IGAMBIT INC.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2017 and 2016
(Unaudited)
Note 1 - Organization and Basis of Presentation
The consolidated financial statements presented are those of iGambit Inc., (the
“Company”) and its wholly-owned subsidiaries, HealthDatix, Inc. (“HealthDatix”), Wala,
Inc. doing business as Arcmail Technology (“ArcMail”) and Gotham Innovation Lab Inc.
(“Gotham”).
The
Company
was
incorporated
under
the
laws
of
the
State
of
Delaware
on
April 13, 2000. The Company was originally
incorporated as Compusations Inc. under the
laws
of
the
State
of
New
York
on
October
2,
1996.
The
Company
changed
its
name
to
BigVault.com
Inc.
upon
changing its
state
of
domicile
on
April
13,
2000.
The
Company
changed
its
name
again
to
bigVault
Storage
Technologies
Inc.
on
December
21,
2000
before
changing
to
iGambit
Inc.
on
April
5,
2006.
Gotham
was
incorporated
under
the
laws
of
the
state
of
New
York
on
September
23,
2009.
The
Company
is
a
holding
company
which seeks out acquisitions of operating companies in technology markets. HealthDatix,
Inc. is engaged in the business of streamlining the process of managing information in the
document-intensive
medical
field
for
customers
throughout
the
United
States. ArcMail
provides
email
archive
solutions
to
domestic
and
international
businesses
through
hardware
and
software
sales,
support,
and
maintenance.
Gotham
was
in
the
business
of
providing
media
technology
services
to
real
estate
agents
and
brokers
in
the
New
York
metropolitan area.
Interim Financial Statements
The
following (a) condensed
consolidated
balance
sheet
as
of December 31, 2016,
which
has
been
derived from
audited
financial statements,
and (b)
the unaudited
condensed
consolidated
interim
financial
statements
of
the
Company
have
been
prepared
in
accordance
with
the
instructions
to
Form
10-Q
and
Rule
8-03
of
Regulation
S-X.
Accordingly,
they
do
not
include
all
of
the
information
and
footnotes
required
by
GAAP
for
complete
financial
statements.
In
the
opinion
of
management,
all
adjustments
(consisting
of normal recurring accruals) considered necessary for a fair presentation have
been
included.
Operating
results
for
the
three months
ended
March 31,
2017
are
not
necessarily
indicative
of
results
that
may
be
expected
for
the
year
ending
December
31,
2017.
These
condensed
consolidated
financial
statements
should
be
read
in
conjunction
with
the
audited
consolidated
financial
statements
and
notes
thereto
for
the
year
ended
December
31,
2016
included
in
the
Company’s
Annual
Report
on
Form
10-K,
filed
with
the Securities and Exchange Commission (“SEC”) on April 17, 2017.
Business Acquisition
On February 14, 2017, the Company acquired Healthdatix, Inc., formally known as
HubCentrix,
Inc.
in
accordance
with
a
stock
purchase
agreement.
Previously,
the
Company
was focused on the technology markets. The Company
has tailored its strategy
to focus on
7
pursuing
specific
medical
technology
strategies
and
objectives.
The
acquisition
of
HealthDatix,
provides
the
Company with
its
first
medical technology,
WellDatix,
a
proprietary platform that
enables
physicians
to
identify patients
eligible for
Annual
Wellness Visits which
is
reimbursed
by
Medicare. This
technology
positions
the
Company
to
participate
in
the
anticipated
accelerated
market
needs
of
the
physician
community
throughout the country. Pursuant to the stock purchase agreement, the total consideration
paid
for
the
outstanding
capital
stock
of
HealthDatix
was
15,000,000
shares
of
iGambit
restricted
common
stock,
valued
at
$.07
per
share.
The
following
table
presents
the
preliminary
allocation
of
the
value
of
the
common
shares
issued
for
HealthDatix
to
the
acquired identifiable assets, liabilities assumed and goodwill:
Fair Value
Cash
$
29,584
Accounts receivable, net
2,250
Fixed assets
3,800
Workforce
60,919
Software
156,925
Customer contracts
644,846
Notes payable
(60,500)
Loan payable
(65,000)
Goodwill
277,176
Purchase price
$
1,050,000
The
results
of
operations
of
HealthDatix
for
the
period
February
14,
2017
to
March
31,
2017 have been included in the consolidated statements of operations for the three months
ended March 31, 2017. The following table presents pro forma results of operations of the
Company and
HealthDatix
as
if
the
acquisition
had
occurred
at
January 1,
2016.
The
pro
forma
condensed
combined
financial
information
is
presented
for
informational
purposes
only.
The
unaudited
pro
forma
results of
operations
are
not
necessarily
indicative
of
results
that
would
have
occurred
had
the
acquisition
taken
place
at
the
beginning
of
the
earliest
period presented, or of future results.
