UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2016

OR

  o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-53862

IGAMBIT INC.

(Exact name of registrant as specified in its charter)

Delaware

11-3363609

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

1050 W. Jericho Turnpike, Suite A

Smithtown, New York 11787

(Address of principal executive offices)

(631) 670-6777

(Registrant’s telephone number)

(Registrant’s former telephone number)

Securities registered under Section 12(b) of the Exchange Act:

Title of Each Class: NONE

Name of Each Exchange on Which

Registered:

Securities registered pursuant to Section 12(g) of the Act: Common Stock

Indicate   by   check   mark   if   the   registrant   is   a   well-known   seasoned   issuer,   as   defined   in

Rule 405 of the Securities Act. Yes o     No þ

Indicate  by  check    mark    if  the    registrant    is    not    required    to    file    reports    pursuant    to

Section 13 or Section 15(d) of the Exchange Act. Yes o     No þ

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 þ     No o

Indicate   by check   mark   whether   the   registrant   has   submitted   electronically and posted   on

its   corporate   website,   if   any,   every   Interactive   Date   File   required   to   be   submitted   and

posted   pursuant   to   Rule 405   of   Regulation S-T   (Section 232.405   of   the   chapter)   during

the   preceding   12 months   (or   for   such   shorter   period   that   the   registrant   was   required   to

submit and post such files). Yes þ     No o

Indicate    by    check    mark    if    disclosure    of    delinquent    filers    pursuant    to    Item 405    of

Regulation S-K    is    not    contained    herein,    and    will    not    be    contained,    to    the    best    of

registrant’s  knowledge,  in  definitive  proxy   or  information  statements   incorporated  by

reference in Part III of this Form 10-K or any amendment to this Form 10-K.  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. (Check one):

Large

Accelerated

Non-accelerated filer o

Smaller

accelerated

filer o

reporting

filer o

company þ

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 126-

2 of the act): Yes o     No þ

As   of   June   30,   2016,   the   aggregate   market   value   of   shares   held   by   non-affiliates   of   the

registrant   (based   upon   the   closing   sale   prices   of   such   shares   on   the   OTCQB   Market   on

June   30,   2016)   was   approximately   $370.773.   For   purposes   of   calculating   the   aggregate

market value of shares held by non-affiliates, we have assumed that all outstanding shares

are  held  by  non-affiliates,  except  for  shares  held  by  each  of  our  executive  officers,

directors   and   5%   or   greater   stockholders.   In   the   case   of   5%   or   greater   stockholders,   we

have   not   deemed   such   stockholders   to   be   affiliates   unless   there   are   facts   and

circumstances   which   would   indicate   that   such   stockholders   exercise   any control   over   our

company,   or   unless   they   hold   10%   or   more   of   our   outstanding   common   stock.   These

assumptions   should   not   be   deemed   to   constitute   an   admission   that   all   executive   officers,

directors   and   5%   or   greater   stockholders   are,   in   fact,   affiliates   of   our   company,   or   that

there   are   not   other   persons   who   may   be   deemed   to   be   affiliates   of   our   company.   Further

information concerning shareholdings of our officers, directors and principal stockholders

is   included   or   incorporated   by   reference   in   Part   III,   Item   12   of   this   Annual   Report   on

Form 10-K.

As   of   April   17,   2017   there   were   116,868,990   shares   of   the   Registrant’s   $0.001   par   value

common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None

iGambit Inc.

FORM 10-K — FOR THE YEAR ENDED DECEMBER 31, 2016

TABLE OF CONTENTS

Page No.

PART I

Item 1

Business

1

Item 1A

Risk Factors

5

Item 1B

Unresolved Staff Comments

5

Item 2

Properties

5

Item 3

Legal Proceedings

6

Item 4

(Removed and Reserved)

6

PART II

Item 5

Market for Registrant’s Common Equity, Related Stockholder Matters

and Issuer Purchases of Equity Securities

6

Item 6

Selected Financial Data

7

Item 7

Management’s Discussion and Analysis of Financial Condition and

Results of Operations

7

Item 7A

Quantitative and Qualitative Disclosure About Market Risk

14

Item 8

Financial Statements and Supplementary Data

14

Item 9

Changes in and Disagreements with Accountants on Accounting and

Financial Disclosure

14

Item 9A

Controls and Procedures

15

Item 9B

Other Information

15

PART III

Item 10

Directors, Executive Officers and Corporate Governance

16

Item 11

Executive Compensation

19

Item 12

Security Ownership of Certain Beneficial Owners and Management

and Related Stockholder Matters

21

Item 13

Certain Relationships, Related Transactions and Director

Independence

22

Item 14

Principal Accountant Fees and Services

23

PART IV

Item 15

Exhibits and Financial Statement Schedules

24

EX-31.1

EX-31.2

EX-32.1

EX-32.2

i

This   annual   report   on   Form   10-K   is   for   the   year   ended   December 31,   2016.   The

Securities   and   Exchange   Commission   (“SEC”)   allows   us   to   “incorporate   by   reference”

information  that  we  file  with  the  SEC,  which  means  that  we  can  disclose  important

information   to   you   by   referring     you   directly   to   those   documents.     Information

incorporated  by   reference  is  considered  to  be  part  of  this  annual  report.  In  addition,

information    that    we  file  with    the    SEC    in    the    future    will  automatically  update    and

supersede   information   contained   in   this   annual   report.   In   this   annual   report,   “Company,”

“we,” “us” and “our” refer to iGambit Inc. and its subsidiaries.

ii

PART I

This Annual Report on Form 10-K 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.   The   Company   has   based   these   forward-

looking   statements   on   the   Company’s   current   expectations   and   projections   about   future

events.    These    forward-looking    statements    are    subject    to    known    and    unknown    risks,

uncertainties   and   assumptions   about   us   and   the   Company’s   subsidiaries   that   may   cause

the  Company’s  actual  results,  levels  of  activity,  performance  or  achievements  to  be

materially   different   from   any   future   results,   levels   of   activity,   performance   or

achievements   expressed   or   implied   by   such   forward-looking   statements.   In   many   cases,

you    can    identify    forward-looking    statements    by    terminology    such    as    “anticipate,”

“estimate,”    “believe,”    “continue,”    “could,”    “intend,”    “may,”    “plan,”    “potential,”

“predict,”   “should,”   “will,”   “expect,”   “objective,”   “projection,”   “forecast,”   “goal,”

“guidance,”    “outlook,”    “effort,”    “target”    and    other    similar    words.    However,    the

absence  of  these  words  does  not  mean  that  the  statements  are  not  forward-looking.

Factors  that  might  cause  or  contribute  to  a  material  difference  include,  but  are  not

limited   to, those   discussed   elsewhere   in   this   Annual   Report, including   the section   entitled

“Risk   Factors”   and   the   risks   discussed   in   the   Company’s   other   Securities   and   Exchange

Commission  filings.   The  following  discussion   should   be   read   in  conjunction   with   the

Company’s   audited   Consolidated   Financial   Statements   and   related   Notes   thereto

included elsewhere in this report.

ITEM 1.   BUSINESS

HISTORY

We were incorporated in the State of Delaware under the name BigVault.com Inc.

on   April 13,   2000.   On   April 18,   2000,   we   merged   with   BigVault.com,   Inc.,   a   New   York

corporation with which we were affiliated. We survived the merger, and on December 19,

2000   changed   our   name   to   bigVAULT   Storage   Technologies,   Inc.   At   that   time   we   were

in   the   business   of   providing   remote,   internet-based   storage   vaulting   services   and   related

ancillary services to end users and resellers (the “Vault Business”).

On    February 28,    2006    we    sold    all    of    our    assets    to    Digi-Data    Corporation

(“DDC”), an unrelated third party, pursuant to the   terms of an Asset   Purchase Agreement

dated   December 21,   2005   (the   “APA”),   a   copy   of   which   is   filed   herewith   as   an   exhibit.

As  consideration   for   our   transfer   of   assets  under   the   APA,   DDC  paid  certain   of   our

liabilities   and   agreed   to   make   certain   quarterly   and   annual   revenue   sharing   payments   to

us,   as   is   further   described   below.   Mr. Salerno   and   Ms.   Luqman   accepted   employment

with   DDC   in   senior   management   positions   post   closing,   and   continued   to   work   for   DDC

until   February 2009.   As   of   March 1,   2009   Mr. Salerno   and   Ms. Luqman   returned   to   their

full time management roles with the Company.

On April 5, 2006, we changed our name to iGambit Inc.

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On October 1, 2009, we   acquired the   assets   of Jekyll   Island Ventures, Inc., a New

York  corporation  doing  business  as  Gotham  Photo  Company  (“Jekyll”)  through  our

wholly    owned    subsidiary    Gotham    Innovation    Lab,    Inc.,    a    New    York    corporation

(“Gotham”).

