Nutex Health, Inc. - Quarter Report: 2015 March (Form 10-Q)

Converted by EDGARwiz

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the Quarterly period ended March 31, 2015

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from

Commission file number 000-53862

iGambit Inc.

(Exact name of small business issuer 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) (Zip Code)

(631) 670-6777

(Issuer’s Telephone Number, Including Area Code)

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 Web

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

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

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

Indicate by check mark 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 filer

Non-accelerated filer o

Smaller reporting

filer o

company þ

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange

Act). Yes o No þ

The Registrant had 26,583,990 shares of its common stock outstanding as of May 15, 2015.

iGambit Inc.

Form 10-Q

Page No.

Part I — Financial Information

Item 1.

Financial Statements:

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Income

Condensed Consolidated Statements of Cash Flows

Notes to Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and

Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Part II — Other Information

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults upon Senior Securities

Item 4.

Removed and Reserved

Item 5.

Other Information

Item 6.

Exhibits

EX-31.1

EX-31.2

EX-32.1

EX-32.2

IGAMBIT INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31,

PART I – FINANCIAL INFORMATION

Item 1 – Financial Statements

IGAMBIT INC.

CONSOLIDATED BALANCE SHEETS

MARCH 31,

2015

DECEMBER 31,

(Unaudited)

2014

ASSETS

Current assets

Cash

38,734 $

133,436

Accounts receivable, net

111,529

81,671

Prepaid expenses

19,435

45,110

Total current assets

169,698

260,217

Property and equipment, net

12,156

8,436

Other assets

Deposits

12,133

193,987 $

280,786

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities

Accounts payable

301,197 $

285,277

Note payable - stockholder

30,180

Total current liabilities

331,377

285,277

Commitments and contingencies

Stockholders' deficiency

Preferred stock, $.001 par value; authorized - 100,000,000 shares;

issued and outstanding - 0 shares in 2015 and 2014,

respectively

Common stock, $.001 par value; authorized - 200,000,000 shares;

issued and outstanding - 26,583,990 shares in 2015 and

2014, respectively

26,584

Additional paid-in capital

2,863,122

2,851,124

Accumulated deficit

(3,027,096)

(2,882,199)

Total stockholders' deficiency

(137,390)

(4,491)

193,987 $

280,786

IGAMBIT INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31,

(UNAUDITED)

2015

2014

Sales

300,347 $

240,213

Cost of sales

135,622

102,912

Gross profit

164,725

137,301

Operating expenses

General and administrative expenses

307,919

272,267

Loss from operations

(143,194)

(134,966)

Other income (expenses)

Interest expense

(1,703)

(3,467)

Amortization of debt discount

(34,500)

Total other income (expenses)

(1,703)

(37,967)

Loss from continuing operations

(144,897)

(172,933)

Income from discontinued operations

11,355

Net loss

$ (144,897) $ (161,578)

Basic and fully diluted earnings (loss) per common share:

Continuing operations

(.01) $

(.01)

Discontinued operations

.00 $

.00

Net loss per common share

(.01) $

(.01)

Weighted average common shares outstanding

26,583,900

25,044,056

IGAMBIT INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31,

(UNAUDITED)

2015

2014

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$ (144,897)

$ (161,578)

Adjustments to reconcile net loss to net

cash provided (used) by operating activities

Income from discontinued operations

(11,355)

Depreciation

1,306

1,191

Debt discount amortization

34,500

Stock-based compensation expense

11,998

Increase (Decrease) in cash flows as a result of

changes in asset and liability account balances:

Accounts receivable

(29,858)

32,581

Prepaid expenses

25,675

(14,204)

Due from rescission agreement

10,000

Accounts payable

15,920

74,240

Net cash used by continuing operating activities

(119,856)

(34,625)

Net cash provided by discontinued operating activities

37,500

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES

(119,856)

2,875

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

(5,026)

(2,026)

Increase in deposits

(2,712)

NET CASH USED BY INVESTING ACTIVITIES

(5,026)

(4,738)

NET CASH PROVIDED BY FINANCING ACTIVITIES:

Proceeds from stockholder's loan

30,180

3,600

NET INCREASE (DECREASE) IN CASH

(94,702)

1,737

CASH - BEGINNING OF PERIOD

133,436

26,870

CASH - END OF PERIOD

38,734

28,607

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the period for:

Interest

1,703

1,425

Note 1 - Organization and Basis of Presentation

The consolidated financial statements presented are those of iGambit Inc., (the

“Company”) and its wholly-owned subsidiary, 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.

