Nutex Health (NUTX) 10-Q 22 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	6 Months Ended
	Jun. 30, 2016	Aug. 22, 2016	Jun. 30, 2015
Document and Entity Information:
Entity Registrant Name	iGambit, Inc.
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Trading Symbol	igmb
Amendment Flag	false
Entity Central Index Key	1,479,681
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		39,683,990
Entity Public Float			$ 0
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2

IGAMBIT INC CONSOLIDATED BALANC

IGAMBIT INC CONSOLIDATED BALANCE SHEETS JUNE 30, 2016 AND DECEMBER 31 2015 - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Assets, Current
Cash and Cash Equivalents, at Carrying Value	$ 33,370	$ 131,987
Accounts Receivable, Net, Current	441,427	230,182
Inventory, Net	1,160	21,160
Due from Related Parties, Current	800
Prepaid Expense, Current	145,924	244,592
Assets from discontinued operations	120,434	262,765
Assets, Current	743,115	890,686
Assets, Noncurrent
Property, Plant and Equipment, Gross	29,080	40,433
Goodwill	6,705,157	6,705,157
Deposits Assets, Noncurrent	1,720	1,720
Assets, Noncurrent	6,735,957	6,747,310
Assets	7,479,072	7,637,996
Liabilities, Current
Accounts Payable, Current	665,834	636,633
Notes Payable, Accured Interest Current	400,272	291,107
Notes Payable, Accrued interest related party	29,958	11,171
Other Long-term Debt, Current	91,173	74,871
Deferred Revenue and Credits, Current	734,634	811,227
Notes Payable, Current	825,374	779,750
Notes Payable, related party	156,566	156,566
Notes, Net,	67,206
Other Liabilities, Noncurrent	18,888	127,353
Liabilities, Current	2,989,905	2,888,678
Liabilities, Noncurrent
Deferred Revenue and Credits, Noncurrent	453,823	379,052
Notes Payable, Noncurrent	2,339,251	2,339,251
Due to Related Parties, Noncurrent	469,699	469,699
Liabilities, Noncurrent	3,262,773	3,188,002
Liabilities	6,252,678	6,076,680
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest
Common Stock, Value, Outstanding	39,684	39,684
Additional Paid in Capital, Common Stock	4,320,022	4,320,022
Retained Earnings (Accumulated Deficit)	(3,133,312)	(2,798,390)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	1,226,394	1,561,316
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures
Liabilities and Equity	$ 7,479,072	$ 7,637,996

IGAMBIT INC STATEMENT OF INCOME

IGAMBIT INC STATEMENT OF INCOME THREE AND SIX MONTHS JANUARY 1ST TO JUNE 30TH 2016 AND 2015 - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues
Sales Revenue, Goods, Net	$ 169,488		$ 242,294
Sales Revenue, Services, Net	420,463		751,407
Sales Revenue, Net	589,951		993,701
Cost of Sales	25,263		28,454
Cost of Revenue
Gross Profit	564,688		965,247
Amortization of Deferred Charges
General and Administrative Expense	581,122	$ 86,796	1,139,775	$ 227,007
Operating Income (Loss)	(16,434)	(86,796)	(174,528)	(227,007)
Investment Income, Nonoperating
Interest Expense	(79,378)	(1,447)	(163,712)	(1,501)
Other Operating Income	(79,378)	(1,447)	(163,712)	(1,501)
Interest and Debt Expense
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest	(95,812)	(88,243)	(338,240)	(228,508)
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest	(240)	36,597	3,318	31,965
Net Income (Loss) Attributable to Parent	$ (96,052)	$ (51,646)	$ (334,922)	$ (196,543)
Earnings Per Share
Continuing operations	$ 0	$ 0	$ (0.01)	$ (0.01)
Discontinued operations, net of tax	0	0	0	0
Earnings Per Share, Basic and Diluted	$ 0	$ 0	$ (0.01)	$ (0.01)
Weighted Average Number of Shares Outstanding, Basic	39,683,990	26,874,100	39,683,990	26,729,846