On  November  4,  2015,  we  consummated  the  acquisition  of  Wala,  Inc.  doing

business    as    ArcMail    Technology    (ArcMail)    in    accordance    with    a    Stock    Purchase

Agreement    (the    “ArcMail    Purchase    Agreement”)    by    and    among    Wala,    Inc.    doing

business   as   ArcMail   Technologies   (“ArcMail”),   Rory   T.   Welch   (the   “Seller”)   and   the

Company.   Pursuant   to   the   Stock   Purchase,   the   total   consideration   to   be   paid   for   the   outstanding

capital   stock   of   ArcMail   is   11,500,000   shares   of   the   Company’s   Common   stock.   10,500,000

shares   of   iGambit’s   Common   stock   to   the   Seller,   and/or   Seller’s   designees   at   Closing   and

the   Holdback   Amount   of   1,000,000   shares   of   the   iGambit’s   Common   stock   to   be   held   in

Escrow and paid to the Seller on later of (i) the first (1 ^st ) anniversary of completion of the

first   audit   of   Purchaser   after   the   Closing,   or   (ii)   that   date   which   is   twelve   (12)   months

from   the   Closing,   provided   that   in   the   event   iGambit   or   the   Purchaser   has   any   claims   for

indemnification    against    the    Seller    under    the    Purchase    Agreement,    Purchaser    shall

continue to withhold the portion of the Holdback Amount subject   to such   claims until the

parties fully and finally resolve such claims.

The ArcMail Purchase Agreement   was   disclosed   on the Company’s   current report

on Form 8-K filed on November 10, 2015.

On   November   5,   2015,   through   our   wholly   owned   subsidiary   Gotham   Innovation

Lab,   Inc.   (“Gotham”),   we   completed   the   sale   of   certain   assets   of   Gotham   to   VHT   Inc.

(“VHT”)    in    accordance    with    an    Asset    Purchase    Agreement    (the    “VHT    Purchase

Agreement”)   by   and   between   Gotham   and   VHT.       Pursuant   to   the   Purchase   Agreement

the  Company   received  $600,000  in  consideration,  $400,000  of  the  consideration  was

received   at   closing   and   the   remaining   $200,000   portion   of   the   consideration   is   subject   to

twelve   (12)   equal   monthly   payments   beginning   January   2016.   The   sale   included   certain

of   the   assets   of   the   Gotham,   including   the   Elliman   customer   agreement,   all   customer

accounts, all vendor agreements and all the intellectual property.

The VHT   Purchase Agreement   was   disclosed on   the Company’s   current   report   on

Form 8-K filed on November 11, 2015.

On  February  14,  2017,  we  consummated  the  acquisition  of  HubCentrix,  Inc.

(HubCentrix)   in   accordance   with   a   Stock   Exchange   Agreement   (the   “Exchange

Agreement”)   by   and   among   HubCentrix,   Jerry   Robinson,   Mary-Jo   Robinson,   Kathleen

Shepherd, Edwin Shepherd, Nora Minor,,and Sandra Gacio (the “Hub Shareholders”) and

the Company. Pursuant to the Exchange   Agreement, the total   consideration to be paid for

the  outstanding  capital  stock  of  HubCentrix  is  15,000,000  shares  of  the  Company’s

Common stock. 13,500,00 shares of iGambit’s Common stock to the Hub Shareholders at

Closing   and   the   Holdback   Amount   of   1,500,000   shares   of   the   iGambit’s   Common   stock

to   be   held   restricted   and   paid   to   the   Seller   on   later   of   (i)   the   first   (1 ^st )   anniversary   of

completion   of   the   first   audit   of   Purchaser   after   the   Closing,   or   (ii)   that   date   which   is

twelve   (12)   months   from   the   Closing,   provided   that   in   the   event   the   Company   has   any

2

claims   for   indemnification   against   the   HubCentrix   under   the   Exchange   Agreement,   the

Company shall   continue   to   withhold   the   portion   of   the   Holdback Amount   subject   to   such

claims until the parties fully and finally resolve such claims.

The   HubCentrix   Exchange   Agreement   was   disclosed   on   the   Company’s   current

report on Form 8-K filed on February 15, 2017.

On March 27, 2017 we changed the name of HubCentrix, Inc. to HealthDatix, Inc.

On   April   5,   2017,   the   Company,   through   its   wholly    owned   subsidiary

HealthDatix,   Inc.   (“HealthDatix”)   consummated   the   acquisition   of   certain   assets   of   the

CyberCare    Health    Network    Division    from    EncounterCare    Solutions    Inc.    (ECSL)    in

accordance    with    an    Asset    Purchase    Agreement    (the    “Agreement”)    by    and    among,

HealthDatix,    ECSL  and    the  Company.    Pursuant    to    the  Agreement,    ECSL  will  sell,

convey, transfer and assign to HealthDatix certain assets (the “Assets”), and  HealthDatix

will purchase and   accept   from the ECSL all right,   title and interest   in and to the Assets in

exchange for sixty million 60,000,000 shares of restricted common stock of iGambit.

The ECSL Agreement was   disclosed on the   Company’s   current report on Form 8-

K filed on April 6, 2017.

OUR COMPANY

Introduction

Previously   we  were  a  company   focused  on  the  technology   markets.  We  have

tailored  our  strategy   to  focus  on  pursuing   specific  medical  technology  strategies  and

objectives.

Presently we have one operating subsidiary, Wala, Inc. doing business as ArcMail

Technology   (ArcMail)   which   was   purchased   on   November   4,   2015.   ArcMail   is   in   the

business   of   providing   simple,   secure   and   cost-effective   email   and   enterprise   archiving

and  management  solutions  to  businesses  of  all  sizes  across  a  wide  range  of  vertical

markets.     On   March   7, 2017   we   entered   into   a   Letter   of   Intent   (LOI)   to   sell   substantially

all   the   assets   of   ArcMail.     The   LOI   has   certain   binding   and   non-binding   obligations,

including the   acquisition   consideration   which is   subject   to   adjustment   and   the   transaction

is  subject  to  various  conditions  to  closing,  including  satisfactory  completion  of  due

diligence,     approval     of     the     Company’s     shareholders,     if     required,     and     definitive

documentation.    There can be no assurance that the transactions contemplated by the   LOI

will   be   consummated.

As   a   result   of   the   entry   into   the   LOI,   the   generally   accepted

accounting    principles    require    us    to    present    the    ArcMail    financial    information    as

discontinued operations.  See financial disclosures below.

Our   primary   focus   is   the   expansion   of   our   newly   acquired   medical   technology

business HealthDatix Inc.

3

HealthDatix

Products and Services

HealthDatix    is    an    end    to    end    Software-as-a-Service    solution    that    manages,

reports,   and   analyzes   critical   data,   enabling   healthcare   organizations   to   deliver   positive

patient  outcomes.    We    offer  a  fully-hosted    cloud  service  for  healthcare  providers  to

conduct   the   Medicare   Annual   Wellness   Visit   (AWV)   program   to   their   Medicare   patients

providing the patient with a 5-10   year Personalized Preventive Plan and physician reports

that  meet  all    Medicare    audit  requirements.      The  AWV    is    a  program    that  allows  a

physician to identify those patients that have 2+ chronic conditions that require additional

screening and management.

Competitive Comparison

HealthDatix   AWV   solution   is   built   on   a   simple   and   flexible   design   that   gives

customers  ownership  and  control  over  their  data  and  offers  a  single  comprehensive

solution   for   Medicare   compliance   and   data   retention.   HealthDatix   primary   competitors

include   AWV360   and   AWVTotal   Solutions.   Their   primary   focus   is   on   just   the   primary

care physicians and not operating through a downstream channel program

HealthDatix   competes   effectively   against   its   primary   competitors   by   providing   a

simple and   scalable application   and   world-class   customer   support. HealthDatix’s   primary

competitive differentiation includes:

§      Simple User Interface

§      Efficient Reporting

Proprietary   algorithm   to   generate   Medicare   required   patient   and   practice

reporting

§      HIPAA complaint

§      Fully automated and easy user data capture

§      Channel Program

§      First Class Customer Service

Support   is   provided   at   our   U.S.   headquarters   by   an   experienced   technical

team

Future Products and Services

HeathDatix’s   product   strategy   is   to   provide   additional   products   that   will   support

the   patients   that   have   been   identified   through   the   program   to   require   additional   chronic

care   management   with   a   medical   wearable   that   will   allow   ease   of   use   for   the   patient   and

effective   tracking   and   management   by   the   physician   through   our   developed   chronic   care

management solution.

