UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended ~~September~~June 30, ~~2013~~2015

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~For~~Commission ~~the~~File ~~transition period from __________ to __________~~Number 0-27865

~~Commission~~UNIFIEDONLINE, ~~File Number 000-27865~~INC.

IceWEB, Inc.

(Exact name of registrant as specified in its charter)

Delaware		13-2640971
State or other jurisdiction of		(I.R.S. Employer
State or other jurisdiction of incorporation or organization		(I.R.S. Employer Identification No.)
incorporation or organization		Identification No.)

324 E 11th, Suite 2425, Kansas City, MO		64106
4126 Leonard Drive, Fairfax, VA		22030
(Address of principal executive offices)		(Zip Code

Registrant’s telephone number, including area code: ~~(571) 287~~816-~~2388~~979-1893

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

Title of each class		Name of each exchange on which registered
None		None

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

Common Stock, $0.001 Par Value

(Title of class)

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þ

Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Act Yes ¨ No þ

Indicate by checkmark 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 þ¨

Indicate by checkmark whether the registrant ~~(1)~~ has ~~filed~~submitted ~~all~~electronically ~~reports~~and posted on its corporate Website, if any, every Interactive Date File required to be ~~filed~~submitted byand ~~Section~~posted 13pursuant orto ~~15(d)~~Rule 405 of ~~the~~Regulation ~~Securities~~S-T ~~Exchange~~(§229.405 ~~Act~~ of ~~1934~~this chapter) during the preceding 12 months (or ~~for~~ such shorter period that the registrant was required to ~~file~~submit ~~such reports),~~ and ~~(2)~~post ~~has been subject to~~ such ~~filing requirements for the past 90 days~~files). Yes þ No ¨

Yes x No ¨

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained in this form, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨o Accelerated filer ¨o Non-accelerated filer ¨o Smaller reporting company xþ

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No xþ

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average of the bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold on ~~March~~December 31, ~~2013,~~2014 ~~the last business day of the registrant’s most recently completed second fiscal quarter~~ was $ 9345,~~288,089~~849.

~~Indicate the number of shares outstanding of each of the registrant’s classes of common equity, as of the latest practicable date.~~ The number of common shares issued and outstanding as of ~~January~~September 1430, ~~2014~~2015 was ~~473~~912,~~460~~897,~~779~~537 shares.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the part of the Form 10-K (e.g. Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). None.

~~TABLE~~Table OFof ~~CONTENTS~~Contents

PART I	4	3
ITEM 1.	BUSINESS.	3
ITEM 1. BUSINESS.	4
ITEM 1A.	RISK FACTORS.	9
ITEM 1A. RISK FACTORS.	6
ITEM 1B.	UNRESOLVED STAFF COMMENTS.	17
ITEM 1B. UNRESOLVED STAFF COMMENTS.	11
ITEM 2:	PROPERTIES.	18
ITEM 2. PROPERTIES.	11
ITEM 3:	LEGAL PROCEEDINGS.	18
ITEM 3. LEGAL PROCEEDINGS.	11
ITEM 4:	MINE SAFETY DISCLOSURES.	18
ITEM 4. MINE SAFETY DISCLOSURE.	11
PART II	12	19
ITEM 5:	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.	19
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.	12
ITEM 6.	SELECTED FINANCIAL DATA.	21
ITEM 6. SELECTED FINANCIAL DATA.	13
ITEM 7:	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	22
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13
ITEM 7A:	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	27
ITEM 7A. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	19
ITEM 8:	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.	28
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.	20
ITEM 9:	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.	59
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	52
ITEM 9A:	CONTROLS AND PROCEDURES.	59
ITEM 9A. CONTROLS AND PROCEDURES	52
ITEM 9B:	OTHER INFORMATION.	60
ITEM 9B. OTHER INFORMATION	52
PART III	53	61
ITEM 10:	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.	61
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	53
ITEM 11:	EXECUTIVE COMPENSATION.	66
ITEM 11. EXECUTIVE COMPENSATION	56
ITEM 12:	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.	69
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS and	57
ITEM 13:	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.	70
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	58
ITEM 14:	PRINCIPAL ACCOUNTANT FEES AND SERVICES.	71
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES	59
PART IV	60	72
ITEM 15:	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.	72
ITEM 15. EXHIBITS	60

Cautionary Statement Regarding Forward Looking Statements

This Annual Report on Form 10-K contains statements that are considered forward-looking statements. Forward-looking statements give our current expectations and forecasts of future events. All statements other than statements of current or historical fact contained in this annual report, including statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. The words “anticipate”, “believe”, “continue”, “estimate”, “expect”, “intend”, “may”, “plan”, and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. These statements are based on our current plans, and our actual future activities and results of operations may be materially different from those set forth in the forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. Any or all of the forward-looking statements in this report may turn out to be inaccurate. We have based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions. We undertake no obligation to publicly revise these forward-looking statements to reflect events occurring after the date hereof. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this report.

OTHER PERTINENT INFORMATION

When used in this report, the terms the “Company”, “~~IceWEB~~UOIP”, "we", "our", and "us" refers to ~~IceWEB~~UnifiedOnline, Inc., a Delaware corporation, and our subsidiaries. When used in this report, “fiscal year ~~2013~~2014” or “~~fiscal~~Fiscal ~~2013~~2014” means the ~~year~~nine month transition period ended ~~September~~June 30, ~~2013~~2014, ~~and~~ “fiscal year ~~2014~~2015” or “~~fiscal~~Fiscal ~~2014~~2015” means the ~~year~~twelve ~~ending~~months ~~September~~ended June 30, ~~2014.~~2015 ~~The~~and ~~information~~“fiscal ~~which~~year ~~appears~~2016” onor ~~our~~“Fiscal ~~Web~~2016” ~~sites~~means isthe ~~not~~twelve ~~part~~months ofended ~~this~~June ~~report~~30, 2016.

PART I

ITEM 1. ~~DESCRIPTION OF~~ BUSINESS.

BUSINESS OF ~~ICEWEB~~UNIFIEDONLINE, INC.

OVERVIEW

With our acquisition of Computers & Telecom, Inc. and KCNAP, LLC, (collectively “CTC”) in October 2013, ~~IceWEB~~UnifiedOnline, Inc. provides wireless and fiber broadband service, co-location space and related services and ~~operate~~operates a Network Access Point (“NAP”) where customers directly interconnect with a network ecosystem of partners and customers. This access to Internet routes provides CTC customers improved reliability and streamlined connectivity while significantly reducing costs by reaching a critical mass of networks within a centralized physical location. In addition, through our IceWEB Storage Corporation subsidiary we can deliver on-line cloud computing application services, ~~and~~other ~~manufacture~~managed ~~and~~services ~~market~~such ~~cloud-attached~~as Disaster Recovery, Archive Storage, Redundant File Storage, Redundant Broadband Services and ~~network~~Business ~~storage~~Continuity Services.

CTC operates a wireless internet service business, providing ~~WIMAX~~various technologies for wireless broadband, including FCC Licensed Wireless, to small and medium -size businesses in the metro Kansas-City, Missouri and Kansas City, Kansas area. Through our network of broadband carriers, we provide services in other US markets as well. In addition, CTC offers the following solutions: (i) premium data center co-location, (ii) interconnection and (iii) exchange and outsourced IT infrastructure services (iv) Business Class Voice over IP services (v) Cloud-based PBX services (vi) Private and Public Cloud services and (vii) Private Network services.

We leverage our NAP which allows our customers to increase information and application delivery performance while significantly reducing costs. Our platform enables scalable, reliable and cost-effective co-location, interconnection and traffic exchange thus lowering overall cost and increasing flexibility.

Our customer base includes ~~U.S. government agencies,~~ enterprise companies, and small to medium sized businesses (“SMB”).

~~IceWEB~~UnifiedOnline, Inc. unified data storage line of products

~~Our~~As ~~high~~customer ~~performance~~requirements ~~unified~~have ~~data~~migrated ~~storage~~from ~~solutions~~deploying ~~make~~physical iton ~~possible~~premise hardware to ~~operate~~increasing ~~and~~use ~~manage~~of ~~files~~a ~~and~~cloud-centric ~~applications~~Information ~~from~~Technology astrategy, ~~single~~we ~~device.~~are ~~File-based~~transitioning ~~and~~out ~~block-based~~of ~~access~~our ~~data~~hardware ~~are~~assembly ~~consolidated~~business, while we continue to maintain those customers whose support agreements remain in effect. Unified storage continues to be a ~~single~~significant ~~storage~~area ~~platform~~of ~~which~~focus ~~supports~~for ~~Fibre~~customers ~~Channel~~who ~~SAN,~~require ~~IP-based~~various ~~SAN~~types ~~(iSCSI),~~of storage in our Kansas City and ~~NAS~~affiliated ~~(network~~datacenters ~~attached~~and ~~storage~~Wireless Internet Service Provider (WISP) businesses.

~~Our~~Competitive unified storage system simultaneously enables storage of file data and handles the block-based I/O (input/output) of enterprise applications. One advantage of unified storage is reduced hardware requirements. Instead of separate storage platforms, like NAS for file-based storage and a RAID disk array for block-based storage, unified storage combines both in a single device. Alternatively, a single device could be deployed for either file or block storage.Landscape

InWe ~~addition~~compete toas ~~reduced~~well ~~capital~~as ~~expenditures~~cooperate ~~for~~(in ~~the~~a ~~enterprise~~“co-opetition model”) with business class wireless, ~~unified~~land-based ~~storage~~and ~~systems~~cloud ~~can~~based ~~also~~providers beof ~~simpler~~broadband and datacenter services. Our flexibility and nimble ability to ~~manage~~quickly ~~than~~deploy ~~separate~~business ~~products~~class ~~since~~services, ~~our~~particularly ~~IceWEB~~in ~~Storage~~areas ~~System~~in ~~offers~~which ~~one~~major ~~platform~~carriers ~~for~~such ~~file~~as AT&T and ~~block~~TW ~~data~~Telecom ofdo ~~all~~not ~~kinds~~offer such services, gives us both a competitive and sustainable advantage. ~~Whether~~ We itsuccessfully iscompete ~~Microsoft~~for ~~Exchange,~~standard ~~SQL~~business ~~Server~~users orin ~~Oracle~~the ~~databases~~hospitality, ~~virtualized environments~~medical, ~~scanned~~professional ~~images~~services, ~~files~~manufacturing, ~~video~~food services, ~~pictures~~distribution, ~~graphics~~governmental, orhuman ~~voice~~resources ~~data~~and general retail areas with our robust offerings, our deep understanding of requirements, design strategies, and rapid deployment. A significant market in which we ~~believe~~excel and in which we frequently work with our ~~products~~competitors ~~maximize~~in a “co-opetition” fashion is the ~~efficiency~~“pop-up” event market requiring very short-term setup and takedown of ~~storage~~complex bynetwork ~~centralizing~~deployments ~~all~~ether ~~data~~for onpublic ~~one~~or ~~platform~~private ~~secured~~events, ~~with~~or ~~strong~~for ~~data~~short ~~protection~~term ~~capabilities~~construction deployments for which land-based broadband is not feasible or available in a timely way.

~~The~~Cloud ~~all-inclusive~~Computing ~~IceWEB~~Products ~~Storage System includes de-duplication; unlimited snapshots; thin provisioning; local or remote, real-time or scheduled replication; capacity~~ and ~~utilization reporting, and integration with virtual server environments. Unified storage systems enjoy the same level of reliability as dedicated file or block storage systems.~~Services

WeFollowing ~~believe~~market ~~our~~conditions ~~product~~and ~~offerings~~preferences, we have ~~broad~~evolved ~~appeal~~from inbeing ~~the~~strictly ~~enterprise~~a ~~and~~hardware ~~federal~~assembler ~~marketplaces,~~to ~~and~~a ~~are~~provider ~~used~~of ascloud ~~core~~and ~~building~~complex ~~blocks~~broadband ~~(enabling~~services. ~~technologies)~~We ofhave ~~business~~focused ~~critical~~our ~~storage~~engineering ~~infrastructure~~and ~~for~~research aand ~~diverse~~development ~~group~~efforts ofon ~~data~~crafting ~~intensive~~our ~~key~~products ~~vertical~~to ~~market~~perform ~~segments such~~ as ~~geospatial~~“smart ~~information~~infrastructure” ~~systems,~~to ~~entertainment,~~facilitate ~~security~~the ~~and~~highly ~~defense,~~complex ~~higher~~application ~~education,~~centric ~~Internet~~requirements ~~service~~of ~~providers,~~companies ~~managed~~moving ~~service~~to ~~providers,~~a ~~oil~~cloud-based ~~and~~IT ~~gas,~~strategy. ~~and~~A ~~health~~smart ~~care.~~infrastructure Weaddresses ~~believe~~the ~~our~~myriad ~~storage~~of ~~systems~~implementation ~~delivers~~issues ~~levels~~faced ofby ~~performance,~~companies ~~scalability,~~moving ~~versatility~~from ~~and~~a ~~simplicity~~premise-based ~~that~~IT ~~exceed~~strategy ~~existing~~to ~~network~~a ~~storage~~cloud ~~alternatives~~based one. Complex ~~Our~~switching, ~~unified~~routing, ~~network~~cabling, ~~storage~~monitoring ~~offering~~and isstorage ~~deployed~~all asrequire ~~storage~~the ~~operating~~types ~~system~~of ~~software~~both onphysical ~~our~~and ~~NAS~~intellectual ~~and~~infrastructure our ~~storage~~facilities ~~area~~and ~~network~~deployment ~~(SAN)~~strategies ~~hardware products~~provide.

~~Our~~By ~~IceSTORMTM~~implementing ~~file~~our ~~management~~smart ~~system~~infrastructure ~~replaces complex~~ and ~~performance-limited~~network ~~competitive~~design ~~products~~approaches ~~with~~we ~~high~~are ~~performance,~~able ~~scalable~~to ~~and~~quickly ~~easy~~deploy toall ~~use~~of ~~systems~~the ~~capable~~benefits of ~~handling~~cloud computing, while reducing the ~~most~~potential for security breaches. High performance data transfers are maintained by back-~~intensive~~hauling ~~applications~~the data and ~~environments.~~replicating Weit ~~believe~~from ~~that~~remote branch offices across existing wide area network links to our ~~solution~~IT ~~delivers~~infrastructure. ~~three~~This ~~key~~“hardware-agnostic” ~~benefits:~~approach to providing smart infrastructure is the approach being taken by the customers we seek as they implement their cloud-based IT strategies.

• Performance - which equals or exceeds all competitive products • Management – which requires less expertise and provides ease of use for overburdened technical staffers • Cost – our solutions typically can be deployed costing far less than those of ours competitors while delivering feature-rich performance with comprehensive, yet easy-to-use management.Customers

~~Competitive~~Our ~~Landscape~~products have been sold to customers in the U.S across a broad range of industries, including GIS, oil and gas, state, local and federal government, hospitality, professional services, manufacturing, food services, distribution and healthcare. We believe that our customers have a high level of satisfaction with our products and services.

WeSales ~~compete with storage vendors such as NetApp, Inc., EMC, Inc.,~~ and ~~many other companies in the markets we serve, including companies that offer a broad spectrum of IT products and services.~~Marketing

~~With~~We ~~the~~sell ~~demand~~our ~~for~~products ~~data~~via ~~storage~~a ~~growing~~“channel-based” ~~exponentially~~model ~~within~~and ~~all~~through ~~organizations~~a direct sales force. In a channel-based sales model, ~~budgetary~~companies ~~and~~with ~~common~~products ~~sense~~or ~~decision~~services ~~making~~build ispartnerships ~~creating~~with asystems ~~second~~integrators, ~~tier~~agents, ~~storage~~manufacturers, ~~marketplace~~value-added ~~where~~resellers, ~~our~~IT ~~IceWEB~~consultants ~~data~~and ~~storage~~value-added ~~products~~distributors ~~are~~leveraging ~~perceived~~the assales ~~compelling~~resources ~~data~~of ~~storage~~those ~~solutions~~groups to drive sales of products and services. ~~Based~~We ~~upon~~believe ~~our~~that ~~review~~the value of ~~the~~a ~~market,~~channel-based wesales ~~believe~~model ~~some~~is ~~customers~~twofold. ~~are~~First ~~searching~~it ~~for~~allows ~~alternatives~~us ~~from~~to ~~the~~grow ~~high~~total ~~costs~~sales volume significantly while keeping sales staff, and ~~hardware~~our ~~replacement~~general ~~upgrades~~and ~~often~~administrative ~~required~~expenses, bylow. ~~the~~Rather ~~larger~~than ~~Tier~~building 1a ~~storage~~significant ~~providers~~direct sales force of our own, ~~who~~this ~~push~~model ~~expensive~~allows ~~upgrades~~us to ~~satisfy~~build a small channel organization responsible for identification, training and support of partner organizations to ~~meet~~ensure their ~~billion~~success ~~dollar~~and ~~revenue~~productivity. ~~growth~~The ~~commitments.~~second ~~Instead,~~value ~~some~~of ~~customers~~the ~~are~~channel-based ~~opting~~model tois ~~deploy~~that ~~our~~partners ~~products~~bring ~~with~~their ~~versatile~~own knowledge of key accounts and ~~feature~~have ~~rich~~relationships ~~capabilities~~already in place which compresses the sales cycle and increases the close ratio on new business, with the goal of generating more sales for our company’s products and services.

~~Cloud~~We ~~Computing~~continue ~~Products~~to aggressively pursue partner agreements to increase our sales and ~~Services~~market exposure and footprint. These partner agreements typically take between three and six months to develop prior to materially increasing sales revenues.

~~Cloud Storage Appliances (CSA)~~Competition

WeThe ~~have~~market ~~focused~~for our ~~engineering~~products and ~~research~~services ~~and~~is ~~development~~highly ~~efforts~~competitive onand ~~crafting~~likely ~~our~~to ~~products~~continue to ~~perform~~be ascompetitive ~~scalable~~in ~~‘building~~the ~~blocks’~~future. Competition ~~for~~in ~~those~~our ~~companies~~product orand service ~~providers~~areas ~~wishing~~has toa ~~rapidly~~relatively ~~deploy~~ high ~~performance~~barrier ~~infrastructure~~ to ~~enable~~entry, ~~delivery~~however, ofas ~~cloud-based~~the ~~services.~~build Inout ~~September 2009 we introduced a line~~ of ~~devices~~and ~~called “cloud storage appliances” or CSAs. A cloud storage appliance is a purpose built storage device configured for either branch office or central site~~ deployment ~~which~~of ~~allows~~smart ~~the~~infrastructure ~~housing~~ and ~~delivery~~development of ~~customer data across not only their internal networking infrastructure, but also to make that data available to employees or business partners securely via~~ the ~~Internet,~~expertise ~~often called the cloud. The CSA line has been built~~ to ~~address~~provide ~~concerns~~its ~~within~~concomitant ~~the~~services ~~enterprise~~requires ~~marketplace~~significant ~~which~~investment ~~revolve~~in ~~around hesitation to entrust corporate data to third party providers such as Amazon S3~~infrastructure, ~~Mozy~~training, ~~Nirvanix~~development, ~~and~~licensure ~~others. The CSA line also addresses additional concerns about data access latency~~ and ~~performance~~time.

ByWe ~~implementing~~believe ~~our~~that ~~CSA devices,~~ we ~~believe~~compete ~~companies~~effectively ~~can~~across ~~gain~~ all of ~~the~~these ~~benefits~~factors. ofIn ~~cloud computing~~particular, ~~while~~we ~~mitigating~~believe ~~the~~that ~~impact~~our ofsmart ~~long-term~~infrastructure ~~contracts~~provides ~~frequently~~significant ~~required~~competitive byadvantages ~~vendors,~~in ~~and~~terms ~~reducing~~of ~~the potential for security breaches. High~~ performance, ~~data~~scalability, ~~transfers~~ease ~~are~~of ~~maintained~~management ~~by back-hauling the data~~ and ~~replicating~~low ittotal ~~from~~cost ~~remote~~of ~~branch~~ownership. ~~offices~~Historically, ~~across~~our ~~existing~~direct ~~wide~~sales ~~area~~and ~~network~~our ~~links~~reseller topartners ~~the~~have ~~corporate~~provided ITus ~~infrastructure.~~with Wea ~~believe~~significant annumber ~~additional benefit derived from the deployment~~ of ~~private~~reference oraccounts ~~hybrid~~which ~~storage~~address ~~clouds~~credibility onand ~~the~~helps ~~CSA~~in ~~products~~our ismarketing ~~that~~efforts ~~companies may not be required~~ to ~~pay~~new ~~per-megabyte or per-gigabyte transfer and storage fees to third party service companies~~customers.

~~Customers~~Many of the competitors especially in the larger urban markets have longer operating histories, better name recognition, larger customer bases and significantly greater financial, technical, sales and marketing resources than we have. Competitors may also be able to devote greater resources to the development, promotion, sale and support of their products. Competitors may also have more extensive customer bases and broader customer relationships than we do, including relationships with our potential customers.

~~Our~~Intellectual products have been sold to customers in the U.S., Canada and Europe across a broad range of industries, including GIS; oil and gas; state, local and federal government; and healthcare. We believe that our customers have a high level of satisfaction with our products and services. During the year ended September 30, 2013 two customers accounted for 40% of our consolidated revenue.Property

4Success in our technological markets depends, in part, upon our ability to obtain and maintain proprietary protection for our products, technology and know-how. This must be accomplished without infringing the proprietary rights of others and while simultaneously preventing others from infringing upon our proprietary rights.

~~Sales~~We seek to protect our proprietary positions by, among other methods, filing patent applications. Patent efforts are focused in the United States and, ~~Marketing~~when justified by cost and strategic importance, we plan to file related foreign patent applications in jurisdictions such as the European Union and Japan.

WePending ~~sell~~patent ~~our~~applications ~~products~~relate ~~via~~to ~~full~~various ~~“channel-based”~~software ~~model~~development projects and ~~through~~to athe ~~direct~~rapid ~~sales~~ingestion ~~force. In~~of amassive ~~channel-based~~amounts ~~sales~~of ~~model,~~video ~~companies~~and ~~with products or services build partnerships with systems integrators,~~ other ~~manufacturers,~~data ~~vertical companies~~ and ~~distributors~~other ~~and~~network ~~leverage~~storage ~~the~~concepts. It ~~sales~~is ~~resources~~unknown ofif ~~those~~any ~~groups to drive sales~~ of ~~products/services. We believe that~~ the ~~value~~patent ofapplications awill ~~channel-based~~issue ~~sales~~as ~~model is twofold~~patents. ~~First~~The itpatent ~~allows~~applications usmay tobe ~~grow total sales volume significantly while keeping sales staff~~opposed, ~~and our general and administrative expenses~~contested, ~~low. Rather than building a significant worldwide sales force of our own~~circumvented, ~~this~~designed ~~model~~around ~~allows~~by ~~us to build~~ a ~~small channel organization responsible for identification~~third-party, ~~training~~or ~~and~~found ~~support of partner organizations~~ to ~~ensure~~be ~~their~~invalid ~~success~~or ~~and productivity~~unenforceable. The second value of the channel-based model is that partners bring their own knowledge of key accounts and have relationships already in place which compresses the sales cycle and increases the close ratio on new business, with the goal of generating more sales for our company’s products and services.

We continue to aggressively pursue partner agreements to increase our sales and market exposure and footprint. These partner agreements typically take between three and six months to develop prior to materially increasing sales revenues.5

~~Manufacturing~~Copyright law, trademarks and trade secret agreements are also used to protect and maintain proprietary positions. Our proprietary information is protected by internal and external controls, including contractual agreements with employees, end-users and channel partners. There is no assurance that these parties will abide by the terms of their agreements.

~~Historically,~~Trademarks ~~our~~are ~~manufacturing~~used ~~has~~on ~~been~~some ~~conducted~~of at our ~~headquarters~~products ~~in Sterling, Virginia. Utilizing chassis from premium manufacturers such as AIC Corporation, Intel, SuperMicro,~~ and ~~others,~~these ~~all~~distinctive ~~systems~~marks ~~are~~may ~~built,~~be ~~burned-in,~~an ~~and~~important ~~tested~~factor ~~at this facility by our~~ in~~-house~~ ~~engineering~~marketing ~~and production staff. We manufacture IceBOX appliances, data storage management platforms. We use best-of-breed, readily available, commercial off-~~the~~-shelf~~ products. ~~sourced~~Inline® ~~from various resellers~~ and ~~suppliers~~Inline inlogo ~~our~~trademarks ~~manufacturing~~have ~~process. Subsequent~~been toregistered ~~our~~in ~~acquisition of CTC, we now outsource~~ the ~~manufacture~~United ~~of our IceWEB Storage products to a third party contract manufacturer located in Northern Virginia~~States.

~~Competition~~Our Recent History

~~The~~On ~~market~~October ~~for~~1, ~~our~~2013 ~~storage~~we isacquired ~~highly~~100% ~~competitive~~of the outstanding stock of Computers and ~~likely~~Tele-Comm., toInc., ~~become~~a ~~even~~Missouri ~~more~~corporation ~~competitive~~(“CTCI”), and its wholly owned subsidiary, KC NAP, LLC (“KC NAP”) in ~~the~~exchange ~~future.~~for ~~Established~~23,921 ~~companies~~shares ~~have~~of ~~historically~~common ~~dominated~~stock. Concurrently, and as part of the ~~storage~~share ~~market~~exchange agreement, ~~including~~the ~~EMC~~Company issued shares to retire an outstanding debt owing by CTCI to Streamside Partners, ~~Network~~LLC, ~~Appliance~~which totaled $155,000, ~~Dell~~and other debts of CTCI totaling $267,823, ~~Hewlett-Packard~~in exchange for 33,714 ~~Sun~~shares ~~Microsystems~~of our $0.001 par value common stock (such transactions taken together are sometimes referred to herein as the “Share Exchange”). As a result of the Share Exchange, ~~Hitachi~~we ~~Data~~are ~~Systems~~now the holding company of CTCI and ~~IBM~~we now operate a company in the business of operating data centers and providing Information Technology (“IT”) services. The acquisition was accounted for using the purchase method of accounting.

In addition, there is additional competition from smaller companies such as Compellent Technologies and Isilon. In the future, new competitors will emerge as well as increased competition, both domestically and internationally, from other established storage companies. The principal competitive market factors are:EMPLOYEES

•At ~~Industry~~September ~~credibility~~30, •2015 ~~Product~~we ~~scalability,~~had ~~performance~~6 ~~and~~full-time ~~reliability~~employees, •including ~~Ease~~our executive officer. None of ~~installation~~our ~~and~~employees ~~management~~are •covered ~~Software~~by ~~functionality~~collective •bargaining ~~Total~~agreements, ~~cost~~and ofwe ~~ownership~~believe •our ~~Customer~~relationships ~~support~~with •our ~~Market~~employees ~~presence~~to be good.

WeITEM ~~believe that we compete effectively across all of these factors~~1A. InRISK ~~particular, we believe that our product architecture provides significant competitive advantages in terms of performance, scalability, ease of management and low total cost of ownership~~FACTORS. ~~Historically, our OEM partners have provided us with a significant number of reference accounts which address credibility and helps in our marketing efforts to new customers.~~

~~Many~~An ofinvestment ~~the~~in ~~competitors~~our ~~have~~common ~~longer~~stock ~~operating~~involves ~~histories,~~a ~~better~~significant ~~name~~degree ~~recognition,~~of ~~larger~~risk. ~~customer~~You ~~bases~~should ~~and~~not ~~significantly~~invest ~~greater~~in ~~financial,~~our ~~technical,~~common ~~sales~~stock ~~and~~unless ~~marketing~~you ~~resources~~can ~~than~~afford weto ~~have~~lose your entire investment. ~~Competitors~~You ~~may~~should ~~also~~consider becarefully ~~able~~the tofollowing ~~devote~~risk ~~greater~~factors ~~resources~~and toother ~~the~~information ~~development,~~in ~~promotion,~~this ~~sale~~annual ~~and~~report ~~support~~before ofdeciding ~~their~~to ~~products.~~invest ~~Competitors~~in ~~may~~our ~~also~~common ~~have~~stock. ~~more~~If ~~extensive~~any ~~customer~~of ~~bases~~the following risks and ~~broader~~uncertainties ~~customer~~were ~~relationships~~to ~~than~~develop weinto doactual events, ~~including~~our ~~relationships~~business, ~~with~~financial ~~potential~~condition or results of operations could be materially adversely affected and you could lose your entire investment in our ~~customers~~company.

5RISKS RELATED TO OUR COMPANY

~~Research~~WE ~~and~~HAVE ~~Development~~ AN ACCUMULATED DEFICIT AND MAY HAVE CONTINUING LOSSES THAT WOULD RESULT IN SIGNIFICANT LIQUIDITY AND CASH FLOW PROBLEMS ABSENT MATERIAL INCREASES IN REVENUES.

~~Research~~We ~~and~~had ~~development~~an ~~expenses~~accumulated ~~consist~~deficit ~~primarily~~ of ~~personnel-related~~approximately ~~expenses,~~$54.7 ~~costs~~million ofat ~~prototype~~June ~~equipment~~30, ~~costs~~2015. ofFor ~~using~~the ~~contractors~~year ended June 30, ~~allocated~~2015 ~~facility~~we ~~and~~had ITa ~~overhead~~net ~~expenses~~loss of approximately $1.9 million and ~~depreciation~~for the nine months ended June 30, 2014, we had a net loss of ~~equipment~~approximately $4.9 million. In the year ended June 30, 2015, cash used in ~~research~~operations was approximately $811K. The report of our independent registered public accounting firm on our consolidated financial statements for the year ended June 30, 2015 contains a qualification expressing substantial doubt as to our ability to continue as a going concern as a result of net losses and ~~development~~cash ~~activities~~used in operations. We ~~expense~~cannot ~~research~~assure ~~and~~prospective ~~development~~investors ~~costs~~that assales ~~incurred~~will increase in future periods, nor can we assure prospective investors that they will not further decrease. ~~Our~~We ~~research~~expect ~~and~~to potentially make significant expenditures related to the development ~~expenses~~of ~~were~~the $1business,~~246,060~~ potentially including hiring additional personnel relating to sales and $1marketing,~~046,026,~~ incustomer ~~fiscal~~service ~~2013~~and support and ~~fiscal~~technology ~~2012~~development. As a result of these increased expenditures, ~~respectively. We~~we ~~anticipate~~will ~~that~~be ~~research~~required to generate and ~~development~~sustain ~~activity~~increased ~~will~~revenue ~~substantially~~to ~~decline~~achieve inprofitability. ~~fiscal~~As ~~2014~~long as cash flow from operations remains insufficient to fund operations, we ~~focus~~will oncontinue ~~selling~~depleting cash and ~~marketing~~other financial resources. Our failure to achieve profitable operations in future periods will adversely affect our ~~storage~~ability ~~products~~to ~~and~~continue ~~operate~~as ~~the~~a ~~businesses~~going concern. In this event, prospective investors could lose all of ~~CTC~~their investment in our company.

~~Intellectual~~OUR ~~Property~~SALES HAVE DECLINED SUBSTANTIALLY FROM PRIOR PERIODS AND THERE ARE NO ASSURANCES OUR SALES WILL RETURN TO HISTORIC LEVELS.