IGAMBIT INC CONSOLIDATED STATEM

IGAMBIT INC CONSOLIDATED STATEMENTS OF CASH FLOWS JANUARY 1ST TO JUNE 30TH 2016 AND 2015 - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Net Cash Provided by (Used in) Operating Activities
Net loss	$ (334,922)	$ (196,543)
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities
Depreciation	12,623	331
Income from discontinued operations	(3,318)	(31,965)
Stock-based compensation expense		131,998
Employee Benefits and Share-based Compensation	(800)
Increase (Decrease) in Operating Assets
Increase (Decrease) in Receivables	(211,245)
Increase (Decrease) in Inventories	20,000
Increase (Decrease) in Prepaid Expense and Other Assets	98,688	(63,889)
Increase (Decrease) in Operating Liabilities
Increase (Decrease) in Accounts Payable	29,201	14,065
Increase (Decrease) in Deferred Liabilities	127,952
Increase (Decrease) in Deferred Revenue	(1,822)
Net cash used by continuing operating activities	(263,663)	(146,003)
Net cash used by discontinued operating activities	42,683	26,133
Net Cash Provided by (Used in) Operating Activities	(220,980)	(119,870)
Net Cash Provided by (Used in) Investing Activities
Payments to Acquire Property, Plant, and Equipment	(1,269)
Net cash provided (used) by continuing investing activities	(1,269)
Net cash provided (used) by discontinued investing activities		(5,026)
Net Cash Provided by (Used in) Investing Activities	(1,269)	(5,026)
Net Cash Provided by (Used in) Financing Activities
Proceeds from (Repayments of) Related Party Debt	16,302	9,000
Proceeds from (Repayments of) Notes Payable	112,830
Proceeds from (Repayments of) Other Debt	16,302
Net Cash Provided by (Used in) Financing Activities	123,632	32,436
Cash and Cash Equivalents, Period Increase (Decrease)	(98,617)	(92,460)
Cash Beginning of Period	131,987	133,436
Cash End of period	33,370	40,976
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for Interest	$ 13,427	$ 4,844

Note 1 - Organization and Basis

Note 1 - Organization and Basis of Presentation	6 Months Ended
	Jun. 30, 2016
Notes
Note 1 - Organization and Basis of Presentation	Note 1 - Organization and Basis of Presentation The consolidated financial statements presented are those of iGambit Inc., (the “Company”) and its wholly-owned subsidiaries, Wala, Inc. doing business as Arcmail Technology (“ArcMail”) and Gotham Innovation Lab Inc. (“Gotham”). The Company was incorporated under the laws of the State of Delaware on April 13, 2000. The Company was originally incorporated as Compusations Inc. under the laws of the State of New York on October 2, 1996. The Company changed its name to BigVault.com Inc. upon changing its state of domicile on April 13, 2000. The Company changed its name again to bigVault Storage Technologies Inc. on December 21, 2000 before changing to iGambit Inc. on April 5, 2006. Gotham was incorporated under the laws of the state of New York on September 23, 2009. The Company is a holding company which seeks out acquisitions of operating companies in technology markets. ArcMail provides email archive solutions to domestic and international businesses through hardware and software sales, support, and maintenance. Gotham is in the business of providing media technology services to real estate agents and brokers in the New York metropolitan area. Interim Financial Statements The following (a) condensed consolidated balance sheet as of December 31, 2015, which has been derived from audited financial statements, and (b) the unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2016 are not necessarily indicative of results that may be expected for the year ending December 31, 2016. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on April 14, 2016. Business Acquisition On November 4, 2015, the Company acquired Wala, Inc. doing business as ArcMail Technology in accordance with a stock purchase agreement. Pursuant to the stock purchase agreement, the total consideration paid for the outstanding capital stock of Wala was 11,500,000 shares of iGambit common stock, valued at $.10 per share. The following table presents the allocation of the value of the common shares issued for ArcMail to the acquired identifiable assets, liabilities assumed and goodwill: Common shares issued, valued at $.10 per share $ 1,150,000 Cash $ 10,198 Accounts receivable, net 205,208 Inventories 21,160 Prepaid expenses 276 Fixed assets 41,235 Total identifiable assets 278,077 Accounts payable and accrued expenses (442,300) Accrued interest (254,718) Deferred revenue (1,254,865) Note payable (3,881,351) Total liabilities assumed (5,833,234) Excess of liabilities assumed over identifiable assets 5,555,157 Total goodwill $ 6,705,157 The results of operations of ArcMail have been included in the consolidated statements of operations for the six months ended June 30, 2016. The following table presents pro forma results of operations of the Company and ArcMail as if the companies had been combined as of January 1, 2014. The pro forma condensed combined financial information is presented for informational purposes only. The unaudited pro forma results of operations are not necessarily indicative of results that would have occurred had the acquisition taken place at the beginning of the earliest period presented, or of future results. December 31, December 31, 2015 2014 Pro forma revenue $ 1,876,313 $ 3,423,954 Pro forma gross profit $ 1,791,518 $ 2,579,661 Pro forma loss from operations $ (703,699) $ (1,381,581) Pro forma net loss $ (496,347) $ (1,828,332)