Customers

HealthDatix    operates    by  bringing  on    Channel    Partners    to    sell    the  service  to

primary  care    Physicians,    ACOs    and    Managed    Care    Practices.    We    currently  have  5

Channel   Partners   with   extensive   sales   arms   through   established   healthcare   technology

companies.

4

Expansion Summary

HealthDatix objective is to be a market leader in providing a world class AWV

software application as well as expand our offering to current and new channel partners

with our new chronic care management and medical wearable technology acquired

pursuant to the recent ECSL transaction.

Employees

We presently have 7 total employees all of which are full-time for operations and

11 full time employees from discontinued operations.

OUR CORPORATE INFORMATION

Our    principal    offices    are    located    at    1050    W.    Jericho    Turnpike,    Suite    A,

Smithtown,   New   York,  11787.   Our   telephone   number   is  (631) 670-6777   and   our   fax

number  is  (631) 670-6780.  We  currently  operate  two  corporate  websites  that  can  be

found at www.igambit.com, and www.healthdatix.com  (the information on the foregoing

websites does not form a part of this report).

ITEM 1A.   RISK FACTORS

Not Required.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.    PROPERTIES

Our   corporate   executive   office   is   located   in   Smithtown,   New   York,   where   we

lease    approximately  1000    square    feet    of    office    space.    Monthly    lease    payments    are

approximately $1,660.   The   lease   is   for   a   term   of   two   (2)   years   commencing   on   March   1,

2017   and   ending   on   February   28,   2019.    The   lease   contains   annual   escalations   of   2%   of

the annual rent.

Our   HealthDatix   operations   are   located   in   St.   Petersbug,   Florida   where   we   lease

where   office   suites   with   furniture   and   equipment   in   the   TecGarage   shared   coworking

incubator   office   building.   Monthly   lease   payments   are   $695   paid   on   a   month   to   month

basis.

Our ArcMail discontinued operations are located in Shreveport, Louisiana, where

we   lease   approximately   2,989   rentable   square   feet   to   be   used   as   office   space   and   178

rentable   square   feet   to   be   used   as   storage   space,   for   a   total   of   3,167   rentable   square   feet.

space.    The   lease   is   for   a   term   of   forty   five   (35)   months   beginning   February   1,   2015   and

ending October 31, 2018 payable monthly in the following manner:

02-01-15 through 04-30-15

$    0.00 / mth .

05-01-15 through 04-30-16

$ 3 , 404 . 19/mth . ($13.25 / s.f / yr.-office ; $7 . 00 / s.f.Iyr.- s torage)

05-01-16 through 04-30-17

$ 3,528.73 / mth . ($13 . 75/s.f / yr.--office ; $7 . 00 / s.f./yr.-storage)

05-01-17 through 10-31-18

$ 3,653 . 27/mth. ($14.25/s.f / yr.--office; $7.00/s.f./yr . -storage)

5

Our   leased   properties   are   suitable   for   their   respective   uses   and   are,   in   general,

adequate   for   our   present   needs.   Our   properties   are   subject   to   various   federal,   state,   and

local   statutes   and   ordinances   regulating   their   operations.   Management   does   not   believe

that   compliance   with   such   statutes   and   ordinances   will   materially   affect   our   business,

financial condition, or results of operations.

ITEM 3.   LEGAL PROCEEDINGS

From   time-to-time,   the   Company is   involved   in   various   civil   actions   as   part   of its   normal

course  of  business.  The  Company   is  not  a  party  to  any   litigation  that  is  material  to

ongoing   operations   as   defined   in   Item   103   of   Regulation   S-K   as   of   the   period   ended

December 31, 2017.

ITEM 4.   ( REMOVED AND RESERVED)

PART II

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED

STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY

SECURITIES

MARKET INFORMATION

Effective   March   19,   2011   the   Company’s   common   stock   is   quoted   on   the   Over

the   Counter   Bulletin   Board,   a   service   maintained   by   the   Financial   Industry   Regulatory

Authority, under the ticker symbol “IGMB”.

HOLDERS

As    of    April    17,    2017,    there    are    116,868,990    shares    of    our    common    stock

outstanding,   held   of   record   by   approximately   181   persons.   There   are   27,867,133   shares

held   in   reserve.   We   have   400,000   common   stock   warrants   outstanding   and   1,034,900

common stock options outstanding.

As   of   April   17,   2016, approximately 39,683,990   shares   of   our   common   stock   are

eligible to be sold under Rule 144.

DIVIDENDS

We  have    never    declared    or    paid    any  dividends    on    our    common    stock.    Any

determination   to   pay   dividends   in   the   future   will   be   at   the   discretion   of   our   Board   of

Directors  and  will  be  dependent  upon  our  results  of  operations,  financial  condition,

capital   requirements,   contractual   restrictions   and   other   factors   deemed   relevant   by   the

Board   of   Directors.   The   Board   of   Directors   is   not   expected   to   declare   dividends   or   make

6

any   other   distributions   in   the   foreseeable   future,   but   instead   intends   to   retain   earnings,   if

any, for use in business operations.

EQUITY COMPENSATION PLAN INFORMATION

We   currently do   not   have   an   equity compensation   plan.     In   2006, we   adopted   the

2006   Long-Term   Incentive   Plan   (the   "2006   Plan").     The   Plan   expired   on   December   31,

2009.    The   2006   Plan   provided   for   the   granting   of   options   to   purchase   up   to   10,000,000

shares   of   common   stock.  8,146,900   options   have   been   issued   under   the   plan   to   date   of

which   7,157,038   have   been   exercised  and  692,962  have  expired   to   date.  There   were

296,900   options   outstanding   under   the   2006   Plan   on   its   expiration   date   of   December   31,

2009.   All options issued subsequent to this date were not issued pursuant to any plan.

In    addition    to    the    2006    Long    Term    Incentive    Plan,    we    have    issued    and

outstanding compensatory   warrants   to   two   consultants   entitling the   holders   to   purchase   a

total   of   275,000   shares   of   our   common   stock   at   an   average   exercise   price   of   $0.94   per

share.   Warrants   to   purchase   25,000 shares of common stock vest   upon   6   months after the

Company   engages   in   an   IPO,   have   an   exercise   price   of   $3.00   per   share,   and   expire   2

years   after   the   Company   engages   in   an   IPO.   Warrants   to   purchase   250,000   shares   of

common stock vest 100,000 shares on issuance (June 1, 2009), and 50,000 shares on each

of   the   following   three   anniversaries   of   the   date   of   issuance,   have   exercise   prices   ranging

from   $0.50   per   share   to   $1.15   per   share,   and   expire   on   June 1,   2019.   The   issuance   of   the

compensatory warrants was not submitted to our shareholders for their approval.

RECENT SALES OF UNREGISTERED SECURITIES

During   2016   we   sold   securities   in   transactions   not   registered   under   the   Securities

Act of 1933, as amended (the “Securities Act”).

ITEM 6.    SELECTED FINANCIAL DATA

Not Required

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

Our   management’s   discussion   and   analysis   of   our   financial   condition   and   results

of    operations    are    based    on    our    financial    statements,    which    have    been    prepared    in

accordance    with    accounting    principles    generally    accepted    in    the    United    States    of

America.   The   preparation   of   financial   statements   may   require   us   to   make   estimates   and

assumptions   that   may   affect   the   reported   amounts   of   assets   and   liabilities   and   the   related

disclosures at the date of the financial statements. We do not currently have any estimates

or   assumptions   where   the   nature   of   the   estimates   or   assumptions   is   material   due   to   the

levels   of   subjectivity   and   judgment   necessary   to   account   for   highly   uncertain   matters   or

the    susceptibility    of    such    matters    to    change    or    the    impact    of    the    estimates    and

7

assumptions    on    financial    condition    or    operating    performance    is    material,    except    as

described below.

Principles of Consolidation

The   consolidated   financial   statements   include   the   accounts   of   the   Company   and

its   wholly-owned   subsidiaries   Wala,   Inc.   and   Gotham   Innovation   Lab,   Inc.  All

intercompany accounts and transactions have been eliminated.

Use of Estimates in the Preparation of Financial Statements

The  preparation  of  financial  statements  in  conformity   with  generally   accepted

accounting principles requires management to make estimates and assumptions that affect

the  reported  amounts  of   assets   and   liabilities  and   disclosure   of   contingent  assets  and

liabilities   at   the   date of   the   consolidated   financial   statements   and   the   reported   amounts   of

revenues and expenses during the period. Actual results could differ from those estimates.

