10-Q

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

For the quarterly period ended September 30, 2014

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

For the transition period from  to 

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 organization)	(IRS Employer Identification No.)

3301 Airport Freeway, Suite 200
Bedford, Texas	76021
(Address of principal executive offices)	(Zip code)

(888) 661-6565

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þNo 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 þNo 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 (Do not check if a smaller reporting company)	Smaller reporting company þ

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, 2014, 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 Consolidated Balance Sheets at September 30, 2014 and December 31, 2013	3
	Unaudited Consolidated Statements of Operations for the three and nine months
	ended September 30, 2014 and 2013	4
	Unaudited Consolidated Statements of Cash Flows for the nine months
	ended September 30, 2014 and 2013	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations		8
Item 3.  Quantitative and Qualitative Disclosures about Market Risk		15
Item 4.  Controls and Procedures		15
Part II – Other Information		16
Item 1.  Legal Proceedings		16
Item 6.  Exhibits		16
Signatures		S-1

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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 service marks 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,” “hope,” “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, our capital expenditures and our exploration and evaluation of a broad range of possible strategic alternatives.  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;

· our inability to prevent or minimize interruptions in our service and interruptions to customer data access, and any related impact on our reputation;

· our inability to retain existing recurring customers and attract new recurring customers;

· our inability to execute our growth and acquisition strategy;

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· our dependence on third-party contractors, platforms, software, websites, and technologies used in the creation and maintenance of the FilesAnywhere service;

· our exploration and evaluation of a broad range of possible strategic alternatives; and

· general economic conditions.

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, 2013, which was filed with the Securities and Exchange Commission, or SEC, on March 31, 2014.

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, as amended, and the Securities Exchange Act of 1934, as amended.  We undertake no obligation to update any forward-looking statements to reflect future events or circumstances.

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PART I – UNAUDITED FINANCIAL INFORMATION

Item 1.  Unaudited Financial Statements.

Immediatek, Inc.

Unaudited Consolidated Balance Sheets

	September 30,			December 31,
	2014			2013
Current assets:
Cash	$	109,334		$	324,171
Accounts receivable, net of allowance for doubtful accounts of		133,947			148,979
$8,484 in 2014 and $30,177 in 2013
Prepaid expenses and other current assets		85,104			83,303
Total current assets		328,385			556,453
Fixed assets, net		651,235			695,901
Intangible assets, net		564,715			755,662
Goodwill		766,532			766,532
Other assets		26,442			20,871
Total Assets	$	2,337,309		$	2,795,419
Current liabilities:
Accounts payable	$	286,225		$	216,059
Accrued liabilities		114,603			135,791
Deferred revenue		792,384			662,804
Current portion of capital lease obligations		34,768			-
Total current liabilities		1,227,980			1,014,654
Capital lease obligations		63,330			-
Total liabilities		1,291,310			1,014,654
Commitments and Contingencies:
Series A convertible preferred stock (conditionally redeemable); $0.001 par value
4,392,286 authorized, issued and outstanding; 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; redemption/liquidation
preference of $500,000		500,000			500,000
Stockholders' deficit:
Common stock, $0.001 par value, 500,000,000 shares authorized, 15,865,641
shares issued and outstanding		15,865			15,865
Additional paid in capital		5,387,272			5,355,772
Accumulated deficit		(7,857,138	)		(7,090,872	)
Total stockholders'  deficit		(2,454,001	)		(1,719,235	)
Total Liabilities, Preferred Stock and Stockholders'  Deficit	$	2,337,309		$	2,795,419

See accompanying notes to unaudited consolidated financial statements.

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Immediatek, Inc.

Unaudited Consolidated Statements of Operations

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013
Revenues	$	732,774		$	848,903		$	2,304,771		$	2,449,516
Cost of revenues		(336,577	)		(344,903	)		(917,706	)		(1,089,422	)
Gross margin		396,197			504,000			1,387,065			1,360,094
Expenses:
Research and development		183,588			240,353			556,298			680,375
Sales and marketing		170,963			277,738			550,144			810,818
General and administrative		233,033			195,470			766,410			673,458
Non-cash consulting expense-related party		10,500			10,500			31,500			31,500
Depreciation and amortization		80,480			81,577			241,645			244,829
Total expenses		678,564			805,638			2,145,997			2,440,980
Net operating loss		(282,367	)		(301,638	)		(758,932	)		(1,080,886	)
Other income:
Litigation settlement income		-			-			-			633,334
Other income		1,594			-			2,390			-
Interest income		34			170			169			621
Total other income		1,628			170			2,559			633,955
Income Tax Expense		3,600			-			9,892			-
Net Loss	$	(284,339	)	$	(301,468	)	$	(766,265	)	$	(446,931	)
Weighted average number of common
shares outstanding- basic and fully diluted		15,865,641			15,865,641			15,865,641			15,865,641
Basic and diluted loss per common share
attributable to common stockholders	$	(0.02	)	$	(0.02	)	$	(0.05	)	$	(0.03	)

See accompanying notes to unaudited consolidated financial statements.

