UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

FORM 10-K/A

Amendment No. 1

 þ

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

EXCHANGE ACT OF 1934

For the Fiscal Year Ended fiscal year ended December 31, 20152022

OR

 o

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

SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to ___________

Commission File Number: 000-53862file number 001-41346

IGAMBIT

NUTEX HEALTH INC.

(Exact name of registrant as specified in its charter)

Delaware6030 S. Rice Ave, Suite C,
Houston, Texas77081
Telephone Number (713) 660-0557

11-3363609

This  annual  report  on  Form  10-K  is  forThere were 12 Board meetings during the fiscal year ended December 31, 2015.  The2022.

Securities

Under our Corporate Governance Guidelines, which are available on our web site at https://www.nutexhealth.com/governance-documents, a director is expected to spend the time and Exchange  Commission  (“SEC”)  allows  useffort necessary to “incorporate  by  reference”

information  that  we  fileproperly discharge his or her responsibilities. Accordingly, a director is expected to regularly prepare for and attend meetings of the Board and all committees on which the director sits (including separate meetings of the independent directors), with the SEC,  which  meansunderstanding 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

SecuritiesExchangeActof1934,asamended.TheCompanyhasbasedtheseforward-

lookingstatementsontheCompany’scurrentexpectationsandprojectionsaboutfuture

events.Theseforward-lookingstatementsaresubjecttoknownandunknownrisks,

uncertaintiesandassumptionsaboutusandtheCompany’ssubsidiariesthatmaycause

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

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

achievementsexpressedorimpliedbysuchforward-lookingstatements.Inmanycases,

youcanidentifyforward-lookingstatementsbyterminologysuchas“anticipate,”

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

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

“guidance,”“outlook,”“effort,”“target”andothersimilarwords.However,the

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

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

limitedto, thosediscussedelsewhereinthisAnnualReport, includingthe sectionentitled

“RiskFactors”andtherisksdiscussedintheCompany’sotherSecuritiesandExchange

Commission  filings.The  following  discussionshouldbereadin  conjunctionwiththe

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.

1

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 December 28, 2012,  we entered  into an  Asset  and Stock   Purchase  Agreement

(the “Purchase Agreement”) to acquire substantially all of the assets of IGX Global  Inc. a

Connecticut  corporation  (“IGXUS”),  and  all  of  the  issued  and  outstanding  shares  of  IGX

Global  UK  Limited  a  UK  Private  Limited  company  (“IGXUK”)  through  our  wholly

owned  subsidiary  IGXGLOBAL  CORP.,  a  Delaware  corporation  (“IGXGLOBAL”),  and

thereby acquired the business operated by IGSUS and IGSUK (the “Acquired Business”).

Thomas  Duffy  is  the  sole  shareholder  of  both  IGXUK  and  IGXUS  (the  “Shareholder”).

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

filed on January 7, 2013.

On  April  8,  2013,  iGambit  Inc.  (“iGambit”)  and  its’  wholly  owned  subsidiary,

IGXGLOBAL,  CORP.    (“IGXGLOBAL”,  and  collectively,  the  "Company"),  entered

into,  and  became  obligated  under,  a  transaction  to  rescind  the  Company’s  Purchase

Agreement  dated  December  28,  2012   with   IGX  Global  Inc.  (“IGXUS”),  IGX  Global

UK Limited (“IGXUK”, and collectively,  “IGXNJ”) and Tomas  Duffy (“Duffy”) the sole

shareholder of both IGXUK and IGXUS (the “Shareholder”).   The Rescission Agreement

was disclosed on the Company’s current report on Form 8-K filed on April 12, 2013.

On  April  25,  2013  the  conditions  to  closing  the  Rescission  Agreement  were

completed.

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.  PursuanttotheStockPurchase,thetotalconsiderationtobepaidfortheoutstanding

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

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

the  Holdback  Amount  of  1,000,000  shares  of  the  iGambit’s  Commonstock  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

2

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.

OUR COMPANY

Introduction

We  are  a  company  focused  on  the  technology  markets.  Presently  we  have  one

operating  subsidiary,  of  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     Revenues

consist  entirely  of  revenues  from  the  operation  of  our  ArcMail  subsidiary  ($474,679

during   the  period  November  4,  2015  through  the  year  ended  December  31,  2015).   In

addition   to   ArcMail’s   operations,   we   had   income   from   discontinued   operations   of

$627,384.