Long-Lived Assets

We   assess   the   valuation   of   components   of   its   property   and   equipment   and   other

long-lived   assets   whenever   events   or   circumstances   dictate   that   the   carrying   value   might

not   be   recoverable.   We   base   our   evaluation   on   indicators   such   as   the   nature   of the   assets,

the   future   economic   benefit   of   the   assets,   any   historical   or   future   profitability

measurements and other external market conditions or factors that may be present. If such

factors    indicate    that    the    carrying    amount    of    an    asset    or    asset    group    may    not    be

recoverable,   we   determine   whether   an   impairment   has   occurred   by analyzing an   estimate

of   undiscounted   future   cash   flows   at   the   lowest   level   for   which   identifiable   cash   flows

exist.   If   the   estimate   of   undiscounted   cash   flows   during   the   estimated   useful   life   of   the

asset   is   less   than   the   carrying   value   of   the   asset,   we   recognize   a   loss   for   the   difference

between   the   carrying   value   of   the   asset   and   its   estimated   fair   value,   generally   measured

by the present value of the estimated cash flows.

Revenue Recognition

We    recognize    revenue    from    product    sales    when    the    following    four    revenue

recognition   criteria   are   met:   persuasive   evidence   of   an   arrangement   exists,   an   equipment

order   has   been   placed   with   the   vendor,   the   selling   price   is   fixed   or   determinable,   and

collectability  is  reasonably  assured.    Revenues  from  maintenance  contracts  covering

multiple   future   periods   are   recognized   during   the   current   periods   and   deferred   revenue   is

recorded   for   future   periods   and   classified   as  current   or   noncurrent,   depending   on   the

terms of the contracts.

Deferred Revenue

Deposits   from   customers   are   not   recognized   as   revenues,   but   as   liabilities,   until

the  following   conditions  are  met:  revenues  are  realized  when  cash  or   claims  to  cash

(receivable)   are   received   in   exchange   for   goods   or   services   or   when   assets   received   in

such   exchange   are   readily    convertible   to   cash   or   claim   to   cash   or   when   such

8

goods/services   are   transferred.   When   such   income   item   is   earned,   the   related   revenue

item  is  recognized,  and  the  deferred  revenue  is  reduced.  To  the  extent  revenues  are

generated   from   our   support   and   maintenance   services,   we   recognize   such   revenues   when

services are completed and billed. We have received deposits from various customers that

have   been   recorded   as   deferred   revenue   in   the   amount   of   $1,092,388   and   $1,190,270   as

of the years ended December 31, 2016 and 2015, respectively.

Accounts Receivable

We   analyze   the   collectability   of   accounts   receivable   from   continuing   operations

each   accounting   period   and   adjust   our   allowance   for   doubtful   accounts   accordingly.   A

considerable  amount  of  judgment  is  required  in  assessing   the  realization  of  accounts

receivables,  including  the    creditworthiness  of  each  customer,  current  and  historical

collection  history  and  the  related  aging  of  past  due  balances.    We    evaluate  specific

accounts   when   we   become   aware   of   information   indicating   that   a   customer   may   not   be

able   to   meet   its   financial   obligations   due   to   deterioration   of   its   financial   condition,   lower

credit    ratings,    bankruptcy    or    other    factors    affecting    the    ability    to    render    payment.

Allowance   for   doubtful   accounts   was   $8,345   at   December   31,   2016   and   2015,

respectively.    Bad   debt   expense   of $0   and   $5,971   was   charged   to   operations   for   the   years

ended December 31, 2016 and 2015, respectively.

Goodwill and Intangible Assets

Goodwill  represents  the  excess  of  liabilities  assumed  over  assets  acquired  of

ArcMail   and   the   fair   market   value   of   the   common   shares   we   issued   for   the   acquisition   of

ArcMail.    In   accordance   with   ASC   Topic   No.   350   “Intangibles   –   Goodwill   and   Other”),

the   goodwill   is   not   being   amortized,   but   instead   will   be   subject   to   an   annual   assessment

of   impairment   by   applying   a   fair-value   based   test,   and   will   be   reviewed   more   frequently

if current events and circumstances indicate a possible impairment. An impairment loss is

charged   to   expense   in   the   period   identified.   If   indicators   of   impairment   are   present   and

future cash flows   are not   expected to be   sufficient   to recover the asset’s carrying amount,

an   impairment   loss   is   charged   to   expense   in   the   period   identified.   A   lack   of   projected

future   operating   results   from   ArcMail’s   operations   may   cause   impairment.   During   the

year   ended   December   31,   2016,   goodwill   was   reallocated   to   intangible   assets   acquired   as

follows:

Workforce

$

138,783

Non-compete

145,315

Customer relations

3,357,756

3,641,854

Goodwill

3,063,303

$     6,705,157

In    connection    with    management’s    decision    to    sell    Arcmail,    we    recorded    an

impairment    charge    to    discontinued    operations    of    $6,263,320,    and    amortization    of

$441,837   was   charged   to   discontinued   operations   during   the   year   ended   December   31,

2016.

9

Stock-Based Compensation

We     account     for     our     stock-based     awards     granted     under     our     employee

compensation   plan   in   accordance  with   ASC   Topic   No.   718-20,  Awards   Classified   as

Equity,   which   requires   the   measurement   of   compensation   expense   for   all   share-based

compensation   granted   to   employees   and   non-employee   directors   at   fair   value   on   the   date

of   grant   and   recognition  of   compensation   expense   over   the   related   service   period   for

awards   expected   to   vest.  We   use   the   Black-Scholes   option   pricing   model   to   estimate   the

fair   value   of   our   stock   options   and   warrants.   The   Black-Scholes   option   pricing   model

requires   the   input   of   highly   subjective   assumptions   including   the   expected   stock   price

volatility of   the   Company’s   common   stock,   the   risk   free   interest   rate   at   the   date   of   grant,

the   expected   vesting   term   of   the   grant,   expected   dividends,   and   an   assumption   related   to

forfeitures   of   such   grants.  Changes   in   these   subjective   input   assumptions   can   materially

affect the fair value estimate of the Company’s stock options and warrants.

Options

In  2006,  we  adopted  the  2006  Long-Term  Incentive  Plan  (the  "2006  Plan").

Awards   granted   under   the   2006   Plan   have   a   ten-year   term   and   may   be   incentive   stock

options,   non-qualified   stock   options   or   warrants.   The   awards   are   granted   at   an   exercise

price   equal to the   fair market value   on the date of   grant   and   generally vest   over a   three   or

four   year   period.   The   Plan   expired   on   December   31,   2009,   therefore   as   of   December   31,

2015,   there   was   no   unrecognized   compensation   cost   related   to   non-vested   share-based

compensation arrangements granted under the 2006 plan.

The   2006   Plan   provided   for   the   granting   of   options   to   purchase   up   to   10,000,000

shares   of   common   stock.  8,146,900   options   have   been   issued   under   the   plan   to   date   of

which   7,157,038   have   been   exercised  and  692,962  have  expired   to   date.  There   were

296,900   options   outstanding   under   the   2006   Plan   on   its   expiration   date   of   December   31,

2009. All options issued subsequent to this date were not issued pursuant to any plan.

Warrants

In  addition  to  our  2006  Long  Term  Incentive  Plan,  we  have  issued  and  outstanding

compensatory   warrants   to   two   consultants   entitling   the   holders   to   purchase   a   total   of

275,000   shares   of   our   common   stock   at   an   average   exercise   price   of   $0.94   per   share.

Warrants  to  purchase  25,000  shares  of  common  stock  vest  upon  6  months  after  the

Company   engages   in   an   IPO,   have   an   exercise   price   of   $3.00   per   share,   and   expire   2

years   after   the   Company   engages   in   an   IPO.   Warrants   to   purchase   250,000   shares   of

common stock vest 100,000 shares on issuance (June 1, 2009), and 50,000 shares on each

of   the   following   three   anniversaries   of   the   date   of   issuance,   have   exercise   prices   ranging

from   $0.50   per   share   to   $1.15   per   share,   and   expire   on   June 1,   2019.   The   issuance   of   the

compensatory warrants was not submitted to our shareholders for their approval.

Convertible Debenture

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During   the   year   ended   December   31,   2016,   we   issued   convertible   debentures   to

two   individuals.    The   debentures   are   convertible   into   50,000   shares   of   common   stock   for

up   to   5   years,   at   the   holders’   option,   at   an   exercise   price   of   $.50   and   $.25,   respectively.

The   debentures   mature   on   the   earlier   of   the   closing   of   a   subsequent   financing   event   by

the   Company   resulting   in   gross   proceeds   of   at   least   $10,000,000   or   three   years   from   the

date of issuance. The   debentures   bear interest   at   a   rate of 10%   and   is   deferred   until   2017.

A    beneficial    conversion    feature    was    not    recorded    as    the    fair    market    value    of    the

Company’s   common   stock   was   less   than   the   exercise   prices   at   the   dates   of   issuance   and

through the end of the year.