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Immediatek, Inc.

Unaudited Consolidated Statements of Cash Flow

	For the Nine Months Ended September 30,
	2014			2013
Cash flows from operating activities
Net loss	$	(766,265	)	$	(446,931	)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Depreciation and amortization		376,479			362,799
Non-cash consulting fees - related party		31,500			31,500
Changes in assets and liabilities:
Accounts receivable		15,032			8,198
Prepaid expenses and other assets		(7,372	)		(13,789	)
Accounts payable		70,166			91,970
Accrued liabilities		(21,189	)		19,613
Deferred revenue		129,580			24,442
Net cash provided by/(used in) operating activities		(172,069	)		77,802
Cash flows from investing activities:
Purchase of fixed assets		(36,563	)		(225,520	)
Net cash used in investing activities		(36,563	)		(225,520	)
Cash flows from financing activities:
Payments on capital lease		(6,205	)		-
Net cash used in financing activities		(6,205	)		-
Net decrease in cash		(214,837	)		(147,718	)
Cash at the beginning of the period		324,171			712,458
Cash at the end of the period	$	109,334		$	564,740
Supplemental disclosures:
Income taxes paid	$	12,500		$	15,338
Supplemental schedule of  non-cash investing
and financing activities:
Capital expenditures funded by capital lease borrowings	$	104,303		$	-

See accompanying notes to unaudited consolidated financial statements.

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IMMEDIATEK, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2014

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

Description of Business:  Officeware Corporation (“Officeware”), a direct, wholly-owned subsidiary of Immediatek, Inc. (“Immediatek”), 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 two customized products, called the FilesAnywhere Professional and Enterprise Plans.  These corporate offerings are designed to meet the specific requirements of each business customer or organization.  The Professional and Enterprise Plan 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 Bedford, Texas.  Additionally, Officeware has one employee and several consultants performing software maintenance and research and development in India.  The cost of the India operations was approximately $87,469 and $264,706 for the three and nine months ended September 30, 2014, respectively, and was approximately $131,022 and $415,074 for the three and nine months ended September 30, 2013, respectively, and is included in research and development expenses in Immediatek’s consolidated financial statements.

Basis of Presentation:  The accompanying unaudited consolidated financial statements of Immediatek 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 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 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 Company’s consolidated balance sheet at September 30, 2014 and consolidated statements of operations for the three and nine months ended September 30, 2014 and 2013 and consolidated statements of cash flows for the nine months ended September 30, 2014 and 2013 are unaudited.  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, 2013, which was filed with the SEC on March 31, 2014 and should be read in conjunction with this Quarterly Report on Form 10-Q.

Net Loss per Share:  For the three and nine months ended September 30, 2014 and 2013, 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 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.

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Liquidity:  Management believes that the funds generated by the operation of Officeware, along with the remaining proceeds from a lawsuit settled in the second quarter of 2013, will provide us with the necessary funds to operate our business for 2014. With the planned operating expense reductions in place for 2014 and the various sales and marketing plans that we have undertaken along with new product offerings, we believe there will be an increase in funds generated from operating activities, although no assurances can be given that those plans and measures will be successful.

If we determine that we need additional capital in the future, it may not be available on favorable terms, or at all, which could place limits on our financial and operational flexibility.  Furthermore, if we raise additional funds through further issuances of equity, convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution in their percentage ownership of our Company, and any new securities we issue could have rights, preferences or privileges senior to those of existing or future holders of our common stock.  An inability to obtain necessary financing on terms satisfactory to us, if and when we require it, could negatively affect our ability to grow or support our business and to respond to business challenges.

NOTE 2 – SIGNIFICANT NON-CASH TRANSACTION

Capital Lease.  On July 17, 2014, the Company entered into a capital lease for the purchase of computer equipment with VAR Resources in the amount of $104,303.  This capital lease is payable in 36 equal monthly installments and bears zero percent interest, as the fair value of the asset equals the stated value.

NOTE 3 – 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, our largest shareholder. Pursuant to this Management Services Agreement, personnel of Radical Ventures, L.L.C. provide certain management services to the Company, including, among others, legal, financial, marketing and technology services. These services are provided to us at a cost of $3,500 per month; however, the Company is not required to pay these fees or reimburse expenses and, accordingly, accounts for these costs of services and expenses as deemed contributions to the Company. This agreement was amended on March 17, 2011, to be effective as of December 31, 2010.

This agreement may be terminated upon 30 days’ written notice by Radical Ventures, L.L.C. for any reason or by the Company in the event of Radical Ventures, L.L.C.’s gross negligence. The Company has also agreed to indemnify and hold harmless Radical Ventures, L.L.C. for losses it incurs as a result of its performance of these services, except for losses resulting from Radical Ventures, L.L.C.’s gross negligence or willful misconduct. Further, the Company has 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 the twelve months prior to the cause of action.

