UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

 þ

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

EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2014

OR

 o

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

SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-53862

IGAMBIT INC.

(Exact name of registrant as specified in its charter)

Delaware

11-3363609

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

1050 W. Jericho Turnpike, Suite A

Smithtown, New York 11787

(Address of  principal executive offices)

(631) 670-6777

(Registrant’s telephone number)

(Registrant’s former telephone number)

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

Title of Each Class: NONE

Name of Each Exchange on Which Registered:

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

Indicate  by  check  mark  if  the  registrant  is  a  well-known  seasoned  issuer,  as  defined  in  Rule  405  of  the

Securities Act. Yes o     No þ

Indicate  by  check  mark  if  the  registrant  is  not  required  to  file  reports  pursuant  to  Section 13  or  Section

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

Indicate  by check  mark  whether  the  registrant:  (1) has  filed  all reports required  to  be  filed  by Section 13  or

15(d)  of  the  Securities  Exchange  Act  of  1934  during  the  preceding  12 months  (or  for  such  shorter  period

that the registrant  was required to  file  such reports), and (2) has been subject  to  such filing requirements for

the past  90 days. Yes þ     No o

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

website,  if  any,  every  Interactive  Date  File  required  to  be  submitted  and  posted  pursuant  to  Rule  405  of

Regulation S-T (Section 232.405 of the chapter) during the preceding 12 months (or for such shorter period

that the registrant  was required to submit  and post such files). Yes þ     No o

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Indicate  by  check  mark  if  disclosure  of  delinquent  filers  pursuant  to  Item 405  of  Regulation S-K  is  not

contained  herein,  and  will  not  be  contained,  to  the  best  of  registrant’s  knowledge,  in  definitive  proxy  or

information  statements  incorporated  by  reference  in  Part  III  of  this  Form  10-K  or  any  amendment  to  this

Form 10-K.  o

Indicate  by  check  mark  whether  the  registrant  is  a  large  accelerated  filer,  an  accelerated  filer,  a  non-

accelerated   filer,   or   a   smaller   reporting   company.   See   the   definitions   of   “large   accelerated   filer,”

“accelerated filer” and “smaller reporting company”  in Rule 12b-2 of the Exchange  Act. (Check one):

Large accelerated

Accelerated

Non-accelerated filer o

Smaller

filer o

filer o

reporting

company þ

(Do not  check if a smaller reporting  company)

Indicate  by  check  mark  whether  the  registrant  is  a  shell  company  (as  defined  in  Rule 126-2  of  the  act):

Yes o     No þ

There  is not currently a  market  for the Registrant’s common stock.

As  of  April  15,  2015  there  were  26,583,990  shares  of  the  Registrant’s  $0.001  par  value  common  stock

outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None

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iGambit Inc.

FORM 10-K — FOR THE YEAR ENDED DECEMBER 31, 2014

TABLE OF CONTENTS

Page No.

PART I

Item 1

Business

1

Item 1A

Risk Factors

9

Item 1B

Unresolved Staff Comments

9

Item 2

Properties

9

Item 3

Legal Proceedings

9

Item 4

(Removed and Reserved)

10

PART II

Item 5

Market for Registrant’s Common Equity, Related Stockholder Matters

and Issuer Purchases of Equity Securities

11

Item 6

Selected Financial Data

12

Item 7

Management’s Discussion and Analysis of Financial Condition and

Results of Operations

13

Item 7A

Quantitative and Qualitative Disclosure About Market Risk

19

Item 8

Financial Statements and Supplementary Data

19

Item 9

Changes in and Disagreements with Accountants on Accounting and

Financial Disclosure

20

Item 9A

Controls and Procedures

20

Item 9B

Other Information

21

PART III

Item 10

Directors, Executive Officers and Corporate Governance

21

Item 11

Executive Compensation

26

Item 12

Security Ownership of Certain Beneficial Owners and Management

and Related Stockholder Matters

28

Item 13

Certain Relationships, Related Transactions and Director

Independence

29

Item 14

Principal Accountant Fees and Services

29

PART IV

Item 15

Exhibits and Financial Statement Schedules

30

EX-31.1

EX-31.2

EX-32.1

EX-32.2

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This  annual  report  on  Form  10-K  is  for  the  year  ended  December 31,  2014.  The

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

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

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

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

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

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

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

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PART I

This Annual Report on Form 10-K includes forward-looking statements within the

meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the

Securities  Exchange  Act  of  1934,  as  amended.  The  Company  has  based  these  forward-

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Company’s   audited   Consolidated   Financial   Statements   and   related   Notes   thereto

included elsewhere in this report.

ITEM 1.  BUSINESS

HISTORY

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

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

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

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

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

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

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

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

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

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

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

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

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

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

full time management roles with the Company.

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

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

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

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

(“Gotham”).

On 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.