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, 2014, which

has been derived from audited financial statements, and (b) the unaudited condensed

consolidated interim financial statements of the Company have been prepared in

accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X.

Accordingly, they do not include all of the information and footnotes required by GAAP

for complete financial statements. In the opinion of management, all adjustments

(consisting of normal recurring accruals) considered necessary for a fair presentation

have been included. Operating results for the three months ended March 31, 2015 are not

necessarily indicative of results that may be expected for the year ending December 31,

2015. 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, 2014 included in the Company’s Annual Report on Form 10-K, filed with

the Securities and Exchange Commission (“SEC”) on April 15, 2015.

Note 2 – Discontinued Operations

Sale of Business

On February 28, 2006, the Company entered into an asset purchase agreement with Digi-

Data Corporation (“Digi-Data”), whereby Digi-Data acquired the Company’s assets and

its online digital vaulting business operations in exchange for $1,500,000, which was

deposited into an escrow account for payment of the Company’s outstanding liabilities.

In addition, as part of the sales agreement, the Company received payments from Digi-

Data based on 10% of the net vaulting revenue payable quarterly over five years. The

Company was also entitled to an additional 5% of the increase in net vaulting revenue

over the prior year’s revenue.

Accounts Receivable

Assets from discontinued operations, net includes accounts receivable which represents

50% of contingency payments earned for the previous quarters. The reserve for bad debts

of $250,000 charged to operations in 2010 was reversed in connection with the Summary

Judgment and Forbearance Agreement described in Note 11. Also included is accrued

interest receivable of $85,156 recorded for interest granted on the balance due from Digi-

data through May 2014. The entire balance including accrued interest totaling $655,746

was repaid to the Company by Digi-data in the year ended December 31, 2014

Note 3 – Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its

wholly-owned subsidiary, 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 and cash equivalents,

accounts receivable, accounts payable, 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’s revenues are derived primarily from the sale of products and services

rendered to real estate brokers. The Company recognizes revenues when the services or

products have been provided or delivered, the fees charged are fixed or determinable, the

Company and its customers understand the specific nature and terms of the agreed upon

transactions, and collectability is reasonably assured.

Advertising Costs

The Company expenses advertising costs as incurred. Advertising costs for the three

months ended March 31, 2015 and 2014 were $1,325 and $843, respectively.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include checking and

money market accounts and any highly liquid debt instruments purchased with a maturity

of three months or less.

Accounts Receivable

The Company analyzes the collectability of accounts receivable from continuing

operations each accounting period and adjusts its allowance for doubtful accounts

accordingly. A considerable amount of judgment is required in assessing the realization

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

historical collection history and the related aging of past due balances. The Company

evaluates specific accounts when it becomes aware of information indicating that a

customer may not be able to meet its financial obligations due to deterioration of its

financial condition, lower credit ratings, bankruptcy or other factors affecting the ability

to render payment. Allowance for doubtful accounts was $17,865 at March 31, 2015 and

December 31, 2014, respectively. There was no bad debt expense charged to operations

for the three months ended March 31, 2015 and 2014, 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 $1,306 and $1,191 was charged to operations for the three

months ended March 31, 2015 and 2014, respectively.

Stock-Based Compensation

The Company accounts for its stock-based awards granted under its employee

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

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

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

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

awards expected to vest. The Company uses the Black-Scholes option pricing model to

estimate the fair value of its stock options and warrants. The Black-Scholes option

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

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

date of grant, the expected vesting term of the grant, expected dividends, and an

assumption related to forfeitures of such grants. Changes in these subjective input

assumptions can materially affect the fair value estimate of the Company’s stock options

and warrants.

Income Taxes

The Company accounts for income taxes using the asset and liability method in

accordance with ASC Topic No. 740, Income Taxes. Under this method, deferred tax

assets and liabilities are determined based on differences between financial reporting and

tax bases of assets and liabilities, and are measured using the enacted tax rates and laws

that are expected to be in effect when the differences are expected to reverse.