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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 3301 Airport Freeway, Suite 200, Bedford, Texas 76021, and our telephone number is (888) 661-6565.  On April 1, 2010, Immediatek acquired Officeware by merger.  As a result of the 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 at the time of the merger.  Radical Holdings LP owns all of the outstanding shares of the Company’s Series A and Series B Convertible Preferred Stock.  In addition, in connection with the merger, Immediatek issued and sold, and Radical Holdings LP, 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 four 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 two customized products, called the FilesAnywhere Professional and Enterprise Plans.  These corporate offerings are designed to meet the specific requirements of each business customer or organization.  The Professional and Enterprise Plan 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 provides an On-Premise solution for large enterprise clients and reseller partners. This solution is for companies who require document sharing and collaboration services and data storage to be hosted from their own data center locations or internal network. This product was introduced in the third quarter of 2014 and allows customers to install a customized version of the FilesAnywhere software system on their own hardware.  This provides the same functionality as our Professional and Enterprise plans, but adds increased security by allowing the client or partner greater control over physical data storage and network security, and allows for file integration with other internal network systems or partner offerings at the customer data center.  Fourth, Officeware offers 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 Bedford, Texas.  Additionally, Officeware has one employee and several consultants performing software maintenance and research and development in India.

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As a result of services provided to larger business users, our business can depend on one or a few major customers, which could potentially expose the Company to concentration of credit risk.  Our revenue and receivables are comprised principally of amounts due from customers throughout the United States.

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,
	2014			2013
Net loss	$	(284,339	)	$	(301,468	)
Net cash used in operating activities	$	(21,447	)	$	(233,078	)
	For the Nine Months Ended September 30,
		2014			2013
Net loss	$	(766,265	)	$	(446,931	)
Net cash provided by (used in) operating activities	$	(172,069	)	$	77,802

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

We funded our operations during the three and nine months ended September 30, 2014, from the revenue generated by Officeware and the remaining proceeds from the settlement of a lawsuit settled in the second quarter of 2013.  With the planned operating expense reductions in place for 2014 and the On-Premise solution, which was introduced in the third quarter of 2014 and which is already being sold, management estimates that the Company will generate sufficient funds from operations to fund future basic operating activities, though the Company anticipates that any excess funds generated would be reinvested into the Company through our increased investment in infrastructure, marketing, sales operations, capital expenditures and research and development.

Our Objectives and 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, along with utilizing third party value added resellers.

Acquisitions.  We may identify and pursue potential acquisition candidates in order to support our strategy of growing and diversifying our business through selective acquisitions.  No assurances can be given, however, that we will be able to successfully identify any potential targets or, when potential targets are identified, consummate their acquisition.

Strategic Alternatives.  In February 2014, the Company retained GuideCap Partners LLC as its financial advisor to assist it in exploring and evaluating a broad range of strategic alternatives.  No decision has been made to enter into any transaction at this time, and there can be no assurances that this evaluation will result in any specific transactions.

Challenges and Risks

Operating in the e-commerce 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 14).

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Utilizing Funds on Hand in a Manner that is Accretive.  If we do not manage our assets aggressively and apply 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 our current customer relationships.  Our largest clients require customized solutions, which in turn requires us to anticipate their needs.

Competition.  There are companies in our 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 while maintaining a competitive price structure.

Additionally, see “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which was filed with the SEC on March 31, 2014.

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 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 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.

· Goodwill.  We assess goodwill for potential impairments at the end of each fiscal year, or during the year if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset.  In evaluating goodwill for impairment, we perform a two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment to be recognized, if any.  In the first step of the review process, we compare the estimated fair value of the reporting unit with its carrying value.  If the estimated fair value of the reporting unit exceeds its carrying amount, no further analysis is needed.  If the estimated fair value of the reporting unit is less than its carrying amount, we proceed to the second step of the review process to calculate the implied fair value of the reporting unit goodwill in order to determine whether any impairment is required.  We calculate the implied fair value of the reporting unit goodwill by allocating the estimated fair value of the reporting unit to all of the assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination.  If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, we recognize an impairment loss for that excess amount.  In allocating the estimated fair value of the reporting unit to all of the assets and liabilities of the reporting unit, we use industry and market data, as well as knowledge of the industry and our past experiences.  We base our calculation of the estimated fair value of a reporting unit on the income approach.  For the income approach, we use internally developed discounted cash flow models that include, among others, the following assumptions: projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends; and estimated discount rates.  We base these assumptions on our historical data and experience, and our expectations.