Note 3 - Summary of Significant

Note 3 - Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2016
Notes
Note 3 - Summary of Significant Accounting Policies	Note 3 – Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Wala, Inc. and Gotham Innovation Lab, Inc. All intercompany accounts and transactions have been eliminated. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash, accounts receivable, prepaid expenses, accounts payable, accrued interest, deferred revenue, and amounts due to 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 The Company recognizes revenue from product sales when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, an equipment order has been placed with the vendor, the selling price is fixed or determinable, and collectability is reasonably assured. Revenues from maintenance contracts covering multiple future periods are recognized during the current periods and deferred revenue is recorded for future periods and classified as current or noncurrent, depending on the terms of the contracts. Gotham’s revenues were derived primarily from the sale of products and services rendered to real estate brokers. Gotham recognized revenues when the services or products have been provided or delivered, the fees charged are fixed or determinable, Gotham and its customers understood the specific nature and terms of the agreed upon transactions, and collectability was reasonably assured. Advertising Costs The Company expenses advertising costs as incurred. Advertising costs for the six months ended June 30, 2016 and 2015 were $130,249 and $2,037, respectively. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include checking and money market accounts and any highly liquid debt instruments purchased with a maturity of three months or less. «2XJW5A13» Accounts Receivable The Company analyzes the collectability of accounts receivable from continuing operations each accounting period and adjusts its allowance for doubtful accounts accordingly. A considerable amount of judgment is required in assessing the realization of accounts receivables, including the creditworthiness of each customer, current and historical collection history and the related aging of past due balances. The Company evaluates specific accounts when it becomes aware of information indicating that a customer may not be able to meet its financial obligations due to deterioration of its financial condition, lower credit ratings, bankruptcy or other factors affecting the ability to render payment. Allowance for doubtful accounts was $8,345 at June 30, 2016 and December 31, 2015, respectively. There was no bad debt expense charged to operations for the six months ended June 30, 2016 and 2015, respectively. Inventories Inventories consisting of finished products are stated at the lower of cost or market. Cost is determined on an average cost basis. Property and equipment and depreciation Property and equipment are stated at cost. Maintenance and repairs are charged to expense when incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss is credited or charged to income. Depreciation for both financial reporting and income tax purposes is computed using combinations of the straight line and accelerated methods over the estimated lives of the respective assets as follows: Office equipment and fixtures 5 - 7 years Computer hardware 5 years Computer software 3 years Development equipment 5 years Goodwill Goodwill represents the excess of liabilities assumed over assets acquired of ArcMail and the fair market value of the common shares issued by the Company for the acquisition of ArcMail. In accordance with ASC Topic No. 350 “Intangibles – Goodwill and Other”), the goodwill is not being amortized, but instead will be subject to an annual assessment of impairment by applying a fair-value based test, and will be reviewed more frequently if current events and circumstances indicate a possible impairment. An impairment loss is charged to expense in the period identified. If indicators of impairment are present and future cash flows are not expected to be sufficient to recover the asset’s carrying amount, an impairment loss is charged to expense in the period identified. A lack of projected future operating results from ArcMail’s operations may cause impairment. As the acquisition of ArcMail occurred on November 4, 2015, it is too early for management to evaluate whether goodwill has been impaired. No impairment was recorded during the six months ended June 30, 2016. Long-Lived Assets The Company assesses the valuation of components of its property and equipment and other long-lived assets whenever events or circumstances dictate that