irving, Texas 75063, and our telephone number is (888) 661-6565. Prior to October 1, 2007, Immediatek, through its wholly-owned, operating subsidiary, DiscLive, Inc., recorded live content, such as concerts and conferences, for sale. On October 1, 2007, DiscLive, Inc. ceased retail sales of its products in conjunction with the decision not to further pursue that line of business. It was determined that the Company re-entered the development stage at that time. On December 16, 2009, Immediatek, Officeware, Tim Rice, Chetan Jaitly, Radical Holdings LP, and Radical Investments LP entered into a Stock Exchange Agreement. On April 1, 2010, Immediatek, Officeware, Timothy Rice, Chetan Jaitly, Radical Holdings LP, Radical Investments LP, Darin Divinia, Dawn Divinia, Robert Hart, Kimberly Hart, Martin Woodall and Officeware Acquisition Corporation, or the Merger Sub, entered into an Amendment to that Agreement dated December 16, 2009, or, the Merger Agreement. Under the Merger Agreement, Merger Sub, a wholly-owned subsidiary of Immediatek, merged with and into Officeware on April 1, 2010. As a result of such merger, Immediatek became the sole shareholder of Officeware and Officeware shareholders received 12,264,256 shares of Immediatek common stock for all of the outstanding shares of stock of Officeware. Radical Investments LP, an affiliate of Radical Holdings LP, owned 24.6% of the Officeware common stock. Radical Holdings LP owns the Company’s Series A and Series B preferred stock. In addition, subject to the terms and conditions of the Merger Agreement, Immediatek issued and sold, and Holdings, Darin Divinia, Dawn Divinia, Robert Hart, Kimberly Hart and Martin Woodall collectively purchased, 3,066,064 shares of Immediatek common stock for an aggregate purchase price of $1.0 million, or approximately $0.33 per share. Due to the merger, it was determined that the Company ceased to be in the development stage as of April 1, 2010.

Currently, the Company primarily operates in one business segment: e-commerce. Our services and products are primarily offered through Officeware. Officeware provides online back-up, file storage and other web-based services for individuals, businesses and governmental organizations. Officeware offers three primary services. First, Officeware operates the website FilesAnywhere.com, primarily designed for individuals and small businesses to allow them to establish a self-service account, enabling them to, among other things, store files on Officeware servers, share and collaborate on documents with other people online, and backup their computers to FilesAnywhere cloud storage. Second, for larger business users, Officeware offers three customized products, called the FilesAnywhere Private Site, Dedicated Server, and Enterprise Server. These corporate offerings are designed to meet the specific requirements of each business customer or organization. The Private Site, Dedicated Server, and Enterprise Server products provide flexible cloud storage and unlimited scalability for users, groups and internet applications, along with client-specific branding and web interfaces, customer data interfaces, and tailored security for mixed corporate environments. Third, Officeware also provides specialized information technology services related to the development of web based databases and data storage on a contract basis for clients.

Our subsidiary, IMKI Ventures, provided an e-commerce product called RadicalBuy. The Company determined that it would be in the best interest of Immediatek to cease operation of the RadicalBuy product. However, we are continuing to explore the possible applications of the technology we developed for the RadicalBuy product. That technology allows content providers to operate across various and diverse platforms including various sites, including social sites, on the internet or via interactive television through the use of a widget. The Company hopes to utilize this technology in conjunction with the products offered through Officeware and to find other applications as well, including potentially for third parties.

History of Operating Losses

The following tables present our net loss and cash provided by or used in operating activities for the periods indicated.

		For the Three Months Ended
		September 30,
		2010				2009
		(unaudited)				(unaudited)
Net loss		$	(224,101	)		$	(181,003	)
Net cash provided by (used in) operating activities		$	132,704			$	(139,869	)

		For the Nine Months Ended
		September 30,
		2010				2009
		(unaudited)				(unaudited)
Net loss		$	(713,164	)		$	(570,287	)
Net cash provided by (used in) operating activities		$	26,963			$	(521,990	)

Our existence and operations are dependent upon our ability to generate sufficient funds from operations to fund operating activities.

The report of our independent registered public accounting firm on our financial statements for the year ended December 31, 2009 included an emphasis paragraph, in addition to their audit opinion, stating that our recurring losses from operations and substantial accumulated deficit 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 if we are unable to continue as a going concern.

We funded our operations during the nine months ended September 30, 2010, primarily from the income generated by Officeware and the sale of 3,066,064 shares of Company common stock for an aggregate purchase price of $1.0 million on April 1, 2010. With the Officeware merger on April 1, 2010, operating cash flows have turned positive for the Company. Management estimates that the Officeware merger will generate sufficient funds from operations to fund future operating activities.