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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, 2014 Compared to

the Three Months Ended September 30, 2013

	For the Three Months Ended September 30,						2014 vs 2013
	2014			2013			Fav/(Unfav) Variance			% Variance
Revenues	$	732,774		$	848,903		$	(116,129	)		(13.68	%)
Cost of revenues		(336,577	)		(344,903	)		8,326			2.41	%
Gross margin		396,197			504,000			(107,803	)		(21.39	%)
Expenses:
Research and development		183,588			240,353			56,765			23.62	%
Sales and marketing		170,963			277,738			106,775			38.44	%
General and administrative		233,033			195,470			(37,563	)		(19.22	%)
Non-cash consulting expense-related party		10,500			10,500			-			-
Depreciation and amortization		80,480			81,577			1,097			1.34	%
Total expenses		678,564			805,638			127,074			15.77	%
Net operating loss		(282,367	)		(301,638	)		19,271			6.39	%
Other income:
Other income		1,594			-			1,594			100.00	%
Interest income		34			170			(136	)		(80.00	%)
Total other income		1,628			170			1,458			857.65	%
Income Tax Expense		3,600			-			(3,600	)		-
Net loss	$	(284,339	)	$	(301,468	)	$	17,129			(5.68	%)

11

The Nine Months Ended September 30, 2014 Compared to

the Nine Months Ended September 30, 2013

	For the Nine Months Ended September 30,						2014 vs 2013
	2014			2013			Fav/(Unfav) Variance			% Variance
Revenues	$	2,304,771		$	2,449,516		$	(144,745	)		(5.91	%)
Cost of revenues		(917,706	)		(1,089,422	)		171,716			15.76	%
Gross margin		1,387,065			1,360,094			26,971			1.98	%
Expenses:
Research and development		556,298			680,375			124,077			18.24	%
Sales and marketing		550,144			810,818			260,674			32.15	%
General and administrative		766,410			673,458			(92,952	)		(13.80	%)
Non-cash consulting expense-related party		31,500			31,500			-			-
Depreciation and amortization		241,645			244,829			3,184			1.30	%
Total expenses		2,145,997			2,440,980			294,983			12.08	%
Net operating loss		(758,932	)		(1,080,886	)		321,954			29.79	%
Other income:
Litigation settlement income		-			633,334			(633,334	)		(100.00	%)
Other income		2,390			-			2,390			100.00	%
Interest income		169			621			(452	)		(72.79	%)
Total other income		2,559			633,955			(631,396	)		(99.60	%)
Income Tax Expense		9,892			-			9,892			-
Net loss	$	(766,265	)	$	(446,931	)	$	(319,334	)		(71.45	%)

Revenues and Cost of Revenues

Revenues and Cost of Revenues.  Revenues have decreased approximately 13.7% for the three months ending September 30, 2014 compared to the three month period ending September 30, 2013 due to a 29.8% decline in consumer revenue.  The decline in consumer revenue was attributed to continued pricing pressures from our competition.  This decline was partially offset by a 9.8% increase in our corporate revenue.  For the nine month period ended September 30, 2014 compared to the nine month period ended September 30, 2013, revenues decreased approximately 5.9%.  This decrease is due to a 29.1% decline in consumer revenue that was partially offset by a 17.5% increase in our corporate revenue.   The majority of the increase in corporate revenue, 64.1%, was attributed to one time fees that are non-recurring.  To combat pricing pressures we are experiencing on our consumer business from the competition, we are actively working on significant enhancements to our FilesAnywhere product that we hope will result in increased corporate users and, consequently, increased market share.  In an effort to become more competitive in the consumer market, we have also made several hardware enhancements to improve our storage capabilities, lowered our pricing and offered additional free storage.  Despite these actions, however, we have continued to experience a decrease in our consumer customer base.  Many factors, including our advertising, customer acquisition and technology costs, and our current and future competitors’ pricing and marketing strategies, can significantly affect our pricing strategies.  Certain of our competitors offer, or may in the future offer, lower-priced or free products or services that compete with our solutions.  There can be no assurance that we will not be forced to engage in price-cutting initiatives, or to increase our advertising and other expenses to attract and retain customers in response to competitive pressures, either of which could have a material adverse effect on our revenue and operating results.

Cost of revenues have decreased, as we have implemented the planned expense reduction and brought our gross margin back in-line with the current level of sales.  The decrease of approximately 2.4% over the three month period ending September 30, 2013 was attributed to the completion of the consolidation of our data centers and a related staffing adjustment due to the consolidation.  The decrease of approximately 15.8% over the nine month period ending September 30, 2013 was attributed to the same factors discussed above.  We are continuing to improve our business platform, which we hope will allow us to translate future growth in revenues directly into growth in profit margins.

12

Research and Development.  Research and development expenses decreased approximately 23.6% for the three month period ended September 30, 2014, as compared to the three month period ended September 30, 2013.  This decrease was attributed to the decreased utilization onthird party developers.  Research and development expenses decreased approximately 18.2% for the nine month period ended September 30, 2014, as compared to the nine month period ended September 30, 2013.  This was due to the same factors discussed above.

Sales and Marketing.  Sales and Marketing expenses decreased 38.4% for the three months ended September 30, 2014 compared to the same three month period last year, as we have reduced our internal marketing department and outsourced the marketing function to third parties. Sales and Marketing expenses decreased 32.2% for the nine months ended September 30, 2014 compared to the same nine month period last year, due to the same factors discussed above.