The Company applies the provisions of ASC Topic No. 740 for the financial statement

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

Company’s financial statements. In accordance with this provision, tax positions must

meet a more-likely-than-not recognition threshold and measurement attribute for the

financial statement recognition and measurement of a tax position.

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.

Note 4 - Earnings Per Common Share

The Company calculates net earnings (loss) per common share in accordance with ASC

260 “Earnings Per Share” (“ASC 260”). Basic and diluted net earnings (loss) per

common share was determined by dividing net earnings (loss) applicable to common

stockholders by the weighted average number of common shares outstanding during the

period. The Company’s potentially dilutive shares, which include outstanding common

stock options and common stock warrants, have not been included in the computation of

diluted net earnings (loss) per share for all periods as the result would be anti-dilutive.

Three Months Ended

March 31,

2015

2014

Stock options

1,718,900

668,900

Stock warrants

275,000

Total shares excluded from calculation

1,993,900

943,900

Note 5 – 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", Topic 718 of the FASB ASC. Stock-based compensation expense, which

is calculated net of estimated forfeitures, is computed using the grant date fair-value and

amortized over the requisite service period for all stock awards that are expected to vest.

The grant date fair value for stock options and warrants is calculated using the Black-

Scholes option pricing model. Determining the fair value of options at the grant date

requires judgment, including estimating the expected term that stock options will be

outstanding prior to exercise, the associated volatility of the Company’s common stock,

expected dividends, and a risk-free interest rate. Stock-based compensation expense is

reported under general and administrative expenses in the accompanying consolidated

statements of operations.

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 March 31,

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

compensation arrangements granted under the 2006 plan.

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

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

7,157,038 have been exercised and 692,962 have expired to date. There were 296,900

options outstanding under the 2006 Plan on its expiration date of December 31, 2009. All

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

Stock option activity during the three months ended March 31, 2015 and 2014 follows:

Weighted

Average

Weighted

Remaining

Weighted

Average

Contractual

Options

Grant-Date

Life

Outstanding

Exercise Price

Fair Value

(Years)

Options outstanding at

December 31, 2013

668,900

0.06

0.10

4.69

No option activity

Options outstanding at

March 31, 2014

668,900

0.06

0.10

4.44

Options outstanding at

December 31, 2014

1,518,900

0.03

0.10

4.76

Options granted

200,000

0.01

0.40

4.98

March 31, 2015

1,718,900

0.03

0.13

4.57

Options outstanding at March 31, 2015 consist of:

Date

Number

Exercise

Expiration

Issued

Outstanding

Exercisable

Price

Date

May 1, 2006

100,000

$0.01

May 1, 2016

May 1, 2006

100,000

$0.01

May 1, 2016

May 1, 2006

50,000

$0.01

May 1, 2016

May 1, 2006

46.900

46,900

$0.01

May 1, 2016

June 9, 2014

213,000

$0.03

June 9, 2024

June 9, 2014

159,000

$0.03

June 9, 2024

June 9, 2014

600,000

$0.03

June 9, 2024

June 6, 2014

250,000

$0.05

June 6, 2019

March 24, 2015

200,000

$0.01

March 24, 2020

Total

1,718,900

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 three months ended March 31, 2015 and 2014 follows:

Weighted

(1)Weighted

Weighted

Average Grant-

Average

Date

Remaining

Warrants

Average

Contractual

Outstanding

Exercise Price

Fair Value

Life (Years)

Warrants outstanding at

December 31, 2013

275,000

0.94

0.10

5.42

No warrant activity

Warrants outstanding at

March 31, 2014

275,000

0.94

0.10

5.17

Warrants outstanding at

December 31, 2014

275,000

0.94

0.10

4.42

No warrant activity

Warrants outstanding at

March 31, 2015

275,000

0.94

0.10

4.17

(1) Exclusive of 25,000 warrants expiring 2 years after initial IPO.

Warrants outstanding at December 31, 2014 consist of:

Date

Number

Exercise

Expiration

Issued

Outstanding

Exercisable

Price

Date

April 1, 2000

25,000

$3.00

2 years after IPO

June 1, 2009

100,000

$0.50

June 1, 2019

June 1, 2009

50,000

$0.65

June 1, 2019

June 1, 2009

50,000

$0.85

June 1, 2019

June 1, 2009

50,000

$1.15

June 1, 2019

Total

275,000

Note 6 – Convertible Note Payable

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 Company amortized $63,250 of debt discount. 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.