Our Objectives

At this time, our primary objectives are to successfully grow the user base for the e-commerce products offered through our Officeware subsidiary.

Areas of Focus

Officeware — Increase Users. We are focused on increasing the number of users of the various online back-up, file storage and other web-based services for individuals, businesses and governmental organizations offered through Officeware. We may pursue aggressive advertising campaigns or other promotions primarily aimed at new users. Additionally, we are focusing on efficiently integrating the Officeware business with our business.

Acquisitions. We may also identify and pursue additional potential acquisition candidates to support our strategy of growing and diversifying our business through selective acquisitions. In addition to the Officeware acquisition which was consummated on April 1, 2010, we may identify and pursue additional potential acquisition candidates. No assurances can be given, however, that we will be successful in identifying any potential targets and, when identified, consummating their acquisition.

Challenges and Risks

Operating in this area 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 (see “Liquidity and Capital Resources and Financial Position—Liquidity” beginning on page 19).

Utilizing Funds on Hand in a Manner that is Accretive. If we do not manage our assets aggressively and apply the available capital judiciously, 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.

Growing Users. In order to be successful with the products and services offered through Officeware, we will be required to attract new customers and deepen the current customer relationships which we currently have. Our largest clients require customized solutions, which in turn requires us to anticipate their needs.

Competition. There are companies in this industry that have far more financial resources and a larger market share than us. In order to compete with these companies, we will be required to be innovative and create more attractive functions and features.

Integration of Officeware. In order to be successful with Officeware, we will need to efficiently integrate that business with our own. Once integrated, we will be required to be innovative with regard to the Officeware business in order to grow that business.

Additionally, see “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009, which was filed with the SEC on March 31, 2010.

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 GAAP in the United States of America, which requires management to make estimates, judgments and assumptions with respect to 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 the rules and regulations promulgated by the SEC. We believe that the most critical accounting policies and estimates relate to the following:

	•		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 ASC Topic 470, Beneficial Conversion Feature.
	•		Revenue Recognition. Officeware generates revenue primarily from monthly fees for the services and products that it offers. While revenues for Officeware’s filesanywhere.com product are often received in advance of providing the applicable service, the Company defers recognizing such revenues until the service has been performed. Revenues for Officeware’s custom products for large enterprises are often received after such services are provided. The Company recognizes such revenues when service has been provided and collection is reasonably assured.

While our estimates and assumptions are based upon our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ from those estimates and assumptions.

Operations Review

The Three Months Ended September 30, 2010 Compared to
the Three Months Ended September 30, 2009

		For the Three Months Ended September 30,								2010 vs. 2009
		2010				2009				Change				% Change
Revenues		$	705,774			$	45			$	705,729				1,568,287	%
Cost of revenues			(150,980	)			—				(150,980	)			—	%
Gross margin			554,794				45				554,749				1,232,776	%
Expenses:
Research and development			292,423				96,846				195,577				202	%
Sales and marketing			112,908				—				112,908				—	%
General and administrative			379,512				85,019				294,493				346	%
Total expenses			784,843				181,865				602,978				332	%
Net operating loss			(230,049	)			(181,820	)			(48,229	)			27	%
Other income (expense):
Other income			10,208				—				10,208				—	%
Other income — related party			2,963				6,488				(3,525	)			(54	)%
Interest income			418				—				418				—	%
Interest expense			(1,800	)			—				(1,800	)			—	%
Interest expense — related party			(5,841	)			(5,671	)			(170	)			(3	)%
Net loss		$	(224,101	)		$	(181,003	)		$	(43,098	)			24	%
Weighted average number of common shares outstanding — basic and fully diluted			15,865,641				535,321				15,330,320				2,864	%
Basic and diluted loss per common share attributable to common stockholders		$	(0.01	)		$	(0.34	)		$	0.32				96	%

The merger with Officeware was effective on April 1, 2010. Thus, operations of Officeware are included in the Company’s results for the three months ended September 30, 2010. The increases from the same period of 2009 are primarily related to Officeware’s operations. Management expects future quarterly results to be comparable and Officeware’s operations to generate positive cash flows. However, no assurances can be given that we will be able to maintain the accretive results of the Officeware merger.