the carrying value might not be recoverable. The Company bases its evaluation on indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present. If such factors indicate that the carrying amount of an asset or asset group may not be recoverable, the Company determines whether an impairment has occurred by analyzing an estimate of undiscounted future cash flows at the lowest level for which identifiable cash flows exist. If the estimate of undiscounted cash flows during the estimated useful life of the asset is less than the carrying value of the asset, the Company recognizes a loss for the difference between the carrying value of the asset and its estimated fair value, generally measured by the present value of the estimated cash flows. Deferred Revenue Deposits from customers are not recognized as revenues, but as liabilities, until the following conditions are met: revenues are realized when cash or claims to cash (receivable) are received in exchange for goods or services or when assets received in such exchange are readily convertible to cash or claim to cash or when such goods/services are transferred. When such income item is earned, the related revenue item is recognized, and the deferred revenue is reduced. To the extent revenues are generated from the Company’s support and maintenance services, the Company recognizes such revenues when services are completed and billed. The Company has received deposits from its various customers that have been recorded as deferred revenue in the amount of $1,188,457 and $1,190,279 as of June 30, 2016 and December 31, 2015, respectively. Stock-Based Compensation The Company accounts for its stock-based awards granted under its employee compensation plan in accordance with ASC Topic No. 718-20, Awards Classified as Equity, Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC Topic No. 740, Income Taxes The Company applies the provisions of ASC Topic No. 740 for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the Company’s financial statements . Recent Accounting Pronouncements FASB ASC 606 ASU 2014-09 - Revenue from contracts with customers: In May 2014, the FASB issued amended guidance on contracts with customers to transfer goods or services or contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). The guidance requires an entity to recognize revenue on contracts with customers to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires that an entity depict the consideration by applying the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. This amendment is to be either retrospectively adopted to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. Adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. FASB ASC 718 ASU 2014-12 – Compensation – Stock Compensation: In June 2014, the FASB issued ASU No. 2014-12, "Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period," ("ASU 2014-12"). The amendments in ASU 2014-12 require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in ASC Topic No. 718, "Compensation - Stock Compensation" as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in ASU 2014-12 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in ASU 2014-12 either: (a) prospectively to all awards granted or modified after the effective date; or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The Company does not anticipate that the adoption of ASU 2014-12 will have a material impact on its consolidated financial statements. FASB ASC 740 ASU 2015-17 - Balance Sheet Classification of Deferred Taxes: In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The FASB issued this ASU as part of its ongoing Simplification Initiative, with the objective of reducing complexity in accounting standards. The amendments in ASU 2015-17 require entities that present a classified balance sheet to classify all deferred tax liabilities and assets as a noncurrent amount. This guidance does not change the offsetting requirements for deferred tax liabilities and assets, which results in the presentation of one amount on the balance sheet. Additionally, the amendments in this ASU align the deferred income tax presentation with the requirements in International Accounting Standards (IAS) 1, Presentation of Financial Statements. The amendments in ASU 2015-17 are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate that the adoption of this standard will have a material impact on its consolidated financial statements. FASB ASC 842 ASU 2016-02 – Leases: In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases. The ASU will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating ASU 2016-02 and its impact on its consolidated financial statements.