~~Success~~Our inacquisition ~~our~~of ~~technological~~CTC ~~markets~~& ~~depends,~~KC NAP in ~~part~~October, ~~upon~~2013 ~~our~~concurrent ~~ability~~with toour ~~obtain~~transition ~~and~~from ~~maintain~~the ~~proprietary~~hardware ~~protection~~assembly ~~for~~business caused our ~~products,~~revenue ~~technology~~to ~~and know-how~~decline. Our ~~This~~revenues ~~must~~from beCTC ~~accomplished~~KC ~~without~~NAP ~~infringing~~throughout the ~~proprietary~~fiscal ~~rights~~period ofhave ~~others~~either ~~and~~maintained ~~while~~their ~~simultaneously~~levels ~~preventing~~or ~~others~~have ~~from~~shown ~~infringing~~slight ~~upon~~increases, but there is no assurance that our ~~proprietary~~revenues ~~rights~~will return to previous levels in the near future.

We seek to protect our proprietary positions by, among other methods, filing patent applications. Patent efforts are focused in the United States and, when justified by cost and strategic importance, we plan to file related foreign patent applications in jurisdictions such as the European Union and Japan.6

~~Pending~~WE ~~patent~~MAY ~~applications~~NEED ~~relate~~ADDITIONAL toFINANCING ~~various~~WHICH ~~software~~WE ~~development~~MAY ~~projects~~NOT ~~and~~BE toABLE ~~the~~TO ~~rapid~~OBTAIN ~~ingestion~~ON ofACCEPTABLE ~~massive~~TERMS, ~~amounts~~IF ofAT ~~video and other data and other network storage concepts~~ALL. It isIF ~~unknown~~WE ifCANNOT ~~any~~RAISE ofADDITIONAL ~~the~~CAPITAL ~~patent~~AS ~~applications~~NEEDED, ~~will~~OUR ~~issue~~ABILITY asTO ~~patents.~~EXECUTE ~~The~~OUR ~~patent~~GROWTH ~~applications~~STRATEGY ~~may~~AND beTO ~~opposed,~~FUND ~~contested,~~OUR ~~circumvented,~~ONGOING ~~designed~~OPERATIONS ~~around~~MAY byBE aIN ~~third-party, or found to be invalid or unenforceable~~JEOPARDY.

~~Copyright law~~Historically, ~~trademarks~~our operations have been financed primarily through the issuance of equity and ~~trade~~short-term ~~secret~~loans. ~~agreements~~Capital ~~are~~is ~~also~~typically ~~used~~needed not only to ~~protect~~fund ongoing operations and ~~maintain~~to ~~proprietary~~pay ~~positions. Our~~existing ~~proprietary~~obligations, ~~information~~but capital is ~~protected~~also bynecessary ~~internal~~if we wish to acquire additional assets or companies and ~~external~~for ~~controls~~the effective integration, operation and expansion of these businesses. Future capital requirements, however, depend on a number of factors, including ~~contractual~~the ~~agreements~~ability ~~with~~to ~~employees~~internally grow revenues, ~~end-users~~manage the business and ~~channel~~control ~~partners~~expenses. At June 30, 2015, we had a working capital deficit of $4.4 million as compared to a working capital deficit of $3.1 million at June 30, 2014. We may need to raise additional capital to fund ongoing operations, pay existing obligations and fund future growth. There isare no ~~assurance~~assurances that ~~these~~additional ~~parties~~working capital will ~~abide~~be byavailable in the future upon terms acceptable to us. If we do not raise funds as needed, our ability to provide for current working capital needs, make additional acquisitions, grow the company, and continue our existing business and operations may be in jeopardy. In this event, prospective investors could lose all of their ~~agreements~~investment in our company.

~~Trademarks~~MANAGEMENT ~~are~~MAY ~~used~~BE onUNABLE ~~some~~TO ofEFFECTIVELY ~~our~~INTEGRATE ~~products~~ACQUISITIONS ~~and~~AND ~~these~~TO ~~distinctive~~MANAGE ~~marks~~GROWTH ~~may~~AND beUOIP anMAY ~~important~~BE ~~factor~~UNABLE inTO ~~marketing~~FULLY ~~the~~REALIZE ~~products.~~ANY ~~Inline®~~ANTICIPATED ~~and~~BENEFITS ~~Inline~~OF ~~logo~~THESE ~~trademarks have been registered in the United States~~ACQUISITIONS.

Our ~~History~~business strategy includes growth through acquisition and internal development. We are subject to various risks associated with our growth strategy, including the risk that we will be unable to identify and recruit suitable acquisition candidates in the future or to integrate and manage the acquired companies. Acquired companies’ histories, geographical locations, business models and business cultures can be different from ours in many respects. Our directors and senior management face a significant challenge in their efforts to integrate the businesses and the business of the acquired companies or assets, and to effectively manage continued growth. There can be no assurance that efforts to integrate the operations of any acquired assets or companies acquired in the future will be successful, that we can manage growth or that the anticipated benefits of these proposed acquisitions will be fully realized. The dedication of management resources to these efforts may detract attention from day-to-day business. There can be no assurance that there will not be substantial costs associated with these activities or of the success of integration efforts, either of which could have a material adverse effect on operating results.

WeECONOMIC ~~were~~CONDITIONS ~~originally~~AND ~~formed~~WORLD ~~under~~EVENTS ~~the~~COULD ~~laws~~AFFECT ofOUR ~~the~~COMPANY’S ~~State~~OPERATING ~~of Delaware in February 1969~~RESULTS. For many years, we were a wholesaler of custom one, two, three and four-color processed commercial printing, as well as disposable and durable office equipment including stock paper, fax paper, fax and copy machines, computers, file cabinets and safes. We conducted our business throughout the United States of America and Puerto Rico from our headquarters in New York.

InWe ~~March~~and ~~1999~~our customers could be adversely affected by an economic downturn such as changes in consumer and investor confidence, weinstability ~~changed~~in the ~~focus~~credit ofand ~~our~~financial markets, volatile corporate profits, and reduced business and ~~closed~~consumer spending. The economy as a ~~transaction~~whole also may be affected by ~~which~~future weworld ~~acquired~~events ~~100%~~such as acts of ~~the~~terrorism, ~~outstanding~~developments ~~capital~~in ~~stock~~the ofwar ~~North~~on ~~Orlando~~terrorism, ~~Sports~~conflicts ~~Promotions~~in international situations, ~~Inc~~and by natural disasters., aThese ~~privately~~factors ~~held~~may ~~Florida~~affect ~~corporation.~~our ~~From~~results ~~1999~~of ~~until~~operations ~~July~~by ~~2001~~reducing sales, wegross ~~operated~~profits and/or net income as a ~~variety~~result of ~~Internet-~~a slowdown in customer orders or order cancellations. In addition, political and social turmoil related ~~services;~~to ~~however~~international conflicts and terrorist acts may put further pressure on economic conditions abroad. Unstable political, wesocial ~~were~~and ~~unable~~economic conditions may make it difficult for our company, our customers, and our suppliers to ~~generate~~accurately ~~positive~~forecast and plan future business activities. If such conditions persist, our business, financial condition, results of operations and cash flow ~~from~~could ~~these~~be ~~Internet-related~~negatively ~~businesses~~affected.

InTHE ~~May~~CONDITION ~~2001,~~OF weTHE ~~executed an Agreement and Plan of Reorganization and Stock Purchase Agreement with Disease S~~U.~~I., Inc. Under the terms of the agreement, we acquired 100% of the issued and outstanding stock of Disease~~ S.~~I.,~~ ~~Inc.~~AND inGLOBAL ~~exchange~~FINANCIAL ~~for~~MARKETS ~~750,000~~HAS ~~shares~~BEEN ofVOLATILE ~~our~~AND ~~common~~MAY ~~stock.~~CONTINUE ~~The~~TO ~~transaction~~BE ~~was accounted for as a reverse acquisition under the purchase method for business combinations~~VOLATILE. Accordingly, the combination of the two companies was recorded as a recapitalization of Disease S.I., Inc., pursuant to which Disease S.I., Inc. was treated as the continuing entity. Disease S.I., Inc. was a developmental stage biopharmaceutical clinical diagnostics company planning to employ a broad array of technologies to detect, identify and quantify substances in blood or other bodily fluids and tissues. It intended to derive revenues from patent sub-licensing fees, royalties from pharmaceutical sales, appropriate milestone payments and research and development contracts.

6Prospective investors should be aware that the U.S. and global financial markets are currently quite volatile and that the condition of the financial markets has become significantly weakened and destabilized in the past few years. Continued volatility and instability could adversely affect our ability to finance our business. Further, financial market instability could result in significant regulatory changes that would have an unpredictable effect on the financial markets in general.

Following completion of the acquisition of Disease S.I., Inc., it became apparent to us that it would be in our best long-term interest that the Internet operations be conducted apart from the biopharmaceutical clinical diagnostics operations. On July 24, 2001, we sold a former officer and director 100% of our subsidiary North Orlando Sports Promotions, Inc., in exchange for the assumption of all liabilities related to North Orlando Sports Promotions, Inc. and its operations estimated at approximately $112,000, and which included the forgiveness of $91,500 in accrued compensation. Included in the sale along with the capital stock of North Orlando Sports Promotions, Inc. were fixed assets, rights to several domain names and various contractual rights and obligations.7

OnOUR ~~November~~BUSINESS ~~27,~~HAS ~~2001,~~INHERENT weOPERATIONAL ~~acquired~~RISKS ~~9,050,833~~THAT ~~shares~~CANNOT ofBE ~~the~~ADEQUATELY ~~common~~COVERED ~~stock~~BY ofINSURANCE ~~Healthspan~~OR ~~Sciences, Inc~~INDEMNITY., a privately held California corporation in exchange for 5,000 shares of our common stock in a private transaction exempt from registration under the Securities Act of 1933 in reliance on Section 4(2) of that act. This agreement was rescinded on March 21, 2002. Pursuant to the rescission, Healthspan Sciences, Inc. returned all 5,000 shares of our common stock issued in the exchange and we returned all 9,050,833 shares of Healthspan Sciences, Inc. which we had received.

OnWe ~~March~~may ~~21,~~face ~~2002,~~unanticipated werisks ~~executed~~of anlegal ~~Agreement~~liability ~~and~~for ~~Plan~~damages ofcaused ~~Merger~~by ~~with~~the ~~IceWEB~~actual ~~Communications,~~or ~~Inc.,~~alleged afailure ~~Delaware~~of ~~corporation~~technologies and ~~its~~products ~~security~~that ~~holders~~we supply. ~~Founded~~We insell ~~2000,~~products ~~IceWEB~~to ~~Communications,~~a ~~Inc.~~variety ~~enabled~~of ~~interactive~~large ~~communications~~entities, and ~~education~~because onof ~~the~~our ~~web.~~size, Inwe ~~June~~have ~~2001,~~limited itability ~~had~~to ~~acquired~~negotiate ~~the~~favorable ~~assets~~commercial terms in ~~bankruptcy~~our ofproduct ~~Learning~~purchase/sale ~~Stream, Inc~~documentation., aWhile ~~provider~~we ofhave ~~streaming~~attempted ~~services. Pursuant~~ to ~~the~~secure ~~agreement,~~appropriate ~~each~~insurance ofcoverage ~~the~~at ~~22,720,500~~reasonable ~~shares~~cost ofit ~~common~~is ~~stock~~not ofpossible ~~IceWEB~~to ~~Communications,~~insure ~~Inc.~~against ~~issued~~all ~~and~~risks ~~outstanding~~inherent ~~immediately~~in ~~prior~~the tomarkets ~~the~~we ~~merger~~serve, ~~were~~nor ~~converted~~can ~~into~~we ~~the~~assure ~~right~~investors tothat ~~receive~~our ~~0.13375~~insurers ~~shares~~will ofpay ~~our~~a ~~common~~particular ~~stock~~claim, ~~for~~or anthat ~~aggregate~~we ofwill ~~303,888~~be ~~shares~~able ofto ~~common~~maintain ~~stock.~~coverage ~~Each~~at ofreasonable rates in the ~~warrants~~future. toSubstantial ~~purchase~~claims anresulting ~~aggregate~~from a failure of ~~680,125~~a ~~shares~~product ofto ~~IceWEB~~perform ~~Communications,~~in ~~Inc.~~excess ~~common~~of ~~stock~~or ~~issued~~not ~~and~~otherwise ~~outstanding~~covered ~~immediately~~by ~~prior~~indemnity toor ~~the~~insurance ~~merger~~could ~~were~~harm ~~converted~~our ~~into~~financial ~~the~~condition ~~right~~and tooperating ~~receive~~results. ~~one~~Insurance ~~warrant~~policies toalso ~~purchase~~contain ~~0.13375~~deductibles, ~~shares~~limitations ofand exclusions which increase our ~~common~~costs ~~stock~~in ~~upon~~the ~~exercise~~event of ~~said~~a ~~warrant~~claim.

InOUR ~~June~~SUCCESS ~~2003,~~AND weCOMPETITIVE ~~acquired~~POSITION ~~100%~~DEPENDS ofON ~~the~~OUR ~~capital~~ABILITY ~~stock~~TO ofOBTAIN ~~Interlan~~AND ~~Communications,~~PROTECT ~~Inc.,~~INTELLECTUAL ~~a privately held corporation, in exchange for 25,000 shares of our common stock~~PROPERTY. InFAILURE ~~June~~TO ~~2003,~~PROTECT weOUR ~~also~~INTELLECTUAL ~~acquired~~PROPERTY ~~100%~~RIGHTS ofWOULD ~~the~~IMPAIR ~~capital~~OUR ~~stock~~ABILITY ofTO ~~Seven~~COMPETE ~~Corporation~~EFFECTIVELY inAND ~~exchange~~DEFEND ~~for~~AGAINST ~~37,500~~THIRD ~~shares~~PARTY ofCLAIMS ~~our~~THAT ~~common~~WE ~~stock~~ARE ~~and~~INFRINGING ~~cash~~ON ~~consideration~~THE ofINTELLECTUAL ~~$123,000.~~PROPERTY AsRIGHTS ~~described~~OF ~~later in this section, we sold Seven Corporation in February 2007~~OTHERS.

InWe ~~October~~maintain ~~2003,~~our weproprietary ~~acquired~~technology ~~19%~~and ofknow-how as trade secrets as well as through the ~~capital~~use ~~stock~~of patents. Some of ~~IceWEB~~our ~~5000~~proprietary technology may be covered by provisional patents. Our policy is to use confidentiality agreements, ~~Inc~~licensing agreements and similar arrangements to establish and protect intellectual property. ofFor ~~Virginia~~example, ~~together~~our ~~with~~policy ~~substantially~~is ~~all~~to ofmaintain ~~its~~confidentiality ~~assets~~agreements ~~including~~with ~~software~~our ~~licenses~~employees, ~~source~~consultants, ~~code~~vendors and business partners and this has controlled access to, ~~potential~~and ~~patents~~distribution of its product design documentation and ~~trademarks~~other ~~for~~proprietary ainformation. ~~combined~~We ~~stock~~intend to continue to protect existing and ~~cash~~new ~~value~~processes and technologies that are developed as trade secrets but may not be able to do so. We hold or have filed patents related to several of ~~approximately~~our ~~$632~~products and technology,~~000~~ ~~which~~however ~~included~~there is no guarantee that we will be able to enforce these patents or that the ~~issuance~~applications ofwill ~~191,381~~be ~~shares~~issued ofas patents. Failure to protect our ~~common~~intellectual ~~stock~~property ~~and~~could ~~cash~~affect ~~consideration~~our ofability ~~$65,500~~to secure additional contracts or preserve market advantages as we develop and commercialize our products.

InOur ~~May~~efforts 2004, we acquired substantially all of the assets of DevElements, Inc. of Virginia, including software licenses, source code, potential patents and trademarks, cash, hardware, and equipment. As consideration for the purchase of the assets, we paid DevElements $100,000 and agreed to ~~the~~protect ~~assumption of liabilities up to an aggregate of $150,000. In exchange for the 19% interest in DevElements, we issued to the security holders of DevElements 187,500 shares of~~ our ~~common~~intellectual ~~stock~~property ~~and~~rights ~~options~~may to purchase 187,500 shares of common stock exercisable at a price of $27.20 per share and expiring May 13, 2009. We issued to the security holders options to purchase 6,250 shares, which were contingently exercisable upon the satisfaction of certain performance criteria. The performance criteria, which required contracts, task orders and other work assignments involving billing of at least $840,000 during the six-month period ending November 13, 2004, was not ~~met and the options were cancelled.~~:

In● ~~March~~prevent ~~2006~~challenges ~~we acquired PatriotNet~~to, ~~Inc.,~~or anthe ~~Internet~~invalidation ~~service~~or ~~provider,~~circumvention ~~for total consideration~~ of ~~$290~~,~~000~~ ofexisting ~~which~~intellectual ~~$190,000~~property ~~was~~rights; ~~paid~~● inprevent ~~cash~~competitors ~~and~~from ~~$100,000~~independently ~~was~~developing ~~paid~~similar ~~through~~products ~~the~~or ~~issuance~~duplicating ~~of 100,000 shares of~~ our ~~common~~products; ~~stock.~~● Weprovide ~~granted~~adequate ~~Patriot~~protection ~~Computer~~for ~~Group,~~intellectual ~~Inc.,~~property ~~the~~rights; ~~seller~~● inprevent ~~the~~disputes ~~transaction,~~with ~~certain~~third ~~piggyback~~parties ~~registration~~regarding ~~rights~~ownership ~~for the 100,000 shares~~ of our ~~common~~intellectual ~~stock~~property ~~issued~~rights; as● ~~partial~~prevent ~~consideration~~disclosure ~~in the transaction. At the time~~ of ~~the~~trade ~~acquisition,~~secrets ~~the~~and ~~purchase~~know-how ~~price~~to ~~exceeded~~third ~~the~~parties ~~fair~~or ~~value~~their ofrelease ~~the~~into ~~assets acquired by $390,600 which we treated as goodwill for accounting purposes. From~~ the ~~date~~public ofdomain; ~~acquisition~~or ~~through~~● ~~September~~prevent ~~30,~~our ~~2007~~company ~~revenues~~ from ~~PatriotNet~~being ~~were~~subject ~~approximately~~to ~~$316,000~~claims ~~and~~of ~~represented~~infringement ~~approximately 6%~~ of ~~our consolidated revenues. On December 1, 2006 we sold PatriotNet to Leros Online, Inc., a third party, for $150,000 in cash and~~ the ~~assumption~~intellectual ofproperty ~~$60,000~~rights ~~in liabilities. At September 30, 2007 we recorded goodwill impairment~~ of ~~$180,000 related to this transaction~~third-parties.

7Others may attempt to copy or otherwise obtain and use our proprietary technologies without consent. Monitoring the unauthorized use of technologies is difficult. There is a significant risk that customers or their end-user customers may attempt to copy or otherwise obtain and use our proprietary technologies without our consent.

OnWe ~~December~~may 1,find ~~2006~~it wenecessary ~~sold~~to ~~100%~~litigate ofagainst ~~the~~others, ~~capital~~including ~~stock~~customers, ofto protect our ~~wholly-owned~~intellectual ~~subsidiary,~~property ~~Integrated~~and ~~Power Solutions, Inc.~~ to ~~Mr. John~~challenge ~~Younts,~~the ~~our~~validity ~~Vice~~and ~~President~~scope of ~~Integrated~~the ~~Power~~proprietary ~~Solutions~~rights ~~and~~asserted aby ~~key employee~~others, ~~for~~and the ~~assumption~~company ofcould ~~approximately~~face ~~$180,000~~counterclaims. inLegal ~~liabilities~~disputes ~~and~~with ~~the~~customers ~~payment~~could ofadversely ~~$12,000~~affect werelationships ~~owed~~and ~~him~~sales. ~~For~~Litigation ~~the~~is ~~fiscal~~inherently ~~year~~uncertain, ~~ended~~and ~~September~~an ~~30,~~adverse ~~2006,~~outcome ~~revenues~~could ~~for~~subject ~~Integrated~~us ~~Power~~to ~~Solutions~~significant ~~were~~liability ~~approximately~~for ~~$457,000,~~damages or ~~approximately,~~invalidate 9our proprietary rights.~~5%,~~ The complexity of ~~our~~the ~~total~~technology ~~sales~~involved and inherent uncertainty and cost of intellectual property litigation increases our risks.

OnThird ~~November~~parties ~~15,~~may ~~2006~~claim that we are infringing on their intellectual property rights, and we ~~acquired~~may ~~certain~~already ofbe ~~the~~unknowingly ~~assets~~infringing. ofWe ~~True~~may ~~North~~face ~~Solutions~~additional ~~related~~liability toif ~~its~~we ~~governmental~~agree ~~customer~~to ~~business~~indemnify ~~for~~customers ~~$350,000~~against ofthird ~~which~~party ~~$250,000~~infringement ~~was~~claims. ~~paid~~If ina ~~cash~~third ~~and~~party ~~the~~establishes ~~balance~~that ~~was~~we ~~paid~~are ~~through~~infringing ~~the~~upon ~~delivery~~their ofintellectual aproperty ~~$100~~rights,~~000~~ ~~principal~~we ~~amount~~may ~~promissory~~be ~~note~~forced ~~secured~~to bymodify ~~collateral~~products ~~pledge~~or ofmanufacturing ~~the~~processes ~~assets,~~and ~~payable~~such ~~immediately~~changes ~~upon~~may ~~accomplishment~~be ofexpensive ~~the~~or ~~novation~~impractical. ofWe ~~the~~may ~~GSA~~be ~~Schedule.~~forced ~~Under~~to ~~the~~seek ~~terms~~royalty ofor ~~the~~license ~~agreement,~~agreements. If we ~~acquired~~are ~~the~~unable ~~customers,~~to ~~forecast,~~agree ~~contract~~on ~~renewals~~acceptable terms, ~~and~~we ~~GSA~~may ~~schedule~~be ofrequired ~~True~~to ~~North~~discontinue ~~Solutions.~~products Weor ~~permitted~~to ~~True~~halt ~~North~~other ~~Solutions~~aspects toof ~~use~~our ~~the~~operations. ~~purchased~~We ~~assets~~may ~~until~~also ~~December~~be ~~31,~~liable ~~2006~~for ~~pursuant~~significant todamages. ~~which~~Even weif ~~acted~~intellectual asproperty ~~the~~claims ~~seller’s~~brought ~~subcontractor~~against ~~until~~us ~~the~~are ~~novation~~without ofmerit, the ~~GSA~~litigation ~~Schedule~~may ~~was~~be ~~complete.~~costly ~~The~~and ~~novation~~time ofconsuming, ~~the~~and ~~GSA~~may ~~schedule~~divert ~~was~~management ~~completed~~and inkey ~~March,~~personnel ~~2008~~from normal business operations.

On February 16, 2007 we sold 100% of the outstanding stock of our subsidiary, The Seven Corporation of Virginia, Inc., to PC NET in exchange for the waiver of approximately $11,000 we owed PC NET. Under the terms of the agreement we may not engage in any staffing services businesses as The Seven Corporation had conducted for a period of at least two years. For the fiscal year ended September 30, 2006 revenues from The Seven Corporation were $360,000 or approximately 7.5%, of our total sales.8

OnWE ~~December~~HAVE ~~22,~~BEEN ~~2007,~~ENGAGED weIN ~~acquired~~VARIOUS ~~100%~~LEGAL ofDISPUTES ~~the~~WHICH ~~outstanding~~COULD ~~stock~~IMPACT ofOUR ~~Inline~~COMPANY ~~Corporation~~AND ~~for~~OUR ~~$2,412,731~~SUPPLIER ~~in cash, plus 503,356 shares of our common stock valued at $276,846, the fair market value on the date of acquisition~~RELATIONSHIPS. ~~The acquisition was accounted for using the purchase method of accounting.~~

OnWe ~~March~~are ~~30,~~currently ~~2009,~~engaged wein ~~completed~~four ~~the~~legal ~~sale~~proceedings. ofThese ~~IceWEB~~legal ~~Virginia,~~proceedings ~~Inc.,~~relate ato ~~wholly~~non-payment ~~owned~~of ~~subsidiary,~~vendors. Claims relating to ~~ABC~~these ~~Networks,~~proceedings ~~Inc.,~~currently atotal ~~privately~~approximately ~~held~~between ~~U.S.~~$40,000 ~~company~~and $55,000. ~~Pursuant~~These toand/or the ~~terms~~remaining ofand/or ~~the~~future ~~transaction,~~potential ~~ABC~~legal ~~Networks,~~proceedings ~~Inc.~~could ~~acquired~~impact ~~100%~~our offinancial ~~the~~position ~~outstanding~~and/or ~~common~~our ~~stock~~relationships ofwith ~~IceWEB~~customers, ~~Virginia~~vendors, ~~Inc~~suppliers, distributors and/or other parties.

OnRISKS ~~October~~RELATING 1,TO ~~we acquired 100% of the outstanding stock of Computers and Tele-Comm.~~UNIFIEDNLINE, ~~Inc~~INC.,’S aCOMMON Missouri corporation (“CTCI”), and its wholly owned subsidiary, KC NAP, LLC (“KC NAP”) in exchange for 9,568,400 shares. Concurrently, and as part of the share exchange agreement, the Company issued shares to retire an outstanding debt owing by CTCI to Streamside Partners, LLC, which totaled $155,000, and other debts of CTCI totaling $267,823, in exchange for 13,485,799 shares of our $0.001 par value common stock (such transactions taken together are sometimes referred to herein as the “Share Exchange”). As a result of the Share Exchange, we are now the holding company of CTCI and we now operate a company in the business of operating data centers and providing Information Technology (“IT”) services. The acquisition was accounted for using the purchase method of accounting.STOCK

~~EMPLOYEES~~THE EXERCISE OF WARRANTS AND OPTIONS AND THE CONVERSION OF SHARES OF OUR SERIES B CONVERTIBLE PREFERRED STOCK WILL BE DILUTIVE TO OUR EXISTING STOCKHOLDERS.

At ~~January~~June 1330, ~~2014~~2015 we had ~~13 full-time employees, including our executive officers. None of our employees are covered by collective bargaining agreements, and we believe our relationships with our employees to be good.~~outstanding:

8● 912,466,204 shares of our common stock,

~~ITEM~~● ~~1A.~~626,667 ~~RISK~~shares ~~FACTORS~~of Series B Convertible Preferred Stock owned by the estate of our former Chief Executive Officer which is convertible into 1,567 shares of our common stock,

An● ~~investment~~Common instock ~~our~~purchase ~~common~~warrants ~~stock~~to ~~involves~~purchase a ~~significant~~total ~~degree~~ of ~~risk.~~64,436,748 ~~You~~shares ~~should~~of ~~not invest in~~ our common stock ~~unless~~with ~~you~~exercise ~~can~~prices ~~afford~~ranging tofrom ~~lose your entire investment~~$0.024 ~~You should consider carefully the following risk factors and other information in this annual report before deciding~~ to ~~invest in our common stock~~$60.00 Ifper any of the following risks and uncertainties were to develop into actual events, our business, financial condition or results of operations could be materially adversely affected and you could lose your entire investment in our company.share

~~RISKS~~● ~~RELATED~~Stock TOoptions ~~OUR~~granted ~~COMPANY~~under our 2012 Equity Compensation Plan and our 2013 Equity Compensation Plan which are exercisable into 7,232 shares of our common stock with a weighted average exercise price of $33.53 per share.

WEThe ~~HAVE~~exercise ANof ~~ACCUMULATED~~the ~~DEFICIT~~outstanding ~~AND~~options ~~MAY~~and ~~HAVE~~warrants ~~CONTINUING~~or ~~LOSSES~~the ~~THAT~~conversion ~~WOULD~~of ~~RESULT~~the INoutstanding ~~SIGNIFICANT~~convertible ~~LIQUIDITY~~securities ~~AND~~will ~~CASH~~be ~~FLOW~~dilutive ~~PROBLEMS~~to ~~ABSENT~~our ~~MATERIAL~~security ~~INCREASES IN REVENUES~~holders.

WePROVISIONS ~~had~~OF anOUR ~~accumulated~~CERTIFICATE ~~deficit~~OF ofINCORPORATION ~~approximately~~AND ~~$47.9~~BYLAWS ~~million~~MAY atDELAY ~~September~~OR ~~30,~~PREVENT ~~2013.~~A ~~For~~TAKE-OVER ~~the~~WHICH ~~years~~MAY ~~ended~~NOT ~~September~~BE ~~30,~~IN ~~2013~~THE ~~and~~BEST ~~2012,~~INTERESTS weOF ~~had~~OUR aSECURITY ~~net loss of approximately $7~~HOLDERS.1 million and approximately $6.485 million, respectively. In fiscal year 2013, cash used in operations was approximately $2.7 million. The report of our independent registered public accounting firm on our consolidated financial statements for the fiscal year ended September 30, 2013 contains a qualification expressing substantial doubt as to our ability to continue as a going concern as a result of net losses and cash used in operations. We cannot assure prospective investors that sales will increase in future periods, nor can we assure prospective investors that they will not further decrease. We expect to potentially make significant expenditures related to the development of the business, potentially including hiring additional personnel relating to sales and marketing, customer service and support and technology development. As a result of these increased expenditures, we will be required to generate and sustain increased revenue to achieve profitability. As long as cash flow from operations remains insufficient to fund operations, we will continue depleting cash and other financial resources. Our failure to achieve profitable operations in future periods will adversely affect our ability to continue as a going concern. In this event, prospective investors could lose all of their investment in our company.

~~OUR~~Provisions ~~SALES~~of ~~HAVE~~our ~~DECLINED~~certificate ~~SUBSTANTIALLY~~of ~~FROM~~incorporation ~~PRIOR~~and ~~PERIODS~~bylaws ~~AND~~may ~~THERE~~be ~~ARE~~deemed NOto ~~ASSURANCES~~have ~~OUR~~anti-takeover ~~SALES~~effects, ~~WILL~~which ~~RETURN~~include TOwhen ~~HISTORIC~~and ~~LEVELS~~by whom special meetings of security holders may be called, and may delay, defer or prevent a takeover attempt. In addition, certain provisions of the Delaware General Corporations Law also may be deemed to have certain anti-takeover effects, including a provisions stipulating that control of shares acquired in excess of certain specified thresholds will not possess any voting rights unless these voting rights are approved by a majority of a corporation’s disinterested security holders.

~~Due~~In toaddition, ~~the~~our ~~untimely~~certificate ~~passing~~ of ~~our~~incorporation ~~Chief~~authorizes ~~Executive~~the ~~Officer~~issuance inof ~~May,~~up ~~2012~~to 10,000,000 weshares ~~experienced~~of apreferred ~~significant~~stock ~~decrease~~with insuch ~~sales~~rights ~~momentum~~and preferences as ~~customers,~~may ~~vendors,~~be ~~and~~determined ~~partners~~from ~~put~~time ~~their~~to ~~purchasing~~time ~~decisions~~by onour ~~hold~~board ~~until~~of wedirectors. We ~~could~~presently ~~reassure~~have ~~them~~outstanding ~~that~~626,667 weshares ~~were~~of ~~going~~Series toB beconvertible ~~able~~preferred tostock ~~provide~~owned ~~them~~by ~~with~~the ~~products~~estate ~~and~~of ~~services~~former CEO and ~~were~~Chairman ~~able~~John toR. ~~continue~~Signorello. Our ~~our~~board ~~operations.~~of Wedirectors ~~cannot~~may, ~~assure~~without ~~you~~stockholder ~~that~~approval, ~~our~~issue ~~operations~~additional ~~will~~series ~~achieve~~of preferred stock with dividends, liquidation, conversion, voting or other rights that could adversely affect the ~~level~~voting power or other rights of ~~historic~~the ~~sales~~holders inof ~~future~~our ~~periods~~common stock.