Our  primary  focus  is  the  acquisition  of  additional  technology  companies.  We

believe  that  the  background  of  our  management  and  of  our  Board  of  Directors  in  the

technology  markets  is  a  valuable  resource  that  makes  us  a  desirable  business  partner  to

the  companies  that  we  are  seeking  to  acquire.  When  we  acquire  a  company,  we  work  to

assume  an  active  role  in  the  development  and  growth  of  the  company,  providing  both

strategic  guidance  and  operational  support.  We  provide  strategic  guidance  to  our  partner

companies   relating  to,   among  other   things,   market   positioning,  business   model   and

product  development,  strategic  capital  expenditures,  mergers  and  acquisitions  and  exit

opportunities. Additionally, we provide operational support to help our partner companies

manage  day-to-day  business  and  operational  issues  and  implement  best  practices  in  the

areas  of  finance,  sales  and  marketing,  business  development,  human  resources  and  legal

services.  Once  a  company  joins  our  partner  company  network,  our  collective  expertise  is

leveraged   to   help   position   that   company   to   produce   high-margin,   recurring   and

predictable earnings and generate long-term value for our stockholders.

Our  current  intention  is  to  fund  the  purchase  price  of  acquisitions  through  a

combination of the issuance of our common stock at  closing and the issuance of common

stock  purchase  or  common-stock  warrants  that  would  become  exercisable  only  in  the

event  certain  earn-out  conditions  are  satisfied  by  the  acquired  company.  In  addition  to

acquiring  entire  companies,  we  would  also  consider  entering  into  joint  ventures  and

acquiring less than 100 percent of a target company.

3

Our Strategy to Grow the Company

General

We  have  an overall  corporate business  plan  as  a  holding company to seek out  and

acquire  operating companies.   Phase  one  of our strategy is  complete.  We  established new

corporate   headquarters   and   a   website,   expanded   our   board   to   include   3   outside

independent   directors,   set   up   periodic   board   meetings,   engaged   a   sophisticated   full

service law firm, engaged a new PCAOB registered auditing firm, engaged an investment

banking  firm  as  advisors  to  assist  in  the  analysis  of  target  acquisitions,  and  become  an

SEC  reporting  company.    In  addition,  we  are  working  on  a  daily  basis  towards  our

strategy, identifying further  acquisitions  that  will expand  and  or  complement  our existing

subsidiary.

Sources of Target Businesses

We  anticipate that target business candidates will  be brought to our attention from

various  sources,  including  our  management  team,  investment  bankers,  venture  capital

funds,   private   equity   funds,   leveraged   buyout   funds,   management   buyout   funds,

consulting  firms  and  other  members  of  the  financial  community  who  will  become  aware

that  we  are  seeking  business  partners  via  public  relations  and  marketing  efforts,  direct

contact  by  management  or  other  similar  efforts,  who  may present  solicited  or  unsolicited

proposals.  Any  finder  or  broker  would  only  be  paid  a  fee  upon  the  completion  of  a

business  combination.  While  we  do  not  presently  anticipate  engaging  the  services  of

professional  firms  that  specialize  in  acquisitions  on  any  formal  basis,  we  may  decide  to

engage  such  firms  in  the  future  or  wedirector may be approached  on  an  unsolicited  basis.  Our

officers  and  directors,  as  well  as  their  affiliates,  may  also  bringunable to our  attention  target

business candidates that  they become aware of through their business contacts.  While  our

officers  and  directors  make  no  commitment  asattend a meeting. A director who is unable to the  amount  of  time  they  will  spend

trying  to  identify  or  investigate  potential  target  businesses,  they  believe  that  the  various

relationships  they  have  developed  over  their  careers  together  with  their  direct  inquiry,

will   generate   a   number   of   potential   target   businesses   that   will   warrant   further

investigation.  In  no  event  will  we  pay  any  of  our  existing  officers,  directors,  special

advisors  or  stockholders  or  any  entity  with  which  they  are  affiliated  any  finder’s  fee  or

other   compensation   for   services   rendered   to   us   prior   to   or   in   connection   with   the

completion of a  business  combination.  In  addition, none of our  officers, directors, special

advisors  or  existing  stockholders  will  receive  any  finder’s  fee,  consulting  fees  or  any

similar  fees  from  any  person  or  entity  in  connection  with  any  business  combination

involving  us  other  than  any  compensation  or  fees  that  may  be  received  for  any  services

provided following such business combination.

Selecting Acquisition Targets

Our  management  has  virtually  unrestricted  flexibility  in  identifying  prospective

target business and diligently reviews all of the proposals we receive.