Note 7 - Derivative Liability

Convertible Note

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

Note 6 above).

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

market price of the Company’s common stock. The Company has identified embedded

derivatives included in these notes as a result of certain anti-dilutive (reset) provisions,

related to certain conversion features. The accounting treatment of derivative financial

instruments requires that the Company record the fair value of the derivatives as of the

inception date of the convertible note and debt discount amortization to fair value as of

each subsequent reporting date. This resulted in a fair value of derivative liability of

$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

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.

Note 8 – 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 Current Action.

Common Stock Issued

In connection with the convertible note payable (see Note 6 above) the noteholder

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.

Note 9 - Income Taxes

Quarter Ended March 31,

2015

2014

Effective tax rate

0.0 %

A full valuation allowance was recorded against the Company’s net deferred tax assets. A

valuation allowance must be established if it is more likely than not that the deferred tax

assets will not be realized. This assessment is based upon consideration of available

positive and negative evidence, which includes, among other things, the Company’s most

recent results of operations and expected future profitability. Based on the Company’s

cumulative losses in recent years, a full valuation allowance against the Company’s

deferred tax assets has been established as Management believes that the Company will

not realize the benefit of those deferred tax assets.

Note 10 - Retirement Plan

Gotham has adopted the Gotham Innovation Lab, Inc. SIMPLE IRA Plan, which covers

substantially all employees. Participating employees may elect to contribute, on a tax-

deferred basis, a portion of their compensation in accordance with Section 408 (a) of the

Internal Revenue Code. The Company matches up to 3% of employee contributions. The

Company's contributions to the plan for the three months ended March 31, 2015 and 2014

were $1,300 and $2,149, respectively.

Note 11 – Concentrations and Credit Risk

Sales and Accounts Receivable

Gotham had sales to one customer which accounted for approximately 57% of Gotham’s

total sales for the three months ended March 31, 2015. The one customer accounted for

approximately 64% of accounts receivable at March 31, 2015.

Gotham had sales to one customer which accounted for approximately 65% of Gotham’s

total sales for the three months ended March 31, 2014. The one customer accounted for

approximately 62% of accounts receivable at March 31, 2014.

Cash

Cash is maintained at a major financial institution. Accounts held at U.S. financial

institutions are insured by the FDIC up to $250,000. Cash balances could exceed insured

amounts at any given time, however, the Company has not experienced any such losses.

The Company did not have any interest-bearing accounts at March 31, 2015 and

December 31, 2014, respectively.

Note 12 - Fair Value Measurement

The Company adopted the provisions of Accounting Standards Codification subtopic

825-10, Financial Instruments (“ASC 825-10”) on January 1, 2008. ASC 825-10 defines

fair value as the price that would be received from selling an asset or paid to transfer a

liability in an orderly transaction between market participants at the measurement date.

When determining the fair value measurements for assets and liabilities required or

permitted to be recorded at fair value, the Company considers the principal or most

advantageous market in which it would transact and considers assumptions that market

participants would use when pricing the asset or liability, such as inherent risk, transfer

restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy

that requires an entity to maximize the use of observable inputs and minimize the use of

unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of

inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar

assets or liabilities; quoted prices in markets with insufficient volume or infrequent

transactions (less active markets); or model-derived valuations in which all significant

inputs are observable or can be derived principally from or corroborated by observable

market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs to the valuation methodology that are significant to the

measurement of fair value of assets or liabilities.

All items required to be recorded or measured on a recurring basis consist of derivative

liabilities and are based upon level 3 inputs.

To the extent that valuation is based on models or inputs that are less observable or

unobservable in the market, the determination of fair value requires more judgment. In

certain cases, the inputs used to measure fair value may fall into different levels of the

fair value hierarchy. In such cases, for disclosure purposes, the level is the fair value

hierarchy within which the fair value measurement is disclosed and is determined based

on the lowest level input that is significant to the fair value measurement.

Upon adoption of ASC 825-10, there was no cumulative effect adjustment to beginning

retained earnings and no impact on the financial statements.

The carrying value of the Company’s cash and cash equivalents, accounts receivable,

accounts payable, short-term borrowings (including convertible note payable), and other

current assets and liabilities approximate fair value because of their short-term maturity.