WEPUBLIC ~~HAVE~~COMPANY ~~ENTERED~~COMPLIANCE ~~INTO~~MAY AMAKE ~~LOAN~~IT ~~ARRANGEMENT~~MORE ~~WITH~~DIFFICULT ATO ~~COMPANY~~ATTRACT ~~CONTROLLED~~AND BYRETAIN ~~OUR~~OFFICERS ~~INDEPENDENT~~AND DIRECTORS ~~WHICH COULD CAUSE A CONFLICT OF INTEREST~~.

InThe ~~November~~Sarbanes-Oxley ~~2012~~Act weof ~~entered into a Loan Agreement with IWEB Growth Fund~~2002, ~~LLC,~~the aDodd-Frank ~~company~~Act ~~which~~and ~~was~~rules ~~recently~~subsequently ~~established~~implemented by ~~Messrs.~~the ~~Compton,~~Commission ~~Bush,~~have ~~Carosi,~~required ~~Pirtle~~changes ~~and~~in ~~Stavish~~corporate ~~and~~governance ~~General~~practices ~~Soyster,~~of ~~our~~public ~~independent directors~~companies. ~~Under~~As ~~the~~a ~~terms~~public ~~of the Loan Agreement~~company, ~~IWEB~~we ~~Growth~~expect ~~Fund~~these ~~agreed~~rules toand ~~make~~regulations ~~one or more loans~~ to uscontinue up to ~~the~~increase ~~total~~compliance ~~principal~~costs ~~amount~~in of2016 ~~$1.5~~and ~~million~~beyond and asto ofmake ~~the~~certain ~~date~~activities ~~hereof~~more wetime ~~have~~consuming ~~borrowed~~and ~~$186,000~~costly ~~from~~than itif ~~under~~we ~~one~~were ~~year~~not ~~12%~~a ~~secured~~public ~~notes~~company. ~~Under~~As ~~the~~a ~~terms~~public ~~of these loans~~company, we ~~granted~~also ~~IWEB~~expect ~~Growth~~that ~~Fund~~these arules ~~second~~and ~~position~~regulations ~~security~~may ~~interest~~make init ~~all~~more ofdifficult ~~our assets~~ and ~~executed~~expensive ~~a confession of judgment. Any additional amounts~~ to beobtain ~~lent~~director toand usofficer ~~under~~liability ~~this~~insurance ~~master~~in ~~agreement are at~~ the ~~discretion~~future ~~of the lender~~ and ~~there~~we ~~are~~may ~~no assurances any additional funds will~~ be ~~available~~required to ~~us.~~accept Inreduced ~~addition,~~policy ~~there~~limits ~~are~~and nocoverage ~~assurances~~or ~~that~~incur ~~the~~substantially ~~terms~~higher ofcosts ~~these loans are as favorable~~ to usobtain asthe wesame ~~might~~or ~~have~~similar ~~received~~coverage. ~~from~~As ~~unrelated~~a ~~third~~result, ~~parties.~~it ~~Lastly,~~may ~~should~~be wemore ~~fail~~difficult to ~~pay~~attract ~~these~~and ~~obligations~~retain ~~when~~qualified ~~due,~~persons ~~the lender could seek~~ to ~~foreclose~~serve on our ~~assets~~board ~~or otherwise obtain a judgment against us. As the principals~~ of ~~the~~directors ~~lender~~or ~~are~~as ~~members~~executive ~~of our Board of Directors, there are no assurances that these potential conflicts of interests will be settled in a manner favorable to the Company~~officers.

WEOUR ~~MAY~~STOCK ~~NEED~~PRICE ~~ADDITIONAL FINANCING WHICH IT~~ MAY ~~NOT~~ BE ~~ABLE~~VOLATILE TOIN ~~OBTAIN~~RESPONSE ~~ON ACCEPTABLE TERMS, IF AT ALL. IF WE CANNOT RAISE ADDITIONAL CAPITAL AS NEEDED, OUR ABILITY~~ TO ~~EXECUTE~~MARKET ~~OUR GROWTH STRATEGY~~ AND TOOTHER ~~FUND OUR ONGOING OPERATIONS MAY BE IN JEOPARDY~~FACTORS.

~~Historically,~~The ~~our~~market ~~operations~~price ~~have been financed primarily through the issuance~~ of ~~equity~~our ~~and~~common ~~short-term~~stock ~~loans. Capital~~ is ~~typically~~likely ~~needed not only~~ to ~~fund~~be ~~ongoing~~highly ~~operations~~volatile and tocould ~~pay~~fluctuate ~~existing~~widely ~~obligations,~~in ~~but~~price ~~capital~~in isresponse ~~also necessary if we wish~~ to ~~acquire~~various ~~additional assets or companies and for the effective integration, operation and expansion of these businesses. Future capital requirements, however, depend on a number of~~ factors, ~~including~~many ~~the ability to internally grow revenues, manage the business and control expenses. At September 30, 2013, we had a working capital deficit~~ of ~~$693,307~~which ~~as compared to a working capital deficit of $2,904,559 at September 30, 2012. We may need to raise additional capital to fund ongoing operations, pay existing obligations and fund future growth. There~~ are nobeyond ~~assurances that additional working capital will be available in the future upon terms acceptable to us. If we do not raise funds as needed,~~ our ~~ability to provide for current working capital needs~~control, ~~make~~including ~~additional acquisitions, grow~~ the ~~company, and continue our existing business and operations may be in jeopardy. In this event, prospective investors could lose all of their investment in our company.~~following:

~~THE~~● ~~LOSS~~competitive OFpricing ~~KEY~~pressures; ~~SENIOR~~● ~~MANAGEMENT~~ability ~~PERSONNEL,~~to ~~INCLUDING~~obtain ~~THE~~working ~~RECENT~~capital ~~DEATH~~financing; OF● ~~OUR~~additions ~~CHAIRMAN~~or ~~AND~~departures ~~CHIEF~~of ~~EXECUTIVE~~key ~~OFFICER,~~personnel; ~~COULD~~● ~~NEGATIVELY~~limited ~~AFFECT~~public ~~OUR~~float ~~BUSINESS~~in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our common stock; ● sales of common stock ● ability to execute our business plan; ● operating results that fall below expectations; ● loss of any strategic relationship; ● regulatory or legal developments; ● economic and other external factors; and ● period-to-period fluctuations in our financial results.

In ~~May 2012~~addition, ~~our Chairman and Chief Executive Officer, John R. Signorello, passed away. Hal Compton, Sr., a member of~~ the ~~board~~securities ofmarkets ~~directors,~~have ~~assumed~~from ~~the~~time ~~role~~to astime ~~interim~~experienced ~~Chief~~significant ~~Executive~~price ~~Officer,~~ and ~~Mark~~volume ~~Lucky,~~fluctuations ~~our~~that ~~Chief~~are ~~Financial~~unrelated Officer, served as interim Chief Operating Officer. In July 2012 until January 14, 2014 Mr. Robert Howe III joined our company as Chief Executive Officer. Without Mr. Signorello’s participation in our company’s business and operations, we could experience negative impacts to ~~our~~the ~~business, future~~ operating ~~profits~~performance ~~and results~~ of ~~operations.~~particular ~~In addition, we depend upon our senior management and other key personnel, including Messrs~~companies. ~~Howe~~These ~~and~~market ~~Lucky.~~fluctuations ~~The~~may ~~loss~~also ofmaterially ~~these individuals or any of our other current or future executive officers or key employees could harm our business, future operating prospects~~ and ~~results~~adversely ofaffect ~~operations. Additionally, we do not currently maintain “key person” life insurance policies on~~ the ~~lives~~market ofprice ~~any~~ of our ~~executive~~common ~~officers~~stock. ~~This lack of insurance means that we may not receive adequate compensation for the loss of services of these individuals.~~

~~WE RELY ON VALUE-ADDED RESELLERS AND OTHER DISTRIBUTION PARTNERS TO SELL OF~~ OUR ~~PRODUCTS.~~COMMON ~~FAILURE~~STOCK TOIS ~~DEVELOP~~A ~~AND~~“PENNY ~~MANAGE~~STOCK,” ORWHICH ~~DISRUPTIONS~~WILL ~~TO,~~MAKE ~~OUR~~IT ~~DISTRIBUTION~~MORE ~~CHANNELS~~DIFFICULT ~~WOULD~~FOR ~~ADVERSELY~~INVESTORS ~~AFFECT~~TO ~~OUR~~SELL ~~BUSINESS~~THEIR SHARES.

Our ~~ability~~common stock is presently subject to ~~maintain~~the or“penny ~~increase~~stock” ~~revenue~~rules ~~will~~adopted ~~depend~~under inSection ~~part~~15(g) onof ~~our~~the ~~ability~~Securities Exchange Act of 1934. The penny stock rules apply to ~~maintain~~companies ~~arrangements~~whose ~~with~~common ~~existing~~stock ~~resellers~~is not listed on a national securities exchange and ~~other~~trades ~~distribution~~at ~~partners~~less than $5.00 per share or that have tangible net worth of less than $2,500,000, ~~which~~or we$2,000,000 ~~refer~~if the company has been operating for three or more years. In certain instances, these rules require, among other things, that brokers who trade penny stock to aspersons other than “~~channel~~established ~~partners,~~customers” ~~and~~complete tocertain ~~establish~~documentation, make suitability inquiries of investors and ~~expand~~provide ~~arrangements~~investors with ~~new~~certain ~~channel~~information ~~partners.~~concerning Iftrading wein ~~fail~~the tosecurity, doincluding ~~so,~~a ~~future~~risk ~~revenue~~disclosure ~~could~~document beand ~~harmed.~~quote ~~Additionally,~~information byunder ~~relying~~certain oncircumstances. ~~channel~~In ~~partners~~addition, wemany brokers and broker-dealers have ~~less~~decided ~~contact~~not ~~with~~to ~~the~~trade ~~ultimate~~penny ~~users~~stocks because of ~~our~~the ~~products~~requirements of the penny stock rules and, ~~which~~as ~~may~~a ~~make~~result, itthe ~~difficult~~number ~~for~~of usbroker-dealers willing to ~~establish~~act ~~and~~as ~~increase~~market ~~brand~~makers ~~awareness~~in such securities is limited. If we continue to remain subject to the penny stock rules, ~~ensure~~it ~~proper~~could ~~delivery~~have ~~and~~an ~~installation~~adverse ofeffect ~~our~~on ~~products~~the market, ~~service~~if ~~ongoing~~any, ~~customer~~for ~~requirements~~our common stock, and ~~respond~~investors will find it more difficult to ~~evolving~~dispose ~~customer~~of ~~needs~~their securities.

~~Recruiting~~OFFERS ~~and~~OR ~~retaining~~AVAILABILITY ~~qualified~~FOR ~~channel~~SALE ~~partners~~OF ~~and~~A ~~training~~SUBSTANTIAL ~~them~~NUMBER inOF ~~our~~SHARES ~~technology~~OF ~~and~~OUR ~~product~~COMMON ~~offerings~~STOCK ~~requires~~MAY ~~significant~~CAUSE ~~time~~THE ~~and~~PRICE ~~resources.~~OF InOUR ~~order~~COMMON toSTOCK ~~develop~~TO ~~and expand distribution channels, we must continue to scale and improve the processes and procedures that support these channels, including investment in systems and training~~DECLINE. ~~Those processes and procedures may become increasingly complex and difficult to manage as we expand our organization.~~

WeIf ~~have~~security noholders ~~minimum~~sell ~~purchase~~substantial ~~commitments~~amounts ~~from~~of ~~any~~our ~~channel~~common ~~partners~~stock in the public market, ~~and~~or ~~contracts~~upon ~~with~~the ~~these~~expiration ~~channel~~of ~~partners~~any dostatutory ~~not~~holding ~~prohibit~~period, ~~them~~under ~~from~~Rule ~~offering~~144, ~~products~~or expiration of lock-up periods applicable to outstanding shares, or ~~services~~issued ~~that~~upon ~~compete~~the ~~with~~exercise ~~ours.~~of ~~Competitors~~outstanding ~~may~~options ~~provide~~or ~~incentives~~warrants, toit ~~existing~~could ~~and~~create ~~potential~~a ~~channel~~circumstance ~~partners~~commonly referred to ~~favor~~as ~~their~~an ~~products.~~“overhang” ~~Channel~~and ~~partners~~in ~~may~~anticipation ~~choose~~of ~~not~~which tothe ~~offer~~market ~~our~~price ~~products~~of ~~exclusively~~our orcommon atstock ~~all~~could fall. ~~Establishing~~The ~~relationships~~existence ~~with~~of ~~channel~~an ~~partners~~overhang, ~~who~~whether ~~have~~or anot ~~history~~sales ofhave ~~selling~~occurred ~~competitors’~~or ~~products~~are ~~may~~occurring, also ~~prove~~could tomake beit more difficult. ~~Failure~~ to ~~establish~~raise ~~and~~additional ~~maintain~~financing ~~successful~~through ~~relationships~~the ~~with~~sale ~~channel~~of ~~partners~~equity ~~would~~or ~~seriously~~equity-related ~~harm~~securities ~~our~~in ~~business~~the future at a time and ~~operating~~price ~~results~~that we deem reasonable or appropriate.

10OUR COMMON STOCK MAY BE SUBJECT TO FURTHER DILUTION IF WE SELL ADDITIONAL SHARES OF OUR COMMON STOCK IN THE FUTURE AT PRICES BELOW THE PRICES IN ITS RECENT PRIVATE OFFERINGS.

WEIf ~~RECEIVE~~it Abecomes ~~SUBSTANTIAL~~necessary ~~PORTION~~for OFus ~~REVENUE~~to ~~FROM~~issue Aadditional ~~LIMITED~~shares ~~NUMBER~~of OFcommon ~~CUSTOMERS~~stock ~~AND~~in ~~CHANNEL~~the ~~PARTNERS~~future at prices below the prices that trigger the anti-dilution protections in connection with previous private offerings, ~~AND~~we ~~THE~~will ~~LOSS~~be OFrequired to issue such additional shares and lower the warrant exercise price of the existing warrants, ORin Aorder ~~SIGNIFICANT~~to ~~REDUCTION~~account INfor the dilutive impact of such future issuances. The anti-dilutive protections are known as “full-ratchet” protections, ~~ORDERS~~meaning ~~FROM~~that ~~ONE~~the ORadditional ~~MORE~~shares OFof ~~OUR~~common ~~MAJOR~~stock ~~CUSTOMERS~~to ~~WOULD~~be ~~HARM~~issued, ~~OUR~~and ~~BUSINESS~~the new exercise price of the warrants, will match the lowest price at which we issue additional shares of common stock in the future. These additional shares of common stock, and warrants to purchase additional shares of common stock, if exercised, could result in substantial future dilution to the holders of our common stock. We currently have warrants outstanding to purchase 64,314,335 shares of common stock which contain “full-ratchet” protections.

Our future success is highly dependent upon establishing and successfully maintaining relationships with a large number of channel partners. We market and sell our IceWEB unified data storage products through an all-channel assisted sales model and we derive substantially all of our revenue from these channel partners. We receive a substantial portion of revenue from a limited number of channel partners. We anticipate that we will continue to receive a significant portion of revenue from a limited number of channel partners for the foreseeable future and, in some cases, a portion of revenue attributable to individual channel partners may increase in the future. The loss of one or more key channel partners or a reduction in sales through any major channel partner could harm our business.10

IFITEM WE1B. ~~ARE~~UNRESOLVED ~~UNABLE~~STAFF ~~TO CONTINUE TO DEVELOP AND INTRODUCE NEW PRODUCTS AND RESPOND TO TECHNOLOGICAL CHANGES, REVENUE COULD BE REDUCED~~COMMENTS.

~~Future~~ Not ~~growth~~applicable ~~depends on the successful development and introduction of new systems and software products. Due~~ to the complexity of network storage systems, these products are subject to significant technical risks that may impact our ability to introduce these products successfully. Our new products also may not achieve market acceptance. In addition, new products must respond to technological changes and evolving industry standards. If we are unable for technological or other reasons to develop and introduce new products in a ~~timely~~smaller ~~manner~~reporting ~~in response to changing market conditions or customer requirements, or if these products do not achieve market acceptance, revenue could be reduced~~company.

~~IMPROVEMENTS~~ITEM IN2. ~~ALTERNATIVE MEANS TO ACCELERATE STORAGE PERFORMANCE OR REDUCE STORAGE COSTS COULD HARM OUR BUSINESS AS THE DEMAND FOR OUR SYSTEMS MAY BE REDUCED~~PROPERTIES.

~~Our~~We ~~products~~lease ~~are~~office ~~designed~~space toin ~~improve~~Kansas ~~the~~City ~~performance~~Missouri ofat ~~many~~two ~~applications,~~locations ~~including~~totaling ~~applications~~6,875 ~~that~~square ~~are based on Microsoft Corporation’s protocols~~feet. These ~~Accordingly,~~operating ~~changes~~leases toare ~~Microsoft~~standard ~~application~~commercial ~~protocols~~leases. ~~such~~We asbelieve tothese ~~accelerate~~facilities ~~storage~~are ~~performance~~suitable orand ~~reduce~~adequate ~~storage costs may reduce the need~~ for our ~~products,~~present ~~adversely affecting our business, operating results and financial condition~~purposes. Changes in other application protocols or in the Transmission Control Protocol, the set of rules used to send data in the form of message units between computers over the Internet, could have a similar effect.

IFITEM WE3. ~~ARE~~LEGAL UNABLE TO CONTINUE TO CREATE ATTRACTIVE INNOVATIONS IN SOFTWARE AND HARDWARE, WE MAY NOT BE ABLE TO GENERATE HIGH-MARGIN REVENUE THAT WILL ENABLE US TO MAINTAIN OR INCREASE GROSS PROFITS, WHICH COULD ADVERSELY AFFECT OUR BUSINESSPROCEEDINGS.

~~Our~~At ~~industry~~June ~~has~~30, a2015 ~~history~~the ofCompany ~~declining~~is ~~network~~the ~~storage~~subject ~~hardware prices as measured on a “dollar per gigabyte~~ of, ~~storage capacity” basis. To maintain~~ or ~~increase~~party ~~gross profits~~to, wefour ~~will~~known, ~~need~~pending ~~to continue to create attractive software that is included with network storage systems and/~~or ~~sold~~threatened, ~~separately~~legal ~~as licensed software applications~~actions. ~~Any~~Following ~~new~~is ~~feature or application that we develop or acquire may not be introduced in~~ a ~~timely~~discussion orof cost- effective manner and may not achieve the broad market acceptance necessary to help increase overall gross margin. If we are unable to successfully develop or acquire and then market and sell additional software and hardware functionality, our business could be adversely affected.each:

~~OUR~~1. ~~ABILITY~~The TOCompany ~~SELL~~was ~~OUR~~named ~~PRODUCTS~~as ISthe ~~HIGHLY~~defendant ~~DEPENDENT~~in ONa ~~THE~~legal ~~QUALITY~~proceeding OFbrought ~~OUR~~by ~~SUPPORT~~FedEx ~~SERVICES~~Customer Information Services, ~~AND~~Inc. ~~ANY~~(the ~~FAILURE~~plaintiff) TOon ~~OFFER~~May ~~HIGH-QUALITY~~28, ~~SUPPORT~~2010 ~~SERVICES~~in ~~COULD~~the ~~REDUCE~~Circuit ~~PRODUCT~~Court ~~SALES~~of ~~AND~~Fairfax ~~REVENUE~~County, Virginia. The plaintiff asserts that the Company failed to pay the full amount owed for services. The plaintiff obtained a judgment for $16,322 plus interest and costs. The Company is seeking an out-of-court settlement.

~~After~~2. ~~our~~The ~~products~~Company ~~are~~was ~~deployed~~named ~~within~~as ~~our~~the ~~customers’~~defendant ~~networks,~~in ~~customers~~a ~~depend~~legal onproceeding ~~our~~brought ~~support~~by ~~services~~FedEx ~~organization~~Customer toInformation ~~resolve~~Services, ~~issues~~Inc. ~~relating to our products and how they perform within~~ (the ~~customer’s~~plaintiff) ~~environment.~~on ~~High-quality~~September ~~support~~15, ~~services~~2010 ~~are~~in ~~critical for~~ the ~~successful~~General ~~marketing~~District ~~and~~Court ~~sale~~ of ~~our~~Fairfax ~~products~~County, Virginia. IfThe weplaintiff doasserts ~~not~~that ~~succeed~~the inCompany ~~helping~~failed ~~our customers~~ to ~~quickly~~pay ~~resolve~~the ~~post-deployment~~full ~~issues~~amount ~~and~~owed ~~provide~~for ~~ongoing~~services. ~~support~~The ifplaintiff ~~our~~obtained ~~partners~~a doConsent ~~not~~Judgment ~~effectively~~for ~~assist~~$12,900 ~~customers~~ in ~~deploying~~compensatory ~~products,~~damages itplus ~~would~~$58 ~~adversely~~in ~~affect our ability to sell products to existing customers and could harm prospects with potential customers~~costs. AsThe aCompany ~~result,~~is ~~failure~~seeking toan ~~maintain high~~out-~~quality~~of-court ~~support services could reduce product sales and revenue~~settlement.

113. The Company was named as the defendant in a legal proceeding brought by i-Cubed Information LLC (the plaintiff) on August 10, 2012 in the General District Court of Fairfax County, Virginia. The plaintiff asserts that the Company failed to pay for delivery of services provided by plaintiff. The plaintiff was granted a judgment by consent in the amount of $12,920. The Company is seeking an out-of-court settlement.

~~OUR~~4. ~~PRODUCTS~~The ~~ARE~~Company ~~HIGHLY~~was ~~TECHNICAL~~named ~~AND~~as ~~MAY~~the ~~CONTAIN~~defendant ~~UNDETECTED~~in ~~SOFTWARE~~a ORlegal ~~HARDWARE~~proceeding ~~DEFECTS,~~brought ~~WHICH~~by ~~COULD~~Pelligrino ~~CAUSE~~and ~~DATA~~Associates ~~UNAVAILABILITY~~(the plaintiff) on August 14, ~~LOSS~~2014 ORin ~~CORRUPTION~~the ~~THAT~~Marion ~~MIGHT~~County Superior Court, INMarion ~~TURN~~County, ~~RESULT~~Indiana. INThe ~~LIABILITY~~plaintiff TOasserts ~~CUSTOMERS,~~that ~~HARM~~the TOCompany ~~ICEWEB~~failed to pay the full amount owed for services. The plaintiff is seeking $20,159 plus attorney’Ss ~~REPUTATION~~fees, ~~AND/OR~~interest Aand ~~REDUCTION~~cots. OFThe ~~PRODUCT~~Company ~~SALES~~is ~~AND~~seeking ~~REVENUE~~an out-of-court settlement.

~~Our~~From ~~network~~time ~~storage products are highly technical and complex and are often used~~ to ~~store~~time, ~~information~~we ~~critical to customers’ business operations. Our products have contained and~~ may ~~contain~~become ~~undetected~~involved ~~errors, defects or security vulnerabilities that could result~~ in ~~data~~various ~~unavailability,~~lawsuits ~~loss or corruption or other harm to customers. Some errors in our products may only be discovered after they have been installed~~ and ~~used~~legal ~~by customers. Any errors~~proceedings, ~~defects~~which orarise ~~security vulnerabilities discovered~~ in ~~our products after commercial release, as well as any computer virus or human error on~~ the ~~part~~ordinary course of ~~our~~business. ~~customer~~However, ~~support~~litigation oris ~~other~~subject ~~personnel~~to ~~resulting~~inherent ~~in the unavailability~~uncertainties, ~~loss~~and oran ~~corruption~~adverse ~~of a customer’s data, could~~ result in athese ~~loss of customers~~ or ~~increased~~other ~~support~~matters ~~and warranty costs, any of which~~ may ~~adversely~~arise ~~affect~~from ~~our~~time ~~business, operating results and financial condition. In addition, we could face claims for product liability, tort or breach of warranty, including claims relating~~ to ~~changes~~time tothat ~~our products made by partners. Our contracts with customers contain provisions relating to warranty disclaimers and liability limitations, which~~ may beharm ~~difficult to enforce. Defending a lawsuit, regardless of its merit, could be costly and might divert management’s attention and adversely affect the market’s perception of~~ our ~~company and our products. In addition, if our~~ business ~~liability insurance coverage proves inadequate for a claim, or future coverage is unavailable on acceptable terms or at all, product sales and revenue could be reduced~~.

~~MANAGEMENT~~ITEM ~~MAY~~4. BEMINE ~~UNABLE~~SAFETY ~~TO EFFECTIVELY INTEGRATE ACQUISITIONS AND TO MANAGE GROWTH AND ICEWEB MAY BE UNABLE TO FULLY REALIZE ANY ANTICIPATED BENEFITS OF THESE ACQUISITIONS~~DISCLOSURE.

~~Our~~ Not ~~business~~applicable ~~strategy includes growth through acquisition and internal development. We are subject~~ to ~~various risks associated with~~ our growth strategy, including the risk that we will be unable to identify and recruit suitable acquisition candidates in the future or to integrate and manage the acquired companies. Acquired companies’ histories, geographical locations, business models and business cultures can be different from ours in many respects. Our directors and senior management face a significant challenge in their efforts to integrate the businesses and the business of the acquired companies or assets, and to effectively manage continued growth. There can be no assurance that efforts to integrate the operations ~~of any acquired assets or companies acquired in the future will be successful, that we can manage growth or that the anticipated benefits of these proposed acquisitions will be fully realized~~. The dedication of management resources to these efforts may detract attention from day-to-day business. There can be no assurance that there will not be substantial costs associated with these activities or of the success of integration efforts, either of which could have a material adverse effect on operating results.

~~ECONOMIC CONDITIONS AND WORLD EVENTS COULD AFFECT OUR COMPANY’S OPERATING RESULTS.~~11

WePART and our customers could be adversely affected by an economic downturn such as changes in consumer and investor confidence, instability in the credit and financial markets, volatile corporate profits, and reduced business and consumer spending. The economy as a whole also may be affected by future world events such as acts of terrorism, developments in the war on terrorism, conflicts in international situations, and by natural disasters. These factors may affect our results of operations by reducing sales, gross profits and/or net income as a result of a slowdown in customer orders or order cancellations. In addition, political and social turmoil related to international conflicts and terrorist acts may put further pressure on economic conditions abroad. Unstable political, social and economic conditions may make it difficult for our company, our customers, and our suppliers to accurately forecast and plan future business activities. If such conditions persist, our business, financial condition, results of operations and cash flow could be negatively affected.II

12ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

~~THE~~Our ~~CONDITION~~common OFstock ~~THE~~is Uquoted on the OTCBB under the symbol UOIP.S The reported high and low closing prices for the common stock as reported on the OTCBB are shown below for the periods indicated. ~~AND~~The ~~GLOBAL~~quotations ~~FINANCIAL~~reflect ~~MARKETS~~inter-dealer ~~HAS~~prices, ~~BEEN~~without ~~VOLATILE~~retail ~~AND~~mark-up, ~~MAY~~markdown ~~CONTINUE~~or TOcommission, BEand ~~VOLATILE~~may not represent actual transactions.

Prospective investors should be aware that the U.S. and global financial markets are currently quite volatile and that the condition of the financial markets has become significantly weakened and destabilized in the past few years. Continued volatility and instability could adversely affect our ability to finance our business. Further, financial market instability could result in significant regulatory changes that would have an unpredictable effect on the financial markets in general.

	High		Low
Nine months ended June 30, 2014
First quarter ended December 31, 2013	$	12.4000	$	3.6400
Second quarter ended March 31, 2014	$	8.0000	$	1.6400
Third quarter ended June 30, 2014	$	2.9600	$	0.4000

Fiscal 2015
First quarter ended September 30, 2014	$	0.5600	$	0.0400
Second quarter ended December 31, 2014	$	0.2400	$	0.0004
Third quarter ended March 31, 2015	$	0.0450	$	0.0101
Fourth quarter ended June 30, 2015	$	0.0280	$	0.0130

~~OUR~~As ~~BUSINESS~~of ~~HAS~~October ~~INHERENT~~7, ~~OPERATIONAL~~2015 ~~RISKS~~the ~~THAT~~last ~~CANNOT~~sale BEprice ~~ADEQUATELY~~of ~~COVERED~~our BYcommon ~~INSURANCE~~shares ORas ~~INDEMNITY~~reported on the OTC Bulletin Board was $0.008 per share. As of September 16, 2015 there were approximately 5,900 record owners of our common stock.

WeDividend may face unanticipated risks of legal liability for damages caused by the actual or alleged failure of technologies and products that it supplies. We sell products to a variety of large entities, and because of our size, we have limited ability to negotiate favorable commercial terms in our product purchase/sale documentation. While we have attempted to secure appropriate insurance coverage at reasonable cost it is not possible to insure against all risks inherent in the markets we serve, nor can we assure investors that our insurers will pay a particular claim, or that we will be able to maintain coverage at reasonable rates in the future. Substantial claims resulting from a failure of a product to perform in excess of or not otherwise covered by indemnity or insurance could harm our financial condition and operating results. Insurance policies also contain deductibles, limitations and exclusions which increase our costs in the event of a claim.Policy

WEWe ~~MAY~~have ~~HAVE~~never ~~DIFFICULTY~~paid ~~SCALING~~cash ~~PRODUCTION~~dividends TOon ~~LARGE~~our ~~VOLUMES~~common stock. IFUnder WEDelaware ~~ARE~~law, ~~UNABLE~~we TOmay ~~MEET~~declare ~~DEMAND~~and ORpay TOdividends ~~EFFICIENTLY~~on ~~INCREASE~~our ~~PRODUCTION~~capital stock either out of our surplus, ~~CUSTOMERS~~as ~~MAY~~defined ~~TURN~~in TOthe ~~PRODUCTS~~relevant ~~OFFERED~~Delaware BYstatutes, ~~COMPETITORS~~or ~~AND~~if ~~OUR~~there ~~OPERATING~~is ~~RESULTS~~no ~~COULD~~such BEsurplus, ~~ADVERSELY~~out ~~AFFECTED~~of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. If, however, the capital of our company, computed in accordance with the relevant Delaware statutes, has been diminished by depreciation in the value of our property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets, we are prohibited from declaring and paying out of such net profits any dividends upon any shares of our capital stock until the deficiency in the amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets shall have been repaired.

We ~~may~~do ~~have~~not ~~difficulty~~anticipate ~~dealing~~that ~~with~~any ~~rapid~~cash ~~growth.~~dividends Ifwill ~~demand~~be ~~for~~declared ~~products increases rapidly, we may need to expand internal production capacity~~ or ~~implement~~paid ~~outsourcing. Success in developing, manufacturing and supporting products manufactured in small volumes does not assure comparable success in operations conducted~~ on ~~a larger scale. It may be necessary to expand capacity beyond existing space, personnel and equipment and we may be unable to do so. Modifying~~ our ~~facilities~~common ~~and~~stock ~~operations~~in to increase production capacity may delay delivery of products. Manufacturing efficiencies, yields and product quality may decline as production volumes increase. In addition, component costs, overhead and other production costs may rise. If we are unable to meet the ~~demand~~foreseeable ~~of customers and deliver quality products quickly and cost effectively, customers may turn to our competitors~~future. The costs associated with implementing new manufacturing technologies, methods and processes, including the purchase of new equipment, and any resulting delays, inefficiencies and loss of sales could harm results of operations.