4

The  criteria  we  look  for  in  a  potential  acquisition  include,  but  are  not  limited  to,

the following:

Company Characteristics

§     Established Company with proven track record

o    Company with history of strong operating and financial performance, or

o    Companyundergoingaturnaroundthatdemonstratesstrongprospectsfor

future growth

§     Strong Cash Flow Characteristics.

o    Cash flow neutral or positive,

o    Predictable recurring revenue stream,

o    High gross margins and

o    Low working capital and capital expenditure needs

§     Strong Competitive Industry Position

o    Leading or niche market position, and/or

o    Strong channel relationships that promote barriers to entry

§     Strong Management Team

o    Experienced,  proven  track  record  in  delivering    revenue  and  abilityto

execute, or

o    Amanagementteamthatcanbecomplementedwithourcontactsand

team

§     Diversified Customer and Supplier base

§     Proprietary products or marketing position

Industry Characteristics

§     Non-cyclical

§     Services Consumer or niche market

§     Fragmented with potential for consolidation or growth

§     Emerging markets

Industries of Interest

§     Real Estate Services

§     Managed Security Services Providers (MSSP)

§     ITSolutionsProvidersspecializinginsecurityandnetworktechnology

products, services, and support

§     Internet

o    Cloud Computing

o     Security focused applications

5

Investment Criteria

§     Sales Volumes: $500 thousand to $30 million

§     Cash Flow: Neutral or positive

§     Structure: Controlled ownership. Closely held private company

§     Geography: North America  Investment size: $1 million to $5 Million

§     Involvement: Board oversight

§     Controlling Interest: Acquire 100% of controlling interest in target

§     Marketing:

o    Target captures a particular segment of the market

o    Target has a focused strategic marketing plan.

These  criteria  are  not  intended  to  be  exhaustive.  Any  evaluation  relating  to  the

merits  of  a  particular  business  combination  will  be  based,  to  the  extent  relevant,  on  the

above  factors  as  well  as  other  considerations  deemed  relevant  by  our  management  in

effecting a business combination consistent with our business objective.

Diligence Process

Upon  receipt  of  a  business  plan,  the  procedure  is  for  management  to  review  the

business plan and determine if it satisfies the Company’s acquisition criteria, and whether

the   business   plan   should   be   rejected   or   pursued   further.   If   the   plan   satisfies   the

requirements, then Management meets with the target’s management to determine if there

is  a  synergy  that  can  work  and  to  explore  the  business  plan  in  greater  detail.  Generally

this occurs over several meetings and can take some time. Depending on the nature of the

business,  management  may  enlist  certain  technical  or  industry  consultants  to  meet  with

the  target  and  provide  feedback  and  analysis.  Management  will  also  review  the  target’s

financials.  If the analysis suggests the target should be explored further Management will

present the opportunity to the BOD for approval to pursue the opportunity further. One or

two outside directors  may meet  with the target to  make an independent  assessment.  If the

opportunity   is   approved   for   further   exploration   management   will   discuss   potential

purchase structure with target’s  management to be sure thatattend a meeting of the minds exists

forBoard or a potential  deal.    At  this  point  management  will  request  that  our  investment  banking

advisors  give  their  opinioncommittee of the industry,Board is expected to notify the market  and  potential  financing  options  of

the   deal.   Often,   the   investment   bankers   will   meet   with   target’s   management.     The

investment   banker’s   feedback  is   presented   to   the  board   and,   if   positive,   the   Board

analyzes   the   proposed   financing  structure,   discusses   effects   of   a   transaction   on   the

Company  as  they  relate  to  taxes,  capitalization,  stock  value  etc.,  engaging  the  necessary

outside  consultants.  If  all  appears  positive  a  letter  of  intent  is  negotiated  and  executed,

additional  diligence  is  conducted,  and  definitive  transaction  documents  are  negotiated

and executed.

6

EvaluationChairman of the Target’s Management

We  would  condition  any  acquisition  onBoard or the commitment  of  managementChairman of the

target  business  to  remain appropriate committee in place  post-closing.  Followingadvance of such meeting, and, whenever possible, participate in such meeting via teleconference in the case of an in-person meeting. We do not maintain a business  combination,  we

may seek to recruit  additional managers to supplementformal policy regarding director attendance at the incumbent  management ofAnnual Meeting; however, it is expected that absent compelling circumstances directors will attend. Given the

target  business.  We  cannot  assure  you  that  we  will  have  the  ability  to  recruit  additional

managers,  or  that  any  such  additional  managers  will  have  the  requisite  skills,  knowledge

or  experience  necessary  to  enhance  the  incumbent  management.  Although  we  intend  to

closely  scrutinize  the  management  of  a  prospective  target  business  when  evaluating  the

desirability   of   effecting   a   business   combination,   we   cannot   assure   you   that   our

assessment timing of the target business’s management will prove to be correct.

Competition

In  identifying,  evaluating  and  selecting  a  target  business,  we  may  encounter

intense  competition  from  other  entities  having a  business  objective  similar  to  ours.  Many

of  these  entities  are  well  established  and  have  extensive  experience  identifying  and

effecting  business  combinations  directly  or  through  affiliates.  Many  of  these  competitors

possess  greater  technical,  human  and  other  resources  than  us  and  our  financial  resources

will be relatively limited when contrasted with those of many of these competitors, which

may  limit  our  ability  to  compete  in  acquiring  certain  target  businesses.  This  inherent

competitive  limitation  gives  others  an  advantage  in  pursuing  the  acquisition  of  a  target

business.