As of March 31, 2015 and December 31, 2014, the Company did not have any items that

would be classified as level 1 or 2 disclosures.

The Company recognizes its derivative liabilities as level 3 and values its derivatives

using the methods discussed in Note 7. While the Company believes that its valuation

methods are appropriate and consistent with other market participants, it recognizes that

the use of different methodologies or assumptions to determine the fair value of certain

financial instruments could result in a different estimate of fair value at the reporting

date. The primary assumptions that would significantly affect the fair values using the

methods discussed in Note 7 are that of volatility and market price of the underlying

common stock of the Company.

As of March 31, 2015 and December 31, 2014, the Company did not have any derivative

instruments that were designated as hedges.

Fluctuations in the Company’s stock price are a primary driver for the changes in the

derivative valuations during each reporting period. As the stock price decreases for each

of the related derivative instruments, the value to the holder of the instrument generally

decreases, therefore decreasing the liability on the Company’s balance sheet.

Additionally, stock price volatility is one of the significant unobservable inputs used in

the fair value measurement of each of the Company’s derivative instruments. The

simulated fair value of these liabilities is sensitive to changes in the Company’s expected

volatility. A 10% change in pricing inputs and changes in volatilities and correlation

factors would currently not result in a material change in value for the level 3 financial

liability.

Note 13 - Related Party Transactions

Note Payable – Related Party

Gotham was provided a loan which was due on December 31, 2013 from an entity that

was previously a related party. The balance of $6,263 has not been paid and is

accordingly included in accounts payable at December 31, 2014.

Loan Payable - Stockholder

A stockholder/officer of the Company made cash advances totaling $30,180 on behalf of

the Company. The loan does not bear interest and will be repaid by December 31, 2015.

Note 14 – Commitments and Contingencies

Lease Commitment

On February 1, 2012, iGambit entered into a 5 year lease for new executive office space

in Smithtown, New York commencing on March 1, 2012 at a monthly rent of $1,500

with 2% annual increases.

Gotham has a month to month license agreement for office space that commenced on

August 2, 2012 at a monthly license fee of $4,025. The license agreement may be

terminated upon 30 days’ notice.

Total future minimum annual lease payments under the lease for the years ending

December 31 are as follows:

2015

$ 14,370

2016

19,440

2017

3,240

$ 37,050

Rent expense of $17,273 and $17,456 was charged to operations for the three months

ended March 31, 2015 and 2014, respectively.

Contingencies

The Company provides accruals for costs associated with the estimated resolution of

contingencies at the earliest date at which it is deemed probable that a liability has been

incurred and the amount of such liability can be reasonably estimated.

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results

of Operations

FORWARD LOOKING STATEMENTS

This Form 10-Q includes “forward-looking statements” within the meaning of

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

Exchange Act of 1934, as amended. All statements, other than statements of historical

facts, included or incorporated by reference in this Form 10-Q which address activities,

events or developments that the Company expects or anticipates will or may occur in the

future, including such things as future capital expenditures (including the amount and

nature thereof), finding suitable merger or acquisition candidates, expansion and growth

of the Company’s business and operations, and other such matters are forward-looking

statements. These statements are based on certain assumptions and analyses made by the

Company in light of its experience and its perception of historical trends, current

conditions and expected future developments as well as other factors it believes are

appropriate in the circumstances.

Investors are cautioned that any such forward-looking statements are not

guarantees of future performance and involve significant risks and uncertainties, and that

actual results may differ materially from those projected in the forward-looking

statements. Factors that could adversely affect actual results and performance include,

among others, potential fluctuations in quarterly operating results and expenses,

government regulation, technology change and competition. Consequently, all of the

forward-looking statements made in this Form 10-Q are qualified by these cautionary

statements and there can be no assurance that the actual results or developments

anticipated by the Company will be realized or, even if substantially realized, that they

will have the expected consequence to or effects on the Company or its business or

operations. The Company assumes no obligations to update any such forward-looking

statements.

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.