13Recent Sales of Unregistered Securities

~~OUR~~Year ~~SUCCESS~~Ended ~~AND~~June ~~COMPETITIVE~~30, ~~POSITION~~2015 DEPENDS ON OUR ABILITY TO OBTAIN AND PROTECT INTELLECTUAL PROPERTY. FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS WOULD IMPAIR OUR ABILITY TO COMPETE EFFECTIVELY AND DEFEND AGAINST THIRD PARTY CLAIMS THAT WE ARE INFRINGING ON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS.Transactions:

WeIn ~~maintain~~July, ~~our~~2014, ~~proprietary technology and know-how as trade secrets as well as through~~ the ~~use~~Company ofissued ~~patents.~~243,750 ~~Some~~shares of ~~our~~common ~~proprietary~~stock, ~~technology~~at ~~may~~the beoriginal ~~covered~~conversion ~~by provisional patents. Our policy is to use confidentiality agreements~~terms, ~~licensing~~at ~~agreements~~a ~~and~~per ~~similar~~share ~~arrangements~~price toranging ~~establish~~from ~~and protect intellectual property~~$0.240 ~~For example, our policy is~~ to ~~maintain~~$0.096 ~~confidentiality~~valued ~~agreements~~at ~~with our employees~~$35,250 consultants, vendors and business partners and this has controlled access to, and distribution of its product design documentation and other proprietary information. We intend to continue to protect existing and new processes and technologies that are developed as ~~trade~~a ~~secrets~~partial ~~but~~conversion ~~may not be able to do so. We hold or have filed patents related to several~~ of ~~our~~principal ~~products~~ and ~~technology,~~interest ~~however~~due ~~there~~under isa noconvertible ~~guarantee that we will be able to enforce these patents or that the applications will be issued as patents~~note. ~~Failure to protect our intellectual property could affect our ability to secure additional contracts or preserve market advantages as we develop and commercialize our products.~~

~~Our~~In ~~efforts~~July, to2014, ~~protect~~the ~~our~~Company ~~intellectual~~issued ~~property~~132,396 ~~rights~~shares ~~may~~of ~~not:~~common stock, at the original conversion terms, at a per share price of $0.096 valued at $12,710 as a partial conversion of principal and interest due under a convertible note.

•In ~~prevent~~July, ~~challenges to~~2014, or the ~~invalidation~~Company orissued ~~circumvention of~~357,182 ~~existing~~shares ~~intellectual~~of ~~property~~common ~~rights;~~stock, •at ~~prevent~~the ~~competitors~~original ~~from~~conversion ~~independently~~terms, ~~developing~~at ~~similar~~a ~~products~~per orshare ~~duplicating~~price ~~our~~ranging ~~products;~~from •$0.192 ~~provide~~to ~~adequate~~$0.0096 ~~protection~~valued ~~for~~at ~~intellectual~~$48,400 ~~property~~as ~~rights;~~a •partial ~~prevent~~conversion ~~disputes with third parties regarding ownership~~ of ~~our~~principal ~~intellectual property rights; • prevent disclosure of trade secrets~~ and ~~know-how~~interest todue ~~third~~under ~~parties~~a orconvertible ~~their release into the public domain; or • prevent our company from being subject to claims of infringement of the intellectual property rights of third-parties~~note.

~~Others~~In ~~may~~August, ~~attempt~~2014, tothe ~~copy~~Company orissued ~~otherwise~~119,614 ~~obtain~~shares ~~and~~of ~~use~~common ~~our~~stock, ~~proprietary~~at ~~technologies without consent. Monitoring~~ the ~~unauthorized~~original ~~use~~conversion ofterms, ~~technologies~~at ~~is difficult. There is~~ a ~~significant~~per ~~risk~~share ~~that~~price ~~customers~~of or$0.072 ~~their~~valued ~~end-user~~at ~~customers~~$8,612, ~~may~~in ~~attempt~~full tosatisfaction ~~copy~~of or$62,222 ~~otherwise~~of ~~obtain~~principal and ~~use~~interest ~~our~~due ~~proprietary~~under ~~technologies~~a ~~without~~convertible ~~our consent~~note.

WeIn ~~may find it necessary to litigate against others~~August, ~~including customers~~2014, ~~to protect our intellectual property and to challenge~~ the ~~validity~~Company ~~and~~issued ~~scope~~867,827 shares of ~~the~~common ~~proprietary rights asserted by others~~stock, ~~and~~at the ~~company~~original ~~could~~conversion ~~face~~terms, ~~counterclaims.~~at ~~Legal~~a ~~disputes~~per ~~with~~share ~~customers~~price ~~could~~ranging ~~adversely~~from ~~affect~~$0.072 ~~relationships~~to ~~and sales~~$0.040 ~~Litigation~~valued isat ~~inherently uncertain~~$42,410 ~~and~~in anfull ~~adverse~~satisfaction ~~outcome could subject us to significant liability for damages or invalidate our proprietary rights. The complexity~~ of ~~the~~principal ~~technology involved~~ and ~~inherent~~interest ~~uncertainty~~due ~~and~~under ~~cost~~a ofconvertible ~~intellectual property litigation increases our risks~~note.

Third parties may claim that we are infringing on their intellectual property rights, and we may already be unknowingly infringing. We may face additional liability if we agree to indemnify customers against third party infringement claims. If a third party establishes that we are infringing upon their intellectual property rights, we may be forced to modify products or manufacturing processes and such changes may be expensive or impractical. We may be forced to seek royalty or license agreements. If we are unable to agree on acceptable terms, we may be required to discontinue products or to halt other aspects of our operations. We may also be liable for significant damages. Even if intellectual property claims brought against us are without merit, the litigation may be costly and time consuming, and may divert management and key personnel from normal business operations.12

14In August, 2014, the Company issued 942,008 shares of common stock, at the original conversion terms, at a per share price ranging from $0.072 to $0.024 valued at $38,714 as a partial conversion of principal and interest due under a convertible note.

~~OUR~~In ~~EFFORTS~~September, TO2014, ~~PROTECT~~the ~~OUR~~Company ~~INTELLECTUAL~~issued ~~PROPERTY~~1,327,239 ~~MAY~~shares BEof ~~LESS~~common ~~EFFECTIVE~~stock, INat ~~SOME~~the ~~FOREIGN~~original ~~COUNTRIES~~conversion ~~WHERE~~terms, ~~INTELLECTUAL~~at ~~PROPERTY~~a ~~RIGHTS~~per ~~MAY~~share ~~NOT~~price BEranging ASfrom ~~STRONG~~$0.032 ASto IN$0.024 ~~THE~~valued ~~UNITED~~at ~~STATES~~$33,360 as a partial conversion of principal and interest due under a convertible note.

WeIn ~~have~~September, ~~not~~2014, ~~obtained~~the ~~and~~Company ~~may~~issued ~~not obtain patent or similar protection for our proprietary technologies or registration for our trademarks in foreign countries~~942,961 ~~which~~shares ~~may impair our ability to use or protect our technology and brand in foreign jurisdictions. The laws~~ of ~~some~~common ~~foreign countries~~stock, ~~including~~at ~~countries~~the inoriginal ~~which~~conversion ~~we have sold and/or plan to sell products~~terms, ~~protect~~at ~~proprietary~~a ~~rights~~per ~~less~~share ~~broadly~~price ~~than do the laws~~ of ~~the United States~~$0.024 ~~Many~~valued ~~U.S.~~at ~~companies~~$22,631 ~~have encountered substantial problems~~ in ~~protecting~~full ~~their~~satisfaction ~~proprietary~~of ~~rights~~principal ~~in such countries,~~ and ~~there~~interest isdue under a ~~risk~~convertible ~~that we may encounter similar problems~~note. ~~If our competitors in these countries copy our technology without our permission, our sales and operations may be harmed.~~

WEIn ~~HAVE~~September, ~~BEEN~~2014, ~~ENGAGED~~the INCompany ~~VARIOUS~~issued ~~LEGAL~~1,649,708 ~~DISPUTES~~shares ~~WHICH~~of ~~COULD~~common ~~IMPACT~~stock, ~~OUR~~at ~~COMPANY~~the ~~AND~~original ~~OUR~~conversion ~~SUPPLIER~~terms, ~~RELATIONSHIPS~~at a per share price of $0.024 valued at $39,593 as a partial conversion of principal and interest due under a convertible note.

WeIn ~~are~~October, ~~currently~~2014, ~~engaged~~the inCompany ~~four~~issued ~~legal~~320,601 ~~proceedings.~~shares ~~These~~of ~~legal~~common ~~proceedings~~stock, ~~relate~~at tothe ~~non-payment~~original ofconversion ~~vendors.~~terms, ~~Claims~~at ~~relating~~a toper ~~these~~share ~~proceedings~~price ~~currently~~of ~~total~~$0.024 ~~approximately~~valued ~~between~~at $507,~~000~~694 ~~and~~in ~~$100,000.~~full ~~These~~satisfaction ~~and/or~~of ~~the~~principal ~~remaining~~ and~~/or~~ ~~future~~interest ~~potential~~due ~~legal~~under ~~proceedings~~a ~~could~~convertible ~~impact our financial position and/or our relationships with customers, vendors, suppliers, distributors and/or other parties~~note.

~~RISKS~~In ~~RELATING~~January, TO2015, ~~ICEWEB~~the Company issued 903,825,954 shares of common stock, at the original conversion terms, to the holder of the Company’Ss ~~COMMON~~Series ~~STOCK~~AA convertible preferred stock upon conversion of 400,000 shares of Series AA convertible preferred stock.

~~THE~~In ~~EXERCISE~~June, OF2015, ~~WARRANTS~~the ~~AND~~Company ~~OPTIONS~~retired ~~AND~~5,976 ~~THE~~shares ~~CONVERSION~~of OFcommon ~~SHARES~~stock OFheld ~~OUR~~in ~~SERIES~~escrow Bat ~~CONVERTIBLE~~time ~~PREFERRED~~of ~~STOCK~~CTC ~~WILL BE DILUTIVE TO OUR EXISTING STOCKHOLDERS~~acquisition.

AtAll ~~January~~stock ~~13,~~based ~~2014~~transactions welisted ~~had~~above ~~outstanding:~~were valued at fair market value (quoted market prices) or the contractual rate which approximates fair market value, as applicable.

•Transactions ~~473,460,779~~after ~~shares~~June ~~of our common stock~~30, • 626,667 shares of Series B Convertible Preferred Stock owned by the estate of our former Chief Executive Officer which is convertible into 626,667 shares of our common stock, • common stock purchase warrants to purchase a total of 102,820,275 shares of our common stock with exercise prices ranging from $0.028 to $0.15 per share, and • Stock options granted under our 2012 Equity Compensation Plan and our 2013 Equity Compensation Plan which are exercisable into 3,417,970 shares of our common stock with a weighted average exercise price of $0.086 per share.2015:

~~The~~In ~~exercise~~July, of2015, the ~~outstanding~~Company ~~options~~issued ~~and~~431,333 ~~warrants~~shares orof common stock, at the original conversion terms, at a per share price of ~~the~~$0.0075 ~~outstanding~~valued at $3,235 as a partial conversion of principal and interest due under a convertible ~~securities~~note. The ~~will~~recipient bewas ~~dilutive~~an toaccredited ~~our~~investor ~~security~~and ~~holders~~the issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act.

~~PROVISIONS~~Purchases OFof ~~OUR~~Equity ~~CERTIFICATE~~Securities OFby ~~INCORPORATION~~the ~~AND~~Issuer ~~BYLAWS~~and ~~MAY~~Affiliated ~~DELAY OR PREVENT A TAKE-OVER WHICH MAY NOT BE IN THE BEST INTERESTS OF OUR SECURITY HOLDERS.~~Purchasers

Provisions of our certificate of incorporation and bylaws may be deemed to have anti-takeover effects, which include when and by whom special meetings of security holders may be called, and may delay, defer or prevent a takeover attemptNone. In addition, certain provisions of the Delaware General Corporations Law also may be deemed to have certain anti-takeover effects, including a provisions stipulating that control of shares acquired in excess of certain specified thresholds will not possess any voting rights unless these voting rights are approved by a majority of a corporation’s disinterested security holders.

InITEM addition, our certificate of incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock with such rights and preferences as may be determined from time to time by our board of directors6. We ~~presently~~SELECTED ~~have~~FINANCIAL ~~outstanding 626,667 shares of Series B convertible preferred stock owned by the estate of former CEO and Chairman John R~~DATA. Signorello. Our board of directors may, without stockholder approval, issue additional series of preferred stock with dividends, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of our common stock.

15Not applicable for a smaller reporting company.

~~PUBLIC~~ITEM ~~COMPANY~~7. ~~COMPLIANCE~~MANAGEMENT’S ~~MAY~~DISCUSSION ~~MAKE~~AND ITANALYSIS ~~MORE~~OF ~~DIFFICULT~~FINANCIAL TOCONDITION ~~ATTRACT~~ AND ~~RETAIN~~RESULTS ~~OFFICERS~~OF ~~AND DIRECTORS.~~OPERATIONS

~~The~~Our ~~Sarbanes-Oxley~~Management’s ~~Act~~Discussion ~~of 2002, the Dodd-Frank Act~~ and ~~rules~~Analysis ~~subsequently implemented by the Commission have required changes in corporate governance practices~~ of ~~public~~Financial ~~companies.~~Condition ~~As a public company, we expect these rules~~ and ~~regulations~~Results toof ~~continue~~Operations to(MD&A) ~~increase~~is ~~compliance~~provided ~~costs~~ in ~~2013~~addition ~~and beyond and~~ to ~~make~~the ~~certain~~accompanying ~~activities~~consolidated ~~more~~financial ~~time~~statements ~~consuming~~ and ~~costly~~notes ~~than~~to ifassist wereaders ~~were~~in ~~not~~understanding aour ~~public~~results ~~company.~~of Asoperations, afinancial ~~public company~~condition, ~~we also expect that these rules~~ and ~~regulations~~cash ~~may~~flows. ~~make~~It itshould ~~more~~be ~~difficult~~read ~~and~~in ~~expensive~~conjunction towith ~~obtain director and officer liability insurance in~~ the ~~future~~accompanying ~~and~~consolidated wefinancial ~~may~~statements ~~be required to accept reduced policy limits~~ and ~~coverage or incur substantially higher costs to obtain the same or similar coverage~~notes. MD&A Asis aorganized ~~result, it may be more difficult to attract and retain qualified persons to serve on our board of directors or~~ as ~~executive officers.~~follows:

~~OUR~~● ~~STOCK~~Overview. ~~PRICE~~Discussion ~~MAY~~of BEour ~~VOLATILE~~business INand ~~RESPONSE~~overall TOanalysis ~~MARKET~~of ~~AND~~financial ~~OTHER~~and ~~FACTORS~~other highlights affecting the company in order to provide context for the remainder of MD&A.

~~The~~● ~~market~~Results ~~price~~ of ~~our~~Operations. ~~common~~An ~~stock~~analysis isof ~~likely~~our tofinancial beresults ~~highly~~comparing ~~volatile~~Fiscal ~~and~~2015 ~~could fluctuate widely in price in response~~ to ~~various~~the ~~factors,~~nine ~~many~~month oftransition ~~which~~period ~~are~~ended ~~beyond~~June ~~our control~~30, ~~including the following:~~2014.

•● ~~competitive~~Liquidity ~~pricing~~and ~~pressures;~~Capital •Resources. ~~ability~~An toanalysis ~~obtain working capital financing; • additions or departures~~ of ~~key~~changes ~~personnel; • limited public float~~ in ~~the~~our ~~hands~~balance ofsheets aand ~~small~~cash ~~number~~flows, ofand ~~persons~~discussion ~~whose sales or lack~~ of ~~sales could result in positive or negative pricing pressure on the market price for~~ our ~~common~~financial ~~stock;~~condition •and ~~sales~~potential ofsources ~~common stock • ability to execute our business plan; • operating results that fall below expectations; • loss~~ of ~~any strategic relationship; • regulatory or legal developments; • economic and other external factors; and • period-to-period fluctuations in our financial results~~liquidity.

In● ~~addition,~~Off ~~the~~Balance-Sheet ~~securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies~~Arrangements. ~~These market fluctuations may also materially and adversely affect the market price of our common stock.~~

~~OUR~~● ~~COMMON~~Recent ~~STOCK~~Accounting ~~IS A “PENNY STOCK,” WHICH WILL MAKE IT MORE DIFFICULT FOR INVESTORS TO SELL THEIR SHARES~~Pronouncements.

Our common stock is presently subject to the “penny stock” rules adopted under Section 15(g) of the Securities Exchange Act of 1934. The penny stock rules apply to companies whose common stock is not listed on a national securities exchange and trades at less than $5.00 per share or that have tangible net worth of less than $2,500,000, or $2,000,000 if the company has been operating for three or more years. In certain instances, these rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. In addition, many brokers and broker-dealers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If we continue to remain subject to the penny stock rules, it could have an adverse effect on the market, if any, for our common stock, and investors will find it more difficult to dispose of their securities.13

16In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs and are subject to a number of known and unknown risks and external factors that in addition to general, economic, competitive and other business conditions, could cause actual results, performance and achievements to differ materially from those described or implied in the forward-looking statements, as more fully discussed below and elsewhere in this filing.

~~OFFERS OR AVAILABILITY FOR SALE OF A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK MAY CAUSE THE PRICE OF OUR COMMON STOCK TO DECLINE.~~OVERVIEW

IfUOIP ~~security~~is ~~holders~~a ~~sell~~provider ~~substantial amounts~~ of ~~our~~high ~~common~~performance ~~stock~~network inservices ~~the public market~~(wireless, orwireline ~~upon~~and ~~the~~fiber), ~~expiration~~ISP ~~of any statutory holding period~~services, ~~under~~private ~~Rule~~networking ~~144~~services, ordatacenter ~~expiration~~services ofand ~~lock-up~~storage ~~periods~~solutions. Our ~~applicable~~wireless point-to-point ~~outstanding~~network ~~shares,~~and orprivate ~~issued~~fiber ~~upon~~ring ~~the~~provide ~~exercise~~customers ofwith ~~outstanding~~a ~~options~~unique orcapability ~~warrants,~~for itnot ~~could~~only ~~create~~high aspeed ~~circumstance~~business ~~commonly referred~~ to asbusiness annetworking, ~~“overhang”~~but ~~and~~also inredundant ~~anticipation~~backup ofcircuitry ~~which~~for ~~the~~disaster ~~market~~preparedness ~~price of our common stock could fall~~purposes. Our ~~The~~datacenter ~~existence~~provides ofhighly ~~an overhang~~secure, ~~whether~~power-dense orrack ~~not~~and ~~sales~~cross-connect ~~have~~capabilities ~~occurred~~to orbusiness ~~are~~customers ~~occurring~~seeking co-location, ~~also~~disaster ~~could~~recovery, ~~make~~managed itservices ~~more~~and ~~difficult~~business tocontinuity ~~raise~~capability. The ~~additional~~efficiency ~~financing through the sale~~ of ~~equity~~our orlocation ~~equity-related~~and ~~securities~~our insolar ~~the~~assisted ~~future~~power atgeneration aenables ~~time~~our ~~and~~low ~~price~~cost ~~that~~of ~~we deem reasonable or appropriate~~operations.

~~OUR~~In ~~COMMON~~addition ~~STOCK~~to ~~MAY~~lower BEcapital ~~SUBJECT~~expenditures TOfor ~~FURTHER~~the ~~DILUTION~~enterprise, IFby WEoutsourcing ~~SELL~~IT ~~ADDITIONAL~~capabilities ~~SHARES~~through OFour ~~OUR~~networks ~~COMMON~~to ~~STOCK~~our INdatacenters, ~~THE~~customers ~~FUTURE~~can ATincrease ~~PRICES~~the ~~BELOW~~security ~~THE~~of ~~PRICES~~their INdata ~~ITS~~assets ~~RECENT~~while ~~PRIVATE~~increasing ~~OFFERINGS~~the availability to their users’ off-premise. Utilizing our smart infrastructure, customers can also avail themselves of rapid deployment of event-based wireless capabilities saving them time and money and providing optimum time savings for broadband-remote locations.

IfThrough itour ~~becomes~~acquisition ~~necessary for us to issue additional shares~~ of ~~common~~Computers ~~stock~~& ~~in the future at prices below the prices that trigger the anti-dilution protections in connection with previous private offerings~~Telecom, weInc. ~~will be required to issue such additional shares~~ and ~~lower~~KCNAP, ~~the warrant exercise price of the existing warrants~~LLC, in(collectively ~~order to account for the dilutive impact of such future issuances. The anti-dilutive protections are known as~~ “~~full-ratchet~~CTC”) ~~protections,~~in ~~meaning~~October ~~that~~2013, ~~the~~UOIP ~~additional~~now ~~shares~~provides ofthese ~~common~~wireless ~~stock to be issued,~~ and ~~the~~fiber ~~new~~broadband ~~exercise price of the warrants~~service, ~~will~~co-location ~~match~~space ~~the~~and ~~lowest~~related ~~price~~services atand ~~which~~operates wea ~~issue~~Network ~~additional~~Access ~~shares~~Point of(“NAP”) ~~common~~where ~~stock~~customers indirectly ~~the~~interconnect ~~future.~~with ~~These~~a ~~additional~~network ~~shares~~ecosystem of ~~common~~partners ~~stock,~~ and ~~warrants~~customers. This access to ~~purchase~~highly ~~additional~~efficient ~~shares~~Internet ofroutes ~~common~~provides ~~stock,~~customers ifimproved ~~exercised,~~reliability ~~could~~and ~~result~~streamlined inconnectivity ~~substantial~~while ~~future~~significantly ~~dilution~~reducing tocosts ~~the~~by ~~holders~~reaching ofa ~~our~~critical ~~common~~mass ~~stock. We currently have warrants outstanding to purchase 36,088,554 shares~~ of ~~common~~networks ~~stock~~within ~~which~~a ~~contain~~centralized ~~“full-ratchet”~~physical ~~protections~~location.

~~ITEM~~CTC 1Boperates a wireless internet service business, providing wireless broadband to small and medium size businesses in the metro Kansas-City, Missouri area. In ~~UNRESOLVED~~addition ~~STAFF~~CTC ~~COMMENTS~~offers the following solutions: (i) premium data center co-location, (ii) interconnection and (iii) exchange and outsourced IT infrastructure services.

~~Not~~We ~~applicable~~leverage our NAP which allows our customers to aincrease ~~smaller~~information ~~reporting~~and ~~company~~application delivery performance. Our platform enables scalable, reliable and cost-effective co-location, interconnection and traffic exchange.

17Our customer base includes enterprise companies, and small to medium sized businesses in hospitality, healthcare, retail and other market spaces (“SMB”).

~~ITEM~~We 2anticipate revenues for Fiscal 2016 will increase as a result of organic growth, the introduction of new products and services, such as additional cloud services offerings through alliances and strategic partnerships with other ISPs and wireless providers, and other products sold through our resellers and OEM partners. ~~PROPERTIES~~There are no assurances, however, that our revenues will return to historic levels.

In February 2009, we entered into a two year lease for approximately 6,978 square feet of office space in which our principal executive offices are located for annual base rental of approximately $74,400. We terminated our tenancy at this location on October 31, 2013. Our Corporate offices have been moved to Kansas City, Missouri. We currently have real estate leases at two locations, totaling 6,875 square feet. These operating leases are standard commercial leases.14

~~ITEM~~RESULTS 3.OF ~~LEGAL PROCEEDINGS.~~OPERATIONS

AtYEAR ~~September~~ENDED JUNE 30, ~~2013~~2015 weAS ~~are~~COMPARED ~~the~~TO ~~subject~~THE ~~of,~~NINE orMONTH ~~party~~TRANSITION ~~to,~~PERIOD ~~four~~ENDED ~~known,~~JUNE ~~pending or threatened~~30, ~~legal actions. Following is a discussion of each:~~2014

~~1. We~~The ~~were~~following ~~named~~table asprovides ~~the~~an ~~defendant~~overview inof acertain ~~legal~~key ~~proceeding~~factors ~~brought~~of byour ~~Wolfe~~results ~~Axelrod~~of ~~Weinberger~~operations ~~Associates,~~for ~~LLC (~~the ~~plaintiff)~~year inended ~~the~~June ~~Circuit Court of Fairfax County~~30, ~~Virginia~~2015 ~~(Case~~as #compared ~~2013-4070). The plaintiff asserts that IceWEB failed~~ to ~~pay~~ the ~~full~~nine ~~amount~~month ~~owed~~transition ~~for~~period ~~investor~~ended ~~relations~~June ~~services.~~30, 2014:

2. We were named as the defendant in a legal proceeding brought by i-Cubed Information LLC (the plaintiff) in the General District Court of Fairfax County, Virginia (Case #GV12-019582-00). The plaintiff asserts that Iceweb failed to pay for delivery of services provided by plaintiff.

	Year Ended			Nine Months Ended
	June 30,						$			%
	2015			2014			Change			Change
Net Revenues	$	924,472		$	722,784		$	201,688			27.9	%
Cost of sales		797,980			860,981			(63,001	)		(7.3	%)
Operating Expenses
Sales and marketing		160,897			114,271			46,626			40.8	%
Depreciation		136,052			133,420			2,632			2.0	%
Technical		335,426			292,750			42,676			14.6	%
General and administrative		919,277			987,979			(68,702	)		(7.0	%)
Total Operating Expenses		1,551,652			1,528,420			23,232			1.5	%
Loss from operations		(1,425,160	)		(1,666,617	)		241,457			(14.5	%)
Total other expense		(455,507	)		(3,227,661	)		2,772,154			(85.9	%)
Net loss	$	(1,880,667	)	$	(4,894,278	)	$	3,013,611			(61.6	%)

~~3. We~~Other ~~were~~Key named as the defendant in a legal proceeding brought by FedEx Customer Information Services, Inc. (the plaintiff) in the Circuit Court of Fairfax County, Virginia (Case # CL2010-7512). The plaintiff asserts that Iceweb failed to pay for delivery of services provided by plaintiff.Indicators:

4. We were named as the defendant in a legal proceeding brought by FedEx Customer Information Services, Inc. (the plaintiff) in the General District Court of Fairfax County, Virginia (Case #GV10-023543-00). The plaintiff asserts that Iceweb failed to pay for delivery of services provided by plaintiff.

	Year Ended			Nine Months Ended
	June 30,
	2015			2014
Cost of sales as a percentage of revenue		86.3	%		119.1	%
Gross profit margin		13.7	%		(19.1	%)
Sales and marketing expense as a percentage of sales		17.4	%		15.8	%
General and administrative expenses as a percentage of sales		99.4	%		136.7	%
Total operating expenses as a percentage of sales		167.8	%		211.5	%

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.Revenues

~~ITEM~~The 4increase in sales is primarily due to a nine month period compared to a twelve month period. Prorated, ~~MINE~~sales ~~SAFETY~~are ~~DISCLOSURE~~slightly down due to non-recurring Fiscal 2014 installation revenue.

~~Not~~Cost ~~applicable~~of toSales ~~our~~and ~~operations.~~Gross Profit

18Our cost of sales consists primarily of the costs of providing wireless and fiber bandwidth and colocation services. For the year ended June 30, 2015 cost of sales were $798K or approximately 86% of revenues compared to $861K or approximately 119% of revenues for the nine months ended June 30, 2014. Of this amount, $272K and $417K related to depreciation expense for the year ended June 30, 2015 and the nine months ended June 30, 2014, respectively. The decrease in costs of sales as a percentage of revenue and the corresponding increase in gross profit margin was due to the change in focus of the business. We anticipate that gross profit margin will remain between 10% and 20% during Fiscal 2016.

~~PART~~Total IIOperating Expenses

~~ITEM~~Our 5total operating expenses increased approximately 1% for the year ended June 30, 2015 as compared to the nine month period ended June 30, 2014. ~~MARKET~~Prorated ~~FOR~~the ~~REGISTRANT’S~~decrease ~~COMMON~~in ~~EQUITY~~operating ~~AND~~expenses ~~RELATED~~for ~~STOCKHOLDER~~the ~~MATTERS~~year ended June 30, 2015 as compared to the prorated twelve month period ended June 30, 2014 is 24%. The changes include:

~~Our~~● ~~common~~Sales ~~stock~~and isMarketing ~~quoted~~expense. onSales ~~the~~and ~~OTCBB~~marketing ~~under~~expense ~~the~~includes ~~symbol~~salaries, ~~IWEB.~~commission, ~~The~~telephone ~~reported~~and ~~high~~travel and ~~low~~entertainment ~~closing~~expenses ~~prices~~ for sales personnel. For the ~~common~~year ~~stock~~ended asJune ~~reported~~30, on2015, ~~the~~sales ~~OTCBB~~and ~~are~~marketing ~~shown~~expense ~~below~~increased ~~for~~approximately 41% from the ~~periods~~nine ~~indicated~~month period ended June 30, 2014. The ~~quotations~~increase ~~reflect~~was ~~inter-dealer~~due ~~prices,~~primarily ~~without~~to ~~retail~~the ~~mark-up,~~three ~~markdown~~extra ormonths ~~commission,~~offset ~~and~~by ~~may~~the ~~not~~issuance ~~represent~~of ~~actual~~stock ~~transactions~~based compensation in 2014 in connection with the purchase of CTC.

	High				Low
Fiscal 2012
First quarter ended December 31, 2011		$		0.195		$		0.010
Second quarter ended March 31, 2012	$		0.1847		$		0.106
Third quarter ended June 30, 2012	$		0.181		$		0.107
Fourth quarter ended September 30, 2012	$		0.1399		$		0.050
Fiscal 2013
First quarter ended December 31, 2012	$		0.0825		$		0.0570
Second quarter ended March 31, 2013	$		0.0640		$		0.0320
Third quarter ended June 30, 2013	$		0.0421		$		0.0227
Fourth quarter ended September 30, 2013	$		0.0389		$		0.0225

●	Depreciation expense. For the year ended June 30, 2015, depreciation expense was $136,052 compared to $133,420 for the nine month period ended June 30, 2014.

As of January 13, 2014 the last sale price of our common shares as reported on the OTC Bulletin Board was $0.0135 per share. As of January 13, 2014, there were approximately 5,200 record owners of our common stock. 15

~~Dividend~~● ~~Policy~~Technical expense. For the year ended June 30, 2015, technical expenses increased approximately 15% from the nine months period ended June 30, 2014 due primarily to the three extra months offset by lower headcount as a result of a shift in the business focus due to the acquisition of CTC in October, 2013. Prorated, technical expense decreased approximately 14% due to a decrease in headcount.

We● ~~have~~General ~~never~~and ~~paid~~administrative ~~cash~~expense. ~~dividends~~For onthe ~~our~~year ~~common~~ended ~~stock.~~June ~~Under~~30, ~~Delaware law~~2015, wegeneral ~~may declare~~ and ~~pay~~administrative ~~dividends~~expenses ondecreased ~~our~~approximately ~~capital~~7% ~~stock~~from ~~either out of our surplus, as defined in~~ the ~~relevant~~nine ~~Delaware~~months ~~statutes,~~ended orJune ~~if there is no such surplus~~30, ~~out~~2014. ofFor ~~our net profits for~~ the ~~fiscal~~ year inended ~~which~~June ~~the~~30, ~~dividend~~2015 ~~is declared~~ and~~/or~~ the ~~preceding~~nine ~~fiscal~~months ~~year.~~ended ~~If,~~June ~~however~~30, ~~the capital of our company~~2014, ~~computed~~general in accordance with the relevant Delaware statutes, has been diminished by depreciation in the value of our property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and ~~outstanding~~administrative ~~stock~~expenses ofconsisted ~~all classes having a preference upon the distribution~~ of ~~assets, we are prohibited from declaring and paying out of such net profits any dividends upon any shares of our capital stock until~~ the ~~deficiency in the amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets shall have been repaired.~~following:

We do not anticipate that any cash dividends will be declared or paid on our common stock in the foreseeable future.