Note 5 - Earnings Per Common Sh

Note 5 - Earnings Per Common Share	6 Months Ended
	Jun. 30, 2016
Notes
Note 5 - Earnings Per Common Share	Note 5 - Earnings (Loss) Per Common Share The Company calculates net earnings (loss) per common share in accordance with ASC 260 “ Earnings Per Share Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Stock options 1,718,900 1,718,900 1,422,000 1,718,900 Stock warrants 275,000 275,000 275,000 275,000 Total shares excluded from calculation 1,993,900 1,993,900 1,697,000 1,993,900

Note 6-stock Based Compensation

Note 6-stock Based Compensation	6 Months Ended
	Jun. 30, 2016
Notes
Note 6-stock Based Compensation	Note 6 – Stock Based Compensation Stock-based compensation expense for all stock-based award programs, including grants of stock options and warrants, is recorded in accordance with " Compensation—Stock Compensation Options In 2006, the Company adopted the 2006 Long-Term Incentive Plan (the "2006 Plan"). Awards granted under the 2006 Plan have a ten-year term and may be incentive stock options, non-qualified stock options or warrants. The awards are granted at an exercise price equal to the fair market value on the date of grant and generally vest over a three or four year period. The Plan expired on December 31, 2009, therefore as of June 30, 2016, there was no unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2006 plan. The 2006 Plan provided for the granting of options to purchase up to 10,000,000 shares of common stock. 8,146,900 options were issued under the plan of which 7,157,038 have been exercised and 989,862 expired. There were 296,900 options outstanding under the 2006 Plan on its expiration date of December 31, 2009 that expired on May 1, 2016. All options issued subsequent to this date were not issued pursuant to any plan and vested upon issuance. Stock option activity during the six months ended June 30, 2016 and 2015 follows: Weighted Average Weighted Remaining Weighted Average Average Contractual Options Outstanding Exercise Price Grant-Date Fair Value Life (Years) Options outstanding at December 31, 2014 1,518,900 $ 0.03 $ 0.10 4.76 Options granted 200,000 0.01 0.40 4.74 Options outstanding at June 30, 2015 1,718,900 $ 0.03 0.13 4.32 Options outstanding at December 31, 2015 1,718,900 $ 0.03 0.13 3.82 Options expired (296,900) 0.01 -- Options outstanding at June 30, 2016 1,422,000 $ 0.03 $ 0.13 6.10 Options outstanding at June 30, 2016 consist of: Date Number Number Exercise Expiration Issued Outstanding Exercisable Price Date June 9, 2014 213,000 213,000 $0.03 June 9, 2024 June 9, 2014 159,000 159,000 $0.03 June 9, 2024 June 9, 2014 600,000 600,000 $0.03 June 9, 2024 June 6, 2014 250,000 250,000 $0.05 June 6, 2019 March 24, 2015 200,000 200,000 $0.01 March 24, 2020 Total 1,422,000 1,422,000 Warrants In addition to our 2006 Long Term Incentive Plan, we have issued and outstanding compensatory warrants to two consultants entitling the holders to purchase a total of 275,000 shares of our common stock at an average exercise price of $0.94 per share. Warrants to purchase 25,000 shares of common stock vest upon 6 months after the Company engages in an IPO, have an exercise price of $3.00 per share, and expire 2 years after the Company engages in an IPO. Warrants to purchase 250,000 shares of common stock vest 100,000 shares on issuance (June 1, 2009), and 50,000 shares on each of the following three anniversaries of the date of issuance, have exercise prices ranging from $0.50 per share to $1.15 per share, and expire on June 1, 2019. The issuance of the compensatory warrants was not submitted to our shareholders for their approval. Warrant activity during the six months ended June 30, 2016 and 2015 follows: Weighted (1)Weighted Weighted Average Grant-Date Average Remaining Warrants Outstanding Average Exercise Price Fair Value Contractual Life (Years) Warrants outstanding at December 31, 2014 275,000 $ 0.94 $ 0.10 4.42 No warrant activity -- -- -- Warrants outstanding at June 30, 2015 275,000 $ 0.94 $ 0.10 3.92 Warrants outstanding at December 31, 2015 275,000 $ 0.94 $ 0.10 3.42 No warrant activity -- -- -- Warrants outstanding at June 30, 2016 275,000 $ 0.94 $ 0.10 2.92 Warrants outstanding at June 30, 2016 consist of: Date Number Number Exercise Expiration Issued Outstanding Exercisable Price Date April 1, 2000 25,000 25,000 $3.00 2 years after IPO June 1, 2009 100,000 100,000 $0.50 June 1, 2019 June 1, 2009 50,000 50,000 $0.65 June 1, 2019 June 1, 2009 50,000 50,000 $0.85 June 1, 2019 June 1, 2009 50,000 50,000 $1.15 June 1, 2019 Total 275,000 275,000 (1) Exclusive of 25,000 warrants expiring 2 years after initial IPO. Note 7 – Deferred Revenue Deferred revenue represents sales of maintenance contracts that extend to and will be realized in future periods. Deferred revenue at June 30, 2016 will be realized in the following years ended December 31, 2016 $ 734,634 2017 357,882 2018 43,720 2019 43,720 2020 6,801 2021 1,700 $ 1,188,457