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 charged

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

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

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

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 March 31, 2015 and December 31,

2014, respectively. There was no bad debt expense charged to operations for three

months ended March 31, 2015 and 2014, 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 $1,306 and $1,191 was charged to operations for the

three months ended March 31, 2015 and 2014, 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 our 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 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, we 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 is

due June 18, 2014 and is convertible any time after 180 days at the option of the holder into shares of our

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 we 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 we recorded a debt discount related to

identified embedded derivatives relating to conversion features and a reset provisions 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, we amortized $63,250 of

debt discount. 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 we 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, we issued a convertible note.

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

of our common stock. We 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 we 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 our common stock of $0.51 per share.

We recorded interest expense from the excess of the derivative liability over the convertible note of

$48,576 during the year ended December 31, 2013. We recorded a gain on derivative liability of $152,076

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) we adopted a sequencing approach

regarding the application of ASC 815-40 to its outstanding convertible note. Pursuant to the sequencing

approach, we evaluate its contracts based upon earliest issuance date.

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.

Assets. At March 31, 2015, we had $193,987 in total assets, compared to $280,786 at December

31, 2014. The decrease in total assets was primarily due to the decrease in cash and the decrease in prepaid

expenses.

Liabilities. At March 31, 2015, our total liabilities were $331,377 compared to $285,277 at

December 31, 2014. Our total liabilities at March 31, 2015 consisted of accounts payable of $301,197, and

a note payable to a shareholder of $30,180, whereas our total liabilities as of December 31, 2014 consisted

of accounts payable of $285,277. We do not have any long term liabilities.

Stockholders’ Deficiency. Our stockholders’ deficiency increased to $137,390 at March 31, 2015

from $4,491 at December 31, 2014. This increase was primarily due to an increase in accumulated deficit

from $(2,882,199) at December 31, 2014 to $(3,027,096) at March 31, 2015, resulting from losses from

operations of $(144,897) for the three months ended March 31, 2015.

THREE MONTHS ENDED MARCH 31, 2015 AS COMPARED TO THREE MONTHS ENDED

MARCH 31, 2014

Revenues and Cost of Sales. We had $300,347 of revenue during the three months ended March

31, 2015 compared to revenue of $240,213 during the three months ended March 31, 2014. The increase in

revenue was due primarily to an increase in revenue generated by our Gotham subsidiary as result of

transitioning out our customer technical services division and focusing more on the real estate photography

division. In addition to Gotham’s operations, we had income from discontinued operations of $0 and

$11,355 for the three months ended March 31, 2015 and March 31, 2014, respectively.

General and Administrative Expenses. General and Administrative Expenses increased to

$307,919 for the three months ended March 31, 2015 from $272,267 for the three months ended March 31,

2014. For the three months ended March 31, 2015 our General and Administrative Expenses consisted of

corporate administrative expenses of $85,794, legal and accounting fees of $40,080,health insurance

expenses of $7,688, directors and officers insurance expenses of $10,600, payroll expenses of $141,041,

consulting expenses of $14,498 and exchange filing fees of $8,218. For the three months ended March 31,

2014 our General and Administrative Expenses consisted of corporate administrative expenses of $74,221,

legal and accounting fees of $36,336, health insurance expenses of $19,887, directors and officers

insurance expenses of $10,924 and payroll expenses of 130,899.. The increases from the three months

ended March 31, 2014 to the three months ended March 31, 2014 relate primarily to: (i) an increase in

payroll expenses; (ii) an increase in consulting expenses; (iii) an increase exchange filing fees; and (iv) an

increase in general and administrative costs associated with the operation of our Gotham subsidiary. Costs

associated with our officers’ salaries and the operation of our Gotham subsidiary should remain level going

forward, subject to a material expansion in the business operations of Gotham which would likely increase

our corporate administrative expenses.

Other Income (Expense). There was interest expense of $1,703 and $3,467 for the three months

ended March 31, 2015 and March 31, 2014, respectively. There was $34,500 in amortization of debt

discount for the three months ending March 31, 2014.

LIQUIDITY AND CAPITAL RESOURCES

General

As reflected in the accompanying consolidated financial statements, at March 31, 2015, we had

$38,734 of cash and a stockholders’ deficiency of $137,390 as compared to $133,436 and $4,491 at

December 31, 2014. At March 31, 2015 we had $193,987 in total assets, compared to $280,786 at

December 31, 2014.

