U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[x] Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2003.
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[ ] Transition Report under Section 13 or 15(d)of the Exchange Act For the
Transition Period from ________ to ___________
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Commission File Number: 000-26073
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Immediatek, Inc.
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(Exact name of small business issuer as specified in its charter)
Nevada 86-0881193
---------------------------- -----------------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification)
2435 N. Central Expressway Suite 1200, Richardson, TX 75080
----------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 712-7336
--------------
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12
months (or 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 [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the Registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Common Stock, $0.001 par value per share, 500,000,000 shares authorized,
as of April 30, 2003, the issuer had 20,379,997 shares of common stock
outstanding.
Traditional Small Business Disclosure Format (check one)
Yes [ ] No [X]
1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements................................. 3
Independent Accountant's Report...................... 4
Balance Sheet (unaudited)............................ 5
Statements of Operations (unaudited)................. 6
Statements of Cash Flows (unaudited)................. 7
Notes to Financial Statements........................ 8-10
Item 2. Management's Discussion and Analysis of Plan
of Operation........................................ 11
Item 3. Controls and Procedures.............................. 16
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................... 17
Item 2. Changes in Securities and Use of Proceeds............ 17
Item 3. Defaults upon Senior Securities...................... 17
Item 4. Submission of Matters to a Vote
of Security Holders................................. 17
Item 5. Other Information..................................... 17
Item 6. Exhibits and Reports on Form 8-K...................... 17
Signatures...................................................... 18
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
As prescribed by Item 310 of Regulation S-B, the independent auditor has
reviewed these unaudited interim financial statements of the registrant
for the three months ended . The financial statements reflect all adjustments
which are, in the opinion of management, necessary to a fair statement of
the results for the interim period presented. The unaudited financial
statements of registrant for the three months ended, follow.
3
Beckstead and Watts, LLP
----------------------------
Certified Public Accountants
3340 Wynn Road, Suite B
Las Vegas, NV 89102
702.257.1984
702.362.0540 fax
INDEPENDENT ACCOUNTANT'S REVIEW REPORT
Board of Directors
Immediatek, Inc.
(formerly ModernGroove Entertainment, Inc.)
(a Development Stage Company)
Richardson, Texas
We have reviewed the accompanying balance sheet of Immediatek, Inc. (formerly
ModernGroove Entertainment, Inc.) (a Nevada corporation) (a development stage
company) as of March 31, 2003 and the related statements of operations for the
three-months ended March 31, 2003 and 2002 and for the period March 1, 2002
(Inception) to March 31, 2003, and statements of cash flows for the three-
months ended March 31, 2003 and 2002 and for the period March 1, 2002
(Inception) to March 31, 2003. These financial statements are the
responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying financial statements referred to above for
them to be in conformity with generally accepted accounting principles in the
United States of America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has had limited operations and has not commenced
planned principal operations. This raises substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are also described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
We previously audited, in accordance with generally accepted auditing
standards, the balance sheet of Immediatek, Inc. (formerly ModernGroove
Entertainment, Inc.) (a development stage company) as of December 31, 2002,
and the related statements of operations, stockholders' equity, and cash
flows for the year then ended (not presented herein) and in our report dated
March 28, 2003, we expressed an unqualified opinion on those financial
statements.
/s/ Beckstead and Watts, LLP
----------------------------
Beckstead and Watts, LLP
May 13, 2003
4
Immediatek, Inc.
(formerly ModernGroove Entertainment, Inc.)
(a Development Stage Company)
Balance Sheet
Balance Sheet
March 31,
2003
---------
Assets
Current assets:
Cash $ 3,859
Accounts receivable 247
---------
Total current assets 4,106
---------
Intellectual property 18,101
---------
$ 22,207
Liabilities and Stockholders' (Deficit)
Current liabilities:
Accounts payable $ 44,450
Notes payable 72,500
Shareholder loan 7,500
---------
Total current liabilities 124,450
---------
Stockholders' (deficit):
Common stock, $0.001 par value, 500,000,000 shares authorized,
1,898,600 shares issued and outstanding 20,380
Additional paid-in capital 2,868,685
(Deficit) accumulated during development stage (2,991,308)
-----------
(102,243)
---------
$ 22,207
=========
The accompanying notes are an integral part of these financial statements.
5
Immediatek, Inc.
(formerly ModernGroove Entertainment, Inc.)