March 31,
March 31,
2017
2016
Pro forma revenue
$
7,600
$
15,750
Pro forma gross profit
$
7,413
$
9,215
Pro forma loss from operations
$
(187,172)
$
(163,460)
Pro forma net loss
$
(199,099)
$
(164,061)
8
Note 2 – Discontinued Operations
Sale of Business
Effective
October
1,
2016,
management
decided
to
dispose
of
its
subsidiary Arcmail
and
entered into
a
letter of intent
on
March
1,
2017
to
sell
Arcmail
in
a
stock exchange
to
the
CEO of Arcmail.
On November 5, 2015, pursuant to an asset purchase agreement Gotham sold assets
consisting
of
fixed
assets,
client
and
supplier
lists,
trade
names,
software,
social
media
accounts
and
websites,
and
domain
names
to
VHT,
Inc.,
a
Delaware
corporation
for
a
purchase
price of
$600,000.
Gotham received $400,000 and
commencing on January 29,
2016,
VHT, Inc.
shall pay
twelve equal monthly
installments
of
$16,667
on
the last
business
day of
each
month (the
“Installment
Payments” and
each,
an
“Installment
Payment”),
each
Installment
Payment
to
consist
of
(1)
an
earn-out
payment
of
$10,000
(the
“Earn-Out
Payments”
and
each,
an
“Earn-Out
Payment”),
and
(2)
an
additional
payment
of $6,667 (the
“Additional
Payments”
and each,
an
“Additional
Payment”); provided that
VHT,
Inc.
shall
only
be
required
to
make
the
Earn-Out
Payments
for
as
long
as
it
maintains
its
relationship
with
Gotham’s
major
client,
unless
it
is
dissatisfied
with
VHT,
Inc.
The
terms of the installment payments were fulfilled as of December 31, 2016.
The
assets
and
liabilities
of
the
discontinued
operations
are
presented
in
the
consolidated
balance
sheets
under
the
captions
“Assets
from
discontinued
operations”
and
“Liabilities
from
discontinued
operations”,
respectively.
The
underlying
assets
and
liabilities
of
the
discontinued
operations
as
of
March
31,
2017
and
December
31,
2016
are
presented
as
follows:
2017
2016
Assets:
Cash (overdraft)
$
(15,959)
$
17,323
Accounts receivable, net
387,368
321,033
Inventory
16,640
1,160
Prepaid expenses
16,940
15,300
Property and equipment
15,762
18,653
Total assets
$
420,751
$
373,469
Liabilities:
Accounts payable and accrued expenses
364,681
359,996
Accrued interest on notes payable
622,160
558,183
Amounts due to related party
28,570
64,509
Deferred revenue
1,160,606
1,092,388
Notes payable
3,119,001
3,119,001
Notes payable - other
165,351
153,404
Note payable - related party
626,266
626,266
$
6,086,635
$
5,973,747
9
The components of loss from discontinued operations presented in the consolidated
statements
of
operations
for
the
three
months
ended
March
31,
2017
and
2016
are
presented
as follows:
2017
2016
Sales
$
386,157
$
403,750
Cost of sales
(29,462)
(3,191)
General and administrative expenses
(326,247)
(384,660)
Depreciation and amortization
(4,537)
(6,172)
Interest expense
(92,848)
(86,060)
Loss from discontinued operations
$
(66,937)
$
(76,333)
Note 3 – Summary of Significant Accounting Policies
Principles of Consolidation
The
consolidated
financial
statements
include
the
accounts
of
the
Company
and
its
wholly-
owned
subsidiaries,
HealthDatix,
Inc.,
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.
Fair Value Measurements
The
Company
adopted
the
provisions
of
ASC
Topic
820,
Fair
Value
Measurements
and
Disclosures,
which
defines
fair
value
as
used
in
numerous
accounting
pronouncements,
establishes
a
framework
for
measuring
fair
value
and
expands
disclosure
of
fair
value
measurements.
The
estimated
fair
value
of
certain
financial
instruments,
including
cash
and
cash
equivalents,
accounts
receivable,
accounts
payable
and
accrued
expenses
are
carried
at
historical cost basis, which approximates their fair values because of the short-term nature
of
these
instruments.
The
carrying
amounts
of
our
short
and
long
term
credit
obligations
approximate
fair
value
because
the
effective
yields
on
these
obligations,
which
include
contractual interest rates taken together with other features such as concurrent issuances of
warrants and/or embedded
conversion options, are comparable
to rates of
returns for
instruments of similar credit risk.
ASC
820
defines
fair
value
as
the
exchange
price
that
would
be
received
for
an
asset
or
paid to transfer a liability (an exit price) in the
principal or most
advantageous market for
10
the
asset
or
liability
in
an
orderly
transaction
between
market
participants
on
the
measurement
date.
ASC
820
also
establishes
a
fair
value
hierarchy,
which
requires
an
entity
to
maximize
the
use
of
observable
inputs
and
minimize
the
use
of
unobservable
inputs
when
measuring
fair
value.