Note 8 - Convertible Note Payab

Note 8 - Convertible Note Payable	6 Months Ended
	Jun. 30, 2016
Notes
Note 8 - Convertible Note Payable	Note 8 – Notes Payable Notes payable at March 31, 2016 consist of various notes payable in annual installments totaling $779,750 through September 2019. The notes include interest at 7% and are secured by the assets of ArcMail. Principal amounts due on notes payable for the years ended December 31, are as follows: 2016 $ 825,374 2017 779,750 2018 779,750 2019 779,751 $ 3,164,625 During the six months ended June 30, 2016, Arcmail entered into merchant financing agreements with two lenders for proceeds totaling $210,000 payable in daily amounts based on various percentages of future collections of accounts receivable, which were assigned to the lenders. The obligations will be satisfied upon total payments of $287,400 and will mature in January 2017. The outstanding balance of notes payable - other was $67,206 at June 30, 2016.

Note 11 - Retirement Plan

Note 11 - Retirement Plan	6 Months Ended
	Jun. 30, 2016
Notes
Note 11 - Retirement Plan	Note 11 - Retirement Plan ArcMail has a defined contribution 401(k) plan, which covers substantially all employees. Under the terms of the Plan, Arcmail is currently not required to match employee contributions. The Company did not make any employer contributions to the Plan during the six months ended June 30, 2016.

Note 12 - Concentrations and Cr

Note 12 - Concentrations and Credit Risk	6 Months Ended
	Jun. 30, 2016
Notes
Note 12 - Concentrations and Credit Risk	Note 12 – Concentrations and Credit Risk Sales and Accounts Receivable No customer accounted for more than 10% of sales for the six months ended June 30, 2016 and 2015, respectively. Cash Cash is maintained at a major financial institution. Accounts held at U.S. financial institutions are insured by the FDIC up to $250,000. Cash balances could exceed insured amounts at any given time, however, the Company has not experienced any such losses. The Company did not have any interest-bearing accounts at June 30, 2016 and December 31, 2015, respectively.

Note 13 - Related Party Transac

Note 13 - Related Party Transactions	6 Months Ended
	Jun. 30, 2016
Notes
Note 13 - Related Party Transactions	Note 13 - Related Party Transactions Note Payable – Related Party ArcMail issued a promissory note to the president of ArcMail on June 30, 2015 for funds advanced. The note is payable in annual installments of $155,566 through December 2019. The notes include interest at 6% and are subordinated to the notes payable (see Note 8). Principal amounts due on notes payable for the years ended December 31, are as follows: 2016 $ 156,566 2017 156,566 2018 156,566 2019 156,567 $ 626,265

Note 3 - Summary of Significa13

Note 3 - Summary of Significant Accounting Policies: Principles of Consolidation (Policies)	6 Months Ended
	Jun. 30, 2016
Policies
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Wala, Inc. and Gotham Innovation Lab, Inc. All intercompany accounts and transactions have been eliminated.

Note 3 - Summary of Significa14

Note 3 - Summary of Significant Accounting Policies: Use of Estimates in The Preparation of Financial Statements (Policies)	6 Months Ended
	Jun. 30, 2016
Policies
Use of Estimates in The Preparation of Financial Statements	Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

Note 3 - Summary of Significa15

Note 3 - Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies)	6 Months Ended
	Jun. 30, 2016
Policies
Fair Value of Financial Instruments	Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash, accounts receivable, prepaid expenses, accounts payable, accrued interest, deferred revenue, and amounts due to 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.