Income Taxes

We follow Accounting Standards Codification subtopic 740, Income Taxes (“ASC

740”) which requires the   recognition of deferred tax   liabilities and assets for the expected

future   tax   consequences   of   events   that   have   been   included   in   the   financial   statements   or

tax   returns.   Under   such   method,   deferred   tax   assets   and   liabilities   are   recognized   for   the

future    tax    consequences    attributable    to    differences    between    the    financial    statement

carrying   amounts   of   existing   assets   and   liabilities   and   their   respective   tax   bases   using

enacted   tax   rates   in   effect   for   the   year   in   which   the   differences   are   expected   to   reverse.

Deferred   taxes   are   classified   as   current   or   non-current,   depending   on   the   classification   of

the assets and liabilities to which they relate.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Introduction

iGambit   is   a   company   focused   on   the   medical   technology   markets.    Our   primary

focus   is   the   expansion   of   our   newly   acquired   medical   technology   business   HealthDatix

Inc.

Year Ended December 31, 2016 as Compared to Year Ended December 31, 2015

Assets.   At   December 31,   2016,   we   had   $507,932   in   current   assets   and   $510,835

in   total   assets,   compared   to   $7,634,620   in   current   assets   and   $7,637,996   in   total   assets   as

of   December 31,   2015.   The   decrease   in   total   assets   was   primarily   due   to   a   decrease   in

assets   from   discontinued   operations   as   a   result   of   impairment   of   goodwill   and   intangible

assets.

Liabilities.   At    December 31,   2016,   we   had   total   liabilities   of    $6,380,260

compared to $6,076,680 at December 31, 2015. Our total liabilities at December 31, 2016

consisted    of    current    liabilities    including    accounts    payable    and    accrued    expenses    of

$356,005,  amounts due to  related parties of $508, convertible debentures of $50,000 and

labilities  from  discontinued  operations  of  $5,905,666,  whereas  our  total  liabilities  at

December    31,    2015    consisted    of    current    liabilities    including     accounts    payable    of

$168,971,   amounts  due  to  related   parties  of   $2,043,   and   liabilities  from  discontinued

operations   of   $5,905,666.   We   had   no   long   term   liabilities   for   the   year   ended   December

11

31, 2016.   The increase in liabilities was primarily due to an increase in accounts payable

and accrued interest

Stockholders’      Equity      (Deficiency).      Our      Stockholders’      Deficiency      was

$(5,869,425)   at   December   31,   2016   compared   to   Stockholders’   Equity   of   $1,561,316   at

December   31,   2015   This   decrease   was   due   to   an   increase   in   accumulated   deficit   from

$(2,798,390)   at   December   31,   2015   to   $(10,230,631)   at   December   31,   2016   resulting

from   net   loss   from   continuing   operations   of   $(451,060)   and   a   net   loss   from   discontinued

operations of $(6,981,181) primarily due to impairment of goodwill and intangible assets.

Net   Income   (Loss) .   We   had   a   loss   from   continuing operations   of   $(451,060)   and

$(536,130) for the   years ended December 31, 2016 and December 31, 2015, respectively,

and  a  loss    from  discontinued  operations    of  $(6,981,181)  compared  to    income  from

discontinued    operations    of    $619,939    for    the    year    ended    December    31,    2016    and

December 31, 2015, respectively.

General  and  Administrative  Expenses .  General  and  Administrative  Expenses

decreased   to   $448,595   for the   year   ended   December 31, 2016   from $532,988 for   the   year

ended  December 31,  2015.  For  the  year  ended  December 31,  2016  our  General  and

Administrative Expenses consisted of corporate administrative expenses of $90,617, legal

and   accounting   fees   of   $115,660,   payroll   expenses   of   $91,155,   Directors   and   Officers

Insurance of $10,053 employee benefits expenses of $24,217 (medical and life insurance)

filing   fees  of  $11,779,  financing  expense  of  $10,000,  and  $95,114  in  marketing  and

finder’s   fees.   For   the   year   ended   December 31,   2015   our   General   and   Administrative

Expenses   consisted   of   corporate   administrative   expenses   of   $98,085,   legal   and

accounting    fees    of    $124,555,    payroll    expenses    of    $111,838,    Directors    and    Officers

Insurance    of    $42,206,    employee    benefits    expenses    of    $20,790    (medical     and    life

insurance),  filing  fees  of  $12,489,    and  $123,025  in  in  marketing  and  finder’s  fees.

Therefore  the  decreases  from  the  year  ended  December 31,  2015  to  the  year  ended

December 31,   2016   relate   primarily   to   a   decrease   in   payroll,   legal   and   professional   fees

and    in    marketing    and    finder’s    fees.    In    2017    we    anticipate    an    increase    in    General

Administrative Expenses associated with the HealthDatix acquisition.

LIQUIDITY AND CAPITAL RESOURCES

General

As   reflected   in   the   accompanying   consolidated   financial   statements,   at   December

31,   2016,   we   had   $10,522   of   cash   and   stockholders’   deficiiency   of   $(5,869,425).     At

December 31, 2015, we had $122,291 of cash and stockholders’ equity of $1,561,316.

Our primary capital requirements in 2017 are likely to arise from the expansion of

our   HealthDatix   operations,   It   is   not   possible   to   quantify those   costs   at   this   point   in   time,

in   that   they   depend   on   HealthDatix’s   business   opportunities   and   the   state   of   the   overall

economy.   We   anticipate   raising   capital   in   the   private   markets   to   cover   any   such   costs,

though   there  can   be   no  guaranty   we  will  be  able   to  do  so   on   terms  we  deem   to  be

12

acceptable.   We   do   not   have   any   plans   at   this   point   in   time   to   obtain   a   line   of   credit   or

other loan facility from a commercial bank.

While   we   believe   in   the   viability   of   our   strategy   to   improve   HealthDatix’s   sales

volume,   and   in   our   ability   to   raise   additional   funds,   there   can   be   no   assurances   that   we

will be able to fully effectuate our business plan.

We   believe   we   will   continue   to   increase   our   cash   position   and   liquidity   for   the

foreseeable future. We believe we have enough capital to fund our present operations.

Cash Flow Activity

Net   cash   used   in   operating   activities   was   $274,223,   for   the   year   ended   December

31,   2016,   compared   to   net   cash   provided   by   operating   activities   of   $44,907   for   the   year

ended    December    31,    2015.     Net    cash    used    in    continuing    operating    activities    was

$142,092   for   the   year   ended   December   31,   2016,   compared   to   $313,932   for   the   year

ended   December   31,   2015.   Our   primary   use   of   operating   cash   flows   from   continuing

operating   activities   was   from   net   losses   of   $451,060   and   $536,130   for   the   years   ended

December   31,   2016   and   2015,   respectively.   Additional   contributing factors   to   the   change

were  from  a  decrease  in  prepaid  expenses  of  $119,961,  and  an  increase  in  accounts

payable   and   accrued   expenses   of   $187,034.     Net   cash   used   in   discontinued   operating

activities   was   $132,131   for   the   year   ended   December   31,   2016   and   net   cash   provided   by

discontinued   operations   was   $358,839   for   the   year   ended   December   31,   2015.   Cash   used

in discontinued operations for the   year ended December 31, 2016 consisted of $1,990,490

in   revenue   from   our   ArcMail   subsidiary   and   $180,849   in   cash   payments   received   from

VHT  Inc.   pursuant  to   the  VHT  Purchase   Agreement.   Cash   provided  by   discontinued

operations for the   year ended December 31, 2015 consisted of $495,930 in cash payments

received from VHT Inc. pursuant to the VHT Purchase Agreement.

Cash   used   in   investing   activities   was   $9,990   for   the   year   ended   December   31,   2016

and   cash   provided   by   investing   activities   was   $1,828   for   the   year   ended   December   31,

2015.   For   the   year   ended   December   31,   2016   the   primary   source   of   cash   from   investing

activities  was  from  an  increase  in  note  receivable  of  $15,000.    For  the  year  ended

December   31,   2015  the  primary   source  of  cash  from   investing   activities  was  from  a

decrease in deposits of $10,413.

Cash   provided   by   financing   activities   was   $172,444   for   the   year   ended   December

31,   2016   compared   to   cash   used   in   financing   activities   of   $(51,277)   for   the   year   ended

December   31,   2015.   The   cash   flows   provided   by   financing   activities   for   the   year   ended

December   31,   2016   was   primarily   from   proceeds   from   convertible   debentures.   The   cash

flows   used   in   financing   activities   for   the   year   ended   December   31,   2015   was   primarily

from repayment of stockholders loans and a note payable from discontinued operations..