Companies Currently Under Review

We   are   constantly   in   the   process   of   reviewing   potential   target   companies.

Currently, we are not under contract to acquire any companies.

Our Partner Company

Wala Inc. dba ArcMail Technology

Products and Services

ArcMail  is  a  provider of  enterprise  information  archiving solutions  for businesses

of  all  sizes  across  a  wide  range  of  vertical  markets.   ArcMail  offers  a  full  array  of  email

and  data  archiving  solutions  with  broad  deployment  options  that  support  a  wide  range  of

content types from various sources.

ArcMail’s  products  and  services  are  offered  in  a  variety  of  deployment  options

that  include  a  turnkey  appliance,  a  virtual  machine  (VM)  software  (VMware  or  MS

Hyper-V), a cloud/premise-based hybrid gateway (which can store information to a SAN,

NAS,  or  any  cloud-based  storage  provider),  and  fully-hosted  services  in  the  cloud.   Each

deployment  option  can  support  multiple  data  types  from:  most  commercially  available

mail  servers,  including  all  versions  of  MS  Exchange,  Linux  variants,  IBM  Lotus  Notes,

IBM   Domino,   and   GroupWise   among   others;   most   cloud-based   systems,   including

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Google   Gmail,   MS   Office365,   Google   Apps,   and   Google   Docs   among   others;   and

Microsoft   SharePoint,   enterprise   social   media   such   as   your   corporate   Twitter;   and

Microsoft and Linux-based file systems.

Whether  a  customer  wants  their  archive  to  reside  behind  the  firewall,  in  the

cloud,  or  anywhere  else,  ArcMail  offers  products  and  services  to  fit  that  deployment

strategy.  Whatever  deployment  option  ArcMail’s  customers  elect,  their  data  is  properly

organized  and  maintained, for e-Discovery,  compliance, disaster recovery and for finding

that  file  that  a  CEO  needs  immediately.  Customers  discoverable  information  is  being

archived  using  a  compliant  and  secure  solution  that  is  scalable,  dependable,  and  easy  to

install, deploy, use, and maintain.

In  addition  to  being  an  archiving  solutions  provider,  ArcMail  has  created  a  sales

and  support  organization  to  help  companies  in  search  of  expertise,  information,  and

supporting  resources  as  they  investigate  their  need  and  develop  strategies  for  enterprise

information  archiving.   ArcMail  recognizes  that  customers'  needs  are  not  met  through  a

"cookie  cutter/one  size  fits  all"  approach.  As  an  expert  in  the  enterprise  information

archiving  market,  ArcMail  works  in  partnership  with  customers  to  ensure  their  archiving

solution is tailored to meet their unique situation and environment.

Competitive Comparison

ArcMail’s  archiving  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  regulatory  compliance,  data  retention  and  eDiscovery.  ArcMail’s  primary

competitors   include   Barracuda   Networks,   Inc.,   MS   Office365,   and   Google   Vault.

ArcMail  rarely  encounters  other  competitors  such  as  EMC,  Symantec  and  Smarsh,  as

they primarily focus on Fortune 500 and SME markets.

ArcMail  competes  effectively  against  its  primary  competitors  by  providing  a  simple  and

scalable  architecture,  and  world-class  customer  support.   ArcMail’s  primary  competitive

differentiation includes:

§     Simplest User Interface

MS Outlook client or a simple Web-based UI

§     Fastest Search and Retrieval

Proprietary algorithms with granular indexing

§     Most  Data Source Types

We  archive  email,  hosted  email,  SharePoint,  system  files,  social  media,

Google Drive, and other data sources

§     Most Deployment Options

We    offer    appliances,    VM    software,    a    cloud/premise-based    hybrid

gateway, and a fully-hosted solution

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§     Leading Storage-Saving Performance

Single-instance  storage,  granular  retention  rules  and  oneClosing of the highest

Data compression rates

§     Best  Customer Service

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

team

Future Products and Services

ArcMail’s product strategy is to provide architectures and deployment capabilities

that  address  the  widest  possible  segment  of  the  archiving  market.  While  ArcMail  is  not

attempting to  be  “all  things  to  all  people”  per  se,  ArcMail,  as  a  result  of  its  differentiated

capabilities,   is   able   to   address   a   majority   segment.   We   see   the   ArcMail   platform

including  appliance,  hosted  and  virtual  products  and  services  as  viable  in  both  the  near

and  long  term.  Enterprise  class  customers  will  continue  to  see  the  appliance  model  as

preferential  to  a  hosted  platform  in  most  cases.  The  SMB  market,  which  is  transitioning

to   the   cloud   in   significant   numbers,   will   help   our   virtualized   and   hosted   solutions

continue to gain ground.