The Nine Months Ended September 30, 2010 Compared to
the Nine Months Ended September 30, 2009

		For the Nine Months Ended September 30,								2010 vs. 2009
		2010				2009				Change				% Change
Revenues		$	1,388,671			$	347			$	1,388,324				400,093	%
Cost of revenues			(317,641	)			—				(317,641	)			—	%
Gross margin			1,071,030				347				1,070,683				308,554	%
Expenses:
Research and development			665,992				302,496				363,495				120	%
Sales and marketing			187,337				—				187,337				—	%
General and administrative			939,842				285,408				654,435				229	%
Total expenses			1,793,171				587,904				1,205,267				205	%
Net operating loss			(722,141	)			(587,557	)			(134,584	)			23	%
Other income (expense):
Other income			10,266				—				10,266				—	%
Other income — related party			18,700				28,464				(9,764	)			(34	)%
Interest income			1,090				518				572				110	%
Interest expense			(3,835	)			—				(3,835	)			—	%
Interest expense — related party			(17,244	)			(11,712	)			(5,532	)			47	%
Net loss		$	(713,164	)		$	(570,287	)		$	(142,877	)			25	%
Weighted average number of common shares outstanding — basic and fully diluted			10,518,978				535,321				9,983,657				1,865	%
Basic and diluted loss per common share attributable to common stockholders		$	(0.07	)		$	(1.07	)		$	1.00				94	%

The merger with Officeware was effective on April 1, 2010. Thus, six months of operations of Officeware are included in the Company’s nine months results. The increases from the same nine month period of 2009 are primarily related to Officeware’s operations. Management expects Officeware’s operations to generate positive cash flows in the future. However, no assurances can be given that we will be able to maintain the accretive results of the Officeware merger.

Liquidity and Capital Resources and Financial Position

General

On March 25, 2009, the Company received $750,000 from Radical Holdings LP under an unsecured Demand Promissory Note bearing interest, calculated on the basis of a 365-day year, at a rate per annum equal to three percent (3%) due on March 24, 2010. On March 24, 2010, this note was refinanced through the issuance of a new Amended and Restated Demand Promissory Note. The principal amount of this new Amended and Restated Demand Promissory Note was $772,500 and includes accrued interest through the date of the amendment. This note bears interest, calculated on the basis of a 365-day year, at a rate per annum equal to three percent (3%). The new Amended and Restated Demand Promissory Note must be repaid within 30 days of receiving a demand for repayment or on March 23, 2012, whichever comes earlier.

On April 1, 2010, we closed the merger with Officeware and stock sale described above under “Our Business—General” and in “Note 2 — Merger with Officeware Corporation” and “Note 3 — Issuance of Common Stock.”

As of September 30, 2010, we had $2,413,714 of operating funds, which management anticipates will sustain our operations. Management anticipates that the operating cash flows of the Company will be positive for the fiscal year ending December 31, 2010. However, no assurances can be given that we will ever achieve profitability. If we need to seek additional funds, our ability to obtain financing will depend, among other things, on our development efforts, business plans, operating performance and condition of the capital markets at the time we seek financing. No assurances can be given that additional financing will be available to us on favorable terms when required, or at all. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, and our stockholders may experience dilution.

Our goal is to grow the products and services offered through Officeware, which we expect will generate revenue to support our operations. No assurances, however, can be given that these lines of business will generate sufficient operating funds to support our operating activities. In addition, we are exploring whether other companies may have interest in utilizing our technology to deliver their content and allow for interactivity with their customers or users across these various platforms.

We may also pursue various acquisition targets that could provide us with operating funds to support our activities. In the event that we acquire a target, depending on the nature of that target, we may require additional funds to consummate the acquisition or support our operations going forward. No assurances, however, can be given that we will be able to identify a potential target, consummate the acquisition of the target and, if consummated, integrate the target company and realize funds from operations.

Operating Activities. Cash provided by operations was $26,963 in the nine months ended September 30, 2010, as compared to cash used of $521,990 for the nine months ended September 30, 2009. The decrease was primarily a result of the Officeware operations included for the six month period from April 1, 2010.

Investing Activities. Cash provided by investing activities for the nine months ended September 30, 2010 was $1,136,399, as compared to $3,508 for the nine months ended September 30, 2009. The increase in investing activity was primarily related to cash acquired with the Officeware merger of $1,243,806.

Financing Activities. For the nine-month period ended September 30, 2010, $1.0 million was provided by the sale of 3,066,064 shares of Company common stock while $750,000 was provided by financing activities for the nine-month period ended September 30, 2009 from the issuance of the note payable with a related party.

Liquidity

We believe that the funds received from the issuance of common stock, the cash received in the merger with Officeware, and funds generated by the operation of Officeware will provide us with the necessary funds to operate our business. While we are also undertaking various plans and measures that we believe will increase funds generated from operating activities, no assurances can be given that those plans and measures will be successful.

Item 3.		Quantitative and Qualitative Disclosures about Market Risk

Not Applicable.