(a Development Stage Company)
Statements of Operations
Statements of Operations
Three months March 1, 2002 March 1, 2002
ended (inception) to (inception) to
March 31, March 31, March 31,
2003 2002 2003
------------ -------------- --------------
Revenue $ 8,965 $ - $ 78,694
------------ -------------- --------------
Expenses:
General and administrative
expenses 66,773 5,752 131,802
Consulting fees 68,400 - 472,152
Consulting fees - related party - - 16,408
Compensation expenses -
related party 2,335,080 - 2,335,080
Salaries and wages - - 55,243
Officer salaries 5,992 - 59,317
------------ -------------- --------------
Total expenses 2,476,245 5,752 3,070,002
------------ -------------- --------------
Net (loss) $ (2,467,280) $ (5,752) $ (2,991,308)
============ ============== ==============
Weighted average number of
common shares outstanding -
basic and fully diluted 20,379,997 1,722,600
============ ==============
Net (loss) per share -
basic and fully- diluted $ (0.12) $ (0.00)
============ ==============
The accompanying notes are an integral part of these financial statements.
6
Immediatek, Inc.
(formerly ModernGroove Entertainment, Inc.)
(a Development Stage Company)
Statements of Cash Flow
Statements of Cash Flow
Three months March 1, 2002 March 1, 2002
ended (inception) to (inception) to
March 31, March 31, March 31,
2003 2002 2003
------------ -------------- --------------
Cash flows from operating
activities
Net (loss) $ (2,467,280) $ (5,752) $ (2,991,308)
Shares issued for services 68,400 - 472,152
Shares issued for services -
related party - - 16,408
Shares issued as compensation to
related parties 2,335,080 - 2,335,080
Adjustments to reconcile net
(loss) to net cash (used) by
operating activities:
(Increase) decrease in
accounts receivable 195 - (247)
Increase in accounts payable (6,189) 5,752 44,450
------------ -------------- --------------
Net cash (used) by operating
activities (69,794) - (123,465)
------------ -------------- --------------
Cash flows from financing activities
Common stock - - 47,324
Payments on notes payable (3,692) - -
Proceeds from note payable 72,500 - 72,500
Proceeds from shareholder loan - - 7,500
------------ -------------- --------------
Net cash provided by financing
activities 69,808 - 127,324
------------ -------------- --------------
Net (decrease) in cash (986) - 3,859
Cash - beginning 4,845 - -
------------ -------------- --------------
Cash - ending $ 3,859 $ - $ 3,859
============ ============== ==============
Supplemental disclosures:
Interest paid $ - $ - $ -
============ ============== ==============
Income taxes paid $ - $ - $ -
============ ============== ==============
Number of shares issued for
services 380,000 - 547,800
============ ============== ==============
Number of shares issued for
services to related party - - 8,200
============ ============== ==============
Number of shares issued as
compensation to related
parties 18,101,397 - 18,101,397
============ ============== ==============
The accompanying notes are an integral part of these financial statements.
7
Immediatek, Inc.
(formerly ModernGroove Entertainment, Inc.)
(a Development Stage Company)
Notes
Note 1 - Basis of Presentation
The consolidated interim financial statements included herein, presented in
accordance with United States generally accepted accounting principles and
stated in US dollars, have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
presented not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that these
consolidated interim financial statements be read in conjunction with the
financial statements of the Company for the year ended December 31, 2002 and
notes thereto included in the Company's 10-KSB annual report. The Company
follows the same accounting policies in the preparation of interim reports.
Results of operations for the interim periods are not indicative of annual
results.
Note 2 - Going concern
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company's ability to continue as a going concern is contingent
upon the successful completion of additional financing arrangements and its
ability to achieve and maintain profitable operations. Management plans to
raise capital to finance the operating and capital requirements of the Company.
Amounts raised will be used to further development of the Company's products,
to provide financing for marketing and promotion, to secure additional property
and equipment, and for other working capital purposes. While the Company is
expending its best efforts to achieve the above plans, there is no assurance
that any such activity will generate funds that will be available for
operations.
The officers and directors are involved in other business activities and may,
in the future, become involved in other business opportunities. If a specific
business opportunity becomes available, such persons may face a conflict in
selecting between the Company and their other business interests. The Company
has not formulated a policy for the resolution of such conflicts.
8
Immediatek, Inc.
(formerly ModernGroove Entertainment, Inc.)