General and Administrative Expense.  General and administrative expense increased 19% due to an increase in legal and consulting expenses for the three month period ended September 30, 2014, as compared to the three month period ended September 30, 2013.  General and administrative expense increased for the nine month period ended September 30, 2014, as compared to the nine month period ended September 30, 2013 for the same reasons addressed above.

Depreciation and Amortization.  Depreciation and Amortization expense did not materially change on a three or nine month comparison basis.

Net Operating Loss and Net Loss

Net Operating Loss.  Net operating loss was $282,367 for the three months ended September 30, 2014, which is a decrease of $19,271, or 6.4%, from $301,638 for the corresponding period in 2013.  Net operating loss was $758,932 for the nine months ended September 30, 2014, which is a decrease of $321,954, or 29.8%, from $1,080,886 for the corresponding period in 2013.  These decreases in net operating loss are attributed to the reduction of marketing, research and development and infrastructure operational expenses.  We have outsourced our marketing function and reduced the dependencyon third party consultants in our research and development and have also consolidated our data centers.  We hope that with these changes and our increased investment in infrastructure hardware, along with a new pricing structure, we will be able to regain the market share on our consumer business that has been lost due to downward pricing pressures from our competitors.  We also hope that the new product enhancements and new product offerings will drive increased corporate sales.

Net Loss.  Net loss was $284,339 for the three months ended September 30, 2014 compared to $301,468 for the same period of 2013.  This decrease was attributed to several planned expense reductions in marketing and infrastructure.  Net loss was $766,265 for the nine months ended September 30, 2014 compared to $446,931 for the same period of 2013.  This increase was attributed to the non-recurrence of other income derived from the settlement of outstanding litigation partially offset by the expense reductions discussed above.

Liquidity and Capital Resources and Financial Position

General

We funded our operations during the three and nine months ended September 30, 2014, from the revenue generated from Officeware’s operations and the remaining proceeds from the settlement of a lawsuit settled in the second quarter of 2013.  As of September 30, 2014, we had $109,334 of cash, which management anticipates will sustain our operations.  With the planned operating expense reductions in place for 2014 and the On-Premise solution, which was introduced in the third quarter of 2014 and which is already being sold, management anticipates that the operating cash flows of the Company will turn positive by December 2014.  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.

13

Our goal is to increase the products and services offered through Officeware, which we hope will generate sufficient 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 continue to explore 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.

The demand for our Officeware consumer products and services is still in decline due to the continued competitive pricing strategies employed by our competitors.  We expected to reverse this trend after we implemented our new storage platform in the second quarter of 2013.  This allowed us to become more price competitive with our base consumer product offerings.  However, we have seen continued downward pricing pressure from our competitors on the consumer side of the business, which has caused a continued decrease in consumer revenues.  To partially offset this decline in consumer revenue, we have seen a 17.5% increase in our corporate revenue due to the increased investment in our product offerings.

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.

In February 2014, the Company retained GuideCap Partners LLC as its financial advisor to assist it in exploring and evaluating a broad range of strategic alternatives.  No decision has been made to enter into any transaction at this time, and there can be no assurances that this evaluation will result in any specific transactions.

Operating Activities.  Cash used in operations was $21,447 for the three months ended September 30, 2014, as compared to cash used in operations of $233,078 for the three months ended September 30, 2013.  The decrease in cash used in operations was attributed to implementing a cost reduction plan for 2014.   Cash used in operations was $172,069 for the nine months ended September 30, 2014, as compared to cash provided by operations of $77,802 for the nine months ended September 30, 2013.  The increase in cash used in operations was attributed to the settlement of a lawsuit in 2013 that provided a substantial amount of other operating income.

Investing Activities.  Cash used for investing activities was $6,089 and $120,684 for the three months ended September 30, 2014 and September 30, 2013, respectively.  The cash outlay was for infrastructure and storage equipment upgrades.  Since we have made large investments in our infrastructure over the past several years, in an effort to build a scalable storage platform, our investing activities have decreased in the third quarter of 2014 as compared to the same period of 2013.  We do not anticipate having to continue to acquire at the level we have had to in the past unless we have a substantial increase in customer volume. Cash used for investing activities was $36,563 and $225,520 for the nine months ended September 30, 2014 and September 30, 2013, respectively.  The cash outlay was also for infrastructure and storage equipment upgrades.

Financing Activities.  Cash used for financing activities was $6,205 for the three months ended September 30, 2014.  The cash outlay was for used for payments on a newly acquired capital lease in the amount of $104,303.

Liquidity

We believe that the funds generated by the operation of Officeware, along with the remaining proceeds from a lawsuit settled in the second quarter of 2013, will provide us with the necessary funds to operate our business for 2014. With the planned operating expense reductions in place for 2014 and the various sales and marketing plans that we have undertaken along with new product offerings, we believe there will be an increase in funds generated from operating activities, although no assurances can be given that those plans and measures will be successful.