Item 4.		Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our chief executive officer and president (our Principal Executive Officer) and our chief financial officer (our Principal 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, as amended, or the Exchange Act) for us. Based on the evaluation of our disclosure controls and procedures (as defined in the Rules 13a-15(e) and 15d-15(e) under the Exchange Act) required by Exchange Act Rules 13a-15(b) or 15d-15(b), our principal executive officer and our principal financial officer have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective.

Changes in internal controls. There were no changes in our internal controls over financial reporting as defined in Exchange Act Rule 13a-15(f) that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 6.		Exhibits.

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

Exhibit
Number				Description of Exhibit
	3.1			Amended and Restated Articles of Incorporation of the Registrant, dated as of June 2, 2006 and filed with the Secretary of State of the State of Nevada on June 5, 2006 (filed as Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-QSB for quarter ended March 31, 2006 (filed on June 26, 2006) and incorporated herein by reference).
	3.2			Bylaws of the Registrant (filed as Exhibit 3.2 to the Registrant’s Annual Report on Form 10-KSB for year ended December 31, 2005 (filed on May 11, 2006) and incorporated herein by reference).
	4.1			Form of common stock certificate of the Registrant (filed as Exhibit 4.1 to the Registrant’s Annual Report on Form 10-KSB for year ended December 31, 2005 (filed on May 11, 2006) and incorporated herein by reference).
	4.2			Amended and Restated Certificate of Designation, Rights and Preferences of Series A Convertible Preferred Stock of the Registrant, dated as of October 13, 2009 and filed with the Secretary of State of the State of Nevada on October 15, 2009 (filed as Exhibit 4.1 to the Registrant’s Form 8-K (filed on October 19, 2009) and incorporated herein by reference).
	4.3			Form of stock certificate for Series A Convertible Preferred Stock (filed as Exhibit 4.8 to the Registrant’s Quarterly Report on Form 10-QSB for quarter ended March 31, 2006 (filed on June 26, 2006) and incorporated herein by reference).
	4.4			Amended and Restated Certificate of Designation, Rights and Preferences of Series B Convertible Preferred Stock of the Registrant, dated as of October 13, 2009 and filed with the Secretary of State of the State of Nevada on October 15, 2009 (filed as Exhibit 4.2 to the Registrant’s Form 8-K (filed on October 19, 2009) and incorporated herein by reference).
	4.5			Form of stock certificate for Series B Convertible Preferred Stock (filed as Exhibit 4.5 to the Registrant’s Annual Report on Form 10-K for year ended December 31, 2008 (filed on March 31, 2009) and incorporated herein by reference).
	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).
	32.2	**		Certification Required by 18 U.S.C. Section 1350 (as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002).

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.

INDEX TO EXHIBITS

Exhibit
Number				Description of Exhibit
	3.1			Amended and Restated Articles of Incorporation of the Registrant, dated as of June 2, 2006 and filed with the Secretary of State of the State of Nevada on June 5, 2006 (filed as Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-QSB for quarter ended March 31, 2006 (filed on June 26, 2006) and incorporated herein by reference).
	3.2			Bylaws of the Registrant (filed as Exhibit 3.2 to the Registrant’s Annual Report on Form 10-KSB for year ended December 31, 2005 (filed on May 11, 2006) and incorporated herein by reference).
	4.1			Form of common stock certificate of the Registrant (filed as Exhibit 4.1 to the Registrant’s Annual Report on Form 10-KSB for year ended December 31, 2005 (filed on May 11, 2006) and incorporated herein by reference).
	4.2			Amended and Restated Certificate of Designation, Rights and Preferences of Series A Convertible Preferred Stock of the Registrant, dated as of October 13, 2009 and filed with the Secretary of State of the State of Nevada on October 15, 2009 (filed as Exhibit 4.1 to the Registrant’s Form 8-K (filed on October 19, 2009) and incorporated herein by reference).
	4.3			Form of stock certificate for Series A Convertible Preferred Stock (filed as Exhibit 4.8 to the Registrant’s Quarterly Report on Form 10-QSB for quarter ended March 31, 2006 (filed on June 26, 2006) and incorporated herein by reference).
	4.4			Amended and Restated Certificate of Designation, Rights and Preferences of Series B Convertible Preferred Stock of the Registrant, dated as of October 13, 2009 and filed with the Secretary of State of the State of Nevada on October 15, 2009 (filed as Exhibit 4.2 to the Registrant’s Form 8-K (filed on October 19, 2009) and incorporated herein by reference).
	4.5			Form of stock certificate for Series B Convertible Preferred Stock (filed as Exhibit 4.5 to the Registrant’s Annual Report on Form 10-K for year ended December 31, 2008 (filed on March 31, 2009) and incorporated herein by reference).
	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).
	32.2	**		Certification Required by 18 U.S.C. Section 1350 (as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002).