Plan of Operation and Funding

We   expect   that working capital   requirements will continue to be funded through   a

combination of our existing funds and further issuances of securities. Our working capital

13

requirements   are   expected   to   increase   in   line   with   the   growth   of   our   business.   Existing

working   capital,   further   advances   and   debt   instruments,   and   anticipated   cash   flow   are

expected   to   be   adequate   to   fund   our   operations   over the   next   twelve   months.   We   have   no

lines    of    credit    or    other    bank    financing    arrangements.    Generally,    we    have    financed

operations  to  date  through  the  proceeds  of  the  private  placement  of  equity  and  debt

instruments.     In   connection   with   our   business   plan,   management   anticipates   additional

increases   in   operating   expenses   and   capital   expenditures   relating   to:   (i)   developmental

expenses   associated   with   a   start-up   business   and   (ii)   marketing   expenses.   We   intend   to

finance   these   expenses   with   further   issuances   of   securities,   and   debt   issuances.

Thereafter,   we   expect   we   will   need   to   raise   additional   capital   and   generate   revenues   to

meet  long-term  operating  requirements.  Additional  issuances  of  equity  or  convertible

debt   securities   will   result   in   dilution   to   our   current   shareholders.   Further,   such   securities

might  have  rights,  preferences  or  privileges  senior  to  our  common  stock.  Additional

financing   may not   be   available upon   acceptable terms,   or   at   all.   If   adequate   funds   are   not

available   or   are   not   available   on   acceptable   terms,   we   may   not   be   able   to   take   advantage

of   prospective   new   business   endeavors   or   opportunities,   which   could   significantly   and

materially restrict our business operations.

OFF BALANCE SHEET ARRANGEMENTS

We have no off balance-sheet arrangements.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT

MARKET RISK

Not Required.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Financial Statements required by this Item 8 are included in this Report beginning

on page F-1, as follows:

Report of Independent Registered Public Accounting Firm

F-1

Consolidated Balance Sheet as of December 31, 2016 and 2015

F-2

Consolidated Statement of Income for the years ended December 31, 2016 and

F-3

2015

Consolidated Statement of Changes in Stockholder’s Equity for the years ended

F-4

December 31, 2016 and 2015

Consolidated Statement of Cash Flows for the years ended December 31, 2016

F-5

and 2015

Notes to Financial Statements

F-7

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

None.

14

ITEM 9A.   CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our   management,   with   the   participation   of   our   chief   executive   officer   and   chief

financial   officer,   evaluated   the   effectiveness   of   our   disclosure   controls   and   procedures

pursuant   to   Rule   13a-15   under   the   Exchange   Act,   as   of   the   end   of   the   period   covered   by

this Annual Report on Form 10-K.

Based   on   this   evaluation,   our   chief   executive   officer   and   chief   financial   officer

concluded   that,   as   of   December   31,   2016,   our   disclosure   controls   and   procedures   are

designed at a reasonable assurance level and are effective to provide reasonable assurance

that   information   we   are   required   to   disclose   in   reports   that   we   file   or   submit   under   the

Exchange   Act   is   recorded,   processed,   summarized,   and   reported   within   the   time   periods

specified   in   the   SEC’s   rules   and   forms,   and   that   such   information   is   accumulated   and

communicated    to    our    management,    including    our    chief    executive    officer    and    chief

financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There    were    no    changes    in    our    internal    control    over    financial    reporting    that

occurred   during   the   quarter   ended   December   31,   2016   that   have   materially   affected,   or

are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal

control   over   financial   reporting,   as   defined   in   Rule   13a-15(f)   of   the   Exchange   Act.   Our

management   conducted   an   evaluation   of   the   effectiveness   of   our   internal   control   over

financial   reporting   based   on   the   framework   in   Internal   Control—Integrated   Framework

issued  by   the  Committee  of  Sponsoring  Organizations  of  the  Treadway  Commission

(2013   framework).   Based   on   this   evaluation,   management   concluded   that   our   internal

control over financial reporting was effective as of December 31, 2016.

Limitations on Effectiveness of Controls and Procedure s

In   designing   and   evaluating   the   disclosure   controls   and   procedures,   management

recognizes   that   any   controls   and   procedures,   no   matter   how   well   designed   and   operated,

can   provide   only   reasonable   assurance   of   achieving   the   desired  control   objectives.   In

addition,   the   design   of   disclosure   controls   and   procedures   must   reflect   the   fact   that   there

are    resource    constraints    and    that    management    is    required    to    apply    its    judgment    in

evaluating the benefits of possible controls and procedures relative to their costs.

ITEM 9B.   OTHER INFORMATION

None.

15

PART III

ITEM 10.    DIRECTORS , EXECUTIVE OFFICERS AND CORPORATE

GOVERNANCE

DIRECTORS AND EXECUTIVE OFFICERS

Our board of directors manages our business and affairs. Under our Articles of

Incorporation and Bylaws, the Board will consist of not less than one, nor more than

seven directors. Currently, our Board consists of five directors.

The  names,  ages,  positions  and  dates  appointed  of  our  current  directors  and

executive officers are set forth below.

Name

A ge

Position

Appointed

John Salerno

78     Chief Executive Officer, President,     March 2009

Chairman of the Board, and

(appointed Chairman

Director

and Director in

April 2000)

Elisa Luqman

52     Chief Financial Officer, Executive     March 2009

Vice President, General Counsel,

(appointed Director

and Director

in August 2009)

George G. Dempster

77     Director

January 2001

John   Salerno,   Chief   Executive   Officer,   President,   Chairman   of   the   Board,

and  Director.  Mr.  Salerno  is  a  seasoned  hands-on  executive  with  over  40 years  of

experience     with     public     and     private     computer     software     and     service     companies.

Mr. Salerno   built   a   multi-million   dollar   business   from   a   start   up,   servicing   the   real   estate

industry.   The   business   was   sold   in   1984   and   Mr. Salerno   provided   consulting services   to

a   wide   range   of   clients   through   1995.   In   1996, along with   his   daughter and   a   small   group

of   private   accredited   investors,   he   co-founded   the   Company.   Mr. Salerno   was   President

and   CEO   of   the   Company   from   April 1,   2000  until  February 28,   2006.   After   signing

contracts with Verizon and Cablevision, the Company sold its assets in 2006 to Digi-Data

Corporation.   From   March 1,   2006   thru   February 2009   Mr. Salerno   served   as   President   of

the   Vault   Services   Division   of   Digi-Data   Corporation.   Upon   the   expiration   of   his   3 year

contract the Vault Services Division was at a revenue run rate of $12 million annually. As

of March 1, 2009,   Mr. Salerno returned to his full   time management roll   at   the Company.

Mr. Salerno is an ex — US Marine Corps, Crypto/ Communications Officer and has a BS

in Mathematics from Fordham University. Mr. Salerno is Elisa Luqman’s father.

Mr. Salerno was nominated as a Director because   if his intimate   knowledge of the

Company   and   its   history   as   a   founder.     Additionally,   Mr.   Salerno’s   mathematical   and

technical background as a data center manager early in his professional career and later as

a   software   developer   offers   the   board   hand’s   on   technical   experience   in   both   operations

and   software   analysis.     Mr.   Salerno   utilized   his   experience   and   contacts   to   secure   the

16

major   customers   driving   the   sales   that   generate   the   Company’s   payment  stream   from

DDC.   Moreover,   Mr.   Salerno   adds   value   to   Gotham   through   his   40   plus   years   serving

the   New   York   Real   Estate   industry.    He   is   thoroughly   familiar   with   the   unique   workings

of   the   New   York   real   estate   industry   and   has   many   contacts   within   that   community   that

are a benefit to Gotham.

Elisa   Luqman,  Chief  Financial   Officer,   Executive  Vice  President,   General

Counsel,   and   Director.   Ms. Luqman   is   a   computer   literate   attorney   with   over   18 years

experience   with   intellectual   property   and   computer   software.   Prior   to   co-founding   the

Company,   Ms. Luqman   was   president   of   University   Software   Corp.,   a   software

development   company   focused   on   a   wide   range   of   student   educational   and   intellectual

applications.   Ms. Luqman   was   Chief   Operating   Officer   of   the   Company,   from   April 1,

2000   until   February 28,   2006.   From   March 1,   2006   through     February 28,   2009

Ms. Luqman   was   employed   as   Chief   Operating   Officer   of   the   Vault   Services   Division   of

Digi-Data   Corporation,   the   company   that   acquired   the   Company’s   assets   in   2006,   and

subsequently  during  her  tenure  with  Digi-Data  Corporation  she  became  the  in-house

general  counsel  for  the  entire  corporation.  In    that  capacity  she  was    responsible  for

acquisitions,   mergers,   patents,   and   employee  contracts,   and   worked   very   closely   with

Digi-Data’s outside counsel firms, DLA-Piper, the   Law Offices of Sandra T. Carr and the

patent   firm   of   Jordan   and   Hamburg.   As   of   March 1,   2009,   Ms.   Luqman   rejoined   the

Company in her current capacities. Ms. Luqman received a BA degree in Marketing, a JD

in  Law,  and  a  MBA  Degree  in  Finance  from  Hofstra  University.  Ms. Luqman  is  a

member    of    the    bar    in    New    York    and    New    Jersey.    Ms. Luqman    is    John    Salerno’s

daughter.