ASC
820
describes
three
levels
of
inputs
that
may be
used
to
measure fair value:
Level 1 – quoted prices in active markets for identical assets or liabilities
Level 2 – quoted prices for
similar
assets and liabilities in active
markets or
inputs that
are observable
Level
3
– inputs that
are
unobservable
(for example cash
flow modeling inputs based
on assumptions)
The
derivative
liability in
connection
with
the
conversion
feature
of
the
convertible
debt,
classified
as
a
Level
3
liability,
is
the
only
financial
liability
measure
at
fair
value
on
a
recurring basis.
The change in the Level 3 financial instrument is as follows:
Balance, January 1, 2017
$
—
·
Issued during the Period
75,000
·
Converted during the Period
—
·
Change in fair value recognized in operations
8,773
Balance, March 31, 2017
$
83,773
Revenue Recognition
iGambit is a holding company and has no sources of revenue.
HealthDatix’s revenues are derived primarily from its Software as a Service (SaaS)
offerings
that
are
rendered
to
healthcare
providers.
HealthDatix recognizes
revenues
when
the
products
or
services
have
been
provided
or
delivered,
the
fees
charged
are
fixed
or
determinable,
HealthDatix
and
its
customers
understand
the
specific
nature
and
terms
of
the agreed upon transactions, and collectability is reasonably assured.
Arcmail
recognizes
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.
Gotham’s revenues were
derived primarily
from
the
sale of
products
and services
rendered
to
real
estate
brokers.
Gotham
recognized
revenues
when
the
services
or
products
have
been
provided
or
delivered,
the
fees
charged
are
fixed
or
determinable,
Gotham
and
its
customers
understood
the
specific
nature
and
terms
of
the
agreed
upon
transactions,
and
collectability was reasonably assured.
11
Advertising Costs
The
Company
expenses
advertising
costs
as
incurred.
Advertising
costs
for
the
three
months ended March 31, 2017 and 2016 were $299 and $0, respectively.
Cash and Cash Equivalents
For
purposes
of
reporting
cash
flows,
cash
and
cash
equivalents
include
checking
and
money market accounts and any highly liquid debt instruments purchased with a maturity
of three months or less.
Accounts Receivable
The
Company
analyzes the
collectability
of
accounts
receivable
from
continuing
operations
each
accounting
period
and
adjusts
its
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.
The
Company
evaluates specific accounts when it becomes 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
March
31,
2017
and
December 31, 2016, respectively. Bad debt expense of $0 and $63 was charged to
operations for the three months ended March 31, 2017 and 2016, respectively.
Inventories
Inventories consisting
of finished products are
stated at the
lower
of cost or market and are
presented
in
assets
from
discontinued
operations.
Cost
is
determined
on
an
average
cost
basis.
Property and equipment and depreciation
Property
and
equipment are
stated
at cost.
Maintenance
and
repairs
are
charged
to
expense
when
incurred. When
property
and
equipment
are
retired
or
otherwise
disposed
of,
the
related
cost
and
accumulated
depreciation
are
removed
from
the
respective
accounts
and
any gain
or
loss
is credited
or
charged
to
income. Depreciation
for
both financial reporting
and
income
tax
purposes
is
computed
using
combinations
of
the
straight
line
and
accelerated methods over the estimated lives of the respective assets as follows:
Office equipment and fixtures
5 - 7 years
Computer hardware
5 years
Computer software
3 years
Development equipment
5 years
12
Amortization
Intangible
assets
are
amortized
using
the
straight
line
method
over
the
estimated
lives
of
the respective assets as follows:
Software
5 years
Workforce
10 years
Customer contracts
10 years
Goodwill
Goodwill
represents
the
excess
of liabilities
assumed over assets
acquired
of HealthDatix
and the fair market value of the common shares issued by
the Company
for the acquisition
of
HealthDatix.
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.
No
impairment was recorded during the three months ended March 31, 2017.
Long-Lived Assets
The
Company
assesses
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.
The
Company
bases
its
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,
the
Company
determines
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, the Company recognizes 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.
Deferred Revenue
Deposits
from
customers
included
in
discontinued
operations
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
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 the Company’s support and maintenance services, the Company
recognizes
such
revenues
when
services
are
completed
and
billed.
The Company
has
received
deposits
from its
various
customers
that
have
been
recorded
as
deferred revenue
13
and presented as discontinued liabilities in the amount of $1,160,606 and $1,092,388 as of
March 31, 2017 and December 31, 2016, respectively.
Stock-Based Compensation
The Company accounts for its stock-based awards granted under its 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. The
Company
uses
the
Black-Scholes
option
pricing
model
to
estimate the fair value of its 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.
Income Taxes
The
Company
accounts
for
income
taxes
using
the
asset
and
liability
method
in
accordance
with
ASC
Topic
No.
740,
Income
Taxes
.
Under
this
method,
deferred tax
assets
and
liabilities
are
determined based
on
differences between financial reporting
and tax bases
of
assets
and
liabilities,
and
are measured
using
the
enacted
tax rates
and
laws
that are
expected to be in effect when the differences are expected to reverse.
The
Company
applies
the
provisions
of
ASC
Topic
No.
740
for
the
financial
statement
recognition, measurement and disclosure of uncertain tax positions recognized in the
Company’s
financial
statements
.