Note 3 - Summary of Significa16

Note 3 - Summary of Significant Accounting Policies: Revenue Recognition (Policies)	6 Months Ended
	Jun. 30, 2016
Policies
Revenue Recognition	Revenue Recognition The Company recognizes revenue from product sales when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, an equipment order has been placed with the vendor, the selling price is fixed or determinable, and collectability is reasonably assured. Revenues from maintenance contracts covering multiple future periods are recognized during the current periods and deferred revenue is recorded for future periods and classified as current or noncurrent, depending on the terms of the contracts. Gotham’s revenues were derived primarily from the sale of products and services rendered to real estate brokers. Gotham recognized revenues when the services or products have been provided or delivered, the fees charged are fixed or determinable, Gotham and its customers understood the specific nature and terms of the agreed upon transactions, and collectability was reasonably assured.

Note 3 - Summary of Significa17

Note 3 - Summary of Significant Accounting Policies: Advertising Costs (Policies)	6 Months Ended
	Jun. 30, 2016
Policies
Advertising Costs	Advertising Costs The Company expenses advertising costs as incurred. Advertising costs for the six months ended June 30, 2016 and 2015 were $130,249 and $2,037, respectively.

Note 3 - Summary of Significa18

Note 3 - Summary of Significant Accounting Policies: Property and Equipment and Depreciation (Policies)	6 Months Ended
	Jun. 30, 2016
Policies
Property and Equipment and Depreciation	Property and equipment and depreciation Property and equipment are stated at cost. Maintenance and repairs are charged to expense when incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss is credited or charged to income. Depreciation for both financial reporting and income tax purposes is computed using combinations of the straight line and accelerated methods over the estimated lives of the respective assets as follows: Office equipment and fixtures 5 - 7 years Computer hardware 5 years Computer software 3 years Development equipment 5 years

Note 3 - Summary of Significa19

Note 3 - Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies)	6 Months Ended
	Jun. 30, 2016
Policies
Recent Accounting Pronouncements	Recent Accounting Pronouncements FASB ASC 606 ASU 2014-09 - Revenue from contracts with customers: In May 2014, the FASB issued amended guidance on contracts with customers to transfer goods or services or contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). The guidance requires an entity to recognize revenue on contracts with customers to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires that an entity depict the consideration by applying the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. This amendment is to be either retrospectively adopted to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. Adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. FASB ASC 718 ASU 2014-12 – Compensation – Stock Compensation: In June 2014, the FASB issued ASU No. 2014-12, "Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period," ("ASU 2014-12"). The amendments in ASU 2014-12 require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in ASC Topic No. 718, "Compensation - Stock Compensation" as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in ASU 2014-12 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in ASU 2014-12 either: (a) prospectively to all awards granted or modified after the effective date; or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The Company does not anticipate that the adoption of ASU 2014-12 will have a material impact on its consolidated financial statements. FASB ASC 740 ASU 2015-17 - Balance Sheet Classification of Deferred Taxes: In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The FASB issued this ASU as part of its ongoing Simplification Initiative, with the objective of reducing complexity in accounting standards. The amendments in ASU 2015-17 require entities that present a classified balance sheet to classify all deferred tax liabilities and assets as a noncurrent amount. This guidance does not change the offsetting requirements for deferred tax liabilities and assets, which results in the presentation of one amount on the balance sheet. Additionally, the amendments in this ASU align the deferred income tax presentation with the requirements in International Accounting Standards (IAS) 1, Presentation of Financial Statements. The amendments in ASU 2015-17 are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate that the adoption of this standard will have a material impact on its consolidated financial statements. FASB ASC 842 ASU 2016-02 – Leases: In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases. The ASU will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating ASU 2016-02 and its impact on its consolidated financial statements.