Under   the   terms   of   the   Rescission   Agreement,   the   Company,   IGXNJ   and

Shareholder   (collectively  “IGX”),   agreed   to   unwind   the   Purchase   Agreement   in   its

entirety  and  to  fully  restore  each  to  the  positions  they  were  respectively  in  prior  to

entering  the  Purchase  Agreement,  in  every  respect  other  than  as  otherwise  expressly

contemplated by the Rescission Agreement; and key terms as follows:

(i)  IGX to payback or arrange acceptable payoff of the Keltic Financing;

(ii) Cancellation of any future consideration to IGX;

(iii)  IGX  to  pay  to  iGambit  $625,000  in  consideration  for  its  expenses  and

inconvenience; and

(v)   IGX   to   assume   and   pay  certain  expenses   related  to   the   contemplated

Purchase Agreement.

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

completed.

OUR COMPANY

Introduction

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

operating subsidiary,  Gotham Innovation Lab  Inc. (“Gotham”). Gotham is in the business

of  providing  media  technology  services  to  the  real  estate  industry.    Revenues  consist

entirely  of  revenues  from  the  operation  of  our  Gotham  subsidiary  ($1,068,617  during

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year  ended  December  31,  2014).   In  addition  to  Gotham’s  operations,  we  earned  other

income,  net  of  other  expenses,  of  $78,493  and  income  from  discontinued  operations  of

$17,531.

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.

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

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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  we  may  be  approached  on  an  unsolicited  basis.  Our

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

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

officers  and  directors  make  no  commitment  as  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.

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    Company  undergoing  a  turnaround  that  demonstrates  strong  prospects  for

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  ability  to

execute, or

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o    A  management  team  that  can  be  complemented    with  our  contacts  and

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)

§     IT   Solutions   Providers   specializing   in   security   and   network   technology

products, services, and support

§     Internet

o    Cloud Computing

o     Security focused applications

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

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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 that a meeting of the minds exists

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

advisors  give  their  opinion  of  the  industry,  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.

Evaluation of the Target’s Management

We  would  condition  any  acquisition  on  the  commitment  of  management  of  the

target  business  to  remain  in  place  post-closing.  Following  a  business  combination,  we

may seek to recruit additional managers to supplement the incumbent management of 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 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.

6

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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

Gotham Innovation Lab Inc.

Products and Services

Gotham’s  business  is  directed  at  providing  media  technology  services  to  the  real

estate  community.  The  range  of  media  services  includes  Real  Estate  Sales  location

Photography,

the   exclusive   Gotham   EXPO   Full   Screen   Experience;   Floorplan

Measurements,  and   Redraws   and  E-Brochures,   Virtual   Staging,   Headshots,   and   HD

Video.

In  2012,  Gotham  launched its  new  offering ScreenPLAY.  Gotham's  ScreenPLAY

is  a  low  cost  tool  that  gets  real  estate  agents  listings  on  YouTube,  Wellcomemat,  and

other  popular  video  platforms  with  enhanced  visibility  on  Google  quickly.   Gotham  has

also  seen  success  in  its  Headshot  events  for  real  estate  agents,  Headshot  events  offer

professional  headshots  photo  sessions  on  an  individual  or  company wide  basis.    Gotham

also  provides  website development  services,  sales  office technology and  data interchange

services for many of the real estate firms in New York City.

When  it  comes  to  selling  real  estate  every  broker  or  seller  listing  has  to  have

pictures.  Utilizing  the  latest  technology  Gotham’s  service  offerings  provide  a  full  listing

experience  for  real  estate  agents’  clients.  Gotham  service  offerings  allow  brokers  and

sellers to present their listings in the best possible  light while giving the viewer control of

the  show.  Gotham’s  services  integrate  images,  photos,  floor  plans,  video,  virtual  staging,

agent and key listing details in an engaging format that immerses the viewer.

All  systems  are  built  on  accessible  web  platforms  that  integrate  quickly  and

seamlessly into the agent’s workflow.

In  addition  to  natural  expansion  into  the  areas  surrounding  NYC,  Gotham  is

actively  working  to  expand  other  geographic  locations  on  the  East  Coast.  Gotham  has

already established a presence in Florida, covering the Miami to West Palm Beach area.

Competitive Comparison

Gotham  competes  with  others  in  the  industry  by  focusing  on  user  interaction,

technology  and  delivery.  Gotham  maintains  strict  standards  of  photography  and  a  roster

of  accomplished  photographers  who  we  engage  in  between  their  premium  assignments

such as fashion shoots, architectural projects, etc.

7

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In   addition   to   superior   media,   in   the   opinion   of   management,   Gotham’s

technology  tools  set  us  apart  from  our  competition.  For  example,  our  expo  product

offering  utilizes  the  pre-generation  of  a  multitude  of  media  sets  to  deliver  images  sized

perfectly  for  the  users  screen,  wasting  no  bandwidth  or  file  size,  thereby  enabling  us  to

maintain  the  speed  and  efficiency  of  the  product  at  an  optimal  level.  In  the  opinion  of

management, a majority of our competitors either don’t seem to employ similar measures

in their full screen product offerings or do so, on a more limited basis.

Future Products and Services

Future   offerings   will   include   enhanced  products   that   focus   on   social  media

interaction,  mobile  applications  and  tools  for  realtors,  as  well  as  multi  touch  augmented

reality  technologies  for  presentations,  etc.  Gotham  will  continue  to  expand  its  media

offerings, integrating with and adopting technologies as they become available.