	Year Ended		Nine Months Ended
	June 30,
	2015		2014
Occupancy	$	162,266	$	135,623
Consulting		154,192		187,473
Employee compensation		264,090		119,886
Professional fees		130,206		139,163
Travel and entertainment		20,987		34,692
Insurance		62,225		42,353
Investor relations		2,350		132,844
Other		122,961		195,945
	$	919,277	$	987,979

~~Recent~~The ~~Sales~~principal ofchanges ~~Unregistered~~between ~~Securities~~the two periods include:

~~Fiscal~~● ~~2013~~For ~~Transactions~~the year ended June 30, 2015, occupancy expense increased approximately 20% from the nine months ended June 30, 2014 due to the nine month period compared to the twelve month period. On an annualized basis, occupancy expense decreased approximately 14% due to a decrease in utility expense.

In● ~~November,~~For ~~2012~~the weyear ~~issued~~ended ~~918~~June 30,~~919~~ ~~shares~~2015, atconsulting aexpense ~~share~~decreased ~~price~~approximately of18% ~~$0.074/share~~due to ~~our~~a ~~executive~~reduced ~~officers~~use ~~and~~of ~~recognized~~consultants ~~stock~~for ~~based~~business ~~compensation~~development ~~expense~~efforts ofas ~~$68,000.~~well ~~The~~as ~~issuance~~reduced ~~was~~non-recurring ~~exempt~~stock-based ~~from~~consulting ~~registration~~fees ~~under~~related ~~the~~to ~~Securities~~merger ~~Act~~and ofacquisition ~~1933~~activity in ~~reliance~~the onnine anmonths ~~exemption~~ended ~~provided~~June by30, ~~Section 4(2) of that act~~2014.

In● ~~December~~For the year ended June 30, ~~2012~~2015, weemployee ~~issued~~compensation ~~112,000~~which ~~shares~~includes ofrelated ~~common~~taxes ~~stock~~and atbenefits aincreased ~~per~~approximately ~~share~~$144K ~~price~~primarily due to the return and cancellation of ~~$0.074,~~restricted ~~valued~~share atcompensation ~~$8,228~~in tothe annine ~~accredited~~month ~~investor~~period ~~for~~ended ~~services~~June ~~rendered~~30, 2014. ~~The~~Excluding ~~issuance~~that ~~was~~adjustment, ~~exempt~~compensation ~~from~~expense ~~registration~~during ~~under~~the year ended June 30, 2015 decreased approximately 48% from the ~~Securities~~nine ~~Act~~month ofperiod ~~1933~~ended inJune ~~reliance~~30 on2014 andue ~~exemption~~to ~~provided~~reduced byheadcount ~~Section~~and ~~4(2)~~lower ofstock-based ~~that~~compensation ~~act~~expense.

In● ~~December,~~For ~~2012,~~the weyear ~~sold~~ended ~~500~~June 30,~~000~~ ~~shares~~2015, ofprofessional ~~common~~fees ~~stock~~decreased atapproximately a6% ~~per~~due ~~share price of $0.074, valued at $37,000~~ to anlower ~~accredited~~litigation ~~investor. The~~and ~~issuance~~legal ~~was~~fees ~~exempt~~incurred ~~from~~in ~~registration under~~ the ~~Securities~~normal ~~Act~~course of ~~1933~~business inas ~~reliance~~compared onto anthe ~~exemption~~nine ~~provided~~months byended ~~Section~~June ~~4(2)~~30, ~~of that act~~2014.

In● ~~January,~~For ~~2013~~the weyear ~~issued~~ended ~~216~~June 30,~~216~~ ~~shares~~2015, atinsurance aexpense ~~share~~increased ~~price~~approximately of47% ~~$0.074/share~~from tothe ~~our~~nine ~~executive~~month ~~officers~~period ~~and~~ended ~~recognized~~June ~~stock based compensation expense of $16~~30,~~000.~~ ~~The~~2014 ~~issuance~~due ~~was~~to ~~exempt~~three ~~from~~additional ~~registration~~months ~~under~~and ~~the~~higher ~~Securities~~premiums ~~Act~~paid offor ~~1933~~directors inand ~~reliance~~officer’s ~~on an exemption provided by Section 4(2) of that act~~insurance.

19● For the year ended June 30, 2015, investor relations decreased approximately 98% as compared to the nine months ended June 30, 2014 due to substantially lower general investor relations activity.

In● ~~January,~~For ~~2013~~the weyear ~~sold~~ended ~~500~~June 30,~~000~~ ~~shares~~2015, ofother ~~common~~expense ~~stock~~decreased atapproximately a37% ~~per~~from ~~share~~the ~~price~~nine ofmonth ~~$0.074,~~period ~~valued~~ended atJune ~~$37~~30,~~000~~ to2014 anprimarily ~~accredited~~due ~~investor. The~~to ~~issuance~~a ~~was~~decrease ~~exempt from registration under the Securities Act of 1933~~ in ~~reliance~~bad ondebt anexpense ~~exemption~~and ~~provided~~other bycost ~~Section~~control ~~4(2) of that act~~measures.

InLoss ~~January, 2013, we issued 112,000 shares of common stock at a per share price of $0.074, valued at $8,228 to an accredited investor for services rendered. The issuance was exempt~~ from ~~registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act.~~Operations

InWe ~~February,~~reported ~~2013, we issued 175,000 shares of common stock at~~ a ~~per~~loss ~~share~~from ~~price~~operations of $01.~~074,~~4 ~~valued~~million atfor ~~$12,950~~the toyear anended ~~accredited~~June ~~investor~~30, ~~for~~2015 ~~services~~as ~~rendered.~~compared ~~The~~to ~~issuance~~a ~~was~~loss ~~exempt~~ from ~~registration~~operations ~~under the Securities Act~~ of ~~1933~~$1.7 inmillion ~~reliance~~for onthe annine ~~exemption~~month ~~provided~~period byended ~~Section~~June ~~4(2)~~30, ~~of that act~~2014.

In February, 2013 we issued 1,950,000 shares of common stock at a per share price of $0.0396, valued at $77,300 to two accredited investors for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act.16

InTotal ~~February,~~Other ~~2013,~~Income we issued 112,000 shares of common stock at a per share price of $0.039, valued at $4,368 to an accredited investor for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2Expenses) ~~of that act.~~

InGain ~~March,~~(loss) ~~2013,~~from wechange ~~issued~~of ~~5,000,000~~fair ~~shares~~value of ~~common~~derivative ~~stock~~liability. For atthe year ended June 30, 2015 we had a ~~per~~gain ~~share~~on ~~price~~the change of fair value of derivative liability of $~~0.04~~195,693 ~~valued~~as atcompared to a loss on the change of fair value of derivative liability of $~~200~~61,~~000~~221 toin anthe ~~accredited~~nine ~~investor~~month ~~for~~period ~~services~~ended ~~rendered~~June 30, 2014. This ~~The~~represents ~~issuance~~the ~~was~~change ~~exempt~~in ~~from~~the ~~registration~~value ~~under~~of the ~~Securities~~derivative ~~Act~~liability based on the Black-Scholes value of ~~1933~~our inoutstanding ~~reliance~~variably-priced onconvertible andebt ~~exemption~~and ~~provided~~warrants. The byvariance ~~Section~~is ~~4(2)~~primarily attributable to the change in the Company’s stock price, conversion of ~~that~~notes ~~act~~and due to new convertible note liabilities in Fiscal 2015.

InDerivative ~~March,~~expense. For ~~2013~~the weyear ~~sold~~ended 1June 30,~~200,000~~ ~~shares~~2015 ofwe ~~common~~had ~~stock at~~ a ~~per~~derivative ~~share~~expense ~~price~~ of $~~0.021~~184,813 ~~valued~~as atcompared ~~$25,000~~ to ana ~~accredited~~derivative ~~investor. The~~expense ~~issuance~~of ~~was~~$35,102 ~~exempt~~for ~~from registration under~~ the ~~Securities~~nine ~~Act~~months ofended ~~1933~~June in30, ~~reliance~~2014. The onincrease anis ~~exemption~~attributable ~~provided~~to bythe ~~Section~~volatility ~~4(2)~~in ofthe ~~that~~stock ~~act~~price.

InLoss ~~April,~~on ~~2013~~extinguishment weof ~~issued~~debt. 8For the nine month period ended June 30,~~000,000~~ ~~shares~~2014 atwe had a ~~share~~loss ~~price~~on extinguishment of debt of $~~0.033/share~~265,311 related to ~~our~~the ~~executive~~sale ~~officers~~ and ~~employees~~assignment of the Agility Master Lease and ~~recognized~~Equipment ~~stock~~Schedule ~~based~~to ~~compensation~~a ~~expense~~third party, UO! IP of ~~$264~~NC,~~000~~ LLC. UO! ~~The~~IP ~~issuance~~of ~~was~~NC, ~~exempt~~LLC ~~from~~is ~~registration~~a ~~under~~related ~~the~~party ~~Securities~~to ~~Act~~the holder of ~~1933~~the inSeries ~~reliance~~AA onPreferred anStock, ~~exemption~~Unified ~~provided~~Online! byLLC. We ~~Section~~did ~~4(2)~~not ofincur ~~that~~a ~~act~~similar expense in Fiscal 2015.

InImpairment ~~April, 2013 we issued 6,750,000 shares at a price~~ of $0Goodwill.~~075/share~~ For ~~valued~~the atnine ~~$506,250~~months asended aJune ~~partial~~30, ~~conversion~~2014, ofwe ~~principal~~incurred ~~and interest due under~~ a ~~convertible~~loss ~~debenture. The~~on ~~recipient~~the ~~was~~impairment anof ~~accredited~~intangible ~~investor~~assets ~~and~~of ~~the~~$2.1 ~~issuance~~million ~~was~~which ~~exempt~~related ~~from~~to ~~registration under~~ the ~~Section~~acquisition ~~Act~~ of ~~1933~~CTC in ~~reliance~~October on2013. We andid ~~exemption~~not ~~provided~~incur bya ~~Section~~similar ~~4(2)~~expense ofin ~~that~~Fiscal ~~act~~2015.

InInterest ~~April,~~Expense. For ~~2013,~~the weyear ~~issued~~ended 2June 30,~~250~~ 2015,~~000~~ ~~shares~~interest ofexpense ~~common~~decreased ~~stock~~approximately at39% acompared ~~per~~to ~~share~~the ~~price~~nine ofmonth ~~$0.0305,~~period ~~valued~~ended atJune ~~$68~~30,~~675~~ to2014. The ~~two~~decrease ~~accredited~~in ~~investor~~interest ~~for~~expense ~~services~~is ~~rendered.~~primarily ~~The~~attributable ~~issuance~~to ~~was~~higher ~~exempt~~loan ~~from~~fee ~~registration~~amortization ~~under~~and ~~the~~debt ~~Securities~~discount ~~Act~~amortization ofon ~~1933~~convertible notes in ~~reliance~~the onnine anmonth ~~exemption~~period ~~provided~~ended byJune ~~Section~~30, ~~4(2) of that act~~2014.

InNet April, 2013, we sold 2,500,000 shares of common stock at a per share price of $0.021, valued at $50,000 to an accredited investor for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act.Loss

InOur ~~May,~~net ~~2013,~~loss wewas ~~issued~~$1.9 ~~224,000~~million ~~shares~~for ofthe ~~common~~year ~~stock~~ended atJune a30, ~~per~~2015 ~~share~~compared ~~price~~to of $04.~~028,~~9 ~~valued~~million ~~at $6,272 to an accredited investor~~ for ~~services rendered. The issuance was exempt from registration under~~ the ~~Securities~~nine ~~Act~~month ofperiod ~~1933~~ended inJune ~~reliance~~30, on2014, an ~~exemption~~improvement ~~provided~~of by$3.6 ~~Section~~million ~~4(2)~~or ofapproximately ~~that act~~65%.

InLIQUIDITY ~~June,~~AND ~~2013,~~CAPITAL we issued 708,333 shares of common stock at a per share price of $0.0254, valued at $18,008 to two accredited investors for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act.RESOURCES

InLiquidity ~~July,~~is ~~2013~~the weability ~~issued~~of ~~6,000,000~~a ~~shares~~company atto agenerate ~~share~~adequate ~~price~~amounts of ~~$0.0236/share~~cash to ~~our~~support ~~executive~~its ~~officers~~current and ~~employees~~future ~~and recognized stock based compensation expense of $141~~operations,~~600.~~ ~~The~~satisfy ~~issuance~~its ~~was~~obligations ~~exempt~~and ~~from~~otherwise ~~registration~~operate ~~under the Securities Act of 1933 in reliance~~ on an ~~exemption~~ongoing ~~provided by Section 4(2) of that act~~basis.

20In summary, our cash flows are as follows:

In July, 2013, we issued 2,000,000 shares of common stock at a per share price of $0.0236, valued at $47,200 to an accredited investor for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act.

	Year Ended			Nine Months Ended
	June 30,
	2015			2014

Net cash used in operating activities	$	(811,118	)	$	(1,286,842	)

Net cash used in investing activities		(12,477	)		(18,226	)

Net cash provided by financing activities		788,513			1,352,243

Net increase (decrease) in cash	$	(35,082	)	$	47,175

InAt ~~August~~June 30, ~~2013~~2015, we ~~issued~~had ~~37,000,000~~a ~~shares~~working capital deficit of ~~our~~$4.4 ~~common~~million ~~stock~~compared into ~~full~~a ~~satisfaction~~working capital deficit of $3.1 million at June 30,~~642~~ 2014,~~739~~ ofan ~~principal~~increase ~~and~~in ~~interest~~the ~~due~~deficit ~~under~~of a$1.3 ~~convertible debenture~~million. The ~~recipient~~increase ~~was~~in anthe ~~accredited~~deficit ~~investor~~is ~~and~~primarily attributable to the ~~issuance~~increase ~~was~~in ~~exempt~~capital ~~from~~lease ~~registration~~payable ~~under~~of $226K due to the ~~Section~~classification ~~Act~~between short-term and long-term driven by the increased payment amounts in Fiscal 2016 as compared to Fiscal 2015, an increase in our notes payable of ~~1933~~$490K due to new notes payable in ~~reliance~~Fiscal on2015, an ~~exemption~~increase ~~provided~~in byour ~~Section~~related-party ~~4(2)~~notes payable of ~~that~~$549K, ~~act~~the decrease in derivative liability of $341K, a non-cash liability and an increase in accounts payable and accrued liabilities of $203K.

In September, 2013, we issued 5,000,000 shares of common stock at a per share price of $0.03, valued at $150,000 to an accredited investor for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act.17

~~Purchases~~Net cash used in operating activities was $811,118 for the year ended June 30, 2015 as compared to net cash used in operating activities of ~~Equity~~$1,286,842 ~~Securities~~for bythe nine months ended June 30, 2014, a decrease of $684,276. For the ~~Issuer~~year ended June 30, 2015, our cash used in operations of $811K consisted of a net loss of $1.9 million offset by non-cash items totaling $1.1 million including items such as depreciation of $408K, amortization of debt discount of $196K and ~~Affiliated~~other ~~Purchasers~~non-cash items of $95K. Additionally, during the year ended June 30, 2015, we had a decrease in operating liabilities combined with an increase in operating assets which increased our net loss.

~~None~~For the nine month period ended June 30, 2014, our cash used in operating activities of $1.3 million consisted of a net loss of $4.9 million offset by non-cash items totaling $3.6 million including items such as depreciation of $551K, goodwill impairment of $2.1 million, loss on extinguishment of debt of $265K, amortization of debt discount of $478K and other non-cash items of $75K. Additionally, during the nine month period ended June 30, 2014, we had a decrease in operating liabilities offset by a decrease in operating assets which increased our net loss.

~~ITEM~~Net 6.cash ~~SELECTED~~used ~~FINANCIAL~~in ~~DATA~~investing activities for the year ended June 30, 2015 was $12K as compared to net cash used in investing activities for the nine month period ended June 30, 2014 of $18K for property and equipment purchases.

~~Not~~Net ~~applicable~~cash provided by financing activities for the year ended June 30, 2015 was $788,513 as compared to $1,352,243 for the nine months ended June 30, 2014, a ~~smaller~~decrease ~~reporting~~of ~~company~~$564K. In the year ended June 30, 2015, proceeds from the sale of convertible notes of $150K, proceeds from notes payable from a related party of $999K and proceeds from a note payable of $50K, offset by payments on notes payable of $411K.

21In the nine months ended June 30, 2014, we received proceeds from the issuance of preferred stock of $116K, proceeds from the sale of convertible notes of $428K, proceeds from notes payable from a related party of $665K and proceeds from the exercise of common stock options of $271K, offset by payments on notes payable of $127K.

~~ITEM~~At June 30, 2015 we had an accumulated deficit of $54.7 million and the report from our independent registered public accounting firm on our consolidated audited financial statements at June 30, 2015 contained an explanatory paragraph regarding doubt as to our ability to continue as a going concern as a result of our net losses in operations. ~~MANAGEMENT’S~~In ~~DISCUSSION~~spite ~~AND~~of ~~ANALYSIS~~our OFsales, ~~FINANCIAL~~there ~~CONDITION~~is ~~AND~~no ~~RESULTS~~assurance OFthat ~~OPERATIONS~~we will be able to maintain or increase our sales in Fiscal 2016 or that we will report net income in any future periods.

~~The~~In ~~following~~November ~~discussion~~2012 we entered into a Loan Agreement with IWEB Growth Fund, LLC, a company which was established by Messrs. Compton, Bush, Carosi, Pirtle and ~~analysis~~Stavish ofand General Soyster, our ~~financial~~former ~~condition~~independent ~~and~~directors. ~~results~~Under the terms of ~~operations~~the ~~should~~Loan beAgreement, ~~read~~IWEB inGrowth ~~conjunction~~Fund ~~with~~agreed to make one or more loans to us up to the ~~accompanying~~total ~~consolidated~~principal ~~financial~~amount ~~statements~~of $1.5 million and ~~notes~~as ~~thereto.~~of Inthe ~~addition~~date tohereof ~~historical~~we ~~financial~~have ~~information~~borrowed $186,000 ~~the~~from ~~following~~it ~~discussion~~under ~~contains~~one ~~forward-looking~~year ~~statements~~12% ~~that~~secured ~~reflect~~notes. ~~our~~Under ~~plans~~the terms of these loans, ~~estimates~~we ~~and~~granted ~~beliefs~~IWEB Growth Fund a second position security interest in all of our assets and ~~are~~executed ~~subject~~a confession of judgment. Any additional amounts to abe ~~number~~lent to us under this master agreement are at the discretion of ~~known~~the lender and ~~unknown~~there ~~risks~~are ~~and~~no ~~external~~assurances ~~factors~~any ~~that~~additional infunds ~~addition~~will be available to ~~general,~~us. ~~economic~~In addition, ~~competitive~~there ~~and~~are ~~other~~no ~~business~~assurances ~~conditions,~~that ~~could~~the ~~cause~~terms ~~actual~~of ~~results,~~these ~~performance~~loans ~~and~~are ~~achievements~~as favorable to ~~differ~~us ~~materially~~as we might have received from ~~those~~unrelated ~~described~~third orparties. ~~implied~~Lastly, inshould ~~the~~we ~~forward-looking~~fail ~~statements~~to pay these obligations when due, asthe ~~more~~lender ~~fully~~could ~~discussed~~seek ~~below~~to ~~and~~foreclose ~~elsewhere~~on inour ~~this~~assets ~~filing~~or otherwise obtain a judgment against us.

~~OVERVIEW~~Between November 9, 2012 and July 11, 2013, IWEB Growth Fund lent us an aggregate of $186,000 under the terms of 9 separate Confession of Judgment Promissory Notes. These notes, which are identical in their terms other than the dates and principal amounts, are for a one year term and bear interest at 12% per annum payable at maturity. Embodied in each of the notes is a confession of judgment which means that should we default upon the payment of the note, we have agreed to permit IWEB Growth Fund to enter a judgment against us in the appropriate court in Virginia before filing suit against us for collection of the amounts. Pursuant to the terms of the Loan Agreement, we paid IWEB Growth Fund’s expenses of $1,500 for the preparation of the Loan Agreement and related documents. We used the net proceeds from these initial loans for general working capital. We are currently in default on these loans.

~~IceWEB~~On isApril 23, 2014, we entered into a ~~provider~~Subscription Agreement with UnifiedOnline! LLC (the “Subscriber”), a Delaware limited liability company, pursuant to which the Subscriber purchased 400,000 shares of ~~high~~Series ~~performance~~AA ~~unified~~Preferred ~~data~~Stock ~~storage~~which ~~solutions. Our~~were ~~storage~~converted ~~systems~~on ~~make~~January it5, ~~possible~~2015 to ~~run~~903,825,954 ~~and~~shares ~~manage~~of ~~files~~common ~~and~~stock. ~~applications~~In ~~from~~consideration afor ~~single~~the ~~device~~Shares, ~~and~~Subscriber ~~consolidate~~paid ~~file-based~~$116,087 to various vendors and ~~block-based~~obtained ~~access~~the inagreement of a ~~single~~certain ~~storage~~related ~~platform~~party ~~which~~lessor ~~supports~~to ~~Fibre~~temporarily ~~Channel~~forbear ~~SAN,~~exercising IPnon-~~based~~payment ~~SAN~~default ~~(iSCSI)~~remedies. Since entering into the Subscription Agreement, ~~and~~the ~~NAS~~Subscriber has advanced $664,578 bearing interest at 10% per annum to fund general working capital.

A unified storage system simultaneously enables storage of file data and handles the block-based I/O (input/output) of enterprise applications. One advantage of unified storage is reduced hardware requirements. Instead of separate storage platforms, like NAS for file-based storage and a RAID disk array for block-based storage, unified storage combines both modes in a single device. Alternatively, a single device could be deployed for either file or block storage as required.18

~~In addition to lower capital expenditures for the enterprise~~Historically, ~~unified~~our ~~storage~~revenues ~~systems~~have ~~can~~not ~~also~~been besufficient ~~simpler~~ to ~~manage~~fund ~~than~~our ~~separate~~operations ~~products. The~~and ~~IceWEB~~we ~~Storage~~have ~~System~~relied ~~offers~~on ~~one~~capital ~~platform~~provided ~~for~~through ~~file~~the ~~and~~sale ~~block data~~ of ~~all~~equity ~~kinds. Whether it's Microsoft Exchange~~securities, ~~SQL~~and ~~Server~~various orfinancing ~~Oracle~~arrangements ~~databases,~~and ~~virtualized~~loans ~~environments,~~from ~~scanned~~related ~~images,~~parties. ~~files,~~At ~~video,~~June ~~pictures~~30, ~~graphics,~~2015 orwe ~~voice~~had ~~data,~~cash ~~IceWEB~~on ~~maximizes~~hand ~~the efficiency~~ of ~~storage by centralizing all data on one platform secured with strong data protection capabilities~~$21,745.

~~The~~We ~~IceWEB~~do ~~Storage~~not ~~System~~have isany ancommitments ~~all-inclusive~~for ~~storage~~capital ~~management~~expenditures. Our ~~system~~working capital needs in future periods depend primarily on the rate at which ~~includes~~we ~~de-duplication;~~can ~~unlimited~~increase ~~snapshots;~~our ~~thin~~revenues ~~provisioning;~~while ~~local~~controlling our expenses and decreasing the use of cash to fund operations. Additional capital may be needed to fund acquisitions of additional companies or ~~remote~~assets, ~~real-time~~although orwe ~~scheduled~~are ~~replication;~~not ~~capacity~~a ~~and~~party ~~utilization~~to ~~reporting,~~any ~~and~~pending ~~integration~~agreements ~~with~~at ~~virtual~~this ~~server~~time ~~environments. Unified~~and, ~~storage~~accordingly, ~~systems~~cannot ~~enjoy~~estimate the ~~same~~amount ~~level~~ of ~~reliability~~capital aswhich ~~dedicated~~may ~~file~~be ornecessary, ~~block~~if ~~storage~~any, ~~systems~~for acquisitions.

~~With~~As long as our ~~acquisition~~cash offlow ~~Computers~~from &operations ~~Telecom,~~remains ~~Inc.~~insufficient ~~and~~to ~~KCNAP,~~completely ~~LLC~~fund operations, ~~(collectively~~we ~~“CTC”)~~will incontinue ~~October~~depleting ~~2013,~~our ~~IceWEB~~financial ~~now~~resources ~~provides~~and ~~wireless~~seeking additional capital through equity and/or ~~fiber~~debt ~~broadband~~financing. There ~~service,~~can ~~co-location~~be ~~space~~no ~~and~~assurance ~~related~~that ~~services~~acceptable ~~and~~financing ~~operate~~can abe ~~Network~~obtained ~~Access~~on ~~Point~~suitable ~~(“NAP”)~~terms, ~~where~~if ~~customers~~at ~~directly~~all. ~~interconnect~~Our ~~with~~ability ato ~~network~~continue ~~ecosystem~~our ofexisting ~~partners~~operations and ~~customers. This~~to ~~access~~continue toour ~~Internet~~growth ~~routes~~strategy ~~provides~~could ~~CTC~~suffer ~~customers~~if ~~improved~~we ~~reliability~~are ~~and~~unable ~~streamlined~~to ~~connectivity~~raise ~~while~~the ~~significantly~~additional ~~reducing~~funds ~~costs~~on byacceptable ~~reaching~~terms awhich ~~critical~~will ~~mass~~have the effect of ~~networks~~adversely ~~within~~affecting aour ~~centralized~~ongoing ~~physical~~operations ~~location. In~~and ~~addition,~~limiting ~~through~~our ability to increase our ~~IceWEB~~revenues ~~Storage~~and ~~Corporation~~maintain ~~subsidiary~~profitable operations in the future. If we ~~deliver~~are ~~on-line~~unable ~~cloud~~to ~~computing~~secure ~~application~~the ~~services~~necessary additional working capital as needed, ~~and~~we ~~manufacture~~may ~~and~~be ~~market~~forced ~~cloud-attached~~to ~~and~~curtail ~~network~~some ~~storage~~or all of our operations.

~~CTC~~OFF ~~operates~~BALANCE aSHEET wireless internet service business, providing WIMAX broadband to small and medium size businesses in the metro Kansas-City, Missouri area. In addition CTC offers the following solutions: (i) premium data center co-location, (ii) interconnection and (iii) exchange and outsourced IT infrastructure services.ARRANGEMENTS

WeAs ~~leverage~~of June ~~our~~30, ~~NAP~~2015 ~~which~~we ~~allows~~did ~~our~~not ~~customers~~have toany ~~increase information and application delivery performance while significantly reducing costs. Our platform enables scalable, reliable and cost~~off-~~effective co~~balance-~~location~~sheet arrangements, ~~interconnection~~as ~~and~~defined ~~traffic~~in ~~exchange~~Item 303(a)(4)(ii) ~~thus~~of ~~lowering~~SEC ~~overall~~Regulation ~~cost and increasing flexibility~~S-K.

~~Our~~RECENT ~~customer~~ACCOUNTING ~~base includes U.S. government agencies, enterprise companies, and small to medium sized businesses (“SMB”).~~PRONOUNCEMENTS

22Various accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

AsITEM ~~described elsewhere herein, we experienced a significant drop in our sales following the death of our Chief Executive Officer in May 2012~~7A. ~~Mr.~~QUANTATIVE ~~Signorello~~AND ~~was~~QUALITATIVE ~~the~~DISCLOSURES ~~founder~~ABOUT ofMARKET ~~our company and the primary point of contact for many of our customers, vendors and partners~~RISK. As a result of Mr. Signorello’s passing, many of our customers delayed making their buying decisions until there was greater certainty about our continuing prospects. We anticipate revenues for fiscal 2014 will increase as a result of the acquisition of CTC in October, 2013 and the introduction of new products and services, including sales of our unified network storage solutions, the launch of additional cloud services offerings and other data storage products sold through our resellers and OEM partners. There are no assurances, however, that our revenues will return to historic levels.

~~Results~~ Not ofapplicable ~~Operations~~to a smaller reporting company.

~~FISCAL YEAR 2013 AS COMPARED TO FISCAL YEAR 2012~~19

~~The~~ITEM ~~following~~8. ~~table~~FINANCIAL ~~provides~~STATEMENTS anAND ~~overview~~SUPPLEMENTARY ~~of certain key factors of our results of operations for fiscal year 2013 as compared to fiscal year 2012:~~DATA.

	Fiscal Year ended September 30,						$			%
	2013			2012			Change			Change
Net Revenues	$	977,368		$	2,640,520		$	(1,663,152	)		(63.0	)%
Cost of sales		555,228			1,780,246			(1,225,018	)		(68.8	)%
Operating Expenses:
Sales and marketing		841,625			1,116,340			(274,715	)		(24.6	)%
Depreciation		215,237			202,130			13,107			6.5	%
Research and development		1,246,060			1,046,026			(200,033	)		(19.1	)%
General and administrative		5,283,363			2,722,048			2,561,315			94.1	%
Total operating expenses		7,586,285			5,086,545			2,499,740			49.1	%
Loss from operation		(7,164,145	)		(4,226,271	)		(2,937,874	)		69.5	%
Total other income (expense)		55,326			(2,258,777	)		2,314,103			(102.4	)%
Net loss	$	(7,108,819	)	$	(6,485,048	)	$	623,771			9.6	%

UNIFIEDONLINE, INC. AND SUBSIDIARIES

~~Other~~INDEX ~~Key~~TO ~~Indicators:~~CONSOLIDATED FINANCIAL STATEMENTS

	Fiscal					Fiscal
	2013					2012
Cost of sales as a percentage of sales			56.81		%			67.42		%
Gross profit margin		43.19		%			32.58		%
Sales and marking expense as a percentage of sales		86.11		%			42.28		%
General and administrative expenses as a percentage of sales		540.57		%			103.09		%
Total operating expenses as a percentage of sales		776.20		%			192.63		%

CONTENTS

Sales

Report of Independent Registered Public Accounting Firm	21

Consolidated Financial Statements:

Consolidated Balance Sheets	22

Consolidated Statements of Operations	23

Consolidated Statements of Comprehensive Loss	24

Consolidated Statements of Changes in Stockholders’ Deficit	25

Consolidated Statements of Cash Flows	26

Notes to Consolidated Financial Statements	27 - 51

The decrease in fiscal 2013 net sales from fiscal 2012 is primarily due to the impact of economic uncertainty on our customers’ budgets and IT spending capacity, as well as the uncertainty caused by the untimely passing of John Signorello, our Chief Executive Officer, in May, 2012.20

~~Cost~~REPORT ofOF ~~Sales~~INDEPENDENT ~~and~~REGISTERED ~~Gross~~PUBLIC ~~Profit~~ACCOUNTING FIRM

~~Our~~To ~~cost of sales consists primarily of products purchased to manufacture our storage products. The decrease in costs of sales as a percentage of sales and~~ the ~~corresponding~~Board ~~increase in our gross profit margin for fiscal 2013 as compared to fiscal 2012 was the result~~ of a decrease in the cost of certain components that go into our systems in fiscal 2013. We anticipate that our cost of sales as a percentage of revenue will remain in the 55% to 60% range in fiscal 2014, as we introduce new higher margin products and solutions to augment our storage business.Directors

23UnifiedOnline, Inc.

~~Total~~We ~~Operating~~have ~~Expenses~~audited the accompanying consolidated balance sheets of UnifiedOnline, Inc. and Subsidiaries as of June 30, 2015 and 2014 and the related consolidated statements of operations, comprehensive loss, changes in stockholders’ deficit and cash flows for the year ended June 30, 2015 and the nine months ended June 30, 2014. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

~~Our~~We ~~total~~conducted ~~operating~~our ~~expenses~~audits ~~increased~~in ~~approximately~~accordance ~~49%~~with ~~for~~the ~~fiscal~~standards ~~2013~~of asthe ~~compared~~Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to ~~fiscal~~obtain ~~2012~~reasonable assurance about whether the consolidated financial statements are free of material misstatement. The ~~increase~~Company is ~~primarily~~not ~~due~~required to ~~increased~~have, ~~merger~~nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of our internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and ~~acquisition~~disclosures ~~activity~~in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the ~~related~~overall ~~consulting~~consolidated ~~expense~~financial statement presentation. ~~The~~We ~~changes~~believe ~~include:~~that our audits provide a reasonable basis for our opinion.