In
accordance
with
this
provision,
tax
positions
must
meet
a
more-likely-than-not
recognition
threshold
and
measurement
attribute
for
the
financial
statement recognition and measurement of a tax position.
Note 4 – Going Concern
The accompanying consolidated financial statements have been prepared on a going
concern
basis,
which
contemplates
the
realization
of
assets
and
the
satisfaction
of
liabilities
in
the
normal
course
of
business.
The
Company
is
in
the
process
of
disposing
of
its
operating
subsidiary,
Arcmail
and
has
stockholders’
deficiency
of
$4,954,876
at March
31,
2017.
These
factors,
among
others,
raise
substantial
doubt
about
the
ability
of
the
Company
to
continue
as
a
going
concern
for
a
reasonable
period
of
time. The
Company’s
continuation
as
a
going
concern
is
dependent
upon
its
ability
to
obtain
necessary
equity
financing and ultimately from generating revenues from its newly acquired subsidiaries to
continue
operations.
The
Company expects
that
working
capital
requirements
will
continue to be funded through a combination of its existing funds and further issuances of
securities.
Working
capital
requirements
are
expected
to
increase
in
line
with
the
growth
of
the
business.
Existing
working
capital,
further
advances
and
debt
instruments,
and
anticipated cash flow are
expected to be adequate to fund operations over the next twelve
14
months.
The
Company
has
no
lines
of
credit
or
other
bank
financing
arrangements.
The
Company has
financed
operations
to
date
through
the
proceeds
of
a
private
placement
of
equity and debt instruments. In connection with the Company’s 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. The Company intends
to finance these expenses
with further
issuances
of
securities,
and
debt
issuances.
Thereafter,
the
Company
expects
it
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
current
stockholders. Further, such securities might have rights, preferences or
privileges senior
to
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, the Company
may
not be able to take
advantage
of prospective new business endeavors or opportunities,
which could significantly and materially restrict business operations
The consolidated financial statements do not include any
adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of
liabilities that might be necessary
should
the Company
be
unable
to
continue as a going concern.
Note 5 – Property and Equipment
Property and equipment are carried at cost and consist of the following at March 31, 2017
and December 31, 2016:
Continuing operations:
2017
2016
Office equipment and fixtures
$
10,964
$
7,164
Less: Accumulated depreciation
6,194
5,981
$
4,770
$
1,183
Discontinued operations:
2017
2016
Office equipment and fixtures
$
131,842
$
131,842
Computer hardware
93,846
92,200
Computer software
77,700
77,700
Development equipment
35,318
35,318
338,706
337,060
Less: Accumulated depreciation
322,944
318,407
$
15,762
$
18,653
15
Depreciation expense
of $213 and $118 was charged to continuing
operations for
the
three
months ended March 31, 2017 and 2016, respectively.
Depreciation
expense
of $4,538
and
$6,172 was charged
to discontinued
operations
for
the
three months ended March 31, 2017 and 2016, respectively.
Note 6 – Intangible Assets
Intangible
assets
from the acquisition of HealthDatix
are carried at
cost
and consist of the
following at March 31, 2017:
Life
Workforce
$
60,919
10 years
Software
156,925
5 years
Customer contracts
644,846
10 years
862,690
Less: Accumulated amortization
12,745
$
849,945
Amortization expense of $12,745 was charged to continuing
operations for the three
months ended March 31, 2017.
Note 7 - Earnings (Loss) Per Common Share
The
Company
calculates
net
earnings
(loss)
per
common
share
in
accordance
with
ASC
260
“
Earnings
Per
Share
”
(“ASC 260”).
Basic
and
diluted
net
earnings (loss)
per
common
share
was
determined
by
dividing net
earnings
(loss)
applicable
to
common
stockholders
by
the
weighted
average
number
of
common
shares
outstanding
during
the
period.
The
Company’s
potentially
dilutive
shares,
which
include
outstanding common
stock
options
and
common
stock
warrants,
have
not
been
included
in
the
computation
of
diluted
net
income (loss) per share for all periods as the result would be anti-dilutive.
Three Months Ended
Mar
ch
31,
2017
2016
Stock options
663,000
1,718,900
Stock warrants
400,000
275,000
Total shares excluded from calculation
1,063,000
1,993,900
Note 8 – Stock Based Compensation
Options
16
Note 9 – Deferred Revenue
Deferred
revenue
included
in
liabilities
from
discontinued
operations
represents
sales
of
maintenance
contracts
that
extend
to
and
will
be
realized
in
future
periods.
Deferred
revenue at March 31, 2017 will be realized in the following years ended December 31,
2017
$
651,327
2018
317,274
2019
128,758
2020
58,368
2021
4,779
2022
100
$
1,160,606
Note 10 – Convertible Debt
Convertible Note Payable
On
March
30,
2017,
the
Company
issued an
8%
convertible
note
in
the
aggregate principal
amount
of
$75,000,
convertible
into
shares
of
the
Company’s
common
stock.