Customers

Gotham   currently  has  approximately  400   client   accounts,   including  accounts

ranging  from  single  agent  accounts  to  large  “master  accounts”  with  large  firms  such  as

Douglas    Elliman    and    Halstead.    Taking    these    and    other    master    accounts    into

consideration,  Gotham  does  business  with  over  3,000  New  York  City  real  estate  agents.

The  following  five  customers  constituted  approximately  75%  of  the  Company’s  sales  in

2014:  Douglas  Elliman  Real Estate,  LLC  –  approximately 70%  of  sales;  Richard  Caplan

Photography  –  approximately  2%  of  sales;  EGR  International,  Inc.  –  approximately  1%

of  sales;  Brooklyn  Ridge  Realty  –  approximately  1%  of  sales;  and  Halstead  Property

Development   Marketing   LLC   –   approximately  1%   of   sales.      The   loss   of   Douglas

Elliman  Real  Estate  could  have  a  material  adverse  affect  on  the  Company’s  financial

condition.

Expansion Summary

Gotham’s  objective  is to  be a market  leader  in  offering EXPO,  Virtual Tours,  and

Video,  type  services  to  the  real estate  industry.  Gotham  is  currently providing services  to

a  number  of  realtors  and  brokers  in  the  New  York  Metropolitan  area  including,  but  not

limited  to,  Douglas  Elliman  (“DE”),  Corcoran,  Trump  among  others.   In  addition  to

natural  expansion  into  the  areas  surrounding  NYC  such  as  Long  Island,    Gotham  has

recently  expanded  into  Florida,  and  is  actively  working  to  expand  by  further  providing

services  to  large  accounts  that  exist  in  both  Manhattan  and  targeted  secondary  markets,

and  through  the  selective  hiring  of  one-off  service  providers  who  are  currently operating

in other markets

Employees

We presently have 9 total employees all of which are full-time.

8

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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.gothamphotocompany.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 $1,590.  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  Gotham  operations  are  located  in  New  York,  New  York,  where  we  license

office  suites  with  furniture  and  equipment  in  a  shared  global  office  building.  Monthly

license  payments  are  approximately  $4,025  and  the  fees  are  paid  on  a  month  to  month

basis.

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

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

state,  and local  statutes  and  ordinances  regulating their  operations.  Management  does  not

believe  that  compliance  with  such  statutes  and  ordinances  will  materially  affect  our

business, financial condition, or results of operations.

ITEM 3.  LEGAL PROCEEDINGS

Digi-Data Corporation

On  October  1,  2012,  we  filed  a  lawsuit  in  the  United  States  District  Court  for  the

District   of   Maryland,   Baltimore   Division,   asserting   claims   against   DigiData   Corp.

("Defendant")  for  monetary  damages  arising  from  the  Defendant's  breach  of  contract

regarding  that  certain  Asset  Purchase  Agreement  dated  February  26,  2006  among  the

parties,   and   to   enforce   payment   of   outstanding   contingency   payments   due   to   the

Company pursuant to said agreement.

9

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On December 13, 2013 the  Court Granted Summary Judgment in iGambit’s favor

against  Digi-Data  in  the  amount  of  $570,590,  plus  interest  at  the  Maryland  legal  rate  of

6% per annum from August 31, 2012, and post judgment interest at the Federal statutory

Rate.   Furthermore, Digi-Data’s Counterclaim was dismissed.

On  February  24,  2014  we  entered  into  a  Forbearance  Agreement  with  Digi-Data

pursuant  to  which  Digi-Data  shall  pay  to  iGambit  Six  Hundred  Forty-Six  Thousand,  Six

Hundred   Sixty-Eight   Dollars   and   Sixty-Seven   Cents   ($646,668.67)   (the   “Settlement

Amount”)  in  full  satisfaction  of the Judgment  based  upon   certain   terms,  which  included

the following:

Digi-Data  Sale:    In  the  event  of  a  Digi-Data  Sale,  iGambit  shall  be  paid  the

Remaining   Balance   at   closing   of   any   such   Digi-Data   Sale   as   provided   in

paragraph 2, below.   iGambit acknowledges that, if the Digi-Data Sale is a sale or

sales  of  the  Digi-Data  Assets,  there  may  be  insufficient  proceeds  to  pay  the

Remaining  Balance  in  full.   If  the  Digi-Data  Sale  is  a  sale  or  sales  of  the  stock  of

Digi-Data  and  there  are  insufficient  proceeds  at  closing  to  pay  the  Remaining

Balance   in   full,   iGambit   shall   continue   to   receive   the   Subsequent   Monthly

Payment until the full Remaining Balance is paid.

On  May  12,  2014,  Digi-Data paid  the  full  balance  due on  the  judgment  plus  all  accrued

interest upon the sale of Digi-Data.