~~• Sales~~In ~~and~~our ~~Marketing.~~opinion, ~~Sales~~the ~~and~~consolidated ~~marketing~~financial ~~expense~~statements ~~includes~~referred ~~salaries~~to above present fairly, ~~commission~~in all material respects, ~~occupancy~~the consolidated financial position of UnifiedOnline, ~~telephone~~Inc. and Subsidiaries, ~~travel~~as of June 30, 2015 and ~~entertainment~~2014 ~~expenses~~and ~~for~~the ~~direct~~consolidated results of their operations, comprehensive loss and ~~indirect~~their ~~sales~~cash ~~personnel.~~flows ~~For~~for the ~~fiscal~~ year ~~2013~~ended June 30, ~~sales~~2015 and ~~marketing~~the ~~decreased~~nine ~~approximately~~months ~~25%~~ended ~~from~~June ~~fiscal~~30, ~~year~~2014, ~~2012.~~in ~~The~~conformity ~~decrease~~with ~~was~~accounting ~~due~~principles ~~primarily~~generally toaccepted ~~decreased~~in ~~sales~~the ~~and~~United ~~marketing~~States ~~headcount~~of ~~during fiscal 2013~~America.

~~• Depreciation~~The ~~expense~~accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. ~~For~~As ~~fiscal~~discussed ~~2013~~in Note 2 to the consolidated financial statements, ~~depreciation~~the ~~expense~~Company ~~increased~~had ~~approximately~~net 6losses of $1,880,667 and $4,894,278, for the year ended June 30, 2015 and for the nine months ended June 30, 2014 and net cash used in operations of $811,118 for the year ended June 30, 2015 and $1,286,842 for the nine months ended June 30, 2014.5% ~~from~~Additionally, ~~fiscal~~the ~~2012~~Company is currently in default on the loans to IWEB Growth Fund and there is no guarantee that IWEB Growth Fund will not enter a judgment against the Company. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~• Research~~/s/ ~~and~~D’Arelli ~~development expense. For fiscal 2013~~Pruzansky, ~~research and development expenses increased approximately 19% from fiscal 2012~~P.A. ~~This~~Certified ~~increase~~Public ~~is related to research and development efforts related to our storage products.~~Accountants

~~• General~~Boca ~~and administrative expense. For fiscal 2013~~Raton, general and administrative expenses increased approximately 94% from fiscal 2012. This increase is primarily attributable to higher consulting expense related to our mergers and acquisition activity, and higher stock based compensation for our employees and consultants. For fiscal 2013 and 2012, general and administrative expenses consisted of the following:Florida

	Fiscal			Fiscal
	2013			2012
Occupancy	$		33,144		$		37,311
Consulting		1,712,926				76,730
Employee compensation		2,106,373				874,719
Professional fees		238,480				452,904
Internet/Phone		9,672				7,916
Travel/Entertainment		37,603				46,493
Investor Relations		737,323				978,332
Insurance		22,259				18,727
Other		385,583				228,915
	$	5,283,363		$		2,722,047

October 9, 2015

~~The principal changes in fiscal 2013 as compared to fiscal 2012 include:~~21

~~• For fiscal 2013~~UNIFIEDONLINE, ~~occupancy expense decreased approximately 11~~INC.2% ~~from~~AND ~~fiscal 2012.~~SUBSIDIARIES

•Consolidated ~~For~~Balance fiscal 2013, employee compensation and related taxes and benefits increased $1,231,654, or approximately 141% from fiscal 2012. The increase was primarily attributable to a decrease in salary expense of $120,124, offset by an increase in stock based compensation, and expense recorded in accordance with ASC Topic 718, “Compensation – Stock Compensation (Formerly SFAS No. 123 (R), “Share-Based Payments”), for fiscal 2013 of $1,351,778, an increase of 677%.Sheets

• For fiscal 2013, professional fees decreased $214,424, or approximately 47.3% from fiscal 2012. The decrease was primarily attributable to a decrease in legal fees incurred and the settlement of lawsuits against us in fiscal 2013 versus 2012.

	June 30,			June 30,
	2015			2014
Assets
Current Assets:
Cash	$	21,745		$	56,827
Accounts receivable, net		19,945			84,091
Inventory		-			19,069
Prepaid expenses		66,543			136,927
Marketable securities		2			3
Other current assets		10,208			51,708
Total Current Assets		118,443			348,625

Property and equipment, net of accumulated depreciation of $1,140,249 and $939,408 respectively		51,462			451,843
Deposits		5,923			5,923
Other assets		1,545			1,545
Total Assets	$	177,373		$	807,936

Liabilities and Stockholders' Deficit
Current Liabilities:
Accounts payable and accrued liabilities	$	1,043,088		$	840,009
Notes payable, current portion		962,810			472,017
Capital lease payable, current portion		886,356			660,458
Note payable, related party		1,029,005			479,578
Deferred revenue		85,407			74,824
Convertible notes payable, net of discount		115,632			197,645
Derivative liability - warrants		83,766			302,065
Derivative liability - embedded conversion option		346,734			469,632
Total Current Liabilities		4,552,798			3,496,228

Capital lease payable, long term portion		517,686			1,143,501
Total Liabilities		5,070,484			4,639,729

Commitments and Contingencies (Note 14)

Stockholders' Deficit:
Series B convertible preferred stock ($.001 par value; 10,000,000 shares authorized; 626,667 shares issued and outstanding)		626			626
Series AA convertible preferred stock ($.001 par value; 10,000,000 shares authorized; 0 and 400,000 shares issued and outstanding, respectively)		-			400
Common stock ($.001 par value; 6,000,000,000 shares authorized; 912,466,204 and 1,742,940 shares issued and outstanding, respectively)		912,466			1,743
Additional paid in capital		48,984,686			49,075,659
Accumulated deficit		(54,696,891	)		(52,816,224	)
Accumulated other comprehensive loss		(80,998	)		(80,997	)
Treasury stock, at cost, (406 shares)		(13,000	)		(13,000	)
Total Stockholders' Deficit		(4,893,111	)		(3,831,793	)
Total Liabilities and Stockholders' Deficit	$	177,373		$	807,936

•See ~~For~~accompanying ~~fiscal~~notes ~~2013, other expense increased approximately $156,668 or 68.4% from fiscal 2012. The increase is primarily due~~ to anconsolidated ~~increase~~financial ~~in bad debt expense of $114,918.~~statements

• For fiscal 2013, consulting expense increased by approximately 2,132% from fiscal 2012. The increase was primarily due to non-recurring stock-based consulting fees related to merger and acquisition activity in fiscal 2013.22

•	For fiscal 2013, internet and telephone expense increased approximately 22.2%. The increase was attributable to non-recurring costs incurred during the fiscal 2013.
24
•	For fiscal 2013, investor relations expense decreased $241,009, or approximately 25% from fiscal 2012. We expect that in fiscal 2014 our investor relations activity and related expense should experience a decrease from fiscal 2013.

UNIFIEDONLINE, INC. AND SUBSIDIARIES

•Consolidated ~~For~~Statements ~~fiscal~~of ~~2013, travel and entertainment expense decreased approximately 19.1%. The decrease was attributable to a decrease in general business travel-related activity.~~Operations

• For fiscal 2013, insurance expense increased approximately 18.9% from fiscal 2012. The increase was attributable to higher premiums paid for general business and directors and officer’s insurance.

	Year Ended			Nine Months Ended
	June 30,
	2015			2014

Sales	$	924,472		$	722,784

Cost of sales		797,980			860,981
Gross profit (loss)		126,492			(138,197	)

Operating expenses:
Sales and marketing		160,897			114,271
Depreciation		136,052			133,420
Technical		335,426			292,750
General and administrative		919,277			987,979
Total Operating Expenses		1,551,652			1,528,420

Loss from Operations		(1,425,160	)		(1,666,617	)

Other income (expenses):
Gain (loss) on sale of assets		8,943			(1,895	)
Gain (loss) from change of fair value of derivative liability		195,693			(61,221	)
Derivative expense		(184,813	)		(35,102	)
Loss on extinguishment of debt		-			(265,311	)
Impairment of goodwill		-			(2,084,710	)
Interest expense		(475,330	)		(779,422	)
Total other income (expenses)		(455,507	)		(3,227,661	)

Net loss	$	(1,880,667	)	$	(4,894,278	)

Loss per common share basic and diluted	$	0.00		$	(3.79	)

Weighted average common shares outstanding - basic and diluted		443,252,450			1,291,231

~~LOSS~~See ~~FROM~~accompanying ~~OPERATIONS~~notes to consolidated financial statements

~~Our loss from operations increased approximately $2,937,874, or 69% in fiscal year 2013 as compared to fiscal year 2012.~~23

~~TOTAL~~UNIFIEDONLINE, ~~OTHER~~INC. ~~INCOME~~AND ~~(EXPENSES)~~SUBSIDIARIES

~~Interest~~Consolidated ~~Expense. For~~Statements ~~fiscal 2013, interest expense decreased approximately 84.5%. The decrease in interest expense is primarily attributable to the lower amortization~~ of ~~loan~~Comprehensive ~~fees, debt discount, and derivative discount in fiscal 2013, versus fiscal 2012.~~ Loss

Loss on extinguishment of debt. For fiscal 2013 we had a loss on extinguishment of debt related to the payoff of our outstanding convertible debenture payable to Sand Hill Finance, LLC of $481,588.

	Year Ended			Nine Months Ended
	June 30,
	2015			2014

Net loss	$	(1,880,667	)	$	(4,894,278	)

Other comprehensive loss, net of tax:

Unrealized loss on securities		(1	)		(2	)

Other comprehensive loss		(1	)		(2	)

Comprehensive loss	$	(1,880,668	)	$	(4,894,280	)

~~Gain~~See onaccompanying ~~change~~notes into ~~derivative~~consolidated ~~liability. For~~financial fiscal 2013 we had a gain on the change in derivative liability of $987,075, which represents the change in the value of the derivative liability based on the Black-Scholes value of our outstanding variably-priced warrants.statements

~~NET LOSS~~24

~~Our net loss was $7~~UNIFIEDONLINE,~~108,819~~ ~~for~~INC. ~~fiscal~~AND ~~2013 compared to $6,485,048 for fiscal 2012, an increase of $623,771 or approximately 10%.~~SUBSIDIARIES

~~LIQUIDITY~~Consolidated ~~AND~~Statements ~~CAPITAL~~of ~~RESOURCES~~Changes in Stockholders’ Deficit

~~Liquidity~~For is the ~~ability~~Year ofEnded aJune ~~company to generate adequate amounts of cash to meet its needs for cash. At September~~ 30, ~~2013,~~2015 we had a working capital deficit of $693,307 compared to a working capital deficit of $2,904,559 at September 30, 2012, an improvement of $2,211,252. The decrease in the deficit is primarily attributable to the decrease in the note payable to Sand Hill Finance of $2,059,582, the decrease in derivative liability of $987,075, a non-cash liability, a decrease in accounts payable and ~~accrued liabilities of $174,834, offset by an increase in our related-party notes payable of $186,000. Also contributing was~~ the ~~decrease~~Nine inMonth ~~accounts~~Period ~~receivable~~Ended ofJune ~~$505~~30,~~152,~~ ~~and a decrease in inventory of $119,063.~~2014

Net cash used in operating activities was $2,700,609 for fiscal 2013 as compared to net cash used in operating activities of $4,067,538 for fiscal 2012, a decrease of $1,366,929. For fiscal 2013, our cash used in operations of $2,700,609 consisted of a net loss of $7,108,819 offset by non-cash items totaling $4,201,005 including items such as depreciation of $215,237, stock based compensation of $969,600, the amortization of deferred compensation of $762,677, the loss on extinguishment of debt OF $481,588, and the issuance of common stock for services of $2,532,773, offset by the change in fair value of derivative liability of $987,075, and other non-cash items of $226,205. Additionally, during fiscal 2013 we had a decrease in operating liabilities offset by a decrease in operating assets which incremented our net loss. This change in operating assets and liabilities primarily consisted of a decrease in accounts receivable of $505,152, and a decrease in inventory of $119,063, offset by an increase in prepaid expenses of $17,223, a decrease in accounts payable and accrued liabilities of $174,835, a decrease in other assets of $175,551, and a decrease in deferred revenue of $21,901.

	Series B and Series AA												Accumulated Other			Additional
	Pref Stock						Common Stock						Comprehensive			Paid-In			Accumulated			Treasury Stock
	Shares			Amount			Shares			Amount			Loss			Capital			Deficit			Share			Amount			Total
Balance at September 30, 2013		626,667		$	626			1,028,743		$	1,027		$	(80,180	)	$	47,642,898		$	(47,921,946	)		(406	)	$	(13,000	)	$	(370,575	)

Common stock issued for exercise of options								62,500			63						271,105												271,168
Common stock issued for services								42,500			43						218,957												219,000
Common stock issued to employees								27,169			27						169,973												170,000
Common stock returned by employees								(40,000	)		(40	)					(527,960	)											(528,000	)
Net loss for the nine months																				(4,894,278	)								(4,894,278	)
Shares issued as finance fee								18,513			19						104,481												104,500
Amortization of deferred compensation																	194,531												194,531
Common stock issued for acquisition								57,635			58						564,667												564,725
Payment on convertible note								527,666			528						321,338												321,866
Exercise of common stock warrants								18,214			18						(18	)											-
Unrealized loss on securities, net														(817	)														(817	)
Preferred stock		400,000			400												115,687												116,087
Balance at June 30, 2014		1,026,667		$	1,026			1,742,940		$	1,743		$	(80,997	)	$	49,075,659		$	(52,816,224	)		(406	)	$	(13,000	)	$	(3,831,793	)

Net loss for the year																				(1,880,667	)								(1,880,667	)
Amortization of deferred compensation																	49,660												49,660
Shares issued for conversion of notes payable								6,903,286			6,903						282,470												289,373
Write-off of derivative liability upon conversion																	480,317												480,317
Unrealized loss on securities, net														(1	)														(1	)
Retirement of shares								(5,976	)		(6	)					6												-
Conversion of Series AA convertible preferred stock		(400,000	)		(400	)		903,825,954			903,826						(903,426	)											-
Balance at June 30, 2015		626,667		$	626			912,466,204		$	912,466		$	(80,998	)	$	48,984,686		$	(54,696,891	)		(406	)	$	(13,000	)	$	(4,893,111	)

25See accompanying notes to consolidated financial statements

For fiscal 2012, our cash used in operations of $4,067,538 consisted of a net loss of $6,485,048 offset by non-cash items totaling $3,386,088 including items such as depreciation and amortization of $202,130, stock based compensation of $310,250, the amortization of deferred compensation of $62,228, shares issued for services of $533,628, interest on the amortization of debt discount of $2,315,337, the change in fair value of derivative liability of $645,501, and other non-cash items of $608,016. Additionally, during fiscal 2012 we had a decrease in operating liabilities and an increase in operating assets which incremented our net loss. This change in operating assets and liabilities primarily consisted of a decrease in accounts receivable of $618,740, and a decrease in prepaid expenses of $10,545, offset by an increase in net inventory of $226,250, a decrease in accounts payable and accrued liabilities of $1,362,562 and an increase in deferred revenue of $19,993.25

~~Net cash used in investing activities for fiscal 2013 was $23~~UNIFIEDONLINE,~~319~~ ~~as compared to net cash used in investing activities of $482,082 for fiscal 2012~~INC. ~~During~~AND fiscal 2013 we used cash of $23,319 for property and equipment purchases. During fiscal 2012 we used cash of $449,082 for property and equipment purchases, and $33,000 for the purchase of VOIS common stock.SUBSIDIARIES

~~Net~~Consolidated ~~cash~~Statements ~~provided by financing activities for fiscal 2013 was $2,463,986 as compared to $4,815,094 for fiscal 2012, a decrease~~ of ~~$2,351,109. In~~Cash fiscal 2013, we received proceeds from the sale of convertible notes of $168,000, proceeds from notes payable from a related party of $186,000, proceeds from the conversion of warrants of $53,480, proceeds from the exercise of common stock options of $1,726,360, the proceeds from the sale of common stock of $245,000, and proceeds from note payable of $297,940, offset by payments on notes payable of $212,794.Flows

In fiscal 2012, we received proceeds from the sale of convertible notes of $1,750,000, proceeds from subscriptions receivable of $1,171,520, proceeds from the conversion of warrants of $275,001, proceeds from the exercise of common stock options of $255,717, the proceeds from the sale of common stock of $2,249,860, and proceeds from note payable of $395,233, offset by payments on notes of $406,225, and the payment of deferred financing costs of $876,012.

	Year Ended			Nine Months Ended
	June 30,
	2015			2014
Net Loss	$	(1,880,667	)	$	(4,894,278	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		408,408			550,799
Gain on sale of assets		8,943			1,895
Share-based compensation		-			170,000
Return of restricted shares		-			(528,000	)
Amortization of deferred compensation		49,660			194,531
Loss on extinguishment of debt		-			265,311
Impairment of goodwill		-			2,084,710
Change in fair value of derivative liability		(195,693	)		61,221
Derivative expense		184,813			35,102
Common stock and options issued for services rendered		-			219,000
Amortization of deferred finance costs		45,650			56,292
Amortization of debt discount		195,670			477,813
Bad debt expense		2,155			18,852
Changes in operating assets and liabilities:
Accounts receivable		61,991			(44,775	)
Prepaid expense		63,734			(15,599	)
Other		-			107,150
Inventory		19,069			144,099
Accounts payable and accrued liabilities		214,566			(203,397	)
Deferred revenue		10,583			12,432
NET CASH USED IN OPERATING ACTIVITIES		(811,118	)		(1,286,842	)

CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of property and equipment		(12,477	)		(18,226	)
NET CASH USED IN INVESTING ACTIVITIES		(12,477	)		(18,226	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable		(410,914	)		(127,410	)
Proceeds from convertible note payable		150,000			427,820
Proceeds from notes payable		500,000			185,000
Proceeds from notes payable, related party		549,427			479,578
Proceeds from issuance of preferred stock		-			116,087
Proceeds from exercise of common stock options		-			271,168
NET CASH PROVIDED BY FINANCING ACTIVITIES		788,513			1,352,243

NET INCREASE (DECREASE) IN CASH		(35,082	)		47,175

CASH - beginning of period		56,827			9,652

CASH - end of period	$	21,745		$	56,827

Supplemental disclosure of cash flow information:
Cash paid for interest	$	52,651		$	169,457

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Conversion of convertible note into common stock	$	289,373		$	321,866
Shares issued for acquisition of subsidiary	$	-		$	564,725
Shares issued for conversion of Series AA convertible preferred stock	$	903,826		$	0

AtSee ~~September~~accompanying ~~30,~~notes ~~2013~~to weconsolidated ~~had an accumulated deficit of $47,921,946 and the report from our independent registered public accounting firm on our audited~~ financial statements at September 30, 2013 contained an explanatory paragraph regarding doubt as to our ability to continue as a going concern as a result of our net losses in operations. In spite of our sales, there is no assurance that we will be able to maintain or increase our sales in fiscal 2013 or that we will report net income in any future periods.statement

On November 2, 2012 IceWEB, Inc. entered into a Loan Agreement with IWEB Growth Fund, LLC, a Virginia limited liability company (“IWEB Growth Fund”) which was recently established by Messrs. Compton, Bush, Carosi, Pirtle and Stavish and General Soyster, our independent directors. Ms. My Le Phuong, an employee of our company, serves as manager of the IWEB Growth Fund. Under the terms of the Loan Agreement, IWEB Growth Fund agreed to make one or more loans to us up to the total principal amount of $1.5 million. The lending of any amounts under the Loan Agreement is conditioned upon the negotiation of notes and related loan documents which contain terms and conditions that are acceptable to the lender to be determined at the time of the loans. We agreed to grant IWEB Growth Fund a security interest in our assets as collateral for these loans, which such security interest is subordinate to the interest of our primary lender Sand Hill Finance, LLC. In the event we should default under the terms of the Loan Agreement, IWEB Growth Fund is entitled to declare all amounts advanced under the various notes immediately due and payable. An event of default includes a breach by us of any covenant, representation or warranty in the Loan Agreement or a default under any note entered into with the lender.26

~~Between~~NOTE November 9, 2012 and July 11, 2013, IWEB Growth Fund lent us an aggregate of $186,000 under the terms of 9 separate Confession of Judgment Promissory Notes. These notes, which are identical in their terms other than the dates and principal amounts, are for a one year term and bear interest at 12% per annum payable at maturity. Embodied in each of the notes is a confession of judgment which means that should we default upon the payment of the note, we have agreed to permit IWEB Growth Fund to enter a judgment against us in the appropriate court in Virginia before filing suit against us for collection of the amounts. Pursuant to the terms of the Loan Agreement, we paid IWEB Growth Fund’s expenses of $1~~,500~~ ~~for~~– ~~the~~NATURE ~~preparation~~OF ~~of the Loan Agreement and related documents. We are using the net proceeds from these initial loans for general working capital.~~BUSINESS

26On January 5, 2015, IceWEB, Inc. changed its name to UnifiedOnline, Inc.

~~Historically~~UnifiedOnline, ~~our~~Inc. ~~sales~~(the ~~have~~“Company”) ~~not~~began ~~been~~trading ~~sufficient~~publicly toin ~~fund~~April ~~our~~2002. During ~~operations~~the ~~and~~year ended June 30, 2015 we ~~have~~had ~~relied~~three onwholly ~~capital~~owned ~~provided~~operating ~~through~~subsidiaries, ~~the~~Computers ~~sale~~& ofTelecom, ~~equity~~Inc. ~~securities~~and KCNAP, LLC, (collectively “CTC) and ~~various~~IceWEB ~~financing~~Storage ~~arrangements~~Corporation (formerly known as Inline Corporation). CTC provides wireless and ~~loans~~fiber ~~from~~broadband service, co-location space and related ~~parties~~services and operates a Network Access Point (“NAP”) where customers directly interconnect with a network ecosystem of partners and customers. This Ataccess ~~September~~to ~~30,~~Internet ~~2013~~routes weprovides ~~had~~CTC ~~cash~~customers onimproved ~~hand~~reliability and streamlined connectivity while significantly reducing costs by reaching a critical mass of ~~$9,652~~networks within a centralized physical location. In addition, tothrough ~~the~~our ~~cash~~IceWEB ~~necessary~~Storage toCorporation ~~fund~~subsidiary ~~our~~we ~~operating~~deliver ~~losses,~~on-line ~~research~~cloud ~~and~~computing ~~development~~application services, ~~marketing~~other ~~and~~managed ~~general~~services ~~growth~~such as Disaster Recovery, weArchive ~~will~~Storage, ~~need~~Redundant ~~cash~~File toStorage, ~~satisfy~~Redundant ~~certain~~Broadband ~~obligations~~Services and Business Continuity Services.

~~Our~~CTC ~~working~~operates ~~capital~~a ~~needs~~wireless ininternet ~~future~~service ~~periods~~business, ~~depend~~providing ~~primarily~~WIMAX onbroadband ~~the~~to ~~rate~~small atand ~~which~~medium wesize ~~can~~businesses ~~increase~~in ~~our sales while controlling our expenses and decreasing~~ the ~~use~~metro ofKansas-City, ~~cash~~Missouri ~~to fund operations~~area. In ~~Additional~~addition ~~capital~~CTC ~~may~~offers bethe ~~needed~~following tosolutions: ~~fund~~(i) premium ~~acquisitions~~data ofcenter ~~additional companies or assets~~co-location, ~~although~~(ii) interconnection weand ~~are~~(iii) exchange ~~not a party to any pending agreements at this time~~ and, ~~accordingly,~~outsourced ~~cannot~~IT ~~estimate~~infrastructure ~~the amount of capital which may be necessary, if any, for acquisitions~~services.

AsWe ~~long~~leverage as our ~~cash~~NAP ~~flow~~which ~~from~~allows ~~operations~~our ~~remains~~customers ~~insufficient~~ to ~~completely~~increase ~~fund~~information ~~operations, we will continue depleting our financial resources~~ and ~~seeking~~application ~~additional~~delivery ~~capital~~performance ~~through~~while ~~equity~~reducing ~~and/or debt financing~~costs. ~~There~~ Our ~~can~~platform beenables ~~no assurance that acceptable financing can be obtained on suitable terms~~scalable, ifreliable ~~at all. Our ability to continue our existing operations~~ and tocost-effective ~~fund~~co-location, ~~our~~interconnection ~~working capital needs will suffer if we are unable to raise the additional funds on acceptable terms which will have the effect of adversely affecting our ongoing operations~~ and ~~limiting~~traffic ~~our~~exchange ~~ability~~thus tolowering ~~increase~~overall ~~our~~cost ~~sales~~ and ~~maintain~~increasing ~~profitable operations in the future~~flexibility. ~~If we are unable to secure the necessary additional working capital as needed, we may be forced to curtail some or all of our operations.~~

~~Off~~NOTE ~~Balance~~2 ~~Sheet~~- ~~Arrangements.~~BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~None.~~Principles of Consolidation

~~Recent~~The ~~Accounting~~accompanying ~~Pronouncements~~consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

In July 2013, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance that requires that an entity net its liability for unrecognized tax positions against a net operating loss carryforward, a similar tax loss or a tax credit carryforward when settlement in this manner is available under the tax law. The Company will adopt this guidance effective at the beginning of its 2015 fiscal year. The Company is currently evaluating the impact of this pronouncement on its financial statements.Reclassifications

InCertain ~~February~~reclassifications ~~2013,~~have ~~the~~been ~~FASB~~made ~~issued~~to ~~authoritative~~previously ~~guidance~~reported ~~that~~amounts ~~amends~~to ~~the~~conform ~~presentation~~to of2015 ~~accumulated~~amounts. ~~other~~The ~~comprehensive~~reclassifications ~~income~~had ~~and~~no ~~clarifies~~impact ~~how~~on topreviously ~~report~~reported ~~the~~results ~~effect~~ of ~~significant~~operations ~~reclassifications~~or ~~out~~stockholders’ ~~of accumulated other comprehensive income~~deficit. The ~~guidance,~~changes ~~which~~were ~~becomes~~as ~~effective~~a ~~for~~result of the ~~Company~~reverse onstock asplit ~~prospective~~which ~~basis~~occurred aton ~~the~~January ~~beginning~~5, of2015, ~~its~~which ~~2014~~was ~~fiscal~~retrospectively ~~year~~applied, ~~requires~~the ~~footnote~~reclass ~~disclosures~~of ~~regarding~~certain ~~the~~depreciation ~~changes~~related into ~~accumulated~~assets ~~other~~used ~~comprehensive~~for ~~income~~providing byservice ~~component~~to ~~and~~cost ~~the~~of ~~line~~sales ~~items~~from ~~affected~~operating inexpense, the ~~statements~~reclass of ~~operations.~~a ~~The~~capital ~~adoption~~lease ofpayable ~~this~~from ~~updated~~notes ~~authoritative~~payable ~~guidance~~to iscapital ~~not~~lease ~~expected~~payable toand ~~have~~the areclass ~~significant~~of ~~impact~~derivative onexpense ~~the~~from ~~Company’s~~interest ~~Consolidated Financial Statements~~expense.

InGoing December 2011, the FASB issued updated authoritative guidance to amend the presentation of comprehensive income in financial statements. This new guidance allows companies the option to present other comprehensive income in either a single continuous statement or in two separate but consecutive statements. It eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. Under both alternatives, companies are required to present each component of net income and comprehensive income. The amendment is effective for fiscal years and interim periods beginning on or after December 15, 2011 on a retrospective basis. The adoption of this guidance will not change the previously reported amounts of comprehensive income. The Company has presented other comprehensive income on the face of the condensed consolidated statements of operations for all periods presented. The adoption of this updated authoritative guidance had no effect on our financial condition, results of operations or cash flow.Concern

~~ITEM~~The 7ACompany has had losses since inception that raise substantial doubt about our ability to continue as a going concern. For ~~QUANTATIVE~~the ~~AND~~year ~~QUALITATIVE~~ended ~~DISCLOSURES~~June ~~ABOUT~~30, ~~MARKET~~2015 ~~RISK~~and the nine months ended June 30, 2014 we incurred a net loss of approximately $1.9 million and $4.9 million, respectively and net cash used in operations of approximately $811K for the year ended June 30, 2015 and approximately $1.2 million for the nine month period ended June 30, 2014. The consolidated financial statements do not include any adjustments related to the recovery and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event we cannot continue in existence. Additionally, the Company is currently in default on the loans to IWEB Growth Fund, and there is no guarantee that IWEB Growth Fund will not enter a judgment against the Company.

~~Not~~Management ~~applicable~~has established plans intended to aincrease ~~smaller~~the ~~reporting~~sales ~~company~~of our products and services. Management intends to seek new capital from new equity securities offerings to provide funds needed to increase liquidity, fund growth, and implement its business plan. However, no assurances can be given that we will be able to raise any additional funds.

27Marketable Securities

~~ITEM~~The 8Company accounts for the purchase of marketable equity securities in accordance with FASB Accounting Standards Codification (ASC) 320, “Investment – Debt and Equity Securities” with any unrealized gains and losses included as a net amount as a separate component of stockholders’ equity. ~~FINANCIAL~~However, ~~STATEMENTS~~those ~~AND~~securities ~~SUPPLEMENTARY~~may ~~DATA~~not have the trading volume to support the stock price if the Company were to sell all their shares in the open market at once, so the Company may have a loss on the sale of marketable securities even though they record marketable equity securities at the current market value.

~~IceWEB, Inc. and Subsidiaries~~27

~~INDEX~~Use TOof ~~CONSOLIDATED FINANCIAL STATEMENTS~~Estimates

~~CONTENTS~~The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable allowances, useful lives of property and equipment, valuation of stock-based compensation, derivative liabilities, deferred tax asset valuation allowance and litigation reserves. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Report of Independent Registered Public Accounting Firm	31
Consolidated Financial Statements:
Consolidated Balance Sheets	33
Consolidated Statements of Operations	34
Consolidated Statements of Changes in Stockholders’ Deficit	35
Consolidated Statements of Cash Flows	36
Notes to Consolidated Financial Statements	37 - 58

Cash and Cash Equivalents

28We consider all highly liquid debt instruments with original maturities of three months or less to be cash equivalents.

~~REPORT~~Accounts ~~OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~Receivable

ToWe record accounts receivable at the ~~Board~~invoiced amount. We maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables. We recorded a bad debt allowance of ~~Directors~~$4,768 and $45,000 as of June 30, 2015 and 2014, respectively. The Company performs ongoing evaluations of its accounts receivable to identify specific customers with known disputes or collectability issues. Bad debt expense amounted to $2,155 and $18,852 for the year ended June 30, 2015 and the nine months ended June 30, 2014, respectively.