(a Development Stage Company)
Notes
Note 3 - Notes payable
The Company received loans totaling $72,500 from various individuals. The
notes are non-interest bearing and are due on demand.
Note 4 - Stockholders' equity
The Company is authorized to issue 5,000,000 shares of $0.001 par value
preferred stock and 500,000,000 shares of $0.001 par value common stock.
Preferred stock
---------------
The Company is offering a minimum of 3,333,333 Shares and a maximum of
6,666,667 Shares of Series B Mandatory Convertible Preferred Stock at $0.15
per share for a total offering of up to $1,000,000. For every 100 Series B
Mandatory Convertible Preferred Stock held, the Holder is granted one warrant
exercisable into 40 shares of the Company's $0.001 par value common stock at
$0.50 per share until December 15, 2003, at which time the remaining number
of purchasable common stock will be reduced by 50% and will have an exercise
price of $1.00 per share until June 15, 2004.
Common stock
------------
On March 17, 2003, the Company issued 18,101,397 shares of its $0.001 par value
common stock pursuant to two separate Asset Purchase Agreements ("Agreements")
with Paul Marin, an individual, and Zach Bair, an individual and president of
the Company, to purchase certain strategic assets. The acquired assets are
valued at $7,360 and $10,741 (based on the par value of the underlying shares)
for a combined total of $18,101. The fair market value of the underlying
shares was $0.13 per share on March 17, 2003. The difference between the par
value of $18,101 and the fair market value of $2,353,182, or $2,335,081,
represents compensation expense to Mr. Bair and Mr. Marin.
On April 10, 2003, the Company issued 380,000 shares of its $0.001 par value
common stock to an individual for consulting services valued at $68,400, the
fair market value of the underlying shares.
There have been no other issuances of common and/or preferred stock.
9
Immediatek, Inc.
(formerly ModernGroove Entertainment, Inc.)
(a Development Stage Company)
Notes
Note 6 - Related party transactions
Intellectual property
---------------------
On March 17, 2003, the Company entered into two separate Asset Purchase
Agreements ("Agreements") with Paul Marin, an individual, and Zach Bair, an
individual and president of the Company, to purchase certain strategic assets.
Pursuant to the terms of the Agreements, the Company issued to Mr. Marin
7,360,000 restricted shares and to Mr. Bair 10,741,397 restricted shares of its
$0.001 par value common stock for a combined total of 18,101,397 shares. The
acquired assets are valued at $7,360 and $10,741 (based on the par value of the
underlying shares) for a combined total of $18,101. The fair market value of
the underlying shares was $0.13 per share on March 17, 2003. The difference
between the par value of $18,101 and the fair market value of $2,353,182, or
$2,335,081, represents compensation expense to Mr. Bair and Mr. Marin.
Shareholder loan
----------------
As of March 31, 2003, the Company owed a shareholder $7,500. The loan is non-
interest bearing and due on demand.
10
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
Immediatek, Inc., formerly called ModernGroove Entertainment, Inc., and
originally called Barrington Laboratories, Inc., and, is a developmental stage
company, hereinafter referred to as ("the Company"), was organized by the filing
of Articles of Incorporation with the Secretary of State of the State of Nevada
on August 6, 1998. The Articles of Incorporation of the Company were amended
on December 9, 2002 to officially change the name of the Company to Immediatek,
Inc, and increase the number of authorized shares to five hundred million
(500,000,000) shares of common stock having a par value of $0.001. The
Corporation shall have the authority to issue and five million (5,000,000)
shares of preferred stock at a par value of $0.001.
On February 27, 2003, Immediatek, Inc. announced that it was acquiring key
assets from Zach Bair and Paul Marin, individually. These assets represent,
breakthrough technology enabling Internet music fans to download standard MP3
files directly to their CD burners while simultaneously protecting the
artists' copyrights. Acquisition of these assets, include: the CD burning
software and the Company's flagship website, www.TwoBigToes.com.
Immediatek currently has license agreements with over 330 independent labels,
1,200 artists, and 30,000 music tracks for its www.TwoBigToes.com website and
core NetBurn (tm) technology. The Company is currently focusing its efforts
towards digital media delivery, utilizing its patent pending NetBurn (tm)
technology. NetBurn (tm) is a patent-pending digital delivery system designed
for music labels, distributors, artists and retailers. NetBurn (tm) allows web
and NetBurn Station(tm) users to download and burn fully licensed music tracks
from a sophisticated content management system utilizing a simple "one-click"
interface, while at the same time protecting the copyright holders who own the
material. NetBurn (tm) allows music, audio and video buyers, using the Internet
or an Automated Digital MediaServer (tm) ("ADM") to burn digital media directly
to Recordable CDs drive and leaves no files for the user to pirate. It requires
no prior download to use, no custom drivers, and features easy centralized
software updating and robust content management.