Financial Advisor Contract

Brooks, Houghton & Company, Inc. (BHC)

We  entered  into  a  contract  with  BHC  in  which  BHC  would  provide  financial  advisory

services  in  connection  with  the  Company’s  proposed  business  combinations  and  related

fund raising transactions. As part of that agreement BHC would be entitled to a “Business

Combination  Fee”  equal  to  three  percent  of  the  amount  of  the  company’s  total  proceeds

and  other  consideration  paid  or  to  be  paid  for  the  assets  acquired,  inclusive  of  equity  or

any debt  issued;  however  the  fee  was  to  be  no  less  than $300,000.  As  a  result  of  the IGX

transaction,  BHC  initially  felt  entitled  to  $300,000.  We  have  taken  a  position  that  since

the  transaction  has  been  rescinded,  that  the  fee  is  has  not  been  earned  and  thus  not  to  be

paid.  While  the  ultimate  outcome  of  this  matter  is  not  presently  determinable,  it  is  the

opinion  of  management  that  the  resolution  of  any  outstanding  claim  will  not  have  a

material adverse effect on the financial position or results of operations of the Company.

ITEM 4.  (REMOVED AND RESERVED)

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PART II

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

STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY

SECURITIES

MARKET INFORMATION

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

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

Authority, under the ticker symbol “IGMB”.

HOLDERS

As   of   April   15,   2015,   there   are   26,583,990   shares   of   our   common   stock

outstanding,  held  of  record  by  181  persons.   We  have  275,000  common  stock  warrants

outstanding and 1,518,900 common stock options outstanding.

As  of  April  15,  2015,  approximately  all  26,583,990  shares  of  our  common  stock  are

eligible to be sold under Rule 144.

DIVIDENDS

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

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

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

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

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

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

any, for use in business operations.

EQUITY COMPENSATION PLAN INFORMATION

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

adopted  the  2006  Long-Term  Incentive  Plan  (the  "2006  Plan").    The  Plan  expired  on

December  31,  2009.   The  2006  Plan  provided  for  the  granting  of  options  to  purchase  up

to  10,000,000  shares  of  common  stock.  8,146,900  options  have  been  issued  under  the

plan  to  date  of  which  7,157,038  have  been  exercised  and  692,962  have  expired  to

date.  There  were  296,900  options  outstanding  under  the  2006  Plan  on  its  expiration  date

of  December  31,  2009.      All  options  issued  subsequent  to  this  date  were  not  issued

pursuant to any plan.

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

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

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

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

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

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

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

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

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

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

The  following  table  describes  our  equity  compensation  plans  as  of  December 31,

2014:

Number of Securities

Remaining Available

for Future Issuance

Number of

Securities

under Equity

to be Issued Upon     Weighted Average      Compensation Plans

Exercise of

Exercise Price of

(excluding securities

Outstanding

Options,

Outstanding Options,

referenced in

Warrants and

Rights

Warrants and Rights

column (a))

Plan Category

(a)

(b)

(c)

Equity

compensation

plans approved by

our stockholders

(1)

296,900  $

0.06

0

Equity

compensation

plans not approved

by our

stockholders

1,222,000  $

0.06

0

(1) Equity compensation plans approved by our stockholders consist of our 2006

Long Term Incentive Plan.

RECENT SALES OF UNREGISTERED SECURITIES

During  2014  we  did  not  sell  securities  in  transactions  not  registered  under  the

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

ITEM 6.   SELECTED FINANCIAL DATA

Not Required

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ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING ESTIMATES

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

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

accordance   with   accounting   principles   generally   accepted   in   the   United   States   of

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

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

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

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

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

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

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

described below.

Fair Value of Financial Instruments

For  certain  of    our  financial  instruments,  including  cash  and  cash  equivalents,

accounts  receivable,  accounts  payable,  and  amounts  due  to/from  related  parties,  the

carrying amounts approximate fair value due to their short maturities.   Additionally, there

are no assets or liabilities for which fair value is remeasured on a recurring basis.

Revenue Recognition

Our  revenues  from  continuing  operations  consist  of  revenues  derived  primarily

from   sales   of   products   and   services   rendered   to   real   estate   brokers.   We   recognize

revenues  when  the  services  or  products  have  been  provided  or  delivered,  the  fees  we

charge  are  fixed  or  determinable,  we  and  our  customers  understand  the  specific  nature

and terms of the agreed upon transactions, and collectability is reasonably assured.

Contingency  payment  income  was  recognized  quarterly  from  a  percentage  of

Digi-Data’s vaulting service revenue, and is included in discontinued operations.

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

We  analyze  the  collectability  of  accounts  receivable  from  continuing  operations

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

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

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

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

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

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

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

Allowance   for   doubtful   accounts   was   $17,865   at   December   31,   2014   and   2013,

respectively.   Bad  debt  expense  of $4,295 and  $0  was charged  to  operations  for  the  years

ended December 31, 2014 and 2013, respectively.

Property and equipment and depreciation

Property   and   equipment   are   stated   at   cost.     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.    Computer

equipment  is  depreciated  over  5  years  and  furniture  and  fixtures  are  depreciated  over  7

years.   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 expense of $4,766 and $6,694 was charged to operations for the years ended

December 31, 2014 and 2013, respectively.

Stock-Based Compensation

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

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

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

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

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

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

the  fair  value  of  our  stock  options  and  warrants.  The  Black-Scholes  option  valuation

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

price  volatility  of  the  Company’s  common  stock.  Changes  in  these  subjective  input

assumptions   can   materially  affect   the   fair   value   estimate   of   our   stock   options   and

warrants.