If we determine that we need additional capital in the future, it may not be available on favorable terms, or at all, which could place limits on our financial and operational flexibility.  Furthermore, if we raise additional funds through further issuances of equity, convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution in their percentage ownership of our Company, and any new securities we issue could have rights, preferences or privileges senior to those of existing or future holders of our common stock.  An inability to obtain necessary financing on terms satisfactory to us, if and when we require it, could negatively affect our ability to grow or support our business and to respond to business challenges.

14

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4.  Controls and Procedures.

Evaluation of Disclosure 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 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.

15

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is involved from time to time in claims, proceedings and litigation.  Please refer to “Item 3.  Legal Proceedings” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which was filed with the Securities and Exchange Commission, or SEC, on March 31, 2014.

From time to time we may become subject to additional proceedings, lawsuits and other claims in the ordinary course of business, including proceedings related to our services, applications and other matters.  Such matters are subject to many uncertainties, and outcomes are not predictable with assurance.

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).
101*	XBRL data files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q.

* Indicates document filed herewith.

16

SIGNATURES

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

Date:  November 12, 2014	IMMEDIATEK, INC.,
	a Nevada corporation
	By:	/s/ Timothy M. Rice
	Name:	Timothy M. Rice
	Title:	Chief Executive Officer and President
		(On behalf of the Registrant and as Principal Executive Officer)

Date:  November 12, 2014
	By:	/s/ Timothy McCrory
	Name:	Timothy McCrory
	Title:	Chief Financial Officer
		(On behalf of the Registrant and as Principal Financial Officer)

S-1

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).
101*	XBRL data files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q.

* Indicates document filed herewith.

Exhibit Index

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Timothy M. Rice, certify that:

1.      I have reviewed this Quarterly Report on Form 10-Q of Immediatek, Inc.;

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

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

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

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

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

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

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

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

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

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

 Dated: November 12, 2014

/s/ Timothy M. Rice

Timothy M. Rice

Chief Executive Officer and President

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Timothy McCrory, certify that:

1.      I have reviewed this Quarterly Report on Form 10-Q of Immediatek, Inc.;

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

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

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

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

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

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

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

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

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

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

 Dated: November 12, 2014

/s/ Timothy McCrory

Timothy McCrory

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Required by 18 U.S.C. Section 1350

(as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report of Immediatek, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Timothy M. Rice, as Principal Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

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

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

Date: November 12, 2014
	/s/ Timothy M. Rice
	Timothy M. Rice
	Chief Executive Officer and President (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Required by 18 U.S.C. Section 1350

(as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report of Immediatek, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Timothy McCrory, as Principal Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

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

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

Date: November 12, 2014
	/s/ Timothy McCrory
	Timothy McCrory
	Chief Financial Officer (Principal Financial Officer)

XML

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2014

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Description of Business

Description of Business:  Officeware Corporation (“Officeware”), a direct, wholly-owned subsidiary of Immediatek, Inc. (“Immediatek”), 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 two customized products, called the FilesAnywhere Professional and Enterprise Plans.  These corporate offerings are designed to meet the specific requirements of each business customer or organization.  The Professional and Enterprise Plan 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 Bedford, Texas.  Additionally, Officeware has one employee and several consultants performing software maintenance and research and development in India.  The cost of the India operations was approximately $87,469 and $264,706 for the three and nine months ended September 30, 2014, respectively, and was approximately $131,022 and $415,074 for the three and nine months ended September 30, 2013, respectively, and is included in research and development expenses in Immediatek's consolidated financial statements.

Basis of Presentation

Basis of Presentation:  The accompanying unaudited consolidated financial statements of Immediatek 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 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 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 Company's consolidated balance sheet at September 30, 2014 and consolidated statements of operations for the three and nine months ended September 30, 2014 and 2013 and consolidated statements of cash flows for the nine months ended September 30, 2014 and 2013 are unaudited.  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, 2013, which was filed with the SEC on March 31, 2014 and should be read in conjunction with this Quarterly Report on Form 10-Q.

Net Loss per Share

Net Loss per Share:  For the three and nine months ended September 30, 2014 and 2013 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 were not included in the computation of diluted loss per share, as the effect of their inclusion would be anti-dilutive.

Comprehensive Loss

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

Liquidity

Liquidity:  Management believes that the funds generated by the operation of Officeware, along with the remaining proceeds from a lawsuit settled in the second quarter of 2013, will provide us with the necessary funds to operate our business for 2014. With the planned operating expense reductions in place for 2014 and the various sales and marketing plans that we have undertaken along with new product offerings, we believe there will be an increase in funds generated from operating activities, although no assurances can be given that those plans and measures will be successful.