The
Note,
including
accrued
interest
is
due
January
15,
2018
and
is
convertible
any
time
after
180
days at the option of the holder into shares of the Company’s common stock at 65% of the
average
stock
price
of
the
lowest
3
closing
bid
prices
during
the
10
trading
day
period
ending
on
the
latest
complete
trading
day
prior
to
the
conversion
date.
The
Company
recorded a debt
discount related to identified embedded derivatives relating to conversion
features
and
a
reset
provisions
(see
Note
11)
based
fair
values
as
of
the
inception
date
of
the Note. The calculated debt discount equaled the face of the note and is being
amortized
over the term of the note.
Convertible Debentures
The
Company
issued
convertible
debentures
to
an
individual
during
the
three
months
ended
March 31, 2017 and to two individuals during the year ended December 31, 2016.
The
debentures
are
convertible
into
75,000
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%. 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 period. Interest expense
on
the
convertible
debentures
of
$1,801
was
recorded
for
the
three
months
ended
March
31, 2017.
Note 11 – Derivative Liability
19
Convertible Note
During
the
three
months
ended
March
31,
2017,
the
Company
issued
a
convertible
note
(see Note 10 above).
The
note
is
convertible
into
common
stock,
at
the
holders’
option,
at
a
discount
to
the
market
price
of
the
Company’s
common
stock.
The
Company
has
identified
embedded
derivatives
included
in
these
notes
as
a
result
of
certain
anti-dilutive
(reset)
provisions,
related
to
certain
conversion
features.
The
accounting
treatment
of
derivative
financial
instruments
requires
that
the
Company
record
the
fair
value
of
the
derivatives
as
of
the
inception
date
of
the
convertible
note
and
debt
discount
amortization
to
fair
value
as
of
each
subsequent
reporting
date.
This
resulted
in
a
fair
value
of
derivative
liability
of
$83,773
in
which
to
the
extent
of
the
face
value
of
convertible
note
was
treated
as
debt
discount with the remainder treated as interest expense.
The
fair
value
of the
embedded
derivatives
at
March
31,
2017,
in
the
amount
of $83,773,
was
determined
using
the
Binomial
Option
Pricing
Model
based
on
the
following
assumptions:
(1)
dividend
yield
of
0%;
(2)
expected
volatility
of
211.00%,
(3)
weighted
average
risk-free
interest
rate of
0.12%,
(4)
expected life
of
0.80
years,
and
(5)
estimated
fair
value
of
the
Company’s
common
stock
of
$0.09
per
share.
The
Company
recorded
interest
expense
from
the
excess
of
the
derivative
liability
over
the
convertible
note
of
$8,773 during the three months ended March 31, 2017.
Based
upon
ASC
840-15-25
(EITF
Issue
00-19,
paragraph
11)
the
Company has
adopted
a
sequencing
approach
regarding
the
application
of
ASC
815-40
to
its
outstanding
convertible
note.
Pursuant
to
the
sequencing
approach,
the
Company
evaluates
its
contracts
based upon earliest issuance date.
Note 12 – Notes Payable
Notes
payable
from
continuing
operations
at
March
31,
2017
consists
of
loans
to
HealthDatix from 3 individuals totaling $60,500.
The loans do not bear interest and there
are no specific terms for repayment.
Notes payable at March 31, 2017 are presented in
liabilities from discontinued operations
and
consist
of
various
notes
payable
in
annual
installments
totaling
$779,750
through
September
2019.
The
notes
include
interest
at
7%
and
are
secured
by
the
assets
of
ArcMail.
Principal amounts due on notes payable for the years ended December 31, are as follows:
2017
$
779,750
2018
779,750
2019
779,750
2020
779,751
$
3,119,001
20
During the three
months
ended
March 31, 2017,
Arcmail entered into merchant financing
agreements
with
various lenders
for
proceeds
totaling $182,474
payable in
daily amounts
based
on
various
percentages
of
future
collections
of
accounts
receivable,
which
were
assigned to the lenders. The obligations will be satisfied upon total payments of $228,120
and
will
mature
in
June
2017.
The
outstanding
balance
of
notes
payable
-
other
was
$165,351 and is presented in liabilities from discontinued operations at March 31, 2017.
Note 13 – Stock Transactions
Common Stock Issued
In
connection
with
the
acquisition
of
HealthDatix
the
Company
issued
15,000,000
common
shares
valued
at
$.07
per
share
to
the
shareholders
of
HealthDatix
on
February
14, 2017.
The
Company
sold
2
million
shares
of
common
stock
to
an
investor
valued
at
$.05
per
share on January 27, 2017.
The
Company
issued
10,000
common
shares
for
services,
valued
at
$.08
per
share
on
January 5, 2017.
Note 14 - Income Taxes
A full valuation allowance was recorded against the Company’s net deferred tax assets. A
valuation
allowance
must
be
established
if
it
is
more
likely
than
not
that
the
deferred
tax
assets will not be realized. This assessment is based upon consideration of available
positive and negative
evidence, which includes, among other things, the Company’s
most
recent
results
of
operations
and
expected
future
profitability.