Income Taxes

We  account  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.

We  apply  the  provisions  of   ASC  Topic  No.  740  for  the  financial  statement

recognition,  measurement  and  disclosure  of  uncertain  tax  positions  recognized  in  the

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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.

Convertible Note

On  September  16,  2013,  the  Company  issued  an  8%  convertible  note  in  the  aggregate

principal  amount  of  $103,500,  convertible  into  shares  of  the  Company’s  common  stock.

The Note, including accrued interest was due June 18, 2014 and was convertible any time

after  180  days  at  the  option  of  the  holder into  shares  of  the  Company’s  common  stock  at

55%  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.

Interest  expense  on  the  convertible  note  of  $3,242  was  recorded  for  the  year  ended

December 31, 2014.

Initially  the  Company  had  anticipated  repaying  the  obligation  prior  to  the  effective  date

of  the  holder  electing  to  convert.   Since  the  effective  date  of  the  election  to  convert  has

passed  the  Company recorded  a  debt  discount  related  to  identified  embedded  derivatives

relating  to  conversion  features  and  a  reset  provisions  (see  Note  7)  based  fair  values  as  of

the  inception  date  of  the  Note.   The  calculated  debt  discount  equaled  the  face  of  the  note

and was amortized over the term of the note.   During the  year ended December 31, 2014,

the noteholder converted $49,000 of the principal balance to 1,539,934 shares of common

stock,  and  the  Company  repaid  the  remaining  note  balance  of  $54,500  and  accrued

interest of $5,646 on June 18, 2014.

Derivative Liability

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

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

$152,076  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  December  31,  2013,  in  the  amount  of

$152,076,   was   determined   using   the   Binomial   Option   Pricing   Model   based   on   the

following  assumptions: (1)  dividend  yield  of  0%;  (2)  expected  volatility of  243.00%,  (3)

weighted average risk-free interest rate of 0.09%, (4) expected lives of 0.72 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  $48,576  during  the  year  ended  December  31,  2013.  A  gain  on

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derivative  liability  of  $152,076  was  recorded  during  the  year  ended  December  31,  2014

for the satisfaction of the convertible note.

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.

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

which  the  Company  is  authorized  to  issue  from  seventy  five  million  (75,000,000)  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 of the stockholders. No dividend, voting, conversion, liquidation or redemptions

rights as well as redemption or sinking fund provisions are  yet established with respect to

the Company’s preferred stock.   On October 3, 2014, the Majority Stockholders executed

and   delivered   to   the   Company   a   written   consent   approving   the   Capitalization

Amendments.

Common Stock Issued

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

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Introduction

iGambit  is  a  company  focused  on  the  technology  markets.  Our  sole  operating

subsidiary,   Gotham   Innovation   Lab,   Inc.,   is   in   the   business   of   providing   media

technology   services   to   the   real   estate   industry.   We   are   focused   on   expanding   the

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

Year Ended December 31, 2014 as Compared to Year Ended December 31, 2013

Assets.  At  December 31,  2014,  we  had  $260,217  in  current  assets  and  $280,786

in  total  assets,  compared  to  $1,050,746  in current  assets  and  $1,071,342  in  total assets as

of  December 31,  2013.   The  decrease  in  total  assets  was  primarily  due  to  a  decrease  in

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accounts  receivable  and  a  decrease  in  assets  from  discontinued  operations  as  a  result  of

iGambit collecting all of its receivables in 2014.

Liabilities.  At  December 31,  2014,  we  had  total  liabilities  of  $285,277  compared

to  $515,155  at  December 31,  2013.  Our  total  liabilities  at  December 31,  2014  consisted

of  accounts  payable  of  $285,277,  whereas  our  total  liabilities  at  December  31,  2013

consisted  of  accounts  payable  of  $316,566,  a  convertible  note  payable  of  $40,250,  a

derivative liability for certain provisions of the convertible note of $152,076 and a note to

a related party of $6,263, The decrease in liabilities was primarily due to a repayment of a

convertible note payable and repayment of a note payable to unrelated parties. We  do not

have any long term liabilities.

Stockholders’ Equity  (Deficiency). Our Stockholders’ Deficiency was $(4,491) at

December  31,  2014  compared  to  Stockholders’  Equity  of  $556,187  at  December 31,

2013.  This  decrease  was  due  to  an  increase  in  accumulated  deficit  from  $(2,197,857)  at

December  31,  2013  to  $(2,882,199)  at  December  31,  2014  resulting  from  net  loss  of

$(684,342)  for  the  year  ended  December  31,  2014  compared  to  net  income  of  $250,489

for the year ended December 31, 2013

Revenue  and  Net  Income.  We  had  revenue  of  $1,068,617  for  the  year  ended

December 31, 2014, compared to revenue of $1,461,183 for the year ended December 31,

2013.   The  decrease  in  revenue  was  due  primarily  to  a  decrease  in  revenue  generated  by

our  Gotham  subsidiary  as  result  of  closing  down  the  Team5  division.  We  also  earned

other  income of  $78,493  for the  year  ended  December  31,  2014 primarily due  to  the gain

on  derivative  liability,  compared  to  $660,245  in  other  income  from  the  IGX  Rescission

Agreement  for  the  year  ended  December  31,  2013.   In  addition  to  Gotham’s  operations,

we had income from discontinued operations of $17,531 and $317,625 for the  year ended

December  31,  2014  and  December  31,  2013,  respectively.   The  decrease  in  our  cost  of

sales  for  the  year  ended  December  31,  2014  was  due  to  a  decrease  in  the  cost  of  the

outsourced photography vendors utilized by Gotham.