~~IceWEB,~~Derivative ~~Inc.~~Liability

WeThe ~~have~~Company ~~audited~~issued ~~the~~warrants ~~accompanying~~to ~~consolidated~~purchase ~~balance~~the ~~sheets~~Company’s ofcommon ~~IceWEB,~~stock ~~Inc.~~in ~~and~~connection ~~Subsidiaries~~with asthe issuance of ~~September~~convertible 30debt, ~~2013~~which ~~and~~contain ~~2012~~certain ~~and~~ratchet ~~the~~provisions ~~related~~that ~~consolidated~~reduce ~~statements~~the exercise price of ~~operations,~~the ~~changes~~warrants inor ~~stockholders’~~the ~~equity~~conversion ~~(deficit)~~price ~~and~~in ~~cash~~certain ~~flows~~circumstances. In ~~for~~accordance ~~each~~with ofASC 815 the ~~two~~Company ~~years~~determined inthat the ~~period~~warrants ~~ended~~and/or ~~September~~the ~~30,~~conversion ~~2013.~~features ~~These~~with ~~consolidated~~provisions ~~financial~~that ~~statements~~reduce ~~are~~ the ~~responsibility~~exercise price of the ~~Company’s~~warrants ~~management.~~did ~~Our~~not ~~responsibility~~qualify isfor toa ~~express~~scope anexception ~~opinion~~under onASC ~~these~~815 ~~consolidated~~as ~~financial~~they ~~statements~~were ~~based~~determined onnot ~~our~~to ~~audits~~be indexed to the Company’s stock.

WeDerivatives ~~conducted~~are ~~our~~required ~~audits~~to inbe ~~accordance~~recorded ~~with~~on the ~~standards~~balance ofsheet ~~the~~at ~~Public~~fair ~~Company~~value ~~Accounting Oversight Board~~ (~~United~~see ~~States~~Note 11). These ~~Those~~derivatives, ~~standards~~including ~~require~~embedded ~~that~~derivatives wein ~~plan and perform~~ the ~~audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The~~ Company’s isstructured ~~not required to have~~borrowings, nor were we engaged to perform, audits of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are ~~appropriate~~separately invalued ~~the~~and ~~circumstances,~~accounted ~~but not~~ for ~~the purposes of expressing an opinion~~ on the ~~effectiveness~~Company’s ofbalance ~~our internal control over financial reporting~~sheet. Fair ~~Accordingly,~~values wefor ~~express~~exchange notraded ~~such~~securities ~~opinion.~~and Anderivatives ~~audit~~are ~~includes~~based ~~examining,~~ on aquoted ~~test~~market ~~basis, evidence supporting the amounts and disclosures in the consolidated financial statements~~prices. Where Anmarket ~~audit~~prices ~~also~~are ~~includes~~not ~~assessing~~readily ~~the accounting principles used and significant estimates made by management~~available, asfair ~~well~~values asare ~~evaluating~~determined ~~the~~using ~~overall~~market ~~consolidated~~based ~~financial~~pricing ~~statement~~models ~~presentation.~~incorporating Wereadily ~~believe~~observable ~~that~~market ~~our~~data ~~audits~~and ~~provide~~requiring ajudgment ~~reasonable~~and ~~basis for our opinion~~estimates.

InFair ~~our~~Value opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of IceWEB, Inc. and Subsidiaries, as of September 30, 2013 and 2012 and the consolidated results of their operations and their cash flows for each of the two years in the period ended September 30, 2013, in conformity with accounting principles generally accepted in the United States of America.Measurements

~~The~~Fair ~~accompanying~~value ~~consolidated~~is ~~financial~~defined ~~statements~~as ~~have~~the ~~been~~exchange ~~prepared~~price ~~assuming~~ that ~~the~~would ~~Company~~be ~~will~~received ~~continue~~for asan aasset ~~going~~or ~~concern.~~paid ~~As discussed in Note 2~~ to ~~the~~transfer ~~consolidated~~a ~~financial~~liability ~~statements,~~(an ~~the~~exit ~~Company~~price) ~~had net losses and net cash used~~ in ~~operating~~the ~~activities~~principal ofor ~~$7,108,819~~most ~~and~~advantageous ~~$2,700,609,~~market ~~respectively,~~ for the ~~year~~asset ~~ended~~or ~~September~~liability ~~30,~~in ~~2013. The Company also had~~ an ~~accumulated~~orderly ~~deficit~~transaction ofbetween ~~$47,921,946~~market atparticipants ~~September~~on ~~30,~~the ~~2013~~measurement date. ~~These~~ The ~~matters~~established ~~raise~~fair ~~substantial~~value ~~doubt~~hierarchy ~~about~~requires ~~the~~an ~~Company’s~~entity ~~ability~~ to ~~continue~~maximize asthe ause ~~going~~of ~~concern.~~observable ~~Management’s~~inputs ~~plans~~and inminimize ~~regards~~the touse ~~these~~of ~~matters~~unobservable ~~are~~inputs ~~also~~when ~~described~~measuring infair ~~Note 2~~value. The ~~consolidated~~standard ~~financial~~describes ~~statements~~three dolevels ~~not~~of ~~include~~inputs ~~any adjustments~~ that ~~might~~may ~~result~~be ~~from~~used ~~the~~to ~~outcome~~measure offair ~~this uncertainty.~~value:

~~/s/~~Level ~~D’Arelli~~1: Observable ~~Pruzansky,~~inputs ~~P.A.~~such ~~Certified~~as ~~Public~~quoted ~~Accountants~~prices (unadjusted) in active markets for identical assets or liabilities.

~~Boca~~Level ~~Raton~~2: Inputs other than quoted prices that are observable for the asset or liability, ~~Florida~~either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; and model-driven valuations whose inputs are observable or whose significant value drivers are observable. Valuations may be obtained from, or corroborated by, third-party pricing services.

~~January~~Level 133: Unobservable inputs to measure fair value of assets and liabilities for which there is little, ~~2014~~if any market activity at the measurement date, using reasonable inputs and assumptions based upon the best information at the time, to the extent that inputs are available without undue cost and effort.

29Fair Value of Financial Instruments

~~IceWEB~~The Company’s financial instruments, ~~Inc.~~including cash and ~~Subsidiaries~~cash equivalents, receivables, accounts payable and accrued liabilities and notes payable are carried at cost, which approximates their fair value, due to the relatively short maturity of these instruments.

~~Consolidated Balance Sheets~~28

	September 30, 2013						September 30, 2012
ASSETS:
CURRENT ASSETS:
Cash		$		9,652				$		269,594
Other receivable			28						-
Accounts receivable			58,140						563,320
Inventory			163,168						282,231
Marketable securities, current			820						72,000
Other current assets			175,551						6,875
Prepaid expenses			36,925						19,702
			444,284						1,213,722
OTHER ASSETS:
Property and equipment, net of accumulated depreciation of $1,422,488 and $1,207,252, respectively			307,868						499,785
Deposits			13,320						13,320
Marketable Securities, net			-						237,600
Deferred financing costs, net			-						114,395
Other assets			1,545						1,545
Total Assets	$		767,017			$			2,080,367
LIABILITIES AND STOCKHOLDERS’ DEFICIT:
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$		649,294			$			824,128
Notes payable			-						2,059,582
Note payable, related parties			186,000						-
Deferred revenue			2,996						24,896
Convertible notes payable, net of discount			181,878						105,176
Derivative liability			117,424						1,104,499
Total Current Liabilities			1,137,592						4,118,281
Stockholders' Deficit
Series B convertible preferred stock ($0.001 par value; 10,000,000 shares authorized; 626,667 shares issued and outstanding)			626						626
Common stock ($.001 par value; 1,000,000,000 shares authorized; 410,424,772 shares issued and 410,262,272 shares outstanding, respectively and 216,443,809 shares issued and 216,281,309 shares outstanding, respectively)			410,262						215,945
Additional paid in capital			47,233,663						38,343,043
Accumulated deficit			(47,921,946		)				(40,813,128		)
Accumulated other comprehensive income (loss)			(80,180		)				228,600
Treasury stock, at cost, (162,500 shares)			(13,000		)				(13,000		)
Total stockholders' deficit			(370,575		)				(2,037,914		)
Total Liabilities and Stockholders’ Deficit	$		767,017			$			2,080,367

Our derivative financial instruments, consisting of embedded conversion features in our convertible debt and ratchet provisions in our warrants, are required to be measured at fair value on a recurring basis under FASB ASC 815. As of June 30, 2015 and 2014 the Company’s derivatives are measured at fair value, using a Black-Scholes valuation model which approximates a binomial lattice valuation methodology utilizing Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities (see Note 12).

~~See accompanying notes to consolidated financial statements~~Inventory

30Inventory is valued at the lower of cost or market, on an average cost basis.

~~IceWEB,~~Property ~~Inc.~~ and ~~Subsidiaries~~Equipment

~~Consolidated~~Property ~~Statements~~and equipment is stated at cost, net of ~~Operations~~accumulated depreciation. Depreciation expense is recorded by using the straight-line method over the estimated useful lives of the related assets.

	For the Years Ended
	September 30,
	2013				2012
Sales	$		977,368			$		2,640,520
Cost of sales		555,228					1,780,246
Gross profit		422,140					860,274
Operating expenses:
Sales and marketing expense		841,625					1,116,340
Depreciation and amortization expense		215,237					202,130
Research and development		1,246,060					1,046,026
General and administrative		5,283,363					2,722,049
Total operating expenses		7,586,285					5,086,545
Loss From Operations		(7,164,145		)			(4,226,271		)
Other income (expenses):
Gain on change in derivative liability		987,075					645,501
Loss on extinguishment of debt		(481,588		)			-
Interest income		-					22
Interest expense		(450,161		)			(2,904,300		)
Total other income (expenses):		55,326					(2,258,777		)
Net loss	$	(7,108,819		)	$		(6,485,048		)
Net loss per common share - basic and diluted	$	(0.02		)	$		(0.04		)
Weighted average common shares outstanding - basic and diluted		290,864,883					173,207,111

Product Warranties

~~See~~The ~~accompanying~~Company’s ~~notes~~products typically carry a warranty for periods of up to ~~consolidated~~three ~~financial~~years. We ~~statements~~have not had any significant warranty claims on our products.

31Long-lived Assets

~~ICEWEB~~In accordance with Accounting Standards Codification (ASC) Topic 360, ~~Inc~~“Property, Plant, and Equipment”, we review the carrying value of intangibles and other long-lived assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the property, if any, exceeds its fair market value.

~~Statement~~Revenue ~~of Consolidated Comprehensive Loss~~Recognition

	For the Years Ended
	September 30,
	2013	2012
Net loss	($7,108,819)	($6,485,048)
Other comprehensive loss, net of tax:
Unrealized gain (loss) on securities	(308,780)	161,400
Other comprehensive income (loss)	(308,780)	161,400
Comprehensive income (loss)	($7,417,599)	($6,323,648)

We follow the guidance of ASC Topic 605, “Revenue Recognition” for revenue recognition. In general, we record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured.

~~See~~It ~~accompanying~~is ~~notes~~our practice to ~~consolidated~~obtain ~~financial~~a ~~statements~~signed master sales agreement for recurring revenue sales, and/or a sales order for events and one-time services. Taxes collected from customers and remitted to government authorities are reported on a net basis and are excluded from revenue.

32We derive the majority of our revenues from recurring revenue streams, consisting of:

~~IceWEB, Inc~~1. Wireless and ~~Subsidiaries~~fiber broadband service;

~~Consolidated~~2. ~~Statements~~Co-location, Ofwhich ~~Stockholders’~~includes ~~Equity~~the ~~(Deficit)~~licensing ~~and~~of ~~Comprehensive~~cabinet ~~Income~~space ~~(Loss)~~and power;

~~For~~3. ~~the~~Interconnection ~~years ended September 30~~services, ~~2013~~such ~~and~~as ~~2012~~cross connects;

												Accumulated
	Series B							Additional				Other
	Preferred Stock			Common Stock				Paid-In		Accumulated		Comprehensive	Treasury Stock
	Shares		Amount	Shares		Amount		Capital		Deficit		Income	Shares		Amount		Total
Balance at September 30, 2011	626,667	$	626	157,959,066	$	157,960	$	32,866,315	$	(34,328,080)	$	67,200	(162,500)	$	(13,000)	$	(1,248,979)
Net loss for the year										(6,485,048)							(6,485,048)
Unrealized gain on marketable securities												161,400					161,400
Comprehensive loss										(6,485,048)		161,400					(6,323,648)
Amortization of deferred compensation								62,228									62,228
Issuance of common stock for cash				22,171,111		22,171		2,227,689									2,249,860
Common stock issued for services				5,137,105		5,137		528,491									533,628
Common stock issued to employees				3,634,871		3,635		306,615									310,250
Common stock issued for exercise of options				1,532,326		1,532		254,184									255,716
Exercise of common stock warrants				3,169,628		3,170		271,831									275,001
Common stock issued as payment on convertible notes				22,339,702		22,340		1,825,691									1,848,031
Balance at September 30, 2012	626,667	$	626	215,943,809	$	215,945	$	38,343,044	$	(40,813,128)	$	228,600	(162,500)	$	(13,000)	$	(2,037,914)
Net loss for the year										(7,108,819)							(7,108,819)
Unrealized loss on marketable securities												(308,780)					(308,780)
Comprehensive loss										(7,108,819)		(308,780)					(7,417,599)
Amortization of deferred compensation								762,677									762,677
Loss on extinguishment of debt								481,588									481,588
Issuance of common stock for cash				10,375,676		10,376		234,624									245,000
Common stock issued for services				13,329,657		13,330		473,155									486,485
Common stock issued to employees				30,297,630		30,296		939,304									969,600
Common stock issued for exercise of options				91,224,000		91,224		3,681,425									3,772,649
Exercise of common stock warrants				1,910,000		1,910		51,570									53,480
Common stock issued as payment on convertible notes				47,181,300		47,181		2,266,277									2,313,458
Balance at September 30, 2013	626,667	$	626	410,262,072	$	410,262	$	47,233,664	$	(47,921,947)	$	(80,180)	(162,500)	$	(13,000)	$	(370,575)

4.	Managed infrastructure services.

~~See~~● ~~accompanying~~Revenues ~~notes~~from recurring revenue streams are generally billed monthly and recognized ratably over the term of the contract, generally one to ~~consolidated~~three ~~financial~~years ~~statements~~for data center space customers. We generally recognize revenue beginning on the date the customer commences use of our services.

33● Implementation and set-up fees are recognized at the time those services are completed and service is working.

~~IceWEB~~● For services that are billed according to customer usage, ~~Inc.~~revenue ~~and~~is ~~Subsidiaries~~recognized in the month in which the usage is provided.

~~Consolidated~~● ~~Statements~~Professional ofservices ~~Cash~~are ~~Flows~~recognized in the period services are provided.

	For the Years Ended September 30,
	2013						2012
Net loss		$		(7,108,819		)			$	(6,485,048		)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation			215,237								202,130
Share-based compensation			969,600								310,250
Amortization of deferred compensation			762,677								62,228
Loss on extinguishment of debt			481,588								-
Change in fair value of derivative liability			(987,075		)						(645,501		)
Common stock and options issued for services rendered			2,532,773								533,628
Write off of subscription receivable			-								83,000
Interest on amortization of debt discount			73,172								2,315,337
Amortization of deferred finance costs			153,033								525,016
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable			505,152								618,740
Prepaid expense			(17,223		)						10,545
Other			(175,551		)						(1,545		)
Inventory			119,063								(226,250		)
Increase (decrease) in:
Accounts payable and accrued liabilities			(174,835		)						(1,362,562		)
Deferred loan fees			(27,500		)						(27,500		)
Deferred revenue			(21,901		)						19,993
NET CASH USED IN OPERATING ACTIVITIES			(2,700,609		)						(4,067,538		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(23,319		)						(449,082		)
Investment in marketable securities			-								(33,000		)
NET CASH USED IN INVESTING ACTIVITIES			(23,319		)						(482,082		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable			297,940								395,233
Payments on notes payable			(212,794		)						(406,225		)
Proceeds from subscription receivable			-								1,171,520
Proceeds from conversion of warrants			53,480								275,001
Proceeds from convertible note payable			168,000								1,750,000
Payment of deferred finance costs			-								(876,012		)
Proceeds from notes payable, related party			186,000								-
Proceeds from sale of common stock			245,000								2,249,860
Proceeds from exercise of common stock options			1,726,360								255,717
NET CASH PROVIDED BY FINANCING ACTIVITIES			2,463,986								4,815,094
NET INCREASE (DECREASE) IN CASH			(259,942		)						265,474
CASH - beginning of year			269,594								4,120
CASH - end of year	$		9,652					$			269,594
Supplemental disclosure of cash flow information:
Cash paid for:
Interest	$		15,075					$			395,233
Income taxes	$		-					$			—
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued for debt and interest	$		2,313,458					$			1,848,031

●	Amounts that have been invoiced are recorded in accounts receivable and revenue.

~~See~~Our ~~accompanying~~customers ~~notes~~generally have the right to ~~consolidated~~cancel ~~financial~~their ~~statements~~contracts by providing prior written notice to us of their intent to cancel the remainder of the contract term. The customer would be required to pay any charge for early cancellation that their contract specifies. In the event that a customer cancels their contract, they are not entitled to a refund for services already rendered. A customer can continue service on a month-to-month basis after their contract expires.

3429

~~IceWEB, Inc. and Subsidiaries~~Advertising

~~NOTES~~Advertising TOcosts ~~CONSOLIDATED~~are ~~FINANCIAL~~expensed ~~STATEMENTS~~as incurred and amounted to approximately $40,000 in the year ended June 30, 2015 and approximately $31,200 in the nine months ended June 30, 2014.

~~Years~~Barter ~~ended September 30, 2013 and 2012~~Transactions

~~NOTE~~Barter 1activity -is ~~ORGANIZATION~~accounted for in accordance with ASC 845, “Nonmonetary Transactions”. Barter revenue relates to the exchange of wireless bandwidth and internet connectivity provided by CTC to business customers in exchange primarily for roof rights for antennae, advertising and other products and services that CTC would otherwise be required to buy for cash. Barter expenses reflect the expense offset to barter revenue. The amount of barter revenue and expense is recorded at the estimated fair value of the services received or the services provided, whichever is more objectively determinable, in the month the services are exchanged. For the year ended June 30, 2015, the Company recorded barter revenue of approximately $24,400 and barter expense of approximately $39,800. For the nine months ended June 30, 2014, the Company recorded barter revenue of approximately $22,500 and barter expense of approximately $31,200.

~~IceWEB,~~Prepaid Inc. (the “Company”) began trading publicly in April 2002. Utilizing resources gained through acquisitions, we have developed our IceWEB data storage products. During fiscal 2013 and 2012 we had one wholly owned operating subsidiary, IceWEB Storage Corporation (formerly known as Inline Corporation). Expenses

~~BUSINESS~~Prepaid OFexpenses ~~ICEWEB~~are comprised primarily of prepaid costs related to the installation of new customers, prepaid advertising costs which are expensed when used and prepaid financing costs which are amortized over the life of the related financing.

~~Since~~Deferred 2005, the Company had been focused on serving the commercial and federal markets with network security products and proprietary on-line software solutions. In 2008, the Company narrowed its focus and expanded its capabilities by acquiring INLINE Corporation, a data storage manufacturing company.Revenue

InAmounts ~~March,~~billed ~~2009,~~in ~~the~~advance ~~Company~~of ~~sold~~services ~~its~~being ~~wholly~~provided ~~owned~~are ~~subsidiary,~~recorded ~~IceWEB Virginia, Inc.~~ to andeferred ~~unrelated~~revenue ~~third~~and ~~party,~~are ~~and~~recognized in the ~~process~~consolidated ~~exited~~statements ~~its~~of ~~low-margin~~operations ITas ~~re-seller~~services ~~business~~are ~~products business to further focus on the higher margin data storage manufacturing business~~provided.

~~With~~Deferred ~~our~~Financing acquisition of Computers & Telecom, Inc. and KCNAP, LLC, (collectively “CTC”) in October 2013, IceWEB provides wireless and fiber broadband service, co-location space and related services and operates a Network Access Point (“NAP”) where customers directly interconnect with a network ecosystem of partners and customers. This access to Internet routes provides CTC customers improved reliability and streamlined connectivity while significantly reducing costs by reaching a critical mass of networks within a centralized physical location. In addition, through our IceWEB Storage Corporation subsidiary we deliver on-line cloud computing application services, and manufacture and market cloud-attached and network storage. Costs

~~CTC~~Debt ~~operates~~issuance acosts ~~wireless~~incurred ~~internet~~in ~~service~~connection ~~business,~~with ~~providing~~the ~~WIMAX~~issuance ~~broadband~~of todebt ~~small~~are capitalized and ~~medium~~amortized ~~size~~to ~~businesses~~interest inexpense based on the ~~metro~~related ~~Kansas-City,~~debt ~~Missouri~~agreements ~~area. In~~on ~~addition~~a ~~CTC~~straight-line ~~offers~~basis, which approximates the ~~following~~effective ~~solutions:~~interest ~~(i) premium~~method. Unamortized ~~data~~amounts ~~center~~are ~~co-location,~~included ~~(ii) interconnection~~in ~~and~~prepaid ~~(iii) exchange~~expenses ~~and~~in ~~outsourced~~the ITaccompanying ~~infrastructure~~consolidated ~~services~~balance sheets.

WeEarnings ~~leverage~~per our NAP which allows our customers to increase information and application delivery performance while significantly reducing costs. Our platform enables scalable, reliable and cost-effective co-location, interconnection and traffic exchange thus lowering overall cost and increasing flexibility.Share

~~Our~~We ~~customer~~compute ~~base~~earnings ~~includes~~per ~~U.S.~~share ~~government~~in ~~agencies~~accordance with ASC Topic 260, ~~enterprise~~“Earnings ~~companies~~Per Share” Under the provisions of ASC Topic 260, basic earnings per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing the net income (loss) for the period by the weighted average number of common and ~~small~~potentially todilutive ~~medium~~common ~~sized~~shares ~~businesses~~outstanding during the period. Potentially dilutive common shares consist of the common shares issuable upon the exercise of stock options and warrants (~~“SMB”~~using the treasury stock method) and upon the conversion of convertible notes and preferred stock (using the if-converted method). Potentially dilutive common shares are excluded from the calculation if their effect is antidilutive. At June 30, 2015, there were options and warrants to purchase 64,443,980 shares of common stock, there was $115,632 of convertible debt outstanding, which, if converted on June 30, 2015 would amount to 26,700,000 shares, and 1,567 shares issuable upon conversion of Series B preferred stock outstanding which could potentially dilute future earnings per share.

~~NOTE 2~~ Stock-Based ~~BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~Compensation

~~Principles~~As ofmore ~~Consolidation~~fully described in Note 15, we have three stock option plans that provide for non-qualified options to be issued to directors, officers, employees and consultants (the 2012 Equity Compensation Plan, 2013 Equity Plan and the 2015 Employee Option Plan (the “Plans”).

~~The~~Cost ~~accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and include the accounts~~ of ~~the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.~~Sales

~~Reclassifications~~Cost of sales consists primarily of the costs of providing wireless and fiber bandwidth and colocation services.

~~Certain~~Recently ~~reclassifications~~Adopted ~~have~~and ~~been~~Recently ~~made~~Issued toAccounting ~~previously reported amounts to conform to 2013 amounts. The reclassifications had no impact on previously reported results of operations or shareholders’ deficit.~~Standards

~~Going~~ Various ~~Concern~~accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company had net losses and net cash used in operating activities of $7,108,819 and $2,700,609, respectively, for the year ended September 30, 2013. The Company also had an accumulated deficit of $47,921,946 at September 30, 2013. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~35 IceWEB, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended September 30, 2013 and 2012~~ NOTE 23 - ~~BASIS~~PROPERTY ~~OF PRESENTATION~~ AND ~~SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)~~EQUIPMENT

~~Management~~Property ~~has~~and ~~established~~equipment ~~plans~~consisted ~~intended~~of ~~to increase~~ the sales of our products and services. Management intends to seek new capital from new equity securities offerings to provide funds needed to increase liquidity, fund growth, and implement its business plan. However, no assurances can be given that we will be able to raise any additional funds.following:

Marketable Securities

	Estimated Life	June 30, 2015			June 30, 2014
Equipment	3 years	$	1,125,304		$	1,324,844
Computer Software	3 years		59,694			59,694
Vehicle	3 years		1,979			1,979
Leasehold Improvements	3 years		4,734			4,734
			1,191,711			1,391,251
Less: Accumulated Depreciation			(1,140,249	)		(939,408	)

Net, Property and Equipment		$	51,462		$	451,843

~~IceWEB~~The ~~accounts~~Company ~~for~~disposed ~~the purchase~~ of ~~marketable equity securities in accordance with FASB Accounting Standards Codification (ASC) 320~~$212,016 ~~“Investment – Debt and Equity Securities” with any unrealized gains and losses included as a net amount as a separate component~~ of ~~stockholders’~~equipment ~~equity. However, those securities may not have the trading volume to support the stock price if the Company were to sell all their shares~~ in the ~~open~~year ~~market~~ended atJune ~~once~~30, so2015. The ~~the~~ Company ~~may~~recognized ~~have~~ a ~~loss~~gain on the ~~sale~~disposal of ~~marketable~~the ~~securities~~assets ~~even~~of ~~though~~$8,943 ~~they~~for ~~record~~the ~~marketable~~year ~~equity~~ended ~~securities~~June at30, ~~the current market value~~2015.

~~Use~~Depreciation expense for the year ended June 30, 2015 and the nine months ended June 30, 2014 was $408,408 and $550,799, respectively, of ~~Estimates~~which $272,356 and $417,379 was included in cost of sales for the year ended June 30, 2015 and the nine months ended June 30, 2014, respectively.

~~The~~NOTE ~~preparation~~4 of– ~~financial~~OTHER ~~statements~~CURRENT in accordance with accounting principles generally accepted in the United States of America 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 balance sheets and the reported amounts of sales and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates in 2013 and 2012 include the valuation of stock-based compensation, the allowance for inventory obsolescence and the useful life of property and equipment and intangible assets, derivative liabilities, and litigation reserves.ASSETS

~~Cash~~Other current assets totaled $10,208 and ~~Cash~~$51,708 ~~Equivalents~~at June 30, 2015 and 2014, respectively. The balance at June 30, 2015 and 2014 consisted primarily of prepaid loan fees related to the capitalized lease obligation to Agility Ventures, LLC.

WeNOTE ~~consider~~5 ~~all~~- ~~highly~~RELATED ~~liquid~~PARTY ~~debt instruments with original maturities of three months or less to be cash equivalents.~~TRANSACTIONS

~~Accounts~~On ~~Receivable~~April 23, 2014, we entered into a Subscription Agreement with UnifiedOnline! LLC (the “Subscriber”), a Delaware limited liability company, pursuant to which the Subscriber purchased 400,000 shares of Series AA Preferred Stock which were converted on January 5, 2015 to 903,825,954 shares of common stock becoming a majority shareholder in the Company. UO! IP of NC, LLC is a related party to Unified Online! LLC. In consideration for the Shares, Subscriber paid $116,087 to various vendors and obtained the agreement of a certain related party lessor to temporarily forbear exercising non-payment default remedies. Since entering into the Subscription Agreement, the Subscriber has advanced $1.0 million bearing interest at 10% per annum to fund general working capital. The balance due was $1,029,005 and $479,578 at June 30, 2015 and 2014, respectively, and is reflected as note payable, related party in the balance sheet.

~~Accounts~~NOTE ~~receivable~~6 ~~consists~~- ofNOTES normal trade receivables. We recorded a bad debt allowance of $0 and $409,000 as of September 30, 2013 and 2012, respectively. Management performs ongoing evaluations of its accounts receivable. Management believes that all remaining receivables are fully collectable. Bad debt expense amounted to $114,918 and $0 for years ended September 30, 2013 and 2012, respectively.PAYABLE

~~Other~~IWEB ~~Receivables~~Growth Fund, LLC

WeOn ~~have~~November a2, ~~purchase~~2012 ~~order~~UnifiedOnline, ~~arrangement~~Inc. entered into a Loan Agreement with IWEB Growth Fund, LLC, a ~~key~~Virginia ~~vendor~~limited ~~that~~liability ~~provides~~company us(“IWEB ~~the~~Growth ~~flexibility~~Fund”) toestablished ~~make~~by ~~purchases~~Messrs. ofCompton, ~~inventory~~Bush, ~~components~~Carosi, onPirtle ~~credit~~and ~~with~~Stavish and General Soyster, our ~~customer~~former ~~remitting~~independent ~~payment~~directors. toUnder the ~~vendor. This~~terms ~~arrangement~~of ~~provides~~the usLoan ~~with~~Agreement, IWEB Growth Fund agreed to make one or more loans to the ~~cash~~Company ~~needed~~up to ~~finance~~the ~~certain~~total principal amount of ~~our~~$1.5 ~~on-going~~million. ~~costs~~The lending of any amounts under the Loan Agreement is conditioned upon the negotiation of notes and ~~expenses,~~related loan documents which contain terms and ~~provides~~conditions that weare ~~collect~~acceptable onto ~~our~~the ~~receivables~~lender ~~once~~to be determined at the ~~vendor~~time ~~has~~of ~~been~~the ~~paid~~loans. ~~This~~ ~~vendor~~We ~~had~~agreed ~~collected~~to ~~$28~~grant onIWEB Growth Fund a security interest in our ~~behalf~~assets ~~that~~as ~~had~~collateral ~~not~~for ~~been~~these ~~remitted~~loans. In the event we should default under the terms of the Loan Agreement, IWEB Growth Fund is entitled to usdeclare asall amounts advanced under the various notes immediately due and payable. An event of ~~September~~default 30includes a breach by us of any covenant, ~~2013~~representation or warranty in the Loan Agreement or a default under any note entered into with the lender.

~~Derivative~~Between ~~Liability~~November 9, 2012 and July 11, 2013, IWEB Growth Fund lent us an aggregate of $186,000 under the terms of 9 separate Confession of Judgment Promissory Notes. These notes, which are identical in their terms other than the dates and principal amounts, are for a one year term and bear interest at 12% per annum payable at maturity. Embodied in each of the notes is a confession of judgment which means that should we default upon the payment of the note, we have agreed to permit IWEB Growth Fund to enter a judgment against us in the appropriate court in Virginia before filing suit against us for collection of the amounts. Pursuant to the terms of the Loan Agreement, we paid IWEB Growth Fund’s expenses of $1,500 for the preparation of the Loan Agreement and related documents. We used the net proceeds from these initial loans for general working capital. The Company is currently in default on these loans. There is no guarantee that IWEB Growth Fund will not enter a judgment against the Company.

The Company issued warrants to purchase the Company’s common stock in connection with the issuance of convertible debt, which contain certain ratchet provisions that reduce the exercise price of the warrants or the conversion price in certain circumstances. In accordance with ASC 815 the Company determined that the warrants and/or the conversion features with provisions that reduce the exercise price of the warrants did not qualify for a scope exception under ASC 815 as they were determined not to be indexed to the Company’s stock.31

36On February 27, 2014, Agility Ventures LLC sold and assigned the Master Lease and Equipment Schedule to a third party, UO! IP of NC, LLC (see Note 7). UO! IP of NC, LLC has advanced the payments made on this lease to the Company at a rate of 10% per annum. The balance due to UO!IP of NC, LLC was $635,000 and $185,000 at June 30, 2015 and 2014, respectively.

~~IceWEB~~On June 16, ~~Inc~~2015, we entered into a loan agreement with Power Up Lending Group, LTD. (“Power Up”) for $50,000 to fund working capital. The note is for a nine month term, payable at $365 per day, for a total repayment amount of $69,000. The balance due to Power Up was $48,315 and ~~Subsidiaries~~$0 at June 30, 2015 and 2014, respectively.

~~NOTES~~As TOpart ~~CONSOLIDATED~~of ~~FINANCIAL~~the ~~STATEMENTS~~acquisition of CTC (see Note 20), the Company acquired two debt obligations – one with Blue Ridge Bank and one for rent payable on an old building which was converted into a loan. The balance due to Blue Ridge Bank was $56,996 and $65,308 at June 30, 2015 and 2014, respectively. The balance due for the rent payable converted into a loan was $37,499 and $35,709 at June 30, 2015 and 2014, respectively.