Based
on
the
Company’s
cumulative losses in recent years, a full valuation allowance against the Company’s
deferred
tax
assets
has
been
established
as
Management
believes
that
the
Company
will
not realize the benefit of those deferred tax assets.
Note 15 - Retirement Plan
ArcMail has a defined contribution 401(k) plan, which covers substantially all employees.
Under the terms
of the Plan, Arcmail is
currently not required
to match employee
contributions. The Company did not
make any employer contributions to the Plan during
the three months ended March 31, 2017.
Note 16 – Concentrations and Credit Risk
Sales and Accounts Receivable
HealthDatix had
sales
to two
customers which accounted
for
approximately
80%
and 11%,
respectively of HealthDatix’s total sales for the three months ended March 31, 2017. One
customer accounted for 100% of accounts receivable at March 31, 2017.
21
No
customer
accounted
for
more
than 10%
of
sales
included
in
discontinued
operations
for
the three months ended March 31, 2017 and 2016, respectively.
Cash
Cash is maintained at a major financial institution. Accounts held at U.S. financial
institutions
are
insured
by the
FDIC
up
to
$250,000.
Cash
balances
could
exceed
insured
amounts
at
any
given
time,
however,
the
Company
has
not
experienced
any
such
losses.
The
Company
did
not
have
any
interest-bearing
accounts
at March
31,
2017
and
December
31, 2016, respectively.
Note 17 - Related Party Transactions
Note Payable – Related Party
ArcMail issued
a promissory note to the president
of ArcMail
on June
30,
2015 for funds
advanced. The note is payable in annual installments of $155,566 through December 2019
and
is
presented
in
liabilities
from
discontinued
operations.
The
notes
include
interest
at
6% and are subordinated to the notes payable (see Note 12).
Principal amounts due on notes payable for the years ended December 31, are as follows:
2017
$
155,566
2018
155,566
2019
155,567
2020
155,567
$
626,266
Amounts Due to Related Parties
Amounts
due
to
related
parties
with
balances
of
$1,000
and
$508
at
March
31,
2017
and
December
31,
2016,
respectively,
consist
of
cash
advances
from
an
officer/stockholder.
These advances do not bear interest and are payable on demand.
Amounts
due
to
related
parties
with
balances
of
$28,570
and
$64,509
at
March
31,
2017
and
December
31,
2016,
respectively,
consist
of
cash
advances
from
the
president
of
Arcmail,
and
is
presented
in
liabilities
from
discontinued
operations.
These
advances
do
not bear interest and are payable on demand.
Note 18 – Commitments and Contingencies
Lease Commitment
22
The
Company
is
obligated
under
two
operating
leases
for
its
premises
that
expire
at
various
times through February 28, 2019.
Total future minimum annual lease payments under the leases for the years ending
December 31 are as follows:
2017
$ 47,429
2018
56,743
2019
3,380
$107,552
Rent
expense
of
$5,591
and
$4,800
was
charged
to
continuing
operations
for
the
three
months ended March 31, 2017 and 2016, respectively.
Rent expense of $10,807 and $8,635 was charged
to discontinued operations for the three
months ended March 31, 2017 and 2016, respectively.
Note 19 – Subsequent Events
Business Acquisition
On
April
5,
2017,
the
Company,
through
its
wholly-owned
subsidiary
HealthDatix,
Inc.
consummated the
acquisition of certain assets of the CyberCare
Health Network Division
from EncounterCare Solutions Inc. (“ECSL”) in accordance with an Asset Purchase
Agreement
by
and
among,
HealthDatix,
Inc.,
ECSL
and
the
Company. Pursuant
to
the
Agreement, ECSL
will sell, convey, transfer and assign to HealthDatix, Inc. certain assets,
and
HealthDatix,
Inc.
will
purchase
and
accept
from
ECSL
all
rights,
title
and
interest
in
and
to
the
Assets
in
exchange
for
60,000,000
shares
of
restricted
common
stock
of
the
Company.
Equity Financing Transaction
On
April
3,
2017,
the
Company
entered
into
a
Convertible
Promissory
Note
with
an
accredited investor pursuant to an
exemption under section 4(a)(2)
of the
securities act of
1933
, pursuant to which the investor agreed to lend and the Company agreed to repay the
investors
the
aggregate
principal
amount
of
$125,000.
The
convertible
note
is
due
12
months
after
issuance
and
bears
interest
at
a
rate
of
12%. The
Note
is
convertible
into
shares
of
common
stock
of
the
Company
180
days
following
the
date
of
funding
and
thereafter.
The
conversion
price
shall
be
subject
to
a
discount
of
50%.
The
conversion
price shall be determined on the basis of the lowest VWAP
(Volume
Weighted
Average
Price)
of the
Common Stock during the prior twenty
(20) trading
day
period. The Investor
will
be
limited
to
convert
no
more
than
4.99%
of
the
issued
and
outstanding
Common
Stock at
the time of conversion at any one time.