NetBurn (tm) is available both as an Application Service Provider ("ASP")
solution as well as deployable, Internet-enabled Automated Digital MediaServers
called "NetBurn Stations(tm)". What makes this technology unique is that with
only a single mouse click by the user, or a few touches on the NetBurn
Station(tm) touch screen, selected, fully licensed music tracks are burned
directly to a CD-recordable drive. In the case of the Internet version, the
user is left with no files on their hard disk. This means there are no files
for the user to copy, thereby providing an extra layer of security and
furthering the demise of music piracy. Users pay by the track or by the CD.
They can create custom CDs complete with liner notes and CD jacket, or choose
to burn exact CDs as found in retail stores. It is Immediatek's goal to work
with the music industry and artist community to help establish the NetBurn (tm)
technology as the de facto standard for digital music delivery.
11
The NetBurn Stations(tm) are available in stand-up and will also be available
as countertop bolt-on units. The machines accept credit and debit cards as well
as cash, and the stand-up units are equipped with 42-inch plasma screens for
targeted custom media and advertising delivery. Various licensing packages for
both the NetBurn Stations(tm) and the core NetBurn (tm) technology are available
and flexible. Licensing, for example, may include a flat yearly fee based on
estimated burns and/or a transaction fee per burn, and a monthly charge for
NetBurn Station(tm) deployment maintenance.
NetBurn (tm) is as much a supply chain solution for the music industry as it is
a tool to be used to combat music piracy. If the Company is successful in its
mission to make NetBurn (tm) the industry standard in digital music delivery, CD
distribution in its present form, as well as the costs associated with it, will
be transformed, with significant costs being driven out of the supply chain.
Artists, record labels and end users alike will all be the beneficiaries.
Coupled with new laws and stricter policing of existing legislation, which will
increasingly become a greater disincentive to music pirates, NetBurn (tm) offers
a legal solution to end users that will retain and enhance their ability to
download individual tracks of their choice, while improving quality and
eliminating the very high risk of exposure to computer viruses. Music downloads
will not be free of charge, as is the case with existing "peer-to-peer"
solutions, but they will be less expensive than existing retail alternatives,
with no loss of quality.
The Company's website at www.TwoBigToes.com targets a market in providing "one
click" web CD burning capabilities. The independent musician is actively
seeking ways to promote their music. There are an estimated 300,000 musician-
owned "official websites" that promote the musician's music, the vast majority
of which do not have CD burning capabilities or e-commerce capabilities.
TwoBigToes is the first and only site to offer CD burning capabilities plus
real-time sales statistics and proceeds paid to the musician. Previously the
musician has opted to link their sites to destination sites such as CDNOW,
MP3.com, Amazon Music, etc. Under MP3.com's model, for example, the musician is
required to pay a monthly service fee of $19.99 and has access to upload their
selections of MP3 files which is hosted by MP3.com's servers, with no CD burning
capabilities and shared sales proceeds.
Immediatek library includes tracks from independent artists and even some well-
known artists such as multi-platinum artist Shania Twain and world's largest
independent contemporary blues label, Alligator Records. Immediatek customer
base includes: Kviar Music, the leading Internet music portal and record label
in Latin America and Micro Center, a computer retailer with over 20 locations
across the United States.
Going Concern - The Company experienced operating losses for the period ended
March 31, 2003. The financial statements have been prepared assuming the
Company will continue to operate as a going concern which contemplates the
realization of assets and the settlement of liabilities in the normal course of
business. No adjustment has been made to the recorded amount of assets or the
recorded amount or classification of liabilities which would be required if the
Company were unable to continue its operations. (See Financial Footnote 2.)