If we determine that we need additional capital in the future, it may not be available on favorable terms, or at all, which could place limits on our financial and operational flexibility.  Furthermore, if we raise additional funds through further issuances of equity, convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution in their percentage ownership of our Company, and any new securities we issue could have rights, preferences or privileges senior to those of existing or future holders of our common stock.  An inability to obtain necessary financing on terms satisfactory to us, if and when we require it, could negatively affect our ability to grow or support our business and to respond to business challenges.

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2014

RELATED PARTY TRANSACTIONS [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 3 – 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, our largest shareholder. Pursuant to this Management Services Agreement, personnel of Radical Ventures, L.L.C. provide certain management services to the Company, including, among others, legal, financial, marketing and technology services. These services are provided to us at a cost of $3,500 per month; however, the Company is not required to pay these fees or reimburse expenses and, accordingly, accounts for these costs of services and expenses as deemed contributions to the Company. This agreement was amended on March 17, 2011, to be effective as of December 31, 2010.

This agreement may be terminated upon 30 days' written notice by Radical Ventures, L.L.C. for any reason or by the Company in the event of Radical Ventures, L.L.C.'s gross negligence. The Company has also agreed to indemnify and hold harmless Radical Ventures, L.L.C. for losses it incurs as a result of its performance of these services, except for losses resulting from Radical Ventures, L.L.C.'s gross negligence or willful misconduct. Further, the Company has 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 the twelve months prior to the cause of action.

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Unaudited Consolidated Balance Sheets (USD $)	Sep. 30, 2014	Dec. 31, 2013
Current assets:
Cash	$ 109,334	$ 324,171
Accounts receivable, net of allowance for doubtful accounts of $8,484 in 2014 and $30,177 in 2013	133,947	148,979
Prepaid expenses and other current assets	85,104	83,303
Total current assets	328,385	556,453
Fixed assets, net	651,235	695,901
Intangible assets, net	564,715	755,662
Goodwill	766,532	766,532
Other assets	26,442	20,871
Total Assets	2,337,309	2,795,419
Current liabilities:
Accounts payable	286,225	216,059
Accrued liabilities	114,603	135,791
Deferred revenue	792,384	662,804
Current portion of capital lease obligations	34,768
Total current liabilities	1,227,980	1,014,654
Capital lease obligations	63,330
Total liabilities	1,291,310	1,014,654
Commitments and Contingencies:
Stockholders' deficit:
Common stock, $0.001 par value, 500,000,000 shares authorized, 15,865,641 shares issued and outstanding	15,865	15,865
Additional paid in capital	5,387,272	5,355,772
Accumulated deficit	(7,857,138)	(7,090,872)
Total stockholders' deficit	(2,454,001)	(1,719,235)
Total Liabilities, Preferred Stock and Stockholders' Deficit	2,337,309	2,795,419
Series A Convertible Preferred Stock [Member]
Preferred Stock:
Convertible preferred stock	3,000,000	3,000,000
Series B Convertible Preferred Stock [Member]
Preferred Stock:
Convertible preferred stock	$ 500,000	$ 500,000

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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2014

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Description of Business:  Officeware Corporation (“Officeware”), a direct, wholly-owned subsidiary of Immediatek, Inc. (“Immediatek”), 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 two customized products, called the FilesAnywhere Professional and Enterprise Plans.  These corporate offerings are designed to meet the specific requirements of each business customer or organization.  The Professional and Enterprise Plan 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 Bedford, Texas.  Additionally, Officeware has one employee and several consultants performing software maintenance and research and development in India.  The cost of the India operations was approximately $87,469 and $264,706 for the three and nine months ended September 30, 2014, respectively, and was approximately $131,022 and $415,074 for the three and nine months ended September 30, 2013, respectively, and is included in research and development expenses in Immediatek's consolidated financial statements.

Basis of Presentation:  The accompanying unaudited consolidated financial statements of Immediatek 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 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 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 Company's consolidated balance sheet at September 30, 2014 and consolidated statements of operations for the three and nine months ended September 30, 2014 and 2013 and consolidated statements of cash flows for the nine months ended September 30, 2014 and 2013 are unaudited.  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, 2013, which was filed with the SEC on March 31, 2014 and should be read in conjunction with this Quarterly Report on Form 10-Q.

Net Loss per Share:  For the three and nine months ended September 30, 2014 and 2013 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 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.

Liquidity:  Management believes that the funds generated by the operation of Officeware, along with the remaining proceeds from a lawsuit settled in the second quarter of 2013, will provide us with the necessary funds to operate our business for 2014. With the planned operating expense reductions in place for 2014 and the various sales and marketing plans that we have undertaken along with new product offerings, we believe there will be an increase in funds generated from operating activities, although no assurances can be given that those plans and measures will be successful.

If we determine that we need additional capital in the future, it may not be available on favorable terms, or at all, which could place limits on our financial and operational flexibility.  Furthermore, if we raise additional funds through further issuances of equity, convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution in their percentage ownership of our Company, and any new securities we issue could have rights, preferences or privileges senior to those of existing or future holders of our common stock.  An inability to obtain necessary financing on terms satisfactory to us, if and when we require it, could negatively affect our ability to grow or support our business and to respond to business challenges.