At
any time during the period beginning
on the date of the Note and ending on the date which is 180 days thereafter, the Company
may repay the Note by paying an amount equal to the then outstanding amount multiplied
by 135%.
23
Item 2 –
Management’s
Discussion and Analysis of Financial Condition and Results
of Operations
FORWARD LOOKING STATEMENTS
This Form
10-Q
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-Q
which
address
activities,
events
or
developments
that
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.
Investors
are
cautioned
that
any
such
forward-looking
statements
are
not
guarantees
of
future
performance
and
involve
significant
risks
and
uncertainties,
and
that
actual
results
may
differ
materially
from
those
projected
in
the
forward-looking
statements.
Factors
that
could
adversely affect
actual
results
and
performance
include,
among
others,
potential
fluctuations
in
quarterly operating results
and
expenses,
government
regulation,
technology
change
and
competition.
Consequently,
all
of
the
forward-looking
statements
made
in
this
Form
10-Q
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.
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.
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.
24
Assets.
At March 31, 2017, we had $1,722,838 in total assets, compared to
$510,835
at
December
31,
2016.
The
increase
in
total
assets
was
primarily
due
to
the
increase
in
cash
and
the
increase
in
intangible
assets
from
the
acquisition
of
our
HealthDatix subsidiary.
Liabilities.
At
March
31,
2017,
our
total
liabilities
were
$6,677,714
compared
to
$6,380,260
at
December
31,
2016.
Our
current
liabilities
at
March
31,
2017
consisted
of
accounts payable and
accrued
expenses of $374,371, accrued
interest
on notes payable of
$1,801,
amounts
due
to
related
parties
of
$1,000,
notes
payable
of
$60,500,
convertible
debentures
of
$69,634,
derivative
liability
of
$83,773
and
liabilities
from
discontinued
operations
of
$6,086,635,
whereas
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
liabilities
from
discontinued operations of $5,973,747.
Stockholders’
Deficiency.
Our
Stockholders’
Deficiency
decreased
to
$(4,954,876)
at March 31, 2017 from $(5,869,425) at
December 31, 2016. This
decrease
was primarily
due to an increase in Common Stock and Additional
paid-in capital
from the HealthDatix
acquisition during the three months ended March 31, 2017.
THREE
MONTHS
ENDED
MARCH
31,
2017
AS
COMPARED
TO
THREE
MONTHS ENDED MARCH 31, 2017
Revenues and
Net Loss
.
We had
$4,350 of revenue from our HealthDatix
subsidiary
and
a
net
loss
of
$242,074
during
the
three
months
ended
March
31,
2017,
compared
to
revenue
of
$0
and
a
net
loss
of
$238,870
for
the
three
months
ended
March
31,
2016. The
increase
in
revenue
was
due
primarily
to
the
revenue
generated
by
our
HealthDatix
subsidiary
acquired
in
February
2017.
In
addition
to
HealthDatix’s
operations,
we
had
a
loss
from
discontinued
operations
of
$(66,937)
compared
to
$(76,333)
for the three months ended March 31, 2017 and March 31, 2016, respectively.
General and Administrative Expenses
.
General and Administrative Expenses
increased
to
$167,380
for
the
three
months
ended
March
31,
2017
from
$161,936
for
the
three
months
ended
March
31,
2016.
For
the
three
months
ended
March
31,
2017
our
General
and
Administrative
Expenses
consisted
of
corporate
administrative
expenses
of
$40,324,
legal
and
accounting
fees
of
$36,600,
employee
benefits
expenses
(health
and
life
insurance)
of
$12,665,
marketing
expenses
of
$16,666,
payroll
expenses
of
$34,483,
consulting expenses of $8,025, commissions
and fees expenses
of $11,000, and exchange
filing
fees
of
$7,617. For
the three months
ended
March
31,
2016
our
General and
Administrative Expenses consisted of corporate administrative expenses of $34,754, legal
and accounting fees of $28,935 employee
benefits (health and
life insurance)
expenses of
$5856, directors and officers insurance expenses of $11,136, payroll expenses of $56,258,
finders
fees
and
commissions
expenses
of
$17,500
and
exchange
filing
fees
of
$7,500.
The
increases
from
the
three
months
ended
March
31,
2016
to
the
three
months
ended
March
31,
2017
relate
primarily
due
to:
(i) an
increase
in
employee
benefits
expenses;
(
(ii)
an
increase
in
marketing
expenses;
and
(iii)
an
increase
in
general
and
administrative
costs
25
associated
with
the
operation
of
our
HealthDatix
subsidiary.
Costs
associated
with
our
officers’ salaries
and the operation of our HealthDatix subsidiary are expected to increase
going
forward,
as
we
expand
the
business
operations
of
HealthDatix
which
would
likely
increase our corporate administrative expenses.
Other
Income
(Expense)
.
We
reported
interest
expense
of
$11,927
and
$601
for
the
three
months
ended
March
31, 2017
and
March
31,
2016, respectively.
Amortization
of
debt discount
of
$457
for
the
convertible
note
payable
was reported
for
the
three
months
ended March 31, 2017.