Ms.   Luqman   was   nominated   as   a   Director   because   of   her   intimate   knowledge   of

the   Company   and   its   history   as   a   founder.   Additionally,   as   an   attorney,   Ms.   Luqman’s

legal  background  enables  her   to  provide   counsel  to  the   Company.   Her   experience   as

general   counsel   to   the   Company   provides   her   with   a   unique   insight   into   the   Company’s

contracts   with   customers   and   vendors,   intellectual   property   assets   and   issues,   financing

transactions   and   shareholder   transactions.     Moreover,   having   been   through   the   merger

and   acquisition   process   on   both   sides   of   the   table,   Ms.   Luqman   offers   the   Company   in-

house   guidance   throughout   the   acquisition   process.   That   combined   with   Ms.   Luqman’s

MBA   in   Finance   aids   in   providing   the   Board   with   more   efficient   analysis   of   input   from

outside auditors and legal advisors.

George   G.   Dempster,   Director.   Mr. Dempster   was   Commissioner   of   Commerce

for   the   State   of   New   York   from   1979   to   1983.   He   served   as   the   Chairman   of   the   Finance

Committee   for   Hofstra   University   for   25 years   from   1976   through   2001,   and   is   currently

Chairman   Emeritus   of   the   Board   of   Trustees.   Mr. Dempster   has   been   the   Chairman   of

Tran-Leisure   Corp.   since   1983,   and   was   its CEO from 1983-2002.    Tran -Leisure   Corp   is

a    diversified    holding    company    with    interests    ranging    from    helicopter    services    to

manufacturing.   From   1969   to   1973   Mr. Dempster   served   as   the   CEO   of   Cybernetics,   a

major   computer   software   developer.   Mr. Dempster   served   as   a   marketing   manager   for

IBM from 1961 to 1968. Mr. Dempster has a BA in business administration from Hofstra

University.

17

Mr.   Dempster   was   nominated   as   a   Director   because   of   his   strong   administrative,

financial   and   economic   background.    Having   served   as   Commissioner   of   Commerce   for

the   State   of   New   York   for   4   years   and   on   the   Board   of   Hofstra   University   for   over   25

years,   Mr.   Dempster   provides   the   Company   with   extensive   experience   in   commerce   and

administration   in   both   the   private   and   public   sectors.     Moreover,   during   his   tenure   at

Hofstra   University   Mr.     Dempster   was   intimately   involved   in   several   financing

transactions   to   maintain   the   University in   a   solvent   and   profitable   manner.    Additionally,

having been   CEO of a   diversified holding company, Mr. Dempster is thoroughly familiar

with    the    merger    and    acquisition    process.    He    offers    years    of    experience    analyzing

business, their models and economics, and identifying the appropriate financing vehicles.

COMMITTEES OF THE BOARD

The   Board   has   established   an   Audit   Committee   and   a   Compensation   Committee.

The    Board    does    not    currently    have    a    Nominating    Committee.    The    work    typically

conducted by a Nominating Committee is conducted by the full Board.

Audit Committee

The   Audit   Committee   consisted   of   Messrs. Charles,   Keefe   and   Dempster,   with

Mr.   Charles   serving   as   chairman.   On   September   14,   2016   Mr.   Charles   resigned   from   the

Board, as disclosed on the Company’s current report on Form 8-K filed on September 19,

2016.   Our   Board   is   actively   seeking   a   suitable   replacement   that   qualifies   as   an   “audit

committee  financial    expert”  as    defined    under    the  federal  securities    laws. The  Audit

Committee  is  responsible  for  monitoring  and  reviewing  our  financial  statements  and

internal   controls   over   financial   reporting.   In   addition,   they   recommend   the   selection   of

the  independent  auditors  and  consult  with  management  and  our  independent  auditors

prior   to   the  presentation  of   financial  statements  to   stockholders   and   the  filing   of   our

forms 10-Q and 10-K. The Audit   Committee has adopted a charter and it is   posted on our

web site at www.igambit.com.

Compensation Committee

The Compensation Committee consisted of Messrs. Charles, Keefe and Dempster,

with   Mr. Keefe   serving   as   chairman.   On   September   14,   2016   Mr.   Keefe   resigned   from

the Board, as disclosed on the Company’s current report on   Form 8-K filed on September

19,  2016.  Our  Board  is  actively  seeking  a  suitable  replacement.  The  Compensation

Committee     is     responsible     for     reviewing     and     recommending     to     the     Board     the

compensation    and   over-all   benefits   of    our    executive   officers.    The   Compensation

Committee   may,   but   is   not   required   to,   consult   with   outside   compensation   consultants.

The Compensation Committee has   adopted a   charter and the   charter is posted on our web

site at www.igambit.com.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

Based   solely   upon   a   review   of   Forms   3   and   4   and   amendments   thereto   furnished

to the Company under Rule 16a-3(e) under the Exchange Act during its most recent fiscal

18

year   and   Forms   5   and   amendments   thereto   furnished   to   the   Company   with   respect   to   its

most recent fiscal   year, and any written representation to the Company from the reporting

person   that   no   Form   5   is   required,   no   person   who,   at   any time   during the   fiscal   year, was

a   director, officer,   beneficial   owner of   more   than   ten   percent   of   the   Company’s   Common

Stock,   or   any   other   person   known   to   the   Company   to   be   subject   to   section   16   of   the

Exchange   Act   with   respect   to   the   Company,   failed   to   file   on   a   timely   basis,   as   disclosed

in   the   above   Forms,   reports   required   by   section   16(a)   of   the   Exchange   Act   during   the

most recent fiscal year or prior fiscal years.

CODE OF ETHICS

The   Company has   adopted   a   Code   of   Ethics   that   applies   to   its   principal   executive

officer,   principal   financial   officer,   principal   accounting   officer   or   controller,   or   persons

performing   similar   functions.    A   copy   of   the   Code   of   Ethics   is   attached   as   an   exhibit   to

this   report.     A   copy   of   the   Code   of   Ethics   is   available   on   the   Company’s   website   at

www.igambit.com.     Any   amendments   to,   or   waivers   from,   the   Code   of   Ethics   will   be

disclosed on the Company’s website at www.igambit.com.

ITEM 11.   EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the compensation received by our executive

officers, for their service, during the year ended December 31, 2016.

Current

Nonqualified

Officers

Non-equity

Deferred

Name &

Option      Incentive Plan      Compensation

All Other

Principal

Salary

Bonus     Stock     Awards       Compensation

Earnings

Compensation

Total

Position

Year

($)

($)

($)

($)

($)

($)

($)

($)

John

Salerno

2016

37,846

0

0

0

0

0

27,454 (1)

65,300

CEO,

President      2015

46,635

0

0

0

0

0

20,790 (2)

67,425

Chairman

&

2014      131,250

0

0

0

0

0

13,206(3)

144,456

Director

Elisa

Luqman

2016

60,459

0

0

0

0

0

0

60,459

CFO,

EVP,  GC     2015

60,577

0

0

0

0

0

0

60,577

and

Director

2014      143,746

0

0

0

0

0

36,514(4)

180,260

(1)      Includes $3,237 in health insurance premiums and $24,217 in life insurance premiums.

(2)      Includes $5,220 in health insurance premiums and $15,670 in life insurance premiums.

(3)      Includes $6,264 in health insurance premiums and $6,942 in life insurance premiums.

(4)      Includes $36,514 in health and dental insurance premiums.

19

Employment Arrangements with Named Executive Officers

Effective    November    4,    2015,    along    with    the    acquisition    ArcMail,    we    entered    into    an

employment   agreement   with   Rory   T.   Welch   (the   Welch   Employment   Agreement).   Under   the

five - year agreement, Mr. Welch is entitled to (a) a base salary of $180,000 per year, (b) an annual

bonus  of  $4 5 ,000,  and  (c)  participation  in  all  benefit  programs  generally   made  available  to

ArcMail   employees.   The   Welch   Employment   Agreement   also   contains   provisions   designed   to

protect   the   confidentiality   of   the   Company’s   confidential   information   and   restricting   Mr.   Welch

from   engaging   in   certain   competitive   activities   for   the   greater   of   60   months   from   the   date   of   the

agreement or two years following the termination of his employment.