General  and  Administrative  Expenses.  General  and  Administrative  Expenses

decreased  to  $1,383,646  for  the  year  ended  December 31,  2014  from  $1,692,556  for  the

year  ended  December 31,  2013.  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.  For  the  year  ended  December 31,  2013  our  General  and

Administrative  Expenses  consisted  of  corporate  administrative  expenses  of  $269,596,

legal  and  accounting  fees  of  $153,113,  payroll  expenses  of  $1,082,212,  Directors  and

Officers  Insurance  of  $40,381,  employee  benefits expenses  of  $117,079  (medical,  dental,

retirement   plan,   and   life   insurance),   and   business   advisory   fees,   commissions   and

expenses   primarily  associated   with   the  IGX   purchase   and   rescission   transaction,   of

$30,175.  Therefore  the  decreases  from  the  year  ended  December 31,  2013  to  the  year

ended December 31, 2014 relate primarily to a decrease in payroll and employee benefits

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expenses.  In  the  event  the  company  effectuates  an  acquisition  in  2015  we  anticipate

additional professional fees associated with the acquisition.

LIQUIDITY AND CAPITAL RESOURCES

General

As  reflected  in  the  accompanying  consolidated  financial  statements,  at  December

31,  2014,  we  had  $133,436  of  cash  and  stockholders’  deficit  of  $(4,491).   At  December

31, 2013, we had $26,870 of cash and stockholders’ equity of $556,187.

Our primary capital requirements in 2015 are likely to arise from the expansion of

our  Gotham  operations,  and,  in  the  event  we  effectuate  an  acquisition,  from:  (i) 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 Gotham’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  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  Gotham’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   $165,805   for   the   year   ended

December  31,  2014,  compared  to  net  cash  used  by  operating  activities  of  $183,151  for

the  year ended December 31, 2013.   Net cash used by continuing operating activities was

$489,941  for  the  year  ended  December  31,  2014,  compared  to  net  cash  provided  by

continuing  operating  activities  of  $134,474  for  the  year  ended  December  31,  2013.  Our

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

ended December 31, 2014 was from our Gotham subsidiary’s revenues of $1,068,617 and

$1,461,183 for the year ended December 31, 2013.   Additional contributing factors to the

change  were  from  a  decrease  in  accounts  receivable  of  $53,621,  an  increase  in  prepaid

expenses  of  $34,520,  a  decrease  in  accounts  payable  of  $37,552  and  a  decrease  in  the

receivable  due  from  the  IGX  rescission  agreement  of  $239,779.   Net  cash  provided  by

discontinued  operating  activities  was  $655,746  for  the  year  ended  December  31,  2014

and  cash  used  in  discontinued  operating  activities  was  $317,625  for  the  year  ended

December   31,   2013.   Cash   provided   by   discontinued   operations   for   the   year   ended

December  31,  2014  consisted  of  $655,746  in  cash  payments  received  from  DDC  against

accounts receivable included in the Assets from Discontinued Operations.

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Cash  used  by investing activities  was  $4,739  for  the  year  ended  December  31,  2014

and  cash  provided  by  investing  activities  was  $1,800  for  the  year  ended  December  31,

2013.  For  the  year  ended  December  31,  2014  the  primary  use  of  cash  from  investing

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

deposits  of  $2,713.  For  the  year  ended  December  31,  2013  the  primary  source  of  cash

provided by investing activities was from a decrease in deposits.

Cash  used  by  financing  activities  was  $(54,500)  for  the  year  ended  December  31,

2014  compared  to  cash  provided  by  financing  activities  of  $103,500  for  the  year  ended

December  31,  2013.  The  cash  flows  used  by  financing  activities  for  the  year  ended

December  31,  2014  was  primarily  from  repayment  of  the  convertible  note  payable.   The

cash  flows  provided  by  financing  activities  for  the  year  ended  December  31,  2013  was

from the issuance of a Convertible note payable to at an unrelated party.

Supplemental Cash Flow Activity

In  the  year  ended  December  31,  2014  the  company  paid  interest  of  $10,033

compared to interest of $3,524 in the year ended December 31, 2013.