~~Years~~A ~~ended~~summary ~~September~~of ~~30,~~our ~~2013~~Notes ~~and~~Payable ~~2012~~is as follows:

NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)

	June 30, 2015		June 30, 2014
IWEB Growth Fund	$	185,000	$	186,000
UO!IP of NC, LLC		635,000		185,000
Power Up Lending Group, LTD.		48,315		-
Other Notes Payable		94,495		101,017
	$	962,810	$	472,017

~~Derivatives~~NOTE ~~are~~7 ~~required~~– toCAPITAL beLEASE recorded on the balance sheet at fair value (see Note 11). These derivatives, including embedded derivatives in the Company’s structured borrowings, are separately valued and accounted for on the Company’s balance sheet. Fair values for exchange traded securities and derivatives are based on quoted market prices. Where market prices are not readily available, fair values are determined using market based pricing models incorporating readily observable market data and requiring judgment and estimates. In addition, additional disclosures are required about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows.PAYABLE

~~Fair~~Agility ~~Value~~Ventures, ~~Measurements~~LLC and UO! IP of NC, LLC

~~Fair~~On ~~value~~October is1, ~~defined~~2013, asin ~~the~~conjunction ~~exchange~~with ~~price~~the ~~that~~acquisition ~~would~~of beCTC ~~received~~(See ~~for~~Note an20), ~~asset~~we orentered ~~paid~~into toan ~~transfer~~equipment alease ~~liability~~agreement ~~(an~~with ~~exit~~Agility ~~price)~~Ventures, LLC in the principal oramount ~~most~~of ~~advantageous~~$1,678,531 ~~market~~which ~~for~~is secured by all of the ~~asset~~assets orof ~~liability~~the inCompany. anThe ~~orderly~~lease ~~transaction~~agreement ~~between~~has ~~market~~a ~~participants~~term onof ~~the~~36 ~~measurement~~months ~~date. The~~and ~~established~~bears ~~fair~~interest ~~value~~at ~~hierarchy~~15% ~~requires~~per anannum. We ~~entity~~also toissued ~~maximize~~Agility ~~the~~Ventures ~~use~~2,500 shares of ~~observable~~the ~~inputs~~Company’s restricted common stock, and ~~minimize~~a ~~the~~Series ~~use~~T common stock warrant covering a total of ~~unobservable~~9,187 ~~inputs~~shares ~~when~~with ~~measuring~~a ~~fair~~term ~~value. The~~of ~~standard~~two ~~describes~~years ~~three~~and ~~levels~~a conversion price of ~~inputs~~$22.00 ~~that~~per ~~may~~share. beThe ~~used~~Company has the option to ~~measure~~purchase ~~fair~~the ~~value:~~equipment at the end of the term.

~~Level~~On 1:February 27, 2014, Agility Ventures LLC sold and assigned the Master Lease and Equipment Schedule to a third party, UO! IP of NC, LLC. ~~Observable~~UO! ~~inputs~~IP ~~such~~of asNC, ~~quoted~~LLC ~~prices~~is ~~(unadjusted)~~a inrelated ~~active~~party ~~markets~~to ~~for~~the ~~identical~~Company’s ~~assets~~majority orshareholder, ~~liabilities~~Unified Online! LLC. The agreement changed the interest rate to 3.75% on the outstanding principal balance of the lease at February 27, 2014. UO! IP of NC, LLC assigned the lease back to UOIP as part of the subscription agreement at the same terms.

~~Level~~The ~~2: Inputs~~Company ~~other~~applied ~~than~~the ~~quoted~~10% ~~prices~~cash flow test pursuant to Topic ASC 470-50-40-10 "Debt Modification and Extinguishment" to calculate the difference between the present value of the new loan's cash flows and the present value of the old loan's remaining cash flow and concluded that ~~are~~the ~~observable~~results ~~for~~exceeded the ~~asset~~10% orfactor, ~~liability~~the debt modification is considered substantially different and applied extinguishment accounting. Accordingly, ~~either~~the ~~directly~~gain or ~~indirectly~~loss on extinguishment should be measured by the difference between the carrying amount of the old debt and the fair value of the new debt. ~~These~~ ~~include~~Additionally, ~~quoted~~Topic ~~prices~~ASC ~~for~~470-50-40-17 ~~similar~~states ~~assets~~if the exchange or ~~liabilities~~modification is to be accounted for in ~~active~~the ~~markets;~~same ~~quoted~~manner ~~prices~~as ~~for~~a ~~identical~~debt orextinguishment ~~similar~~and ~~assets~~the new debt instrument is initially recorded at fair value, then the fees paid or ~~liabilities~~received ~~that~~shall ~~are~~be ~~not~~associated ~~active;~~with the extinguishment of the old debt instrument and ~~model-driven~~included ~~valuations~~in ~~whose~~determining ~~inputs~~the ~~are~~debt ~~observable~~extinguishment gain or ~~whose~~loss ~~significant~~to be recognized. The fair value ~~drivers~~of ~~are~~the ~~observable. Valuations~~new ~~may~~debt was determined to be ~~obtained~~$1,983,164 ~~from~~and the carrying amount of the old debt of principal and accrued interest totaling $1,717,853 orresulted ~~corroborated~~in bya total loss on the extinguishment of debt of $265,311 ~~third-party~~at ~~pricing~~June ~~services~~30, 2014.

Level 3: Unobservable inputs to measure fair value of assets and liabilities for which there is little, if any market activity at the measurement date, using reasonable inputs and assumptions based upon the best information at the time, to the extent that inputs are available without undue cost and effort.32

~~Fair~~The ~~Value~~underlying assets and related depreciation were included in the appropriate fixed asset category, and related depreciation account. Capitalized equipment under lease agreements totaled approximately $1.9 million prior to the CTC acquisition of ~~Financial~~which ~~Instruments~~$666,782 was recorded at fair value at the time of acquisition (See Note 20). $16,176 remains net of accumulated depreciation as of June 30, 2015 and $279,981 remains net of accumulated depreciation as of June 30, 2014. The lease term of each capital equipment lease is 36 months.

~~The~~Future ~~Company’s~~minimum ~~financial~~payments ~~instruments,~~required ~~including~~under ~~cash~~capital ~~and~~leases ~~cash~~at ~~equivalents,~~June ~~receivables~~30, ~~accounts~~2015 ~~payable and accrued liabilities and notes payable~~ are ~~carried~~as ~~at cost, which approximates their fair value, due to the relatively short maturity of these instruments.~~follows:

Our derivative financial instruments, consisting of embedded conversion features in our convertible debt, which are required to be measured at fair value on a recurring basis under FASB ASC 815-15-25 or FASB ASC 815 as of September 30, 2013 are measured at fair value, using a Black-Scholes valuation model which approximates a binomial lattice valuation methodology utilizing Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities (see Note 11).

2016	$	1,170,000
2017		273,356

Total future payments		1,443,356
Less amount representing interest		39,314

Present value of future minimum payments		1,404,042
Less current portion		886,356

Long-term portion	$	517,686

~~Inventory~~NOTE 8 - INVENTORY

Inventory isconsisted ~~valued~~of at the ~~lower of cost or market, on an average cost basis.~~following:

Property and Equipment

	June 30, 2015		June 30, 2014
Raw Materials	$	-	$	19,069
Work in Progress		-		-
Finished Goods		-		-
	$	-	$	19,069

~~Property~~The ~~and~~decrease ~~equipment~~in inventory is ~~stated~~due atto ~~cost,~~a ~~net~~shift ofin ~~accumulated~~the ~~depreciation.~~business’ ~~Depreciation~~focus ~~expense~~to iswireless ~~recorded~~and byfiber ~~using~~broadband ~~the~~service, ~~straight~~co-~~line~~location ~~method~~space ~~over~~and ~~the~~data ~~estimated~~center ~~useful~~operations ~~lives~~related to our acquisition of ~~the~~CTC ~~related~~in ~~assets~~October 2013.

~~Product~~NOTE ~~Warranties~~ 9 - COMMITMENTS

The Company’s ~~products~~leased ~~typically~~office ~~carry~~space in Sterling, Virginia under a ~~warranty~~two-year ~~for~~operating ~~periods~~lease ofthat upexpired toon ~~three~~March ~~years~~31, 2011. We ~~have~~occupied ~~not~~the ~~had~~office ~~any~~space ~~significant~~on ~~warranty~~a ~~claims~~month-to-month onbasis until October 31, 2013, when we relocated our ~~products~~operations to Kansas City, Missouri in conjunction with our acquisition of CTC. In Kansas City we currently have real estate leases at two locations, totaling 6,875 square feet. These operating leases are standard commercial leases.

37As of June 30, 2015, future minimum lease payments under these operating leases are as follows:

IceWEB, Inc. and Subsidiaries

For the Year Ending,
June 30,	Amount
2016		63,275
2017		15,385
2018		-
	$	78,660

~~NOTES~~Rent TOexpense ~~CONSOLIDATED~~was ~~FINANCIAL~~approximately ~~STATEMENTS~~$90,100 and $73,700 for the year ended June 30, 2015 and for the nine months ended June 30, 2014, respectively.

~~Years ended September 30, 2013 and 2012~~33

NOTE 210 - ~~BASIS~~INCOME ~~OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)~~TAXES

~~Software~~The ~~Development~~Company ~~Costs~~accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The ~~costs~~Company ~~for~~follows the ~~development~~provisions of ~~new~~the ~~software~~ASC ~~products~~740 ~~and~~-10 ~~substantial~~related ~~enhancements~~ to, ~~existing~~Accounting ~~software~~for ~~products~~Uncertain Income Tax Positions. When tax returns are ~~expensed~~filed, asit ~~incurred~~is ~~until~~highly ~~technological~~certain ~~feasibility~~that ~~has~~some ~~been~~positions ~~established~~taken would be sustained upon examination by the taxing authorities, atwhile others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, ~~time~~based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. ~~additional~~Tax ~~costs~~positions ~~would~~taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be ~~capitalized~~reflected as a liability for uncertain tax benefits in ~~accordance~~the accompanying balance sheet along with any associated interest and penalties that would be payable to the ~~accounting~~taxing ~~guidance~~authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for ~~software~~uncertain tax benefits.

~~Because~~The ~~our~~Company ~~current~~has ~~process~~adopted ~~for~~ASC ~~developing~~740-10-25 ~~software~~Definition isof ~~essentially~~Settlement, ~~completed~~which ~~concurrently~~provides ~~with~~guidance on how an entity should determine whether a tax position is effectively settled for the ~~establishment~~purpose of ~~technological~~recognizing ~~feasibility,~~previously ~~which~~unrecognized ~~occurs~~tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a ~~working~~taxing ~~model~~authority without being legally extinguished. For tax positions considered effectively settled, noan ~~costs~~entity ~~have~~would ~~been~~recognize ~~capitalized~~the ~~for~~full ~~any~~amount of tax benefit, even if the ~~periods~~tax ~~presented~~position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As of June 30, 2015, tax years ended September 30, 2014, 2013 and 2012, are still potentially subject to audit by the taxing authorities.

~~Intangible~~Due ~~Assets~~to recurring losses, the Company’s tax provision for the year ended June 30, 2015 and the nine month period ended June 30, 2014 was $0.

~~Intangible~~A ~~assets,~~summary ~~net consists~~ of ~~the~~our ~~cost~~deferred oftax acquired customer relationships. We capitalize and amortize the cost of acquired intangible assets over their estimated useful lives on a straight-line basis. The Company periodically reevaluates the carrying value of its intangible assets for events or changes in circumstances that indicate that the carrying value may not be recoverable. As part of this reevaluation, the Company estimates the future cash flows expected to result from the use of the asset. If the sum of the expected future cash flows is ~~less~~as ~~than the carrying amount of the asset, an impairment loss is recognized to reduce the carrying value of the intangible asset to the estimated fair value of the asset.~~follows:

Long-lived Assets

	June 30,			June 30,
	2015			2014
Tax benefit of net operating loss carry forward	$	9,941,000		$	9,249,000
Less: valuation allowance		(9,941,000	)		(9,249,000	)
Net deferred tax assets	$	-		$	-

InThe ~~accordance~~Company’s ~~with~~tax ~~ASC~~year ~~Topic~~is ~~360,~~the ~~“Property,~~twelve ~~Plant,~~month ~~and~~period ~~Equipment”~~ending ~~(formerly~~September ~~SFAS 144,~~30th. As ~~“Accounting~~of ~~for~~September 30, 2014, the ~~Impairment~~Company orhad ~~Disposal~~unused ofnet ~~Long-Lived~~operating ~~Assets”),~~loss wecarry ~~review~~forwards ~~the~~of ~~carrying~~approximately ~~value~~$24.3 ofmillion ~~intangibles~~available ~~and~~to ~~other~~reduce ~~long-lived~~future ~~assets~~federal ~~for~~taxable ~~impairment~~income. atAs ~~least~~of ~~annually~~June or30, ~~whenever~~2015, ~~events~~the orestimated ~~changes~~tax inloss ~~circumstances~~had ~~indicate~~increased ~~that~~to ~~the~~approximately ~~carrying~~$26.4 ~~amount~~million. Net ofoperating anloss ~~asset~~carryforwards ~~may~~expire ~~not~~through befiscal ~~recoverable~~years ending 2035. ~~Recoverability~~Internal ofRevenue ~~long-lived~~Code ~~assets~~Section is382 ~~measured~~places bya ~~comparison~~limitation on the amount of ~~its~~taxable ~~carrying~~income ~~amount~~that tocan ~~the~~be ~~undiscounted~~offset ~~cash~~by ~~flows~~carryforwards ~~that~~after ~~the~~a ~~asset~~change orin ~~asset~~control ~~group~~(generally isa ~~expected~~greater tothan ~~generate~~50% change in ownership). In IfApril ~~such~~2014, ~~assets~~there ~~are~~was ~~considered~~an toownership bechange ~~impaired~~of more than 50%, ~~the~~which resulted ~~impairment~~in toan beIRC ~~recognized~~Section is382 ~~measured~~limitation byon the ~~amount~~utilization byof ~~which~~the Company's tax loss carry forwards. Accordingly, the ~~carrying~~full ~~amount~~benefit of ~~the~~such ~~property,~~loss ifcarryforwards ~~any,~~is ~~exceeds~~not ~~its~~likely ~~fair~~to ~~market~~be ~~value~~realized.

~~Advertising~~34

~~Advertising~~The ~~costs~~valuation ~~are~~allowance ~~expensed~~at asJune ~~incurred~~30, ~~and~~2015 ~~amounted~~was to $209,~~813~~941,000. inThe ~~fiscal~~increase ~~2013~~during ~~and~~the ~~$93~~twelve months ended June 30,~~975~~ in2015 ~~fiscal~~was ~~2012~~approximately $692,000.

~~Revenue~~The ~~Recognition~~table below summarizes the differences between our effective tax rate and the statutory federal rate as follows for fiscal 2015 and 2014. The effective tax rate is 34% Federal and 3.6% State after Federal tax benefit:

We follow the guidance of ASC Topic 605, “Revenue Recognition” (formerly Staff Accounting Bulletin (SAB) No. 104, “Revenue Recognition”) for revenue recognition. In general, we record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for our various revenues streams:

	2015			2014
Computed "expected" tax benefit		(34.0	%)		(34.0	%)
State income taxes, net of federal tax benefit		(3.6	%)		(3.6	%)
Goodwill		0.0	%		16.0	%
Other permanent differences		(5.3	%)		4.6	%
Change in valuation allowance		42.9	%		17.0	%
Effective tax rate		0.0	%		0.0	%

~~Revenues~~NOTE ~~from~~11 ~~sales~~– ofCONVERTIBLE products are generally recognized when products are shipped unless the Company has obligations remaining under sales or licensing agreements, in which case revenue is either deferred until all obligations are satisfied or recognized ratably over the term of the contract.NOTES

~~Deferred~~As ~~Financing~~of ~~Costs~~June 30, 2015 and 2014 the Company had the following convertible notes outstanding:

Debt issuance costs incurred in connection with the issuance of debt are capitalized and amortized to interest expense based on the related debt agreements on a straight-line basis, which approximates the effective interest method. Unamortized amounts are included in the related debt payable, net, in the accompanying consolidated balance sheets.

	June 30, 2015			June 30, 2014
December 2013 $62,222 Convertible Note, 12% interest, due July 2014, with a 10% original issue discount	$	-		$	43,862	(1)
November 2013 $132,000 Convertible Note, 10% interest, due November 2014, with a 10% original issue discount		-			102,000	(2)
December 2013 $43,821 Convertible Note, 10% interest, due December 2014		-			43,821	(3)
December 2013 $60,000 Convertible Note, 10% interest, due December 2014		60,000			60,000	(4)
January 2014 $53,000 Convertible Note, 8% interest, due October 2014		-			53,000	(5)
February 2014 $32,500 Convertible Note, 8% interest, due November 2014		-			32,500	(6)
January 2015 $53,500 Convertible Note, 8% interest, due October 2015		53,500			-	(7)
February 2015 $33,000 Convertible Note, 8% interest, due November 2015		33,000			-	(8)
April 2015 $30,500 Convertible Note, 12% interest, due April 2017, with a 10% original issue discount		30,500			-	(9)
May 2015 $33,000 Convertible Note, 8% interest, due February 2016		33,000			-	(10)
		210,000			335,183
Less: Debt Discount		(94,368	)		(137,538	)
	$	115,632		$	197,645

38(1) The Company borrowed $62,222 in December 2013, due July 2014, with a one-time interest charge of 12%. The holder of the note has the right, after the first one hundred eighty days of the note to convert the note and accrued interest into common stock at a price per share equal to 60% (representing a discount rate of 40%) of the lowest trade price of the Company's common stock in the twenty-five days prior to the date of Conversion Notice, with a floor of $0.001 per share. The Company recorded a debt discount of $62,222 and a derivative liability of $117,798, related to the conversion feature of the note, in December 2013. Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the seven month term of the note. Also, see Note 12. During July and August 2014, the holder of the Convertible Note exercised their conversion rights and converted $43,862 of the outstanding principal and accrued interest balance.

~~IceWEB~~(2) The Company borrowed $132,000 ~~Inc~~in November 2013, due November 2014, with interest at 10%. The holder of the note has the right to convert the note and ~~Subsidiaries~~accrued interest into common stock at a price per share equal to 60% of the lowest trade price in the 15 trading days previous to the conversion, with a floor of $0.001 per share. The note has an original issue discount of $12,000 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a derivative liability at inception of $114,000. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the year ended June 30, 2015 total amortization was recorded in the amount of $51,500 resulting in a debt discount of $0 at June 30, 2015. Interest expense of $45 was recorded during the year ended June 30, 2015. Also, see Note 12. During the period July through September 2014, the holder of the Convertible Note exercised their conversion rights and converted $109,745 of the outstanding principal and accrued interest balance, at the contractual terms per the note agreement.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~35

~~Years~~(3) The Company borrowed $43,821 in December 2013, due December 2014, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note to convert the note and accrued interest into common stock at a price per share equal to 60% (representing a discount rate of 40%) of the lowest trading price for the Common Stock during the fifteen trading day period ending one trading day prior to the date of Conversion Notice, with a floor of $0.001 per share. The Company recorded a debt discount at inception of the note of $43,821. During the year ended ~~September~~June 30, ~~2013~~2015 total amortization was recorded in the amount of $18,259 resulting in a debt discount of $0 at June 30, 2015. Interest expense of $910 was recorded during the year ended June 30, 2015. Also, see Note 12. During September and ~~2012~~October 2014, the holder of the Convertible Note exercised their conversion rights and converted $47,286 of the outstanding principal and accrued interest balance, at the contractual terms per the note agreement.

~~NOTE~~(4) 2The -Company ~~BASIS~~borrowed OF$60,000 ~~PRESENTATION~~in ~~AND~~December ~~SUMMARY~~2013, OFdue ~~SIGNIFICANT~~December ~~ACCOUNTING~~2014, ~~POLICIES~~with interest at 10%. This note is currently in default. The holder of the note intends to convert at some point in the future. The holder of the note has the right, after the first one hundred eighty days of the note to convert the note and accrued interest into common stock at a price per share equal to 60% (~~continued~~representing a discount rate of 40%) of the lowest trading price for the Common Stock during the fifteen trading day period ending one trading day prior to the date of Conversion Notice, with a floor of $0.001 per share. The Company recorded a debt discount at inception of the note of $60,000. During the year ended June 30, 2015 total amortization was recorded in the amount of $25,000 resulting in a debt discount of $0 at June 30, 2015. Interest expense of $4,200 was recorded during the year ended June 30, 2015. Also, see Note 12.

~~Earnings~~(5) The Company borrowed $53,000 in January 2014, due October 2014, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note to convert the note and accrued interest into common stock at a price per ~~Share~~share equal to 60% of the average of the lowest three trading prices during the 10 trading days previous to the conversion, with a floor of $0.001 per share. The Company recorded a debt discount and derivative liability at inception of $44,040. During the year ended June 30, 2015, the Company recorded amortization of debt discount of $24,724 resulting in a debt discount of $0 at June 30, 2015. Interest expense of $353 was recorded during the year ended June 30, 2015. Also, see Note 12. During July and August 2014, the holder of the Convertible Note exercised their conversion rights and converted $55,120 of the outstanding principal and accrued interest balance, at the contractual terms per the note agreement, at the contractual terms per the note agreement.

We(6) ~~compute~~The ~~earnings~~Company ~~per~~borrowed ~~share~~$32,500 in ~~accordance~~February ~~with~~2014, ~~ASC~~due ~~Topic~~November ~~260~~2014, ~~“Earnings~~with ~~Per~~interest ~~Share”~~at ~~Under~~8%. ~~the~~The ~~provisions~~holder of ~~ASC~~the ~~Topic~~note ~~260~~has the right, ~~basic~~after ~~earnings~~the ~~per~~first ~~share~~one ishundred ~~computed~~eighty bydays ~~dividing~~of the ~~net~~note ~~income~~to ~~(loss)~~convert ~~for~~ the ~~period~~note byand ~~the~~accrued ~~weighted~~interest ~~average~~into ~~number~~common stock at a price per share equal to 60% of ~~common~~the ~~shares~~average ~~outstanding~~of the lowest three trading prices during the ~~period.~~10 ~~Diluted~~trading ~~earnings~~days previous to the conversion, with a floor of $0.001 per share. isThe ~~computed~~Company byrecorded ~~dividing~~a ~~the~~debt ~~net~~discount ~~income~~and ~~(loss)~~derivative ~~for~~liability at inception of $32,500. During the ~~period~~year byended June 30, 2015, the ~~weighted~~Company ~~average~~recorded ~~number~~amortization of ~~common~~debt ~~and~~discount ~~potentially~~of ~~dilutive~~$18,055 ~~common~~resulting ~~shares~~in ~~outstanding~~a ~~during~~debt ~~the~~discount ~~period~~of $0 at June 30, 2015. ~~Potentially~~Also, ~~dilutive~~see ~~common~~Note ~~shares~~12. ~~consist~~During September 2014, the holder of the ~~common~~Convertible ~~shares~~Note ~~issuable~~exercised ~~upon~~their conversion rights and converted $33,360 of the outstanding principal and accrued interest balance, at the contractual terms per the note agreement.

the exercise of stock options and warrants (using the treasury stock method) and upon the conversion of convertible notes and preferred stock (using the if-converted method). Potentially dilutive common shares are excluded from the calculation if their effect is antidilutive. At September 30, 2013, there were options and warrants to purchase 106,238,245 shares of common stock, and 626,667 shares issuable upon conversion of Series B preferred stock outstanding which could potentially dilute future earnings per share.36

~~Stock-Based~~(7) ~~Compensation~~The Company borrowed $53,500 in January 2015, due October 2015, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note to convert the note and accrued interest into common stock at a price per share equal to 58% of the average of the lowest three trading prices during the 10 trading days previous to the conversion. The agreement includes a ratchet provision resulting in the recording of a derivative liability. The Company recorded a derivative liability of $81,133 at inception of the note of which $53,500 was recorded as a debt discount. During the year ended June 30, 2015, the Company recorded amortization of debt discount of $32,694 resulting in a debt discount of $20,806 at June 30, 2015. Interest expense of $1,962 was recorded during the year ended June 30, 2015. Also, see Note 12.

As(8) ~~more~~The ~~fully~~Company ~~described~~borrowed $33,000 in ~~Note~~February 132015, wedue ~~have~~November ~~two~~2015, ~~stock~~with ~~option~~interest ~~plans~~at ~~that~~8%. ~~provide~~The ~~for~~holder ~~non-qualified~~of ~~options~~the note has the right, after the first one hundred eighty days of the note to beconvert ~~issued~~the note and accrued interest into common stock at a price per share equal to ~~directors~~58% of the average of the lowest three trading prices during the 10 trading days previous to the conversion. The agreement includes a ratchet provision resulting in the recording of a derivative liability. The Company recorded a derivative liability of $127,624 ~~officers~~at inception of the note of which $33,000 ~~employees~~was ~~and~~recorded ~~consultants~~as (a debt discount. During the ~~2012~~ ~~Equity~~year ~~Compensation~~ended ~~Plan and~~June 30, 2015, the ~~2013~~Company ~~Equity~~recorded ~~Plan~~amortization (of debt discount of $14,667 resulting in a debt discount of $18,333 at June 30, 2015. Interest expense of $880 was recorded during the ~~“Plans”)~~year ended June 30, 2015. Also, see Note 12.

~~Prior~~(9) toThe ~~October~~Company 1,borrowed ~~2005~~$30,500 wein ~~accounted~~April ~~for~~2015, ~~stock~~due ~~options~~April ~~issued~~2017, ~~under~~with ~~the~~a ~~Plan~~one-time ~~under~~interest ~~the~~charge ~~recognition~~of ~~and~~12%. ~~measurement~~The ~~provisions~~holder of ~~APB~~the ~~Opinion~~note ~~No.~~has 25the right, ~~Accounting~~ ~~for~~after ~~Stock~~the ~~Issued~~first one hundred eighty days of the note to ~~Employees,~~convert the note and ~~related~~accrued ~~interpretations,~~interest asinto ~~permitted~~common bystock ~~ASC~~at ~~Topic~~a ~~718,~~price ~~“Compensation~~per –share ~~Stock~~equal ~~Compensation,~~to ~~“Share-Based~~the ~~Payments”~~lesser of $0.03 Noper share or 60% (representing a discount rate of 40%) of the lowest trade price of the Company's common stock in the twenty-~~based~~five ~~compensation~~days ~~cost~~prior ~~related~~to the date of Conversion Notice. The note has an original issue discount of $3,000 which has been added to ~~employee~~the ~~stock~~principal ~~options~~balance ~~was~~of the note and is being recognized in interest expense over the ~~Consolidated~~life ~~Statement~~of the note. The Company recorded a debt discount of ~~Operations~~$2,500 ~~for~~related to the ~~year~~conversion ~~ended~~feature ~~September~~of the note, along with a derivative liability of $50,833 of which $30,500 ~~2005~~was recorded as ~~all~~a ~~options~~debt ~~granted~~discount ~~under~~in ~~the~~April, ~~Plan~~2015. ~~had~~During anthe ~~exercise~~year ~~price~~ended ~~equal~~June to30, 2015, the ~~market~~Company ~~value~~recorded amortization of ~~the~~$3,437 ~~underlying~~resulting ~~common~~in ~~stock~~a ondebt ~~the~~discount ~~date~~of $29,562 at June 30, 2015. Interest expense of ~~grant~~$312 was recorded during the year ended June 30, 2015. Also, see Note 12.

~~Recently~~(10) ~~Issued~~The ~~Accounting~~Company ~~Standards~~borrowed $33,000 in May 2015, due February 2016, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note to convert the note and accrued interest into common stock at a price per share equal to 58% of the average of the lowest three trading prices during the 10 trading days previous to the conversion. The agreement includes a ratchet provision resulting in the recording of a derivative liability. The Company recorded a derivative liability of $75,223 at inception of the note of which $33,000 was recorded as a debt discount. During the year ended June 30, 2015, the Company recorded amortization of debt discount of $7,333 resulting in a debt discount of $25,667 at June 30, 2015. Interest expense of $440 was recorded during the year ended June 30, 2015. Also, see Note 12.

InNOTE ~~July~~12 ~~2013, the FASB issued ASU 2013~~-~~11,~~ ~~“Presentation~~DERIVATIVE of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This standard requires that an unrecognized tax benefits, or a portion of an unrecognized tax benefit be presented on a reduction to a deferred tax asset for an NOL carryforward, a similar tax loss, or a tax credit carryforward with certain exceptions to this rule. If certain exception conditions exists, an entity should present an unrecognized tax benefit in the financial statements as a liability and should not net the unrecognized tax benefit with a deferred tax asset. This standard is effective for fiscal years and interim periods within those years beginning after December 15, 2013. The Company does not expect the adoption of the new provisions to have a material impact on our financial condition or results of operations.LIABILITIES

~~The~~Derivative ~~Company~~liability ~~believes~~- ~~that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations.~~warrants

39The Company has warrants issued in connection with its convertible notes payable outstanding with price protection provisions that allow for the reduction in the exercise price of the warrants in the event the Company subsequently issues stock or securities convertible into stock at a price lower than the exercise price of the warrants. Simultaneously with any reduction to the exercise price, the number of shares of common stock that may be purchased upon exercise of each of these warrants shall be increased or decreased proportionately, so that after such adjustment the aggregate exercise price payable for the adjusted number of warrants shall be the same as the aggregate exercise price in effect immediately prior to such adjustment. The Company accounted for its warrants with price protection in accordance with FASB ASC Topic 815.

~~IceWEB, Inc. and Subsidiaries~~37

~~NOTES~~Accounting TOfor ~~CONSOLIDATED~~Derivative ~~FINANCIAL~~Warrant ~~STATEMENTS~~Liability

~~Years~~The ~~ended~~Company’s ~~September~~derivative warrant instruments have been measured at fair value at June 30, ~~2013~~2015 using the Black-Scholes model, which approximates a binomial or lattice model. The Company recognizes all of its warrants with price protection in its consolidated balance sheet as liabilities. The liability is revalued at each reporting period and ~~2012~~changes in fair value are recognized currently in the consolidated statements of operations. The initial recognition and subsequent changes in fair value of the derivative warrant liability have no effect on the Company’s cash flows.

~~NOTE~~The 3derivative warrants outstanding at June 30, 2015 are all currently exercisable with a weighted-average ~~PROPERTY~~remaining ~~AND~~life ~~EQUIPMENT~~of 1.25 years.

AtDerivative ~~September~~liability ~~30,~~– ~~property~~convertible ~~and equipment consisted of the following:~~notes

	Estimated Life		2013						2012
Office equipment		5 years		$		644,020				$		644,020
Computer software	3 years				52,841						29,523
Furniture and fixtures	5 years				-						-
Leasehold improvements	5 years				1,033,495						1,033,495
					1,730,356						1,707,038
Less: accumulated depreciation					(1,422,488		)				(1,207,253		)
			$		307,868			$			499,785

From November, 2013 through June 30, 2015 the Company issued convertible notes in the total principal amount of $553,543. Upon the issuance of these convertible notes and as a consequence of its convertible features, the convertible notes give rise to derivative liabilities. The Company’s derivative liabilities related to its convertible notes payable have been measured at fair value at June 30, 2015 and 2014 using the Black-Scholes model.

~~Depreciation~~The ~~expense~~revaluation of the warrants and convertible notes at each report

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