Customers

ArcMail currently has approximately 1,500 client accounts ranging from 50 active

email  accounts  to  5,000  active  email  accounts.   Most  of  ArcMail’s  customers  are  in  the

Northeast, South, and Central  region of the  country.   The typical  profile of our customers

are  100-5,000  email  mailboxes/employees.   ArcMail’s  customers  are  usually in  regulated

industries  or  have  e-discovery  legal  requests,  H.R.  audits,  and/or  regulatory  compliance

issues.  Their  pain  points  will  vary depending  on  the  prospect  you  are  speaking  with.   No

one  Customer  constitutes  more  than  5%  of  ArcMail’s  sales  and  the  loss  of  any  customer

will not have a material adverse effect on the Company’s financial condition.

Expansion Summary

ArcMail’s   objective   is   to   be   a   market   leader   in   the   Enterprise   Information

archiving  industry.  ArcMail  currently  has  significant  market  share  in  the  education  and

local/County/State  government  industry  sector.   ArcMail  is  currently  expanding  its  sales

and marketing initiatives to further penetrate the health care, financial services, insurance,

manufacturing,  and  transportation  industry  sectors.     ArcMail  has   expanded  its  sales

channel  overseas  to  such  areas  as  New  Zealand,  Australia,  Canada,  Mexico  and  other

Latin  American  countries.    ArcMail  is  also  actively  working  to  expand  by  providing

services to larger accounts in the SME enterprises with 5,000+ end users.  ArcMail is also

planning  to  expand  its  products  and  services  portfolio  and  customer  channels  through

acquisition.

Employees

We presently have 14 total employees all of which are full-time.

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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.arcmail.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 $1,620.  The  lease  is  for  a  term  of  five  (5)  years  commencing on  March  1,

2012  and  ending  on  February  28,  2017.   The  lease  contains  annual  escalations  of  2%  of

the annual rent.

Our  ArcMail  operations  are  located  in  Shreveport,  Louisiana,  where  we  lease

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

feet  to 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:

Derivative Liability

Convertible Note

During the year ended December 31, 2013, we issued a convertible note.

The note is convertible into common stock, at the  holders’ option, at  a discount to

thereported closing market price of our common stock.   stock on Nasdaq as of December 30, 2022 ($1.90 per share).

Executive Compensation Arrangements

We have identified   embedded   derivativesentered into offers of employment letters or employment agreements with each of Drs. Vo and Hosseinion, as well as Jon Bates. The material terms of these agreements are described below.

included  in  these  notes

Thomas T. Vo, M.D., MBA entered into an employment agreement with the Company (the “Vo Employment Agreement”) to serve as a  result  of  certain  anti-dilutive  (reset)  provisions,  related  to

certain  conversion  features.  The  accounting  treatment  of  derivative  financial  instruments

requires  that  we  record  the  fair  valueChief Executive Officer of the derivatives  asCompany for a five-year term following completion of the inception  dateMerger. The Vo Employment Agreement provides for an annual base salary of the

convertible  note$1,000,000, subject to a three percent minimum increase annually and debt  discount  amortizationreview on at least an annual basis. Dr. Vo is eligible to fair  value  asreceive an annual cash bonus, the decision to provide, amount and terms of each  subsequent

reporting date.   This resultedwhich are in a fair value of derivative liability of $152,076 in which to

the extentsole and absolute discretion of the face  value  of  convertible  note  was  treated  as  debt  discount  with  the

remainder treated as interest expense.

The  fair  valueCompensation Committee of the embedded  derivatives  at  December  31,  2013,Board. In addition, Dr. Vo is entitled to participate in the amount

2022 Plan. Dr. Vo’s employment may be terminated at any time by Dr. Vo or the Company, subject to certain notice requirements. Upon termination of $152,076,  was  determined  usingDr. Vo’s employment by the Binomial  Option  Pricing  Model  based  on  the

following  assumptions:  (1)  dividend  yieldCompany without cause or Dr. Vo’s resignation for good reason and completion of 0%;  (2)  expected  volatilitya general release of 243.00%,  (3)

weighted average  risk-free interest rateclaims, Dr. Vo will be entitled to receive (i) an amount equal to three times Dr. Vo’s most recent base salary, plus (ii) a proportional payment of 0.09%, (4) expected lives of 0.72any annual bonus amount Dr. Vo would have earned with respect to 0.75 years,

and  (5)  estimated  fair  value  of  the  Company’s  common  stock  of  $0.51  per  share.  The

Company  recorded  interest  expense  from  the  excess  of  the  derivative  liability  over  the

convertible  note  of  $48,576days employed during the year ended  December  31,  2013.  A  gain   on

derivative  liability  of $152,076  was  recorded  duringtermination, and (iii) treatment of any outstanding equity awards as determined in accordance with the year  ended  December  31,  2014

for the satisfactionterms of the convertible note.