OFF BALANCE SHEET ARRANGEMENTS

We have no off balance-sheet arrangements.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT

MARKET RISK

Not Required.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

on page F-1, as follows:

Report of Independent Registered Public Accounting Firm

F-1

Consolidated Balance Sheet as of December 31, 2014 and 2013

F-3

Consolidated Statement of Income for the years ended December 31, 2014 and

F-4

2013

Consolidated Statement of Changes in Stockholder’s Equity for the years ended      F-5

December 31, 2014 and 2013

Consolidated Statement of Cash Flows for the years ended December 31, 2014

F-6

and 2013

Notes to Financial Statements

F-7

19

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ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.  CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We  carried  out  an  evaluation,  as  required  by  paragraph  (b) of  Rule 13a-15  and

15d-15  of  the  Exchange  Act  under  the  supervision  and  with  the  participation  of  our

management,  including  our  Chief  Executive  Officer  and  Chief  Financial  Officer,  of  the

effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and

15d-15(e) under the Exchange  Act as of  December 31, 2014. Based upon that evaluation,

our  Chief  Executive  Officer  and  Chief  Financial  Officer  concluded  that  our  disclosure

controls and procedures were effective as of December 31, 2014.

Management’s Annual Report on Internal Control over Financial Reporting.

We  are  responsible  for  establishing  and  maintaining  adequate  internal  control

over  financial  reporting.  Internal  control  over  financial  reporting  is  defined  in  Rule 13a-

15(f)  and  Rule  15d-15(f)  promulgated  under  the  Exchange  Act  as  a  process  designed  by,

or  under  the  supervision  of,  our  Chief  Executive  Officer  (our  principal  executive  officer)

and  Chief  Financial  Officer  (our  principal  accounting  and  financial  officer),  and  effected

by  our   board   of   directors,   management  and   other   personnel,   to   provide   reasonable

assurance  regarding  the  reliability  of  financial  reporting  and  the  preparation  of  financial

statements   for   external   purposes   in   accordance   with   generally   accepted   accounting

principles.   Our   internal   control   over   financial   reporting   includes   those   policies   and

procedures that:

•

Pertain  to  the  maintenance  of  records  that,  in  reasonable  detail,  accurately

and fairly reflect the transactions and dispositions of our assets;

•

Provide  reasonable  assurance  that  transactions  are  recorded  as  necessary

to  permit  preparation  of  financial  statements  in  accordance  with  generally

accepted  accounting  principles,  and  that  our  receipts  and  expenditures  are

being  made  only  in  accordance  with  authorizations  of  our  management

and our directors; and

•

Provide  reasonable  assurance  regarding  prevention  or  timely  detection  of

unauthorized acquisition,  use or  disposition  of  our assets  that could  have  a

material effect on the financial statements.

Our  internal  control  system  was  designed  to  provide  reasonable  assurance  to  our

management  and  board  of  directors  regarding  the  preparation  and  fair  presentation  of

published  financial  statements.  Because  of  its  inherent  limitations,  internal  control  over

financial  reporting  may  not  prevent  or  detect  misstatements.  Also,  projections  of  any

evaluation  of  effectiveness  to  future  periods  are  subject  to  the  risk  that  controls  may

become  inadequate  because  of  changes  in  conditions,  or  that  the  degree  of  compliance

with the policies or procedures may deteriorate.

20

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Our  management  assessed  the  effectiveness  of  the  Company’s  internal  control

over   financial   reporting   as   of   December 31,   2014.   In   making   this   assessment,

management  used  the  criteria  set  forth  in  the  Internal  Control  —  Integrated  Framework

issued  by  the  Committee  of  Sponsoring  Organizations  of  the  Treadway  Commission

(COSO).  Based  on  management’s  assessment,  we  concluded  that,  as  of  December 31,

2014, our internal control over financial reporting was effective.

Change in Internal Controls

During the quarter ended December 31, 2014, there were no changes in our

internal control over financial reporting that materially affected, or are reasonably likely

to materially affect, our internal control over financial reporting.

ITEM 9B.  OTHER INFORMATION

None.

PART III

ITEM 10.   DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE

GOVERNANCE

DIRECTORS AND EXECUTIVE OFFICERS

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

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

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

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

executive officers are set forth below.

Name

Age

Position

Appointed

John Salerno

76     Chief Executive Officer, President,    March 2009

Chairman of the Board, and

(appointed Chairman

Director

and Director in

April 2000)

Elisa Luqman

50     Chief Financial Officer, Executive     March 2009

Vice President, General Counsel,

(appointed Director

and Director

in August 2009)

James J. Charles

72     Director

March 2006

George G. Dempster

75     Director

January 2001

John Keefe

72     Director

July 2013

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

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

experience    with    public    and    private    computer    software    and    service    companies.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

are a benefit to Gotham.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

daughter.

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

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

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

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

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

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

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

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

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

outside auditors and legal advisors.

James  J.  Charles,  Director.  Mr. Charles  is  a  high  profile  financial  executive

with  a  broad  base  of  experience  with  firms  ranging  in  size  from  $24MM  to  $180MM  in

annual revenue. He worked closely with management and Boards of  Directors on matters

ranging  from  mergers  and  acquisitions  to  stock  restructurings  and  spin-offs.  Mr. Charles

has  been  a  self  employed  Certified  Public  Accountant  from  1999  to  present.  From  1994

to   1999   Mr. Charles   was   the   chief   financial   officer   of   Interpharm   Holdings,   Inc.