Mr.  Welch  has  diverse  management  experience  in  growing  international  businesses

across multiple industries, Rory Welch is ushering ArcMail into the next phase   of the Company’s

lifecycle with emphasis on expanding global sales, marketing and distribution strategies. A senior

executive   with   more   than   20   years   of   experience   in   strategy,   supply chain,   sourcing,   distribution,

logistics,   marketing   and   sales   management,   he   has   success   in   expanding   profits   through   both

revenue growth and cost savings.

Prior   to   joining   ArcMail,   he   managed   his   own   consulting   firm,   and   then   before   that   held

leadership   positions   at   Movado   Group,   Inc.,   including   COO   for   the   boutique   division   and   Senior

Vice   President   of   wholesale   operations.   Earlier   in   his   career,   Welch   served   as   VP   of   strategic

planning   and   analysis   at   Arrow   Electronics,   where   he   was   responsible   for   building   performance

models across all aspects of the organization. While at Arrow, Welch also held positions as VP of

product   management   for   Asia-Pacific,   with   responsibility   for   overseeing   all   aspects   of   product

management for the $1 billion division; as well as general manager of aerospace/military program

accounts; product manager; and asset and logistics manager.

A   graduate   of   Indiana   University’s   Kelley   School   of   Business   with   a   master’s   degree   in

business administration, Welch holds a bachelor’s degree in economics from Furman University.

We do not currently have any other employment agreements with our executive officers.

Compensation of the Board of Directors

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

OPTION AWARDS

STOCK AWARDS

Equity

Market      Equity

Equity

Incentive

Number      Value     Incentive      Incentive

Plan

of

of

Plan

Plan

Awards:

Shares     Shares     Awards:      Awards:

Number of

Number of

Number of

or Units

or

Number      Market or

Securities

Securities

Securities

of Stock     Units

of

Payout

Underlying      Underlying

Underlying

That

of

Unearned      Value of

Unexercised      Unexercised      Unexercised      Option

Have

Stock

Shares,      Unearned

Options

Options

Unearned     Exercise

Option

Not

That

Units or

Shares,

(#)

(#)

Options

Price

Expiration

Vested      Have

Other

Units or

Exercisable     Unexercisable

(#)

($)

Date

(#)

Not

Rights

Other

Name (a)

(b)

(c)

(d)

(e)

(f)

(g)

Vested

That

Rights

20

 

($)

Have Not

That

(h)

Vested      Have Not

(#)

Vested

(i)

(#)

(j)

James Charles

59,000

0

0

$0.03

06/09/2024

0

0

0

0

James Charles

100,000

0

0

$0.03

06/09/2024

0

0

0

0

George

Dempster

113,000

0

0

$0.03

06/09/2024

0

0

0

0

George

Dempster

100,000

0

0

$0.03

06/09/2024

0

0

0

0

John Keefe

600,000

0

0

$0.03

06/09/2024

0

0

0

0

The  following  table  sets  forth  the  compensation  received  by  our  directors,  for  their

service as directors, during the year ended December 31, 2016.

Nonqualified

Fees

Non-equity

deferred

earned or

Stock

Option

incentive plan

compensation

All other

paid in

awards

awards

compensation

earnings

compensation

Total

Name

cash ($)

($)

($)

($)

($)

($)

($)

John Salerno (1)

-

-

-

-

-

-

0

Elisa Luqman (1)

-

-

-

-

-

-

0

George G. Dempster

$4,000

-

-

-

-

$4,000

(1)   These   individuals   serve   as   executive   officers   of   the   Company,   and   do   not

receive    any    compensation    for    the    services    they    provide    as    directors    of    the

Company.

Members of our Board receive $1,000 per quarter for their service to the Company.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The   following   table   sets   forth   information   known   to   us,   as   of   April   17,   2017,

relating to the beneficial ownership of shares of common stock by:   (i) each person who is

known   by   us   to   be   the   beneficial   owner   of   more   than   5%   of   the   Company’s   outstanding

common    stock;    (ii) each    director;    (iii) each    executive    officer;    and    (iv) all    executive

officers   and   directors   as   a   group.   Under   securities   laws,   a   person   is   considered   to   be   the

beneficial  owner   of   securities  owned   by   him   (or   certain   persons  whose   ownership  is

attributed   to   him)   or   securities   that   can   be   acquired   by   him   within   60 days,   including

21

upon the exercise of options, warrants or convertible securities. The Company determines

a    beneficial    owner’s    percentage    ownership    by    assuming    that    options,    warrants    and

convertible   securities   that   are   held   by   the   beneficial   owner   and   which   are   exercisable

within 60 days, have been exercised or converted.   The Company believes that   all persons

named   in   the   table   have   sole   voting   and   investment   power   with   respect   to   all   shares   of

common   stock   shown   as   being   owned   by   them.   Unless   otherwise   indicated,   the   address

of   each   beneficial   owner   in   the   table   set   forth   below   is   care   of   iGambit   Inc.,   1050   W.

Jericho   Turnpike,   New   York,   11787.   The   percentages   in   the   following   table   are   based

upon 25,044,056 shares outstanding as of April 17, 2017.

Amount and Nature

of Beneficial

Name of Beneficial Owner

O wnership

Percent of Class

John Salerno, C.E.O., President, Chairman

of the Board, and Director

5,000,000

%

Elisa Luqman, C.F.O., Executive Vice

President, General Counsel and Director

5,685,000,(1)

%

%

George G. Dempster, Director

605,000(2)

%

Rory T. Welch, CEO & President ArcMail

10,000,000

HealthDatix Management

11,250,000

Executive Officers and Directors as Group:

32,540,000 (3)

%

1     Includes 685,000 shares of common stock held by Muhammad Luqman, Ms. Luqman’s husband.

2.    Includes options to purchase 213,000 shares of the common stock at $0.03 per share.

3.    Includes the disclosures in footnotes 1 through 4 above.

ITEM 13.    CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND

DIRECTOR INDEPENDENCE

RELATED PARTY TRANSACTIONS

None.

BOARD INDEPENDENCE

The Company has elected to use   the independence standards of the   NYSE AMEX

Equities    Exchange    in    its    determination    of    whether    the    members    of    its    Board    are

independent.   Based   on   the   foregoing,   the   Company   has   concluded   that   Mr. Dempster   is

independent.    The    Board    has    established    an    Audit    Committee    and    a    Compensation

Committee.  The  Board  does  not  currently   have  a  Nominating  Committee.  The  work

typically conducted by a Nominating Committee is conducted by the full Board.

22

ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

The    following    table    shows    what    Paritz    and    Company    P.A.    and    Michael    F.

Albanese,   CPA   billed   for   the   audit   and   other   services   for   the   year   ended   December   31,

2016 and December 31, 2015 respectively.

Year Ended  Year Ended

12/31/ 2016    12/31/2015

Audit Fees

$

47,500  $

38,500

Audit-Related Fees

        ---

          ---

All Tax Fees

---

—

Other Fees

---

—

Total

$

47,500   $

38,500

Audit   Fees   — This   category includes the audit of the Company’s annual financial

statements,    review    of    financial    statements    included    in    the    Company’s    Form    10-Q

Quarterly Reports   and   services   that   are   normally provided   by the   independent   auditors   in

connection with engagements for those   years.

Audit-Related   Fees   —   This   category   includes   assurance   and   related   services   by

the   independent   auditor   that   are   reasonably   related   to   the   performance   of   the   audit   or

review of the   Company’s   financial   statements   and   that   are   not   reported   under the   caption

“Audit Fees.”

Tax   Fees   —   This   category includes   services   rendered   by the   independent   auditor

for tax compliance, tax advice, and tax planning.

All   Other   Fees   —   This   category   includes   products   and   services   provided   by   the

independent   auditor   other   than   the   services   reported   under   the   captions   “Audit   Fees,”

“Audit-Related Fees,” and “Tax Fees.”

Overview    —    The    Company’s    Audit    Committee,    reviews,    and    in    its    sole

discretion   pre-approves,  our   independent   auditors’   annual   engagement   letter   including

proposed   fees   and   all   audit   and   non-audit   services   provided   by   the   independent   auditors.

Accordingly,  all  services  described  under  “Audit  Fees,”  “Audit-Related  Fees,”  “Tax

Fees,” and “All Other Fees” were pre-approved by our Company’s Audit Committee. The

Audit  Committee  may  not  engage  the  independent  auditors  to  perform  the  non-audit

services   proscribed   by law   or   regulation.   The   Company’s   Audit   Committee   may delegate

pre-approval   authority to   a   member   of   the   Board   of   Directors,   and   authority delegated   in

such manner must be reported at the next scheduled meeting of the Board of Directors.

PART IV

ITEM 15.      EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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