12
Results of Operations
---------------------
During the First Quarter ended March 31, 2003, the Company generated $8,965 in
revenues, this compares to no revenues for the same period last year. In its
most recent three month operating period ended March 31, 2003, the Company
experienced a net loss of $2,467,245 versus a net loss of $5,752 for the
same period last year. The bulk of this loss came from compensation expenses
(related party) of $2,335,080 to purchase certain strategic assets; general and
administrative expenses of $66,773 and consulting fees of $68,400. During the
First Quarter, the Company continued to seek new strategies for market its
business plan. Since the Company's inception, the Company experienced a net
lost $2,991,308.
The major components to expenses faced by the company in its day-to-day
operations includes auditor fees, legal fees, developing software, databases,
marketing its internet site, and general administrative expenses. If the
Company becomes profitable, the company will access salaries and adding
additional personnel to the payroll. Management intends to continue
minimize costs until such a time in its discretion it believes expansion would
be prudent. One element in making this determination is positive cash flow on
a quarterly basis. If or when the company is successful in achieving this
quarterly positive cash flow, it is likely that the company will consider
expanding its personnel which will increase costs.
Plan of Operation
-----------------
Management does not believe that the Company will be able to generate
significant profit during the coming year, unless the company can expand
its customer base for its NetBurn (tm) products. NetBurn (tm) is a patent-
pending digital delivery system which allows web and NetBurn Station(tm) users
to download and burn fully licensed music tracks by utilizing a simple "one-
click" interface, while at the same time protecting the copyright holders who
own the material. Management does not believe the company will generate any
significant profit in the near future, as developmental and marketing costs
will most likely exceed any anticipated revenues.
Liquidity and Capital Resources
-------------------------------
On March 17, 2003, the Company issued 18,101,397 shares of its $0.001 par value
common stock pursuant to two separate Asset Purchase Agreements ("Agreements")
with Paul Marin, an individual, and Zach Bair, an individual and president of
the Company, to purchase certain strategic assets. The acquired assets are
valued at $7,360 and $10,741 (based on the par value of the underlying shares)
for a combined total of $18,101. The fair market value of the underlying shares
was $0.13 per share on March 17, 2003. The difference between the par value of
$18,101 and the fair market value of $2,353,182, or $2,335,081, represents
compensation expense to Mr. Bair and Mr. Marin.
13
On April 10, 2003, the Company issued 380,000 shares of its $0.001 par value
common stock to an individual for consulting services valued at $68,400, the
fair market value of the underlying shares.
As of March 31, 2003, the Company owed a shareholder $7,500. The loan is non-
interest bearing and due on demand. (See Financial Footnote 6.)
The Company received loans totaling $72,500 from various individuals. The
notes are non-interest bearing and are due on demand.
The Company could be required to secure additional financing to fully implement
its entire business plan. There are no guarantees that such financing will be
available to the Company, or if available, will be on terms and conditions
satisfactory to management.
The Company has no current commitments or other long-term debt. Additionally,
the Company has and may in the future invest in short-term investments from
time to time. There can be no assurance that these investments will result in
profit or loss.
Employees
---------
The Company currently has two employees, who also serve as officers and
directors of the Company.
The Company has no material commitments for capital expenditures nor
does it foresee the need for such expenditures over the next year.
Market For Company's Common Stock
---------------------------------
Market Information
------------------
On September 14, 1999, the Company's common stock was initially cleared for
trading on the OTC Bulletin Board system under the symbol BRRT. The Company
subsequently changed its name to ModernGroove Entertainment, Inc., and its
trading symbol to: MODG. On January 7, 2003, the Company changed its name to
Immediatek, Inc. and its trading symbol to IMDK. On February 25, 2003, the
Company initiated a 1 for 250 reverse stock split and changed it trading symbol
to ITEK. A very limited market exists for the trading of the Company's common
stock.
There is currently no Common Stock which is subject to outstanding
options or warrants to purchase, or securities convertible into, the
Company's common stock.
There is currently no common stock of the Company which could be sold
under Rule 144 under the Securities Act of 1933 as amended or that the
registrant has agreed to register for sale by security holders.
14
Dividends
---------
Holders of common stock are entitled to receive such dividends as the board of
directors may from time to time declare out of funds legally available for the
payment of dividends. No dividends have been paid on our common stock, and we
do not anticipate paying any dividends on our common stock in the foreseeable
future.
Forward-Looking Statements
--------------------------
This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things
as future capital expenditures (including the amount and nature thereof),
finding suitable merger or acquisition candidates, expansion and growth of the
Company's business and operations, and other such matters are forward-looking
statements. These statements are based on certain assumptions and analyses
made by the Company in light of its experience and its perception of
historical trends, current conditions and expected future developments as
well as other factors it believes are appropriate in the circumstances.