LIQUIDITY AND CAPITAL RESOURCES
General
As
reflected
in
the
accompanying
consolidated
financial
statements,
at
March
31,
2017,
we
had $73,527 of
cash and stockholders’
deficiency
of $(4,954,867). At December
31, 2016, we had $10,522 of cash and stockholders’ deficiency of $(5,869,425).
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
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
$174,715,
for
the
three
months
ended
March
31, 2017,
compared
to $282,435
for the
three
months
ended
March
31, 2016.
Net
cash
used
in
continuing
operating
activities
was
$115,740
for
the
three
months
ended
March
31,
2017,
compared
to
$12,999
for
the
three
months
ended
March
31,
2017.
Our
primary
use
of
operating
cash
flows
from
continuing
operating
activities
was
from
net
losses
of
$242,074
and
$238,870
for
the
three
months
ended
March
31,
2017
and
2016,
respectively.
Additional contributing
factors to
the
change
were
from an
increase in
accounts
receivable
of
$1,250,
decrease
in
prepaid
expenses
of
$17,492,
an
increase
in
accounts payable and accrued expenses of $18,366, and an increase in accrued interest on
notes payable
of
$1,801. Net
cash
used in
discontinued
operating
activities was
$8,975 for
the
three
months
ended
March
31,
2017
and
$269,436
for
the
three
months
ended
March
31, 2016. Cash used in discontinued operations was primarily from net losses of $66,937
26
and $76,333 from our ArcMail subsidiary for the three months ended March 31, 2017 and
2016, respectively.
Net
cash
provided
by
continuing
investing
activities
was
$20,416
for
the
three
months
ended
March
31,
2017
and
$0
for
the
three
months
ended
March
31,
2016.
For
the
three
months
ended
March
31,
2017
the
primary source
of
cash
flows
from
investing
activities
was
from
cash
received
from
the
acquisition
of
our
HealthDatix
subsidiary.
Net
cash
provided
by
discontinued
investing
activities
was
$31,636
for
the
three
months
ended
March 31, 2017 and $14,946 for the three months ended March 31, 2016.
Net
Cash
provided
by
financing
activities
was
$176,500
for
the
three
months
ended
March
31,
2017
compared
to
$160,986
for
the
three
months
ended
March
31,
2016.
The
cash
flows
provided
by continuing financing
activities
for
the
three
months
ended
March
31,
2017
was
primarily
from
$100,000
in
proceeds
from
the
sale
of
stock,
$100,000
in
proceeds from convertible debentures and $492 in advances from related parties. The cash
flows
provided
by
continuing
financing
activities
for
the
three
months
ended
March
31,
2016 consisted of amounts due to related parties of $2,300. The cash flows used in
discontinued financing activities for the three months ended March 31, 2017 was $23,992
compared
to
$158,686
in
cash
flows
provided
by discontinued
financing activities
for the
three months ended March 31, 2016.
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
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.
Item 3.
Quantitative
and Qualitative Disclosures about Market Risk.
Not Required.
27
Item 4.
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 Quarterly Report on Form 10-Q.
Based on this evaluation, our chief executive officer and chief financial officer
concluded that, as of March 31, 2017, 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
March
31,
2017
that
have
materially
affected,
or
are
reasonably
likely to materially affect, our internal control over financial reporting
.
Limitations on Effectiveness of Controls and Procedures
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.
PART II — OTHER INFORMATION
Item 1.
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
March
31,
2017.
Item 1A.
Risk
Factors.
Not required
28
Item 2.
Unregistered Sales of
Equity
Securities and Use of Proceeds.
None
Item 3.
Defaults upon
Senior
Securities.
None
Item 4.
Removed
and Reserved.
Item 5.
Other
Information.
None
Item 6.
Exhibits
Exhibit No.
D
escription
31.1
Certification of the Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2
Certification of the Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1
Certification of the Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed “filed” for
the purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to the liability
of that section. Further, this
exhibit shall not be deemed to be incorporated by reference into any filing
under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended.)
32.2
Certification of the Interim Chief Financial Officer Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed
“filed” for the purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liability
of that section.
Further, this exhibit shall not be deemed to be incorporated by reference
into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended.)
29
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report
to be
signed on its behalf by
the
undersigned,
thereunto duly
authorized, on May
22, 2017.
iGambit Inc.
/s/ John Salerno
John Salerno
Chief Executive Officer
/s/ Elisa Luqman
Elisa Luqman
Chief Financial Officer and
Principal Accounting Officer
Exhibit Index
Exhibit No.
Description
31.1
Certification of the Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2
Certification of the Interim Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification of the Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed “filed” for
the purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to the liability
of that section. Further, this
exhibit shall not be deemed to be incorporated by reference into any filing
under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended.)
32.2
Certification of the Interim Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002. (This exhibit shall not be
deemed “filed” for the purposes of Section 18 of the Securities Exchange
Act of 1934, as amended, or otherwise subject to the liability of that
section. Further, this exhibit shall not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended.)