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 used by operating activities was $119,856 for the three months ended March 31, 2015,

compared to net cash provided by operating activities of $2,875 for the three months ended March 31,

2014. Our primary source of operating cash flows from continuing operating activities for the three months

ended March 31, 2015 was from our Gotham subsidiary’s revenues of $300,347 and $240,213 for the three

months ended March 31, 2014. Additional contributing factors to the change were from an increase in

accounts receivable of $29,858, a decrease in prepaid expenses of $25,675 and an increase in accounts

payable of $15,920. Net cash provided by discontinued operating activities was $0 for the three months

ended March 31, 2015 and cash provided by discontinued operating activities was $37,500 for the three

months ended March 31, 2014. The $37,500 cash provided by discontinued operations for the three months

ended March 31, 2014, represents cash payments received from DDC which was offset by a decrease in

accounts receivable included in the Assets from Discontinued Operations.

Cash used in investing activities was $5,026 for the three months ended March 31, 2015 and $4,738

for the three months ended March 31, 2044. For the three months ended March 31, 2015 the use of cash

from investing activities was from the purchase of property and equipment of $5,026. For the three

months ended March 31, 2014 the use of cash from investing activities was $2,026 from the purchase of

property and equipment and from an increase in deposits of $2,712.

Cash provided by financing activities was $30,180 for the three months ended March 31, 2015

compared to $3,600 for the three months ended March 31, 2014. The cash provided by financing activities

for the three months ended March 31, 2015 and March 31, 2014 was loans from shareholders of $30,180

and $3,600, respectively.

Supplemental Cash Flow Activity

In the three months ended March 31, 2015 the company paid interest of $1,703 compared to

interest of $1,425 in the three months ended March 31, 2014.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not Required.

Item 4. 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 March 31, 2012.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our

disclosure controls and procedures were effective as of March 31, 2015.

Change in Internal Controls

During the quarter ended March 31, 2015, 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.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

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

business. The Company is not a party to any litigation that is material to ongoing operations as defined in

Item 103 of Regulation S-K as of the period ended March 31, 2015.

Item 1A. Risk Factors

Not required

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

In connection with the convertible note payable the noteholder 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.

Item 3. Defaults upon Senior Securities.

None

Item 4.

Removed and Reserved.

Item 5. Other Information.

None

Item 6.

Exhibits

Exhibit No.

Description

31.1 Certification of the Chief Executive Officer Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002.

31.2 Certification of the Chief Financial Officer Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002.

32.1 Certification of the Chief Executive Officer Pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed “filed” for

the purposes of Section 18 of the Securities Exchange Act of 1934, as

amended, or otherwise subject to the liability of that section. Further, this

exhibit shall not be deemed to be incorporated by reference into any filing

under the Securities Act of 1933, as amended, or the Securities Exchange

Act of 1934, as amended.)

32.2 Certification of the Interim Chief Financial Officer Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed

“filed” for the purposes of Section 18 of the Securities Exchange Act of

1934, as amended, or otherwise subject to the liability of that section.

Further, this exhibit shall not be deemed to be incorporated by reference

into any filing under the Securities Act of 1933, as amended, or the

Securities Exchange Act of 1934, as amended.)

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this

report to be signed on its behalf by the undersigned, thereunto duly authorized, on May

14, 2015.

iGambit Inc.

/s/ John Salerno

John Salerno

Chief Executive Officer

/s/ Elisa Luqman

Elisa Luqman

Chief Financial Officer and

Principal Accounting Officer

Exhibit Index

Exhibit No.

Description

31.1

Certification of the Chief Executive Officer Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002.

31.2

Certification of the Interim Chief Financial Officer Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of the Chief Executive Officer Pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed “filed” for

the purposes of Section 18 of the Securities Exchange Act of 1934, as

amended, or otherwise subject to the liability of that section. Further, this

exhibit shall not be deemed to be incorporated by reference into any filing

under the Securities Act of 1933, as amended, or the Securities Exchange

Act of 1934, as amended.)

32.2

Certification of the Interim Chief Financial Officer Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002. (This exhibit shall not be

deemed “filed” for the purposes of Section 18 of the Securities Exchange

Act of 1934, as amended, or otherwise subject to the liability of that

section. Further, this exhibit shall not be deemed to be incorporated by

reference into any filing under the Securities Act of 1933, as amended, or

the Securities Exchange Act of 1934, as amended.)