Note 6-stock Based Compensati20

Note 6-stock Based Compensation: Options (Policies)	6 Months Ended
	Jun. 30, 2016
Policies
Options	Options In 2006, the Company adopted the 2006 Long-Term Incentive Plan (the "2006 Plan"). Awards granted under the 2006 Plan have a ten-year term and may be incentive stock options, non-qualified stock options or warrants. The awards are granted at an exercise price equal to the fair market value on the date of grant and generally vest over a three or four year period. The Plan expired on December 31, 2009, therefore as of June 30, 2016, there was no unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2006 plan. The 2006 Plan provided for the granting of options to purchase up to 10,000,000 shares of common stock. 8,146,900 options were issued under the plan of which 7,157,038 have been exercised and 989,862 expired. There were 296,900 options outstanding under the 2006 Plan on its expiration date of December 31, 2009 that expired on May 1, 2016. All options issued subsequent to this date were not issued pursuant to any plan and vested upon issuance. Stock option activity during the six months ended June 30, 2016 and 2015 follows: Weighted Average Weighted Remaining Weighted Average Average Contractual Options Outstanding Exercise Price Grant-Date Fair Value Life (Years) Options outstanding at December 31, 2014 1,518,900 $ 0.03 $ 0.10 4.76 Options granted 200,000 0.01 0.40 4.74 Options outstanding at June 30, 2015 1,718,900 $ 0.03 0.13 4.32 Options outstanding at December 31, 2015 1,718,900 $ 0.03 0.13 3.82 Options expired (296,900) 0.01 -- Options outstanding at June 30, 2016 1,422,000 $ 0.03 $ 0.13 6.10 Options outstanding at June 30, 2016 consist of: Date Number Number Exercise Expiration Issued Outstanding Exercisable Price Date June 9, 2014 213,000 213,000 $0.03 June 9, 2024 June 9, 2014 159,000 159,000 $0.03 June 9, 2024 June 9, 2014 600,000 600,000 $0.03 June 9, 2024 June 6, 2014 250,000 250,000 $0.05 June 6, 2019 March 24, 2015 200,000 200,000 $0.01 March 24, 2020 Total 1,422,000 1,422,000

Note 6-stock Based Compensati21

Note 6-stock Based Compensation: Warrants (Policies)	6 Months Ended
	Jun. 30, 2016
Policies
Warrants	Warrants In addition to our 2006 Long Term Incentive Plan, we have issued and outstanding compensatory warrants to two consultants entitling the holders to purchase a total of 275,000 shares of our common stock at an average exercise price of $0.94 per share. Warrants to purchase 25,000 shares of common stock vest upon 6 months after the Company engages in an IPO, have an exercise price of $3.00 per share, and expire 2 years after the Company engages in an IPO. Warrants to purchase 250,000 shares of common stock vest 100,000 shares on issuance (June 1, 2009), and 50,000 shares on each of the following three anniversaries of the date of issuance, have exercise prices ranging from $0.50 per share to $1.15 per share, and expire on June 1, 2019. The issuance of the compensatory warrants was not submitted to our shareholders for their approval. Warrant activity during the six months ended June 30, 2016 and 2015 follows: Weighted (1)Weighted Weighted Average Grant-Date Average Remaining Warrants Outstanding Average Exercise Price Fair Value Contractual Life (Years) Warrants outstanding at December 31, 2014 275,000 $ 0.94 $ 0.10 4.42 No warrant activity -- -- -- Warrants outstanding at June 30, 2015 275,000 $ 0.94 $ 0.10 3.92 Warrants outstanding at December 31, 2015 275,000 $ 0.94 $ 0.10 3.42 No warrant activity -- -- -- Warrants outstanding at June 30, 2016 275,000 $ 0.94 $ 0.10 2.92 Warrants outstanding at June 30, 2016 consist of: Date Number Number Exercise Expiration Issued Outstanding Exercisable Price Date April 1, 2000 25,000 25,000 $3.00 2 years after IPO June 1, 2009 100,000 100,000 $0.50 June 1, 2019 June 1, 2009 50,000 50,000 $0.65 June 1, 2019 June 1, 2009 50,000 50,000 $0.85 June 1, 2019 June 1, 2009 50,000 50,000 $1.15 June 1, 2019 Total 275,000 275,000 (1) Exclusive of 25,000 warrants expiring 2 years after initial IPO.