Based  upon  ASC  840-15-25  (EITF  Issue  00-19,  paragraph  11)applicable award agreements. In the event that Dr. Vo’s employment is terminated by the Company hasfor cause, Dr. Vo will be entitled to receive any earned but unpaid base salary and annual bonus for services rendered through the date of termination and compensation or benefits vested subject to the terms of the applicable compensation or benefits program or arrangement. The Vo Employment Agreement also includes provisions regarding confidentiality, the assignment of intellectual property of the Company, participation in the Company’s employee benefit plans and reimbursement of expenses.

adopted

Warren Hosseinion, M.D. entered into an employment agreement with the Company (the “Hosseinion Employment Agreement”) to serve as President of the Company for a sequencing   approach   regardingfive-year term following completion of the applicationMerger. The Hosseinion Employment Agreement provides for an annual base salary of ASC   815-40$750,000, subject to a minimum three percent increase annually and review on at least an annual basis. Dr. Hosseinion is eligible to receive an annual cash bonus, the decision to provide, amount and terms of which are in the sole and absolute discretion of the Board. In addition, Dr. Hosseinion is eligible to participate in any long-term incentive plan the Company makes available to its

outstanding   convertible   note.   Pursuant executives. Dr. Hosseinion’s employment may be terminated at any time by Dr. Hosseinion or the Company, subject to certain notice requirements. Upon termination of Dr. Hosseinion’s employment by the Company without cause or Dr. Hosseinion’s resignation for good reason and completion of a general release of claims, Dr. Hosseinion will be entitled to receive a cash payment equal to (i) two times Dr. Hosseinion’s most recent base salary, plus (ii) an amount equal to the sequencing   approach,premium amounts paid for group medical, dental and vision coverage of Dr. Hosseinion for a period of twelve months. In the Company

evaluates its contracts based upon earliest issuance date.

Stock Transactions

On  September  25,  2014,  the  Board  unanimously  approved  an  amendment  to  the

Company’s  Articles  of  Incorporation  to  increase  the  number  of  shares  of  Common  Stock

whichevent that Dr. Hosseinion’s employment is terminated by the Company is  authorizedfor cause, Dr. Hosseinion will be entitled to issue  from  seventy  five  million  (75,000,000)receive any earned but unpaid base salary and annual bonus for services rendered through the date of termination and compensation or benefits vested subject to

Three  Hundred  Million  (300,000,000)  shares  of  Common  Stock,  $0.001  par  value  per

share,   and   to   create   a   new   class   of   stock   entitled   “preferred   stock”   (together, the

“Capitalization  Amendments”).  The  Capitalization  Amendments  create  provisions  in  the

Company’s  Articles  of  Incorporation,  which  allows  the  voting  powers,  designations,

preferences  and  other  special  rights,  and  qualifications,  limitations  and  restrictions  of

each  series  of  preferred  stock  to  be  established  from  time  to  time  by  the  Board  without

approval terms of the stockholders. No dividend, voting, conversion, liquidationapplicable compensation or redemptions

rights as well  as redemptionbenefits program or sinking fundarrangement. The Hosseinion Employment Agreement also includes provisions are  yet established  with respect to

regarding confidentiality, the assignment of intellectual property of the Company, participation in the Company’s preferred  stock.   On October 3, 2014, the Majority Stockholders executedmedical and similar insurance plans and reimbursement of expenses.

and   delivered   to   the    Company   a   written   consent    approving   the   Capitalization

Amendments.

19

Common Stock Issued

In connection with Jon Bates’ appointment as the acquisitionCompany’s Chief Financial Officer, on June 8, 2022, the Company entered into a two (2) year employment agreement with Mr. Bates (the “Bates Agreement”) pursuant to which Mr. Bates is entitled to receive a base annual salary of Wala,  Inc.  we  issued  11,500,000  common

shares  valued$300,000, subject to annual review by the Company’s Chief Executive Officer and Board. The employment agreement contains automatic one-year extensions at $.10  per  share  to  the president  and  CEOend of Wala,  Inc.  on  November  4,

2015.

We  issued  1,000,000  and  600,000  common  shares  for services, valued  at  $.20 per

share on August 3, 2015 and May 18, 2015, respectively.

In connection with the convertible note payable the note holder converted $49,000

each term unless 60-day advance notice of the  principal  balance  to  1,539,934  shares  of  common  stock  during  the  year  ended

December   31,   2014.     The   stock   issued   was   determined   based   on   the  terms   of  the

convertible note.

Income Taxes

We  account  for  income  taxes  using  the  asset  and  liability  method  in  accordance

with  ASC  Topic  No.  740,IncomeTaxes.  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.