Interpharm   Holdings,   Inc.,   through   its   subsidiary,   Interpharm,   Inc.,   engaged   in   the

development,  manufacture,  and  marketing  of  generic  prescription  strength  and  over-the-

counter  pharmaceuticals  in  the  United  States.  It  also  focused  on  the  development  of

products  in  the  areas  of  female  hormone,  scheduled  narcotic,  soft  gelatin  capsule,  oral

liquid,  products  coming  off  patent,  and  other  products.  From  1966  to  1994  Mr. Charles

was  a  Senior  Managing  Partner  with  Ernst  &  Young.  Mr. Charles’  education  includes

studies   and   management   programs   at   Harvard   University   and   Williams   College.

Mr. Charles received his BBA in Accounting at Manhattan College.

Mr.  Charles  was  nominated  as  a  Director  because  of  his  financial  expertise.  He

has  been  involved  in  the  practice  of  public  accounting  for  over  forty  years.   During  his

tenure  as  a  Senior  Managing  Partner  at  Ernst  &  Young  he  spent  considerable  years

analyzing  potential  acquisition  targets  for  corporate  clients  and  has  particular  experience

and  skills  on  matter  such  as  mergers  and  acquisitions,  stock  restructuring  and  spin-offs.

He has also been a Chief Financial Officer of a public company.

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

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

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

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

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

a   diversified   holding   company   with   interests   ranging   from   helicopter   services   to

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

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

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

University.

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

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

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

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

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

Hofstra   University   Mr.   Dempster   was   intimately   involved   in   several   financing

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

23

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

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

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

John  Keefe,  Director.  Mr.  Keefe  is  an  investment  banker,  venture  capitalist,  founder

of  three  businesses,  and  a  turnaround  consultant  to  businesses  in  trouble.   Since  2011  to

Present,  Mr.  Keefe  is  the  Founder  and  Chief  Development  Officer  of  Security  Capital

Advisors  LLC,  located  in  Jersey  City,  NJ.    Security  Capital  Advisors  LLC  is  a  firm

providing  indirect  financing  to  local  governments  in  the  US.     From  2007  to  2011  Mr.

Keefe  was  Managing  Director  of  Nachman  Hays  Brownstein,  located  in  New  York,  NY.

Nachman   Hays   Brownstein   is   a   national   turnaround   management   firm,   assisting

underperforming   and   troubled   companies,   maximizing   value   for   owners,   investors,

creditors  and  employees.  Mr.  Keefe  was  also  a  founding  General  Partner  of  a  venture

capital   firm,   a   founder   and   CFO   of   a   computer   software   company,   a   Senior   Vice

President  of  an  investment  banking  firm,  and  emergency  CFO  and  Chief  Restructuring

Officer of several distressed businesses. He is a graduate of Harvard College and Harvard

Business School.

Mr.   Keefe’   was   nominated   as   a   Director   because   of   his   financial   expertise

combined  with  his  strong  technical  background.  He  started  his  career  as  a  computer

software  engineer  and  designer  for  IBM,  General  Electric,  and  Litton  Industries.  He

evolved  into  the  financial  arena  serving  many  years  a  corporate  Chief  Financial  Officer.

He   is  now  involved  in  the  practice  of  venture  capital  and  investment  banking   He  has

particular   skills   acting   as   a   turnaround   consultant   to   businesses   in   trouble   being   a

‘Certified  Turnaround  Professional’  by  the  Turnaround  Management  Association.  He

offers  years  of  experience  analyzing  business,  their  revenue  models,  and  identifying

appropriate financing vehicles.

COMMITTEES OF THE BOARD

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

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

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

Audit Committee

The    Audit    Committee    presently   consists    of    Messrs. Charles,    Keefe    and

Dempster,   with   Mr.   Charles   serving   as   chairman.   Our   Board   has   determined   that

Mr. Charles  qualifies  as  an  “audit  committee  financial  expert”  as  defined  under  the

federal securities laws. The Audit Committee is responsible for monitoring and reviewing

our  financial  statements  and  internal  controls  over  financial  reporting.  In  addition,  they

recommend  the  selection  of  the  independent  auditors  and  consult  with  management  and

our  independent  auditors  prior  to  the  presentation  of  financial  statements  to  stockholders

and  the  filing  of  our  forms  10-Q  and  10-K.  The  Audit  Committee  has  adopted  a  charter

and it is posted on our web site at www.igambit.com.

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Compensation Committee

The  Compensation  Committee  presently  consists  of  Messrs.  Charles,  Keefe  and

Dempster,   with   Mr. Keefe   serving   as   chairman.   The   Compensation   Committee   is

responsible  for  reviewing and  recommending to  the  Board  the  compensation  and  over-all

benefits  of  our  executive  officers,  including  administering  the  Company’s  2006  Long

Term  Incentive  Plan.  The  Compensation  Committee  may,  but  is  not  required  to,  consult

with  outside  compensation  consultants.  The  Compensation  Committee  has  adopted  a

charter and the charter is posted on our web site at www.igambit.com.

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

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

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

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

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

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

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

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

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

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

most recent fiscal year or prior fiscal years, except as described below:

Name

No. of Late Reports

No. of transactions

Failure to file a

that were not

required Form

reported on a timely

basis

John Salerno

2

2

0

Elisa Luqman

2

1

0

CODE OF ETHICS

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

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

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

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

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

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

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