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SIGNIFICANT NON-CASH TRANSACTION

9 Months Ended

Sep. 30, 2014

SIGNIFICANT NON-CASH TRANSACTION [Abstract]

SIGNIFICANT NON-CASH TRANSACTION

NOTE 2 – SIGNIFICANT NON-CASH TRANSACTION

Capital Lease.  On July 17, 2014 the Company entered into a capital lease for the purchase of computer equipment with VAR Resources in the amount of $104,303.  This capital lease is payable in 36 equal monthly installments and bears zero percent interest as the fair value of the asset equals the stated value.

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Unaudited Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Allowance for doubtful accounts	$ 8,484	$ 30,177
Stockholders' deficit:
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	15,865,641	15,865,641
Common stock, shares outstanding	15,865,641	15,865,641
Series A Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized	4,392,286	4,392,286
Convertible preferred stock, shares issued	4,392,286	4,392,286
Convertible preferred stock, shares outstanding	4,392,286	4,392,286
Convertible preferred stock, liquidation preference	3,000,000	3,000,000
Series B Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized	69,726	69,726
Convertible preferred stock, shares issued	69,726	69,726
Convertible preferred stock, shares outstanding	69,726	69,726
Convertible preferred stock, liquidation preference	$ 500,000	$ 500,000

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 12, 2014
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Entity Registrant Name	IMMEDIATEK INC
Entity Central Index Key	0001084182
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2014
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		15,865,641

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Unaudited Consolidated Statements of Operations (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Unaudited Consolidated Statements of Operations [Abstract]
Revenues	$ 732,774	$ 848,903	$ 2,304,771	$ 2,449,516
Cost of revenues	(336,577)	(344,903)	(917,706)	(1,089,422)
Gross margin	396,197	504,000	1,387,065	1,360,094
Expenses:
Research and development	183,588	240,353	556,298	680,375
Sales and marketing	170,963	277,738	550,144	810,818
General and administrative	233,033	195,470	766,410	673,458
Non-cash consulting expense-related party	10,500	10,500	31,500	31,500
Depreciation and amortization	80,480	81,577	241,645	244,829
Total expenses	678,564	805,638	2,145,997	2,440,980
Net operating loss	(282,367)	(301,638)	(758,932)	(1,080,886)
Other income:
Litigation settlement income				633,334
Other income	1,594		2,390
Interest income	34	170	169	621
Total other income	1,628	170	2,559	633,955
Income Tax Expense	3,600		9,892
Net Loss	$ (284,339)	$ (301,468)	$ (766,265)	$ (446,931)
Weighted average number of common shares outstanding - basic and fully diluted	15,865,641	15,865,641	15,865,641	15,865,641
Basic and diluted loss per common share attributable to common stockholders	$ (0.02)	$ (0.02)	$ (0.05)	$ (0.03)

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RELATED PARTY TRANSACTIONS (Details) (Radical Ventures, LLC [Member], USD $)	9 Months Ended
	Sep. 30, 2014
Radical Ventures, LLC [Member]
Related Party Transaction [Line Items]
Monthly cost of management services	$ 3,500
Required cancellation notice for agreement	30 days

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SIGNIFICANT NON-CASH TRANSACTION (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
SIGNIFICANT NON-CASH TRANSACTION [Abstract]
Capital expenditures funded by capital lease borrowings	$ 104,303
Lease term	36 months
Interest rate	0.00%

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Unaudited Consolidated Statements of Cash Flow (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities
Net loss	$ (766,265)	$ (446,931)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	376,479	362,799
Non-cash consulting fees - related party	31,500	31,500
Changes in assets and liabilities:
Accounts receivable	15,032	8,198
Prepaid expenses and other assets	(7,372)	(13,789)
Accounts payable	70,166	91,970
Accrued liabilities	(21,189)	19,613
Deferred revenue	129,580	24,442
Net cash provided by/(used in) operating activities	(172,069)	77,802
Cash flows from investing activities
Purchase of fixed assets	(36,563)	(225,520)
Net cash used in investing activities	(36,563)	(225,520)
Cash flows from financing activities
Payments on capital lease	(6,205)
Net cash used in financing activities	(6,205)
Net decrease in cash	(214,837)	(147,718)
Cash at the beginning of the period	324,171	712,458
Cash at the end of the period	109,334	564,740
Supplemental disclosures:
Income taxes paid	12,500	15,338
Supplemental schedule of non-cash investing and financing activities:
Capital expenditures funded by capital lease borrowings	$ 104,303

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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Research and development	$ 183,588	$ 240,353	$ 556,298	$ 680,375
Convertible preferred stock excluded from the computation of diluted loss per share	14,794,999	14,794,999	14,794,999	14,794,999
India [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Research and development	$ 87,469	$ 131,022	$ 264,706	$ 415,074