We  apply  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.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Introduction

iGambitnon-extension is a  company  focused  on  the  technology  markets.  Our  sole  operating

subsidiary,  of  Wala,  Inc.  doing  business  as  ArcMail  Technology  (ArcMail)  is  in  the

business  of  providing simple,  secure  and  cost-effective  We  are  focused  on  expanding the

operations of ArcMaildelivered by marketing the company to existing and potential new clients.

Year Ended December 31, 2015 as Compared to Year Ended December 31, 2014

Assets. At December 31, 2015, we had $890,686 in current assets and $7,637,996

in  total  assets,  compared  to  $276,398  in  current  assets  and  $280,786  in  total  assets  as  of

December 31,  2014.    The  increase  in  total  assets  was  primarily  due  to  an  increase  in

goodwill, inventories,  accounts  receivable and  prepaid  expenses  from the  purchase  of the

ArcMail  business,  and  an  increase  in  assets  from  discontinued  operations  as  a  result  of

the sale of Gotham in 2015.

20

Liabilities.   At   December 31,   2015,   we   had   total   liabilities   of   $6,076,680

compared  to  $285,277  at  December 31,  2014.  Our  total  liabilities  at  December 31,  2015

consisted   of   current   liabilities   including   accounts   payable   and   accrued   expenses   of

$636,633,  accrued  interest  on  notes  payable  of  $302,278,  Notes  payable  of  $779,750,

Notes  Payable  to  a  related  party  of  $156,566,  liabilities  from  discontinued  operations  of

$127,353  and  deferred  revenue  of  $811,227,  and  long-term  liabilities  including  notes

payable of $2,339,251,  notes payable to a  related  party of $469,699  and deferred revenue

of  $379,052,  whereas  our  total  liabilities  at  December  31,  2014  consisted  of  current

liabilities   including     accounts   payable   of   $91,177   and   liabilities   from   discontinued

operations  of  $194,100.  We  had  no  long term  liabilities  for  the  year  ended  December  31,

2014.      The  increase  in  liabilities  was  primarily  due  to  the  liabilities  assumed  in  the

purchase of the ArcMail business.

Stockholders’   Equity   (Deficiency).   Our   Stockholders’   Equity   was   $1,561,316   at

December  31,  2015  compared  to  Stockholders’  Deficiency   of  $(4,491)  at  December 31,

2014. This  increase  was  due  to  the  common  shares  issued  in  the  purchase  of the  ArcMail

business  and   a  decrease  in  accumulated  deficit  from  $(2,882,199)  at  December  31,  2014

to  $(2,798,390)  at  December 31, 2015  resulting from net  income   of $83,809 for  the  year

ended December 31, 2015 compared to net loss of $684,342 for the  year ended December

31, 2014

Revenue  and  Net  Income.  We  had  revenue  of  $474,679  for  the  year  ended

December 31, 2015, compared to revenue of $1,068,617 for the year ended December 31,

2014.   The  decrease  in  revenue  was  due  primarily to  the  sale of the  Gotham  business  and

purchase  of  the  ArcMail  business  in  November  2015.   We  had  no  other  income  for  the

year  ended  December  31,  2015  compared  to  other  income  of  $84,701  for  the  year  ended

December  31,  2014  primarily  due  to  the  gain  on  derivative  liability  of  $152,076.  In

addition   to   ArcMail’s   operations,   we   had   income   from   discontinued   operations   of

$627,384  and  $17,531  for  the  year  ended  December  31,  2015  and  December  31,  2014,

respectively.

General  and  Administrative  Expenses.  General  and  Administrative  Expenses

decreased  to  $965,609  for  the  year  ended  December 31,  2015  from  $1,383,646  for  the

year  ended  December 31,  2014.  For  the  year  ended  December 31,  2015  our  General  and

Administrative Expenses consisted of corporate administrative expenses of $73,308, legal

and  accounting  fees  of  $165,041,  payroll  expenses  of  $330,671,  Directors  and  Officers

Insurance   of   $42,206,   employee   benefits   expenses   of   $22,385   (medical,   dental,

retirement  plan,  and  life  insurance)  and   $331,998  in  stock  based  compensation  expense.

For   the   year   ended   December 31,   2014   our   General   and   Administrative   Expenses

consisted  of  corporate  administrative  expenses  of  $292,096,  legal  and  accounting  fees  of

$111,477,  payroll  expenses  of  $731,606,  Directors  and  Officers  Insurance  of  $43,754,

employee   benefits   expenses   of   $74,975   (medical,   dental,   retirement   plan,   and   life

insurance),  $74,664  in  stock  based  compensation  expense,    and  a  bad  debt  write  off  of

$55,074.  Therefore  the  decreases  from  the  year  ended  December 31,  2014  to  the  year

ended December 31, 2015 relate  primarily to  a  decrease in payroll  and employee  benefits

expenses.either party. In the event the company  effectuates  an  acquisition  in  2016  we  anticipate

additional professional fees associated withCompany (or its successor) terminates Mr. Bates employment without cause or Mr. Bates resigns for good reason, severance benefits would be twelve months of base salary and a cash subsidy for group medical, dental and vision programs for twelve months. No severance is payable under the acquisition.