However, whether actual results or developments will conform with the
Company's expectations and predictions is subject to a number of risks and
uncertainties, general economic market and business conditions; the business
opportunities (or lack thereof) that may be presented to and pursued by the
Company; changes in laws or regulation; and other factors, most of which
are beyond the control of the Company.
This Form10-QSB contains statements that constitute "forward-looking
statements." These forward-looking statements can be identified by the use of
predictive, future-tense or forward-looking terminology, such as "believes,"
"anticipates," "expects," "estimates," "plans," "may," "will," or similar
terms. These statements appear in a number of places in this Registration and
include statements regarding the intent, belief or current expectations of
the Company, its directors or its officers with respect to, among other
things: (i) trends affecting the Company's financial condition or results of
operations for its limited history; (ii) the Company's business and growth
strategies; and, (iii) the Company's financing plans. Investors are cautioned
that any such forward-looking statements are not guarantees of future
15
performance and involve significant risks and uncertainties, and that actual
results may differ materially from those projected in the forward-looking
statements as a result of various factors. Factors that could adversely
affect actual results and performance include, among others, the Company's
limited operating history, dependence on continued growth in the irrigation
industry, potential fluctuations in quarterly operating results and expenses,
government regulation dealing with irrigation systems, technological change
and competition.
Consequently, all of the forward-looking statements made in this Form 10-QSB
are qualified by these cautionary statements and there can be no assurance
that the actual results or developments anticipated by the Company will be
realized or, even if substantially realized, that they will have the expected
consequence to or effects on the Company or its business or operations. The
Company assumes no obligations to update any such forward-looking statements.
Item 3. Controls and Procedures
Within the 90 days prior to the date of this report, we carried out an
evaluation, under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls
and procedures pursuant to Securities Exchange Act Rule 13a-14. Based upon
that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are effective in timely
alerting them to material information relating to us (including our
consolidated subsidiaries) required to be included in our periodic SEC filings.
There have been no significant changes in our internal controls or in other
factors that could significantly affect internal controls subsequent to the
date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
16
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company is not a party to any legal proceedings.
ITEM 2. Changes in Securities and Use of Proceeds
On February 25, 2003, the Company initiated a 1 for 250 reverse stock split and
changed it trading symbol to ITEK.
ITEM 3. Defaults upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
During the quarter ended, no matters were submitted to the Company's
security holders.
ITEM 5. Other Information
Pursuant to Nevada Corporate law, NRS 78.335(5), the Board of Directors filled
a previous Board vacancy with the nomination and acceptance of Mr. Paul Marin,
effective March 20, 2003. This new board member will hold office for the
unexpired term of his predecessor and/or until his successor(s) are elected
and qualified.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Title of Document
-----------------------------------------------
23 Consent of Experts
99.1 Chief Executive Officer-Section 302 Certification pursuant to
Sarbane-Oxley Act.
99.2 Chief Executive Officer-Section 906 Certification pursuant to
Sarbane-Oxley Act.
(b) Reports on Form 8-K
On January 23, 2003, the Company amended its Current Report dated November,
12, 2002, pursuant to pursuant to Item 1 ("Changes in Control of Registrant");
Item 2 ("Acquisition or Disposition of Assets"); Item 5 ("Other Events"); and,
Item 7. ("Exhibits"), entitled "Stock Purchase Agreement."
The Company filed a Current Report dated March 17, 2003, pursuant to Item 1
("Changes in Control of Registrant"); Item 2 ("Acquisition or Disposition of
Assets"); and, Item 7. ("Exhibits"), entitled Asset Purchase Agreements.
17
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
Immediatek, Inc.
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(Registrant)
Dated: May 14, 2003 By: /s/ Zach Bair
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Zach Bair
Chairman of the Board
President, Secretary
Chief Executive Officer
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.
IMMEDIATEK, INC.
Date: May 14, 2003 By: /s/ Zach Bair
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Zach Bair
Chief Executive Officer
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Exhibit 99.1 -- Chief Executive Officer Certification (Section 302)
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Zach Bair, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Immediatek,
Inc.;
2. Based on my knowledge, this quarterly 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 quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:
a) designed such disclosure controls and procedures 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
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
May 14, 2003 /s/ Zach Bair
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Zach Bair
Chief Executive Officer
19