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LIQUIDITY AND CAPITAL RESOURCES

General

As  reflectedBates Agreements if Mr. Bates employment is terminated by the Company for cause (as defined in the accompanying  consolidated  financial  statements,  at  December

31, 2015, we had $131,987 of cash and stockholders’ equity of $1,561,316.  At December

31, 2014, we had $126,833 of cash and stockholders’ deficit of $(4,491).

Our primary capital requirements in 2016 are likely to arise from the expansion of

our  ArcMail  operations,  and,Bates Agreement), Mr. Bates resigns without good reason (as defined in the event  we  effectuateBates Agreement) or is unable to perform due to death or disability. Mr. Bates is entitled to receive payment of all salary and benefits accrued up to the termination date of his employment upon any termination of employment, unpaid expense reimbursements, and accrued but unused paid time off within thirty (30) days. Mr. Bates will also be eligible to receive an acquisition,  from:  (i) the

annual cash bonus (the “Annual Bonus”) in an amount of up to forty percent (40%) of his Base Salary. The amount of the purchase  price  payable  in  cash  at  closing,  if  any;  (ii) professional  fees

associated  with  the  negotiation,  structuring,  and  closing  of  the  transaction;  and  (iii) post

closing  costs.  It  is  not  possible  to  quantify  those  costs  at  this  point  in  time,  in  that  they

depend on ArcMail’s business opportunities, the state of the overall economy, the relative

size  of  any  target  company  we  identify  and  the  complexity  of  the  related  acquisition

transaction(s).  We  anticipate  raising  capital  in  the  private  markets  to  cover  any  such

costs,  though  there  can  be  no  guaranty  weAnnual Bonus 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  inrecommended by the  viability  of  our  strategy  to  improve  ArcMail’s  sales

volume  and  to  acquire  companies,  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   provided   by   operating   activities   was   $44,907   for   the   year   ended

December  31,  2015,  compared  to  $159,202  for  the  year  ended  December  31,  2014.   Net

cash  used  by  continuing  operating  activities  was  $451,023  for  the  year  ended  December

31,  2015,  compared  to  $491,127  for  the  year  ended  December  31,  2014.  Our  primary

source  of  operating  cash  flows  from  continuing  operating  activities  for  the  year  ended

December 31, 2015 was from our ArcMail subsidiary’s revenues of $466,628 and  for the

year   ended   December   31,   2014   our   primary   source   of   operating   cash   flows   from

continuing   operating   activities   was   from   revenues   of   $1,068,617   from   our   Gotham

subsidiary  that  was  sold  in  November  2015.    Additional  contributing  factors  to  the

change  were  from  a  decrease  in  accounts  receivable  of  $56,697,  an  increase  in  prepaid

expenses  of  $199,207,  a  decrease  in  accounts  payable  and  accrued  expenses  of  $90,944,

an  increase  in accrued interest  of $47,559  and  a  decrease  in  deferred  revenue  of $64,586,

Net  cash  provided  by  discontinued  operating  activities  was  $495,930  for  the  year  ended

December 31, 2015 and   $650,329 for the  year ended December 31, 2014.  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.

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Cash  provided  by investing activities  was  $11,524  for  the  year  ended  December  31,

2015  and  cash  used  by  investing  activities  was  $4,739  for  the  year  ended  December  31,

2014.  For  the  year  ended  December  31,  2015  the  primary  source  of  cash  from  investing

activities  was  cash  from  the  subsidiary  acquisitions  and  a  decrease  in  deposits.   For  the

year  ended  December  31,  2014  the  primary  source  of  cash  used  by  investing  activities

was  from  purchases  of  property  and  equipment  of  $2,026  and  an  increase  in  deposits  of

$2,713.

Cash  used  by  financing  activities  was  $(51,277)  for  the  year  ended  December  31,

2015  compared  to  cash  used  by  financing  activities  of  $(54,500)  for  the  year  ended

December  31,  2014.  The  cash  flows  used  by  financing  activities  for  the  year  ended

December  31,  2015  was  primarily  from  repayment  of  stockholders  loans  and  a  note

payable.  The  cash  flows  used  by  financing  activities  for  the  year  ended  December  31,

2014 was primarily from repayment of the convertible note payable.

Supplemental Cash Flow Activity

In   the   year   ended   December   31,   2015   the  company  paid   interest   of   $3,146

compared to interest of $10,033 in the year ended December 31, 2014.

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: